Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
Registration Statement
Under
The Securities Act of 1933
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International Business Machines Corporation
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(Exact name of registrant as specified in its charter)
State of New York 13-0871985
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Armonk, New York 10504
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(Address of Principal Executive (Zip Code)
Offices)
IBM Tax Deferred Savings Plan
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(Full title of the plan)
John E. Hickey, Vice President and Secretary
International Business Machines Corporation
Armonk, New York 10504
(914) 765-1900
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(Name, address and telephone number
of agent for service)
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered(1) registered(1)( share(3) price(3) fee:
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Capital Stock 2,000,000 $ 90.875** $ 181,750,000** $62,672.42
($1.25 par shares
value per share)
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(REMAINDER OF PAGE FOLLOWS)
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(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
(2) The shares of IBM Capital Stock being registered will be acquired by the
Trustee for the benefit of plan participants under the IBM Stock Fund investment
alternative of the IBM Tax Deferred Savings Plan.
(3) ** The offering price hereinabove is estimated solely for the purpose of
calculating the registration fee under Rule 457(c), based upon the average of
the highest and lowest prices at which shares of Capital Stock of the
Corporation were sold on July 24, 1996 (NYSE Composite Transactions).
This registration statement serves to register additional shares of IBM Capital
Stock together with plan interests under the IBM Tax Deferred Savings Plan,
which Plan previously registered securities with the Commission under
Registration Statement No. 33-33590.
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Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 have
been and will continue to be sent or given to participating employees as
specified by Rule 428(b)(1) under the Securities Act of 1933, as amended (the
"Act"). These documents and the documents incorporated by reference into this
Registration Statement, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Act. Capitalized terms used but not defined
herein shall have the same meanings ascribed to them in the IBM Tax Deferred
Savings Plan (sometimes hereinafter described for convenience as the "Plan").
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Annual Report of International Business Machines Corporation ("IBM") on Form
10-K for the fiscal year ended December 31, 1995, and the Annual Report of the
IBM Tax Deferred Savings Plan on Form 11-K for the fiscal year ended December
31, 1995 are incorporated herein by reference. All other reports filed since
December 31, 1995 by IBM pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") are also incorporated by reference.
All documents filed by IBM pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act, after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
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Item 6. Indemnification of Directors and Officers.
The By-Laws of IBM (Article VI, Section 6) provide the following:
"The Corporation shall, to the fullest extent permitted by applicable law as
in effect at any time, indemnify any person made, or threatened to be made, a
party to an action or proceeding whether civil or criminal (including an action
or proceeding by or in the right of the Corporation or any other corporation of
any type or kind, domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, for which any director or officer of
the Corporation served in any capacity at the request of the Corporation), by
reason of the fact that such person or such person's testator or intestate was a
director or officer of the Corporation, or served such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
any capacity, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily incurred
as a result of such action or proceeding, or any appeal therein. Such
indemnification shall be a contract right and shall include the right to be paid
advances of any expenses incurred by such person in connection with such action,
suit or proceeding, consistent with the provisions of applicable law in effect
at any time. Indemnification shall be deemed to be 'permitted' within the
meaning of the first sentence hereof if it is not expressly prohibited by
applicable law as in effect at any time."
The Certificate of Incorporation of IBM (Article ELEVENTH) provides the
following:
"Pursuant to Section 402(b) of the Business Corporation Law of the State of
New York, the liability of the Corporation's directors to the Corporation or its
stockholders for damages for breach of duty as a director shall be eliminated to
the fullest extent permitted by the Business Corporation Law of the State of New
York, as it exists on the date hereof or as it may hereafter be amended. No
amendment to or repeal of this Article shall apply to or have any effect on the
liability or alleged liability of any director of the corporation for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal."
With certain limitations, Sections 721 through 726 of the New York Business
Corporation Law permit a corporation to indemnify a director or officer made a
party to an action (i) by a corporation or in its right in order to procure a
judgment in its favor unless he shall have breached his duties, or (ii) other
than an action by or in the right of the corporation in order to procure a
judgment in its favor, if such director or officer acted in good faith and in a
manner he reasonably believed to be in or, in certain cases not opposed to such
corporation's interest and additionally, in criminal actions, had no reasonable
cause to believe his conduct was unlawful.
In addition, IBM maintains directors' and officers' liability insurance
policies.
Item 7. Exemption from Registration Claimed
Not Applicable.
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Item 8. Exhibits.
Exhibit Number Reference
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(4) Instruments defining the rights of security
holders, including indentures
IBM Tax Deferred Savings Plan Exhibit 4
(5) Opinion re: legality None
In accordance with Item 8(a) to Form S-8, no original issuance shares are being
registered herein. The Capital Stock which is the subject of this registration
statement will be purchased by the Plan Trustee in the open market.
