**EXHIBIT10.47**

 

**EMPLOYMENT AGREEMENT**

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**THIS EMPLOYMENT AGREEMENT** (this “Agreement”)is made and entered into effective as of January 1, 2005, or the dateimmediately following the filing of the quarterly reports (10-Qs) for 2004,whichever date is latest, (the “Effective Date”), by and between **LIQUIDMETAL TECHNOLOGIES,Inc.,** a Delaware corporation (the “Company”), and **John K. Thorne** (the “Employee”).

 

**RECITALS**

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**WHEREAS,** the Employee desires tobe employed by the Company upon the terms and conditions set forth in thisAgreement; and

 

**WHEREAS,** the Company desires toassure itself of the Employee’s continued employment in the capacities setforth herein.

 

**NOW, THEREFORE**, in considerationof the foregoing recitals and for other good and valuable consideration, theparties hereto covenant and agree as follows:

 

# 1.             **Employment.**  TheCompany hereby employs Employee, and the Employee hereby accepts suchemployment, upon the terms and conditions set forth in this Agreement.

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# 2.             **Term**. Subject to the terms and conditions of thisAgreement, including, but not limited to, the provisions for termination setforth in Section 6 hereof, the employment of the Employee under this Agreementshall commence on the Effective Date and shall continue through the close ofbusiness on April 30, 2005 (the “Initial Term”).  Upon the expiration of the Initial Term, theEmployee’s employment with the Company may continue on a month to month basis,at the same salary, if mutually agreed in writing by the Company and theEmployee at leasttwo weeks prior toeach extension. Notwithstanding the expiration of the Initial Term of thisAgreement, the provisions of this Agreement other than those of Sections 2, 4,and 6, Term, Compensation, and Termination, respectively, shall remain in fullforce and effect.  All other provisionsof this Agreement, including but without limitation, Sections 1, 7, and 8,entitled Employment, Nonsolicitation and Nondisclosure Covenants, and EmployeeInventions, respectively, shall survive the expiration of the Initial Term.  Notwithstanding the expiration of thisAgreement or the termination of employment by any means by any party, Sections2, 7, and 8, entitled Term, Nonsolicitation and Nondisclosure Covenants, andEmployee Inventions, respectively, shall survive and remain fully enforceable.

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# 3.             **Duties**.  Employeewill serve as Interim Chief Executive Officer and President of theCompany.  The Board of Directors may, atany time, decide to discontinue to use of the title Interim Chief ExecutiveOfficer and President but will continue to compensate the Employee at the samesalary level for the balance of the term of the contract.  In the event such a decision is made, theCompany will assign a title and duties commensurate with the Employee’sexperience and abilities. The Employee will devote Employee’s entire businesstime, attention, skill, and energy exclusively to the business of the Company,will use the 

 

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# Employee’s best efforts to promote the success of the Company’s business,and will cooperate fully with the Board of Directors in the advancement of thebest interests of the Company.  TheEmployee will report directly to the Board of Directors of the Company.  Furthermore, the Employee shall assume andcompetently perform such reasonable responsibilities and duties as may beassigned to the Employee from time to time by the Board of Directors or theirdesignee.  To the extent that the Companyshall have any parent company, subsidiaries, affiliated corporations,partnerships, or joint ventures (collectively “Related Entities”), the Employeeshall perform such duties to promote these entities and to promote and protecttheir respective interests to the same extent as the interests of the Companywithout additional compensation. At all times, the Employee agrees that theEmployee has read and will abide by, and prospectively will read and abide by,any employee handbook, policy, or practice that the Company or Related Entitieshas or hereafter adopts with respect to its employees generally.

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# 4.             **Compensation****.**

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## (a)           Salary. As compensation for Employee’s servicesand in consideration for the Employee’s covenants contained in this Agreement,the Company shall pay the Employee, for the period from January 1, 2005 throughApril 30, 2005, a monthly base salary of $20,834**. **Additionally, 10,000nonqualified stock options in Liquidmetal Technologies common stock shall begranted to the Employee on the effective date of this Employment Agreement witha vesting schedule wherein all the options vest upon the last day of theInitial Term, so long as Employee is still employed by the Company under thisAgreement on such date.   Such optionswill be exercisable at any time during a 12 month period subsequent to vesting.The exercise price for the options will be equal to the “Fair Market Value” ofthe Company’s common stock on the grant date, as determined under the Company’s2002 Equity Incentive Plan.  In all otherrespects, the option will have the terms and conditions applicable to optionsregularly granted under the Company’s Equity Incentive Plan.  The base salary shall be payable in equal oras nearly equal as practicable installments in accordance with the policy thenprevailing for the Company’s salaried employees generally, and the monthly basesalary shall be subject to any tax and other withholdings or deductionsrequired by applicable laws and regulations.

