<PAGE>
As filed with the Securities and Exchange Commission on December 24, 1997
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________
VALENCE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
_____________
Delaware 77-0214673
(State of Incorporation) (I.R.S. Employer Identification No.)
_____________
301 CONESTOGA WAY
HENDERSON, NEVADA 89015
(702) 558-1000
(Address and telephone number of principal executive offices)
_____________
1990 STOCK OPTION PLAN (THE "1990 PLAN")
1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN (THE "1996 PLAN")
(Full title of the plan)
BRADLEY A. PERKINS
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
VALENCE TECHNOLOGY, INC.
301 CONESTOGA WAY
HENDERSON, NEVADA 89015
(702) 558-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_____________
Copies to:
Andrei M. Manoliu, Esq.
Cooley Godward LLP
5 Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306
(650) 843-5000
_____________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE (1) AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common Stock (par
value $.001) . . . . . . . . . . . . 1,090,000 $4.44 $4,839,600 $1,428
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</TABLE>
______________
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h). The price per share and
aggregate offering price are based upon the average of the high and low
prices of Registrant's Common Stock on December 19, 1997 as reported on the
NASDAQ National Market System.
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
<PAGE>
INCORPORATION BY REFERENCE OF CONTENTS OF
REGISTRATION STATEMENTS ON FORM S-8
The contents of Registration Statements on Form S-8 previously filed with
the Securities and Exchange Commission (the "Commission") relating to the 1990
Plan (File Nos. 333-21671, 33-94522 and 33-48982, filed with the Commission on
February 12, 1997, July 12, 1995 and June 30, 1992, respectively) and relating
to the 1996 Plan (File No. 333-21669, filed with the Commission on February 12,
1997) are incorporated by reference herein.
EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement
24.1 Power of Attorney is contained on the signature pages.
99.1 1990 Stock Option Plan, as amended on October 3, 1997.
99.2 1996 Non-Employee Directors' Stock Option Plan, as amended on
October 3, 1997
1
<PAGE>
SIGNATURES
THE COMPANY. Pursuant to the requirements of the Securities Act of
1933, as amended, the Company certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Henderson, State of
Nevada, on December 23, 1997.
VALENCE TECHNOLOGY, INC.
By /s/ David P. Archibald
----------------------------------------
David P. Archibald
Vice President, Finance and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Lev Dawson and Andrei M. Manoliu, and
each or any one of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Calvin L. Reed
- ----------------------------- President, Chief December 22, 1997
Calvin L. Reed Executive Officer,
and Chairman of the
Board (Principal
Executive Officer)
/s/ David P. Archibald
- ----------------------------- Vice President, December 22, 1997
David P. Archibald Finance, Chief
Financial Officer
(Principal Financial
and Accounting
Officer)
/s/ Carl E. Berg
- ----------------------------- Director December 22, 1997
Carl E. Berg
/s/ Alan F. Shugart
- ----------------------------- Director December 22, 1997
Alan F. Shugart
3
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement
24.1 Power of Attorney is contained on the signature pages.
99.1 1990 Stock Option Plan, as amended October 3, 1997
99.2 1996 Non-Employee Directors' Stock Option Plan, as amended on
October 3, 1997
4
<PAGE>
Exhibit 5.1
[COOLEY GODWARD LLP LETTERHEAD]
December 22, 1997
Valence Technology, Inc.
