Document:

Exhibit 4.1

 

IBM Personal Learning Accounts Plan 

(Effective
July 1, 2008)

 

The
substantive purpose of this Plan is to provide Eligible Employees an
opportunity to establish and fund specialized accounts to pay for Eligible
Educational Expenses. It is the intention of the Corporation that the Plan
qualify as a plan providing qualified educational assistance under Code
§ 127(b)(1), and that the educational assistance under the Plan be
eligible for exclusion from the Employees’ income under Code § 127(a). This
Plan is effective as of July 1, 2008.

 

1.                                      Eligible
Employees. Except
as provided below, each regular employee of a Participating Company shall be an
Eligible Employee; provided he or she:

 

(a)                                  has
at least five Years of Service; and

 

(b)                                 is
receiving pay from a Participating Company.

 

An individual
is not an Eligible Employee if he or she:

 

(a)                                  is
not a regular employee of  a
Participating Company;

 

(b)                                 has
less than five Years of Service;

 

(c)                                  is
eligible for benefits under the IBM Long-Term Disability Plan; or

 

(d)                                 has
separated from service from the Corporation (and its subsidiaries) (including a
retiree, resourced employee, voluntary resignation, management-initiated
separation, or as a result of a divestiture or outsourcing transaction).

 

2.                                      Participation. An Eligible Employee shall become a
Participant by completing and forwarding a payroll deduction authorization in
accordance with the procedures established by the IBM Plan Administrator. An
individual shall cease to be a Participant on the later of the date he or she
ceases to be an Eligible Employee or the date the individual ceases to have a
balance in his or her Participant Contributions Account.

 

3.                                      Participant
Contributions. A
Participant may contribute up to $1,000 each Plan Year on an annual basis from
his or her base salary received while he or she is an Eligible Employee.
However, for the initial Plan Year, a Participant’s maximum Participant
Contribution is $500. Participant Contributions shall be by payroll deduction
on an after-tax basis. The payroll deduction authorization will authorize a
regular payroll deduction from the Eligible Employee’s base salary and must
specify the date on which the deduction is to commence, which day may not be
retroactive. The payroll deduction authorization must be received by the
Corporation’s payroll department in accordance with payroll procedures
established by IBM. All changes to payroll deductions under the Plan shall be
in accordance with procedures established by the IBM Plan Administrator. A
Participant may increase or decrease the payroll deduction by filing a new
payroll deduction authorization at any time. The change may not become
effective sooner than the next pay period after receipt of the authorization.  The
IBM Plan Administrator shall establish or cause to be established a trust to
hold and invest Participant Contributions. The assets of the trust shall be
invested in such investment options as may be directed by the IBM Plan
Administrator.

 

4.                                      Participant
Contribution Accounts. The IBM Plan Administrator shall cause to be
established a Participant Contribution Account for each Participant.
Participant Contributions shall be credited to the Participant Contribution
Accounts as soon as practicable after such contributions are deducted from the Participants’
base salary, but in no event than later the date required under ERISA or other
applicable law. Each Participant Contribution Account also shall be credited
with its proportionate earnings (losses) of the trust established under Section 3.
Earnings (losses) shall be credited daily unless a different period is
specified by the IBM Plan Administrator. Plan earnings will be treated as
annual taxable income and reported to the IRS as required by law.

 

5.                                      IBM Match
Accounts. The
IBM Plan Administrator shall cause to be established an IBM Match Account for
each Participant for purposes of determining the amount of educational benefits
to which the employee is eligible. The IBM Match Account shall be a notional
recordkeeping account and no special fund shall be established for purposes of
paying Benefits attributable to the IBM Match. Each IBM Match 

 

 

Account also
shall be credited with its proportionate earnings (losses) as if the IBM Match
had been invested in the same investments as the trust established under Section 3.

 

6.                                      Benefits.  Every Participant shall be eligible
to receive Benefits under the Plan for Eligible Educational Expenses incurred
by the Participant, subject to the limitations described below. A Participant
shall be entitled to Benefits under this Plan only for Eligible Educational
Expenses incurred during the Benefit Eligibility Period.

