Exhibit 10.1
 
VALENCE TECHNOLOGY, INC.
 
2009 EQUITY INCENTIVE PLAN
 
PERFORMANCE BASED RESTRICTED STOCK UNIT AWARD AGREEMENT
 
Unless otherwise defined herein, the terms defined in the Valence Technology,
Inc. 2009 Equity Incentive Plan (the “Plan”) will have the same defined meanings
in this Performance Based Restricted Stock Unit Award Agreement (the “Award
Agreement”).
 
NOTICE OF RESTRICTED STOCK UNIT GRANT
 
Participant Name:
 
Address:
 
You have been granted the right to receive an Award of Restricted Stock Units,
subject to the terms and conditions of the Plan and this Award Agreement, as
follows:
 

 
Grant Number
             
Date of Grant
             
Vesting Commencement Date
             
Number of Restricted Stock Units
             
Vesting Schedule:
   

 
Subject to any acceleration provisions contained in the Plan or set forth below,
the Restricted Stock Unit will vest in accordance with the following schedule:

[A number of Restricted Stock Units designated in the Table below will vest for
each calendar quarter based on the corresponding “Minimum Quarterly Revenue
Achievement” level achieved for the quarter.  If the specified minimum level is
met, the designated number of Restricted Stock Units will vest following the
close of each quarter two trading days after Valence Technology, Inc. (the
“Company”) files its Form 10-Q Quarterly Report or its Form 10-K Annual Report,
for such period.  However, should the market value of the Restricted Stock Unit
shares that vest on such vesting date be lower than the predetermined “Minimum
Award Value” for the quarter in which earned, the Company will pay an additional
cash award, in the next payroll period following the vesting date, equal to the
difference between the predetermined “Minimum Award Value” for that quarter and
the market value of the shares that vest on the vesting date.]
 
 
 

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

 
 
Revenue Goals and Awards
Fiscal Year 2012
Minimum Quarterly Revenue Achievement
Number of Shares
 Minimum Award Value
$_______
_____ shares
$______
$_______
_____ shares
$______
$_______
_____ shares
$______
$_______
_____ shares
$______
$_______
_____ shares
$______
$_______
_____ shares
$______

 
In the event Participant ceases to be an Employee or Service Provider for any or
no reason before Participant vests in the Restricted Stock Units, the Restricted
Stock Units and Participant’s right to acquire any shares of Company Common
Stock (the “Shares”) or receive payments hereunder will immediately terminate.
 
By Participant’s signature and the signature of the Company below, Participant
and the Company agree that this Award of Restricted Stock Units is granted under
and governed by the terms and conditions of the Plan and this Award Agreement,
including the Terms and Conditions of Restricted Stock Unit Grant, attached
hereto as Exhibit A, all of which are made a part of this document.  Participant
has reviewed the Plan and this Award Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Award
Agreement and fully understands all provisions of the Plan and Award
Agreement.  Participant hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions relating to
the Plan and Award Agreement.  Participant further agrees to notify the Company
upon any change in the residence address indicated below.
 

PARTICIPANT:   VALENCE TECHNOLOGY, INC.                    ---------      
Signature   By            ---------       Print Name   Title           Residence
Address:                      

 
 
2

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

 
EXHIBIT A
 
TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT
 
1.           Grant.  Valence Technology, Inc. (the “Company”) hereby grants to
the individual named in the Notice of Grant attached as Part I of this Award
Agreement (the “Participant”) under the Valence Technology, Inc. 2009 Equity
Incentive Plan (the “Plan”) an Award of Restricted Stock Units, subject to all
of the terms and conditions in this Award Agreement and the Plan, which is
incorporated herein by reference.  Subject to Section 1.8 of the Plan, in the
event of a conflict between the terms and conditions of the Plan and the terms
and conditions of this Award Agreement, the terms and conditions of the Plan
will prevail.
 
2.           Company’s Obligation to Pay.  Each Restricted Stock Unit represents
the right to receive a Share on the date it vests.  Unless and until the
Restricted Stock Units have vested in the manner set forth in Section 3,
Participant will have no right to payment of such Restricted Stock Units.  Prior
to actual payment of any vested Restricted Stock Units, such Restricted Stock
Units will represent an unsecured obligation of the Company, payable (if at all)
only from the general assets of the Company.  Any Restricted Stock Units that
vest in accordance with Sections 3 or 4 will be paid to Participant (or in the
event of Participant’s death, to his or her estate) in whole Shares, subject to
Participant satisfying any applicable tax withholding obligations as set forth
in Section 7.  Subject to the provisions of Section 4, such vested Restricted
Stock Units will be paid in Shares as soon as practicable after vesting, but in
each such case within the period ending no later than the date that is two and
one-half (2½) months from the end of the Company’s tax year that includes the
vesting date.
 
