Document:

ex10-11.htm

EXHIBIT 10.11

Notice of Grant of Stock Option and Stock Option Agreement under 2000 Stock Option Plan

 

 

[GRANT DATE]

 

To:                                [_GRANTEE NAME____________] Grant No:  [___]

 

 

Valence Technology, Inc. ("Valence"), pursuant to its 2000 Stock Option Plan ("Plan") has this day granted to you, the optionee named above, an option to purchase shares of the common stock of Valence ("Common Stock"). This option is intended to qualify and will be treated as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended from time to time ("Code").

 

The grant hereunder is in connection with and in furtherance of Valence's compensatory benefit plan for participation of Valence's employees (including officers), directors or consultants.  The details of your option are as follows:

 

1) Shares and Vesting

 

The total number of shares of Common Stock subject to this option is [# Options]. Subject to the limitations contained herein, this option shall be exercisable with respect to each installment shown below on or after the date of vesting applicable to such installment, as follows.

 

[INSERT VESTING SCHEDULE]

 

 

2) Exercise Price

 

The exercise price of this option is [$__] per share, being not less than the fair market value of the Common Stock on [GRANT DATE], the date of grant of this option.

 

Payment of the exercise price per share is due in full in cash (including check) upon exercise of all or any part of each installment which has become exercisable by you. Notwithstanding the foregoing, this option may be exercised pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which results in the receipt of cash (or check) by Valence prior to the issuance of Common Stock.

 

3) Minimum Exercise

 

The minimum number of shares with respect to which this option may be exercised at any one time is One Hundred (100), except (a) as to an installment subject to exercise, as set forth in paragraph 1, which amounts to fewer than One Hundred (100) shares, in which case, as to the exercise of that installment, the number of such shares in such installment shall be the minimum number of shares, and (b) with respect to the final exercise of this option this minimum shall not apply. This option may be exercised for only whole shares.

 

4) Registration

 

Notwithstanding anything to the contrary contained here, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Securities Act of 1933, as amended (the "Act") or, if such shares are not then so registered, Valence has determined that such exercise and issuance would be exempt from the registration requirements of the Act.

 

5) Term

 

The term of this option commences on the date hereof and, unless sooner terminated as set forth below or in the Plan, terminates on [GRANT EXPIRATION DATE] (which date shall be no more than ten (10) years from the date this option is granted).

 

This option shall terminate prior to the expiration of its term as follows: three (3) months after the termination of your employment with Valence or an Affiliate of Valence (as defined in the Plan) for any reason or for no reason unless:

 

 

  

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EXHIBIT 10.11

 

(1) such termination of continuous employment or relationship as a director or consultant is due to your permanent and total disability (within the meaning of Section 422A(c) (7) of the Code), in which event the option shall terminate on the earlier of the termination date set forth above or one (1) year following such termination of continuous employment or relationship as a director or consultant;

 

(2) such termination of continuous employment or relationship as a director or consultant is due to your death, in which event the option shall terminate on the earlier of the termination date set forth above or eighteen (18) months after your death; or iii. during any part of such three (3) month period the option is not exercisable solely because of the condition set forth in paragraph 4 above, in which event the option shall not terminate until the earlier of the termination date set forth above or until it shall have been exercisable for an aggregate period of three (3) months after the termination of continuous employment or relationship as a director or consultant; or

 

(3) exercise of the option within three (3) months after termination of your continuous employment or relationship as a director or consultant with Valence or with an Affiliate would result in liability under Section 16(b) of the Securities Exchange Act of 1934, in which case the option will terminate on the earlier of (i) the termination date set forth above, (ii) the tenth (10th) day after the last date upon which exercise would result in such liability or (iii) six (6) months and ten (10) days after the termination of your continuous employment or relationship as a director or consultant with Valence or an Affiliate.

 

(4) However, this option may be exercised following termination of continuous employment or relationship as a director or consultant only as to that number of shares as to which it was exercisable on the date of termination of continuous employment or relationship as a director or consultant under the provisions of paragraph 1 of this option.

 

6) Exercise

 

This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by Valence) together with the exercise price to the Secretary of Valence, or to such other persons as Valence may designate, during regular business hours, together with such additional documents as Valence may then require pursuant to subparagraph 5(f) of the Plan.

 

By exercising this option you agree that Valence may require you to enter an arrangement providing for the cash payment by you to the company of any tax withholding obligation of Valence arising by reason of: (1) the exercise of this option; (2) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (3) the disposition of shares acquired upon such exercise.

 

7) Non-Transferable

 

This option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of the option are then registered under the Act or, if such shares are not then so registered, Valence has determined that such exercise and issuance would be exempt from the.registration requirements of the Act.

