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

















	
   

  	
   

  	
  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.

  
	
   

  	
   

  	
   

  



 


 


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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.

  



 


 


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  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.

  



 


 


2

















 


	
   

  	
   

  	
  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.

  



 


 


3

















 


 


	
   

  	
   

  	
  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.

  



 


 


1

















 


	
   

  	
   

  	
  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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