Exhibit 10.18


 


SEVERANCE AGREEMENT AND RELEASE


 


This
Severance Agreement and Release (the “Agreement”) is made and entered into by
and between Valence Technology, Inc. (the “Company”) and Thomas Mezger (“Mezger”)
as of the Execution Date of this Agreement.


 


1.     Termination.  Mezger’s employment with the Company is
terminated effective as of February 15, 2008. (‘Separation Date”).


 


2.     Consideration.  Although the Company has no policy or
procedure requiring payment of any severance benefits, the Company agrees to
the following:


 


a)              To pay Mezger a cash payment
equal to three (3) months of his current base salary, less applicable
taxes and withholdings to be made in a lump sum within ten (10) days of
the Effective Date of this Agreement as outlined in Mezger’s Employment Offer
Letter signed on September 9, 2005;


 


b)             To pay Mezger an additional
cash payment equal to two (2) months of his current base salary, less
applicable taxes and withholdings in lieu of 
notice of termination.


 


c)              To pay for the monthly premiums
at Mezger’s current coverage level for group health benefits for a period of
five (5) months after the Separation Date, provided that Mezger elects to
continue such benefits and remains eligible to receive such benefits in
accordance with the applicable provisions of the Consolidated Budget
Reconciliation Act (“COBRA”);


 


d)             To pay for Mezger’s accrued,
but unused, vacation.


 


Mezger acknowledges and
agrees that this Consideration fully and satisfactorily compensates Mezger for
executing and not revoking the Release of Claims set forth herein.


 


3.     Nondisparagement.  Mezger and Company agree that neither party
will at any time disparage the other to third parties in any manner likely to
be harmful to the other party, their business reputation, or the personal or
business reputation of its directors, shareholders and/or employees.  Notwithstanding the prohibition in the
preceding sentence, each party shall respond accurately and fully to any
question, inquiry, or request for information when required by legal process.


 


4.     Company Property.  Mezger agrees to return to the Company all
the Company’s documents (and all copies thereof) and any and all other Company
property in Mezger’s possession, custody or control, including, but not limited
to, financial information, customer information, customer lists, employee
lists, Company notes, contracts, drawings, records, business plans and
forecasts, specifications, computer-recorded information, software, tangible
property, credit cards, entry cards, identification badges and keys, and any
other materials of any kind (and all reproductions thereof).  Mezger will be allowed to retain possession
of his cellular telephone.  Mezger will
also be allowed to retain possession of his laptop after all Company
information has been removed by IT.


 


5.     Proprietary Information. Mezger agrees not to use,
reproduce, or disclose to any other person or company, any confidential or
proprietary information of the Company (and all reproductions thereof).


 

















 


6.     Options. Mezger acknowledges and agrees that, if he
desires to exercise any options that have or will become vested on or before
the Separation Date, Mezger must do so no later than six (6) months
following the Separation Date and in accordance with the terms and provisions
of the applicable option agreements.


 


7.     Release of Claims.  For the Consideration set forth in paragraph
2 and the mutual covenants set forth in this Agreement, Mezger hereby fully
releases the Company, and all of its owners, affiliates, subsidiaries or other
related entities, current and former officers, directors, agents,
representatives, attorneys, employees, shareholders, predecessors, successors
and assigns from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys’ fees, damages, indemnities and obligations of every
kind and nature, in law, equity, or otherwise, known or unknown, suspected and
unsuspected, disclosed and undisclosed, liquidated or contingent, arising out
of or in any way related to agreements, events, acts or conduct at any time
prior to and including the Execution Date, including but not limited to: any
and all such claims and demands directly or indirectly arising out of or in any
way connected with Mezger’ employment with the Company or the conclusion of
that employment; claims or demands related to salary, bonuses, commissions,
incentive payments, stock, stock options, or any ownership or equity interests
in the Company, vacation pay, personal time off, benefits, expense
reimbursements, severance benefits or any other form of compensation; claims
pursuant to any federal, any state or any local law, statute, or common law
cause of action including, but not limited to, wrongful discharge claims;
whistleblower claims; breach of express or implied contract claims; retaliation
claims; the federal Civil Rights Act of 1964, as amended; the federal Americans
with Disabilities Act of 1990; the Family and Medical Leave Act; the Age
Discrimination in Employment Act (“ADEA”); the Worker Adjustment and Retraining
Notification Act (WARN) or any acts prohibiting discrimination based on race,
color, creed, marital status, veteran status, gender, sexual preference,
national origin, citizenship, disability, religion or any other protected
characteristic; tort law; contract law; wrongful discharge; fiduciary duty;
discrimination; harassment; fraud; defamation; libel; emotional distress; and
breach of the implied covenant of good faith and fair dealing.  This release shall not apply to claims for
workers’ compensation benefits or unemployment compensation benefits.  This release shall not apply to any claims
for indemnity or for coverage under the Company’s Director & Officer
Liability insurance.