301 Conestoga Way
Henderson, Nevada 89015
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Valence Technology, Inc. (the "Company") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of up to 1,090,000 shares of the
Company's Common Stock, $.001 par value, (the "Shares") pursuant to its 1990
Stock Option Plan and 1996 Non-Employee Directors' Stock Option Plan (together,
the "Plans").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Certificate of Incorporation and By-laws, as amended,
and such other documents, records, certificates, memoranda and other instruments
as we deem necessary as a basis for this opinion. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof, and
the due execution and delivery of all documents where due execution and delivery
are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Plans, the
Registration Statement and related Prospectus, will be validly issued, fully
paid, and nonassessable (except as to shares issued pursuant to certain deferred
payment arrangements, which will be fully paid and nonassessable when such
deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward LLP
/s/ Andrei M. Manoliu
Andrei M. Manoliu
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of Valence Technology, Inc. and subsidiaries (companies in the development
stage) (the "Company") on Form S-8 for 1,090,000 shares of Common Stock
reserved for issuance under the 1990 Stock Plan and the 1996 Non-Employee
Directors' Stock Plan of our report dated May 2, 1997 of our audits of the
consolidated financial statements of the Company as of March 30, 1997 and
March 31, 1996 and for the period of March 3, 1989 (date of inception) to
March 30, 1997 and for each of the three years in the period ending March 30,
1997, which report is included in the Annual Report on Form 10-K for the year
ended March 30, 1997.
/s/ Coopers & Lybrand L.L.P.
San Jose, California
December 22, 1997
<PAGE>
[VALANCE LOGO] 1990 STOCK OPTION PLAN
1. PURPOSE
a. The purpose of the Plan is to provide a means by which selected key
employees and directors (if declared eligible under paragraph 4) of and
consultants to Valence Technology, Inc., a Delaware corporation (the
"Company"), and its Affiliates, as defined in subparagraph 1(b), may be given
an opportunity to purchase stock of the Company.
b. The word "Affiliate" as used in the Plan means any parent corporation or
subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
from time to time (the "Code").
c. The Company, by means of the Plan, seeks to retain the services of persons
now employed by or serving as consultants or directors to the Company, to
secure and retain the services of new employees/persons capable of filling such
positions, and to provide incentives for such persons to exert maximum efforts
for the success of the Company.
d. The Company intends that the options issued under the Plan shall, in the
discretion of the Board of Directors of the Company (the "Board") or any
committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph 2(c), be either incentive stock options as
that term is used in Section 422 of the Code ("Incentive Stock Options"), or
options which do not qualify as incentive stock options ("Supplemental Stock
Options"). All options shall be separately designated Incentive Stock Options
or Supplemental Stock Options at the time of grant, and in such form as issued
pursuant to paragraph 5, and a separate certificate or certificates shall be
issued for shares purchased on exercise of each type of option. An option
designated as a Supplemental Stock Option shall not be treated as an incentive
stock option.
2. ADMINISTRATION
a. The Plan shall be administered by the Board unless and until the Board
delegates administration to a committee, as provided in subparagraph 2(c).
Whether or not the Board has delegated administration, the Board shall have the
final power to determine all questions of policy and expediency that may arise
in the administration of the Plan.
b. The Board shall have the power, subject to, and within the limitations of,
the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible under
the Plan shall be granted options; when and how the option shall be
granted; whether the option will be an Incentive Stock Option or a
Supplemental Stock Option; the provisions of each option granted (which
need not be identical), including the time or times during the term of
each option within which all or portions of such option may be exercised;
and the number of shares for which an option shall be granted to each such
person.
(2) To construe and interpret the Plan options granted under it, and to
establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission
or inconsistency in the Plan or in any option agreement, in a manner and
to the extent it shall deem necessary or expedient to make the Plan fully
effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the
Company.
c. The Board may delegate administration of the Plan to a committee or
committees ("Committee") of one or more members of the Board. In the
discretion of the Board, a Committee may consist solely of two (2) or more
Outside Directors, in accordance with Code Section 162(m), or solely of two (2)
or more Non-Employee Directors, in accordance with Rule 16b-3. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board (and
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<PAGE>
references in this Plan to the Board shall thereafter be to the Committee),
subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration
of the Plan.
d. "Non-Employee Director" means a director who either (I) is not a current
employee or officer of the Company or its parent or subsidiary, does not
receive compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act of 1933 ("Regulation S-K"), does not possess an interest in any
other transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.
e. "Outside Director" means a director who either (I) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration
from the Company or an "affiliated corporation" for services in any capacity
other than as a director, or (ii) is otherwise considered an "outside director"
for purposes of Section 162(m) of the Code.