 

Employee shall be offered participation in all benefitprograms, including but not limited to, health, life, and disability insurance,as generally available to the Company’s salaried employees and in accordancewith the standard terms and conditions for participation in such programs.Employee may elect not to participate in those programs he considersunnecessary or uneconomic under his particular circumstances. The Company shallpay all payroll taxes (excluding income taxes, Medicaid/Medicare, and othertaxes customarily paid by employees) as generally required for all salariedemployees.

 

The Company shall arrange and pay for a Residence Inn, or equivalent, proximate to the Lake Forest, CA Company offices for use bythe Employee and his spouse throughout the Initial Term and any extensions ofthis Agreement.  Amenities shall includereasonable living and sleeping accommodations, telephone, TV, cooking, and awasher and dryer, or as otherwise agreed upon. In the event the cost of such accommodations is attributable to theEmployee as 

 

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earned income, the Company shall “gross up” suchearned income such that there will be no cost to the employee a post-tax basis.

 

## (b)           Reimbursementof Expenses.  The Employee shall bereimbursed for all reasonable and customary travel and other business expensesincurred by Employee in the performance of Employee’s duties hereunder,provided that such reimbursement shall be subject to, and in accordance with,any expense reimbursement policies and/or expense documentation requirements ofthe Company that may be in effect from time to time.

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5.**             Employee’sProtection Against Liability.** Employee and the Company acknowledge that Employee is undertakinginterim employment with the Company because certain allegations and issues havearisen concerning the Company’s financial affairs, including issues related tothe Company’s audit(s) and certain stock transactions.  The Company acknowledges that Employee had noinvolvement in the Company’s financial affairs prior to the Effective Date ofthis Agreement.  The Company furtheracknowledges that Employee is only willing to undertake interim employment withan express understanding that he will receive full and complete protectionagainst any and all claims made in connection with or arising out of theperformance of his duties up to the maximum extent allowable by law, and theCompany hereby promises Employee such protection.  All benefits conferred upon Employee pursuantto this Section 5 shall inure to the benefit of Employee’s spouse, estate,heirs, personal representatives, executors, administrators and trustees.  Without limiting the generality of theforegoing, the parties hereby agree to the following additional terms:

 

(a)           Directorsand Officers’ Liability Insurance. The Company shall maintain, entirely at its expense and with no cost toEmployee, a directors and officers’ liability insurance policy that provides aminimum of $25 million in coverage and applies to all acts taken, or omissionsmade, by Employee on behalf of the Company throughout the course of hisemployment with the Company, whether during the Initial Term or any extensionof the Initial Term (the “D&O Policy”). The D&O Policy shall be in place as of the Effective Date of thisAgreement and shall continue in place following termination of Employee’semployment with the Company, regardless of the reason for such termination,until such time as the Company’s regular outside counsel shall inform theCompany, in writing, that all applicable statutes of limitation have expiredfor the time period during which Employee was employed by the Company and thereno longer is any need for the Company to maintain the D&O Policy to coveracts or omissions occurring during that time period.  Employee shall have the right to review andcopy the D&O Policy at any time. Should the Company fail to maintain the D&O Policy or provideEmployee with a copy upon request, Employee may resign his employmentimmediately and shall then be entitled to receive all compensation that wouldhave been due had his employment continued through the end of the Initial Termor any extension thereof, as may be applicable under the circumstances.  In addition, Employee may pursue such legalor equitable remedies as may be available to him including, without limitation,the filing of a claim for specific performance of this Section 5.

