Exhibit 10.4

 

 

 

 

International Business Machines Corporation (“IBM”)

 

 

 

 

 

Stock Option Award Agreement

 

 

 

 

 

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

Identification

 

Name: Sample

 

 

Home Country & Employee ID: Sample

 

 

 

Purpose

 

The purpose of this grant is to retain selected executives and employees whose
skills and talents are important to IBM’s operations and to align their
interests with those of IBM’s stockholders. You recognize that these options
represent a potentially significant benefit to you and are granted for the
purposes stated here.

 

 

 

Grant

 

Date of Grant: [Month, Date, Year]

 

 

Exercise Price: $XX

 

 

Number of Nonqualified Options Granted: XX

 

 

 

Vesting and Term

 

Options become exercisable in 4 equal installments on the first 4 anniversaries
of the Date of Grant.

 

 

 

 

 

Options expire 10 years from the Date of Grant, subject to earlier termination
under Sections 12 and 13 of the Plan and as set forth below.

 

 

 

Death, Disability,
Termination of Employment

 

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 an active employee of the Company.

 

 

 

 

 

Termination of Employment

 

 

If your employment terminates for any reason (other than for cause):

 

 

any Options that are not exercisable as of the date your employment terminates
shall be canceled immediately, and

 

 

 

 

 

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 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 that are exercisable as of the date your employment terminates shall
remain exercisable for the full term as set forth above.

 

 

 

 

1

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If your employment terminates for cause, all Options are canceled immediately.

 

 

 

 

 

 

 

Leave of Absence

 

 

 

 

 

 

 

In the event of a management approved leave of absence, any unvested Options
shall continue to vest and be exercisable as if you were an active employee of
the Company, subject to the terms above. If you return to active status, your
Options will continue to vest and be exercisable in accordance with their terms.
If you do not return to active status, your unvested Options will be canceled
immediately and your vested Options will be canceled on the 91st day following
your last day of active employment.

 

 

 

 

 

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 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 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.

 

 

 

 

Cancellation and Rescission

 

You understand that the Company 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 the Company’s sole discretion. Determinations made
under this 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 this
Agreement are reasonable and agree not to challenge the reasonableness of such
provisions, even where forfeiture of Options is the penalty for violation.

 

 

 

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 any court of competent jurisdiction finds any provision of this 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 this Agreement shall continue in full force and effect.

 

 

 

 

 

If you or the Company brings an action to enforce this 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 this award, 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, you will pay to the Company any amount demanded by the Company for the
purpose of satisfying such liability.

 

 

 

 

 

2

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

Miscellaneous

 

In consideration of this Award, you agree (i) to 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.”

 

 

 

 

 

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. This Agreement and
the Plan, which is incorporated herein by reference, constitute the entire
agreement between you and the Company regarding the terms and conditions of this
Award.

 

 

 

 

 

An award does not give an employee the right to be retained in the employ of the
Company nor does it interfere with the right of the Company to discharge an
employee at any time.

 

3

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

 

 

 

International Business Machines Corporation (“IBM”)

 

 

 

 

 

Stock Option Award Agreement (Buy-First)

 

 

 

Plan

 

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

 

 

 

Identification

 

Name: Sample

 

 

Home Country & Employee ID: Sample

 

 

 

Award Information

 

Date of Grant: [Month, Date, Year]

 

 

Number of Nonqualified Stock Options Granted: XX

 

 

Exercise Price: $XX

 

 

Option Vesting Date: [Month, Date, Year]

 

 

 

Vesting and Expiration Terms

 

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.

 

 

 

Death, Disability, or Leave of Absence

 

In the event of your death while employed by the Company and prior to the
vesting of the Options, 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 an active employee of the Company.

 

 

 

 

 

In the event of a management approved leave of absence, any unvested Options
shall continue to vest and be exercisable as if you were an active employee of
the Company, subject to the Vesting and Expiration Terms above.  If you return
to active status, your Options will continue to vest and be exercisable in
accordance with their terms.  If you do not return to active status, your
unvested Options will be canceled immediately and your vested Options will be
canceled on the 91st day following your last day of active employment.

 

 

 

 

 

1

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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 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 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 executive during the Vesting Period, and the resulting
prorated number of Options shall vest and be exercisable for the full term as
set forth above; and

 

 

 

 

 

 

 

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 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 that are
exercisable as of the date your employment terminates shall remain exercisable
for the full term as set forth above; and

 

 

 

 

 

 

 

if your employment terminates for cause, all exercisable and not exercisable
Options are canceled immediately.

 

 

 

 

Cancellation and Rescission

 

You understand that the Company 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 the Company’s sole discretion.  Determinations made
under this 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 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 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 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.

