EXHIBIT 10.1

 

 

 

International Business Machines Corporation (“IBM”)

Equity Award Agreement

 

 

 

Plan

 

[IBM 1999 Long-Term Performance Plan (the “Plan”)]

 

 

 

Award Type

 

[Stock Options, Restricted Stock, Restricted Stock Units, Cash-Settled
Restricted Stock Units, SARs]

 

 

 

Purpose

 

The purpose of this Award is to retain selected employees and executives. You
recognize that this Award represents a potentially significant benefit to you
and is awarded for the purpose stated here.

 

 

 

Awarded to
Home Country
Global ID

 

Sample
United States (USA) [Employee ID]
[Global ID]

 

 

 

Award Agreement

 

This Equity Award Agreement, together with the “Terms and Conditions of Your
Equity Award: Effective June 7, 2013” (“Terms and Conditions”) document and the
Plan http://w3.ibm.com/hr/exec/comp/eq_prospectus.shtml, both of which are
incorporated herein by reference, together constitute the entire agreement
between you and IBM with respect to your Award. This Equity Award Agreement
shall be governed by the laws of the State of New York, without regard to
conflicts or choice of law rules or principles.

 

 

 

Grant

 

Date of Grant: [Month Date, Year]
[Exercise Price: $XX]
Number of [Options/Units/Shares/SARs] Awarded: [XX]

 

 

 

Vesting

 

This Award vests as set forth below, subject to your continued employment with
the Company as described in the Terms and Conditions document.

 

 

 

 

 

Options/Units/Shares/SARs

 

Date

 

 

 

[number of shares]

 

[month date year]

 

 

 

[number of shares]

 

[month date year]

 

 

 

[             “             ]

 

[             “             ]

 

 

 

 

 

 

 

Options expire, subject to the Terms and Conditions document, on: [month date
year]

 

1

--------------------------------------------------------------------------------

 

Terms and Conditions of Your Equity Award

 

Refer to the Terms and Conditions document
http://w3.ibm.com/hr/exec/comp/eq_prospectus.shtml for an explanation of the
terms and conditions applicable to your Award, including those relating to:

 

·      Cancellation and rescission of awards (also see below)

·      Jurisdiction, governing law, expenses and taxes

·      Non-solicitation of Company employees and clients, if applicable

·      Treatment of your Award in the event of death or disability or leave of
absence

·      Treatment of your Award upon termination of employment, including
retirement or for cause, (i) if you are on the performance team, or any
successor team thereto, and (ii) under all other circumstances.

 

It is strongly recommended that you print the Terms and Conditions document for
later reference.

 

 

 

Cancellation and Rescission

 

You understand that IBM may cancel, modify, rescind, suspend, withhold or
otherwise limit or restrict this Award in accordance with the terms of the Plan,
including, without limitation, canceling or rescinding this Award if you render
services for a competitor prior to, or during the Rescission Period. You
understand that the Rescission Period that has been established is 12 months.
Refer to the Terms and Conditions document and the Plan for further details.

 

 

 

Data Privacy, Electronic Delivery

 

By accepting this Award, you agree that data, including your personal data,
necessary to administer this Award may be exchanged among IBM and its
subsidiaries and affiliates as necessary, and with any vendor engaged by IBM to
administer this Award, subject to the Terms and Conditions document; you also
consent to receiving information and materials in connection with this Award or
any subsequent awards under IBM’s long-term performance plans, including without
limitation any prospectuses and plan documents, by any means of electronic
delivery available now and/or in the future (including without limitation by
e-mail, by Web site access and/or by facsimile), such consent to remain in
effect unless and until revoked in writing by you.

 

 

 

Extraordinary Compensation

 

Your participation in the Plan is voluntary. The value of this Award is an
extraordinary item of income, is not part of your normal or expected
compensation and shall not be considered in calculating any severance,
redundancy, end of service payments, bonus, long-service awards, pension,
retirement or other benefits or similar payments. The Plan is discretionary in
nature. This Award is a one-time benefit that does not create any contractual or
other right to receive additional awards or other benefits in the future. Future
grants, if any, are at the sole grace and discretion of IBM, including but not
limited to, the timing of the grant, the number of units and vesting provisions.
This Equity Award Agreement is not part of your employment agreement, if any.

