VALENCE TECHNOLOGY INC
S-8, 1999-03-17
COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH
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<PAGE>

 As filed with the Securities and Exchange Commission on March 17, 1999
                                                     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, NV 89015
                                   (702) 558-1000
                      (Address of principal executive offices)
                                          
                   1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
                             (Full title of the plans)
                                          
                                   LEV M. DAWSON
            CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
                              VALENCE TECHNOLOGY, INC.
                                 301 CONESTOGA WAY
                                HENDERSON, NV 89015
                                   (702) 558-1000
  (Name, address, including zip code, and telephone number, including area code,
                               of agent for service)
                                          
                                     Copies to:
                                          
                                ANDREI MANOLIU, ESQ.
                                BRETT D. WHITE, ESQ.
                                 COOLEY GODWARD LLP
                               FIVE PALO ALTO SQUARE
                                3000 EL CAMINO REAL
                              PALO ALTO, CA 94306-2155
                                   (650) 843-5000
                                          
                          CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
                                                      Proposed Maximum          Proposed Maximum
     Title of Securities          Amount to be            Offering                 Aggregate                Amount of
       to be Registered            Registered       Price per Share (1)        Offering Price (1)       Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                <C>                       <C>                      <C>
  Common Stock, par value         410,000 shares         $7.00                   $2,870,000              $797.86
     $0.001 per share
- ---------------------------------------------------------------------------------------------------------------------------
</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 March 16, 1999 as reported on the
     Nasdaq National Market. 


<PAGE>
                                          
                                 EXPLANATORY NOTE 

     This Registration Statement on Form S-8 is being filed for the purpose of
registering an additional 410,000 shares of the Registrant's Common Stock to be
issued pursuant to the Registrant's 1996 Non-Employee Directors' Stock Option
Plan, as amended (the "Plan"). The Registration Statements on Form S-8
previously filed with the Securities and Exchange Commission relating to the
Plan (File Nos. 333-21669 and 333-43203, filed with the Commission on February
12, 1997 and December 24, 1997, respectively) are incorporated by reference
herein.

                                          
                                      EXHIBITS

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER

<S>          <C>
  5.1        Opinion of Cooley Godward LLP 

 23.1        Consent of PricewaterhouseCoopers LLP

 23.2        Consent of Samil Accounting Corporation 

 23.3        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        1996 Non-Employee Directors' Stock Option Plan
</TABLE>


                                       1.

<PAGE>
                                          
                                     SIGNATURES

     THE REGISTRANT.  Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant 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 March 17, 1999.

                                   VALENCE TECHNOLOGY, INC.

                                   By:  /s/ Lev M. Dawson
                                      ----------------------------------------
                                        Lev M. Dawson
                                        Chairman of the Board,
                                        Chief Executive Officer and President
                                   
                                   
                                 POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Lev M. Dawson 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 attorney-in-fact and agent 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 attorney-in-fact and agent
or his substitute, may lawfully do or cause to be done by virtue hereof.

     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. 

<TABLE>
<CAPTION>
   SIGNATURE                             TITLE                      DATE
                                                                
<S>                              <C>                           <C>
/s/ Lev M. Dawson                Chairman of the Board,        March 17, 1999
- ----------------------------     Chief Executive Officer
       LEV M. DAWSON             and President (Principal
                                 Executive Officer and
                                 Principal Financial and
                                 Accounting Officer)
                                 
                                                                
/s/ Carl E. Berg                 Director                      March 17, 1999
- ----------------------------
       CARL E. BERG    
                                                                
/s/ Bert C. Roberts, Jr.         Director                      March 17, 1999
- ----------------------------
   BERT C. ROBERTS, JR.

/s/ Alan F. Shugart              Director                      March 17, 1999
- ----------------------------
      ALAN F. SHUGART       
</TABLE>


                                       2.

<PAGE>

                                   EXHIBIT INDEX

<TABLE>
<CAPTION>
    EXHIBIT
     NUMBER                        DESCRIPTION
<S>           <C>
      5.1     Opinion of Cooley Godward LLP

     23.1     Consent of PricewaterhouseCoopers LLP
            
     23.2     Consent of Samil Accounting Corporation

     23.3     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     1996 Non-Employee Directors' Stock Option Plan
</TABLE>

                                       3.

<PAGE>

                                                                   EXHIBIT 5.1

March 16, 1999

Valence Technology, Inc.
301 Conestoga Way
Henderson, NV 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 410,000 shares of the 
Company's Common Stock, $.001 par value (the "Shares"), pursuant to its 1996 
Non-Employee Directors' Stock Option Plan (the "Plan").

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 Plan, 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


Brett D. White



<PAGE>

                                                                  EXHIBIT 23.1

                         CONSENT OF INDEPENDENT ACCOUNTANTS

     We consent to the incorporation by reference in the registration 
statement of Valence Technology, Inc. (a company in the development stage) 
(the "Company") on Form S-8 to register three million shares of common stock 
and common stock options, of our report, which includes an explanatory 
paragraph regarding the Company's ability to continue as a going concern, 
dated June 8, 1998, on our audits of the consolidated financial statements of 
the Company as of March 29, 1998 and March 30, 1997, and for the period from 
March 3, 1989 (date of inception) to March 29, 1998 and for each of the years 
ending March 29, 1998, March 30, 1997 and March 31, 1996, which report is 
included in the Company's annual report on Form 10-K. 

PricewaterhouseCoopers LLP 


San Jose, California 
March 17, 1999 


<PAGE>

                                                                  EXHIBIT 23.2
                                          
                         CONSENT OF INDEPENDENT ACCOUNTANTS

     We consent to the incorporation by reference in the registration 
statement of Valence Technology, Inc. (a company in the development stage) 
(the "Company") on Form S-8 of our report, which includes an explanatory 
paragraph regarding Hanil Valence Co. Ltd.'s ability to continue as a going 
concern, dated May 11, 1998, on our audit of the consolidated financial 
statements of Hanil Valence Co., Ltd. as of March 31, 1998, and for the year 
then ended, which report is included in the Company's annual report on Form 
10-K. 

Samil Accounting Corporation


Seoul, Korea 
March 9, 1999



<PAGE>

                                                                  EXHIBIT 99.1

             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 seven hundred fifty thousand (750,000) 
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 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


Page 1

<PAGE>

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 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.


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<PAGE>

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.
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


Page 3

<PAGE>

     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.
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
AMENDED BY THE BOARD OF DIRECTORS ON NOVEMBER 1, 1998.
AMENDED BY THE STOCKHOLDERS ON FEBRUARY 4, 1999.


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