 

7.                                      Limitations on
Benefits.
Benefits under the Plan shall be subject to the following limitations:

 

(a)                                  In
no event shall a Participant be entitled to receive any Benefit under this Plan
in lieu of any other compensation he or she might otherwise be entitled to from
the Corporation or a Participating Company.

 

(b)                                 Not
more than 5% of Benefits paid or incurred each year under the Plan shall be
attributable to principal (5%) shareholders or owners of the Corporation in
accordance with Code § 127(b).

 

(c)                                  In
accordance with Code § 127(a), a Participant may not receive more than
$5,250 in Benefits for a Plan Year attributable to his or her IBM Match Account
and benefits under any other plan of the Corporation (or its subsidiaries)
providing qualified educational assistance under Code § 127(b)(1).

 

(d)                                 A
Participant may not receive at any time Benefits in excess of the amounts then
credited to his or her Participant Contributions Account and IBM Match Account.
The IBM Plan Administrator shall establish rules for the subsequent
payment of Eligible Educational Expenses in excess of such account balances.

 

8.                                      Named Fiduciaries.
The IBM
Senior Vice President, Human Resources and the IBM Plan Administrator, or each
person on the committee serving as the IBM Plan Administrator, shall severally
have the authority to control and manage the operation and administration of
the Plan as herein delineated and shall each be a named fiduciary with respect
to the Plan within the meaning of Section 402(a) of ERISA. Each named
fiduciary shall be responsible for discharging only the duties assigned to it
by the terms of the Plan and the Trust Agreement or Agreements. The IBM Senior
Vice President, Human Resources shall be responsible for the appointment,
retention and removal of the individuals who will serve as the IBM Plan
Administrator. The IBM Plan Administrator shall be responsible for the
appointment, retention, and removal of the Trustees that hold the assets of the
Plan and the vendor that administers the Plan.

 

9.                                      Administration. The IBM Plan Administrator shall be
the “plan administrator” within the meaning of ERISA. The IBM Plan
Administrator shall have the authority to control and manage the operation and
administration of the Plan, including the authority to:

 

(a)                                  make
and enforce rules or regulations for the efficient administration of the
Plan;

 

(b)                                 interpret
the Plan; and

 

(c)                                  decide
all questions concerning the Plan and the eligibility of any person to
participate in the Plan.

 

The IBM Plan
Administrator’s interpretations and decisions with regard thereto shall be
final and conclusive. The IBM Plan Administrator shall cause reasonable notice
of the availability and terms of the Plan be given to Eligible Employees. The
IBM Plan Administrator shall cause accurate records to be kept of Participant’s
accounts and of all Benefits paid to Participants under the Plan. The IBM Plan
Administrator shall ensure that no Benefit was paid to a Participant in lieu of
other compensation due to the Participant. The IBM Plan Administrator may
appoint or retain a recordkeeper to perform any or all of its duties under the
Plan. The IBM Plan Administrator may appoint and delegate responsibilities to
such other IBM employees as may be needed to carry out the responsibilities of
the IBM Plan Administrator or to provide adequate staff services to the IBM
Plan Administrator.

 

10.                               Claims Procedures.
A
Participant shall make a claim for Benefits by making a request from the Claims
Administrator in accordance with procedures established by the IBM Plan
Administrator. The request must be filed after the Eligible Educational
Expenses have been incurred and on or before the 60th day after the
Benefit Eligibility Period. The request must be accompanied by evidence that
the Eligible 

 

 

Educational
Expenses have been incurred by the Participant. If a claim is wholly or
partially approved, reimbursement of the Participant’s Eligible Educational
Expenses shall be made two thirds from his or her Participant Contribution
Account and one third from his or her IBM Match Account. Payment of the portion
attributable to the Participant’s IBM Match Account shall be made from the
general assets of the Corporation or a Participating Company.

