Exhibit 10.1


 


 


 


CERTAIN IDENTIFIED INFORMATION
HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT


IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF


PUBLICLY
DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.




 


SEVERANCE AGREEMENT AND GENERAL RELEASE


 


This SEVERANCE AGREEMENT
AND GENERAL RELEASE (“Agreement”) is made and entered into by Liquidia Technologies, Inc. (the “Company”)
and Tim Albury (“Employee”). Throughout the remainder of the Agreement, the Company and Employee may be collectively
referred to as the “Parties.”


 


Employee has entered
into an Amended and Restated Executive Employment Agreement with the Company dated July 25, 2018, and the First Amendment to the
Amended and Restated Executive Employment Agreement dated March 8, 2019 (collectively, the “Employment Agreement”).
Employee’s employment by the Company will terminate pursuant to Section 6.1 of the Employment Agreement, effective November
30, 2019. The Parties desire that the employment termination be on mutually agreeable terms and to avoid all litigation relating
to the employment relationship and its termination, and Employee desires severance benefits pursuant to Section 6.1(b) of the Employment
Agreement. Accordingly, the Parties have agreed upon the terms herein.


 


Employee represents
that Employee has carefully read the entire Agreement, understands its consequences, and voluntarily enters into it.


 


In consideration of
the above and the mutual promises and good and valuable consideration set forth below, the sufficiency of which is acknowledged
by the Parties, Employee and the Company agree as follows:


 


1.          
SEPARATION Employee’s employment by the Company will terminate, effective November 30, 2019 (“Termination
Date”). Until the termination date, Employee remains employed in accordance with the terms and conditions of the employment
agreement. By signing this Agreement, Employee represents that Employee has been paid for all time worked and received all wages,
salary, and other amounts of any kind owed to Employee by the Company, with the exception of the Accrued Obligations as defined
in the Employment Agreement, any earned but unpaid incentive compensation pursuant to the terms of any such plan in which Employee
is a participant, and the Severance Benefits described in Paragraph 2 of this Agreement. Employee’s Liquidia Technologies,
Inc. Long-Term Incentive option grants dated July 1, 2015, March 7, 2018, and February 5, 2019 (collectively the “Equity
Agreements”), shall continue in effect pursuant to their terms.


 






     


     


    

 


2.           
SEVERANCE BENEFITS. Pursuant to Section 6.1(b) of the Employment Agreement, if Employee signs and does
not revoke this Agreement and complies with its terms, the Company will provide to Employee the following “Severance Benefits:”


 


a.           
an amount equal to Employee’s 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 after the revocation period set forth in Section 7 expires unexercised, with the remaining installments occurring
on the Company’s regularly scheduled payroll dates thereafter;


 


b.           
an amount equal to 11/12th of the bonus (35% of base salary) (if any) that Employee would have earned pursuant to the
Liquidia Technologies, Inc. Annual Cash Bonus Plan, as amended by the Company from time to time (the “Bonus Plan”)
for the 2019 Performance Period (as defined in the Bonus Plan) if Employee had remained employed through the end of 2019 (the sole
criteria shall be the company multiplier as determined by the Board), notwithstanding the employment requirement set forth in Section
6.3 of the Bonus Plan, which amount 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


 


c.           
payment of the employer portion of the premiums required to continue Employee’s group health care coverage under
the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), provided that Employee
timely elects to continue coverage under COBRA, until the earliest of (i) the close of the Severance Period, (ii) the expiration
of Employee’s eligibility for the continuation coverage under COBRA, or (iii) the date when Employee becomes eligible for
substantially equivalent health insurance coverage in connection with new employment (such period from the termination date through
the earliest of (i), (ii) or (iii), 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 Employee 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 Employee elects COBRA coverage (the “Special Severance Payment”).
Employee may, but is not obligated to, use such Special Severance Payment toward the cost of COBRA premiums. If Employee becomes
eligible for coverage under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the
COBRA Payment Period, Employee must immediately notify the Company of such event, and all payments and obligations under this clause
will cease.


 


The Severance Benefits
afforded under this Agreement exceed what Employee otherwise is entitled to receive and are in lieu of any other severance compensation
or severance benefits to which Employee otherwise might be entitled, and payment of these Severance Benefits is conditioned upon
Employee’s material compliance with the terms of this Agreement.





 






