Exhibit 10.1

 

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is
entered into effective July 25, 2018 (the “Effective Date”), by and between Tim
Albury (“Executive”) and Liquidia Technologies, Inc., a Delaware corporation
(the “Company”).  Each of the Company and Executive is a “Party” and,
collectively, they are the “Parties.”

 

The Company and Executive entered into an Executive Employment Agreement dated
January 22, 2018 (the “Prior Agreement”); and

 

The Parties agree that this Agreement supersedes any and all prior employment
agreement and understandings between the Parties and to provide for the
employment of Executive upon the terms and conditions set forth herein.

 

Accordingly, in consideration of the mutual promises and covenants contained
herein, the Parties agree to the following:

 

1.                                      EMPLOYMENT BY THE COMPANY.

 

1.1                               At-Will Employment.  Executive shall be
employed by the Company on an “at will” basis, meaning either the Company or
Executive may terminate Executive’s employment at any time, with or without
cause or advance notice. Any contrary representations that may have been made to
Executive shall be superseded by this Agreement. This Agreement shall constitute
the full and complete agreement between Executive and the Company on the “at
will” nature of Executive’s employment with the Company, which may be changed
only in an express written agreement signed by Executive and a duly authorized
officer of the Company. Executive’s rights to any compensation following a
termination shall be only as set forth in Section 6.

 

1.2                               Position.  Subject to the terms set forth
herein, the Company agrees to employ Executive in the position of Senior Vice
President, Chief Accounting Officer, and Executive hereby accepts such
employment.  Executive will report to the President and Chief Financial Officer
(“CFO”) and/or such executive designated by the CFO.  Executive agrees that, by
accepting this Agreement, Executive consents to the changes to Executive’s
position, duties, and responsibilities as set forth in this Agreement and agrees
that such changes alone will not result in any right of Executive to terminate
employment for Good Reason, as defined herein or in any other context, and
receive the Severance Benefits described herein or any other similar benefits
under any contractual arrangement, including the Prior Agreement.

 

1.3                               Duties.  Executive shall faithfully perform
all duties of the Company related to the position or positions held by
Executive, including but not limited to all duties set forth in this Agreement
and/or in the Bylaws of the Company related to the position or positions held by
Executive and all additional duties that are reasonably prescribed from time to
time by the CFO or other designated officers or directors of the Company.
Executive shall devote Executive’s full business time and attention to the
performance of Executive’s duties and responsibilities on behalf of the Company
and in furtherance of its best interests.  Executive shall perform Executive’s
duties under this Agreement principally out of the Company’s corporate
headquarters in North Carolina.  In addition, Executive shall make such business
trips at the

 

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Company’s expense to such places as may be necessary or advisable for the
efficient operations of the Company.

 

1.4                               Company Policies.  Executive shall comply with
all Company policies, standards, rules, and regulations (a “Company Policy” or
collectively, the “Company Policies”) and all applicable government laws, rules,
and regulations that are now or hereafter in effect. Executive acknowledges
receipt of copies of all written Company Policies that are in effect as of the
date of this Agreement. Notwithstanding the foregoing, in the event that the
terms of this Agreement differ from or are in conflict with the Company’s
general employment policies or practices, this Agreement shall control.

 

2.                                      COMPENSATION.

 

2.1                               Salary.  Executive shall receive a monthly
salary of $29,333.33, which equates to $352,000.00 on an annualized basis,
payable subject to standard federal and state payroll withholding requirements
in accordance with the Company’s standard payroll practices (“Base Salary”). 
Executive’s Base Salary may be increased from time to time by the Board of
Directors of the Company (the “Board”). Notwithstanding anything to the
contrary, the Base Salary may be reduced if the Board determines such reduction
is necessary and justified by the financial condition of the Company and
implements an equal percentage reduction in the base salaries of all of the
Company’s executive officers, but in no event will such reduction be greater
than ten percent (10%) of the Base Salary. A reduction in Executive’s Base
Salary in accordance with the immediately preceding sentence shall not
constitute a material diminution in Base Salary as described in
Section 6.4(b) of this Agreement.

 

2.2                               Bonus. During the period Executive is employed
with the Company, Executive shall be eligible to earn a discretionary annual
cash bonus of up to 25% of Base Salary (“Target Amount”), subject to review and
adjustment by the Company in its sole discretion, pursuant to the terms of the
Liquidia Technologies, Inc. Annual Cash Bonus Plan, as amended by the Company
from time to time (the “Bonus Plan”), or its successor plan.  Any bonus, if
earned, will be paid to Executive within the time period set forth in the Bonus
Plan.

 

2.3                               Benefits.  Executive will be eligible to
participate on the same basis as similarly situated employees in the Company’s
benefit plans in effect from time to time during Executive’s employment.  All
matters of eligibility for coverage or benefits under any benefit plan shall be
determined in accordance with the provisions of such plan.  The Company reserves
the right to change, alter, or terminate any benefit plan in its sole
discretion.

 

2.4                               Expense Reimbursement.  The Company shall
reimburse Executive for all customary and appropriate business-related expenses
actually incurred and documented in accordance with Company Policy, as in effect
from time to time.  For the avoidance of doubt, to the extent that any
reimbursements payable to Executive are subject to the provisions of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”):
(a) any such reimbursements will be paid no later than December 31 of the year
following the year in which the expense was incurred, (b) the amount of expenses
reimbursed in one year will not affect the amount eligible for reimbursement in
any subsequent year, and (c) the right to reimbursement under this Agreement
will not be subject to liquidation or exchange for another benefit.

 

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3.                                      PROPRIETARY INFORMATION, INVENTIONS,
NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS.  The Parties have entered into
a Confidentiality, Inventions and Non-Competition Agreement (the “Confidential
Information Agreement”), which may be amended by the Parties from time to time
without regard to this Agreement.  The Confidential Information Agreement
contains provisions that are intended by the Parties to survive and do survive
termination of this Agreement.

 

3.1                               Permissible Communications.  Notwithstanding
anything to the contrary in the Confidential Information Agreement, Executive
acknowledges that nothing in the Confidential Information Agreement shall be
construed to prohibit Executive from (a) filing a charge or complaint with, or
participating in any proceeding before, a government agency authorized to
enforce and investigate suspected violations of federal anti-discrimination
laws, labor relations laws, occupational health and safety laws, wage and hour
laws, and such similar state or local laws; (b) reporting possible violations of
federal securities laws to the appropriate government enforcing agency and
making such other disclosures that are expressly protected under such laws, or
(c) responding truthfully to inquiries from, or otherwise cooperating with, any
governmental or regulatory investigation (the activities set forth in clauses
(a) through (c) are collectively referred to as the “Protected Activities”). 
Executive understands that in connection with such Protected Activity, Executive
is permitted to disclose documents or other information as permitted by law, and
without giving notice to, or receiving authorization from, the Company;
provided, however, that Executive agrees to take all reasonable precautions to
prevent any unauthorized use or disclosure of any information that may
constitute Proprietary Information under the Confidential Information Agreement
to any parties other than the appropriate government agencies. Executive further
understands that “Protected Activity” does not include the disclosure of any
Company attorney-client privileged communications, and that any such disclosure
without the Company’s written consent shall constitute a material breach of this
Agreement.