 

 

 

Accept Your Award

 

This Award is considered valid when you accept it. This Award will be cancelled
unless you accept it by 11:59 p.m. Eastern time by two business days prior to
the first vesting date in the “Vesting” section of this Agreement. By pressing
the Accept button below to accept your Award, you acknowledge having received
and read this Equity Award Agreement, the Terms and Conditions document and the
Plan under which this Award was granted and you agree (i) not to hedge the
economic risk of this Award or any previously-granted outstanding awards, which
includes entering into any derivative transaction on IBM securities (e.g., any
short sale, put, swap, forward, option, collar, etc.), (ii) to comply with the
terms of the Plan, this Equity Award Agreement and the Terms and Conditions
document, including those provisions relating to cancellation and rescission of
awards and jurisdiction and governing law, and (iii) that by your acceptance of
this Award, all awards previously granted to you under the Plan or other IBM
Long-Term Performance Plans are subject to the “Cancellation and Rescission”
section of this Agreement (unless your previous award agreement(s) specified a
longer Rescission Period, in which case such longer period will apply) and the
“Cancellation and Rescission” section of the Terms and Conditions document.

 

2

--------------------------------------------------------------------------------

 

 

 

International Business Machines Corporation (“IBM”)

Equity Award Agreement

 

 

 

Plan

 

[IBM 1999 Long-Term Performance Plan (the “Plan”)]

 

 

 

Award Type

 

Performance Share Units (PSUs)

 

 

 

Purpose

 

The purpose of this Award is to retain selected executives. You recognize that
this Award represents a potentially significant benefit to you and is awarded
for the purpose stated here.

 

 

 

Awarded to
Home Country
Global ID

 

Sample
United States (USA) [Employee ID]
[Global ID]

 

 

 

Award Agreement

 

This Equity Award Agreement, together with the “Terms and Conditions of Your
Equity Award: Effective June 7, 2013” (“Terms and Conditions”) document and the
Plan http://w3.ibm.com/hr/exec/comp/eq_prospectus.shtml, both of which are
incorporated herein by reference, together constitute the entire agreement
between you and IBM with respect to your Award. This Equity Award Agreement
shall be governed by the laws of the State of New York, without regard to
conflicts or choice of law rules or principles.

 

 

 

Grant

 

Date of Grant

 

# PSUs Awarded

 

Performance Period

 

Date of Payout

 

 

 

[month day year]

 

[amount]

 

[dates]

 

[date]

 

 

 

[month day year]

 

[amount]

 

[dates]

 

[date]

 

 

 

[            “            ]

 

[      “     ]

 

[    “   ]

 

[   “  ]

 

 

 

 

Vesting

 

You can earn the PSUs awarded above based on IBM’s performance in achieving
cumulative business targets of earnings-per-share and cash flow, weighted 80/20
respectively, over the 3-year Performance Period applicable to the award.
Performance against each of the targets will be subject to separate payout
calculations according to the following table (which will be applied separately
for each award of PSUs listed above): 

 

 

 

 

 

% of Target

 

<70%

 

70%

 

80%

 

90%

 

100%

 

110%

 

>120%

 

 

 

% of PSUs earned

 

0%

 

25%

 

50%

 

75%

 

100%

 

125%

 

150%

 

 

 

 

Payout of Awards

 

Following the Date of Payout, the Company shall either (a) deliver to you a
number of shares of Capital Stock equal to the number of your earned PSUs, or
(b) make a cash payment to you equal to the Fair Market Value on the Date of
Payout of the number of your earned PSUs at the end of the Performance Period,
in either case, net of any applicable tax withholding, and the respective PSUs
shall thereafter be canceled.

 

All payouts under this Award are subject to the provisions of the Plan, this
Agreement and the Terms and Conditions document, including those relating to the
cancellation and rescission of awards.

 

 

 

Terms and Conditions of Your Equity Award

 

Refer to the Terms and Conditions document
http://w3.ibm.com/hr/exec/comp/eq_prospectus.shtml for an explanation of the
terms and conditions applicable to your Award, including those relating to:

 

·   Cancellation and rescission of awards (also see below)

·   Jurisdiction, governing law, expenses and taxes

·   Non-solicitation of Company employees and clients, if applicable

·   Treatment of your Award in the event of death or disability or leave of
absence

·   Treatment of your Award upon termination of employment, including retirement
or for cause, (i) if you are on the performance team, or any successor team
thereto, and (ii) under all other circumstances.

 

It is strongly recommended that you print the Terms and Conditions document for
later reference.