The Internal Revenue Service ("IRS"), by letter dated June 14, 1993, issued its
latest determination letter that the IBM Tax Deferred Savings Plan is a
qualified plan under Section 401 of the Internal Revenue Code. The Registrant
hereby undertakes that it will submit the Plan Document, as amended from time to
time, to the IRS in a timely manner, and will make all changes required by the
IRS in order to maintain continued qualification of the Plan under the Internal
Revenue Code.
(15) Letter re: unaudited interim financial information. None
(23) Consent of Independent Accountants
the consent of Price Waterhouse LLP Exhibit 23
(24) Powers of attorney Exhibit 24
(28) Information from reports furnished to state insurance regulatory
authorities None
(99) Additional Exhibits None
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement;
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
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therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act and each filing of the Plan's annual report pursuant to section
15(d) of the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the town of North Castle, State of New York, as of the 29th day
of July, 1996.
INTERNATIONAL BUSINESS MACHINES CORPORATION
By:
/s/ JOHN E. HICKEY
-------------------------------------------
(John E. Hickey, Secretary)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
date indicated.
Signature Title Date
- -----------------------------------------------------------------------
Louis V. Gerstner, Jr. Chairman of the Board )
of Directors and Chief )
Executive Officer )
(Principal Executive )
Officer) )
)
)
G. Richard Thoman Senior Vice President )
and Chief Financial ) /s/ JOHN E. HICKEY
Officer (Principal ) ------------------
Financial Officer) ) (John E. Hickey,
) Attorney-in-Fact)
John R. Joyce Controller ) July 29, 1996
(Principal Accounting )
Officer) )
Cathleen Black Director )
Harold Brown Director )
Juergen Dormann Director )
Nannerl O. Keohane Director )
Charles F. Knight Director )
Lucio A. Noto Director )
John B. Slaughter Director )
Alex Trotman Director )
Lodewijk C. van Wachem Director )
Charles M. Vest Director )
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The Plan. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Mount Pleasant, State of
New York, on June 27, 1996.
Tax Deferred Savings Plan
-------------------------
(Plan)
By: /s/ JOANNE F. INMAN
Joanne F. Inman
Plan Administrator
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EXHIBIT INDEX
EXHIBIT NO.
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4 IBM Tax Deferred Savings Plan
23 Consent of Independent Accountants
24 Powers of Attorney
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EXHIBIT 4
IBM TAX DEFERRED SAVINGS PLAN
Restated as of June 15, 1996
ARTICLE 1 - Purpose
International Business Machines Corporation ("IBM"), a New York corporation, has
established the IBM Tax Deferred Savings Plan (the "Plan" or "TDSP") to assist
eligible employees in their retirement, by allowing them to defer a portion of
their compensation which IBM will contribute on their behalf to the Plan: i)
under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code"), or ii) (effective July 1, 1992, with respect to employees subject to
Puerto Rican income taxes and employed by IBM in Puerto Rico) under Section
3165(e) of Title 13 of the Laws of Puerto Rico. (Title 13 of the Laws of Puerto
Rico is hereafter referred to as the "Puerto Rico Code.")
In addition, IBM will make a Matching Contribution as described below. It is
intended that the Plan shall qualify as a profit sharing plan under Section
40l(a) of the Code and (with respect to Puerto Rican employees) under Section
3165 of the Puerto Rico Code.
ARTICLE 2 - Definitions
The following words and phrases as used herein have the following meanings
unless a different meaning is required by the context:
a. Company - International Business Machines Corporation ("IBM"), a New
York corporation having its principal place of business at Armonk, New
York, and its Domestic Subsidiaries excluding Foreign Branches of the
Company except as may be otherwise provided in these Articles.
b. Subsidiary - a corporation, or other form of business organization, the
majority interest of which is owned, directly or indirectly, by the
Company.
c. Domestic Subsidiary - a Subsidiary organized and existing under the laws
of the United States or any state, territory or possession thereof,
provided, however, that the Plan shall not be deemed to cover the employees
of any Domestic Subsidiary acquired or established after July l, l983
unless so authorized by resolution of the Retirement Plans Committee.
d. Foreign Branch - a branch of the Company or of a Domestic Subsidiary
which operates principally outside the United States, its territories or
possessions.
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e. IBM Tax Deferred Savings Plan (the "Plan" or "TDSP") the Plan
established by the Company by resolution of its Retirement Plans Committee,
effective July 1, 1983, as set forth herein and as amended from time to
time.
f. Trust Fund - the trust fund or funds established pursuant to ARTICLE 4
that contain the Plan assets from which Plan benefits are provided. The
Trust Fund shall include one or more Investment Funds. If permitted by the
terms of the trust indenture, the Trust Fund may be used to fund other
Company-sponsored plans which are qualified under Section 401(a) of the
Code, and in that event, any Investment Fund included in the Trust Fund
which is offered under other plans that participate in the Trust Fund also
may be offered under the Plan.
g. Fund ("Investment Fund") - an investment fund maintained as part of the
Trust Fund and invested in the manner specified in the trust indenture
establishing the Trust Fund, the investment experience and expenses of
which shall be accounted for separately by the Trustee.
h. Employee - an employee of the Company whose scheduled employment by the
Company prior to retirement, dismissal, resignation, or death is (i)
continuous throughout the year and (ii) for an unlimited period of years.