3. SHARES SUBJECT TO THE PLAN
a. Subject to the provisions of paragraph 9 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to options granted under
the Plan shall not exceed in the aggregate Four Million Five Hundred Thousand
(4,500,000) shares of the Company's common stock. If any option granted under
the Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such option shall again become
available for the Plan.
b. The stock subject to the Plan may be unissued reacquired shares, bought on
the market or otherwise.
c. An Incentive Stock Option may be granted to an eligible person under the
Plan only if the aggregate fair market value (determined at the time the option
is granted) of the stock with respect to which incentive stock options (as
defined in the Code) granted after 1986 are exercisable for the first time by
such optionee during any calendar year under all incentive stock option plans
of the Company and its Affiliates does not exceed one hundred thousand dollars
($100,000). Should it be determined that an option granted under the Plan
exceeds such maximum for any reason other than the failure of a good faith
attempt to value the stock subject to the option, such option shall be
considered a Supplemental Stock Option to the extent, but only to the extent,
of such excess; provided, however, that should it be determined that an entire
option or any portion thereof does not qualify for treatment as an incentive
stock option by reason of exceeding such maximum, such option or the applicable
portion shall be considered a Supplemental Stock Option.
4. ELIGIBILITY
a. Incentive Stock Options may be granted only to employees (including
officers) of the Company or its Affiliates. A director of the Company shall
not be eligible to receive Incentive Stock Options unless such director is also
an employee (including an officer) of the Company or any Affiliate.
Supplemental Stock Options may be granted only to key employees (including
officers) of, directors of or consultants to the Company or its Affiliates.
b. Subject to the provisions of Section 9 relating to adjustments upon
changes in stock, no person shall be eligible to be granted options covering
more than seven hundred thousand (700,000) shares of the Company's common stock
in any fiscal year.
c. No person shall be eligible for the grant of an option under the Plan if,
at the time of grant, such person owns (or is deemed to own pursuant to Section
424(d) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of
Page 2
<PAGE>
stock of the Company or of any of its Affiliates unless the exercise price of
such option is at least one hundred ten percent (110%) of the fair market
value of such stock at the date of grant and the term of the option does not
exceed five (5) years from the date of grant.
5. OPTION PROVISIONS
Each option shall be in such form and shall contain such terms and conditions
as the Board or the Committee shall deem appropriate. The provisions of
separate options need not be identical, but each option shall include (through
incorporation of provisions hereof by reference in the option or otherwise) the
substance of each of the following provisions:
a. The term of any option shall not be greater than ten (10) years from the
date it was granted.
b. The exercise price of each Incentive Stock Option shall be not less than
one hundred percent (100%) of the fair market value of the stock subject to the
option on the date the option is granted. The exercise price of each
Supplemental Stock Option shall be not less than eighty-five percent (85%) of
the fair market value of the stock subject to the option on the date the option
is granted.
c. The purchase price of stock acquired pursuant to an option shall be paid,
to the extent permitted by applicable statutes and regulations, either:
(i) in cash at the time the option is exercised, or
(ii) at the discretion of the Board or the Committee, either at the time
of the grant or exercise of the option,
(A) by delivery to the Company of other common stock of the Company,
(B) according to a deferred payment or other arrangement (which may
include, without limiting the generality of the foregoing, the use of
other common stock of the Company) with the person to whom the option
is granted or to whom the option is transferred pursuant to
subparagraph 5(d), or
(C) in any other form of legal consideration that may be acceptable
to the Board or the Committee.
