Document:

<PAGE>
                                                                     EXHIBIT 4.2

                       [LOGO OF LIQUIDMETAL TECHNOLOGIES]

         Number                                                 Shares

LMT
   -----------------                                        ---------------
       COMMON STOCK                                           COMMON STOCK

       INCORPORATED UNDER
           THE LAWS OF
     THE STATE OF CALIFORNIA

                                                                  CUSIP

     THIS CERTIFIES THAT

                                                            SEE REVERSE FOR
                                                          CERTAIN DEFINITIONS

     IS THE REGISTERED HOLDER OF

     SHARES OF COMMON STOCK, NO PAR VALUE, FULLY PAID AND NON-ASSESSABLE OF

                            LIQUIDMETAL TECHNOLOGIES

transferable on the books of the Corporation by the holder hereof, in person or
by Attorney, upon surrender of this Certificate properly endorsed. This
Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.

         WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

Dated:

                  [CORPORATE SEAL OF LIQUIDMETAL TECHNOLOGIES]

         SECRETARY                                         PRESIDENT

COUNTERSIGNED AND REGISTERED:
            AMERICAN STOCK TRANSFER & TRUST COMPANY
                                   TRANSFER AGENT AND REGISTRAR

BY

                                    AUTHORIZED SIGNATURE

<PAGE>

                            LIQUIDMETAL TECHNOLOGIES

         Liquidmetal Technologies will furnish to any holder of its Common Stock
or Preferred Stock, upon request and without charge, a full statement of the
designations, preferences and relative participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such designations, preferences and/or rights.
Such requests shall be made to the Secretary of the Corporation at the principal
office of the Corporation.

         KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, OR
DESTROYED, THE CORPORATION MAY REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE
ISSUANCE OF A REPLACEMENT CERTIFICATE.

         The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
         <S>                                                       <C>
         TEN COM -     as tenants in common                        UNIF GIFT MIN ACT -__________Custodian__________
         TEN ENT -     as tenants by the entireties                                      (Cust)            (Minor)
         JT TEN -      as joint tenants with right of                                 under Uniform Gifts to Minors
                       survivorship and not as tenants                                Act________________________
                       in common                                                                 (State)

                                                                   UNIF TRF MIN ACT -________Custodian (until age_____)
                                                                                      (Cust)
                                                                                     ___________under Uniform Transfers
                                                                                       (Minor)
                                                                                     to Minors Act___________________
                                                                                                        (State)

</TABLE>
     Additional abbreviations may also be used though not in the above list.

For value received, ________________________________ hereby sell, assign, and
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

--------------------------------

------------------------------------------------------------------------------
  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)

------------------------------------------------------------------------------

------------------------------------------------------------------------------

                                                                        shares
------------------------------------------------------------------------

of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
                                                                      Attorney
----------------------------------------------------------------------
to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.

Dated
     ---------------------------

                                 Signature:
                                           ------------------------------------
                                 NOTICE:   THE SIGNATURE TO THIS ASSIGNMENT MUST
                                           CORRESPOND WITH THE NAME AS WRITTEN
                                           UPON THE FACE OF THE CERTIFICATE IN
                                           EVERY PARTICULAR, WITHOUT ALTERATION
                                           OR ENLARGEMENT OR ANY CHANGE
                                           WHATEVER.

SIGNATURE(S) GUARANTEED:
                        -------------------------------------------------------
                        THE SIGNATURES SHOULD BE GUARANTEED BY AN ELIGIBLE
                        GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
                        LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
                        AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
                        PURSUANT TO S.E.C. RULE 17Ad-15.

                                        2<PAGE>
                                                                   EXHIBIT 10.29

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of March 21, 2002 (the "Effective Date"), by and between
LIQUIDMETAL TECHNOLOGIES, a California corporation (the "Company"), and Neil
Paton (the "Employee").

                                    RECITALS

         WHEREAS, the Employee desires to be employed by the Company upon the
terms and conditions set forth in this Agreement; and

         WHEREAS, the Company desires to assure itself of the Employee's
continued employment in the capacities set forth herein.

         NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the parties hereto covenant and agree as
follows:

                  EMPLOYMENT. The Company hereby employs Employee, and the
Employee hereby accepts such employment, upon the terms and conditions set forth
in this Agreement.

1.       TERM. Subject to the terms and conditions of this Agreement, including,
         but not limited to, the provisions for termination set forth in Section
         5 hereof, the employment of the Employee under this Agreement shall
         commence on the Effective Date and shall continue through the close of
         business on July 31, 2004 (the "Initial Term"). Upon the expiration of
         the Initial Term, The Employee's employment with the Company will
         continue on an "at-will" basis and may be renegotiated if the Company
         and Employee agree to do so or may be terminated by Employee or the
         Company for any reason and at any time, provided that in the event of
         termination, the terminating party shall provide at least thirty (30)
         days prior written notice of the termination to the other party (unless
         the termination is With Cause as defined in this Agreement, in which
         case the Employee's employment may be terminated immediately).
         Notwithstanding the expiration of the Initial Term of this Agreement,
         the provisions of this Agreement other than those of Sections 1, 4, and
         5, Term, Compensation, and Termination, respectively, shall remain in
         full force and effect. All other provisions of this Agreement,
         including but without limitation, Sections 2, 6, and 7, entitled
         Employment, Nonsolicitation and Nondisclosure Covenants, and Employee
         Inventions, respectively, shall survive the expiration of the Initial
         Term. Notwithstanding the expiration of the this Agreement or the
         termination of employment by any means by any party, Sections 2, 6, and
         7, entitled Term, Nonsolicitation and Nondisclosure Covenants, and
         Employee Inventions, respectively, shall survive and remain fully
         enforceable.

2.       DUTIES. Employee will initially serve as Chief Technology Officer of
         the Company. The Employee will devote his best efforts to promote the
         success of the Company's business, and will cooperate fully with the
         Board of Directors in the advancement of the best interests of the
         Company. It is the intent of the Company and the Employee that the
         Employee shall maintain the same degree of discretion in scheduling his
         activities on behalf of the Company as he has maintained immediately
         prior to entering into this

<PAGE>

         Employment Agreement. Over time, at a rate acceptable to both the
         Company and Employee, the amount of time required in a facility of the
         Company by Employee shall gradually be reduced. The Employee agrees
         that he will be available to provide advice, information and analysis
         on technology issues even when he is not physically at one of the
         facilities of the Company.

3.       COMPENSATION. Annual Base Salary. As compensation for Employee's
         services and in consideration for the Employee's covenants contained in
         this Agreement, the Company shall pay the Employee an annual base
         salary of two hundred thousand dollars ($200,000.00). Such annual base
         salary shall be payable in equal or as nearly equal as practicable
         installments in accordance with the policy then prevailing for the
         Company's salaried employees generally, and the annual base salary
         shall be subject to any tax and other withholdings or deductions
         required by applicable laws and regulations. The Employee's annual base
         salary will be reviewed by the Board of Directors or Chief Executive
         Officer of the Company not less frequently than annually. For purposes
         of this Agreement, the term "Salary Year" means the one year, 365-day
         period (or 366 day period for a leap year) that begins on the Effective
         Date and each successive one year period thereafter.

         (a)      Bonuses. In addition to the Employee's annual base salary,
                  during the term of the Employee's employment hereunder, the
                  Employee shall be entitled to only such bonuses or additional
                  compensation as may be granted to the Employee by the Board of
                  Directors or Chief Executive Officer of the Company, in their
                  sole discretion.

         (b)      Other Benefits. During the term of the Employee's employment
                  hereunder, the Employee shall be eligible to participate in
                  such pension, life insurance, health insurance, disability
                  insurance and other benefits plans, if any, which the Company
                  may from time to time make available to similar-level
                  employees.

         (c)      Vacation. The Employee shall be entitled to four weeks paid
                  vacation during each Salary Year during the term of the
                  Employee's employment hereunder. Vacation shall be taken at
                  such times and with such notice so as to not disrupt or
                  interfere with the business of the Company. Unused vacation
                  from a particular Salary Year will not carry over to
                  succeeding Salary Years, and the Employee will not be paid for
                  any unused vacation.

