Exhibit 10.2


 


	
  

  	
  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


 

















 


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.


 

















 


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

  	
   

  



 

















 


	
  

  	
   

  	
   

  
	
   

  	
   

  
	
  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

  



 

















 


	
  

  	
   

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  



 






* 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