In the case of any deferred payment arrangement, interest shall be payable at
least annually and shall be charged at the minimum rate of interest necessary
to avoid the treatment as interest, under any applicable provisions of the
Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.
d. An Incentive Stock Option shall not be transferable except by will or by
the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Incentive Stock Option is granted only by
such person. A Supplemental Stock Option may be transferred to the extent
provided in the option agreement; provided that if the option agreement does
not expressly permit the transfer of a Supplemental Stock Option, the
Supplemental Stock Option shall not be transferable except by will, by the laws
of descent and distribution or pursuant to a domestic relations order
satisfying the requirements of Rule 16b-3, and shall be exercisable during the
lifetime of the person to whom the option is granted only by such person or any
transferee pursuant to a domestice relations order. Notwithstanding the
foregoing, the person to whom the option is granted may, be delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the optionee, shall thereafter be
entitled to exercise the option.e. The total number of shares of stock subject
to an option may, but need not, be allotted in periodic installments (which
may, but need not, be equal). From time to time during each of such
installment periods, the option may become exercisable ("vest") with respect to
some or all of the shares allotted to that period, and may be exercised with
respect to some or all of the shares allotted to such period and/or any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The provisions of this
subparagraph 5(e) are subject to any option provisions governing the minimum
number of shares as to which an option may be exercised.
f. The Company may require any optionee, or any person to whom an option is
transferred under subparagraph 5(d), as a condition of exercising any such
option,
Page 3
<PAGE>
(1) to give written assurances satisfactory to the Company as to the
optionee's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together
with the purchaser representative, the merits and risks of exercising the
option; and
(2) to give written assurances satisfactory to the Company stating that
such person is acquiring the stock subject to the option for such person's
own account and not with any present intention of selling or otherwise
distributing the stock. These requirements, and any assurances given
pursuant to such requirements, shall be inoperative if
(i) the issuance of the shares upon the exercise of the option has
been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the
"Securities Act"), or
(ii) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws.
g. An option shall terminate three (3) months after termination of the
optionee's employment or relationship as a consultant or director with the
Company or an Affiliate, unless
(i) such termination is due to such person's permanent and total
disability, within the meaning of Section 422 (c)(7) of the Code, in which
case the option may, but need not, provide that it may be exercised at any
time within one (1) year following such termination of employment or
relationship as a consultant or director; or
(ii) the optionee dies while in the employ of or while serving as a
consultant or director to the Company or an Affiliate, or within not more
than three (3) months after termination of such relationship, in which
case the option may, but need not, provide that it may be exercised at any
time within eighteen (18) months following the death of the optionee by
the person or persons to whom the optionee's rights under such option pass
by will or by the laws of descent and distribution; or
(iii) the option by its terms specifies either
(a) that it shall terminate sooner than three (3) months after
termination of the optionee's employment or relationship as a
consultant or director, or
(b) that it may be exercised more than three (3) months after
termination of such relationship with the Company or an Affiliate.
This subparagraph 5(g) shall not be construed to extend the term of any option
or to permit anyone to exercise the option after expiration of its term, nor
shall it be construed to increase the number of shares as to which any option
is exercisable from the amount exercisable on the date of termination of the
optionee's employment or relationship as a consultant or director.
h. The option may, but need not, include a provision whereby the optionee may
elect at any time during the term of his or her employment or relationship as a
consultant or director with the Company or any Affiliate to exercise the option
as to any part or all of the shares subject to the option prior to the stated
vesting date of the option or of any installment or installments specified in
the option. Any shares so purchased from any unvested installment or option
may be subject to a repurchase right in favor of the Company or to any other
restriction the Board or the Committee determines to be appropriate.
i. To the extent provided by the terms of an option, the optionee may satisfy
any federal, state or local tax withholding obligation relating to the exercise
of such option by any of the following means or by a combination of such means:
(1) tendering a cash payment;
(2) authorizing the Company to withhold from the shares of the common
stock otherwise issuable to the participant as a result of the exercise of
the stock option a number of shares having a fair market value less than
or equal to the amount of the withholding tax obligation; or
(3) delivering to the Company owned and unencumbered shares of the common
stock having a fair market value less than or equal to the amount of the
withholding tax obligation.