 

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(b)           Indemnificationand Duty to Defend.  If any claim ismade against Employee related to or in any way arising out of the performanceof Employee’s duties under this Agreement, and for any reason the D&OPolicy referenced above fails to provide Employee with legal counsel at no costto Employee or fails to cover all or any portion of any potential liability(including, without limitation, any deductible that might apply under theD&O Policy) that might one day be imposed on Employee for Employee’s actsor omissions, the Company shall, as necessary to insure that Employee has nofinancial responsibility or exposure in connection with any such claim, (1)provide Employee with legal counsel of Employee’s choosing at no cost toEmployee by paying such legal counsel directly and as may be required by suchcounsel, and (2) indemnify Employee against any and all liability arising outof any such claim.  Employee agrees toconsult with the Company regarding settlement issues that may arise in thecourse of any legal action covered by this provision, but in the end allsettlement decisions with respect to any claim made against Employeeindividually will be made by Employee in his sole and exclusive discretion, andthe vesting of this exclusive discretion with the Employee shall not dilute oraffect the Company’s economic responsibilities as set forth herein.

 

# 6.**            ****Termination**.

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## (a)           Death.  The Employee’s employment under thisAgreement shall terminate immediately upon Employee’s death.  In the event of a termination pursuant tothis Section 6(a), the “Thorne Family Trust dated January 28, 1998, John K.Thorne and Shirley A. Thorne, Trustees” shall be entitled to receive any unpaidbase salary owing to Employee up through and including the date of the Employee’sdeath.

 

## (b)           Disability.  If, during the term of the Employee’semployment hereunder, the Employee becomes physically or mentally disabled inthe determination of a physician appointed or selected by the Company, or, ifdue to any physical or mental condition, the Employee becomes unable for aperiod of more than sixty (60) days during the four-month period to performEmployee’s duties hereunder on substantially a full-time basis as determined bya physician selected by the Company, the Company may, at its option, terminatethe Employee’s employment upon not less than thirty (30) days written notice.In the event of a termination pursuant to this Section 6(b), the Employee shallbe entitled to receive any unpaid base salary owing to Employee up through andincluding the effective date of Termination.

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## (c)           TerminationBy Company Without Cause.  Inaddition to the other termination provisions of this Agreement, the Company mayterminate the Employee’s employment at any time without cause (a “TerminationWithout Cause”).  In the event of aTermination Without Cause, the Employee shall continue to receive the Employee’sbase salary (as then in effect) during the three (3) month period immediatelyfollowing the effective date of the Termination Without Cause (the “SeverancePeriod”).  In addition to the severancepay described in the preceding sentence, the Employee shall continue toreceive, during the Severance Period, all employee health and welfare benefitsthat Employee would have received 

 

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## during theSeverance Period in the absence of such termination.  Employee agrees and acknowledges, however,that Employee will forfeit the right to receive base salary and benefits duringthe Severance Period immediately upon the Employee’s breach of any covenant setforth in Section 6 of this Agreement. The Employee will also forfeit the right to salary and benefits duringthe Severance Period upon accepting employment with another employer with comparablesalary and benefits hereunder shall be forfeited and shall cease upon theEmployee becoming eligible for benefits from the Employee’s new employer.  Notwithstanding the foregoing, thetermination of the Employee’s employment pursuant to the second sentence ofSection 2 of this Agreement shall not constitute a Termination Without Causeand shall not give rise to any severance payment or other benefits pursuant tothis Section 6(c).

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## (d)           TerminationBy Company With Cause.  The Companymay terminate the Employee’s employment at any time with Cause.  As used in this Agreement, “Cause” shallinclude the following: (1) the Employee’s failure or inability to performEmployee’s duties under this Agreement, excepting death or disability as per6(a) and 6(b) above; (2) dishonesty or other serious misconduct, (3) thecommission of an unlawful act material to Employee’s employment, (4) a materialviolation of the Company’s policies or practices which reasonably justifiesimmediate termination; (5) committing, pleading guilty, nolo contendre or nocontest (or their equivalent) to, entering into a pretrial intervention ordiversion program regarding, or conviction of, a felony or any crime or actinvolving moral turpitude, fraud, dishonesty, or misrepresentation; (6) thecommission by the Employee of any act which could reasonably affect or impactto a material degree the interests of the Company or Related Entities or insome manner injure the reputation, business, or business relationships of theCompany or Related Entities; (7) the Employee’s inability to perform anessential function of Employee’s position; or (8) any material breach byEmployee of this Agreement.  The Companymay terminate this Agreement for Cause at any time without notice.  In the event of a termination for Cause, theCompany shall be relieved of all its obligations to the Employee provided forby this Agreement as of the effective date of termination, and all payments tothe Employee hereunder shall immediately cease and terminate as of such date,except that Employee shall be entitled to the annual base salary hereunder upto and including the effective date of termination, provided, however, that theEmployee’s obligations under Sections 7 and 8 shall survive such a Terminationfor Cause and any liabilities or obligations which have accrued and are owed bythe Employee to the Company shall not be extinguished or released thereby.

