Exhibit 10.71
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made on this 26th day of January,
2009, by and between AVI BioPharma, Inc., an Oregon
corporation, with its principal office at 4575 SW Research Way,
Suite 200, Corvallis, Oregon, (“ Company
”), and Stephen Bevan Shrewsbury MD, 1100 Lincoln Village
Circle, Apartment 248, Larkspur, CA 94939 (“
Employee ”).
RECITALS:
The Company desires to hire the
Employee as Senior Vice President — Preclinical, Clinical and
Regulatory Affairs and the Employee desires to accept such position
under the terms and conditions stated herein.
NOW, THEREFORE, in consideration of
the mutual benefits contained herein, the sufficiency of which the
parties acknowledge, the parties hereby agree as
follows:
AGREEMENT:
1.
Employment Term.
The term of employment
(“ Term ”) shall commence on the Effective Date
and shall continue until the first anniversary of the Effective
Date, unless extended or terminated in accordance with
Section 12 . This Agreement establishes an
“at will” employment relationship, as such term is
defined and used under Oregon law, between the Company and the
Employee. Employee shall commence employment not later
than January 26, 2009 (the “ Effective Date
”). Failure to do so shall be grounds for immediate
termination for Cause , as such term is defined in
Section 12 hereof.
2.
Duties. Employee shall be employed as Senior Vice
President- Preclinical, Clinical and Regulatory Affairs and shall
have such duties as are customarily associated with that position,
including overall responsibility for pre-clinical, clinical and
regulatory activities and initiatives that will enable the Company
to develop candidates for further clinical activities, and such
other duties as may be assigned to him from time to time by the
Company’s Chief Executive Officer (“ CEO
”) and the Board of Directors of the Company (“
Board ”). Employee shall be a direct report of the
Company’s Chief Executive Officer. Employee shall devote
substantially all of his business time to the service of the
Company throughout the Term. Employee and Company acknowledge
and agree that (i) Employee may hold certain offices within
certain entities as set forth on Exhibit A to this
Agreement, (ii) Employee’s devotion of reasonable
amounts of time in such capacities, so long as it does not
interfere with his performance of services hereunder, shall not
conflict with the terms of this Agreement, and (iii)
Exhibit A may be amended from time to time by agreement
of the parties.
3.
Compensation.
(a)
Base Compensation
. During the Term the Company
shall compensate the Employee at an initial annual salary of Three
Hundred Ten Thousand Dollars ($310,000.00), payable in accordance
with the Company’s payroll practices in effect from time to
time, and less amounts required to be withheld under applicable law
and requested to be withheld by the Employee (as increased from
time to time, “ Base Compensation ”). The
Employee’s Base Compensation shall be subject to review for
potential increase on an annual basis. Except as otherwise provided
in this Agreement, the Base Compensation shall be prorated for any
period of service less than a full month.
(b)
Bonus . The Employee shall be eligible for an
annual bonus of up to 25% of Employee’s Base Compensation,
which bonus shall be paid in the normal cycle of payment of
executive bonuses and upon achievement and satisfaction of goals
and objectives (“ Goals and Objectives ”)
established upon mutual agreement of the CEO, Employee and the
Compensation Committee of the Company’s Board. Such
goals shall be established concurrently with the goals and
objectives of the Company’s other senior executives.
Employee shall be eligible for consideration for an award of a full
12-month bonus based on achievement of 2009 Goals and
Objectives.
(c)
Equity Compensation
.
(i)
On the Effective Date, the Employee
will be granted options to purchase Four Hundred Fifty Thousand
(450,000) shares of the Company’s common stock (the “
Options ”) under the Company’s 2002 Equity
Incentive Plan (the “ Plan ”) (a copy of which
is attached as Exhibit B , with an exercise price at
the fair market value of the Company common stock on the date
Effective Date;
(ii)
In addition, Employee will be issued
60,000 shares of restricted stock under the Plan (the “
Restricted Shares ”). In the event Employee
remains employed on the 181 st day following the Effective Date, vesting
shall commence with respect to such Restricted Shares as of the
Effective Date; and
(iii)
The exercise price of the Options
and the issuance price of the Restricted Shares and all other terms
and conditions associated with the Options and Restricted Shares be
determined in accordance with the Plan. To the maximum extent
possible, the Options shall be Incentive Stock Options. Subject to
accelerated vesting or termination as set forth herein, the
Standard Options and Restricted Shares shall vest in equal annual
installments over three (3) years
4.