Page 4
<PAGE>
6. COVENANTS OF THE COMPANY
a. During the terms of the options granted under the Plan, the Company shall
keep available at all times the number of shares of stock required to satisfy
such options.
b. The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to issue
and sell shares of stock upon exercise of the options granted under the Plan;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell stock upon
exercise of such options unless and until such authority is obtained.
7. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.
8. MISCELLANEOUS
a. Neither an optionee nor any person to whom an option is transferred under
subparagraph 5(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
b. Throughout the term of any option granted pursuant to the Plan, the
Company shall make available to the holder of such option, not later than one
hundred twenty (120) days after the close of each of the Company's fiscal years
during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the stockholders of the
Company provided for in the bylaws of the Company.
c. Nothing in the Plan or any instrument executed or option granted pursuant
thereto shall confer upon any eligible employee or optionee any right to
continue in the employ of the Company or any Affiliate (or to continue acting
as a consultant or director) or shall affect the right of the Company or any
Affiliate to terminate the employment or consulting relationship or
directorship of any eligible employee or optionee with or without cause. In
the event that an optionee is permitted or otherwise entitled to take a leave
of absence, the Company shall have the unilateral right to
(i) determine whether such leave of absence will be treated as a
termination of employment for purposes of paragraph 5(g) hereof and
corresponding provisions of any outstanding options, and
(ii) suspend or otherwise delay the time or times at which the shares
subject to the option would otherwise vest.
9. ADJUSTMENTS UPON CHANGES IN STOCK
a. If any change is made in the stock subject to the Plan, or subject to any
option granted under the Plan (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or otherwise), then the Plan and outstanding options
shall be appropriately adjusted:
(1) in the class(es) and maximum number of shares subject to the Plan;
and
(2) in the class(es) and number of shares and price per share of stock
subject to outstanding options.
b. In the event of:
(1) a merger or consolidation in which the Company is not the surviving
corporation; or
(2) a reverse merger in which the Company is the surviving corporation
but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise;
Page 5
<PAGE>
then to the extent permitted by applicable law:
(i) any surviving corporation shall assume any Options outstanding under
the Plan or shall substitute similar Options for those outstanding under
the Plan, or
(ii) such Options shall continue in full force and effect.
In the event any surviving corporation refuses to assume such Options, refuses
to continue such Options in full force and effect, or refuses to substitute
similar options for those outstanding under the Plan, then all such vested
Options shall be terminated if not exercised prior to such event, and all such
unvested Options shall terminate upon such event. In the event of a
dissolution or liquidation of the Company, all vested Options outstanding under
the Plan shall terminate if not exercised prior to such event, and all unvested
Options outstanding under the Plan shall terminate upon such event.
10. AMENDMENT OF THE PLAN
a. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders
of the Company to the extent stockholder approval is necessary for the Plan to
satisfy the requirements of Rule 16b-3 under the Exchange Act or any Nasdaq or
securities exchange listing requirements.
b. It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to employee incentive stock
options and/or to bring the Plan and/or incentive stock options granted under
it into compliance therewith.
c. Rights and obligations under any option granted before amendment of the
Plan shall not be altered or impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the option was
granted and
(ii) such person consents in writing.
11. TERMINATION OR SUSPENSION OF THE PLAN
a. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate ten (10) years from the date the Plan is
adopted by the Board or approved by the shareholders of the Company, whichever
is earlier. No options may be granted under the Plan while the Plan is
suspended or after it is terminated.
b. Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
12. EFFECTIVE DATE OF PLAN
The Plan shall become effective as determined by the Board, but no options
granted under the Plan shall be exercised unless and until the Plan has been
approved by the stockholders of the Company, and, if required, an appropriate
permit has been issued by the Commissioner of Corporations of the State of
California.