 


8.     Acknowledgments.  Mezger acknowledges that he is knowingly and
voluntarily waiving and releasing any rights or claims the he may have under
the ADEA.  The parties agree and
acknowledge that Mezger has been advised by this writing, as required by the
ADEA that:  (a) the Release set
forth above does not apply to any claims that may arise after the date that
Mezger signs this Agreement; (b) Mezger has the right to and is advised to
consult with an attorney prior to executing this Agreement; (c) Mezger was
provided forty-five (45) days within which to consider the original Agreement
(although Mezger was provided the opportunity to voluntarily execute the
Agreement earlier); and (d) Mezger has seven days following the execution
of this Agreement to revoke this Agreement by sending, via certified United
States mail, written notice of revocation to the attention of Roger A.
Williams, VP Law, 1889. E. Maule, Suite A, Las Vegas, Nevada, 89119.


 


9.     Decision Period.  Mezger acknowledges that he was notified of
his impending termination on February 13, 2008 and that the Company
afforded him a period of thirty (30) days, or until March 14, 2008, within
which to consider and sign the Agreement. 
Mezger was provided the option of accepting and signing the original
Agreement before the expiration of the time period, but was not required to do
so by the Company.


 


10.  Revocation Period.  It is further understood and agreed by Mezger
and the Company that Mezger will have seven (7) days after the Execution
Date of this Separation and Release Agreement to revoke the Agreement.  The Agreement will not become effective and
enforceable until this revocation 


 


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period has expired.  Upon the expiration of the seven (7) day
revocation period, the following day will be the Effective Date for purposes of
payment of the Consideration set forth in paragraph 2 of this Agreement.


 


11.  Confidentiality. For the Consideration,
Mezger agrees that he will not, unless required to do so by valid order of a
court of competent jurisdiction, disclose to anyone or in any way, the terms and
conditions of this Agreement. 
Notwithstanding the above, Mezger may disclose this Agreement in
confidence to his attorneys, accountants, auditors, tax preparers, and
financial advisors and may disclose this Agreement insofar as such disclosure
may be necessary to enforce its terms or as otherwise required by law.


 


12.  Tax Consequences. Mezger acknowledges,
agrees, and represents that the Company has not made any representations or
warranties to Mezger regarding how the payment of the Consideration will be
construed for tax purposes.  All sums
paid to Mezger pursuant to this Agreement shall be reported by the Company on a
Form W-2.  Mezger will be obligated
to pay any taxes or other payments which might be required, and the Company
will have no obligation to pay any additional sum or sums to Mezger or to
anyone else by reason thereof.  Any
imposition of taxes or determination relating thereto arising from the payment
of the Consideration shall not in any way affect the finality of this Agreement
or the release of claims against the Company.


 


13.  No Third Party Rights.  The parties agree that by making this
Agreement they do not intend to confer any benefits, privileges or rights to
others.  The Agreement is strictly
between the parties hereto, subject to the terms of the paragraph entitled
Successors and Assigns below, and that it shall not be construed to vest in any
other the status of third-party beneficiary.


