Exhibit 10.1

International Business Machines Corporation ("IBM")

Stock Option Award Agreement

Plan   IBM 1999 Long-Term Performance Plan (the "Plan")
Identification
 
Name: Sample
Home Country & Employee ID: Sample
Award Information
 
Date of Grant: [Month, Day, Year]
Number of Options Granted: XX
Grant Price: $XX
Option Vesting Date: [Month, Day, Year three years after the Date of Grant]
Vesting and Term
 
The Options are unvested until the third anniversary of the Date of Grant (the
"Option Vesting Date"), on which date they will become 100% vested and
exercisable.
 
 
Subject to earlier termination pursuant to the sections entitled "Termination of
Employment" and "Cancellation and Rescission" below, the Options shall expire on
the close of business on the tenth anniversary of the Date of Grant (the "Stated
Expiration Date").
Death or Disability
 
In the event of your death, all Options shall become fully exercisable and
remain exercisable for their full term.
 
 
In the event you become disabled (as described in Section 12 of the Plan) while
employed by the Company, any unvested Options shall continue to vest and be
exercisable as if you were fully employed.
Termination of Employment
 
In the event that your employment with the Company terminates prior to the
Option Vesting Date:
 
 
•
 
any options that are not exercisable as of the date your employment terminates
shall be canceled immediately; provided, however, if you are an 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 period
between the Date of Grant and the Option Vesting Date (the "Vesting Period"),
the Options granted hereunder will be prorated for the number of months
completed as an active employee during the Vesting Period, and the resulting
prorated number of options shall vest and be exercisable for the full term as
set forth above.
 
 
•
 
any options that are exercisable as of the date your employment terminates
(other than for cause) will remain exercisable for 90 days after the date of
termination, after which any unexercised options are canceled; provided,
however, if you are an 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 that are exercisable as
of the date your employment terminates shall remain exercisable for the full
term as set forth above.          

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•
 
If your employment terminates for cause, all options are canceled immediately.
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.
 
 
All determinations regarding enforcement, waiver or modification of the
cancellation and rescission and other provisions of the Plan and this Agreement
(including the provisions relating to death, disability and termination of
employment) shall be made in IBM's sole discretion.
 
 
You agree that the cancellation and rescission provisions of the Plan and this
Agreement are reasonable and agree not to challenge the reasonableness of such
provisions, even where forfeiture of options is the penalty for violation.
Non-Solicitation
 
In consideration of this award, 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: a) hire, solicit or make an offer
to any employee of the Company (as defined in the Plan) to be employed or
perform services outside of the Company; or b) 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 this award, you acknowledge that IBM would suffer
irreparable harm if you fail to comply with the foregoing, and that IBM would be
entitled to any appropriate relief, including money damages, equitable relief
and attorneys' fees.
Jurisdiction, Governing Law, Expenses and Taxes
 
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 this Agreement.
 
 
This Agreement shall be governed by the laws of the State of New York, without
regard to conflicts or choice of law rules or principles.
 
 
If you or IBM bring an action to enforce this Agreement and IBM prevails, you
will pay all costs and expenses incurred by IBM in connection with that action
and in connection with collection, including reasonable attorneys' fees.
 
 
If IBM, in its sole discretion, determines that it has incurred or will incur
any obligation to withhold taxes as a result of this award, IBM may withhold the
number of shares that it determines is required to satisfy such liability and,
to the extent that such amounts are not withheld, you will pay to IBM any amount
demanded by IBM for the purpose of satisfying such liability.
Other Terms and Conditions
 
In consideration of this Option Grant, you agree to (i) comply with the terms of
the Plan and this Agreement, including those provisions relating to cancellation
and rescission of awards and (ii) that by your acceptance of this award, all
awards and options previously granted to you under the Plan or prior IBM plans
are subject to the terms set forth above under "Cancellation and Rescission" and
"Jurisdiction, Governing Law, Expenses and Taxes." The Company may alter, amend
or terminate this Agreement without your consent, upon written notice to you.  
       

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This Agreement and the Plan, which is incorporated herein by reference,
constitute the entire agreement between you and IBM regarding the terms and
conditions of this Award. By accepting this award, you acknowledge having
received and read the Plan, and you consent to receiving information and
materials in connection with this Award or any subsequent awards under the
Company'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.

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