 

If a claim is
wholly or partially denied, notice of the decision shall be furnished to the
claimant within a reasonable period of time, not to exceed 90 days after
receipt of the claim by the Claims Administrator, unless special circumstances
require an extension of time for processing the claim. If such an extension of
time is required, written notice of the extension shall be furnished to the
claimant before the termination of the initial 90-day period. In no event shall
such extension exceed a period of 90 days from the end of such initial period.
The extension notice shall indicate the special circumstances requiring an
extension of time and the date on which the Claims Administrator expects to
render a decision. The Claims Administrator shall provide every claimant who is
denied a claim for benefits written notice setting forth, in a manner
calculated to be understood by the claimant, the following:

 

(a)           a
specific reason or reasons for the denial;

 

(b)           reference
to specific Plan provisions upon which the denial is based;

 

(c)           a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

 

(d)           an
explanation of the Plan’s appeal procedures, as set forth below in Section 11.

 

11.                               Appeal Procedures.
The purpose
of the review procedure set forth in this Section is to provide a
procedure by which a claimant under the Plan may have reasonable opportunity to
appeal a denial of a claim to the Appeals Administrator for a full and fair
review. To accomplish that purpose, the claimant, or the claimant’s duly
authorized representative may:

 

(a)                                  request
review upon written application to the Appeals Administrator;

 

(b)                                 review
relevant Plan documents; and

 

(c)                                  submit
issues and comments in writing.

 

A claimant (or
a claimant’s duly authorized representative) shall request a review by filing a
written application for review with the Appeals Administrator at any time
within 60 days after receipt by the claimant of written notice of the denial of
his or her claim. Decision on review of a denied claim shall be made in the
following manner:

 

(a)                                  The
decision on review shall be made by the IBM Plan Administrator or a designee of
the IBM Plan Administrator, who may, in its discretion, hold a hearing on the
denied claim; the IBM Plan Administrator or designee shall make its decision
promptly, and not later than 60 days after the IBM Plan Administrator receives
the request for review, unless special circumstances require extension of time
for processing, in which case a decision shall be rendered as soon as possible,
but not later than 120 days after receipt of the request for review. If such an
extension of time for review is required, written notice of the extension shall
be furnished to the claimant prior to the commencement of the extension.

 

(b)                                 The
decision on review shall be in writing and shall include specific reasons for
the decision, written in a manner calculated to be understood by the claimant,
and references to the specific Plan provisions on which the decision is based.

 

If a dispute
arises with respect to any matter under this Plan, the IBM Plan Administrator
may refrain from taking any other or further action in connection with the
matter involved in the controversy until the dispute has been resolved.

 

12.                               Withdrawal of
Participant Contributions. A Participant may withdraw all or any portion of his
or her Participant Contribution Account at any time. Upon doing so, an amount
equal to 50% of the withdrawal shall be forfeited from the Participant’s IBM
Match Account.

 

13.                               Rights on Death. In the event of a Participant’s
death, the value of his or her Participant 

 

 

Contribution
Account will be paid to the Participant’s estate. Except as provided below, the
value of Participant’s IBM Match Account will be forfeited:

 

(a)                                  If
the Participant had submitted a claim for Benefits before his or her death, the
proceeds will be paid to the Participant’s estate;

 

(b)                                 A
Participant’s estate may submit a claim for Benefits for Eligible Educational
Expenses incurred after the Participant enrolled in the Plan and before the
Participant’s death; provided that the estate must submit such a claim for
Benefits within six months after the Participant’s death.

 

14.                               Rights Not
Transferable. Rights
under this Plan are not transferable by an Eligible Employee.

 

15.                               Rights Not Subject to Alienation. Rights under this Plan cannot be
pledged as collateral, nor can such rights be sold, assigned, hypothecated, pledged,
alienated or otherwise impignorated, either for the benefit of an Eligible
Employee or for any third party.

