Document:

Exhibit 10.6.1

 

 EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(the “Agreement”), made effective as of April 1, 2008, is entered into by Intercept Pharmaceuticals, Inc. (the “Company”)
and David Shapiro (“Executive”).

 

WHEREAS, the Company
desires to employ Executive, and Executive desires to be employed by the Company.

 

NOW THEREFORE, in consideration
of the mutual covenants and promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties to this Agreement, the parties agree as follows:

 

1.          Term
of Employment. The Company hereby agrees to employ Executive, and Executive hereby accepts employment with the Company, upon
the terms set forth in this Agreement, for the period commencing on April 1, 2008 (the “Commencement Date”) and ending
on March 31, 2009, unless sooner terminated in accordance with the provisions of Section 4 (such period, the “Initial Term”);
provided, however, that on each anniversary of the Commencement Date, the term of employment under this Agreement
shall be automatically extended for an additional one-year period (each such period, a “Subsequent Period”) unless
terminated sooner pursuant to Section 4 or if, at least sixty (60) days prior to the applicable anniversary date, either Executive
or the Company provides written notice to the other party electing not to extend. The Initial Term together with each Subsequent
Term, if any, are referred to hereinafter as the “Agreement Term.”

 

2.          Title;
Capacity. During the Agreement Term, the Company will employ Executive as its Chief Medical Officer and Executive Vice President,
Development to perform the duties and responsibilities inherent in such position and such other duties and responsibilities as
the Chief Executive Officer of the Company (the “CEO”) shall from time to time reasonably assign to him. Within ninety
(90) days of the Commencement Date, and on an annual basis thereafter, the Company’s Board of Directors (the “Board”),
in consultation with Executive and the CEO, will set reasonably attainable, specific goals pursuant to the Operating Plan of the
Company as in effect from time to time. Executive shall report directly to the CEO and shall be subject to the supervision of,
and shall have such authority as is delegated to him by, the CEO, which authority shall be sufficient to perform his duties hereunder.
Executive will work out of his home office until such time as the Company establishes a California office, at which point he shall
be based there. The location of Executive’s employment is subject to change during the course of the Agreement Term as determined
by the CEO in consultation with Executive. Executive hereby accepts such employment and agrees to undertake the duties and responsibilities
inherent in such position and such other duties as may be reasonably assigned to him. Executive shall devote his full business
time, energies and attention in the performance of the foregoing services.

 

3.          Compensation
and Benefits.

 

3.1           Salary.
The Company shall pay Executive an initial annualized base salary of $350,000, payable in accordance with the Company’s
regular payroll practices. Such base salary shall be subject to annual review and increase (but not decrease) as may be determined
and approved by the Board or the Company’s Compensation Committee in its sole discretion. Such annual review will be completed
by March 31 in each year beginning with March 31, 2009.

 

    	 

    	 

    

 

3.2           Automobile
Allowance. The Executive will be provided with a monthly automobile allowance in the amount of $1,000. The Executive shall be responsible
for payment of all automobile-related expenses and the Company shall have no obligation beyond the payment of the monthly allowance
set forth above. The Executive agrees to obtain commercially reasonable automobile insurance covering the operation of any vehicle
he uses during the course of his employment with the Company.

 

3.3           Bonuses.
At the end of a given fiscal year, Executive will be eligible to receive a bonus equal to up to 25% of his base salary in effect
at the end of such fiscal year. The amount of any such bonus shall be based on factors including, but not limited to, Executive’s
achievement, as determined by the Board in its sole discretion, of reasonable goals and milestones established in advance by the
Board in consultation with the CEO and Executive. The period for calculation of the bonus shall be consistent with the Company’s
fiscal year. The goals and milestones will be established by the Board in consultation with Executive and communicated to Executive
within thirty (30) days of the start of the new fiscal year, or in the case of the 2008 fiscal year, within ninety (90) days of
the Commencement Date. Such bonus, if any, will be paid to Executive on or after January 1 and on or before March 31 of the immediately
succeeding fiscal year. The bonus shall be paid in cash; provided that, if requested by Executive and if approved
by the Board in its sole discretion, some or all of the bonus for which Executive may be eligible in that future year may be paid
in options or restricted stock (valued at the fair market value thereof), or any combination of the foregoing.