(An employee employed by IBM in Puerto Rico and subject to Puerto Rican
income taxes is covered, with certain modifications to the basic Plan to
comply with the Puerto Rico Code.)
The term "Employee" shall not include leased employees who would be
considered employees of the Company solely by virtue of Sec. 414(n) of the
Code except that, notwithstanding any other provisions of this Plan, for
purposes of determining the number or identity of Highly Compensated
Employees or for purposes of the pension requirements of Section 414(n)(3)
of the Code, "employee" shall be interpreted to include leased employees
within the meaning of Sec. 414(n)(2) of the Code.
The term "Employee" shall not include nonresident aliens who receive no
earned income from the Company which constitutes income from sources within
the United States.
i. Participant - an Employee or a former Employee who has an Account
balance under the Plan.
j. Continuous Service - the time commencing with the date an Employee first
works an hour for which he or she is paid or entitled to payment under the
Company's
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Human Resources and Payroll practices then in effect and continuing until
the date the Employee severs from service with the Company, including
service equivalent to Continuous Service as provided for in ARTICLE 2(l).
In the case of conflict between this definition and ARTICLE 2(l), ARTICLE
2(l) shall prevail.
An hour of service shall be any hour for which a Participant is paid or is
entitled to be paid for performance of duties for the Company or entitled
to be paid by the Company for a period of time when no duties are performed
due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty, or leave of absences during the Plan
Year.
A year of severance under the Plan shall be defined as a consecutive 12
month period during which a Participant does not perform an hour of
service.
k. Break in Continuous Service - the period beginning on the date an
Employee severs from service with the Company and ending on the date (if
any) he or she is reemployed by the Company as an Employee.
l. Prior Continuous Service (Effective August 23, 1984) all periods of
Prior Continuous Service with the Company, a Foreign Subsidiary, or Foreign
Branch, shall be treated in all respects as Continuous Service under the
Plan.
An Employee who has been granted a leave of absence under IBM Human
Resources practices then in effect, including but not limited to any leave
required to be granted under Sec. 411(a)(6)(E) of the Code by reason of the
pregnancy of the Employee, by reason of the birth of a child of the
Employee, by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or for
purposes of caring for such child for a period beginning immediately
following such birth or placement which practices shall be administered on
an equitable basis among similarly situated Employees, and resumes the
status of Employee upon completion of the leave of absence, will be deemed,
for all Plan purposes, as having been an Employee throughout the leave of
absence, notwithstanding that such Employee may have been employed from
time to time on a temporary part-time basis during the leave. If status as
an Employee is not so resumed, the Employee will be treated for the
purposes of ARTICLE 3 only as having severed from service with the Company
one year after the date on which the leave of absence commenced or, if
earlier, on the date of the death, resignation or
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involuntary termination of the Employee.
In the case of an individual who is employed by the Company on a temporary
basis or by an Affiliate (and is not otherwise covered by this Plan), if
such individual was previously employed or is subsequently employed by the
Company as an Employee, then for the sole purpose of determining whether
such Employee is eligible to participate under ARTICLE 3 he or she shall be
treated as having been an Employee throughout his or her period of service
with the Company provided that he or she has not had a Break in Continuous
Service of five years or more or a Break in Continuous Service equal to or
greater than prior Continuous Service whichever is greater, between
employments. For all other purposes, such Employee's service under the Plan
with respect to any period of employment on a temporary basis or with an
Affiliate shall be determined in accordance with such uniform rules and
regulations as the Plan Administrator may from time to time adopt.
m. Beneficiary - a person other than a Participant who is designated by a
Participant or by the terms of the Plan to receive a benefit under the Plan
by reason of the death of the Participant.
n. Spouse - the spouse of a Participant as determined by the law of the
domicile of the Participant; provided, however, that to the extent required
by any qualified domestic relations order (as defined in Section 206(d)(3)
of ERISA and 414(p) of the Code), a former spouse of the Participant shall
be treated as the Spouse of the Participant.
o. ERISA - the Employee Retirement Income Security Act of l974, as amended
from time to time.
p. Retirement Plans Committee (also, the "Committee") - the Retirement
Plans Committee of the Board of Directors or such other persons or group as
said Board may appoint to serve as the Retirement Plans Committee.
q. Plan Administrator - a person or a committee appointed pursuant to
ARTICLE 5 which shall be responsible for overseeing and assuring compliance
with ERISA's reporting, disclosure, recordkeeping and related
administrative requirements. If appointed as a committee, any one of the
members of the committee may act individually on behalf of the committee to
fulfill the committee's obligations as Plan Administrator under ERISA and
the Plan.
r. Board of Directors - the Board of Directors of IBM.