 

16.                               Administrative
Expenses. The
Corporation shall pay the costs of administering the Plan. However, the IBM
Plan Administrator has the right impose reasonable administrative fees on
Participants to defray the administrative costs of the Plan, which shall in no
event exceed the actual administrative costs of the Plan.

 

17.                               Amendment and
Termination of the Plan. The Plan may be amended or terminated at any time by
duly adopted resolution. Upon termination of the Plan, remaining balances in
the Participant Contributions Accounts shall be distributed to Participants and
remaining balances in the IBM Match Accounts shall be forfeited.

 

18.                               No Contract of
Employment.
This Plan shall not be deemed to constitute a contract between the Corporation
(or any of its subsidiaries) and any Participant or employee or to be a
consideration or an inducement for the employment of any Participant or
employee. Nothing contained in this Plan shall be deemed to give any
Participant or employee the right to be retained in the service of the
Corporation (or any of its subsidiaries) or to interfere with the right of the
Corporation (or any of its subsidiaries) to discharge any Participant or
employee at any time regardless of the effect which the discharge shall have
upon him or her as a Participant in this Plan.

 

19.                               Definitions. The following terms shall have the
meanings set forth below unless the context otherwise requires:

 

(a)                                  “Appeals
Administrator” shall mean the person(s), committee, or entity responsible for
reviewing denials of claims for Benefits. The Appeals Administrator shall be
the IBM Plan Administrator except to the extent that the IBM Plan Administrator
has delegated that function.

 

(b)                                 “Benefit
Eligibility Period” for a Participant means the period beginning on the date
the Eligible Employee becomes a Participant in accordance with Section 2
and ending on the earlier of the Participant’s death or the second anniversary
of the date he or she ceases to be an Eligible Employee.

 

(c)                                  “Benefits”
means the direct payment or reimbursement of Eligible Educational Expenses
incurred by a Participant.

 

(d)                                 “Claims
Administrator” shall mean the person(s), committee, or entity responsible for
initially determining eligibility for Benefits. The Claims Administrator shall
be the IBM Plan Administrator except to the extent that the IBM Plan
Administrator has delegated that function.

 

(e)                                  “Code”
means the Internal Revenue Code of 1986, as amended. Reference to a specific
section of the Code includes the regulations thereunder.

 

(f)                                    “Corporation”
or “IBM” means International Business Machines Corporation, a New York
corporation.

 

(g)                                 “Eligible
Employee” means an individual described in Section 2.

 

(h)                                 “Eligible
Educational Expenses” means the expenses incurred by or on behalf of a 

 

 

Participant for his or her training and
education that is not specifically related to a participant’s job at IBM. To be
reimbursed under this Plan, Eligible Educational Expenses must satisfy the
definition in Code § 127(c)(1).

 

(i)                                     “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
Reference to a specific section of ERISA includes the regulations thereunder.

 

(j)                                     “IBM
Match” means 50% of the Participant Contributions for a Plan Year.

 

(k)                                  “IBM
Match Account” means the recordkeeping account established under the Plan for
purposes of tracking the IBM Match and earnings (losses) on the IBM Match.

 

(l)                                     “IBM
Plan Administrator” shall be a committee appointed by the IBM Senior Vice
President, Human Resources, comprised of one or more persons employed by IBM as
an Assistant Controller, an IBM Vice President in Human Resources, or an
Assistant Treasurer or such other person or persons holding comparable
positions as the IBM Senior Vice President, Human Resources deems appropriate.

 

(l)                                     “Participant”
means any Eligible Employee who has satisfied the eligibility requirements of Section 3.

 

(m)                               “Participating
Company” means the Corporation or any U.S. subsidiaries of the Corporation that
are designated as eligible to participate in the Plan.

 

(n)                                 “Participant
Contribution Account” means the account established under the Plan for purposes
of tracking Participant Contributions and earnings (losses) on those
contributions.

 

(o)                                 “Participant
Contributions” means the after-tax contributions made to the Plan by a
Participant pursuant to Section 4.