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3.           
RELEASE. In consideration of the benefits conferred by this Agreement, EMPLOYEE (ON BEHALF OF EMPLOYEE
AND EMPLOYEE’S ASSIGNS, HEIRS, AND OTHER REPRESENTATIVES) RELEASES THE COMPANY, ITS PREDECESSORS, SUCCESSORS, AND ASSIGNS
AND ITS AND/OR THEIR PAST, PRESENT, AND FUTURE OWNERS, PARENTS, SUBSIDIARIES, AFFILIATES, PREDECESSORS, SUCCESSORS, ASSIGNS, OFFICERS,
DIRECTORS, EMPLOYEES, EMPLOYEE BENEFIT PLANS (TOGETHER WITH ALL PLAN ADMINISTRATORS, TRUSTEES, FIDUCIARIES, AND INSURERS), AND
AGENTS (“RELEASEES”) FROM ALL CLAIMS AND WAIVES ALL RIGHTS, KNOWN OR UNKNOWN, EMPLOYEE MAY HAVE OR CLAIM
TO HAVE RELATING TO EMPLOYEE’S EMPLOYMENT WITH THE COMPANY, ITS PREDECESSORS, SUBSIDIARIES, OR AFFILIATES OR EMPLOYEE’S
SEPARATION THEREFROM, arising before the execution of this Agreement, including, but not limited to, claims: (i) for
discrimination, harassment, retaliation, or accommodation arising under federal, state, or local laws prohibiting age, sex, national
origin, race, religion, disability, veteran status, genetic information, or other protected class discrimination, harassment, or
retaliation for protected activity (including, but not limited to, claims under the Age Discrimination in Employment Act of 1967
(ADEA), as amended); (ii) for compensation and benefits (including, but not limited to, claims under the Employee Retirement
Income Security Act of 1974 (ERISA), as amended, the Fair Labor Standards Act of 1938 (FLSA), as amended, the Family and Medical
Leave Act of 1993 (FMLA), as amended, and similar federal, state, and local laws); (iii) arising under federal, state, or
local law of any nature whatsoever (including, but not limited to, constitutional, statutory, tort, express or implied contract,
or other common law); (iv) for attorneys’ fees; and (v) of any kind whatsoever (with the exception of those listed below)
whether or not Employee knows about them at the time Employee signs this Agreement. The release of claims set forth in this paragraph
does not apply to: (i) claims for workers’ compensation benefits or unemployment benefits filed with the applicable state
agencies; (ii) vested or accrued employee benefits under any of the Company’s health, welfare or retirement benefit plans;
(iii) any earned but unpaid incentive compensation pursuant to the terms of any such plan in which Employee is a participant; (iv)
any rights Employee may have as an insured under any insurance policy purchased or secured by the Company, including without limitation,
any directors or officers liability insurance; and (v) Employee’s rights pursuant to the Equity Agreements.


 


4.           
COVENANT NOT TO SUE. Employee will not sue Releasees on any matters relating to Employee’s employment
arising before the execution of this Agreement or join as a party with others who may sue Releasees on any such claims; provided,
however, this paragraph will not: (i) bar claims for workers’ compensation or unemployment benefits referenced in Paragraph
3 above, (ii) bar a challenge under the Older Workers Benefit Protection Act of 1990 (OWBPA) to the enforceability of the waiver
and release of ADEA claims set forth in this Agreement, or (iii) bar a claim for breach of any agreement between Employee and the
Company that is not superseded by this Agreement, or (iv) apply when prohibited by law, including as set forth in Paragraph 5 below.
If Employee does not abide by this paragraph, then Employee will indemnify Releasees for all expenses that they incur in defending
the action.





 






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5.           
AGENCY CHARGES/INVESTIGATIONS. Nothing in this Agreement shall prohibit Employee from filing a charge
or participating in an investigation or proceeding conducted by the U.S. Equal Employment Opportunity Commission or other governmental
agency concerning the terms, conditions, and privileges of Employee’s employment; provided, however, that by signing this
Agreement, Employee waives Employee’s right to, and shall not seek or accept, any monetary or other relief of any nature
whatsoever in connection with any such charges, investigations, or proceedings, to the extent permitted by applicable law. In addition,
nothing in this Agreement prevents Employee from reporting to, cooperating with, communicating with, or participating in any proceeding
before the Securities and Exchange Commission or from taking any action protected under the whistleblower provisions of any federal
securities law, none of which activities shall constitute a breach of the release, non-disparagement or confidentiality clauses
of this Agreement.


 


6.            COMPANY
INFORMATION AND PROPERTY. Nothing in this Agreement shall relieve Employee from any confidentiality, proprietary information,
secrecy, non-compete, non-disclosure, non-solicitation, invention rights and assignment obligations, or other such related obligations
under any previously executed agreements with the Company. Without limiting the foregoing, Employee agrees that Employee will continue
to be bound by the terms and conditions contained in the Confidentiality, Inventions and Non-Competition Agreement between Employee
and the Company dated July 25, 2018 (the “Confidentiality Agreement”), including any amendments thereto, and the terms
of the Confidentiality Agreement are in full force and effect and survive Employee’s termination of employment with the Company.


 


7.           
RIGHT TO REVIEW AND REVOKE. The Company delivered this Agreement to Employee on November 4, 2019 and desires
that Employee have adequate time and opportunity to review and understand the consequences of entering into it. Accordingly, the
Company advises Employee to consult with an attorney prior to executing it, that Employee has twenty-one days within which to consider
it, and that Employee may not execute it before the Termination Date. In the event that Employee does not return an executed copy
of the Agreement to the Company by no later than the 22nd calendar day after receiving it or the Termination Date, whichever
occurs later , the Agreement and the obligations of the Company herein shall become null and void. Employee may revoke the Agreement
during the seven-day period immediately following Employee’s execution of this Agreement. The Agreement will not become effective
or enforceable until this revocation period has expired. To revoke the Agreement, a written notice of revocation must be delivered
to the Company to the attention of Florina Gordon ([***]) during the seven-day period immediately following Employee’s execution
of this Agreement.