 

8) No Employment Contract

 

This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of Valence, or of the company to continue your employment with Valence. In the event that this option is granted to you in connection with the performance of services as a consultant or director, references to employment, employee and similar terms shall be deemed to include the performance of services as a consultant or a director, as the case may be, provided, however, that no rights as an employee shall arise by reason of the use of such terms.

 

 

  

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EXHIBIT 10.11

 

 

9) Notice

 

Any notices provided for in this option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by Valence to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate to written notice to Valence.

 

10) Subject to Plan

 

This option is subject to all the provisions of the Plan, a copy of which is attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of paragraph 5 of the Plan relating to option provisions, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this option and those of the Plan, the provisions of the Plan shall control.

 

Dated: [GRANT DATE]

 

Valence Technology, Inc.

 

 

By:                      

 

Duly authorized on behalf of the Board of Directors

 

 

The undersigned optionee acknowledges:

 

	
1)  

	
receipt of the foregoing option grant and the attachments referenced therein and understands that all rights and liabilities with respect to this option are set forth in this option grant and the Plan; and

 

	
2)  

	
that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and Valence and its Affiliates regarding the acquisition of stock in Valence and supersedes all prior oral and written agreements on that subject.

 

 

Optionee:

 

Signed

 

 

 

 

 

 

3ex10-30.htm

EXHIBIT 10.30

 

FY 2011 Incentive Compensation and Stock Option Incentive Awards (Robert L. Kanode)

 

 

 

[***] Indicates text has been omitted from this Exhibit pursuant to a confidential treatment request and has been filed separately with the Securities and Exchange Commission.

June 16, 2010

STRICTLY CONFIDENTIAL

Robert L. Kanode

Chief Executive Officer

Valence Technology, Inc.

12303 Technology Boulevard, Suite 950

Austin, Texas  78727

	
  

	
RE:

	
Valence Technology, Inc. FY2011 Incentive Compensation and Stock Option Incentive Awards

Dear Bob:

On June 16, 2010, the Compensation Committee (the “Committee”) of Valence Technology, Inc. (the “Company”) approved your compensation package for your service as the Company’s Chief Executive Officer and President for the fiscal year ending March 31, 2011 (FY2011).  In addition, the Committee approved the terms of a performance award grant of stock options to be vested over the next three years upon the satisfaction of certain Company performance goals.  This letter outlines the terms of your compensation package.

FY2011 Salary and Bonus

Set forth below is the cash compensation for which you are eligible in FY2011:

Salary:

Your salary for the fiscal year ending March 31, 2011 will be $20,833.33 per month ($250,000.00 annualized), payable bi-weekly in accordance with the Company’s regular payroll practices.  Your salary and all other amounts that may become payable hereunder to you are subject to applicable statutory deductions and withholding.

Bonus:

Target Bonus:  You will be eligible to receive a target bonus in the amount of $100,000.00 payable within 30 days after the issuance of the Company’s audited financial statements for FY2011 if the Company achieves (1) revenue of at least $35,945,000 in FY2011 and (2) FY2011 earnings (loss) before interest and taxes (EBIT) (i.e, net operating income (loss)) of not greater than $(13,832,582) (these targets being based on the proposed objectives presented by you to the Company’s Board at the April 27, 2010 meeting).  Should either or both of these objectives not be achieved, no bonus will be payable with respect thereto.  For all purposes in this letter, “issuance of the Company’s audited financial statements” for a particular fiscal year shall be deemed to occur upon the filing of the Company’s Annual Report on Form 10-K for such fiscal year, which includes such financial statements.

  

  

  

 

Upside Bonus:  Furthermore, you will be eligible to receive an additional bonus of $50,000.00 within 30 days after the issuance of the Company’s audited financial statements for FY2011 if the Company exceeds the target FY2011 revenue and net operating income (loss) objectives described above by 25% (i.e., FY2011 revenue exceeds $44,931,250 and FY2011 EBIT / net operating income (loss) is not greater than $(10,374,436)).  Should either or both of these objectives not be achieved, no bonus will be payable with respect thereto.

Regardless of whether you meet the bonus criteria specified above, the Committee, in its sole discretion but without any obligation, may elect to pay a discretionary bonus based on factors that it considers appropriate at such time.

Should a Change of Control (as defined below) of the Company occur, or should your employment with the Company terminate for any reason (including death), prior to the date on which the attainment of these bonus targets is determined, or if you are not in good standing as an employee of the Company on the date of payment, none of the bonuses provided above shall be due, earned or payable.