3.           Vesting Schedule.  Except as provided in Section 4, and subject to
Section 5, the Restricted Stock Units awarded by this Award Agreement will vest
in accordance with the vesting provisions set forth in the Notice of
Grant.  Restricted Stock Units scheduled to vest on a certain date or upon the
occurrence of a certain condition will not vest in accordance with any of the
provisions of this Award Agreement, unless Participant will have been
continuously an Employee or Service Provider from the Date of Grant until the
date such vesting occurs.
 
4.           Committee Discretion.  The Committee, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of the balance, of
the unvested Restricted Stock Units at any time, subject to the terms of the
Plan.  If so accelerated, such Restricted Stock Units will be considered as
having vested as of the date specified by the Committee.
 
 
3

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

 
Notwithstanding anything in the Plan or this Award Agreement to the contrary, if
the vesting of the balance, or some lesser portion of the balance, of the
Restricted Stock Units is accelerated in connection with Participant’s
termination as an Employee or Service Provider (provided that such termination
is a “separation from service” within the meaning of Section 409A, as determined
by the Company), other than due to death, and if (x) Participant is a “specified
employee” within the meaning of Section 409A at the time of such termination as
an Employee or Service Provider and (y) the payment of such accelerated
Restricted Stock Units will result in the imposition of additional tax under
Section 409A if paid to Participant on or within the six (6) month period
following Participant’s termination as an Employee or Service Provider, then the
payment of such accelerated Restricted Stock Units will not be made until the
date six (6) months and one (1) day following the date of Participant’s
termination as an Employee or Service Provider, unless the Participant dies
following his or her termination as an Employee or Service Provider, in which
case, the Restricted Stock Units will be paid in Shares to the Participant’s
estate as soon as practicable following his or her death.  It is the intent of
this Award Agreement to comply with the requirements of Section 409A so that
none of the Restricted Stock Units provided under this Award Agreement or Shares
issuable thereunder will be subject to the additional tax imposed under Section
409A, and any ambiguities herein will be interpreted to so comply.  For purposes
of this Award Agreement, “Section 409A” means Section 409A of the Code, and any
proposed, temporary or final Treasury Regulations and Internal Revenue Service
guidance thereunder, as each may be amended from time to time.
 
5.           Forfeiture upon Termination of Status as an Employee or Service
Provider.  Notwithstanding any contrary provision of this Award Agreement, the
balance of the Restricted Stock Units that have not vested as of the time of
Participant’s termination as an Employee or Service Provider for any or no
reason and Participant’s right to acquire any Shares or receive payments
hereunder will immediately terminate.
 
6.           Death of Participant.  Any distribution or delivery to be made to
Participant under this Award Agreement will, if Participant is then deceased, be
made to Participant’s designated beneficiary, or if no beneficiary survives
Participant, the administrator or executor of Participant’s estate.  Any such
transferee must furnish the Company with (a) written notice of his or her status
as transferee, and (b) evidence satisfactory to the Company to establish the
validity of the transfer and compliance with any laws or regulations pertaining
to said transfer.
 
7.           Withholding of Taxes.  Notwithstanding any contrary provision of
this Award Agreement, no certificate representing the Shares will be issued to
Participant, unless and until satisfactory arrangements (as determined by the
Committee) will have been made by Participant with respect to the payment of
income, employment and other taxes which the Company determines must be withheld
with respect to such Shares.  The Committee, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit Participant
to satisfy such tax withholding obligation, in whole or in part (without
limitation) by (a) paying cash, (b) electing to have the Company withhold
otherwise deliverable Shares having a Fair Market Value equal to the minimum
amount required to be withheld, (c) delivering to the Company already vested and
owned Shares having a Fair Market Value equal to the amount required to be
withheld, or (d) selling a sufficient number of such Shares otherwise
deliverable to Participant through such means as the Company may determine in
its sole discretion (whether through a broker or otherwise) equal to the amount
required to be withheld.  To the extent determined appropriate by the Company in
its discretion, it will have the right (but not the obligation) to satisfy any
tax withholding obligations by reducing the number of Shares otherwise
deliverable to Participant.  If Participant fails to make satisfactory
arrangements for the payment of any required tax withholding obligations
hereunder at the time any applicable Restricted Stock Units otherwise are
scheduled to vest pursuant to Sections 3 or 4, Participant will permanently
forfeit such Restricted Stock Units and any right to receive Shares thereunder
and the Restricted Stock Units will be returned to the Company at no cost to the
Company.
 
 
4

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

 
8.           Rights as Shareholder.  Neither Participant nor any person claiming
under or through Participant will have any of the rights or privileges of a
shareholder of the Company in respect of any Shares deliverable hereunder unless
and until certificates representing such Shares will have been issued, recorded
on the records of the Company or its transfer agents or registrars, and
delivered to Participant.  After such issuance, recordation and delivery,
Participant will have all the rights of a shareholder of the Company with
respect to voting such Shares and receipt of dividends and distributions on such
Shares.
 
