Reference: Contingent Employment Offer

 

 

                                                                    Exhibit 10.1

 

 

July 8, 2005

 

 

Dr. James R Akridge

4435 S. Paseo Melodoso

Tucson, AZ 95730

 

Reference:  Contingent Employment Offer

 

Dear Jim,

 

     The Board of Directors is pleased to extend a contingent offer of

employment with you in the capacity as Chief Executive Officer of Valence

Technology, Inc. (the "Company"). This letter outlines the terms of our

employment offer. If it is agreeable to you, please so indicate by executing a

copy of this letter in the space provided for below, and returning it to the

undersigned. This offer is contingent upon the occurrence of two conditions

precedent: (1) The presentation to the Board of Directors of the Company of an

executed release of any non-compete obligations from Sion Power Corporation

acceptable to the Company's Board of Directors; and (2) The acceptance by the

Board of a signed employment offer letter from you. The key terms are as

follows:

 

1.   Capacity and Duties. You shall serve the Company as its Chief Executive

     Officer and shall report directly to the Board of Directors of the Company

     (the "Board of Directors"). Subject to the direction and control of the

     Board of Directors, you shall have the full authority and responsibility to

     operate and manage, on a day to day basis, the business and affairs of the

     Company, and shall perform such other duties and responsibilities as are

     currently prescribed by the Bylaws of the Company and which are customarily

     vested in the office of the chief executive officer of a corporation. You

     shall devote your business time, energy and efforts faithfully and

     diligently to promote the Company's interests. The foregoing shall not

     preclude you from engaging in appropriate professional, educational, civic,

     charitable or religious activities, provided that such activities do not

     interfere or conflict with your duties to the Company. Except for routine

     travel incident to the business of the Company, you shall perform your

     duties and obligations under this Agreement from an office provided by the

     Company in Nevada.

 

2.   Nomination to the Board of Directors. The Company agrees to nominate you to

     the Board of Directors for all periods during which you serve as Chief

     Executive Officer of the Company. You agree to resign from the Board of

     Directors of the Company and each of its subsidiaries at such time as you

     no longer serve the Company as its Chief Executive Officer.

 

3.   Compensation. During the term of your employment with the Company, your

     salary shall be at an annualized rate of two hundred fifty thousand dollars

     ($250,000). Commencing on July 1, 2006, and on each anniversary thereafter

     (each, an "Adjustment Date"), or from time to time at the sole discretion

     of the Board of Directors, your salary shall be reviewed by the Board of

     Directors and may be increased, but may never be decreased, in the sole

     discretion of the Board of Directors. The Company may deduct from your

     salary amounts sufficient to cover applicable federal, state and/or local

     income tax withholdings and any other amounts, which the Company is

     required to withhold by applicable law. In the event you or the Company

     terminates your employment, for any reason, you will earn the base salary

     prorated to the date of termination.

 

 

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4.   Stock Options. Upon your employment, you will receive an employee stock

     option in the amount of one million shares. Upon your hire date, 10% of the

     shares will immediately vest. The remaining shares will vest over a four

     year period with 25% of the remaining shares vesting on the anniversary of

     hire date and the remaining 75% vesting quarterly over the remaining three

     years. The exercise price of this option will be the closing value of

     Valence's stock on your first day of employment. In addition, Valence will

     buy out your nine month non-expiring severance agreement with Sion Power

     Corporation in cash upon the date of hiring--$127,500.00.

 

5.   Benefits. During the term of your employment, if and to the extent eligible

     you shall be entitled to participate in all operative executive officer

     benefit and welfare plans of the Company then in effect ("Company Benefit

     Plans"), including, to the extent then in effect, group life, medical,

     disability and other insurance plans, all on the same basis generally

     applicable to the ex