 

3.2                               Defend Trade Secrets Act.  Pursuant to the
Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not
have criminal or civil liability under any Federal or State trade secret law for
the disclosure of a trade secret that (a) is made (i) in confidence to a
Federal, State, or local government official, either directly or indirectly, or
to an attorney and (ii) solely for the purpose of reporting or investigating a
suspected violation of law; or (b) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal. In
addition, if Executive files a lawsuit for retaliation by the Company for
reporting a suspected violation of law, Executive may disclose the trade secret
to Executive’s attorney and may use the trade secret information in the court
proceeding, if Executive (x) files any document containing the trade secret
under seal and (y) does not disclose the trade secret, except pursuant to court
order.

 

4.                                      OUTSIDE ACTIVITIES DURING EMPLOYMENT. 
Except with the prior written consent of the Company, which shall not be
unreasonably withheld, Executive will not, while employed by the Company,
undertake or engage in any other employment, occupation, or business enterprise
that would interfere with Executive’s responsibilities and the performance of
Executive’s duties hereunder, except for (i) reasonable time devoted to
volunteer services for or on behalf of such religious, educational, non-profit,
and/or other charitable organization as Executive may wish to serve,
(ii) reasonable time devoted to activities in the non-profit and business
communities

 

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consistent with Executive’s duties, and (iii) such other activities as may be
specifically approved by the Company. This restriction shall not, however,
preclude Executive from owning less than one percent (1%) of the total
outstanding shares of a publicly traded company, or employment or service in any
capacity with Affiliates of the Company.  As used in this Agreement,
“Affiliates” means an entity under common management or control with the
Company.

 

5.                                      NO CONFLICT WITH EXISTING OBLIGATIONS. 
Executive represents that Executive’s performance of all the terms of this
Agreement and as an executive of the Company do not and will not breach any
agreement or obligation of any kind made prior to Executive’s employment by the
Company, including agreements or obligations Executive may have with prior
employers or entities for which Executive has provided services.  Executive has
not entered into, and Executive agrees that Executive will not enter into, any
agreement or obligation, either written or oral, in conflict herewith.

 

6.                                      TERMINATION OF EMPLOYMENT.  The Parties
acknowledge that Executive’s employment relationship with the Company is
at-will.  The provisions in this Section govern the amount of compensation, if
any, to be provided to Executive upon termination of employment and do not alter
this at-will status.

 

6.1                               Termination by the Company Without Cause.

 

(a)                                 The Company shall have the right to
terminate Executive’s employment with the Company pursuant to this Section 6.1
at any time without “Cause” (as defined in Section 6.2(b) below) by giving
notice as described in Section 7.1 of this Agreement.  A termination pursuant to
Sections 6.3 and 6.5 below is not a termination without “Cause” for purposes of
receiving the benefits described in this Section 6.1.

 

(b)                                 If the Company terminates Executive’s
employment at any time without Cause and provided that such termination
constitutes a “separation from service” (as defined under Treasury Regulation
Section 1.409A-1(h) a “Separation from Service”), then Executive shall be
entitled to receive the Accrued Obligations (defined below) and, subject to
Executive’s compliance with the obligations in Section 6.1(c) below, then
Executive shall also be entitled to receive (collectively, the “Severance
Benefits”):

 

(i)                                     an amount equal to Executive’s then
current Base Salary for six (6) months (the “Severance Period”), less all
applicable withholdings and deductions, paid in equal installments beginning on
the Company’s first regularly scheduled payroll date following the Release
Effective Date (as defined in Section 6.1(c) below), with the remaining
installments occurring on the Company’s regularly scheduled payroll dates
thereafter;

 

(ii)                                  an amount equal to the bonus (if any) that
Executive would have earned pursuant to the Bonus Plan with respect to any full
Performance Period (as defined in the Bonus Plan) through which Executive
continued to provide services, notwithstanding the employment requirement set
forth in Section 6.3 of the Bonus Plan, which shall be paid at the same time and
in the same manner that bonus awards are paid to the Company’s other
participants in the Bonus Plan; and

 

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(iii)                               payment of the employer portion of the
premiums required to continue Executive’s group health care coverage under the
applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), provided that Executive timely elects to continue coverage under
COBRA, until the earliest of (A) the close of the Severance Period, (B) the
expiration of Executive’s eligibility for the continuation coverage under COBRA,
or (C) the date when Executive becomes eligible for substantially equivalent
health insurance coverage in connection with new employment (such period from
the termination date through the earliest of (A), (B) or (C), the “COBRA Payment
Period”).  Notwithstanding the foregoing, if at any time the Company determines
in its sole discretion that the payment of the COBRA premiums would result in a
violation of the nondiscrimination rules of Section 105(h)(2) of the Code, or
any statute or regulation of similar effect (including but not limited to the
2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health
Care and Education Reconciliation Act), then in lieu of providing the COBRA
premiums, the Company will instead pay Executive on the last day of each
remaining month of the COBRA Payment Period, a fully taxable cash payment equal
to the COBRA premiums for that month, subject to applicable tax withholdings for
the remainder of the COBRA Payment Period, regardless of whether Executive
elects COBRA coverage (the “Special Severance Payment”).  Executive may, but is
not obligated to, use such Special Severance Payment toward the cost of COBRA
premiums. If Executive becomes eligible for coverage under another employer’s
group health plan or otherwise ceases to be eligible for COBRA during the COBRA
Payment Period, Executive must immediately notify the Company of such event, and
all payments and obligations under this clause will cease.

 

(c)                                  Executive will be paid all of the Accrued
Obligations on the Company’s first payroll date after Executive’s date of
termination from employment or earlier if required by law.  Executive shall
receive the Severance Benefits pursuant to Section 6.1(b) of this Agreement if:
(i) Executive signs and delivers to the Company an effective, general release of
claims in favor of the Company and its affiliates and representatives, in a form
acceptable to the Company (the “Release”), by the 60th day following the
termination date or such earlier date as set forth in the Release, which cannot
be revoked in whole or part (if applicable) by such date or such earlier date as
set forth in the Release (the date that the Release can no longer be revoked is
referred to as the “Release Effective Date”); (ii) if Executive holds any other
positions with the Company, Executive resigns such position(s) to be effective
no later than the date of Executive’s termination date (or such other date as
requested by the Board);  (iii) Executive returns all Company property in proper
order and condition, reasonable wear and tear excepted, (including, but not
limited to, all books, documents, papers, materials and any other property or
assets relating to the business or affairs of the Company which may be in
Executive’s possession or under his control but excluding copies of records
related to Executive’s compensation from the Company and any equity ownership in
the Company); (iv) Executive complies with all post-termination obligations
under this Agreement and the Confidential Information Agreement; and
(v) Executive complies with the terms of the Release, including without
limitation any non-disparagement and confidentiality provisions contained in the
Release.  To the extent that any Severance Benefits are deferred compensation
under Section 409A of the Code, and are not otherwise exempt from the
application of Section 409A, then, if the period during which Executive may
consider and sign the Release spans two calendar years, the payment of Severance
Benefits will not be made or begin until the later calendar year.

 

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(d)                                 For purposes of this Agreement, “Accrued
Obligations” are (i) Executive’s accrued but unpaid salary through the date of
termination, (ii) any unreimbursed business expenses incurred by Executive
payable in accordance with the Company’s standard expense reimbursement
policies, and (iii) benefits owed to Executive under any qualified retirement
plan or health and welfare benefit plan in which Executive was a participant in
accordance with applicable law and the provisions of such plan.

 

(e)                                  The Severance Benefits provided to
Executive pursuant to this Section 6.1 is in lieu of, and not in addition to,
any benefits to which Executive may otherwise be entitled under any Company
severance plan, policy or program.