 

3.4           Stock
Options.

 

(a)          Contemporaneously
with the execution of this Agreement, the Company shall award Executive a stock option under its 2003 Stock Incentive Plan (the
“2003 Plan”) to purchase 500,000 shares of the Company’s common stock at a per share exercise price of $1.80
(the “Option”), such amount being the fair market value of one share of the Company’s common stock on the date
hereof. The Option will be evidenced in writing by, and subject to the terms of, a stock option agreement provided by the Company,
which agreement will specify vesting over four (4) years and exercise of vested options for up to ten (10) years except as otherwise
provided in the stock option agreement or by the 2003 Plan.

 

(b)          
The Option shall vest as follows: (i) one-quarter of the Option (i.e. 125,000 shares) will vest on the first anniversary of the
Commencement Date; and (ii) the remaining balance of the 375,000 shares will vest in equal quarterly installments in arrears over
the three (3) year period commencing on the first anniversary of the Commencement Date and ending on the fourth anniversary of
the Commencement Date, all subject to Executive’s continued employment by the Company, except as otherwise set forth herein.

 

(c)          At
the sole discretion of the Board or the Company’s Compensation Committee, additional stock options or other stock awards
may be granted to Executive from time to time.

 

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3.5           Fringe
Benefits. Executive shall be entitled to participate in all bonus and benefit programs that the Company establishes and makes
available to its executives and/or employees from time to time, including, but not limited to, health care plans, dental care plans,
supplemental retirement plans, life insurance plans, disability insurance plans and incentive compensation plans, to the extent
that Executive is eligible under, and subject to the terms and conditions of, the applicable plan documents governing such programs.
The Company shall pay 100% of the premium cost for health insurance coverage for Executive and his spouse, if his spouse is not
already covered by a health insurance plan at another employer. Executive shall be eligible to accrue up to four (4) weeks of paid
vacation each calendar year (to be taken at such times and in such number of days as Executive shall determine in consultation
with the CEO and in a manner so as not to impair or otherwise interfere with Executive’s ability to perform his duties and
responsibilities hereunder). The vacation days for which Executive is eligible shall accrue at the rate
of 1.67 days per month that Executive is employed during such calendar year. Vacation accrual will be capped at 1.75 times Executive’s
annual vacation accrual. When Executive’s accrued vacation reaches the cap, he will not accrue additional vacation time until
some of the previously accrued vacation is used and the accrued amount falls below the cap, unless the Company is acquired by another
business venture, in which case none of the previous year’s accrued vacation will be subject to a cap. Executive shall also
be eligible for paid holidays and up to five (5) paid sick days annually, in accordance with the Company’s policies
for its senior executives as in effect from time to time. At the end of each calendar year, all unused sick days shall be forfeited.

 

3.6           Reimbursement
of Expenses. The Company shall reimburse Executive for reasonable travel, entertainment and other expenses incurred or paid
by him in connection with, or related to the performance of his duties, responsibilities or services under this Agreement, upon
presentation by Executive of documentation, expense statements, vouchers and/or such other supporting information as the Company
may request. Executive must submit proper documentation for each such expense within sixty (60) days after the later of (i) his
incurrence of such expense or (ii) his receipt of the invoice for such expense. The Company will reimburse Executive for that expense
within thirty (30) days after receipt of the documentation.

 

3.7           Withholdings.
Payments made under this Section 3 shall be subject to applicable federal, state and local taxes and withholdings.

 

4.          Termination
of Employment Period. The Agreement Term shall terminate upon the occurrence of any of the following:

 

4.1           Expiration
of the Agreement Term. This Agreement shall expire at the end of the Agreement Term; provided, that notice is
given in accordance with Section 1 of this Agreement.

 

4.2           Termination
by the Company for Cause. At the election of the Company, for Cause (as defined below), immediately following written notice
by the Company to Executive, which notice shall identify in reasonable detail the Cause upon which termination is based. For the
purposes of this Agreement, “Cause” for termination shall be deemed to exist upon:

 

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(a)          a
good faith finding by the Company that (i) Executive has engaged in dishonesty, willful misconduct or gross negligence; (ii) Executive
has breached or has threatened to breach his Invention, Non-Disclosure, and Non-Solicitation Agreement; or (iii) Executive has
materially breached this Agreement, and Executive has failed to cure such conduct or breach within thirty (30) days after his receipt
of written notice from the Company of such breach; or

 

(b)          Executive’s
conviction, guilty plea, or entry of nolo contendere to any crime involving moral turpitude, fraud or embezzlement, or any felony.

