EXHIBIT 10.18
VALENCE TECHNOLOGY, INC.
SUPPLEMENTAL STOCK OPTION
Xxxxxxx X. Xxxxxxxx
Valence Technology, Inc. ("Valence"), pursuant to this Supplemental Stock Option
Agreement 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 Xxxxxxx's
compensatory benefit plan for participation of Xxxxxxx'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 1,500,000.
Subject to the limitations contained herein, this option shall exercisable with
respect to each installment shown below on or after the date of vesting
applicable to such installment, as follows:
NUMBER OF SHARES DATE OF EARLIEST EXERCISE
(INSTALLMENT) (VESTING)
375,000 May 2, 2002
93,750 August 2, 2002
93,750 November 2, 2002
93,750 February 2, 2003
93,750 May 2, 2003
93,750 August 2, 2003
93,750 November 2, 2003
93,750 February 2, 2004
93,750 May 2, 2004
93,750 August 2, 2004
93,750 November 2, 2004
93,750 February 2, 2005
93,750 May 2, 2005
2. Exercise Price
a. The exercise price of this option is $6.52 per share, being not less than
the fair market value of the Common Stock on the date of grant of this option.
b. 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 in 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, Xxxxxxx has determined that such exercise and
issuance would be exempt from the registration requirements of the Act.
5. Term
a. The term of this option commences on the date hereof and, unless sooner
terminated as set forth below, terminates on May 2, 2011 (which date shall be no
more than ten (10) years from the date this option is granted.)
b. 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 for any reason or for no reason unless:
I. 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 director or consultant;
II. 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
IV. 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 o relationship as a director or
consultant with Valence or an Affiliate.
c. 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
a. 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.
b. 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 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. 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, or the case may be,
provided, however, that no rights as an employee shall arise by reason of the
use of such terms.
9. Notice
Any notices provided for in this option 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.
Dated: May 2, 2001
Valence Technology, Inc.
By /S/ XXXX X. XXXXXXX
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Duly authorized on behalf of the Board of Directors
The undersigned optionee acknowledges:
i. receipt of the foregoing option grant and understands that all rights and
liabilities with respect to this option are set forth in this option grant; and
ii. 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.
/S/ XXXXXXX X. XXXXXXXX
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Optionee
