**Exhibit10.38**

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**EMPLOYMENT AGREEMENT**

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**THIS EMPLOYMENT AGREEMENT** (this “Agreement”)is made and entered into as of **January 13,2008**, by and between **LIQUIDMETAL TECHNOLOGIES, Inc.,** a Delawarecorporation (the “Company”), **GERALD E. MORROW**(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.**  The Company hereby employs Employee, and theEmployee hereby accepts such employment, upon the terms and conditions setforth in this Agreement.

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# 2.                                       **Term**. Subject to the terms andconditions of this Agreement, including, but not limited to, the provisions fortermination set forth in Section 5 hereof, the employment of the Employeeunder this Agreement shall commence on January 13, 2008 and shall continuethrough the close of business on January 13, 2011 (the “Initial Term”).  Upon the expiration of the Initial Term, theEmployee’s employment with the Company will continue on an “at-will” basis andmay be terminated by Employee or the Company for any reason and at any time,provided that the terminating party shall provide at least thirty (30) daysprior written notice of the termination to the other party (unless thetermination is With Cause as defined in this Agreement, in which case theEmployee’s employment may be terminated immediately).  Notwithstanding the expiration of the InitialTerm of this Agreement, the provisions of this Agreement other than those ofSections 1, 4, and 5, Term, Compensation, and Termination, respectively, shallremain in full force and effect.  Allother provisions of this Agreement, including but without limitation, Sections2, 6, and 7, entitled Employment, Nonsolicitation and Nondisclosure Covenants,and Employee Inventions, respectively, shall survive the expiration of theInitial Term.  Notwithstanding theexpiration of the this Agreement or the termination of employment by any meansby any party, Sections 2, 6, and 7, entitled Term, Nonsolicitation and NondisclosureCovenants, and Employee Inventions, respectively, shall survive and remainfully enforceable.

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# 3.                                       **Duties**.  Employee will initially serve as **Chief Financial Officer** of the Company. TheEmployee will devote the necessary business time, attention, skill, and energyto the business of the Company, will use the Employee’s best efforts to promotethe success of the Company’s business, and will cooperate fully with the Boardof Directors in the 

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advancement of the bestinterests of the Company.  Furthermore,the Employee shall assume and competently perform such reasonableresponsibilities and duties as may be assigned to the Employee from time totime by the Board of Directors, Chairman of the Board, President, ChiefExecutive Officer of the Company or their designee.  To the extent that the Company shall have anyparent company, subsidiaries, affiliated corporations, partnerships, or jointventures (collectively “Related Entities”), the Employee shall perform suchduties to promote these entities and to promote and protect their respectiveinterests to the same extent as the interests of the Company without additionalcompensation. At all times, the Employee agrees that the Employee has read andwill abide by, and prospectively will read and abide by, any employee handbook,policy, or practice that the Company or Related Entities has or hereafteradopts with respect to its employees generally. The Employee will reportdirectly to the Chairman of the Board.

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# 4.                                       **Compensation.**

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## (a)                                  AnnualBase Salary.  As compensation forEmployee’s services and in consideration for the Employee’s covenants containedin this Agreement, the Company shall pay the Employee an annual base salary of $175,000.00.  The annual compensation (and commissionrates, if applicable) may be adjusted upward or downward in the sole discretionof the Board of Directors or Chief Executive Officer.  For purposes of this Agreement, the term “SalaryYear” means the one year, 365-day period (or 366 day period for a leapyear) that begins on the January 13, 2008 and each successive one yearperiod thereafter.

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## (b)                                 Bonuses.  In addition to the Employee’s annual basecompensation, during the term of the Employee’s employment hereunder, theEmployee shall be entitled to only such bonuses or additional compensation asmay be granted to the Employee by the Board of Directors or Chief ExecutiveOfficer of the Company, in their sole discretion.

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## (c)                                  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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(d)                                 OptionGrant.  In addition to the foregoing,in consideration of the execution of this Agreement by the Employee, theCompany shall, on the date hereof, grant to the employee an option to purchaseup to 200,000****shares of the commonstock of the Company in accordance with a stock option agreement in the formset forth as Exhibit A hereto.

 

(e)                                  Other****Benefits.  Duringthe term of the Employee’s employment hereunder, the Employee shall be eligibleto participate in such pension, life insurance, health insurance, disabilityinsurance and other benefits plans, if any, which the Company may from time totime make available to similar-level employees.

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(f)                                    Vacation.  The Employee shall be entitled to three weekspaid vacation during each Salary Year during the term of the Employee’semployment hereunder.  Vacation 

 

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shall be taken at suchtimes and with such notice so as to not disrupt or interfere with the businessof the Company.  Unused vacation from aparticular Salary Year will not carry over to succeeding Salary Years, and theEmployee will not be paid for any unused vacation.

 

# 5.                                       **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 5(a), the Employee’s estate shall be entitled to receive anyunpaid base salary owing to Employee up through and including the date of theEmployee’s death.