 

4.3           Termination
By Executive for Good Reason. At the election of Executive, for Good Reason. For purposes of this Agreement, “Good Reason”
means the occurrence, without Executive’s written consent, of either of the events or circumstances set forth in clauses
(a) or (b) below. In addition, notwithstanding the occurrence of either of the events enumerated in clause (a) or (b), such occurrence
shall not be deemed to constitute Good Reason if, within thirty (30) days after the Company’s receipt of written notice from
Executive of the occurrence or existence of an event or circumstance enumerated in clause (a) or (b), such event or circumstance
has been remedied by the Company.  Executive shall not be deemed to have terminated his employment for Good Reason unless
he first delivers a written notice of termination to the Company identifying in reasonable detail the acts or omissions constituting
Good Reason within ninety (90) days after their occurrence and the provision of this Agreement relied upon, such acts or omissions
are not cured by the Company within thirty (30) days of the receipt of such notice, and Executive actually ends his employment
within one-hundred and twenty (120) days after the Company’s failure to cure. 

 

(a)          within
six (6) months after a Change of Control (as defined below), a change by the Company in the location at which Executive performs
his principal duties for the Company to a different location that is (i) outside a radius of thirty five (35) miles from Executive’s
principal residence immediately prior to the date on which such change occurs, and (ii) more than fifty (50) miles from the location
at which Executive performed his principal duties for the Company immediately prior to the date on which such change occurs; or

 

(b)          any
material breach by the Company of this Agreement.

 

4.4           Death
or Disability. Immediately upon Executive’s death or disability. As used in this Agreement, the determination of “disability”
shall occur when Executive, due to a physical or mental disability, for a period of 60 consecutive days, or 120 days in the aggregate
whether or not consecutive, during any 360-day period, is unable to perform the services contemplated under this Agreement. A determination
of disability shall be made by a physician satisfactory to both Executive and the Company; provided, that, if Executive
and the Company do not agree on a physician, Executive and the Company shall each select a physician and these two together shall
select a third physician, whose determination as to disability shall be binding on all parties.

 

4.5           Termination
by Executive Without Good Reason or Termination by the Company Without Cause. At the election of Executive without Good Reason
or by the Company without Cause, upon not less than thirty (30) days’ prior written notice to the other party.

 

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5.          Effect
of Termination.

 

5.1           Payments
Upon Termination for Any Reason. In the event Executive’s employment is terminated pursuant to Section 4, the Company
shall pay to Executive (or his estate or legal representative, if applicable), on the date of his termination of employment with
the Company, the compensation and benefits under Sections 3.1, 3.4 and 3.5 that are accrued and unpaid through such termination
date (including, without limitation, an amount equal to all accrued but unused vacation pay and unreimbursed expenses). Subject
to Section 5.5, in the event of termination of Executive’s employment by Executive by reason of non-renewal of the Agreement
Term pursuant to Sections 1 and 4.1, the Company for Cause pursuant to Section 4.2, by reason of Executive’s death or disability
pursuant to Section 4.4, or by Executive without Good Reason pursuant to Section 4.5, Executive shall not receive any compensation
or benefits other than as expressly stated in this Section 5.1 and as otherwise required by law.

 

5.2           Termination
by the Company Without Cause, by the Company by Reason of Non-Renewal of Agreement Term, or by Executive for Good Reason. Subject
to Section 5.3 below, in addition to the payments and provisions under Section 5.1, in the event of termination of Executive’s
employment by the Company by reason of non-renewal of the Agreement Term pursuant to Sections 1 and 4.1, by Executive for Good
Reason pursuant to Section 4.3, or by the Company without Cause pursuant to Section 4.5, provided that Executive executes a severance
agreement and release of claims in a form reasonably satisfactory to the Company (the “Severance Agreement”) and allows
it to become binding, the Company shall provide Executive with the following:

 

(a)          
twelve (12) months of Executive’s base salary in effect at the time of termination of employment, payable as a single lump
sum no later than thirty (30) calendar days following the date on which the Company receives an executed Severance Agreement from
Executive or the date on which the Severance Agreement becomes binding on Executive, whichever occurs later (such date, the “Payment
Date”); and