 

 

 

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.

 

 

 

 

 

2

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

 

 

 

If any court of competent jurisdiction finds any provision of this 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 this Agreement shall continue in full force and effect.

 

 

 

 

 

If you or the Company bring an action to enforce this 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 this Award, 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, you will pay to the Company any amount demanded by the Company for the
purpose of satisfying such liability.

 

 

 

Other Terms and Conditions

 

In consideration of this Award, 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.”

 

 

 

 

 

This Agreement and the Plan, which is incorporated herein by reference,
constitute the entire agreement between you and the Company 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.

 

 

 

 

 

An award does not give an employee the right to be retained in the employ of the
Company nor does it interfere with the right of the Company to discharge an
employee at any time.

 

 

3

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

 

 

 

International Business Machines Corporation (“IBM”), Armonk, New York 10504

 

 

 

 

 

 

 

Restricted Stock Unit Agreement (“Agreement”)

 

 

 

 

 

 

 

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

 

Identification

 

Name: Sample

 

 

 

Home Country & Employee ID: Sample

 

 

 

 

 

Grant

 

The Company has awarded to you, restricted stock units (“RSUs”)  as follows:

 

 

 

 

 

 

 

Award Date:

 

[Month, Date, Year]

 

 

 

Number of RSUs:

 

XX

 

 

 

 

 

 

 

RSUs are awarded to retain selected employees whose skills and talents are
important to IBM’s operations and to align their long-term interests with those
of IBM’s stockholders.  You recognize that the RSUs granted pursuant to this
Agreement represent a potentially significant benefit to you and are awarded for
the purposes stated here.

 

 

 

 

 

Vesting and Termination of Employment

 

The RSUs awarded under this Agreement will vest according to the table below on
the condition that you continuously remain an employee of the Company until such
date.

 

 

 

 

 

 

 

 

 

 

 

 

Vesting Date(s)

 

# of Units to Vest

 

 

 

 

 

[Month, Date, Year]

 

XX

 

 

 

 

 

 

 

 

Subject to Sections 12 and 13 of the Plan and the paragraph entitled “Death or
Disability” 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 Company shall make a payment to Participant, either in shares of Capital
Stock of IBM or cash equivalent to the Fair Market Value of such shares, equal
to the number of vested RSUs, net of any applicable tax withholding
requirements, 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 payment date using a commercially reasonable measure of exchange rate.  RSUs
are not shares of IBM Capital Stock and do not convey any stockholder rights.

 

 

 

 

 

 

 

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

 

 

 

 

Cancellation and Rescission

 

You understand that the Company 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 the Company’s sole discretion.  Determinations made
under this 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 this
Agreement are reasonable and agree not to challenge the reasonableness of such
provisions, even where forfeiture is the penalty for violation.

 

 

1

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

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 become disabled as
described in Section 12 of the Plan, your RSUs shall continue to vest according
to the terms of this Award if you remain continuously employed by the Company
while you are disabled.

 

 

 

Dividend Equivalents

 

Prior to the Vesting Date(s), the Company shall cause to be paid to Participant
for each unvested RSU awarded hereunder an amount equal to the dividend paid on
one share of IBM Capital Stock whenever such actual dividends are paid to IBM
stockholders, or as soon thereafter as may be practicable but in no event later
than March 15 of the following calendar year, provided that the respective RSUs
have been awarded as of the applicable dividend record date and provided you are
employed by the Company on the applicable dividend record date of such
dividends.

 

 

 

Annual Compensation

 

Neither this Award nor payment hereunder shall be considered part of your
earnings for purposes of calculating benefits and entitlements under any Company
plan.  This Award is unfunded although a memorandum account may be established.

 

 

 

Tax Withholding

 

If the Company, in its sole discretion, determines that it has incurred or will
incur any obligation to withhold taxes as a result of this Award, the Company
may withhold the amount, in cash or 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, you will pay to the Company any amount demanded by the
Company for the purpose of satisfying such liability.

 

 

 

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 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 IBM.  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 and Expenses

 

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 any conflicts or choice of law rules or principles.

 

 

 

 

 

If any court of competent jurisdiction finds any provision of this 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 this Agreement shall continue in full force and effect.

 

 

 

 

 

If you or the Company bring an action to enforce this 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 collections, including
reasonable attorneys’ fees.

 

 

 

 

 

2

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

 

Miscellaneous

 

This Agreement and the Plan, which is incorporated herein by reference,
constitute the entire agreement between you and the Company 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.

 

 

 

 

 

In consideration of this Award, you agree (i) to 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,”
“Jurisdiction, Governing Law and Expenses” and “Tax Withholding.”