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(e)           Treatmentof Stock Options in Event of Termination. In the event of termination of employment for causes 6(a), 6(b), or 6(c)above, stock options granted the employee per 4(a) on the Effective Date of theAgreement will vest immediately in an amount pro-rated to the number ofcalendar days of employment subsequent to the Effective Date relative to thenumber of days of the Initial Term and be exercisable 12 months subsequent tosuch vesting.

 

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# 7.             **Nonsolicitation and Nondisclosure Covenants.**

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## (a)           Rationalefor Restrictions.  Employeeacknowledges that Employee’s services hereunder are of a special, unique, andextraordinary character, and Employee’s position with the Company placesEmployee in a position of confidence and trust with customers, suppliers, andother persons and entities with whom the Company and its Related Entities havea business relationship.   The Employeefurther acknowledges that the rendering of services under this Agreement willlikely require the disclosure to Employee of Confidential Information (asdefined below) including Trade Secrets of the Company relating to the Companyand/or Related Entities.  As aconsequence, the Employee agrees that it is reasonable and necessary for theprotection of the goodwill and legitimate business interests of the Company andRelated Entities that the Employee make the covenants contained in this Section7, that such covenants are a material inducement for the Company to employ theEmployee and to enter into this Agreement, and that the covenants are given asan integral part of and incident to this Agreement.

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## (b)           NonsolicitationCovenants.  As used herein, the term “RestrictivePeriod” means the time period commencing on the Effective Date of thisAgreement and ending on the second (2nd) anniversary of the date on which theEmployee’s employment by the Company (or any Related Entity) expires or isterminated for any reason, including both a termination by the Company forCause and Not for Cause.  In addition,the term “Covered Business” means any business which is the same as, orsimilar to, any business conducted by the Company or any of the RelatedEntities at any time during the Restrictive Period.  The Employee agrees that the Employee willnot engage in any of the following acts anywhere in the world during theRestrictive Period:

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### (i)            directlyor indirectly assist, promote or encourage any existing or potential employees,customers, clients, or vendors of the Company or any Related Entity, as well asany other parties which have a business relationship with the Company or aRelated Entity, to terminate, discontinue, or reduce the extent of theirrelationship with the Company or a Related Entity;

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### (ii)           directlyor indirectly solicit business of the same or similar type as a CoveredBusiness, from any person or entity known by the Employee to be a customer orclient of the Company, whether or not the Employee had contact with such personor entity during the Employee’s employment with the Company;

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### (iii)          disparagethe Company, any Related Entities, and/or any shareholder, director, officer,employee, or agent of the Company or any Related Entity; and/or

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### (iv)          engage inany practice the purpose of which is to evade the provisions of this Section 7or commit any act which adversely affects the Company, any Related Entity, ortheir respective businesses.

 

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Employee acknowledgesthat Employee’s services hereunder are of a special, unique, and extraordinarycharacter, and Employee’s position with the Company places Employee in aposition of confidence and trust with customers, suppliers, and other personsand entities with whom the Company and its Related Entities have a businessrelationship.   The Employee furtheracknowledges that the rendering of services under this Agreement will likelyrequire the disclosure to Employee of Confidential Information (as definedbelow) and Trade Secrets (as defined below) of the Company relating to theCompany and/or Related Entities.  As aconsequence, the Employee agrees that it is reasonable and necessary for theprotection of the goodwill and legitimate business interests of the Company andRelated Entities that the Employee make the covenants contained in this Section7, that such covenants are a material inducement for the Company to employ theEmployee and to enter into this Agreement, and that the covenants are given asan integral part of and incident to this Agreement.  Accordingly, the Employee agrees that thegeographic scope of the above covenants is a reasonable means of protecting theCompany’s (and the Related Entities’) legitimate business interests.  Notwithstanding the foregoing covenants,nothing set forth in this Agreement shall prohibit the Employee from owning thesecurities of (i) corporations which are listed on a national securitiesexchange or traded in the national over-the-counter market in an amount whichshall not exceed 5% of the outstanding shares of any such corporation or (ii)any corporation, partnership, firm or other form of business organization whichdoes not compete with, is not engaged in, and does not carry on any aspect of,either directly or indirectly through a subsidiary or otherwise, any CoveredBusiness.