 

(b)          the
Company will, for a period of twelve (12) months following Executive’s termination from employment, continue Executive’s
participation in the Company’s group health plan and shall pay that portion of the premiums that the Company paid on behalf
of Executive during Executive’s employment, provided, however, that if the Company’s health insurance
plan does not permit such continued participation in such plan after Executive’s termination of employment, then the Company
shall pay the costs of COBRA continuation coverage on Executive’s behalf for such twelve-month
period; and provided, further, that if Executive becomes employed with another employer during the period in which
continued health insurance is being provided pursuant to this Section, the Company shall not be required to continue such health
benefits, or if applicable, to pay the costs of COBRA, if Executive becomes covered under a health insurance plan of the new employer.
(For purposes of this Section 5.2(b), the term “Executive” shall include, to the extent applicable, Executive’s
spouse and any of his dependents covered under the Company’s group health plan prior to his termination of employment.)

 

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5.3           Termination
in the Event of a Change in Control.

 

(a)          In
addition to the payments and provisions under Section 5.1 but in lieu of, and not in addition to, the payments required pursuant
to Section 5.2 above and 5.5 below, in the event Executive’s employment with the Company is terminated by the Company by
reason of non-renewal of the Agreement Term pursuant to Sections 1 and 4.1, by Executive for Good Reason pursuant to Section 4.3,
or by the Company without Cause pursuant to Section 4.5, in any such case, within twelve (12) months following a Change in Control
(as defined below), provided that Executive (or his legal representative, if applicable) executes a Severance Agreement and allows
it to become binding, Executive shall be entitled to the following:

 

(i)          a
lump sum cash amount equal to twelve (12) months of Executive’s base salary in effect at the time of Executive’s termination,
such payment to be made no later than thirty (30) calendar days following the Payment Date;

 

(ii)         for
up to twelve (12) months after Executive’s date of termination, the Company shall continue Executive’s participation
in the Company’s group health plan and shall pay that portion of the premiums that the Company paid on behalf of Executive
during Executive’s employment; provided, however, that if the Company’s health insurance plan does not
permit Executive’s continued participation in such plan after his termination of employment, then the Company shall pay the
costs of COBRA continuation coverage on Executive’s behalf for so long as COBRA continuation
coverage is available, up to twelve (12) months; and provided, further, that if Executive becomes employed with another
employer during the period in which continued health insurance is being provided pursuant to this Section, the Company shall not
be required to continue such health benefits, or if applicable, to pay the costs of COBRA, if Executive becomes covered under a
health insurance plan of the new employer. (For purposes of this Section 5.3(a)(ii), the term “Executive” shall include,
to the extent applicable, Executive’s spouse and any of his dependents covered under the Company’s group health plan
prior to his termination of employment.)

 

(b)          As
used herein, “Change in Control” shall occur or be deemed to occur if any of the following events occur:

 

(i)          any
sale, lease, exchange or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets
of the Company; or

 

(ii)         any
consolidation or merger of the Company (including, without limitation, a triangular merger) where the shareholders of the Company
immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own, directly
or indirectly, shares representing in the aggregate more than fifty percent (50%) of the combined voting power of all the outstanding
securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation,
if any); or

 

(iii)        a
third person, including a “person” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (but other than (x) the Company, (y) any employee benefit plan of the Company, or (z) investors
purchasing equity securities of the Company pursuant to a financing or a series of financings approved by the Board of Directors
of the Company) becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of Controlling
Securities (as defined below). “Controlling Securities” shall mean securities representing 25% or more of the total
number of votes that may be cast for the election of the directors of the Company.

 

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5.4           Effect
of Termination on Stock Options and Other Equity Compensation.

 

(a)          In
the event of Executive’s termination by Executive or the Company by reason of non-renewal of the Agreement Term pursuant
to Sections 1 and 4.1, by the Company for Cause pursuant to Section 4.2, or by Executive without Good Reason pursuant to Section
4.5, all unvested stock and stock options granted to Executive before and after the date of this Agreement shall be immediately
forfeited upon the effective date of such termination of employment or as otherwise provided in the option agreement; provided,
that, Executive shall have ninety (90) days from the date of termination to exercise the vested portion of any stock options,
subject to Section 3.3(b) hereof, provided that Executive executes a Severance Agreement and allows it to become
binding.

