Exhibit 10.2


 


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 Joel Sandahl (“Sandahl”) as of the
Execution Date of this Agreement.


 


1.             Termination.  Sandahl’s
employment with the Company is terminated effective as of October 29,
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 Sandahl 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 as outlined in Sandahl’s Employment Offer Letter signed on June 16,
2006 within ten (10) days following the Effective Date of this Agreement;


 


b)            To pay Sandahl 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 within ten (10) days
following the Effective Date of this Agreement.


 


c)             To pay the monthly premiums at Sandahl’s
current coverage level for group health benefits for a period of five (5) months
after the Separation Date, provided that Sandahl 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 Sandahl’s accrued, but unused,
vacation within ten (10) days following the Effective Date of this Agreement.


 


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


 


3.             Nondisparagement.  Sandahl
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.  Sandahl
agrees to return to the Company all the Company’s documents (and all copies thereof)
and any and all other Company property in Sandahl’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).  Sandahl will
be allowed to retain possession of his cellular telephone.  Sandahl will also be allowed to retain
possession of his laptop after all Company information has been removed by IT.


 


5.             Proprietary Information. Sandahl 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. Sandahl acknowledges and agrees that, if he
desires to exercise any options that have or will become vested on or before
the Separation Date, Sandahl must do so no later than six (6) 


 


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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, Sandahl 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 Sandahl’s
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.  Sandahl
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 Sandahl
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 Sandahl signs this
Agreement; (b) Sandahl has the right to and is advised to consult with an
attorney prior to executing this Agreement; (c) Sandahl was provided
forty-five (45) days within which to consider the original Agreement (although Sandahl
was provided the opportunity to voluntarily execute the Agreement earlier); and
(d) Sandahl 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.  Sandahl
acknowledges that he was notified of his impending termination on October 29,
2008 and that the Company afforded him a period of forty-five (45) days, or
until December 13, 2008, within which to consider and sign the
Agreement.  Sandahl 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 Sandahl and the Company that Sandahl 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 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, Sandahl 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 


 


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and conditions of this
Agreement.  Notwithstanding the above, Sandahl
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. Sandahl acknowledges, agrees, and represents
that the Company has not made any representations or warranties to Sandahl
regarding how the payment of the Consideration will be construed for tax
purposes.  All sums paid to Sandahl
pursuant to this Agreement shall be reported by the Company on a Form W-2.  Sandahl 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 Sandahl 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. Sandahl
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.  Sandahl
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 Sandahl,
Sandahl agrees to direct such prospective employers exclusively to the Company’s
Human Resources Department.  Should the
Human Resources Department receive an inquiry, it shall limit its response to Sandahl’s
period of employment with the Company and the position Sandahl held with the
Company.


 


16.      Indemnification.  Sandahl
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 Sandahl’s behalf or on behalf of Sandahl’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 Sandahl 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 Sandahl 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 Sandahl and a duly
authorized officer of the Company. Sandahl 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 Sandahl with the Company, including any
nondisclosure, noncompetition, and nonsolicitation covenants, shall remain in
enforce and effect and are incorporated herein. 
Sandahl 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.


 


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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.


 


	
  JOEL SANDAHL

  	
   

  	
  VALENCE TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
  /s/ Joel Sandahl

  	
   

  	
  By:

  	
  /s/ Robert L. Kanode

  
	
  Joel Sandahl

  	
   

  	
   

  
	
   

  	
   

  	
  Its:  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Date:  October 29, 2008

  	
   

  	
  Date:  October 29, 2008

  



 


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