 

 

 

 

 

An award does not give an employee the right to be retained in the employ of the
Company nor does it interfere with the right of the Company to discharge an
employee at any time.

 

 

3

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

 

 

 

International Business Machines Corporation (“IBM” or the “Company”), Armonk,
New York 10504

 

 

 

 

 

Special Restricted Stock Unit Agreement (“Agreement”)

 

 

 

 

 

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

Identification

 

Name: Sample

 

 

Home Country & Employee ID: Sample

 

 

 

Grant

 

Under Section 6(c) of the Plan, the Company has awarded to you, restricted stock
units (“RSUs”)  as follows:

 

 

 

 

 

Award Date:

 

[Month, Date, Year]

 

 

Number of RSUs:

 

XX

 

 

 

 

 

RSUs are awarded to retain selected employees whose skills and talents are
important to IBM’s operations and to align their long-term interests with those
of IBM’s stockholders.  You recognize that the RSUs granted pursuant to this
Agreement represent a potentially significant benefit to you and are awarded for
the purposes stated here.

 

 

 

Vesting and Termination of Employment

 

The RSUs awarded under this Agreement will vest according to the table below on
the condition that you continuously remain an employee of the Company or a
subsidiary of the Company until such date.

 

 

 

 

 

 

 

 

 

 

# of Units to Vest

 

Vesting Date(s)

 

 

 

 

XX

 

[Month, Date, Year]

 

 

 

 

 

 

Subject to Sections 12 and 13 of the Plan and the paragraph entitled “Death or
Disability” 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 Company shall cause payment to be made to Participant either in shares of
Capital Stock of the Company equal to the number of vested RSUs or in cash equal
to the Cash Value of the vested RSUs, net of any applicable withholding tax
requirements, and the respective RSUs shall thereupon be canceled.  The “Cash
Value” of each RSU shall be equal to the average of the high and low prices as
reported on the New York Stock Exchange of one share of IBM Capital Stock on the
applicable Vesting Date.  Cash Value will be calculated in your home country
currency at the exchange rate on the payment date, as reported in the Wall
Street Journal, New York edition.  RSUs are not shares of IBM Capital Stock and
do not convey any stockholder rights.

 

 

 

 

 

In the event you cease to be an active employee prior to the Vesting Date(s) set
forth above, all then unvested RSUs under this award shall be canceled.  In the
event of a management approved leave of absence, the vesting of your RSUs will
be suspended until you return to active employment.  If you do not return to
active employment, this award will be canceled.

 

 

 

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.  For a period of three years following your date of termination of
employment with the Company you will comply with Section 13 of the Plan.  If you
breach this obligation, in addition to any other rights the Company may have,
the Company may require you to return an amount equal to what the value of this
award was at the time payment was made to you pursuant to this Agreement. 
Determinations made under this 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 this Agreement are reasonable and agree not to challenge the
reasonableness of such provisions.

 

 

1

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

 

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 become disabled as
described in Section 12 of the Plan, your RSUs shall vest immediately and your
Vesting Date shall be the date you become disabled.

 

 

 

Dividend Equivalents

 

Prior to the Vesting Date(s), the Company shall cause to be paid to Participant
for each unvested RSU awarded hereunder an amount equal to the dividend paid on
one share of IBM Capital Stock whenever such actual dividends are paid to IBM
stockholders, provided that the respective RSUs have been awarded as of the
applicable dividend record date and provided you are employed by the Company on
the date of payment of such dividend equivalents.

 

 

 

Annual Compensation

 

Neither this Award nor payment hereunder shall be considered part of your
earnings for purposes of calculating benefits and entitlements under any Company
plan. This Award is unfunded although a memorandum account may be established.

 

 

 

Tax Withholding

 

If the Company, 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/or IBM may withhold amounts from other compensation to the extent
required to satisfy such liability under federal, state, local, foreign or other
tax laws.  To the extent that such amounts are not withheld, you will pay to the
Company any amount demanded by the Company for the purpose of satisfying such
liability.

 

 

 

Non-Solicitation

 

In consideration of this award, you agree that during your employment with IBM
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 IBM.  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.

 

 

 

Non-Disclosure

 

You understand that revealing the existence of this award or of disseminating
any other information relating to this award to any person outside or inside the
Company (including its officers and any of your superiors or subordinates) may
be injurious to the Company.  Accordingly, you will not disclose the existence
of this award or any information concerning it except as required by law, or to
your financial advisor from whom you will obtain a similar confidentiality
obligation.  Any breach of this confidentiality obligation before or after the
RSUs shall vest will constitute good cause for termination of employment by the
Company and may result in unvested RSUs being canceled in the sole discretion of
the Company.