 

1

--------------------------------------------------------------------------------

 

Cancellation and Rescission

 

You understand that IBM may cancel, modify, rescind, suspend, withhold or
otherwise limit or restrict this Award in accordance with the terms of the Plan,
including, without limitation, canceling or rescinding this Award if you render
services for a competitor prior to, or during the Rescission Period. You
understand that the Rescission Period that has been established is 12 months.
Refer to the Terms and Conditions document and the Plan for further details.

 

 

 

Data Privacy, Electronic Delivery

 

By accepting this Award, you agree that data, including your personal data,
necessary to administer this Award may be exchanged among IBM and its
subsidiaries and affiliates as necessary, and with any vendor engaged by IBM to
administer this Award, subject to the Terms and Conditions document; you also
consent to receiving information and materials in connection with this Award or
any subsequent awards under IBM’s long-term performance plans, including without
limitation any prospectuses and plan documents, by any means of electronic
delivery available now and/or in the future (including without limitation by
e-mail, by Web site access and/or by facsimile), such consent to remain in
effect unless and until revoked in writing by you.

 

 

 

Extraordinary Compensation

 

Your participation in the Plan is voluntary. The value of this Award is an
extraordinary item of income, is not part of your normal or expected
compensation and shall not be considered in calculating any severance,
redundancy, end of service payments, bonus, long-service awards, pension,
retirement or other benefits or similar payments. The Plan is discretionary in
nature. This Award is a one-time benefit that does not create any contractual or
other right to receive additional awards or other benefits in the future. Future
grants, if any, are at the sole grace and discretion of IBM, including but not
limited to, the timing of the grant, the number of units and vesting provisions.
This Equity Award Agreement is not part of your employment agreement, if any.

 

 

 

Accept Your Award

 

This Award is considered valid when you accept it. This Award will be cancelled
unless you accept it by 11:59 p.m. Eastern time two business days prior to the
end of the Performance Period in the “Grant” section of this Agreement. By
pressing the Accept button below to accept your Award, you acknowledge having
received and read this Equity Award Agreement, the Terms and Conditions document
and the Plan under which this Award was granted and you agree (i) not to hedge
the economic risk of this Award or any previously-granted outstanding awards,
which includes entering into any derivative transaction on IBM securities
(e.g., any short sale, put, swap, forward, option, collar, etc.), (ii) to comply
with the terms of the Plan, this Equity Award Agreement and the Terms and
Conditions document, including those provisions relating to cancellation and
rescission of awards and jurisdiction and governing law, and (iii) that by your
acceptance of this Award, all awards previously granted to you under the Plan or
other IBM Long-Term Performance Plans are subject to (A) the “Cancellation and
Rescission” section of this Agreement (unless your previous award
agreement(s) specified a longer Rescission Period, in which case such longer
period will apply) and the “Cancellation and Rescission” section of the Terms
and Conditions document and (B) any other cancellation, rescission or recovery
required by applicable laws, rules, regulations or standards, including without
limitation any requirements or standards of the U.S. Securities and Exchange
Commission or the New York Stock Exchange.

 

2

--------------------------------------------------------------------------------

 

 

 

International Business Machines Corporation (“IBM”)

Equity Award Agreement

 

 

 

Plan

 

[IBM 1999 Long-Term Performance Plan (the “Plan”)]

 

 

 

Award Type

 

Retention Restricted Stock Units (RRSUs)

 

 

 

Purpose

 

The purpose of this Award is to retain selected executives. You recognize that
this Award represents a potentially significant benefit to you and is awarded
for the purpose stated here.

 

 

 

Awarded to
Home Country
[Global ID]

 

Sample
United States (USA) [Employee ID]
[Global ID]

 

 

 

Award Agreement

 

This Equity Award Agreement, together with the “Terms and Conditions of Your
Equity Award: Effective June 7, 2013” (“Terms and Conditions”) document and the
Plan http://w3.ibm.com/hr/exec/comp/eq_prospectus.shtml, both of which are
incorporated herein by reference, together constitute the entire agreement
between you and IBM with respect to your Award. This Equity Award Agreement
shall be governed by the laws of the State of New York, without regard to
conflicts or choice of law rules or principles.

 

 

 

Grant

 

Date of Grant: [Month Date, Year]
Number of Units Awarded: [XX]

 

 

 

Vesting

 

This Award vests as set forth below, subject to your continued employment with
the Company as described in the Terms and Conditions document.     

