Exhibit 10.2

 

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Valence
Technology, Inc.

 

 

August 29th, 2007

 

Mr. Alastair Johnston
7 Knockhill Park

Belfast, BT5 6HX
Northern Ireland

 

Dear Alastair,

 

We are pleased to offer you the position of Vice-President, Worldwide
Marketing & Sales of Valence Technology, Inc. (the “Company”). This letter and
the attached Statement of Employment Particulars outline the terms of our
employment offer. If it is agreeable to you, please so indicate by executing a
copy of this letter and Statement of Employment Particulars, in the spaces
provided, and return both documents to the undersigned.

 

1. Capacity and Duties.  You shall serve the Company as its Vice President,
Worldwide Marketing & Sales and shall report directly to me, the Company’s CEO
and President.

 

2. Compensation.  Your starting salary will be at an annualized rate of
ninety-six thousand pounds sterling (£96,000) per annum payable in monthly
intervals. The Company may deduct from your salary amounts sufficient to cover
applicable income tax withholdings and any other amounts which the Company is
required to withhold by applicable law. In the event you are involuntarily
separated from the Company within twenty-four (24) months from your first date
of employment, upon signing a mutually acceptable release, Company will pay you
a one-hundred thousand dollar (US$100,000.00) lump-sum. In the event you
voluntarily resign from Valence, no separation payment will be paid by Company.

 

4. Stock Options.  Upon your employment, you will receive an employee stock
option in the amount of two-hundred and fifty thousand (250,000) shares. This
option vests over a four (4) year period as follows: 25% upon the anniversary of
your first day of employment, the remaining 75% vesting quarterly over the
remaining 3 years. The exercise price for this option grant will be the closing
value of Valence’s stock on your first day of employment.

 

5. Benefits.  During the term of your employment, if and to the extent eligible,
you shall be entitled to participate in all operative benefit and welfare plans
of the Company then in effect for Company’s UK employees including, to the
extent then in effect, group life, medical, disability and other insurance
plans; provided, however, that nothing contained in this paragraph shall, in any
manner whatsoever, directly or indirectly, require or otherwise prohibit the
Company from amending, modifying, curtailing, discontinuing or otherwise
terminating, any Company benefit and welfare plan at any time effective upon
notification to you. For any employee benefit or welfare plan which is based in
whole or in part on length of employment, your prior employment term with
Valence will be included when calculating such employment benefits.

 

Valence Technology, Inc. 1889 E. Maule Ave., Suite A, Las Vegas, Nevada 89119
Tel: 702-558-1000, Fax: 702-558-1001

 

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6. FY 2008 Cash Bonus.  You will be eligible to receive a performance bonus that
will be equivalent to three quarters of a percent (0.75%) of the worldwide
Qualified Revenue achieved in fiscal year 2008 (FY2008) by the Company. For
purposes herein, Qualified Revenue shall mean the worldwide battery and systems
sales revenue received by the Company exclusive of licensing revenue and revenue
from sales to OEMTec, Light Engineering and EVI, and other possible House
Accounts based on agreement between you and the President & CEO of the Company.
The eligibility for the performance bonus is contingent on the following
accomplishments:

1)                                      The Company achieving $25M in Qualified
Revenue for FY2008;

2)                                      The Company achieving $10M in Qualified
Revenue in any one calendar quarter in FY2008 or thereafter (the “$10M QTR”);

3)                                      You and your sales team develop one new
strategic customer account per calendar quarter on average for the time period
beginning with the third quarter of FY2008 until the Company completes the $10M
QTR; and

4)                                      You are employed by Valence at the time
the Company completes the $10M QTR.

 

The performance bonus will be placed in a non-interest earning escrow account if
the Company achieves $25M in Qualified Revenue for FY2008. Upon the successful
completion of the four contingencies, the performance bonus will be payable
within ten (10) days following the accounting close of the $10M QTR.

 

7. Business Expenses.  You will be reimbursed for all reasonable, out-of-pocket
business expenses incurred in the performance of your duties on behalf of the
Company, consist with Company policies. To obtain reimbursement, expenses must
be submitted promptly with appropriate supporting documentation in accordance
with the Company’s policies.

 

8. Probationary Period.  The first six months of your employment are
probationary. During the six-month probationary period the notice period to be
given by both parties is one week. After a successful probationary period any
notice of termination given to you by the Company will be three months notice.
You are also required to give the company three months notice of termination of
your employment after successful completion of your probationary period. The
Company reserves the Right to make Payment in Lieu of Notice at its sole
discretion.

 

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To indicate your acceptance of the Company’s offer, please sign and date this
letter and the attached Statement of Employment Particulars, in the space
provided for each, and return the signed copies to the undersigned. A duplicate
original of each document is enclosed for your records. This letter and
accompanying Statement of Employment Particulars sets forth the terms of your
employment with the Company as of the date indicated above and supersedes any
prior representations or agreements whether written or oral.