 

 

 

Jurisdiction, Governing Law and Expenses

 

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 any conflicts or choice of law
rules or principles.  If you or the Company bring an action to enforce this
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
collections, including reasonable attorneys’ fees.

 

 

 

Miscellaneous

 

This Agreement and the Plan, which is incorporated herein by reference,
constitute the entire agreement between you and the Company regarding the terms
and conditions of the award of RSUs granted hereby.  You acknowledge having
received and read the Plan, a copy of which was delivered to you with this
Agreement.

 

 

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In consideration of this award, you agree (i) to 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,”
“Jurisdiction, Governing Law and Expenses” and “Tax Withholding.”

 

 

 

 

 

By accepting this award you shall be conclusively deemed to have indicated your
acceptance and ratification of, and consent to, any action taken under the Plan
by the Committee, the chief executive officer or other senior officer designated
by the Committee.

 

 

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International Business Machines Corporation (“IBM”)

 

 

 

 

 

Performance Stock Unit Award Agreement

 

 

 

 

 

Under the IBM 1999 Long-Term Performance Plan (the “Plan”).

Identification

 

Name: Sample

Home Country & Employee ID: Sample

 

 

 

Purpose

 

The purpose of this award is to retain IBM’s senior executives. You recognize
that these Performance Stock Units (PSUs) represent a potentially significant
benefit to you and are awarded for the purposes stated here.

 

 

 

Award

 

Date of Award: Month, Date, Year

Number of PSUs awarded: XXX

Date of Payout: Month, Date, Year

 

 

 

Vesting

 

You can earn the PSUs awarded based on IBM’s performance in achieving cumulative
business targets of earnings-per-share and cash flow, weighted 80/20
respectively, over a 3-year period beginning XX/XX/XX and ending XX/XX/XX
(“Performance Period”).  Performance against each of the targets will be subject
to separate payout calculations according to the following table:

 

 

 

 

 

% of Target                  <70%     70%     80%     90%     100%     110%    
>120%

 

 

% of PSU’s earned           0%     25%     50%     75%     100%     125%      
150%

 

 

 

Payout of Award

 

On the Date of Payout, the Company shall either (a) deliver to you a number of
shares of IBM Capital Stock equal to the number of your earned PSUs, or (b) make
a cash payment to you equal to the value 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.  If paid in cash, the value of
each PSU at the end of the Performance Period shall be equal to the average
closing price, as reported on the New York Stock Exchange (“NYSE”), of one share
of IBM common stock for the month of January following the end of the
Performance Period.

 

 

 

 

 

All payouts under this award are subject to the provisions of the Plan and this
Agreement relating to the cancellation and rescission of awards.

 

 

 

Ceasing to be an active, full-time employee

 

Death or Disability:

In the event of your death or if you become disabled (as described in Section 12
of the Plan) prior to the Date of Payout, all PSUs shall be prorated and the
reduced number of PSUs will be earned based on IBM performance over the entire
Performance Period.

 

 

 

 

 

Other:

If you cease to be an active, full-time employee for any other reason before the
Date of Payout, all PSUs are canceled immediately.

 

 

 

Cancellation and Rescission

 

You understand that the Company 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 otherwise ceasing to
be an active, full-time employee) shall be made in the Company’s sole
discretion.  Determinations made under this 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 this
Agreement are reasonable and agree not to challenge the reasonableness of such
provisions, even where forfeiture is the penalty for violation.

 

 

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Performance Stock Unit Award Agreement

International Business Machines Corporation (“IBM”)

 

 

 

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 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 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.

 

 

 

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 any court of competent jurisdiction finds any provision of this 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 this Agreement shall continue in full force and effect.

 

 

 

 

 

If you or the Company brings an action to enforce this 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 this Award, the Company
may withhold the amount, in cash or 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, you will pay to the Company any amount demanded by the
Company for the purpose of satisfying such liability.

 

 

 

Miscellaneous

 

In consideration of this Award, you agree (i) to 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
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.”

 

 

 

 

 

This Agreement and the Plan, which is incorporated herein by reference,
constitute the entire agreement between you and the Company 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.

 

 

 

 

 

An Award does not give an employee the right to be retained in the employ of the
Company nor does it interfere with the right of the Company to discharge an
employee at any time.

 

 

 

 

 

For purposes of compliance with the short-term deferral exception of Section
409A of the Internal Revenue Code, all payments under this Agreement will be
made no later than March 15th of the year following the first taxable year in
which the amount is no longer subject to a substantial risk of forfeiture.

 

 

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