 

 

 

 

 

Units

 

Date

 

 

 

[amount]

 

[month date, year]

 

 

 

[amount]

 

[month date, year]

 

 

 

 

Terms and Conditions of Your Equity Award

 

Refer to the Terms and Conditions document
http://w3.ibm.com/hr/exec/comp/eq_prospectus.shtml for an explanation of the
terms and conditions applicable to your Award, including those relating to:

 

·              Cancellation and rescission of awards (also see below)

·              Jurisdiction, governing law, expenses and taxes

·              Non-solicitation of Company employees and clients, if applicable

·              Treatment of your Award in the event of death or disability or
leave of absence

·               Treatment of your Award upon termination of employment,
including retirement or for cause

 

It is strongly recommended that you print the Terms and Conditions document for
later reference.

 

 

 

Cancellation and Rescission

 

You understand that IBM may cancel, modify, rescind, suspend, withhold or
otherwise limit or restrict this Award in accordance with the terms of the Plan,
including, without limitation, canceling or rescinding this Award if you render
services for a competitor prior to, or during the Rescission Period. You
understand that the Rescission Period that has been established is three years.
Refer to the Terms and Conditions document and the Plan for further details.

 

 

 

Data Privacy, Electronic Delivery

 

By accepting this Award, you agree that data, including your personal data,
necessary to administer this Award may be exchanged among IBM and its
subsidiaries and affiliates as necessary, and with any vendor engaged by IBM to
administer this Award, subject to the Terms and Conditions document; you also
consent to receiving information and materials in connection with this Award or
any subsequent awards under IBM’s long-term performance plans, including without
limitation any prospectuses and plan documents, by any means of electronic
delivery available now and/or in the future (including without limitation by
e-mail, by Web site access and/or by facsimile), such consent to remain in
effect unless and until revoked in writing by you.

 

1

--------------------------------------------------------------------------------

 

Extraordinary Compensation

 

Your participation in the Plan is voluntary. The value of this Award is an
extraordinary item of income, is not part of your normal or expected
compensation and shall not be considered in calculating any severance,
redundancy, end of service payments, bonus, long-service awards, pension,
retirement or other benefits or similar payments. The Plan is discretionary in
nature. This Award is a one-time benefit that does not create any contractual or
other right to receive additional awards or other benefits in the future. Future
grants, if any, are at the sole grace and discretion of IBM, including but not
limited to, the timing of the grant, the number of units and vesting provisions.
This Equity Award Agreement is not part of your employment agreement, if any.

 

 

 

Accept Your Award

 

This Award is considered valid when you accept it. This Award will be cancelled
unless you accept it by 11:59 p.m. Eastern time two business days prior to the
first vesting date in the “Vesting” section of this Agreement. By pressing the
Accept button below to accept your Award, you acknowledge having received and
read this Equity Award Agreement, the Terms and Conditions document and the Plan
under which this Award was granted and you agree (i) not to hedge the economic
risk of this Award or any previously-granted outstanding awards, which includes
entering into any derivative transaction on IBM securities (e.g., any short
sale, put, swap, forward, option, collar, etc.), and (ii) to comply with the
terms of the Plan, this Equity Award Agreement and the Terms and Conditions
document, including those provisions relating to cancellation and rescission of
awards and jurisdiction and governing law.

 

2

--------------------------------------------------------------------------------

 

IBM

 

TERMS AND CONDITIONS OF YOUR EQUITY AWARD: EFFECTIVE JUNE 7, 2013

 

--------------------------------------------------------------------------------

 

Table of Contents

 

 

 

Page

 

 

 

1.

Introduction

2

 

 

 

2.

How to Use This Document

2

 

 

 

3.

Definition of Terms

3

 

 

 

4.

Provisions that apply to all Award types and all countries

4

 

 

 

5.

Provisions that apply to all Award types but not all countries

4

 

 

 

6.

Provisions that apply to specific Award types for all countries

 

 

 

 

 

a.

Restricted Stock Units (“RSUs”) including Cash-Settled RSUs and Retention RSUs
(“RRSUs”)

6

 

 

 

 

 

 

 

i.

All RSUs

 

 

 

 

 

 

 

 

ii.

RSUs Other Than Cash-Settled RSUs and Cash-Settled RRSUs

 

 

 

 

 

 

 

 

iii.

Cash-Settled RSUs including Cash-Settled RRSUs

 

 

 

 

 

 

 

b.

Restricted Stock

7

 

 

 

 

 

 

c.

Stock Options (“Options”) and Stock Appreciation Rights (“SARs”)

9

 

 

 

 

 

 

 

i.

All Option and SAR Awards

 

 

 

 

 

 

 

 

ii.

