Document:

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.
	 	 	 	 	 

	

 	
 	

•	
 	

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.
	 	 	 	 	 

	

 	
 	

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.Exhibit 10.4

 

Annual Incentive Awards

Performance Goals and Target Awards for 2004 and 2005

 

The registrant
maintains two shareholder-approved plans under which executive officers have
the opportunity to receive an annual cash award based on the achievement of
performance goals over a one-year period.  The Annual Covered Employee
Incentive Compensation Plan (Covered Employee Plan) governs awards to those
executive officers who are considered “covered employees” as defined in Section 162(m)(3)
of the Internal Revenue Code.  Annual
incentive awards to all other executive officers are governed by and made under
the Annual Executive Incentive Compensation Plan (Executive Plan).  The Compensation and Succession Committee of
the Board of Directors establishes performance goals for each fiscal year and
sets threshold, target and maximum award opportunities.  The Committee has the authority to adjust the
amount of awards, but has no authority to increase the amount of an award otherwise
payable under the Covered Employee Plan. 
Payments are made after the Committee has certified in writing the
degree of attainment of the performance goals.

 

In March 2004,
the Committee approved performance goals and target awards for 2004.  The same performance goals and target awards
apply to both the Covered Employee Plan and Executive Plan.  For the chief executive officer and executive
officers in corporate functions, there are two equally-weighted goals.  One is based on an adjusted operating income
per diluted share measure as approved by the Committee at the beginning of the
fiscal year.  The other goal is based on
combined business unit results.

 

For Allstate
Protection executive officers, their award opportunity is based on five
performance goals, weighted as follows: 
50% based on a matrix that measures the results of premium growth,
policy growth and combined ratio; 20% based on a matrix measuring sales of
Allstate Financial products by Allstate exclusive agencies; 10% based on
expense ratio reduction; 10% based on a measure of customer loyalty; and 10%
based on the corporate adjusted operating income per diluted share measure.

 

For the Allstate
Financial executive officer, there are six performance goals, weighted as
follows:  30% based on adjusted Allstate
Financial operating income; 20% based on expense management; 15% based on new
traditional life premiums; 15% based on annuity sales; 10% based on
profitability of new sales; and 10% based on the corporate adjusted operating
income per diluted share measure.

 

For
the executive officer in the Investments business unit, there are four
performance goals, weighted as follows: 
45% based on property/casualty portfolio total return; 35% on Allstate
Financial spread volume goal; 10% on Allstate Financial portfolio loss
reduction; and 10% based on the corporate adjusted operating income per diluted
share measure.

 

1

 

Threshold,
target and maximum levels of performance are established for each performance
goal.  If the maximum level of performance
is achieved, the award would be three times the executive officer’s target
award, with target awards ranging from 70% to 120% of annual salary for the
fiscal year.

 

On February 22,
2005, the Committee adopted performance goals and target awards under the plans
for 2005 that are identical to those previously approved for 2004, except as
follows:  (1) the weight for the Allstate
Protection performance goal based on sales of Allstate Financial products by
Allstate exclusive agencies is 15% and (2) the Allstate Protection customer
loyalty measure is a relative ranking compared to a peer group of companies and
is weighted 15%.  All other terms of the
Covered Employee and Executive Plans are as previously described.

 

2

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