The Committee will have full and final authority to determine whether and to what extent any of the foregoing targets have been met and accordingly whether the requirements of your being entitled to either or both of the bonuses have been attained and fulfilled, and its decisions shall be final and binding; provided that in the event of misconduct that results in material non-compliance with SEC financial reporting requirements, and as a result of such non-compliance the Company is required to restate its financial statements, which restatement results in a determination that any of the above targets have not been achieved, you will be required to disgorge any bonus compensation for which you would not have been eligible based on such restated financial statements.  This disgorgement requirement is in addition to and not in limitation of, any requirement under Section 304 of the Sarbanes-Oxley Act of 2002 for the Company’s chief executive officer or chief financial officer to disgorge bonuses or other incentive compensation and profits from the sale of stock following a restatement of the Company’s financial statements resulting from misconduct.

Special Stock Option Incentive Awards

You have been granted performance-based stock options to purchase up to 500,000 shares (the “Option Shares”) of the Company’s common stock.  The Option Shares are awarded on and with an exercise price equal to the closing value of the Company’s stock on the 16th day of June 2010.  Additionally, the Option Shares shall be subject to the terms and conditions of the Company’s 2009 Equity Incentive Plan (the “Plan”) and a Stock Option Agreement between yourself and the Company.  The Option Shares shall be eligible to vest and become exercisable contingent upon the achievement of the performance targets specified below:

	
  

	
1)

	
100,000 Option Shares shall vest and will be available for exercise after the issuance of the Company’s audited financial statements for FY2011 provided and only if the Company achieves earnings (loss) before interest and taxes (EBIT) (i.e, net operating income ((loss)) of not greater than $(13,832,582) during FY2011.  If this target is not met (i.e., if EBIT/net operating loss is greater than $(13,835,582)), the 100,000 Option Shares grant shall lapse upon the issuance of the Company’s audited financial statements for FY2011.

  

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EXHIBIT 10.30

 

 

	
  

	
2)

	
Up to an additional 200,000 Option Shares shall vest and will be available for exercise after the issuance of the Company’s audited financial statements for FY2012 based on attainment of the objectives set forth in the following table:

	
FY2012 EBIT (Net Operating Income (Loss))

	
# of Options Eligible for Vesting

	
≥ [***]

	
200,000

	
≥ [***]

	
40,000

	
≥ [***]

	
20,000

Any Option Shares that do not vest in accordance with the foregoing schedule shall lapse upon the issuance of the Company’s audited financial statements for FY2012.

	
  

	
3)

	
Up to an additional 200,000 Option Shares shall vest and will be available for exercise after the issuance of the Company’s audited financial statements for FY2013 based on attainment of the objectives set forth in the following table:

	
FY2013 EBIT (Net Operating Income)

	
# of Options Eligible for Vesting

	
≥ [***]

	
200,000

	
≥ [***]

	
190,000

	
≥ [***]

	
180,000

	
≥ [***]

	
170,000

	
≥[***]

	
160,000

Any Option Shares that do not vest in accordance with the foregoing schedule shall lapse upon the issuance of the Company’s audited financial statements for FY2013.

Should a Change of Control (as defined in the Plan) occur, or should your employment with the Company terminate for any reason (including death), prior to the date on which any of the Option Shares described above shall have vested, any then-unvested stock options shall lapse.

Notwithstanding anything to the contrary in the foregoing, the Committee will have full and final authority to determine whether and to what extent any of the foregoing performance targets have been met (and accordingly whether such Option Shares vest), and its decisions shall be final and binding; provided that in the event of misconduct that results in material non-compliance with SEC financial reporting requirements, and as a result of such non-compliance the Company is required to restate its financial statements, which restatement results in a determination that any of the above targets have not been achieved, you will be required to return any unexercised options in which you would not vested based on such restated financial statements, return any shares you acquired upon the exercise of such options, and/or any profit you received upon the sale of any such Option Shares.  This disgorgement requirement is in addition to and not in limitation of, any requirement under Section 304 of the Sarbanes-Oxley Act of 2002 for the Company’s chief executive officer or chief financial officer to disgorge bonuses or other incentive compensation and profits from the sale of stock following a restatement of the Company’s financial statements resulting from misconduct.

  

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EXHIBIT 10.30

 

This a summary of your stock option award.  The terms of the Plan and your stock option award agreements will supersede this summary and control the terms of your option grant in the event of any conflict with the terms described in this letter.

*  *  *  *  *

Hereafter, the Compensation Committee will review your cash bonus targets and stock incentive compensation and set targets or make awards as we deem it appropriate.  Accordingly, this policy will supersede and replace any other prior agreement or understanding regarding bonus or equity incentive compensation.  Nothing contained in this letter shall alter the at will nature of your employment.

If you have questions regarding the foregoing, please do not hesitate to contact me.  We look forward to working with you on behalf of the Company and its shareholders.

Regards,

/s/ Bert C. Roberts

Bert Roberts,

On Behalf of the Compensation Committee

of Valence Technology, Inc.

cc:           Chairman of the Board

Roger Williams

 

 

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