All SAR Awards

 

 

 

 

 

 

 

d.

Performance Share Units (“PSUs”)

11

 

 

 

 

 

7.

Provisions that apply to specific countries

12

 

 

 

 

a.

Denmark

 

 

1

--------------------------------------------------------------------------------

 

Introduction

 

This document provides you with the terms and conditions of your Award that are
in addition to the terms and conditions contained in your Equity Award Agreement
for your specific Award.  Also, your Award is subject to the terms and
conditions in the governing plan document; the applicable document is indicated
in your Equity Award Agreement and can be found at
http://w3.ibm.com/hr/exec/comp/eq_prospectus.shtml.

 

As an Award recipient, you can see a personalized summary of all your
outstanding equity grants in the “Personal statement” section of the IBM
executive compensation web site (http://w3.ibm.com/hr/exec/comp). This site also
contains other information about long-term incentive awards, including copies of
the prospectus (the governing plan document).  If you have additional questions
and you are based in the U.S., you can call the Employee Service Center at
800-796-9876 (or 919-784-8646) weekdays, from 8:00 a.m. to 8:00 p.m. Eastern
time (TTY available at 800-426-6537).  If you are based in another country, you
can call your local IBM Employee Service Center.

 

How to Use This Document

 

Terms and conditions that apply to all awards in all countries can be found on
page 4.  Review these in addition to any award- or country-specific terms and
conditions that may be listed.  Once you have reviewed these general terms,
check in your Equity Award Agreement for any award-specific and/or
country-specific terms that apply to your Award.

 

2

--------------------------------------------------------------------------------

 

Definition of Terms

 

The following are defined terms in the Long-Term Performance Plan and/or your
Equity Award Agreement.  These are provided for your information.  See the Plan
prospectus and your Equity Award Agreement for more details.

 

“Awards” — The grant of any form of stock option, stock appreciation right,
stock or cash award, whether granted singly, in combination or in tandem, to a
Participant pursuant to such terms, conditions, performance requirements,
limitations and restrictions as the Committee may establish in order to fulfill
the objectives of the Plan.

 

“Board” — The Board of Directors of International Business Machines Corporation
(“IBM”).

 

“Capital Stock” — Authorized and issued or unissued Capital Stock of IBM, at
such par value as may be established from time to time.

 

“Committee” — The committee designated by the Board to administer the Plan.

 

“Company” — IBM and its affiliates and subsidiaries including subsidiaries of
subsidiaries and partnerships and other business ventures in which IBM has an
equity interest.

 

“Equity Award Agreement” — The document provided to the Participant which
provides the grant details.

 

“Fair Market Value” — The average of the high and low prices of Capital Stock on
the New York Stock Exchange for the date in question, provided that, if no sales
of Capital Stock were made on said exchange on that date, the average of the
high and low prices of Capital Stock as reported for the most recent preceding
day on which sales of Capital Stock were made on said exchange.

 

“Participant” — An individual to whom an Award has been made under the Plan.
Awards may be made to any employee of, or any other individual providing
services to, the Company. However, incentive stock options may be granted only
to individuals who are employed by IBM or by a subsidiary corporation (within
the meaning of section 424(f) of the Code) of IBM, including a subsidiary that
becomes such after the adoption of the Plan.

 

“Plan” — Any IBM Long-Term Performance Plan.

 

3

--------------------------------------------------------------------------------

 

Provisions that apply to all Award types but not all countries

 

The following terms apply to all countries and for all Award types (Restricted
Stock Units, Cash-Settled Restricted Stock Units, Restricted Stock, Stock
Options, Stock Appreciation Rights and Performance Share Units).

 

Cancellation and Rescission

 

All determinations regarding enforcement, waiver or modification of the
cancellation and rescission and other provisions of the Plan and your Equity
Award Agreement (including the provisions relating to termination of employment,
death and disability) shall be made in IBM’s sole discretion.  Determinations
made under your Equity Award Agreement and the Plan need not be uniform and may
be made selectively among individuals, whether or not such individuals are
similarly situated.

 

You agree that the cancellation and rescission provisions of the Plan and your
Equity Award Agreement are reasonable and agree not to challenge the
reasonableness of such provisions, even where forfeiture of your Award is the
penalty for violation.

 

Jurisdiction, Governing Law, Expenses and Taxes

 

Your Equity Award Agreement shall be governed by the laws of the State of New
York, without regard to conflicts or choice of law rules or principles.  You
submit to the exclusive jurisdiction and venue of the federal or state courts of
New York, County of Westchester, to resolve all issues that may arise out of or
relate to your Equity Award Agreement.