ADOPTED BY THE BOARD OF DIRECTORS ON JULY 17, 1990
APPROVED BY THE STOCKHOLDERS ON JULY 23, 1990
AMENDED BY THE BOARD OF DIRECTORS ON OCTOBER 3, 1990
AMENDED BY THE BOARD OF DIRECTORS ON MARCH 14, 1992
AMENDED BY THE STOCKHOLDERS ON MARCH 23, 1992
AMENDED BY THE BOARD OF DIRECTORS ON JUNE 18, 1992
AMENDED BY THE STOCKHOLDERS ON SEPTEMBER 2, 1993
AMENDED BY THE BOARD OF DIRECTORS ON DECEMBER 18, 1996
AMENDED BY THE STOCKHOLDERS ON JANUARY 31, 1997
AMENDED BY THE BOARD OF DIRECTORS ON JULY 22, 1997
AMENDED BY THE STOCKHOLDERS ON OCTOBER 3, 1997
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[VALANCE LOGO] 1996 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN
1. PURPOSE
a. The purpose of the Valence Technology, Inc. 1996 Non-Employee Directors'
Stock Option Plan ("Plan") is to provide a means by which each director of
Valence Technology, Inc., a Delaware corporation ("Company") who is not
otherwise an employee of the Company or of any Affiliate of the Company (each
such person being hereinafter referred to as a "Non-Employee Director") will be
given an opportunity to purchase stock of the Company.
b. The word "Affiliate" as used in the Plan means any parent corporation or
subsidiary corporation of the Company as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
from time to time ("Code").
c. The Company, by means of the Plan, seeks to retain the services of persons
now serving as Non-Employee Directors of the Company, to secure and retain the
services of persons capable of serving in such capacity, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company.
2. ADMINISTRATION
a. The Plan shall be administered by the Board of Directors of the Company
("Board") unless and until the Board delegates administration to a committee,
as provided in subparagraph 2.b.
b. The Board may delegate administration of the Plan to a committee composed
of not fewer than two (2) members of the Board ("Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the power theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. SHARES SUBJECT TO THE PLAN
a. The stock that may be sold pursuant to options granted under the Plan
shall not exceed in the aggregate three hundred forty thousand (340,000) shares
of the Company's common stock. If any option granted under the Plan shall for
any reason expire or otherwise terminate without having been exercised in full,
the stock not purchased under such option shall again become available for the
Plan.
b. The stock subject to the Plan may unissued shares or reacquired shares,
bought on the market or otherwise.
4. ELIGIBILITY
Options shall be granted only to Non-Employee Directors of the Company.
5. NON-DISCRETIONARY GRANTS
a. Each person who is, after the Effective Date, elected for the first time
to be a Non-Employee Director automatically shall, upon the date of initial
election to be a Non-Employee Director by the Board or Stockholders of the
Company, be granted an option to purchase one hundred thousand (100,000) shares
of common stock of the Company on the terms and conditions set forth herein.
The exercise price of each such option shall be equal to the last sale price
per share of the Company's Common Stock on the National Market of the Nasdaq
Stock Market on the date of the grant as reported in THE WALL STREET JOURNAL,
which the Board hereby determines, after consideration of all relevant factors,
to be equal to the fair market value of the Company's Common Stock on the date
hereof, and this option shall become exercisable according to one-fifth vesting
on the date of the first and second anniversary of the date the Non-Employee
Director was elected to the Board and one-twentieth quarterly vesting over the
remaining three (3) year vesting schedule, with vesting to begin on the date of
the grant, and
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the appropriate officers of the Company are hereby authorized and directed to
execute an option agreement with the foregoing optionee in the form approved
by the Board for use with the Plan, as well as any and all other documents
convenient or proper to carry the foregoing option into effect, and to
perform the commitments of the Company upon the exercise of such option,
including but not limited to the sale and issuance of the shares covered by
such options.