         (d)      Reimbursement of Expenses. The Employee shall be reimbursed
                  for all reasonable and customary travel and other business
                  expenses incurred 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 of the
                  Company that may be in effect from time to time.

         (e)      Stock Options. The Employee's previously granted stock options
                  of 200,000 shares shall fully vest as of the Effective Date of
                  this Agreement.

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<PAGE>

4.       TERMINATION.

         (a)      Death. The Employee's employment under this Agreement shall
                  terminate immediately upon Employee's death. In the event of a
                  termination pursuant to this Section 5(a), the Employee's
                  estate shall be entitled to receive any unpaid base salary
                  owing to Employee up through and including the date of the
                  Employee's death.

         (b)      Disability. If, during the term of the Employee's employment
                  hereunder, the Employee becomes physically or mentally
                  disabled in the determination of a physician appointed or
                  selected by the Company, or, if due to any physical or mental
                  condition, the Employee becomes unable for a period of more
                  than sixty (60) days during any six-month period to perform
                  Employee's duties hereunder on substantially a full-time basis
                  as determined a physician selected by the Company, the Company
                  may, at its option, terminate the 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 Employee
                  shall be entitled to receive any unpaid base salary owing to
                  Employee up through and including the effective date of
                  Termination.

         (c)      Termination By Company Without Cause. In addition to the other
                  termination provisions of this Agreement, the Company may
                  terminate the Employee's employment at any time without cause
                  (a "Termination Without Cause"). In the event of a Termination
                  Without Cause, the Employee shall continue to receive the
                  Employee's base salary (as then in effect) during the three
                  month period immediately following the effective date of the
                  Termination Without Cause (the "Severance Period"). In
                  addition to the severance pay described in the preceding
                  sentence, the Employee shall continue to receive, during the
                  Severance Period, all employee health and welfare benefits
                  that Employee would have received during the Severance Period
                  in the absence of such termination. Employee agrees and
                  acknowledges, however, that Employee will forfeit the right to
                  receive base salary and benefits during the Severance Period
                  immediately upon the Employee's breach of any covenant set
                  forth in Section 6 of this Agreement. The Employee will also
                  forfeit the right to salary and benefits during the Severance
                  Period upon accepting employment with another employer with
                  comparable salary and benefits hereunder shall be forfeited
                  and shall cease upon the Employee becoming eligible for
                  benefits from the Employee's new employer. Notwithstanding the
                  foregoing, the termination of the Employee's employment
                  pursuant to the second sentence of Section 2 of this Agreement
                  shall not constitute a Termination Without Cause and shall not
                  give rise to any severance payment or other benefits pursuant
                  to this Section 5(c).

         (d)      Termination By Company With Cause. The Company may terminate
                  the Employee's employment at any time with Cause. As used in
                  this Agreement, "Cause" shall include the following: (1) the
                  Employee's failure or inability to perform Employee's duties
                  under this Agreement; (2) dishonesty or other serious
                  misconduct, (3) the commission of an unlawful act material to
                  Employee's employment, (4) a material violation of the
                  Company's policies or practices which

                                       3
<PAGE>

                  reasonably justifies immediate termination; (5) committing,
                  pleading guilty, nolo contendre or no contest (or their
                  equivalent) to, entering into a pretrial intervention or
                  diversion program regarding, or conviction of, a felony or any
                  crime or act involving moral turpitude, fraud, dishonesty, or
                  misrepresentation; (6) the commission by the Employee of any
                  act which could reasonably affect or impact to a material
                  degree the interests of the Company or Related Entities or in
                  some manner injure the reputation, business, or business
                  relationships of the Company or Related Entities; (7) the
                  Employee's inability to perform an essential function of
                  Employee's position; or (8) any material breach by Employee of
                  this Agreement. The Company may terminate this Agreement for
                  Cause at any time without notice. In the event of a
                  termination for Cause, the Company shall be relieved of all
                  its obligations to the Employee provided for by this Agreement
                  as of the effective date of termination, and all payments to
                  the Employee hereunder shall immediately cease and terminate
                  as of such date, except that Employee shall be entitled to the
                  annual base salary hereunder up to and including the effective
                  date of termination, provided, however, that the Employee's
                  obligations under Sections 6 and 7 shall survive such a
                  Termination for Cause and any liabilities or obligations which
                  have accrued and are owed by the Employee to the Company shall
                  not be extinguished or released thereby.