 

If any court of competent jurisdiction finds any provision of your Equity Award
Agreement, or portion thereof, to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of the
parties, and the remainder of your Equity Award Agreement shall continue in full
force and effect.

 

If you or the Company brings an action to enforce your Equity Award Agreement
and the Company prevails, you will pay all costs and expenses incurred by the
Company in connection with that action and in connection with collection,
including reasonable attorneys’ fees.

 

If the Company, in its sole discretion, determines that it has incurred or will
incur any obligation to withhold taxes as a result of your Award, without
limiting the Company’s rights under Section 9 of the Plan, the Company may
withhold the number of shares that it determines is required to satisfy such
liability and/or the Company may withhold amounts from other compensation to the
extent required to satisfy such liability under federal, state, provincial,
local, foreign or other tax laws.  To the extent that such amounts are not
withheld, the Company may require you to pay to the Company any amount demanded
by the Company for the purpose of satisfying such liability.

 

4

--------------------------------------------------------------------------------

 

The following provision applies to all Award types (Restricted Stock Units,
Cash-Settled Restricted Stock Units, Restricted Stock, Stock Options, Stock
Appreciation Rights and Performance Share Units) granted to all individuals in
all countries except those with a home country of Latin America, specifically:
Argentina, Bolivia, Brazil, Chile, Columbia, Costa Rica, Ecuador, Mexico,
Paraguay, Peru, Uruguay, and Venezuela.

 

Non-Solicitation

 

In consideration of your Award, you agree that during your employment with the
Company and for two years following the termination of your employment for any
reason, you will not directly or indirectly hire, solicit or make an offer to
any employee of the Company to be employed or perform services outside of the
Company.  Also, you agree that during your employment with the Company and for
one year following the termination of your employment for any reason, you will
not directly or indirectly, solicit, for competitive business purposes, any
customer of the Company with which you were involved as part of your job
responsibilities during the last year of your employment with the Company.  By
accepting your Award, you acknowledge that the Company would suffer irreparable
harm if you fail to comply with the foregoing, and that the Company would be
entitled to any appropriate relief, including money damages, equitable relief
and attorneys’ fees.

 

5

--------------------------------------------------------------------------------

 

Provisions that apply to specific Award types for all countries

 

a.              Restricted Stock Units (“RSUs”) including Cash-Settled RSUs and
Retention RSUs (“RRSUs”)

 

All references in this document to RSUs include RRSUs, unless explicitly stated
otherwise

 

i.                 All RSUs

 

Termination of Employment including Death, Disability and Leave of Absence

 

Termination of Employment

 

In the event you cease to be an employee (other than on account of death or are
disabled as described in Section 12 of the Plan) prior to the Vesting
Date(s) set in your Equity Award Agreement, all then unvested RSUs, including 
RRSUs, under your Award shall be canceled.

 

However, your unvested and/or outstanding RSUs, but not RRSUs, will continue to
vest upon the termination of employment if all of the following criteria are
met:

 

·                  You are on the performance team, or any successor team
thereto, at the time of termination of employment;

·                  You have completed at least one year of active service since
the award date of grant;

·                  You have reached age 55 with 15 years of service at the time
of termination of employment (age 60 with 15 years of service for the Chairman
and CEO); and

·                  Appropriate senior management, the Committee or the Board, as
appropriate, do not exercise their discretion to cancel or otherwise limit the
vesting of the RSUs.

 

Death or Disability

 

Upon your death all RSUs covered by this Agreement shall vest immediately and
your Vesting Date shall be your date of death.  If you are disabled as described
in Section 12 of the Plan, your RSUs shall continue to vest according to the
terms of your Award.

 

Leave of Absence

 

In the event of a management approved leave of absence, any unvested RSUs shall
continue to vest as if you were an active employee of the Company, subject to
the terms in this document and your Equity Award Agreement. If you return to

 

6

--------------------------------------------------------------------------------

 

active status, your unvested RSUs will continue to vest in accordance with the
terms in this document and your Equity Award Agreement.

 

Dividend Equivalents

 

IBM shall not pay dividend equivalents on cash-settled or stock-settled unvested
RSU awards.