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## (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 any six-month period to performEmployee’s duties hereunder on substantially a full-time basis as determined aphysician 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 5(b), the Employeeshall be entitled to receive any unpaid base salary owing to Employee upthrough and including 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 six 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 during the Severance Period in the absence ofsuch termination.  Employee agrees andacknowledges, however, that Employee will forfeit the right to receive basesalary and benefits during the Severance Period immediately upon the Employee’sbreach of any covenant set forth in Section 6 of this Agreement.  The Employee will also forfeit the right tosalary and benefits during the Severance Period upon accepting employment withanother employer with comparable salary and benefits hereunder shall be forfeitedand shall cease upon the Employee becoming eligible for benefits from theEmployee’s new employer.  Notwithstandingthe foregoing, the termination of the Employee’s employment pursuant to thesecond sentence of Section 2 of this Agreement shall not constitute aTermination Without Cause and shall not give rise to any severance payment orother benefits pursuant to this Section 5(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” shall includethe following: (1) the Employee’s failure or inability to perform Employee’sduties under this Agreement; (2) dishonesty or other serious misconduct, (3) thecommission of an unlawful act material to Employee’s employment, (4) amaterial violation of the Company’s policies or practices which reasonablyjustifies immediate termination; 

 

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(5) committing,pleading guilty, nolo contendre or no contest (or their equivalent) to,entering into a pretrial intervention or diversion program regarding, orconviction of, a felony or any crime or act involving moral turpitude, fraud,dishonesty, or misrepresentation; (6) the commission by the Employee ofany act which could reasonably affect or impact to a material degree theinterests of the Company or Related Entities or in some manner injure thereputation, business, or business relationships of the Company or RelatedEntities; (7) the Employee’s inability to perform an essential function ofEmployee’s position; or (8) any material breach by Employee of thisAgreement.  The Company may terminatethis 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 6 and 7 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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# 6.                                       **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 Section 6,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 date of this Agreement andending 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 

 

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|   |   | relationship with the  Company or a Related Entity, to terminate, discontinue, or reduce the extent  of their relationship with the Company or a Related Entity;                                                                                                                                                     |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                 |
| (ii)   |   | directly or  indirectly solicit business of the same or similar type as a Covered  Business, from any person or entity known by the Employee to be a customer or  client of the Company, whether or not the Employee had contact with such  person or entity during the Employee’s employment with the Company; |
|   |   |                                                                                                                                                                                                                                                                                                                 |
| (iii)  |   | disparage the  Company, any Related Entities, and/or any shareholder, director, officer,  employee, or agent of the Company or any Related Entity; and/or                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                 |
| (iv)   |   | engage in any  practice the purpose of which is to evade the provisions of this  Section 6 or commit any act which adversely affects the Company, any  Related Entity, or their 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 Section 6,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) anycorporation, 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 eitherduring or after the Employee’s term of employment with the Company, disclose,directly or indirectly, 

 

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to any person or entity,or use or authorize any person or entity to use, any confidential orproprietary information with respect to the Company or Related Entities withoutthe prior written consent of the Company, including, without limitation,information as to the financial condition, results of operations, identities ofclients or prospective clients, products under development, acquisitionstrategies or acquisitions under consideration, pricing or cost information,marketing strategies, passwords or codes or any other information relating tothe Company or any of the Related Entities which could be reasonably regardedas confidential (collectively referred to as “Confidential Information”).  However, the term “Confidential Information”does not include any information which is or shall become generally availableto the public other than as a result of disclosure by the Employee or by anyperson or entity which the Employee knows (or which the Employee reasonablyshould know) has a duty of confidentiality to the Company or a Related Entitywith respect to such information.  Inaddition to the foregoing, Company will be fully entitled to all of theprotections and benefits afforded by the California Uniform Trade Secrets Actsand any other applicable law.  TradeSecret shall mean information, including a formula, pattern, compilation,program, device, method technique, or process that derives independent economicvalue, actual or potential, from being not generally known to, and not beingreadily ascertainable by proper means by, other persons who can derive economicvalue from its disclosure or use, including but not limited to the patentedinformation and processes as well as the unpatented information and processescomprising, underlying, arising from, and associated with Liquidmetal Alloy andLiquidmetal 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 the

 

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exclusive property of theCompany.  Upon termination of Employee’semployment with the Company by either party (regardless of the reason fortermination), or upon the request of the Company during the term of employment,the Employee will return to the Company all of the Proprietary Items in theEmployee’s possession or subject to the Employee’s control, and the Employeeshall not retain any copies, abstracts, sketches, or other physical embodimentof any of the Proprietary Items, Confidential Information, Trade Secret or anypart thereof.

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## (f)                                    Enforcementand Remedies.  In the event of anybreach of any of the covenants set forth in this Section 6, 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 this Section 6.  Additionally, the period of time applicableto any covenant set forth in this Section 6 will be extended by theduration 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 6are excessively broad as to duration, geographic scope, prohibited activitiesor otherwise, the parties agree that this covenant shall be reduced orcurtailed to the extent, but only to the extent, necessary to render itenforceable.

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# 7.                                       **Employee Inventions**.