 

(f)                                   Any damages caused by the termination of
Executive’s employment without Cause would be difficult to ascertain; therefore,
the Severance Benefits for which Executive is eligible pursuant to
Section 6.1(b) above in exchange for the Release is agreed to by the Parties as
liquidated damages, to serve as full compensation, and not a penalty.

 

6.2                               Termination by the Company for Cause.

 

(a)                                 Subject to Section 6.2(c) below, the Company
shall have the right to terminate Executive’s employment with the Company at any
time for Cause by giving notice as described in Section 7.1 of this Agreement.

 

(b)                                 “Cause” for termination shall mean that the
Company has determined in its sole discretion that Executive has engaged in any
of the following: (i) any material breach of the terms of this Agreement by
Executive, or the willful failure of Executive to diligently and properly
perform Executive’s material duties for the Company; (ii) Executive’s
misappropriation or unauthorized use of the Company’s tangible or intangible
property that causes or is likely to cause material harm to the Company or its
reputation, or material breach of the Confidential Information Agreement or any
other similar agreement regarding confidentiality, intellectual property rights,
non-competition or non-solicitation; (iii) any material failure to comply with
the Company Policies or any other policies and/or directives of the Board;
(iv) Executive’s use of illegal drugs or any illegal substance, or Executive’s
use of alcohol in any manner that materially interferes with the performance of
Executive’s duties under this Agreement; (v) any (A) dishonest or illegal action
(including, without limitation, embezzlement) by Executive, or (B) other action,
whether or not dishonest or illegal, by Executive, in either case which is
materially detrimental to the interest and well-being of the Company, including,
without limitation, harm to its reputation; (vi) Executive’s failure to fully
disclose any material conflict of interest Executive may have with the Company
in a transaction between the Company and any third party which is materially
detrimental to the interest and well-being of the Company; (vii) any adverse
action or omission by Executive which would be required to be disclosed pursuant
to public securities laws or which would limit the ability of the Company or any
entity affiliated with the Company to sell securities under any Federal or state
law or which would disqualify the Company or any affiliated entity from any
exemption otherwise available to it; or (viii) become prohibited by law or any
order from any regulatory body or governmental body from being an employee or
director of any company, firm or entity; provided, however, that prior to any
termination of Executive for “Cause,” if the grounds for such Cause are
reasonably capable of cure by Executive, the

 

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Company shall provide Executive with written notice of the grounds for Cause and
provide Executive with ten (10) business days in which to cure such Cause.

 

(c)                                  In the event Executive’s employment is
terminated at any time for Cause, Executive will not receive Severance Benefits
or any other severance compensation or benefits, except that, pursuant to the
Company’s standard payroll policies, the Company shall pay to Executive the
Accrued Obligations.

 

6.3                               Resignation by Executive.

 

(a)                                 Executive may resign from Executive’s
employment with the Company at any time by giving notice as described in
Section 7.1.

 

(b)                                 In the event Executive resigns from
Executive’s employment with the Company for any reason (other than a resignation
for Good Reason as described in Section 6.4 below), Executive will not receive
Severance Benefits or any other severance compensation or benefits, except that,
pursuant to the Company’s standard payroll policies, the Company shall pay to
Executive the Accrued Obligations.

 

6.4                               Resignation by Executive for Good Reason.

 

(a)                                 Provided Executive has not previously been
notified of the Company’s intention to terminate Executive’s employment,
Executive may resign from employment with the Company for Good Reason (as
defined in Section 6.4(b) below).

 

(b)                                 “Good Reason” for resignation shall mean the
occurrence of any of the following without Executive’s prior consent:  (i) a
material diminution in Executive’s authority, duties or responsibilities; (ii) a
material diminution in Executive’s Base Salary; (iii) a requirement that
Executive report to an employee other than the CFO; (iv) Executive’s principal
place of employment is relocated by more than fifty (50) miles from the
Company’s present location in Research Triangle Park, North Carolina; or (v) the
Company materially breaches its obligations under this Agreement.  In addition
to any requirements set forth above, in order for any of the above events to
constitute “Good Reason,” Executive must (X) inform the Company of the existence
of the event within sixty (60) days of the initial existence of the event, after
which date the Company shall have no less than thirty (30) days to cure the
event which otherwise would constitute “Good Reason” hereunder and (Y) Executive
must terminate his employment with the Company for such “Good Reason” no later
than ninety (90) days after the initial existence of the event which prompted
Executive’s termination. Any actions taken by the Company to accommodate a
disability of Executive or pursuant to the Family and Medical Leave Act shall
not be a Good Reason for purposes of this Agreement.

 

(c)                                  In the event Executive resigns from
Executive’s employment for Good Reason, and provided that such termination
constitutes a Separation from Service, then subject to Executive’s compliance
with the obligations in Section 6.1(c) above, Executive shall be eligible to
receive the same Severance Benefits as described in Section 6.1 and on the same
terms and conditions set forth in Section 6.1(c) and Section 6.1(e) as if
Executive had been terminated by the Company without Cause.

 

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(d)                                 Any damages caused by the termination of
Executive’s employment for Good Reason would be difficult to ascertain;
therefore, the Severance Benefits for which Executive is eligible pursuant to
Section 6.1(b) above in exchange for the Release is agreed to by the Parties as
liquidated damages, to serve as full compensation, and not a penalty.

 

6.5                               Termination by Virtue of Death or Disability
of Executive.

 

(a)                                 In the event of Executive’s death while
employed pursuant to this Agreement, all obligations of the Parties hereunder
shall terminate immediately, and the Company shall, pursuant to the Company’s
standard payroll policies, pay to Executive’s legal representatives all Accrued
Obligations.

 

(b)                                 Subject to applicable state and federal law,
the Company shall at all times have the right, upon written notice to Executive,
to terminate this Agreement based on Executive’s Disability.  Termination by the
Company of Executive’s employment based on “Disability” shall mean termination
because a qualified medical doctor mutually acceptable to the Company and
Executive or Executive’s personal representative has certified in writing that:
(A) Executive is unable, because of a medically determinable physical or mental
disability, to perform the essential functions of Executive’s job, with or
without a reasonable accommodation, for more than one hundred and eighty (180)
calendar days measured from the last full day of work; or (B) by reason of
mental or physical disability, it is unlikely that Executive will be able,
within one hundred and eighty (180) calendar days, to resume the essential
functions of Executive’s job, with or without a reasonable accommodation, and to
otherwise discharge Executive’s duties under this Agreement.  This definition
shall be interpreted and applied consistent with the Americans with Disabilities
Act, the Family and Medical Leave Act, and other applicable law. In the event
Executive’s employment is terminated based on Executive’s Disability, Executive
will not receive Severance Benefits or any other severance compensation or
benefit, except that, pursuant to the Company’s standard payroll policies, the
Company shall pay to Executive the Accrued Obligations.