 

ii.             RSUs Other Than Cash-Settled RSUs and Cash-Settled RRSUs

 

Settlement of Award

 

Subject to Sections 12 and 13 of the Plan and the section “Termination of
Employment including Death, Disability and Leave of Absence” above, upon the
Vesting Date(s), or as soon thereafter as may be practicable but in no event
later than March 15 of the following calendar year, IBM shall make a payment to
Participant in shares of Capital Stock equal to the number of vested RSUs,
subject to any applicable tax withholding requirements as described in Section 9
of the Plan, and the respective RSUs shall thereupon be canceled.  RSUs are not
shares of Capital Stock and do not convey any stockholder rights.

 

iii.         Cash-Settled RSUs including Cash-Settled RRSUs

 

Settlement of Award

 

Subject to Sections 12 and 13 of the Plan and the section entitled “Termination
of Employment including Death, Disability and Leave of Absence” above, upon the
Vesting Date(s), or as soon thereafter as may be practicable but in no event
later than March 15 of the following calendar year, the Company shall make a
payment to Participant in cash equal to the Fair Market Value of the vested
RSUs, subject to any applicable tax withholding requirements as described in
Section 9 of the Plan, and the respective RSUs shall thereupon be canceled. 
Fair Market Value will be calculated in your home country currency at the
exchange rate on the applicable Vesting Date using a commercially reasonable
measure of exchange rate.  RSUs are not shares of Capital Stock and do not
convey any stockholder rights.

 

b.              Restricted Stock

 

Settlement of Award

 

Subject to Sections 12 and 13 of the Plan and the paragraph entitled
“Termination of Employment including Death, Disability or Leave of Absence”
below, upon the Vesting Date(s), or as soon thereafter as may be practicable but
in no event later than March 15 of the following calendar year, the shares of
Restricted Stock awarded under your Equity Award Agreement will be deliverable
to you, subject to any applicable tax withholding requirements as described in
Section 9 of the Plan.

 

7

--------------------------------------------------------------------------------

 

Termination of Employment including Death, Disability and Leave of Absence

 

Termination of Employment

 

In the event you cease to be an employee (other than on account of death or are
disabled as described in Section 12 of the Plan) prior to the Vesting Date(s) in
your Equity Award Agreement, all then unvested shares of Restricted Stock under
your Award shall be canceled (unless your Equity Award Agreement provides
otherwise).

 

Death or Disability

 

Upon your death all unvested shares of Restricted Stock covered by your Equity
Award Agreement shall vest immediately and your Vesting Date shall be your date
of death.  If you are disabled as described in Section 12 of the Plan, your
unvested shares of Restricted Stock shall continue to vest according to the
terms of your Equity Award Agreement.

 

Leave of Absence

 

In the event of a management approved leave of absence, any unvested shares of
Restricted Stock shall continue to vest as if you were an active employee of the
Company, subject to the terms in this document and your Equity Award Agreement.
If you return to active status, your unvested shares of Restricted Stock will
continue to vest in accordance with the terms in this document and your Equity
Award Agreement.

 

Dividends and Other Rights

 

During the period that the Restricted Stock is held by IBM hereunder, such stock
will remain on the books of IBM in your name, may be voted by you, and any
applicable dividends shall be paid to you.  Shares issued in stock splits or
similar events which relate to Restricted Stock then held by IBM in your name
shall be issued in your name but shall be held by IBM under the terms hereof.

 

Transferability

 

Shares of Restricted Stock awarded under your Equity Award Agreement cannot be
sold, assigned, transferred, pledged or otherwise encumbered prior to the
vesting of your Award as set forth in your Equity Award Agreement and any such
sale, assignment, transfer, pledge or encumbrance, or any attempt thereof, shall
be void.

 

8

--------------------------------------------------------------------------------

 

c.               Stock Options (“Options”) and Stock Appreciation Rights
(“SARs”)

 

i.                 All Option and SAR Awards

 

Termination of Employment including Death, Disability and Leave of Absence

 

Termination of Employment

 

In the event you cease to be an employee (other than on account of death or are
disabled as described in Section 12 of the Plan):

 

·                  Any Options or SARs that are not exercisable as of the date
your employment terminates shall be canceled immediately (unless your Equity
Award Agreement provides otherwise), and

 

·                  Any Options or SARs that are exercisable as of the date your
employment terminates (other than for cause) will remain exercisable for 90 days
(not three months) after the date of termination, after which any unexercised
Options or SARs are canceled; provided, however, if you are a banded executive
when your employment with the Company terminates (other than for cause) after
you have attained age 55 and completed at least 15 years of service with the
Company at the time of termination, any Options or SARs that are exercisable as
of the date your employment terminates shall remain exercisable for the full
term as in your Equity Award Agreement (unless your Equity Award Agreement
provides otherwise).