Expenses. The Company will reimburse Employee for
all expenses reasonably incurred by him in discharging his duties
for the Company, conditioned upon Employee’s submission of
written documentation in support of claimed reimbursement of such
expenses, and consistent with the Company’s expense
reimbursement policies in effect from time to time. The Company
will reimburse the Employee up to One Hundred Thousand Dollars
($100,000) for reasonable expenses incurred in 2009 to relocate
Employee and parts of Employee’s household in a manner
compatible with Employee’s duties hereunder to the city where
the Company’s headquarters are located (“ Facility
Location ”), including the shipment of personal effects
to the Facility Location, and the customary closing costs
associated with the purchase of a residence in the Facility
Location. In addition, Company shall reimburse Employee (or
pay on Employee’s behalf) rent and related living expenses,
not to exceed $2,500 per month in the aggregate and up to six
(6) months in duration for temporary living
arrangements. In addition, the Company shall reimburse
Employee for reasonable attorneys fees incurred in connection with
the review and negotiation of this Agreement in an amount not to
exceed $3,000.
5.
Benefits. Subject to eligibility requirements,
Employee shall be entitled to participate in such benefits plans
and programs as adopted by the Company from time to time and shall
be eligible for paid vacation of four (4) business weeks (20
business days) annually; provided, however, if Employee does
not use all available vacation in any given year, Employee may
roll-over up to one business week (5 business days) to the
following year, the parties intending that Employee shall have a
maximum of five (5) business weeks (25 business days) of paid
vacation in any year following 2009.
6.
Confidentiality.
(a)
In the course of his employment with
the Company, it is anticipated that Employee may acquire knowledge
(both orally and in writing) regarding confidential affairs of the
Company and confidential or proprietary information including:
(i) matters of a technical nature, such as know-how,
inventions, processes, products, designs, chemicals, compounds,
materials, drawings, concepts, formulas, trade secrets, secret
processes or machines, inventions or research projects;
(ii) matters of a business nature, such as information about
costs, profits and pricing policies; (iii) markets, sales,
suppliers, customers, plans for future development, plans for
future products, marketing plans or strategies; and (iv) other
information of a similar nature which is not generally disclosed by
the Company to the public, referred to collectively hereafter as
“Confidential Information.” “Confidential
Information” shall not include information generally
available to the public. Employee agrees that during the term of
this Agreement and thereafter, he (1) will keep secret and
retain in the strictest confidence all Confidential Information,
(2) not disclose Confidential Information to anyone except
employees of the Company authorized to receive it and third parties
to whom such disclosure is specifically authorized, and
(3) not use any Confidential Information for any purpose other
than performance of services under this Agreement without prior
written permission from the Company.
(b)
If Employee is served with any
subpoena or other compulsory judicial or administrative process
calling for production or disclosure of Confidential Information or
if Employee is otherwise required by law or regulation to disclose
Confidential Information, Employee will immediately, and prior to
production or disclosure, notify the Company and
provide it with such information as may be
necessary in order that the Company may take such action as it
deems necessary to protect its interest.
(c)
The provisions of this
Section 6 shall survive termination of this
Agreement.
7.
Non-competition and
Non-solicitation.
(a)
For a period of one (1) year in
the case of the payment of severance equal to 12 months Base
Compensation and for a period of two (2) years in the case of
the payment of severance equal to 24 months Base Compensation, in
both instances as provided in Section 13(c)
below, Employee shall not directly or indirectly engage in or
have any ownership interest in, or participate in the financing,
operation, management or control of, any person, firm, corporation
or business that engages in any activity customarily associated
with the Company’s ordinary course of business at the time of
such termination anywhere in the world; provided, however,
that this provision shall not prohibit Employee from owning up to
five percent (5%) of any class of outstanding bonds, preferred
stock or shares of common stock of any such entity or from
employment with any institute of higher learning.
(b)
For a period of two (2) years
following termination of employment with the Company for any
reason, except with the express written consent of the Company,
Employee agrees to refrain from directly or indirectly recruiting,
hiring or assisting anyone else to hire, or otherwise counseling to
discontinue employment with the Company, any person then employed
by the Company or its subsidiaries or affiliates.