 

6.6                               Change in Control Benefits.  In the event the
Company (or any surviving or acquiring corporation) terminates Executive’s
employment without Cause or Executive resigns for Good Reason within twelve (12)
months following the effective date of a Change in Control (as defined under the
Liquidia Technologies, Inc. 2016 Equity Incentive Plan, as may be amended from
time to time by the Company (the “Plan”)), then Executive shall be entitled to
the Accrued Obligations and, provided that Executive complies with the
obligations in Section 6.1(c) of this Agreement (including the requirement to
provide an effective Release), Executive shall be eligible to receive the same
Severance Benefits as described in Section 6.1(b) and on the same conditions as
if Executive had been terminated by the Company without Cause; provided,
however, that (a) the Severance Period shall be increased to nine (9) months;
(b) Executive shall receive a bonus equal to one-twelfth of the Target Amount
multiplied by nine (9); and (c) in the event that Executive’s outstanding equity
as of the closing of the Change in Control is assumed or continued (in
accordance with its terms) by the surviving entity in a Change in Control, then
100% of the unvested portion of such equity shall become vested.

 

6.7                               Cooperation With Company After Termination of
Employment.  Following termination of Executive’s employment for any reason and
for a period of one (1) year thereafter,

 

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Executive agrees to cooperate (a) with the Company in (i) the defense of any
legal matter involving any matter that arose during Executive’s employment with
the Company, and (ii) all matters relating to the winding up of Executive’s
pending work and the orderly transfer of any such pending work to such other
employees as may be designated by the Company; and (b) with all government
authorities on matters pertaining to any investigation, litigation or
administrative proceeding pertaining to the Company.  The Company will reimburse
Executive for any reasonable travel and out of pocket expenses incurred by
Executive in providing such cooperation.  The Company will also pay Executive a
per diem amount equal to Executive’s Base Salary as of the date of termination
divided by two hundred and thirty (230) for each day or partial day that
Executive devotes to fulfilling his obligation to cooperate under this
Section 6.7, unless Executive is then receiving continued payment of his Base
Salary under 6.1(b)(i), above.   Following termination of Executive’s employment
for any reason, and in the event of a failure by Executive (following reasonable
efforts by the Company to secure his voluntary cooperation) to resign from any
position as officer or director of the Company, with such resignation to be
effective no later than the date of Executive’s termination date (or such other
date as requested by the Board), the Company is hereby irrevocably authorized to
appoint its then-current Chief Executive Officer  to act in Executive’s name and
on his behalf to execute any documents and to do all things reasonably necessary
to effect such resignation.  Further, Executive shall not, at any time after
termination of Executive’s employment for any reason, represent himself as being
an agent or representative of the Company, unless expressly authorized in a
written agreement executed by an authorized officer of the Company.

 

6.8                               Application of Section 409A.

 

(a)                                 It is intended that all of the severance
payments payable under this Agreement satisfy, to the greatest extent possible,
the exemptions from the application of Section 409A of the Code and the
regulations and other guidance thereunder and any state law of similar effect
(collectively, “Section 409A”) provided under Treasury Regulations Sections
1.409A-1(b)(4) and 1.409A-1(b)(9), and this Agreement will be construed in a
manner that complies with Section 409A.  If not so exempt, this Agreement (and
any definitions hereunder) will be construed in a manner that complies with
Section 409A, and incorporates by reference all required definitions and payment
terms.

 

(b)                                 The preceding provisions shall not be
construed as a guarantee by the Company of any particular tax effect to
Executive under this Agreement. The Company shall not be liable to Executive for
any payment made under this Agreement which is determined to result in an
additional tax, penalty or interest under Section 409A, nor for reporting in
good faith any payment as an amount includible in gross income under
Section 409A.

 

(c)                                  No severance payments will be made under
this Agreement unless Executive’s termination of employment constitutes a
“separation from service” (as defined under Treasury Regulation
Section 1.409A-1(h)).

 

(d)                                 For purposes of Section 409A (including,
without limitation, for purposes of Treasury Regulations
Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment
payments under this Agreement (whether severance payments or otherwise) shall be

 

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treated as a right to receive a series of separate payments and, accordingly,
each installment payment hereunder shall at all times be considered a separate
and distinct payment.

 

(e)                                  If the Company determines that the
severance benefits provided under this Agreement constitutes “deferred
compensation” under Section 409A and if Executive is a “specified employee” of
the Company, as such term is defined in Section 409A(a)(2)(B)(i) of the Code at
the time of Executive’s Separation from Service, then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax consequences under
Section 409A, the timing of the Severance Benefits will be delayed as follows:
on the earlier to occur of (i) the date that is six months and one day after
Executive’s Separation from Service, and (ii) the date of Executive’s death
(such earlier date, the “Delayed Initial Payment Date”), the Company will
(1) pay to Executive a lump sum amount equal to the sum of the Severance
Benefits that Executive would otherwise have received through the Delayed
Initial Payment Date if the commencement of the payment of the Severance
Benefits had not been delayed pursuant to this Section 6.8, and (2) commence
paying the balance of the Severance Benefits in accordance with the applicable
payment schedule set forth in Section 6.1. No interest shall be due on any
amounts deferred pursuant to this Section 6.8.

 

6.9                               Parachute Payments.

 

(a)                                 Notwithstanding any other provisions of this
Agreement to the contrary, in the event that it shall be determined that any
payment or distribution to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (a “Payment”) would be nondeductible by the Company for Federal
income tax purposes because of Section 280G of the Code, the Company shall
reduce the aggregate present value of the Payments under this Agreement to the
Reduced Amount (as defined below) if, and only if, reducing the Payments under
this Agreement will provide Executive with a greater net after-tax amount than
would be the case if no such reduction was made, taking into account the
applicable federal, state, local and foreign income, employment and other taxes,
including the excise tax imposed by Section 4999 of the Code.  If a reduction in
the Payments is necessary, such reduction shall occur in the following order:
(1) reduction of cash payments; (2) cancellation of accelerated vesting of
equity awards other than stock options; (3) cancellation of accelerated vesting
of stock options; and (4) reduction of other benefits paid to Executive. Within
any such category of payments and benefits (that is, clauses (1), (2), (3) or
(4) of this Section 6.9(a)), a reduction shall occur first with respect to
amounts that are not “deferred compensation” within the meaning of Section 409A
of the Code and then with respect to amounts that are.  The “Reduced Amount”
shall be an amount expressed in present value that maximizes the aggregate
present value of Payments under this Agreement without causing any Payment to be
nondeductible by the Company because of Section 280G of the Code.

 

(b)                                 All determinations to be made under this
Section 6.9 shall be made at the Company’s expense by a firm of certified public
accountants of national standing selected by the Company (the “Accounting Firm”)
which may be the firm regularly auditing the financial statements of the
Company.  The Company and Executive shall furnish to the Accounting Firm such
information and documents as the Accounting Firm may reasonably require in order
to make a determination under this Section.  To the extent requested by
Executive, the Company shall cooperate with Executive in good faith in valuing,
and the Accounting Firm shall value,

 

10

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services to be provided by Executive (including refraining from performing
services pursuant to a covenant not to compete) before, on or after the date of
the transaction which cause the application of Section 280G of the Code such
that payments in respect of such services may be considered to be “reasonable
compensation” within the meaning of the regulations under Section 280G of the
Code.  In making its determinations hereunder, the Accounting Firm shall apply
reasonable, good faith interpretations regarding the applicability of
Section 280G and Section 4999, along with any other applicable portions of the
Code or other tax laws.  The Accounting Firm shall make all determinations
required to be made under this Section and shall provide detailed supporting
calculations to the Company and Executive within 30 days after the Termination
Date or such earlier time as is requested by the Company, and provide an opinion
to Executive that he or she has substantial authority not to report any excise
tax on his or her Federal income tax return with respect to any Payments.  Any
such determination by the Accounting Firm shall be binding upon the Company and
Executive.  Subject to Sections 6.1(c) and 6.9, within five business days
thereafter, the Company shall pay to or distribute to or for the benefit of
Executive such amounts as are then due to Executive under this Agreement.