5.       NONSOLICITATION AND NONDISCLOSURE COVENANTS.

         (a)      Rationale for Restrictions. Employee acknowledges that
                  Employee's services hereunder are of a special, unique, and
                  extraordinary character, and Employee's position with the
                  Company places Employee in a position of confidence and trust
                  with customers, suppliers, and other persons and entities with
                  whom the Company and its Related Entities have a business
                  relationship. The Employee further acknowledges that the
                  rendering of services under this Agreement will likely require
                  the disclosure to Employee of Confidential Information (as
                  defined below) including Trade Secrets of the Company relating
                  to the Company and/or Related Entities. As a consequence, the
                  Employee agrees that it is reasonable and necessary for the
                  protection of the goodwill and legitimate business interests
                  of the Company and Related Entities that the Employee make the
                  covenants contained in this Section 6, that such covenants are
                  a material inducement for the Company to employ the Employee
                  and to enter into this Agreement, and that the covenants are
                  given as an integral part of and incident to this Agreement.

         (b)      Nonsolicitation Covenants. As used herein, the term
                  "Restrictive Period" means the time period commencing on the
                  Effective Date of this Agreement and ending on the second
                  (2nd) anniversary of the date on which the Employee's
                  employment by the Company (or any Related Entity) expires or
                  is terminated for any reason, including both a termination by
                  the Company for Cause and Not for Cause. In addition, the term
                  "Covered Business" means any business which is the same as, or
                  similar to, any business conducted by the Company or any of
                  the Related Entities at any time during the Restrictive
                  Period. The Employee agrees that the Employee will not, except
                  as otherwise provided herein engage in any of the following
                  acts anywhere in the world during the Restrictive Period:

                                       4
<PAGE>

                  (i)      directly or indirectly assist, promote or encourage
                           any existing or potential employees, customers,
                           clients, or vendors of the Company or any Related
                           Entity, as well as any other parties which have a
                           business 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 or commit any
                           act which adversely affects the Company, any Related
                           Entity, or their respective businesses.

         Employee acknowledges that Employee's services hereunder are of a
         special, unique, and extraordinary character, and Employee's position
         with the Company places Employee in a position of confidence and trust
         with customers, suppliers, and other persons and entities with whom the
         Company and its Related Entities have a business relationship. The
         Employee further acknowledges that the rendering of services under this
         Agreement will likely require the disclosure to Employee of
         Confidential Information (as defined below) and Trade Secrets (as
         defined below) of the Company relating to the Company and/or Related
         Entities. As a consequence, the Employee agrees that it is reasonable
         and necessary for the protection of the goodwill and legitimate
         business interests of the Company and Related Entities that the
         Employee make the covenants contained in this Section 6, that such
         covenants are a material inducement for the Company to employ the
         Employee and to enter into this Agreement, and that the covenants are
         given as an integral part of and incident to this Agreement.
         Accordingly, the Employee agrees that the geographic scope of the above
         covenants is a reasonable means of protecting the Company's (and the
         Related Entities') legitimate business interests. Notwithstanding the
         foregoing covenants, nothing set forth in this Agreement shall prohibit
         the Employee from owning the securities of (i) corporations which are
         listed on a national securities exchange or traded in the national
         over-the-counter market in an amount which shall not exceed 5% of the
         outstanding shares of any such corporation or (ii) any corporation,
         partnership, firm or other form of business organization which does 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
         Covered Business.