 

(b)          In
the event of Executive’s termination by Executive for Good Reason pursuant to Section 4.3 or by the Company without Cause
pursuant to Section 4.5, and provided that Executive (or his legal representative, if applicable) executes a Severance Agreement
and allows it to become binding, that number of Executive’s stock and stock options that would otherwise have vested from
the effective date of Executive’s termination to the first anniversary of such date shall immediately vest and Executive
(or his estate or legal representative, if applicable) shall have one (1) year to exercise the vested portion of such stock options,
subject to Section 3.3(b) hereof.

 

(c)          In
the event Executive’s employment with the Company is terminated by the Company by reason of non-renewal of the Agreement
Term pursuant to Sections 1 and 4.1, by Executive for Good Reason pursuant to Section 4.3, or by the Company without Cause pursuant
to Section 4.5, in any such case, within twelve (12) months following a Change in Control, in lieu of the acceleration provided
for pursuant to Section 5.4(b) above, provided that Executive (or his legal representative, if applicable) executes a Severance
Agreement and allows it to become binding, all of Executive’s stock and stock options shall immediately become exercisable
with respect to all shares underlying such options and Executive (or his estate or legal representative, if applicable) shall have
one (1) year to exercise such stock options, subject to any earlier expiration under the 2003 Plan or the terms of the Change of
Control.

 

5.5           Limitation
on Benefits.

 

(a)          It
is the intention of Executive and the Company that no payments made or benefits provided by the Company to or for the benefit of
Executive under this Agreement or any other agreement or plan pursuant to which Executive is entitled to receive payments or benefits
shall be non-deductible to the Company by reason of the operation of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), relating to golden parachute payments.

 

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(b)          The
Company will make the payments under this Agreement without regard to whether the deductibility of such payments (or any other
payments or benefits) would be limited or precluded by Code Section 280G and without regard to whether such payments would subject
Executive to the federal excise tax levied on certain “excess parachute payments” under Code Section 4999 of the Code;
provided, however, that if the Total After-Tax Payments (as defined below) would be increased by the reduction or elimination of
any payment and/or other benefit (including the vesting of the options) under this Agreement, then the amounts payable under this
Agreement will be reduced or eliminated as follows, if possible: (i) first, by reducing or eliminating any cash payments or other
benefits (other than the vesting of the options) and (ii) second, by reducing or eliminating the vesting of that options that occurs
as a result of such Change of Control (as provided above), to the extent necessary to maximize the Total After-Tax Payments. The
Company’s independent, certified public accounting firm will determine whether and to what extent payments or vesting under
this agreement are required to be reduced in accordance with the preceding sentence. For purposes of this Agreement, “Total
After-Tax Payments” means the total of all “parachute payments” (as that term is defined in Section 280G(b)(2)
of the Code) made to or for the benefit of Executive (whether made under the Agreement or otherwise), after reduction for all applicable
federal taxes (including, without limitation, the tax described in Section 4999 of the Code).

 

5.6           Withholdings.
Payments made under this Section 5 shall be subject to applicable federal, state and local taxes and withholdings.

 

6.          Invention,
Non-Disclosure, and Non-Solicitation. As a condition of Executive’s employment, Executive shall execute the Invention,
Non-Disclosure, and Non-Solicitation Agreement attached hereto as Exhibit A.

 

7.          Notices.
All notices, requests, consents and other communications hereunder will be in writing, will be addressed, if to the Company, at
its principal corporate offices, and if to Executive, at his address set forth on the signature page hereto, or in either case,
such other address as a party may designate by notice hereunder, and will be either (i) delivered by hand, (ii) sent
by overnight courier, or (iii) sent by registered or certified mail, return receipt requested, postage prepaid. All notices,
requests, consents and other communications hereunder will be deemed to have been given either (i) if by hand, at the time
of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if sent by overnight courier,
on the next business day following the day such notice is delivered to the courier service, or (iii) if sent by registered or certified
mail, on the fifth business day following the day such mailing is made.

 

8.          Absence
of Restrictions. Executive represents and warrants that he is not bound by any employment contracts, restrictive covenants
or other restrictions that prevent him from entering into employment with, or carrying out his responsibilities for, the Company,
or which are in any way inconsistent with any of the terms of this Agreement.