 

(c)                                  As a result of the uncertainty in the
application of Section 280G of the Code at the time of the initial determination
by the Accounting Firm or the Company hereunder, it is possible that Payments,
as the case may be, will have been made by the Company which should not have
been made (“Overpayment”) or that additional Payments, as the case may be, which
will not have been made by the Company could have been made (“Underpayment”), in
each case, consistent with the calculations required to be made hereunder. In
the event that the Accounting Firm, based upon the assertion of a deficiency by
the Internal Revenue Service against Executive which the Accounting Firm
believes has a high probability of success determines that an Overpayment has
been made, promptly on notice and demand Executive shall repay to the Company
any such Overpayment paid or distributed by the Company to or for the benefit of
Executive together with interest at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of the Code; provided, however, that no such amount shall
be payable by Executive to the Company if and to the extent such payment would
not either reduce the amount on which Executive is subject to tax under
Section 1 and Section 4999 of the Code or generate a refund of such taxes. In
the event that the Accounting Firm, based upon controlling precedent or other
substantial authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive together with interest at the applicable federal rate provided for in
Section 7872(f)(2)(A) of the Code.

 

7.                                      GENERAL PROVISIONS.

 

7.1                               Notices.  Any notices required hereunder to be
in writing shall be deemed effectively given: (a) upon personal delivery to the
Party to be notified, (b) when sent by electronic mail or confirmed facsimile if
sent during normal business hours of the recipient, and if not, then on the next
business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.  All communications shall be
sent to the Company at its primary office location and to Executive at
Executive’s address as listed on the Company payroll, or at such other address
as the Company or Executive may designate by ten (10) days advance written
notice to the other.

 

11

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7.2                               Severability.  Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provisions had never been contained
herein.

 

7.3                               Survival.  Provisions of this Agreement which
by their terms must survive the termination of this Agreement in order to
effectuate the intent of the Parties will survive any such termination, whether
by expiration of the term, termination of Executive’s employment, or otherwise,
for such period as may be appropriate under the circumstances.

 

7.4                               Waiver.  If either Party should waive any
breach of any provisions of this Agreement, it shall not thereby be deemed to
have waived any preceding or succeeding breach of the same or any other
provision of this Agreement.

 

7.5                               Complete Agreement.  This Agreement
constitutes the entire agreement between Executive and the Company with regard
to the subject matter hereof.  This Agreement is the complete, final, and
exclusive embodiment of their agreement with regard to this subject matter and
supersedes any prior oral discussions or written communications and agreements,
including the Prior Agreement.  This Agreement is entered into without reliance
on any promise or representation other than those expressly contained herein,
and it cannot be modified or amended except in writing signed by Executive and
an authorized officer of the Company, subject to the approval of the Board, its
compensation committee or (if necessary) the stockholders of the Company.  The
Parties have entered into a separate Confidential Information Agreement and have
entered or may enter into separate agreements related to equity.  These separate
agreements govern other aspects of the relationship between the Parties, have or
may have provisions that survive termination of Executive’s employment under
this Agreement, may be amended or superseded by the Parties without regard to
this Agreement and are enforceable according to their terms without regard to
the enforcement provision of this Agreement.

 

7.6                               Headings.  The headings of the sections hereof
are inserted for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.

 

7.7                               Successors and Assigns.  The Company shall
assign this Agreement and its rights and obligations hereunder in whole, but not
in part, to any company or other entity with or into which the Company may
hereafter merge or consolidate or to which the Company may transfer all or
substantially all of its assets, if in any such case said Company or other
entity shall by operation of law or expressly in writing assume all obligations
of the Company hereunder as fully as if it had been originally made a Party, but
may not otherwise assign this Agreement or its rights and obligations
hereunder.  Executive may not assign or transfer this Agreement or any rights or
obligations hereunder, other than to Executive’s estate upon death.

 

7.8                               Withholding.  All amounts payable hereunder
shall be subject to applicable tax withholding.

 

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7.9                               Choice of Law.  This Agreement in all respects
shall be governed by and interpreted in accordance with the laws of the State of
North Carolina, both procedural and substantive, without regard to conflicts of
law, except to the extent that federal laws and regulations preempt otherwise
applicable law.

 

7.10                        Mandatory Mediation.   Prior to and as a condition
of either Party’s filing suit in state or federal court, the Parties shall
engage in a mediated settlement conference in accordance with the North Carolina
Superior Court Rules Implementing Statewide Mediation.  The Parties shall
mediate in good faith until settlement is reached or an impasse is declared by
the mediator.

 

7.11                        Jurisdiction.  Each Party hereby irrevocably submits
to the exclusive jurisdiction of the United States District Court located in
Wake County, North Carolina, or any state court located within such state, in
respect of any claim relating to this Agreement or Executive’s employment with
the Company, and hereby waives, and agrees not to assert, as a defense in any
action, suit or proceeding in which any such claim is made that said Party is
not subject thereto or that such action, suit or proceeding may not be brought
or is not maintainable in such courts or that the venue thereof may not be
appropriate or that this Agreement may not be enforced in or by such courts. 
Any appellate proceedings shall take place in the appropriate courts having
appellate jurisdiction over the courts set forth in this Section.

 

7.12                        Counterparts.  This Agreement may be executed in
separate counterparts, any one of which need not contain signatures of more than
one Party, but all of which taken together will constitute one and the same
Agreement.  Facsimile signatures and signatures transmitted by PDF shall be
equivalent to original signatures.

 

[SIGNATURES TO FOLLOW ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first written above.

 

 

LIQUIDIA TECHNOLOGIES, INC.

 

 

 

By:

/s/ Neal Fowler

 

 

Name: Neal Fowler

 

 

Title: Chief Executive Officer

 

 

 

Executive:

 

 

 

/s/ Tim Albury

 

Tim Albury

 

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Exhibit A

 

CONFIDENTIALITY, INVENTIONS AND NON-COMPETITION AGREEMENT

 

A-1

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[g2738418ks05i001.jpg]

 

CONFIDENTIALITY, INVENTIONS AND NON-COMPETITION AGREEMENT

 

THIS CONFIDENTIALITY, INVENTIONS AND NON-COMPETITION AGREEMENT (this
“Agreement”) is effective as of DATE (the “Effective Date”) by and between NAME
(hereinafter “Employee”) and Liquidia Technologies, Inc. (the “Company”).

 

STATEMENT OF PURPOSE

 

The Employee desires to be employed by the Company, and the Company is willing
to employ Employee strictly subject to Employee’s agreement to be bound by the
terms of this Agreement.