 

## (c)           Disclosureof Confidential Information.  TheEmployee acknowledges that the inventions, innovations, software, TradeSecrets, business plans, financial strategies, finances, and all otherconfidential or proprietary information with respect to the business andoperations of the Company and Related Entities are valuable, special, andunique assets of the Company.  Accordingly,the Employee agrees not to, at any time whatsoever either during or after theEmployee’s term of employment with the Company, disclose, directly orindirectly, to any person or entity, or use or authorize any person or entityto use, any confidential or proprietary information with respect to the Companyor Related Entities without the prior written consent of the Company,including, without limitation, information as to the financial condition,results of operations, identities of clients or prospective clients, productsunder development, acquisition strategies or acquisitions under consideration,pricing or cost information, marketing strategies, passwords or codes or anyother information relating to the Company or any of the Related Entities whichcould be reasonably regarded as confidential (collectively referred to as “ConfidentialInformation”).  However, the term “ConfidentialInformation” does not include any information which is or shall becomegenerally available to the public other than as a result of disclosure by theEmployee or by any person or entity which the Employee knows (or which theEmployee reasonably should know) has a duty of confidentiality to the Companyor a Related Entity with respect to such information.  In addition to the foregoing, Company will befully entitled to all of the protections and benefits afforded by theCalifornia Uniform Trade Secrets Acts and any other applicable law.  Trade Secret shall mean information,including a formula, pattern, compilation, program, device, method technique,or process that derives independent economic value, actual or potential, frombeing not generally known to, and not being readily ascertainable by propermeans by, other persons who can derive economic value from its disclosure oruse, including but not 

 

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## limited to thepatented information and processes as well as the unpatented information andprocesses comprising, underlying, arising from, and associated with LiquidmetalAlloy and Liquidmetal Coatings used by the Company.

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## (d)           Preventionof Premature Disclosure of Confidential Information and Trade Secrets.  The Employee agrees and acknowledges that,because the success of the Company is heavily dependent upon maintaining thesecrecy of the Company’s Confidential Information and Trade Secrets andpreventing the premature public disclosure of the Company’s proprietaryinformation and technology including its Confidential Information and TradeSecrets, the Employee agrees to use the Employee’s best efforts and his or herhighest degree of care, diligence, and prudence to ensure that no ConfidentialInformation or Trade Secret prematurely leaks or otherwise prematurely makesits way into the public domain or any public forum, including, withoutlimitation, into any trade publications, internet chat rooms, or other similarforums.  In the event that the Employeebecomes aware of any premature leak of Confidential Information or Trade Secretor becomes aware of any circumstances creating a risk of such a leak, theEmployee shall immediately inform the Board of Directors, the Chief ExecutiveOfficer, or the Employee’s supervisor of such leak or of such circumstances.

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## (e)           Removaland Return of Proprietary Items.  TheEmployee will not remove from the Company’s premises (except to the extent suchremoval is for purposes of the performance of the Employee’s duties at home orwhile traveling, and under such conditions and restrictions as are specificallyauthorized and/or required by the Company) or transmit by any means, electronicor otherwise, any document, record, notebook, plan, model, component, device,computer software or code, or Confidential Information or Trade Secret whetherembodied in a disk or in any other form, including electronic form(collectively, the “Proprietary Items”). The Employee recognizes that, as between the Company and the Employee,all of the Proprietary Items, whether or not developed by the Employee, are theexclusive property of the Company.  Upontermination of Employee’s employment with the Company by either party(regardless of the reason for termination), or upon the request of the Companyduring the term of employment, the Employee will return to the Company all ofthe Proprietary Items in the Employee’s possession or subject to the Employee’scontrol, and the Employee shall not retain any copies, abstracts, sketches, orother physical embodiment of any of the Proprietary Items, ConfidentialInformation, Trade Secret or any part thereof.

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## **(f)****           **Enforcementand Remedies.  In the event of anybreach of any of the covenants set forth in this Section 7, the Employeerecognizes that the remedies at law will be inadequate and that in addition toany relief at law which may be available to the Company for such violation orbreach and regardless of any other provision contained in this Agreement, theCompany shall be entitled to equitable remedies (including an injunction) andsuch other relief as a court may grant after considering the intent of thisSection 7.  Additionally, the period oftime applicable to any covenant set forth in this Section 7 will be extended bythe duration of any violation by Employee of such covenant.  In the event a court of competentjurisdiction determines that any of the covenants set forth in this Section 7are excessively broad as to duration, geographic scope, prohibited activitiesor otherwise, the parties agree 

 

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## that this covenantshall be reduced or curtailed to the extent, but only to the extent, necessaryto render it enforceable.