b. On the Effective Date of the Plan, each person who is, as of that date, a
Non-Employee Director who has never before been granted an option by the
Company, automatically shall be granted an option to purchase one hundred
thousand (100,000) shares of common stock of the Company. The exercise prices
and vesting schedule shall be determined as described in section 5.a., above.
c. On the anniversary of a Non-Employee Director's election to the Board (or
the anniversary of the Effective Date of the Plan for a Non-Employee Director
who received a stock option under section 5.b., above), the Non-Employee
Director shall be granted an option to purchase shares of the Company's common
stock. The number of shares subject to such option shall be equal to one
hundred thousand (100,000) less the number of unvested shares subject to
options granted to the Non-Employee Director by the Company. The exercise
price shall be determined as described in section 5.a., above. This option
shall be become exercisable according to one-twelfth quarterly vesting over a
three (3) year vesting period, with vesting to begin on the date of the grant.
6. OPTION PROVISIONS
a. The term of each option commences on the date it is granted and, unless
sooner terminated as set forth herein, expires on the date ("Expiration Date")
ten (10) years from the date of grant. If the optionee's service as a
Non-Employee Director or employee of or Consultant to the Company or any
Affiliate terminates for any reason or for no reason, the option shall
terminate on the earlier of the Expiration Date or the date twelve (12) months
following the date of termination of all such service; provided, however, that
if such termination of service is due to the optionee's death, the option shall
terminate on the earlier of the Expiration Date or eighteen (18) months
following the date of the optionee's death. In any and all circumstances, an
option may be exercised following termination of the optionee's service as a
Non-Employee Director, or employee of, or consultant, to the Company, or any
Affiliate, only as to that number of shares as to which it was exercisable on
the date of termination of such service.
b. Payment of the exercise price of each option is due in full in cash upon
any exercise when the number of shares being purchased upon such exercise is
one thousand (1,000) shares or less. However, when the number of shares being
purchased upon as exercise is more than one thousand (1,000) shares, the
optionee may elect to make payment of the exercise price under one of the
following alternatives:
i. payment of the exercise price per share in cash or by check at the
time of exercise;
ii. provided that at the time of the exercise the Company's common stock
is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of shares of common stock of the Company already owned
by the optionee, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interest, which common stock shall be
valued at its fair market value on the date preceding the date of
exercise; or
iii. payment by a combination of the methods of payment specified in
sections 6.b.i and 6.b.ii, above.
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 the Company prior to
the issuance of shares of the Company's common stock.
c. A option may be transferred to the extent provided in the option
agreement; provided that if the option agreement does not expressly permit the
transfer of a option, the option shall
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not be transferable except by will, by the laws of descent and distribution
or pursuant to a domestic relations order satisfying the requirements of Rule
16b-3, and shall be exercisable during the lifetime of the person to whom the
option is granted only by such person or any transferee pursuant to a
domestic relations order. Notwithstanding the foregoing, the person to whom
the option is granted may, be delivering written notice to the Company, in a
form satisfactory to the Company, designate a third party who, in the event
of the death of the optionee, shall thereafter be entitled to exercise the
option.
d. The minimum number of shares with respect to which this option may be
exercised at any one time is one thousand (1,000), except (a) as to an
installment subject to exercise, as set forth in paragraph 1, which amounts to
fewer than one thousand (1,000) 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. In no event may this option be exercised
for any number of shares which would require the issuance of anything other
than whole shares.
e. The Company may require any optionee, or any person to whom an option is
transferred under subparagraph 6(d), as a condition of exercising any such
option:
i. to give written assurances satisfactory to the Company as to the
optionee's knowledge and experience in financial and business matters; and
ii. to give written assurances satisfactory to the Company stating that
such person is acquiring the stock subject to the option for such person's
own account and not with any present intention of selling or otherwise
distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if the issuance of the shares upon the exercise of the
option has been registered under a then-currently-effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws.
f. Notwithstanding anything to the contrary contained herein, an option may
not be exercised unless the shares issuable upon exercise of such option are
then registered under the Securities Act or, if such shares are not then so
registered, the Company has determined that such exercise and issuance would be
exempt from the registration requirements of the Securities Act.