 

IN CONSIDERATION of the Company’s employment of the Employee and the
compensation and other benefits that the Company may provide to Employee as an
employee, the Employee, intending to be legally bound, agrees to the following:

 

1.                                      For purposes of this Agreement,
“Proprietary Information” is information (whether in written or other form or
whether or not patentable or protectable by copyright, trade secret, trade
dress, trademark, or the like) that: (i) has been created, invented, discovered,
or developed by the Employee in connection with the Employee’s employment by the
Company; (ii) is non-public and has been disclosed, furnished, or communicated
to the Employee in connection with the Employee’s employment by the Company; or
(iii) is non-public and the unauthorized disclosure of which could be
detrimental to the interests of the Company.  Proprietary Information includes,
but is not limited to, all inventions, works of authorship, trade secrets, know
how, proprietary or confidential information, including, but not limited to,
research, product or business plans, products, services, projects, proposals,
processes, formulas, ideas, data, compositions, technology, computer programs
and related source code and object code, developments, designs, drawings,
marketing information and plans, customer lists, budgets, projections, partners,
cost analyses, acquisition candidates, relevant parts of analysis, reviews,
compilations, studies or other records and documents, and other information
owned by the Company, disclosed to the Employee, or to which the Employee has
been provided access or gains access, either directly or indirectly, by any
means.  Proprietary Information does not include information that is or becomes
generally available to the public other than as a result of a disclosure by the
Employee or by any other person or entity that is under a confidentiality
obligation to Company with respect to such information.

 

2.                                      Nondisclosure of Proprietary
Information.

 

2.1                   The Employee acknowledges and agrees that Proprietary
Information is the sole property of the Company or its designee and that the
Employee shall have no right,

 

A-2

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title, license, or interest in or to any Proprietary Information.  During and
after the Employee’s employment by the Company, the Employee shall keep in the
strictest confidence and trust all Proprietary Information and shall not
directly or indirectly disclose, distribute, copy, supply, or use, in whole or
in part, any Proprietary Information except as approved in advance in writing by
the Company.  Notwithstanding the foregoing, it is understood that, at all such
times, the Employee is free (i) to use information which was known to the
Employee prior to employment with the Company or which is generally known in the
trade or industry through no breach of this Agreement or other act or omission
by the Employee, (ii) to discuss the terms of the Employee’s employment, wages
and working conditions to the extent expressly protected by applicable law,
(iii) to report possible violations of federal securities laws to the
appropriate government enforcing agency and make such other disclosures that are
expressly protected under such laws, (iv) to respond to inquiries from, or
otherwise cooperate with, any governmental or regulatory investigation, or
(v) to testify truthfully as compelled by lawful process or subpoena related to
such testimony after the Employee has provided advance written notice of said
subpoena to the Company’s Chief Executive Officer and reasonably cooperates with
the Company in any process to oppose said subpoena.

 

2.2                               The Employee shall not use or disclose to the
Company, or assist in the disclosure to the Company of, proprietary or
confidential information belonging to any third parties, including any prior
employer(s).

 

2.3                               The Employee acknowledges and agrees that the
Company has received and in the future may receive from third parties,
including, but not limited to, potential collaborating partners or customers of
the Company, confidential or proprietary information (“Third Party Information”)
subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes.  During the term of
the Employee’s employment with the Company and thereafter, the Employee will
hold Third Party Information in the strictest confidence and will not disclose
to anyone (other than Company personnel or the Company’s designee who need to
know such information in connection with their work for the Company or such
third party) or use Third Party Information, except in connection with the
Employee’s work for the Company or such third party, unless expressly approved
in advance in writing by the Company.  The Employee further agrees to be bound
by and subject to any confidentiality or nondisclosure agreements or clauses
with respect to such Third Party Information between the Company and any such
third party.

 

2.4                               Pursuant to the Defend Trade Secrets Act of
2016, the Employee acknowledges that the Employee will not have criminal or
civil liability under any federal or state trade secret law for the disclosure
of a trade secret that (i) is made (a) in confidence to a federal, state, or
local government official, either directly or indirectly, or to an attorney and
(b) solely for the purpose of reporting or investigating a suspected violation
of law; or (ii) is made in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal. In addition, if the
Employee files a lawsuit for retaliation by the Company for reporting a
suspected violation of law, the Employee may

 

A-3

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disclose the trade secret to the Employee’s attorney and may use the trade
secret information in the court proceeding, if the Employee (x) files any
document containing the trade secret under seal and (y) does not disclose the
trade secret, except pursuant to court order.

 

3.                                      Upon the earliest to occur of
(i) termination of the Employee’s employment by the Company for any reason,
(ii) termination of the Employee’s access to Proprietary Information, or
(iii) the request of the Company, the Employee shall return to the Company (and
will not keep in Employee’s possession or control or deliver to anyone else) all
materials belonging to the Company, whether kept at the Employee’s business
office, personal residence or otherwise, including, but not limited to, all
materials containing or relating to any Proprietary Information in any written,
tangible, electronic or other form that the Employee may have in Employee’s
possession or control, and any and all mobile telephones, personal digital
assistants, pagers, computer and other electronic devices and credit cards. 
After returning the materials and equipment described in the preceding sentence
to the Company, the Employee shall not retain any copies of any such materials.

 

4.                                      Ownership of Proprietary Information.

 

4.1                               All Proprietary Information and other
information, which by its nature is proprietary to the Company, relating to the
Company’s business or the Company’s anticipated business, or based on, derived
from or relating to any Proprietary Information (collectively, Proprietary
Information and “Work Product”) shall be the sole property of the Company.  The
Employee agrees that all Proprietary Information and Work Product created,
conceived, reduced to practice, made or otherwise developed by the Employee,
solely or jointly, during and in any way related to the Employee’s employment,
shall be the exclusive property of the Company and/or its designees or
assignees, and shall be deemed “works made for hire,” as that term is defined in
Section 101 of the U.S. Copyright Act of 1976, as amended.

 

4.2                               If, for any reason, any Proprietary
Information and Work Product does not qualify as works made for hire, the
Employee shall assign and does hereby irrevocably, unconditionally, and without
encumbrance of any kind assign to the Company, and forever waives and agrees
never to assert, all right, title, and interest, including without limitation,
all patent, trademark, copyright, trade secret, and other intellectual property
(collectively, “Intellectual Property”) rights, in and to such Proprietary
Information and Work Product.  The Employee shall assist the Company, or its
designee, in every proper way to secure the Company’s rights in the Proprietary
Information and Work Product and any Intellectual Property rights relating
thereto in any and all countries, including (i) the disclosure to the Company of
all pertinent information and data with respect thereto, (ii) the execution of
all applications, specifications, oaths, assignments and all other instruments
which the Company shall deem necessary in order to apply for and obtain such
rights and in order to assign and convey to the Company or its designee the sole
and exclusive right, title and interest in and to the Proprietary Information
and Work Product, and (iii) the defense of any claim, demand, action,
litigation, suit, or other proceeding,

 

A-4

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including, but not limited to, interference, cancellation, opposition, or other
proceedings in respect of such applications or any registrations or patents
issuing therefrom.  The Employee shall continue such assistance after the
termination of the Employee’s employment by the Company.

 

4.3                               During the Employee’s employment by the
Company, the Employee shall report promptly to the Company all Proprietary
Information and Work Product created, conceived, reduced to practice, or
otherwise developed by the Employee, solely or jointly.

 

4.4                               If the Company is unable because of the
Employee’s mental or physical incapacity or for any other reason to secure the
Employee’s signature to apply for or to secure protection of any Proprietary
Information and Work Product, then the Employee hereby designates and appoints
the Company and its duly authorized officers and agents as its agents and
attorneys-in-fact to execute and file any certificates, applications or
documents and to do all of their lawful acts necessary to perfect and protect
the Company’s rights in the Proprietary Information and Work Product.  The
Employee expressly acknowledges that the foregoing power of attorney is coupled
with an interest and is therefore irrevocable and shall survive the Employee’s
death or incompetency and the termination of the Employee’s employment or
engagement by the Company.