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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)    |   | disclose to the  Company in writing any Employee Invention;                                                                                    |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                           |
| (ii)   |   | assign to the  Company or to a party designated by the Company, at the Company’s request and  without additional compensation, all of the |

 

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|   |   | Employee’s right  to the Employee Invention for the United States and all foreign  jurisdictions;                                                                                                                                                                           |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                             |
| (iii)  |   | execute and  deliver to the Company such applications, assignments, and other documents as  the Company may request in order to apply for and obtain patents or other  registrations with respect to any Employee Invention in the United States and  any foreign jurisdictions; |
|   |   |                                                                                                                                                                                                                                                                             |
| (iv)   |   | sign all other  papers necessary to carry out the above obligations; and                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                             |
| (v)    |   | give testimony  and render any other assistance in support of the Company’s rights to any  Employee Invention.                                                                                                                                                              |

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# 8.                                       **Essential and Independent Covenants**.  The Employee’s covenants in Sections 6 and 7of 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 6 or 7.  The covenants of Sections 6 and 7 shallsurvive the termination, extinguishment, or lapse of this Agreement under any circumstances,even if this Agreement is terminated by either party, whether for Cause or Notfor Cause.

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# 9.                                       **Representations and Warranties by The Employee**.The Employee represents and warrants to the Company that the execution anddelivery by the Employee of this Agreement do not, and the performance by theEmployee of the Employee’s obligations hereunder will not, with or without thegiving of notice or the passage of time, or both: (a) violate anyjudgment, writ, injunction, or order of any court, arbitrator, or governmentalagency applicable to the Employee, or (b) conflict with, result in thebreach of any provisions of or the termination of, or constitute a defaultunder, any agreement to which the Employee is a party or by which the Employeeis or may be bound, including, without limitation, any noncompetition agreementor similar agreement.  Employee furtherrepresents and warrants that he fully and completely understands this Agreementand that he has engaged in negotiations with the Company and has eitherconsulted with an attorney of his choice or has had ample opportunity to do soand is fully satisfied with the opportunity he has had.

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# 10.                                 **Notices**.  For purposes of this Agreement, notices andall other communications provided for herein shall be in writing and shall bedeemed to have been duly given when hand-delivered, sent by facsimiletransmission (as long as receipt is acknowledged), or mailed by United Statescertified or registered mail, return receipt requested, postage prepaid,addressed to the address or facsimile number for each party set forth on thesignature page hereto, or to such other address or facsimile number aseither party may have furnished to the other in writing in accordance herewith,except that a notice of change of address shall be effective only upon receipt.

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# 11.                                 **Miscellaneous**.  No provision of this Agreement may bemodified or waived unless such waiver or modification is agreed to in writingsigned by both of the parties hereto.  Nowaiver by any party hereto of any breach by any other party hereto shall bedeemed a waiver of any similar or dissimilar term or condition at the same orat any prior or subsequent time.  ThisAgreement is the entire agreement between the parties hereto with respect tothe 

 

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Employee’s employment bythe Company, 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 provision deletedand the rights and obligations of the parties shall be construed and enforcedaccordingly.  This Agreement may beassigned by the Company without the consent of the Employee, provided, however,that the Employee is given notice of the assignment.

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# 12.                                 **Governing Law; Resolution of Disputes**. The validity, interpretation,construction, and performance of this Agreement shall be governed by the lawsof the State of California without regard to principles of choice of law orconflicts of law thereunder.  Any actionor proceeding seeking to enforce any provision of, or based on any rightarising out of, this Agreement may be brought against either of the parties inthe courts of the State of California, County of Orange, or, if it has or canacquire jurisdiction, in the federal courts located in, Orange County,California, and each of the parties consents to the jurisdiction of such courts(and of the appropriate appellate courts) in any such action or proceeding andwaives any objection to venue laid therein. Process in any action or proceedingreferred to in the preceding sentence may be served on either party anywhere inthe world.  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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# 13.                                 **Counterparts; Facsimile Signatures**.  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 signature pages heretoduly executed by such party; provided, however, that any partydelivering 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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# 14.                                 **Modification By The Court**.   Inthe event that any provision or Section of this Agreement violates any lawof the state of California or is for some other reason unenforceable as writtenin the state of California, the Employee and the Company agree that theunenforceable provision or Section should not cause the entire Agreementto become unenforceable unless it is caused to fail in its essentialpurpose.  In the event that any provision

 

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or Section of thisAgreement 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.

 

**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                     |
|   |                                     |
|   | Liquidmetal  Technologies                |
|   | 30452 Esperanza                          |
|   | Rancho Santa  Margarita, CA 92688        |
|   | Facsimile  Number: 949-635-2108          |
|   |                                     |
|   |                                     |
|   | **EMPLOYEE**                             |
|   |                                     |
|   | By:                                      | /s/ Gerald  Morrow |
|   |                                     |
|   | Printed Name:                            | Gerald Morrow |
|   |                                     |
|   | Address and  Facsimile Number:           |
|   |                                     |
|   |                                     |
|   |                                     |
|   |                                     |
|   |                                     |
|   |                                     |
|   |                                     |
|   |                                     |
|        |                                          |  |  |

 

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