 

(p)                                 “Plan”
means this IBM Personal Learning Accounts Plan.

 

(q)                                 “Plan
Year” means the calendar year except that the initial Plan Year shall commence
on July 1, 2008 and end on December 31, 2008.

 

(r)                                    “Regular employee” shall be
defined as such by IBM’s rules and regulations but only if he or she:

 

(i)                                     is
compensated by salary or by commission, or partly by salary and partly by
commission,

 

(ii)                                  is
subject to IBM’s Personal Business Commitments program, or any successor
program, and

 

(iii)                               is
employed for an indefinite period,

 

provided, however, that the term “regular
employee” shall never include any of the following individuals:

 

(i)                                     an
individual who is in a unit covered by a collective bargaining agreement
between a Participating Company and a collective bargaining agent, unless the
collective bargaining agreement, by specific reference to the Plan, provides
for his or her participation in the Plan,

 

(ii)                                  an
individual who is a “leased employee” within the meaning of Code § 414(n),

 

(iii)                               an
individual who is treated as an employee of a Participating Company by reason
of Code § 414(m) or (o),

 

(iv)                              an
individual who is retained by a Participating Company under a contract or
agreement specifying that he or she is not eligible to participate in the Plan,

 

(v)                                 an
individual whose basic compensation for services rendered on behalf of a
Participating Company is not paid directly by the Corporation (or its
subsidiary) out of its regular payroll accounts,

 

(vi)                              an
individual who is a non-resident alien and who receives no earned income
(within the meaning of Code § 911(b)) from a Participating Company that
constitutes gross income from sources within the United States (within the 

 

 

meaning of Code § 861(a)(3)),

 

(vii)         an
individual whose relationship to a Participating Company is not initially
classified by the Participating Company as that of a “common law” employee but
which is later determined to be that of a “common law” employee of the
Participating Company by reason of Revenue Ruling 87-41 or other similar
guidance, a court decision, or a governmental determination.

 

(s)                                  “Years
of Service” means the number of years, including fractional portions thereof,
elapsed since the first date an employee was paid or entitled to payment for
the performance of duties for the Corporation or its subsidiaries.

 

20.                               Governing Law. This Plan shall be construed and
enforced according to New York law, other than its laws concerning choice of
law, to the extent not preempted by ERISA or any other federal law.Exhibit 10.1

 

 

June 12,
2008

 

Mr. Carl
E. Berg

Berg &
Berg Enterprises, LLC

10050
Bandley Dr.

Cupertino,
CA  95014

 

Re:  Amended Covenants in Loan Agreements

 

Dear
Mr. Berg:

 

Valence Technology, Inc. (the “Borrower”) and
Berg & Berg Enterprises, LLC, are currently parties to two loan
agreements: (a) the Loan Agreement dated July 17, 1990, as amended
(the “Original Amended Loan Agreement”) and (b) the Loan Agreement dated October 5,
2001 (the “New Loan Agreement”) (collectively the “Loan Agreements” or “Loans”).  This letter is to formally document our
agreement to amend the Loan Agreements to extend the maturity dates of the Loan
Agreements from September 30, 2008 to September 30, 2010.

 

This letter shall serve as Amendment No. 13 to
the Original Amended Loan Agreement and as Amendment No. 5 to the New Loan
Agreement.

 

Kindly indicate your acceptance of the amendments described
above by signing and returning the enclosed copy of this letter.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  VALENCE
  TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Galen H. Fischer

  
	
   

  	
  Galen
  H. Fischer

  
	
   

  	
  VP
  of Finance

  

 

	
  ACCEPTED
  AND AGREED:

  	
   

  
	
   

  	
   

  
	
  BERG &
  BERG ENTERPRISES, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   /s/ Carl E. Berg

  	
   

  
	
  Carl
  E. Berg, Managing Member

  	
   

  

 

Valence Technology, Inc. 12201 Technology
Blvd. Suite 150, Austin, TX 78727

Tel: 512-527-2900, Fax: 512-527-2910

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