 

9.          Entire
Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings,
whether written or oral relating to the subject matter of this Agreement, with the exception of the Invention, Non-Disclosure,
and Non-Solicitation Agreement, dated as of the date hereof, by and between the Company and Executive.

 

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10.         Amendment.
This Agreement may be amended or modified only by a written instrument executed by both the Company and Executive.

 

11.         Governing
Law; Consent to Jurisdiction. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the
State of New York without regard to conflict of law principles. Any action, suit or other legal proceeding arising under or relating
to any provision of this Agreement shall be commenced only in a court of the State of New York (or, if appropriate, a federal court
located within the State of New York), and the Company and Executive each consents to the jurisdiction of such a court. The Company
and Executive each hereby irrevocably waive any right to a trial by jury in any action, suit or other legal proceeding arising
under or relating to any provision of this Agreement

 

12.         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors
and assigns, including any corporation with which, or into which, the Company may be merged or which may succeed to the Company’s
assets or business, provided, however, that the obligations of Executive are personal and shall not be assigned by
him.

 

13.         Miscellaneous.

 

13.1         No
Waiver. No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that
or any other right. A waiver or consent given on any one occasion shall be effective only in that instance and shall not be construed
as a bar or waiver of any right on any other occasion.

 

13.2         Captions.
The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.

 

13.3         Severability.
In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability
of the remaining provisions shall in no way be affected or impaired thereby.

 

13.4         Counterparts.
This Agreement may be executed in two 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 delivered by facsimile, and facsimile signatures shall be treated
as original signatures for all applicable purposes.

 

13.5         Blue
Penciling. To the extent that any provision herein contravenes the requirements of Code Section 409A or the regulations thereunder
(when issued) it should be appropriately modified so Executive is not subject to the adverse effects of such Code Section 409A.

 

13.6         Section
409A. All payments hereunder (other than reimbursement of expenses) shall be subject to any and all applicable statutory
deductions. Employee acknowledges and agrees that the Company may revise the timing of payments in this Agreement to the extent
necessary to comply with Section 409A of the Code (although the parties agree that the provisions of this Agreement are not intended
to be deferred compensation subject to such section). In any event, Company makes no representations or warranty and shall have
no liability to Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation
subject to Code Section 409A but not to satisfy the conditions of that section.

 

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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the day and year set forth above.

 

	 	THE  COMPANY:
	 	 
	 	INTERCEPT PHARMACEUTICALS, INC.
	 	 
	 	By:	/s/ Mark Pruzanski
	 	 	Name:	Mark E. Pruzanski
	 	 	Title:	Chief Executive Officer
	 	 	 	 
	 	Date:	March 21, 2008
	 	 
	 	EXECUTIVE:
	 	 
	 	/s/ David Shapiro
	 	Name: David Shapiro, MD
	 	 
	 	Date: March 21, 2008
	 	 
	 	Address for Notice Purposes:

 

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Exhibit A

 

 

Invention, Non-Disclosure, and Non-Solicitation
Agreement 

 

    	11Exhibit 10.6.2

 

INVENTION, NON-DISCLOSURE,
AND NON-SOLICITATION AGREEMENT

 

This Invention, Non-Disclosure, and Non-Solicitation
Agreement is made by and between Intercept Pharmaceuticals, Inc. (the “Company”) and David Shapiro (the “Employee”).

 

IN CONSIDERATION of the Employee's employment
by the Company, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Employee agrees
as follows:

 

1.          Condition
of Employment.

 

The Employee acknowledges that his/her employment
with the Company is contingent upon his/her agreement to sign and adhere to the provisions of this Invention, Non-Disclosure, and
Non-Solicitation Agreement (the “Agreement”).

 

2.          Proprietary
and Confidential Information.

 

(a)        The
Employee agrees that all information, whether or not in writing, of a private, secret or confidential nature concerning the Company’s
business, business relationships or financial affairs (collectively, “Proprietary Information”) is and shall be the
exclusive property of the Company. By way of illustration, but not limitation, Proprietary Information may include inventions,
products, processes, methods, techniques, formulas, compositions, compounds, projects, developments, plans (including business
and marketing plans), research data, clinical data, financial data (including sales costs, profits, pricing methods), personnel
data, computer programs (including software used pursuant to a license agreement), customer and supplier lists, and contacts at
or knowledge of customers or prospective customers of the Company. The Employee will not disclose any Proprietary Information to
any person or entity other than employees of the Company or use the same for any purposes (other than in the performance of his/her
duties as an employee of the Company) without written approval by an officer of the Company, either during or after his/her employment
with the Company, unless and until such Proprietary Information has become public knowledge without fault by the Employee.