         (c)      Disclosure of Confidential Information. The Employee
                  acknowledges that the inventions, innovations, software, Trade
                  Secrets, business plans, financial strategies, finances, and
                  all other confidential or proprietary information with respect
                  to the business and operations of the Company and Related
                  Entities are valuable, special, and unique assets of the
                  Company. Accordingly, the Employee

                                       5
<PAGE>

                  agrees not to, at any time whatsoever either during or after
                  the Employee's term of employment with the Company, disclose,
                  directly or indirectly, to any person or entity, or use or
                  authorize any person or entity to use, any confidential or
                  proprietary information with respect to the Company or 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, products under development, acquisition
                  strategies or acquisitions under consideration, pricing or
                  cost information, marketing strategies, passwords or codes or
                  any other information relating to the Company or any of the
                  Related Entities which could be reasonably regarded as
                  confidential (collectively referred to as "Confidential
                  Information"). However, the term "Confidential Information"
                  does not include any information which is or shall become
                  generally available to the public other than as a result of
                  disclosure by the Employee or by any person or entity which
                  the Employee knows (or which the Employee reasonably should
                  know) has a duty of confidentiality to the Company or a
                  Related Entity with respect to such information. In addition
                  to the foregoing, Company will be fully entitled to all of the
                  protections and benefits afforded by the California 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,
                  from being not generally known to, and not being readily
                  ascertainable by proper means by, other persons who can derive
                  economic value from its disclosure or use, including but not
                  limited to the patented information and processes as well as
                  the unpatented information and processes comprising,
                  underlying, arising from, and associated with Liquidmetal
                  Alloy and Liquidmetal Coatings used by the Company.

         (d)      Prevention of 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 the secrecy of the Company's Confidential
                  Information and Trade Secrets and preventing the premature
                  public disclosure of the Company's proprietary information and
                  technology including its Confidential Information and Trade
                  Secrets, the Employee agrees to use the Employee's best
                  efforts and his or her highest degree of care, diligence, and
                  prudence to ensure that no Confidential Information or Trade
                  Secret prematurely leaks or otherwise prematurely makes its
                  way into the public domain or any public forum, including,
                  without limitation, into any trade publications, internet chat
                  rooms, or other similar forums. In the event that the Employee
                  becomes aware of any premature leak of Confidential
                  Information or Trade Secret or becomes aware of any
                  circumstances creating a risk of such a leak, the Employee
                  shall immediately inform the Board of Directors, the Chief
                  Executive Officer, or the Employee's supervisor of such leak
                  or of such circumstances.

         (e)      Removal and Return of Proprietary Items. The Employee will not
                  remove from the Company's premises (except to the extent such
                  removal is for purposes of the performance of the Employee's
                  duties at home or while traveling, and under such conditions
                  and restrictions as are specifically authorized and/or
                  required by the

                                       6
<PAGE>

                  Company) or transmit by any means, electronic or otherwise,
                  any document, record, notebook, plan, model, component,
                  device, computer software or code, or Confidential Information
                  or Trade Secret whether embodied 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 exclusive
                  property of the Company. Upon termination of Employee's
                  employment with the Company by either party (regardless of the
                  reason for termination), 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 the Employee's
                  possession or subject to the Employee's control, and the
                  Employee shall not retain any copies, abstracts, sketches, or
                  other physical embodiment of any of the Proprietary Items,
                  Confidential Information, Trade Secret or any part thereof.

         (f)      Enforcement and Remedies. In the event of any breach of any of
                  the covenants set forth in this Section 6, the Employee
                  recognizes that the remedies at law will be inadequate and
                  that in addition to any relief at law which may be available
                  to the Company for such violation or breach and regardless of
                  any other provision contained in this Agreement, the Company
                  shall be entitled to equitable remedies (including an
                  injunction) and such other relief as a court may grant after
                  considering the intent of this Section 6. Additionally, the
                  period of time applicable to any covenant set forth in this
                  Section 6 will be extended by the duration of any violation by
                  Employee of such covenant. In the event a court of competent
                  jurisdiction determines that any of the covenants set forth in
                  this Section 6 are excessively broad as to duration,
                  geographic scope, prohibited activities or otherwise, the
                  parties agree that this covenant shall be reduced or curtailed
                  to the extent, but only to the extent, necessary to render it
                  enforceable.