 






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8.            CONFIDENTIALITY
AND NONDISPARAGEMENT. The terms and provisions of this Agreement are confidential, and Employee represents and
warrants that since receiving this Agreement, Employee has not disclosed, and going forward will not disclose, the terms and
provisions of this Agreement to third parties, except as required by law or as reasonably necessary to enforce
this Agreement. Notwithstanding the above, Employee may reveal the terms and provisions of this Agreement to members of
Employee’s immediate family or to an attorney consulted for legal advice, provided that such persons agree to maintain
the confidentiality of the Agreement. Employee represents and agrees that, since receiving this Agreement, Employee has not
made, and going forward will not make, disparaging, defamatory, or derogatory remarks about the Company or its products,
services, business practices, directors, officers, managers, or employees to anyone. The Company represents and agrees that,
since receiving this Agreement, the Company, acting through its current members of the Board of Directors and the officer to
whom Employee reports has not made, and going forward will not make, disparaging, defamatory, or derogatory remarks about
Employee. Nothing in this Agreement shall prohibit Employee or the Company from participating in any communication with, or
disclosing any information to, any representatives of any government agency referenced in Paragraph 5 of this Agreement or
shall prohibit either the Company or Employee from providing truthful testimony in response to lawful process, or as
otherwise required by law.


 


9.           
APPLICATION OF SECTION 409A. It is intended that
all of the Severance Benefits payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application
of Section 409A of the Internal Revenue Code of 1986, as amended (“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 is so exempt from 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. In the event that the terms of this Agreement would subject Employee to any additional
tax, penalty or interest under Section 409A (the “409A Penalties”), the Company and Executive shall cooperate in good
faith to amend the terms of this Agreement to avoid such 409A Penalties, if possible, while preserving the intended economic effects
of the Agreement to the greatest extend possible. The preceding provisions shall not be construed as a guarantee by the Company
of any particular tax effect to Employee under this Agreement. The Company shall not be liable to Employee 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. Notwithstanding anything to the contrary
set forth herein, no Severance Benefits that constitute nonqualified deferred compensation not exempt from the application of Section
409A will be made under this Agreement until Employee has incurred a “separation from service” (as defined under Treasury
Regulation Section 1.409A-1(h)). For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations
Section 1.409A-2(b)(2)(iii)), Employee’s right to receive any installment payments under this Agreement (whether severance
payments or otherwise) shall be 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. 


 






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10.         
OTHER. Except as expressly provided in this Agreement and except for the Confidentiality Agreement and other
agreements related to Employee’s equity, this Agreement supersedes all other understandings and agreements, oral or written,
between the Parties and constitutes the sole agreement between the Parties with respect to its subject matter. For avoidance of
doubt, this Agreement does not supersede the Equity Agreements The Parties acknowledge that no representations, inducements, promises,
or agreements, oral or written, have been made by any of the Parties or by anyone acting on behalf of any of the Parties that are
not embodied in this Agreement, and no agreement, statement or promise not contained or described in this Agreement shall be valid
or binding on the Parties. No change or modification of this Agreement shall be valid or binding on the Parties unless such change
or modification is in writing and is signed by the Parties. Employee’s or the Company’s waiver of any breach of a provision
of this Agreement shall not waive any subsequent breach by the other Party. If a court of competent jurisdiction holds that any
provision or sub-part thereof contained in this Agreement is invalid, illegal, or unenforceable, that invalidity, illegality, or
unenforceability shall not affect any other provision in this Agreement.


 


This Agreement is intended
to avoid all litigation relating to Employee’s employment with the Company and Employee’s separation therefrom; therefore,
it is not to be construed as the Company’s admission of any liability to Employee – liability that the Company denies.


 


This Agreement shall
apply to, be binding upon, and inure to the benefit of the Parties’ successors, assigns, heirs, and other representatives
and be governed by North Carolina law, without regard to the conflicts of laws principles thereof, and the applicable provisions
of federal law. 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 Employee consents to the exercise of personal jurisdiction over Employee in any such adjudication
and hereby waives any and all objections and defenses to the exercise of such personal jurisdiction.


 


CAUTION! READ BEFORE
SIGNING. THIS AGREEMENT CONTAINS A RELEASE OF ALL CLAIMS.


 


IN WITNESS WHEREOF,
the Parties have entered into this Agreement on the date written below.





 






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EMPLOYEE REPRESENTS
THAT EMPLOYEE HAS CAREFULLY READ THE ENTIRE Agreement, UNDERSTANDS ITS CONSEQUENCES,
AND VOLUNTARILY ENTERS INTO IT.


 





	 	/s/ Tim Albury	 	11/30/2019
	 	Tim Albury	 	Date


 





	 	LIQUIDIA TECHNOLOGIES, INC.



 


	 	 	 	 
	 	By:	/s/ Neal F. Fowler	 	12/2/2019
	 	Name:	Neal F. Fowler	 	Date
	 	Title:	CEO	 	 


 






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