 

(b)        The
Employee agrees that all files, documents, letters, memoranda, reports, records, data, sketches, drawings, models, laboratory notebooks,
program listings, computer equipment or devices, computer programs or other written, photographic, or other tangible material containing
Proprietary Information, whether created by the Employee or others, which shall come into his/her custody or possession, shall
be and are the exclusive property of the Company to be used by the Employee only in the performance of his/her duties for the Company
and shall not be copied or removed from the Company premises except in the pursuit of the business of the Company. All such materials
or copies thereof and all tangible property of the Company in the custody or possession of the Employee shall be delivered to the
Company, upon the earlier of (i) a request by the Company or (ii) termination of his/her employment. After such delivery, the Employee
shall not retain any such materials or copies thereof or any such tangible property.

 

    	 

    	 

    

 

(c)        The
Employee agrees that his/her obligation not to disclose or to use information and materials of the types set forth in paragraphs
(a) and (b) above, and his/her obligation to return materials and tangible property set forth in paragraph (b) above also extends
to such types of information, materials and tangible property of customers of the Company or suppliers to the Company or other
third parties who may have disclosed or entrusted the same to the Company or to the Employee.

 

3.          Inventions.

 

(a)        The
Employee will make full and prompt disclosure to the Company of all inventions, creations, improvements, discoveries, trade secrets,
secret processes, technology, know-how, methods, developments, software, and works of authorship or other creative works, whether
patentable or not, which are created, made, conceived or reduced to practice by the Employee or under the Employee's direction
or jointly with others during his/her employment by the Company, whether or not during normal working hours or on the premises
of the Company (all of which are collectively referred to in this Agreement as “Inventions”).

 

(b)        The
Employee agrees to assign and does hereby assign to the Company (or any person or entity designated by the Company) all his/her
right, title and interest in and to all Inventions and all related patents, patent applications, copyrights and copyright applications
to the maximum extent permitted by Section 2870 of the California Labor Code or any like statute of any other state. The Employee
hereby also waives all claims to moral rights in any Inventions. The Employee understands that the provisions of this Agreement
requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of California
Labor Code Section 2870 (attached hereto as Exhibit A). The Employee agrees to advise the Company promptly in writing of any inventions
that he/she believes meets the criteria in Section 2870 and not otherwise disclosed on Exhibit B.

 

(c)        The
Employee agrees to cooperate fully with the Company and to take such further actions as may be necessary or desirable, both during
and after his/her employment with the Company, with respect to the procurement, maintenance and enforcement of copyrights, patents
and other intellectual property rights (both in the United States and foreign countries) relating to Inventions. The Employee shall
sign all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, formal assignments,
assignments of priority rights, and powers of attorney, which the Company may deem necessary or desirable in order to protect its
rights and interests in any Invention. The Employee further agrees that if the Company is unable, after reasonable effort, to secure
the signature of the Employee on any such papers, any executive officer of the Company shall be entitled to execute any such papers
as the agent and the attorney-in-fact of the Employee, and the Employee hereby irrevocably designates and appoints each executive
officer of the Company as his/her agent and attorney-in-fact to execute any such papers on his/her behalf, and to take any and
all actions as the Company may deem necessary or desirable in order to protect its rights and interests in any Invention, under
the conditions described in this sentence.

 

    	2

    	 

    

 

4.          Other
Agreements.

 

The Employee hereby represents that,
except as the Employee has disclosed in writing to the Company, the Employee is not bound by the terms of any agreement with any
previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information
in the course of his/her employment with the Company, to refrain from competing, directly or indirectly, with the business of such
previous employer or any other party, or to refrain from soliciting employees, customers or suppliers of such previous employer
or other party. The Employee further represents that his/her performance of all the terms of this Agreement and the performance
of his/her duties as an employee of the Company do not and will not breach any agreement with any prior employer or other party
to which the Employee is a party (including without limitation any non-disclosure or non-competition agreement), and that the Employee
will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging
to any previous employer or others.