 

 

Sincerely,

 

 

/s/ Robert L. Kanode

 

Robert L. Kanode

 

CEO and President

 

 

 

 

 

ACCEPTED AND AGREED TO:

 

 

 

 

 

/s/ Alastair Johnston

 

Alastair Johnston

 

 

 

Date: 31/8/07

 

 

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12303 Technology Blvd.
Suite 950
Austin, Texas 78727

T +1 512 527 2900
F +1 512 527 2910
W www.valence.com

 

ADDENDUM

 

December 22, 2008

Alastair Johnston

Re: Addendum to Employment Offer and Statement of Particulars

 

Dear Alastair,

 

In recognition and appreciation of your hard work and dedication to Valence, I
would like to extend to you a salary increase of £4,000 per annum. This
adjustment will increase your annual salary to £100,000 per year. The effect of
the change will be noted in the January 2009 payroll.

 

In addition to the salary increase, I would like to extend the proposed Bonus
Compensation Plan for FY2010. The plan highlights are as follows:

 

Term:

FY2010

Existing Stock:

250,000 (will continue original vesting schedule)

Prior Comp Plan:

$50,000 award (to be paid on the January 2009 payroll)

Bonus Stock Options:

March 31, 2010 (Award date with immediate vesting)

Cash Bonus:

None

 

This Stock Bonus Plan is contingent on assured compliance with Gross Margin
Target established by Valence’s Chief Executive Officer and Chief Financial
Officer and in accordance with the approved pricing schedule and budget. The
Bonus Stock Option strike price will be $2.53 per share, being not less than the
fair market value of the Common Stock on December 22, 2008, the date of this
contract signing. The terms and conditions of this Stock Bonus Plan are subject
to all the provisions of the 2000 Stock Option Plan.

 

This Addendum supersedes all prior Bonus agreements, arrangements, and
communications, whether oral or written, between the parties. No amendment to
this Agreement may be made except by a writing signed by the Company and
Employee.

 

We appreciate your contribution and efforts to the success of Valence
Technology, and wish you success throughout the remainder of this year.

 

Signed:

/s/ Alastair Johnston

 

Signed:

/s/ Robert L. Kanode

 

Alastair Johnston

 

 

Robert L. Kanode

 

 

 

 

 

Date:

7/1/09

 

Date:

1/7/09

 

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12303 Technology Blvd.
Suite 950
Austin, Texas 78727

T +1 512 527 2900
F +1 512 527 2910
W www.valence.com

 

Alastair Johnston:                                    

Robert L. Kanode                                     

 

Alastair Johnston Proposed Compensation Plan FY2010

 

(Requires Comp. Committee Approval)
Revision as Approved By Comp Committee February  , 2009

 

 

 

Plan Highlights

Term

 

FY2010

Base Salary

 

100,000 British Pounds

Assured Compliance with Gross Margin Target Established By CFO/CEO

 

Approved Pricing Schedule / Budget

Bonus Stock Option Strike Price

 

$2.53

Bonus Stock Option Award Date with Immediate Vesting

 

Date of Audit Report for FY 2010

FY2010 Cash Bonus

 

NONE

FY2011 Compensation Plan to be Negotiated by

 

1-Dec-09

 

 

 

Audited

 

Bonus

 

 

 

Stock Option Bonus Award

 

 

 

Revenue Goal

 

Percentage of

 

 

 

# of Stock

 

Total

 

Stock Option Bonus Plan*

 

FY2010

 

Revenue Goal

 

Value of Bonus

 

Options**

 

Options

 

 

 

 

 

 

 

 

 

 

 

 

 

Base Stock Option Bonus

 

 

 

 

 

 

 

 

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

18,972

 

18,972

 

 

 

 

 

 

 

 

 

 

 

55,336

 

55,336

 

 

 

 

 

 

 

 

 

 

 

94,862

 

94,862

 

 

 

 

 

 

 

 

 

 

 

126,482

 

126,482

 

 

 

 

 

 

 

 

 

 

 

 

 

Stretch Stock Option Bonus Equal to
Bonus plus Stretch Bonus
Percentage of Difference in Goals

 

Stretch Revenue
Goal

 

Stretch Bonus
Percentage

 

Value of
Stretch Bonus

 

# of Stretch
Stock
Options**

 

 

 

 

 

 

 

 

 

 

 

 

 

3,162

 

129,644

 

 

 

 

 

 

 

 

 

 

 

23,715

 

150,198

 

 

 

 

 

 

 

 

 

 

 

50,593

 

177,075

 

Maximum Stock Option Bonus

 

 

 

 

 

 

 

 

 

94,862

 

221,344

 

 

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* The Company believes that Instruction 4 to Item 402(b) of Regulation S-K under
the Securities Exchange Act of 1934, as amended, is applicable to the specific
audited revenue goals.  The disclosure of such information would cause
competitive harm to the Company as the audited revenue goals involve
confidential information.  Therefore, such audited revenue goals, and the bonus
percentages and values which are calculated directly therefrom, are not
disclosed herein.  The Company believes that the target levels of performance
based on the audited revenue goals are reasonably, but not easily, achievable,
and believes that such target levels should be reasonable so as to motivate the
executive officer receiving the grant and further the objectives of the Company.

 

** Calculated at Stock Option Strike Price of $2.53

 

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