 

4.5                               The Employee hereby represents and warrants
that the Employee has fully disclosed to the Company on Schedule A attached
hereto any idea, invention, discovery or process relating to the Company’s
business which, prior to the Employee’s employment with the Company, the
Employee conceived, reduced to practice, or developed, individually or jointly,
and is to be excluded from the scope of this Agreement.

 

4.6                               Notwithstanding anything in this Agreement to
the contrary, the obligation of the Employee to assign or offer to assign the
Employee’s rights in an invention to the Company shall not extend or apply to an
invention that the undersigned developed (i) entirely on the Employee’s own
time; (ii) without using Company equipment, supplies, facilities, or other
resources, Proprietary Information or trade secret information unless such
invention (a) relates to the Company’s business or actual or demonstrably
anticipated research or development, or (b) results from any work performed by
the Employee for the Company.  The Employee shall bear the burden of proof in
establishing that the Employee’s invention qualifies for exclusion under this
Section 4.6.

 

5.                                      Covenant Not To Compete.

 

5.1                               For purposes of Part 5 of this Agreement,
including each of its subparts, the following terms shall have the following
meanings:

 

a.                                      “Competing Business” shall mean any
corporation, partnership, person, or other entity that is researching,
developing, manufacturing, marketing, distributing, or selling any product,
service, or technology that is competitive with any part of the Company’s
Business.

 

A-5

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b.                                      The “Company’s Business” shall mean the
development, manufacture, marketing, distribution, or sale of, including
research directed to, any product, service, or technology that the Company is
developing, manufacturing, marketing, distributing, or selling or to which the
Company directed research at any time during Employee’s employment with the
Company.  As of the date of this Agreement, the Company’s Business includes, but
is not limited to, research directed to and the development, manufacture,
marketing, distribution, and/or sale of: (i) isolated size and/or shape
controlled pharmaceutical or therapeutic particles fabricated from a mold,
including products of or containing the isolated size and/or shape controlled
pharmaceutical or therapeutic particles fabricated from a mold; (ii) size and/or
shape controllable pharmaceutical or therapeutic particles molded using a
polymer or low surface energy mold; (iii) film based products of or containing
arrays of size and/or shape controlled structures molded from a low surface
energy mold; (iv) isolated nano or micro size and/or shape controlled particles
fabricated from a mold, including products of or containing the isolated size
and/or shape controlled particles fabricated from a mold; (v) nano or micro size
and/or shape controllable particles molded using a polymer or low surface energy
mold; or (vi) patterned drum fabrication and mold for manufacturing the products
of (i)-(v) above.  The Employee understands that during the Employee’s
employment with the Company, the Company’s Business may expand or change, and
the Employee agrees that any such expansions or changes shall expand or contract
the definition of the Company’s Business and the Employee’s obligations under
this Agreement accordingly.

 

c.                                       “Territory” shall mean the following
severable geographic areas:  (i) the world, (ii) any country in which the
Company or a Competing Business is engaged in business, (iii) any country in
which the Company is engaged in business, (iv) the United States, Europe, and
Asia, (v) the United States, (vi) any state, including the District of Columbia,
in which the Company or a Competing Business is engaged in business, (vii) any
state, including the District of Columbia, in which the Company is engaged in
business, (viii) North Carolina, (ix) a one hundred mile radius of the
Employee’s principal place of employment or work for the Company, or (x) a one
hundred mile radius of the Company’s corporate headquarters.

 

5.2                               It is recognized and understood by the
Employee that, through the Employee’s association with the Company, the Employee
shall: (i) have access to trade secrets and confidential information of the
Company, including, but not limited to, valuable information about its
intellectual property, business operations and methods, and the persons with
which it does business in various locations throughout the world, that is not
generally known to or readily ascertainable by the Company’s competitors,
(ii) develop relationships with the Company’s customers and others with which
the Company does business, and these relationships are among the Company’s most
important assets, (iii) receive specialized knowledge of and specialized
training in the Company’s Business, and (iv) gain such knowledge of the
Company’s Business that, during the course of the Employee’s employment with the
Company and for a period of one year following the termination thereof, the
Employee could not perform services for a Competing Business

 

A-6

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without inevitably disclosing the Company’s trade secrets and Proprietary
Information to that Competing Business.

 

5.3                               While employed by the Company, the Employee
will not, without the express written consent of an authorized representative of
the Company:  (i) perform services (as an employee, independent contractor,
officer, director, or otherwise) for any Competing Business, (ii) engage in any
activities (or assist others to engage in any activities) that compete with the
Company’s Business, (iii) own or beneficially own an equity interest in a
Competing Business, (iv) request, induce, or solicit (or assist others to
request, induce, or solicit) any existing or prospective customers, suppliers,
business partners, or contractors of the Company to curtail or cancel their
business with the Company or to do business within the scope of the Company’s
Business with a Competing Business, or (v) request, induce, or solicit (or
assist others to request, induce, or solicit) any employee of the Company to
terminate his or her employment with the Company.

 

5.4                               For a period of one year following the
termination of the Employee’s employment with the Company, the Employee will
not, without the express written consent of an authorized representative of the
Company:  (i) perform services (as an employee, independent contractor, officer,
director, or otherwise), within the Territory for any Competing Business, that
are the same or substantially similar to any services that the Employee
performed for the Company or that otherwise utilize skills, knowledge, and/or
business contacts and/or relationships that the Employee developed while
providing services to the Company, (ii) engage in any activities (or assist
others to engage in any activities) within the Territory that compete with the
Company’s Business, (iii) own or beneficially own an equity interest in a
Competing Business, (iv) request, induce, or solicit (or assist others to
request, induce, or solicit) any existing customer or any prospective customers
to whom the Company has made a written proposal (“Prospective Customers”),
suppliers, business partners, or contractors of the Company, during the last
year of the Employee’s employment with the Company, to curtail or cancel their
business with the Company or to do business within the scope of the Company’s
Business with a Competing Business, (v) request, induce, or solicit (or assist
others to request, induce, or solicit) any existing customer or Prospective
Customers, suppliers, business partners, or contractors of the Company with
which the Employee worked or had business contact during the last year of the
Employee’s employment with the Company to curtail or cancel their business with
the Company or to do business within the scope of the Company’s Business with a
Competing Business, or (vi) request, induce, or solicit (or assist others to
request, induce, or solicit) any employee of the Company to terminate his or her
employment with the Company.  Where a Competing Business is a large enterprise
with separately operated business units, the restrictions in
Section 5.4(i) shall not apply to any such business unit that has no involvement
in the research, development, manufacture, marketing, distribution, or sale of a
product, service, or technology that is competitive with any part of the
Company’s Business; provided, however, that this sentence does not apply to any
employees in a scientific role or whose role involves the research, development
or maintenance of the Company’s trade secrets.  These obligations will continue
for the specified period regardless of whether the termination of the Employee’s

 

A-7

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employment was voluntary or involuntary or with or without cause, and the
specified period shall be tolled and shall not run during any time in which the
Employee fails to abide by this obligations.

 

5.5                               The Employee shall not at any time following
the termination of the Employee’s employment with the Company use the name or
trading style of the Company in any country, or use in any country any name or
trading style which is the same as or similar to any of the trade or service
marks of the Company or any brand name or proposed brand name of any of the
Company’s products or proposed products, or represent himself or herself as
carrying on or continuing or being connected with the Company or its business
for any purpose whatsoever unless otherwise agreed by the Company in writing.