7. COVENANTS OF THE COMPANY
a. During the terms of the option granted under the Plan, the Company shall
keep available at all times the number of shares of stock required to satisfy
such options.
b. The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to issue
and sell shares of stock upon exercise of the options granted under the Plan;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan, or any stock issued or issuable pursuant to any such option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell stock upon
exercise of such options.
8. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.
9. MISCELLANEOUS
a. Neither an optionee nor any person to whom an option is transferred under
section 6.c shall be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any shares subject to such option unless and until
such person has satisfied all requirements for exercise of the Option pursuant
to its terms.
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b. Nothing in the Plan or in any instrument executed pursuant thereto shall
confer upon any Non-Employee Director any right to continue in the service of
the Company or any Affiliate or shall affect any right of the Company, its
Board or stockholders or any Affiliate to terminate the service of any
Non-Employee Director with or without cause.
c. No Non-Employee Director, individually or as a member of a group, and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any option reserved for the purposes of the
Plan except as to such shares of common stock, if any, as shall have been
reserved for him pursuant to an option granted to him.
d. In connection with each option made pursuant to the Plan, it shall be a
condition precedent to the Company's obligation to issue or transfer shares to
a Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal or other withholding tax
required to be withheld with respect to such sale or transfer, or such removal
or lapse, is made available to the Company for timely payment of such tax.
10. ADJUSTMENTS UPON CHANGES IN STOCK
a. If any change is made in the stock subject to the Plan, or subject to any
option granted under the Plan (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Plan and
outstanding options will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan and the class(es) and number of shares and
price per share of stock subject to outstanding options.
b. In the event of:
i. a dissolution, liquidation or sale of substantially all of the assets
of the Company;
ii. a merger or consolidation in which the Company is not the surviving
corporation;
iii. a reverse merger in which the Company is the surviving corporation
but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise; or
iv. any other capital reorganization (including a sale of stock of the
Company to a single purchaser or single group of affiliated purchasers)
after which less than fifty percent (50%) of the Outstanding voting shares
of the new or continuing corporation are owned by shareholders of the
Company immediately before such transaction;
options under the Plan shall immediately become fully vested and the time
during which options outstanding under the Plan may be exercised shall be
accelerated to permit the optionee to exercise all such options In full prior
to such event, and the options shall terminate if not exercised prior to such
event.
11. AMENDMENT OF THE PLAN
a. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 10 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary for
the Plan to satisfy the requirements of Rule 16b-3 under the Exchange Act or
any Nasdaq or securities exchange listing requirements.
b. Rights and obligations under any option granted before any amendment of
the Plan shall not be impaired by such amendment unless:
i. the Company requests the consent of the person to whom the option was
granted; and
ii. such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN
a. The Board may suspend or terminate the Plan at any time. No options may
be granted under the Plan while the Plan is suspended or after it is
terminated.
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b. Rights and obligations under any option granted while the Plan is in
effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the option was granted.
13. EFFECTIVE DATE OF THE PLAN; CONDITIONS OF EXERCISE
a. The Plan shall become effective on February 13, 1996 ("Effective Date"),
provided that no options may be exercised unless and until the Plan is approved
by stockholders of the Company.
b. No option granted under the Plan shall be exercised or exercisable unless
and until the condition of subparagraph 13.a, above, has been met.
ADOPTED BY THE BOARD OF DIRECTORS ON FEBRUARY 13, 1996
AMENDED BY THE BOARD OF DIRECTORS ON DECEMBER 18, 1996
APPROVED BY THE STOCKHOLDERS ON JANUARY 31, 1997
AMENDED BY THE BOARD OF DIRECTORS ON JULY 22, 1997
AMENDED BY THE STOCKHOLDERS ON OCTOBER 3, 1997
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