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## 8.**            ****EmployeeInventions.**

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## (a)           Definition.For purposes of this Agreement, “Employee Invention” means any idea,invention, technique, modification, process, or improvement (whether patentableor not), any industrial design (whether registerable or not), any mask work,however fixed or encoded, that is suitable to be fixed, embedded or programmedin a semiconductor product (whether recordable or not), and any work ofauthorship (whether or not copyright protection may be obtained for it)created, conceived, or developed by the Employee, either solely or inconjunction with others, during the Employee’s employment with the Company orduring the twenty four (24) month period following such employment, thatrelates in any way to, or is useful in any manner in, the businesses then beingconducted or proposed to be conducted by the Company or any Related Entity.

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## (b)           Ownershipof Employee Inventions.  Employeeagrees and acknowledges that all Employee Inventions will belong exclusively tothe Company and that all Employee Inventions are works made for hire and theproperty of the Company, including any copyrights, patents, semiconductor maskprotection, or other intellectual property rights pertaining thereto.  If it is determined that any such works arenot works made for hire, the Employee hereby assigns to the Company all of theCompany’s right, title, and interest, including all rights of copyright,patent, semiconductor mask protection, and other intellectual property rights,to or in such Employee Inventions. The Employee covenants that the Employeewill promptly:

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### (i)                                     discloseto the Company in writing any Employee Invention;

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### (ii)           assign tothe Company or to a party designated by the Company, at the Company’s requestand without additional compensation, all of the Employee’s right to theEmployee Invention for the United States and all foreign jurisdictions;

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### (iii)          executeand deliver to the Company such applications, assignments, and other documentsas the Company may request in order to apply for and obtain patents or otherregistrations with respect to any Employee Invention in the United States andany foreign jurisdictions;

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### (iv)                              signall other papers necessary to carry out the above obligations; and

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### (v)           givetestimony and render any other assistance in support of the Company’s rights toany Employee Invention.

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# 9.**            ****Essential and IndependentCovenants**.  The Employee’s covenants in Sections 7 and 8of this Agreement are independent covenants, and the existence of any claim bythe Employee against the Company under this Agreement or otherwise will notexcuse the Employee’s breach of any covenant in Section 7 or 8.  The covenants of Sections 7 and 8 shall 

 

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# survive the termination, extinguishment, or lapse of this Agreement underany circumstances, even if this Agreement is terminated by either party,whether for Cause or Not for Cause.

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# 10.           **Representations and Warranties by The Employee**. The Employee represents and warrants to theCompany that the execution and delivery by the Employee of this Agreement donot, and the performance by the Employee of the Employee’s obligationshereunder will not, with or without the giving of notice or the passage oftime, or both: (a) violate any judgment, writ, injunction, or order of anycourt, arbitrator, or governmental agency applicable to the Employee, or(b) conflict with, result in the breach of any provisions of or thetermination of, or constitute a default under, any agreement to which theEmployee is a party or by which the Employee is or may be bound, including,without limitation, any noncompetition agreement or similar agreement.  Employee further represents and warrants thathe fully and completely understands this Agreement and that he has engaged innegotiations with the Company and has either consulted with an attorney of hischoice or has had ample opportunity to do so and is fully satisfied with theopportunity he has had.

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# 11.**          ****Notices**.  Forpurposes of this Agreement, notices and all other communications provided forherein shall be in writing and shall be deemed to have been duly given whenhand-delivered, sent by facsimile transmission (as long as receipt isacknowledged), or mailed by United States certified or registered mail, returnreceipt requested, postage prepaid, addressed to the address or facsimilenumber for each party set forth on the signature page hereto, or to such otheraddress or facsimile number as either party may have furnished to the other inwriting in accordance herewith, except that a notice of change of address shallbe effective only upon receipt.