         (g)      The Company recognizes that the Employee has an interest in
                  maintaining business activities in addition to his employment
                  with the Company. The Employee may continue to maintain such
                  outside business activities so long as they do not represent a
                  conflict of interest with his duties and responsibilities as
                  an employee of the Company and do not constitute a breach of
                  Sections 5 or 6 of this agreement. Specifically, the Employee
                  may continue to participate in consulting activities with
                  other entities. However, the Employee agrees that he will
                  recuse himself from any activities with any third party in the
                  event that such activity should represent a conflict of
                  interest with his duties on behalf of the Company. The
                  Employee further agrees that this paragraph in no way relieves
                  the Employee from the absolute responsibility to maintain the
                  Trade Secrets and other Confidential Information of the
                  Company and that no Confidential Information of the Company
                  shall directly or indirectly be shared with any other entity
                  with which the Employee is consulting, or any of its
                  representatives and, likewise, no Confidential Information of
                  Trade Secrets of any other entity shall be shared directly or
                  indirectly with the Company. The Employee represents that he
                  has disclosed to any entity with which he consults his duties
                  and the general terms of this Agreement and that he has
                  approval from authorized representatives of any other entity
                  with which he consults, to maintain his position with that
                  entity as well as with the Company. The Employee further
                  represents that he is not subject to any agreement providing
                  that any Employee Invention will be owned by any other third
                  party.

                                       7
<PAGE>

6.       EMPLOYEE INVENTIONS.

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

         (b)      Ownership of Employee Inventions. Employee agrees and
                  acknowledges that all Employee Inventions will belong
                  exclusively to the Company and that all Employee Inventions
                  are works made for hire and the property of the Company,
                  including any copyrights, patents, semiconductor mask
                  protection, or other intellectual property rights pertaining
                  thereto. If it is determined that any such works are not works
                  made for hire, the Employee hereby assigns to the Company all
                  of the Company'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 Employee will
                  promptly:

                  (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 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.

7.       ESSENTIAL AND INDEPENDENT COVENANTS. The Employee's covenants in
         Sections 6 and 7 of this Agreement are independent covenants, and the
         existence of any claim by the

                                       8
<PAGE>

         Employee against the Company under this Agreement or otherwise will not
         excuse the Employee's breach of any covenant in Section 6 or 7. The
         covenants of Sections 6 and 7 shall survive the termination,
         extinguishment, or lapse of this Agreement under any circumstances,
         even if this Agreement is terminated by either party, whether for Cause
         or Not for Cause.

8.       REPRESENTATIONS AND WARRANTIES BY THE EMPLOYEE. The Employee represents
         and warrants to the Company that the execution and delivery by the
         Employee of this Agreement do not, and the performance by the Employee
         of the Employee's obligations hereunder will not, with or without the
         giving of notice or the passage of time, or both: (a) violate any
         judgment, writ, injunction, or order of any court, arbitrator, or
         governmental agency applicable to the Employee, or (b) conflict with,
         result in the breach of any provisions of or the termination of, or
         constitute a default under, any agreement to which the Employee 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 that he fully and completely
         understands this Agreement and that he has engaged in negotiations with
         the Company and has either consulted with an attorney of his choice or
         has had ample opportunity to do so and is fully satisfied with the
         opportunity he has had.

9.       NOTICES. For purposes of this Agreement, notices and all other
         communications provided for herein shall be in writing and shall be
         deemed to have been duly given when hand-delivered, sent by facsimile
         transmission (as long as receipt is acknowledged), or mailed by United
         States certified or registered mail, return receipt requested, postage
         prepaid, addressed to the address or facsimile number for each party
         set forth on the signature page hereto, or to such other address or
         facsimile number as either 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.