(c)
In the event that the provisions of
this Section 7 should ever be deemed to exceed the
duration or geographic limitations or scope permitted by applicable
law, then such provisions shall be reformed to the maximum time or
geographic limitations or scope, as the case may be, permitted by
applicable laws.
(d)
The provisions of this
Section 7 shall survive termination of this Agreement
and the term of employment.
8.
Covered Work.
(a)
All rights, title and interest to
any Covered Work that Employee makes or conceives (whether alone or
with others) while employed by the Company, belong to the Company.
This Agreement operates as an actual assignment of all rights in
Covered Work to the Company. “ Covered Work ”
means products and Inventions that relate to the actual or
anticipated business of the Company or any of its subsidiaries or
affiliates, or that result from or are suggested by a task assigned
to Employee or work performed by Employee on behalf of the Company
or any of its subsidiaries or affiliates, or that were developed in
whole or in part on the Company time or using the Company’s
equipment, supplies or facilities. “ Inventions
” mean ideas, improvements, designs, computer software,
technologies, techniques, processes, products, chemicals,
compounds, materials, concepts, drawings, authored works or
discoveries, whether or not patentable or copyrightable, as well as
other newly discovered or newly applied information or concepts.
Attached hereto as Exhibit D is a description of any
product or Invention in which
Employee had or has any right, title or
interest, which is not included within the definition of Covered
Work or which is otherwise excluded from the restrictions set forth
in this Section 8 .
(b)
Employee shall promptly reveal all
information relating to Covered Work and Confidential Information
to an appropriate officer of the Company and shall cooperate with
the Company, and execute such documents as may be necessary, in the
event that the Company desires to seek copyright, patent or
trademark protection thereafter relating to same.
(c)
In the event that the Company
requests that Employee assist in efforts to defend any legal claims
to patents or other right, the Company agrees to reimburse Employee
for any reasonable expenses Employee may incur in connection with
such assistance. This obligation to reimburse shall survive
termination of this Agreement and the term of
employment.
(d)
The provisions of this
Section 8 shall survive termination of this Agreement
and the term of employment.
9.
Return of Inventions, Products
and Documents. Employee acknowledges and agrees that all
Inventions, all products of the Company and all originals and
copies of records, reports, documents, lists, drawings, memoranda,
notes, proposals, contracts and other documentation related to the
business of the Company or containing any information described in
this Section 9 shall be the sole and exclusive
property of the Company and shall be returned to the Company
immediately upon termination of Employee’s employment with
the Company or upon the written request of the Company. The
provisions of this Section 9 shall survive termination
of this Agreement and the term of employment
10.
Injunction.
Employee agrees that it would
be difficult to measure damages to the Company from any breach by
Employee of Sections 6, 7, 8 and/or 9 of this
Agreement, and that monetary damages would be an inadequate remedy
for any such breach. Accordingly, Employee agrees that if Employee
shall breach Sections 6, 7, 8 and/or 9 of this
Agreement, the Company shall be entitled, in addition to all other
remedies it may have at law or in equity, to an injunction or other
appropriate orders to restrain any demonstrated breach without
showing or proving any actual damage sustained by the Company. The
provisions of this Section 10 shall survive termination
of this Agreement and the term of employment.
11.
Obligations to Others.
Except for items fully
disclosed in writing to the Company, Employee represents and
warrants to the Company that (i) Employee’s employment
by the Company does not violate any agreement with any prior
employer or other person or entity, and (ii) Employee is not
subject to any existing confidentiality or non-competition
agreement or obligation, or any agreement relating to the
assignment of Inventions except as has been fully disclosed in
writing to the Company.
12.
Termination.
(a)
Employee may voluntarily terminate
his employment with the Company upon giving the Company sixty (60)
days written notice.
(b)
The Company may terminate
Employee’s employment without Cause (as defined below) upon
giving Employee thirty (30) days written notice of
termination.
(c)
Employee’s employment with the
Company shall terminate upon the occurrence of any one of the
following:
(i)
Employee’s death;
(ii)
The effective date of a notice sent
to Employee stating the Board’s determination made in good
faith and after consultation with a qualified physician selected by
the Board, that Employee is incapable of performing his duties
under this Agreement, with reasonable accommodation, because of a
physical or mental incapacity that has prevented Employee from
performing such full-time duties for a perio