 

5.6                               While employed by the Company, the Employee
shall disclose to the audit committee of the Company the Employee’s interest in
respect of any contract or arrangement in which the Employee has any personal
material interest, directly or indirectly, or any conflicts of interest
(including the conflict of interest that may arise from the Employee’s
directorship(s) or executive position or personal investments in any
corporation(s)) that may involve the Employee. Upon such disclosure, the
Employee shall abstain from voting in respect of any such contract, arrangement,
proposal, transaction, or matter in which the conflict of interest arises,
unless and until the audit committee has determined that no such conflict of
interest exists.

 

5.7                               As an exception to the restrictions set forth
in Parts 5.3 and 5.4 herein, the Employee may own passive investments in a
Competing Businesses, (including, but not limited to, indirect investments
through mutual funds), provided that the securities of the Competing Business
are publicly traded and the Employee does not own or control more than two
percent of the outstanding voting rights or equity of the Competing Business.

 

5.8                               In the event that a court determines that the
length of time, the geographic area, or the activities prohibited under this
Agreement are too restrictive to be enforceable, the Court may reduce the scope
of the restriction to the extent necessary to make the restriction enforceable.

 

5.9                                The market for the Company’s services and the
Company’s Business is highly specialized and highly competitive such that other
companies and business entities compete with the Company in various locations
throughout the world.  The provisions set forth in this Agreement: (i) are
reasonably necessary to protect the Company’s legitimate business interests,
(ii) are reasonable as to the time, territory, and scope of activities that are
restricted, (iii) do not interfere with the Employee’s ability to earn a
comparable living or secure employment in the field of the Employee’s choice,
(iv) do not interfere and are not inconsistent with public policy or the public
interest, and (v) are described with sufficient accuracy and definiteness to
enable the Employee to understand the scope of the restrictions on the Employee.

 

A-8

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5.10                         Because of the unique nature of the Proprietary
Information, the Employee understands and agrees that the Company will suffer
irreparable harm in the event that the Employee fails to comply with any of the
Employee’s obligations under this Agreement and that monetary damages will be
inadequate to compensate the Company for such breach.  Accordingly, the Employee
agrees that the Company will, in addition to any other remedies available to it
at law or in equity, be entitled to injunctive relief to enforce the terms of
this Agreement.

 

6.                                       The Employee hereby authorizes the
Company to provide a copy of this Agreement, including any exhibits hereto, to
any and all of the Employee’s future employers and to notify any and all such
future employers that the Company intends to exercise its legal rights arising
out of or in connection with this Agreement and/or any breach or any inducement
of a breach hereof.

 

7.                                      The Employee agrees that, during the
term of the Employee’s employment with the Company, the Employee will not:
(i) engage in any other employment, occupation, consulting, or other business
activity that conflicts with the Employee’s obligations to the Company, or
(ii) engage in any other activities that conflict with the Employee’s
obligations to the Company.

 

8.                                      Debarment Certification

 

8.1                               The Employee represents and promises that
Employee:

 

(a)         is not presently, and during the Employee’s employment will not be,
debarred or convicted for a crime for which Employee can be debarred under the
Generic Drug Enforcement Act of 1992 (21USC335a)(the “Act”); and

 

(b)         is not presently, and during the Employee’s employment will not be,
indicted or otherwise criminally or civilly charged by a government entity
(Federal or State) with commission of the kinds of conduct for which Employee
can be debarred under the Act; and

 

(c)          will not employ or otherwise engage any individual who has been
(i) debarred or (ii) convicted of a crime for which a person can be debarred
under the Act, in any capacity in connection with the activities of developing
or reporting data which may become part of an application for approval of a drug
or biologic.

 

8.2                               The Employee promises that, during the
Employee’s employment with the Company, the Employee will promptly notify the
Company upon learning of or having a belief that the Employee cannot satisfy the
obligations of Section 8.1 above.

 

A-9

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9.                                      The Employee agrees that this Agreement
shall be enforced, construed and interpreted under the law of the state of North
Carolina, without regard to the conflicts of laws principles thereof.  The state
and federal courts in North Carolina shall be the exclusive venues for the
adjudication of all disputes arising out of this Agreement, and the Employee
consents to the exercise of personal jurisdiction over the Employee in any such
adjudication and hereby waives any and all objections and defenses to the
exercise of such personal jurisdiction.

 

10.                               The Employee agrees that:  (i) the Employee’s
employment relationship with the Company is “at-will,” which means that either
the Employee or the Company can terminate the relationship at any time for any
reason or no reason, with or without notice, unless the Employee and the Company
are parties to a contract that expressly provides a fixed term of employment,
(ii) the Employee’s employment relationship with the Company is contingent upon
the Employee’s execution of this Agreement, which is a material inducement to
the Company to offer the employment relationship to the Employee and to provide
Proprietary Information to the Employee, and (iii) this Agreement shall survive
any termination for any reason whatsoever of the Employee’s employment
relationship with the Company.

 

11.                               The Employee agrees that the Company’s failure
to insist upon strict compliance with any provision of this Agreement shall not
be deemed a waiver of such provision or of any other provision in the
Agreement.  The provisions of this Agreement shall be enforceable,
notwithstanding the existence of any breach of this Agreement by the Company or
of any claim by the Employee against the Company, whether predicated on this
Agreement or otherwise.

 

12.                               This Agreement contains the entire
understanding between the parties with respect to the subject matter hereof and
supersedes all prior or contemporary agreements or understandings, whether
written or oral, with respect thereto, provided, however, prior to the execution
of this Agreement, if Company and the Employee were parties to any agreement
regarding the subject matter hereof, that agreement will be superseded by this
Agreement prospectively only.  This Agreement may not be modified or amended
except by an agreement in writing signed by both parties.

 

13.                               The Employee agrees that this Agreement is
assignable by the Company at the Company’s discretion and the Employee
authorizes the Company’s successors and assigns to enforce this Agreement for
their respective benefits.

 

14.                               The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement and each other provision of this Agreement
shall be severable and enforceable to the extent permitted by law.

 

15.                               The Employee agrees that a breach of any
provision(s) of this Agreement will toll the running of the limitation period
with respect to such provision(s) for as long as such breach occurs.

 

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16.                               The Employee agrees and acknowledges that the
Company’s agreement to employ the Employee, in and of itself, is sufficient and
adequate consideration for the Employee’s promises and obligations hereunder,
and that the compensation and other benefits that the Company provides the
Employee during the course of the Employee’s employment are, independently and
collectively, sufficient and adequate consideration for the Employee’s promises
and obligations hereunder.

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, the Employee has
executed this Agreement to be effective as of the date set forth above.

 

LIQUIDIA TECHNOLOGIES, INC.

 

 

By:

 

(s)

Name:

 

Title:

 

 

 

 

 

 

(s)

NAME

 

 

A-11

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SCHEDULE A

 

The following items are inventions, ideas, computer software programs or other
equipment or technology not covered by Section 4 of this Agreement, which the
undersigned conceived of or developed, wholly or in part, prior to the
Employee’s employment or engagement with the Company and shall be excluded from
the scope of this Agreement.

 

If the undersigned has no such items to disclose, write “NONE” on this line:    
             .

 

Description of Items:  (if applicable)

 

Title on Document

 

Date on Document

 

Name of Witness
on Document

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIQUIDIA TECHNOLOGIES, INC.

 

 

 

 

 

By:

 

NAME

 

 

 

 

 

 

Dated:

 

 

Dated:

 

 

A-12

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