 

Death or Disability

 

In the event of your death, all Options or SARs shall become fully exercisable
and remain exercisable for their full term.

 

In the event you are disabled (as described in Section 12 of the Plan), any
unvested Options or SARs shall continue to vest and be exercisable.

 

9

--------------------------------------------------------------------------------

 

Leave of Absence

 

In the event of a management approved leave of absence, any unvested Options or
SARs shall continue to vest and be exercisable as if you were an active employee
of the Company, subject to the terms in this document and your Equity Award
Agreement.  If you return to active status, your Options or SARs will continue
to vest and be exercisable in accordance with their terms.  If you do not return
to active status,

 

·                  Your unvested Options or SARs will be canceled immediately;
and

 

·                  Your vested Options or SARs will be canceled on the later of
the 91st day following your last day of active employment or the date of the
termination of your leave of absence; provided, however, if you are a banded
executive when your employment terminates (other than for cause) after you have
attained age 55 and completed at least 15 years of service with the Company at
the time of termination, any Options or SARs that are exercisable as of the date
your employment terminates shall remain exercisable for the full term as in your
Equity Award Agreement.

 

Termination of Employment for Cause

 

If your employment terminates for cause, all exercisable and not exercisable
Options or SARs are canceled immediately.

 

ii.             All SAR Awards

 

Settlement of Award

 

Upon exercise, the Company shall deliver an aggregate amount, in cash, equal to
the excess of the Fair Market Value of a share of Capital Stock on the date of
exercise over the Exercise Price set forth in your Equity Award Agreement
multiplied by the number of SARs exercised, subject to any applicable tax
withholding requirements as described in Section 9 of the Plan.  The value of
the Award will be calculated in your home country currency at the exchange rate
on the date the Award becomes fully vested using a commercially reasonable
measure of exchange rate.

 

10

--------------------------------------------------------------------------------

 

d.              Performance Share Units ("PSUs")

 

Termination of Employment, including Death and Disability, and Leave of Absence

 

Termination of Employment and Leave of Absence

 

If you cease to be an active, full-time employee for any reason (other than on
account of death or are disabled as described in Section 12 of the Plan) before
the Date of Payout (in the case of a recipient in the United States, at year end
of the applicable PSU Performance Period), all PSUs are canceled immediately
provided, however, if you are a banded executive when your employment terminates
(other than for cause) after you have attained age 55, completed at least 15
years of service with the Company at the time of termination, and completed at
least one year of active service during the PSU Performance Period (as set forth
in your Equity Award Agreement), the PSUs granted hereunder shall be paid out on
the Date of Payout (as set forth in your Equity Award Agreement) based on IBM
performance over the entire applicable Performance Period(s), in an amount that
will be prorated for the number of months completed as an active executive
during the PSU Performance Period, adjusted for the performance score.

 

However, your unvested PSUs will continue to vest upon termination of employment
or the time you cease to be an active, full-time employee if all of the
following criteria are met:

 

·                  You are on the performance team, or any successor team
thereto, at the time of termination of employment or the time you cease to be an
active, full-time employee;

·                  You have completed at least one year of active service during
the PSU Performance Period (as set forth in your Equity Award Agreement);

·                  You have reached age 55 with 15 years of service at the time
of termination of employment or the time you cease to be an active, full-time
employee (age 60 with 15 years of service for the Chairman and CEO);

·                  The Committee has certified that all performance conditions
have been met; and

·                  Appropriate senior management, the Committee or the Board, as
appropriate, do not exercise their discretion to cancel or otherwise limit the
payout.

 

Death or Disability

 

Prior to the Date of Payout, (i) in the event of your death or (ii) if you are
disabled (as described in Section 12 of the Plan), all PSUs shall continue to
vest according to the terms of your Equity Award Agreement and the PSUs will be
paid out at the end of the Performance Period based on IBM performance over the
entire applicable Performance Period(s).

 

11

--------------------------------------------------------------------------------

 

Provisions that apply to specific countries

 

a.              Denmark

 

i.           All Awards

 

Non-Solicitation

 

The following part of the above non-solicitation provision does not apply to
those individuals with the home country of Denmark: “In consideration of your
Award, you agree that during your employment with the Company and for two years
following the termination of your employment for any reason, you will not
directly or indirectly hire, solicit or make an offer to any employee of the
Company to be employed or perform services outside of the Company.”

 

12

--------------------------------------------------------------------------------