9.           No Guarantee of Continued Service.  PARTICIPANT ACKNOWLEDGES AND
AGREES THAT THE VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING
SCHEDULE HEREOF IS EARNED ONLY BY SATISFYING PERFORMANCE CRITERIA AND CONTINUING
AS AN EMPLOYEE OR SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR
SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING
HIRED, BEING GRANTED THIS AWARD OF RESTRICTED STOCK UNITS OR ACQUIRING SHARES
HEREUNDER.  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE OR SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR
THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS AN EMPLOYEE OR SERVICE
PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
 
10.         Address for Notices.  Any notice to be given to the Company under
the terms of this Award Agreement will be addressed to the Company at Valence
Technology, Inc., 12303 Technology Boulevard, Suite 950, Austin, Texas 78727, or
at such other address as the Company may hereafter designate in writing.
 
11.         Grant is Not Transferable.  Except to the limited extent provided in
Section 6, this grant and the rights and privileges conferred hereby will not be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and will not be subject to sale under execution, attachment
or similar process.  Upon any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this grant, or any right or privilege conferred hereby,
or upon any attempted sale under any execution, attachment or similar process,
this grant and the rights and privileges conferred hereby immediately will
become null and void.
 
12.         Binding Agreement.  Subject to the limitation on the transferability
of this grant contained herein, this Award Agreement will be binding upon and
inure to the benefit of the heirs, legatees, legal representatives, successors
and assigns of the parties hereto.
 
13.         Additional Conditions to Issuance of Stock.  If at any time the
Company will determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory authority
is necessary or desirable as a condition to the issuance of Shares to
Participant (or his or her estate), such issuance will not occur unless and
until such listing, registration, qualification, consent or approval will have
been effected or obtained free of any conditions not acceptable to the
Company.  Where the Company determines that the delivery of the payment of any
Shares will violate federal securities laws or other applicable laws, the
Company will defer delivery until the earliest date at which the Company
reasonably anticipates that the delivery of Shares will no longer cause such
violation.  The Company will make all reasonable efforts to meet the
requirements of any such state or federal law or securities exchange and to
obtain any such consent or approval of any such governmental authority.
 
 
5

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

 
14.         Plan Governs.  This Award Agreement is subject to all terms and
provisions of the Plan.  In the event of a conflict between one or more
provisions of this Award Agreement and one or more provisions of the Plan, the
provisions of the Plan will govern.  Capitalized terms used and not defined in
this Award Agreement will have the meaning set forth in the Plan.
 
15.         Committee Authority.  The Committee will have the power to interpret
the Plan and this Award Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules (including, but not limited
to, the determination of whether or not any Restricted Stock Units have
vested).  All actions taken and all interpretations and determinations made by
the Committee in good faith will be final and binding upon Participant, the
Company and all other interested persons.  No member of the Committee will be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Award Agreement.
 
16.         Electronic Delivery.  The Company may, in its sole discretion,
decide to deliver any documents related to Restricted Stock Units awarded under
the Plan or future Restricted Stock Units that may be awarded under the Plan by
electronic means or request Participant’s consent to participate in the Plan by
electronic means.  Participant hereby consents to receive such documents by
electronic delivery and agrees to participate in the Plan through any on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.
 
17.         Captions.  Captions provided herein are for convenience only and are
not to serve as a basis for interpretation or construction of this Award
Agreement.
 
18.         Agreement Severable.  In the event that any provision in this Award
Agreement will be held invalid or unenforceable, such provision will be
severable from, and such invalidity or unenforceability will not be construed to
have any effect on, the remaining provisions of this Award Agreement.
 
19.         Modifications to the Agreement.  This Award Agreement constitutes
the entire understanding of the parties on the subjects covered.  Participant
expressly warrants that he or she is not accepting this Award Agreement in
reliance on any promises, representations, or inducements other than those
contained herein.  Modifications to this Award Agreement or the Plan can be made
only in an express written contract executed by a duly authorized officer of the
Company.  Notwithstanding anything to the contrary in the Plan or this Award
Agreement, the Company reserves the right to revise this Award Agreement as it
deems necessary or advisable, in its sole discretion and without the consent of
Participant, to comply with Section 409A or to otherwise avoid imposition of any
additional tax or income recognition under Section 409A in connection to this
Award of Restricted Stock Units.
 
20.         Amendment, Suspension or Termination of the Plan.  By accepting this
Award, Participant expressly warrants that he or she has received an Award of
Restricted Stock Units under the Plan, and has received, read and understood a
description of the Plan.  Participant understands that the Plan is discretionary
in nature and may be amended, suspended or terminated by the Company at any
time.
 
21.         Governing Law.  This Award Agreement will be governed by the laws of
the State of Texas, without giving effect to the conflict of law principles
thereof.
 
6