 

5.          United
States Government Obligations.

 

The Employee acknowledges that the Company
from time to time may have agreements with other persons or with the United States Government, or agencies thereof, which impose
obligations or restrictions on the Company regarding inventions made during the course of work under such agreements or regarding
the confidential nature of such work. The Employee agrees to be bound by all such obligations and restrictions that are made known
to the Employee and to take all action necessary to discharge the obligations of the Company under such agreements.

 

6.          Not
An Employment Contract.

 

The Employee acknowledges that this Agreement
does not constitute a contract of employment, either express or implied, and does not imply that the Company will continue the
Employee’s employment for any period of time.

 

7.          General
Provisions.

 

(a)          No
Conflict. The Employee represents that the execution and performance by him/her of this Agreement does not and will not conflict
with or breach the terms of any other agreement by which the Employee is bound.

 

(b)          Entire
Agreement. This Agreement supersedes all prior agreements, written or oral, between the Employee and the Company relating to
the subject matter of this Agreement. This Agreement may not be modified, changed or discharged in whole or in part, except by
an agreement in writing signed by the Employee and the Company. The Employee agrees that any change or changes in his/her duties,
salary or compensation after the signing of this Agreement shall not affect the validity or scope of this Agreement.

 

    	3

    	 

    

 

(c)          Severability.
The invalidity or unenforceability of any provision of this Agreement shall not affect or impair the validity or enforceability
of any other provision of this Agreement.

 

(d)          Waiver.
No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion is effective only in that instance and will not be construed
as a bar to or waiver of any right on any other occasion.

 

(e)          Employee
Acknowledgment and Equitable Remedies. The Employee acknowledges that the restrictions contained in this Agreement are necessary
for the protection of the business and goodwill of the Company and are considered by the Employee to be reasonable for such purpose.
The Employee agrees that any breach of this Agreement is likely to cause the Company substantial and irrevocable damage and therefore,
in the event of any breach or threatened breach of this Agreement, the Employee agrees that the Company, in addition to such other
remedies that may be available, shall be entitled to specific performance and other injunctive relief without posting a bond, and
the Employee hereby waives the adequacy of a remedy at law as a defense to such relief.

 

(f)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors
and assigns, including any corporation or entity with which or into which the Company may be merged or which may succeed to all
or substantially all of its assets or business, provided however that the obligations of the Employee are personal and shall not
be assigned by the Employee.

 

(g)          Subsidiaries
and Affiliates. The Employee expressly consents to be bound by the provisions of this Agreement for the benefit of the Company
or any subsidiary or affiliate thereof to whose employ the Employee may be transferred without the necessity that this Agreement
be re-signed at the time of such transfer.

 

(h)          Governing
Law, Forum and Jurisdiction. This Agreement shall be governed by and construed as a sealed instrument under and in accordance
with the laws of the State of New York without regard to conflict of laws provisions. Any action, suit, or other legal proceeding
which is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in
a court of the State of New York (or, if appropriate, a federal court located within New York), and the Company and the Employee
each consents to the jurisdiction of such a court.

 

(i)          Captions.
The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.

 

    	4

    	 

    

 

THE EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS
CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

 

WITNESS our hands and seals:

 

 

INTERCEPT PHARMACEUTICALS, INC.

 

	 	 	 
	/s/ Mark Pruzanski	 	March 21, 2008
	By:  Mark E. Pruzanski, MD	 	Date
	President and Chief Executive Officer	 	 
	 	 	 
	David Shapiro, MD	 	 
	 	 	 
	/s/ David Shapiro	 	March 31st 2008
	 	 	Date
	 	 	 

 

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Exhibit A

 

CALIFORNIA LABOR CODE SECTION 2870

 

(a)          Any
provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time
without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

		(1)	Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer, or

 

		(2)	Result from any work performed by the employee for his
employer.

 

(b)          To
the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

 

    	6

    	 

    

 

Exhibit B

 

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP:

 

	Title	 	Date	 	Identifying Number or Brief Description

 

 

 

 

	X	 	No inventions or improvements
	 	 	 
	 	 	Additional Sheets Attached
	 	 	 
	Signature of Employee:	 	/s/ David Shapiro
	 	 	 
	Printed Name of Employee:	 	David Shapiro

 

	Date: 	31st March 2008	 

 

    	7

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