 


14.  Voluntarily and Knowingly. Mezger acknowledges that in
executing this Agreement, he has reviewed it and understands its terms and has
had an opportunity and was advised to seek guidance from counsel of his own
choosing, was fully aware of his rights under law, and acted knowingly and
voluntarily and with full understanding of this Agreement and the effect of
signing it.


 


15.  Future Employment.  Mezger agrees that the Company has no
obligation to reemploy him in the future. 
To coordinate the Company’s response to any inquiries from prospective
employers seeking employment references concerning Mezger, Mezger agrees to
direct such prospective employers exclusively to the Company’s Human Resources
Department.  Should the Human Resources
Department  receive an inquiry, they
shall reveal Mezger’s period of employment with the Company and the position Mezger
held with the Company.


 


16.  Indemnification.  Mezger agrees to hold the company harmless of
and from and indemnify it for and against all loss, damages, costs, and
expenses, including reasonable attorneys’ fees, and all other sums which the
Company may hereafter incur, pay, or be required or become obligated to pay on
account of any and every demand, claim or suit by or on Mezger’s behalf or on
behalf of Mezger’s purported assignee within the scope of the matters released
hereby as described above, or for any contest or attempt to modify, change,
reform, set aside, nullify, cancel, or negate this Agreement or any part or
provision of this Agreement for any reason whatsoever by Mezger or for being
required to enforce this Agreement or sue for breach of this Agreement.


 


17.  Entire Agreement.  This Agreement constitutes the complete,
final and exclusive embodiment of the entire agreement between Mezger and the
Company with regard to the subject matter hereof.  This Agreement is entered into without
reliance on any promise or representation, written or oral, other than those
expressly contained herein.  It may not
be modified except in a writing signed by 


 


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Mezger and a duly authorized
officer of the Company. Mezger agrees that, except to the extent they are in
conflict with the provisions of this Agreement, the terms and conditions of any
prior agreements of Mezger with the Company, including any nondisclosure,
noncompetition, and nonsolicitation covenants, shall remain in enforce and
effect and are incorporated herein. 
Mezger further agrees that this Agreement does not negate any
confidentiality obligations owed to the Company, its affiliates, and its or
their directors, officers or employees.


 


18.  Governing Law.  The validity, performance and construction of
this Agreement shall be governed by the laws of the State of Texas.


 


19.  Successors and Assigns.  This Agreement shall bind the heirs, personal
representatives, successors, assigns, executors and administrators of each
party, and inure to the benefit of each party, its heirs, successors and
assigns.


 


20.  Severable.  If
any provision of this Agreement is determined to be invalid, void or
unenforceable, in whole or in part, this determination will not affect any
other provision of this Agreement, and the provision in question shall be
modified so as to be rendered enforceable.


 


21.  Execution Date.  The Execution Date is the later of the dates
that each party signed this Agreement.


 


I
HAVE CAREFULLY READ THIS ENTIRE DOCUMENT. 
I UNDERSTAND THAT BY SIGNING THIS DOCUMENT, I AM WAIVING AND RELEASING
ALL CLAIMS RELATING TO MY EMPLOYMENT WITH VALENCE TECHNOLOGY, INC.  AND THE TERMINATION OF THAT EMPLOYMENT.  I HAVE SIGNED THIS AGREEMENT VOLUNTARILY,
INTENDING TO BE LEGALLY BOUND.


 


	
  THOMAS
  MEZGER

  	
   

  	
  VALENCE
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
  /s/ Thomas Mezger

  	
   

  	
  By:

  	
  /s/ Robert L. Kanode

  
	
  Thomas Mezger

  	
   

  	
   

  
	
   

  	
   

  	
  Its:  CEO &
  President

  
	
   

  	
   

  	
   

  
	
  Date:  February 15,
  2008

  	
   

  	
  Date:  February 18,
  2008

  



 


 


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