10.      MISCELLANEOUS. No provision of this Agreement may be modified or waived
         unless such waiver or modification is agreed to in writing signed by
         both of the parties hereto. No waiver by any party hereto of any breach
         by any other party hereto shall be deemed a waiver of any similar or
         dissimilar term or condition at the same or at any prior or subsequent
         time. This Agreement is the entire agreement between the parties hereto
         with respect to the Employee's employment by the Company, and there are
         no agreements or representations, oral or otherwise, expressed or
         implied, with respect to or related to the employment of the Employee
         which are not set forth in this Agreement. This Agreement shall be
         binding upon, and inure to the benefit of, the Company, its respective
         successors and assigns, and the Employee and Employee's heirs,
         executors, administrators and legal representatives. The duties and
         covenants of the Employee under this Agreement, being personal, may not
         be delegated or assigned by the Employee without the prior written
         consent of the Company, and any attempted delegation or assignment
         without such prior written consent shall be null and void and without
         legal effect. The parties agree that if any provision of this Agreement
         shall under any circumstances be deemed invalid or inoperative, the
         Agreement shall be construed with the invalid or inoperative provision
         deleted and the rights and obligations of the parties shall be
         construed and enforced

                                       9
<PAGE>

         accordingly. This Agreement may be assigned by the Company without the
         consent of the Employee, provided, however, that the Employee is given
         notice of the assignment.

11.      GOVERNING LAW; RESOLUTION OF DISPUTES. The validity, interpretation,
         construction, and performance of this Agreement shall be governed by
         the laws of the State of Florida without regard to principles of choice
         of law or conflicts of law thereunder. Any action or proceeding seeking
         to enforce any provision of, or based on any right arising out of, this
         Agreement may be brought against either of the parties in the courts of
         the State of Florida, County of Hillsborough, or, if it has or can
         acquire jurisdiction, in the United States District Court located in
         Hillsborough County, Florida, and each of the parties consents to the
         jurisdiction of such courts (and of the appropriate appellate courts)
         in any such action or proceeding and waives any objection to venue laid
         therein. Process in any action or proceeding referred to in the
         preceding sentence may be served on either party anywhere in the world.
         The parties hereto agree that having venue and jurisdiction solely in
         Florida is reasonable in that the headquarters for the Company is in
         Tampa, Hillsborough County, Florida and that site for litigation is the
         most central for such matters. THE PARTIES HEREBY WAIVE A JURY TRIAL IN
         ANY LITIGATION ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
         EMPLOYMENT OF THE EMPLOYEE WITH THE COMPANY. This Agreement shall not
         be construed against either party but shall be construed without regard
         to the participation of either party in the drafting of this Agreement
         or any part thereof.

         COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
be effective upon the execution and delivery by any party hereto of facsimile
copies of signature pages hereto duly executed by such party; provided, however,
that any party delivering a facsimile signature page covenants and agrees to
deliver promptly after the date hereof two (2) original copies to the other
party hereto.

         MODIFICATION BY THE COURT. In the event that any provision or Section
of this Agreement violates any law of the state of California or is for some
other reason unenforceable as written in the state of California, the Employee
and the Company agree that the unenforceable provision or Section should not
cause the entire Agreement to become unenforceable unless it is caused to fail
in its essential purpose. In the event that any provision or Section of this
Agreement violates any law of the state of California or is for some other
reason unenforceable as written in the state of California, the Employee agrees
that the provision should be reduced in scope or length or otherwise modified by
the Court, if possible under the law, to cause the provision or Section of the
Agreement to be legal and enforceable but to still provide to the Company the
maximum protection available to it under the law.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       10
<PAGE>

                                 LIQUIDMETAL TECHNOLOGIES

                                 By:          /s/ John Kang
                                    --------------------------------------------
                                    John Kang, President and Chief Executive
                                    Officer

                                 Liquidmetal Technologies
                                 100 North Tampa Street
                                 Tampa, FL 33602
                                 Facsimile Number: (813) 314-0270

                                 EMPLOYEE

                                 By:          /s/ Neil Paton
                                    --------------------------------------------

                                 Printed Name: Neil Paton
                                              ----------------------------------

                                       11

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