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# 12.**          ****Miscellaneous**.  Noprovision of this Agreement may be modified or waived unless such waiver ormodification is agreed to in writing signed by both of the parties hereto.  No waiver by any party hereto of any breachby any other party hereto shall be deemed a waiver of any similar or dissimilarterm or condition at the same or at any prior or subsequent time.  This Agreement is the entire agreementbetween the parties hereto with respect to the Employee’s employment by theCompany, and there are no agreements or representations, oral or otherwise,expressed or implied, with respect to or related to the employment of theEmployee which are not set forth in this Agreement.  This Agreement shall be binding upon, andinure to the benefit of, the Company, its respective successors and assigns,and the Employee and Employee’s heirs, executors, administrators and legalrepresentatives.  The duties andcovenants of the Employee under this Agreement, being personal, may not bedelegated or assigned by the Employee without the prior written consent of theCompany, and any attempted delegation or assignment without such prior writtenconsent shall be null and void and without legal effect.  The parties agree that if any provision ofthis Agreement shall under any circumstances be deemed invalid or inoperative,the Agreement shall be construed with the invalid or inoperative provisiondeleted and the rights and obligations of the parties shall be construed andenforced accordingly.  This Agreement maybe assigned by the Company without the consent of the Employee, provided,however, that the Employee is given notice of the assignment.

 

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# 13.**          ****Governing Law; Resolution ofDisputes**.  The validity, interpretation, construction,and performance of this Agreement shall be governed by the laws of the State ofCalifornia without regard to principles of choice of law or conflicts of lawthereunder.  Any action or proceedingseeking to enforce any provision of, or based on any right arising out of, thisAgreement may be brought against either of the parties in the courts of theState of California, County of Orange, or, if it has or can acquirejurisdiction, in the federal courts located in, Orange County, California, andeach of the parties consents to the jurisdiction of such courts (and of theappropriate appellate courts) in any such action or proceeding and waives anyobjection to venue laid therein. Process in any action or proceeding referredto in the preceding sentence may be served on either party anywhere in theworld.  The parties hereto agree thathaving venue and jurisdiction solely in California is reasonable in that theheadquarters for the Company is in Orange County, California and that site forlitigation is the most central for such matters.  THE PARTIES HEREBY WAIVE A JURY TRIAL IN ANYLITIGATION ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE EMPLOYMENT OF THEEMPLOYEE WITH THE COMPANY.  ThisAgreement shall not be construed against either party but shall be construedwithout regard to the participation of either party in the drafting of thisAgreement or any part thereof.

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# 14.**          ****Counterparts; FacsimileSignatures**.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument.  This Agreement may be effective upon theexecution and delivery by any party hereto of facsimile copies of signaturepages hereto duly executed by such party; provided, however, thatany party delivering a facsimile signature page covenants and agrees to deliverpromptly after the date hereof two (2) original copies to the other partyhereto.

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# 15.           **Modification By The Court**.   In theevent that any provision or Section of this Agreement violates any law of thestate of California or is for some other reason unenforceable as written in thestate of California, the Employee and the Company agree that the unenforceableprovision or Section should not cause the entire Agreement to becomeunenforceable unless it is caused to fail in its essential purpose.  In the event that any provision or Section ofthis Agreement violates any law of the state of California or is for some otherreason unenforceable as written in the state of California, the Employee agreesthat the provision should be reduced in scope or length or otherwise modifiedby the Court, if possible under the law, to cause the provision or Section ofthe Agreement to be legal and enforceable but to still provide to the Companythe maximum protection available to it under the law.

 

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**INWITNESS WHEREOF**, the parties have executed this Agreement asof the day and year first above written.

 
|   | **LIQUIDMETAL  TECHNOLOGIES, Inc.** |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | By:                                 | /s/ John Kang |   |
|   |                                | John Kang,  Chairman of the Board |
|   |                                |
|   | Liquidmetal  Technologies           |   |
|   | 25800  Commercentre Drive           |   |
|   | Suite 100                           |   |
|   | Lake Forest, CA                     |   |
|   | 92630                               |   |
|   | Facsimile  Number: 949.206.8008     |   |
|   |                                |   |
|   |                                |   |
|   | **EMPLOYEE**                        |   |
|   |                                |   |
|   |                                |
|   | By:                                 | /s/ John K.  Thorne |   |
|   |                                |
|   | Printed Name:                       | John K. Thorne |   |
|   |                                |
|   | Date:                               | January 14, 2005 |   |
|   |                                |   |
|   |                                |   |
|   | Address and  Facsimile Number:      |   |
|   |                                |   |
|   |                                |   |
|   |                                |   |
|   |                                |   |
|        |                                     |  |  |  |  |  |  |

 

12

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