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s. Compensation - salary, commission payments and recurring payments under
any form of variable compensation plan and additional compensation paid for
service as a Regular Employee, including but not limited to payments for
nonscheduled workdays, overtime and shift premium, all determined before
giving effect to any election by the Participant to reduce his or her
Compensation pursuant to ARTICLE 6A. Special awards, deferred and accrued
vacation payments to retiring and separating employees, separation pay and
termination incentive payments, shall not be considered Compensation.
Effective January 1, 1994, in no event will the annual compensation of any
Participant taken into account under the Plan for any year exceed $150,000
(as adjusted from time to time by the Secretary of the Treasury). In
determining the compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) shall apply, except that in
applying such rules, the term "family" shall include only the Spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the Plan Year. If, as a result of the
application of such rules the adjusted $150,000 limitation is exceeded,
then the limitation shall be prorated among the affected individuals in
proportion to each such individual's compensation as determined prior to
the application of this limitation.
t. Investment Manager - any person, group of persons or entity serving as
an Independent Investment Manager or as an IBM Staff Investment Manager.
u. Independent Investment Manager - a registered investment adviser under
the Investment Advisers Act of l940, a bank as defined in that Act or an
insurance company qualified to manage, acquire and dispose of the assets of
employee benefit plans under the laws of more than one state, which has
been authorized by the Committee to manage, acquire and dispose of all or
any portion of the assets of the Trust Fund, and which has acknowledged in
writing that it is a fiduciary with respect to the Plan.
v. IBM Staff Investment Manager - one or more IBM employees who have been
authorized by the Committee to direct, either jointly or severally, the
management, acquisition and disposition of all or any portion of the assets
of the Trust Fund. Any IBM Staff Investment Manager shall be a named
fiduciary with respect to the Plan for purposes of Sections 402(a) and
403(a)(l) of ERISA.
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w. Trustee - a bank chartered under federal or state laws which has been
authorized by the Committee to hold and/or manage all or any portion of the
assets of the Trust Fund in trust pursuant to a trust indenture.
x. Plan Year - July 1 through December 31, 1983; thereafter, the calendar
year.
y. Account - a bookkeeping account or accounts maintained in the records of
the Plan to reflect each Participant's interest in the Plan.
z. Participant's Account - the Account in which are reflected, all Company
Contributions allocated to a particular Participant, together with all
gains and losses attributable thereto.
aa. Matching Contribution Account (also "Matching Account") - the Account
in which are reflected all Matching Contributions allocated to a particular
Participant, together with all gains and losses attributable thereto.
bb. Company Contribution - a contribution by the Company pursuant to
ARTICLE 6B or 6C.
cc. Matching Contribution - a contribution by the Company pursuant to
Article 6G.
dd. Matched Deferrals - a Participant's salary deferrals made pursuant to
ARTICLE 6A to the extent matched by Matching Contributions pursuant to
ARTICLE 6G, but in no event shall Matched Deferrals exceed 6% of
Compensation. Participants who are Employees of Technology Service
Solutions shall have 7% of their deferrals matched.
ee. Unit - the unit of value used to account for each Participant's
interest in each Fund.
ff. Valuation Date - each date as of which the Trustee makes a valuation of
Trust Fund assets. In no event shall the Valuation Date occur less
frequently than monthly.
gg. Normal Retirement Age - age 65, at which time the right to benefits of
a Participant, if not already, becomes nonforfeitable.
hh. Qualified Domestic Relations Order ("QDRO") - effective August 23, 1984
shall mean a "qualified domestic relations order" as that term is defined
by Section 206(d) of ERISA and Section 414(p) of the Code, as amended.
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ii. Affiliate - shall mean the Company and any corporation which is a
member of a controlled group of corporations (as defined in Section 414(b)
of the Code) which includes the Company; any trade or business (whether or
not incorporated) which is under common control (as defined in Section
414(c) of the Code) with the Company; any organization (whether or not
incorporated) which is a member of an affiliated service group (as defined
in Sec. 414(m) of the Code) which includes the Company; and any other
entity required to be aggregated with the Company pursuant to regulations
under Sec. 414(o) of the Code.
jj. Family Member - shall mean, with respect to any employee, such
employee's spouse and lineal ascendants or descendants and the spouses of
such lineal ascendants or descendants.
kk. Highly Compensated Employee - shall mean as defined in Article 6J.
ll. Non-Highly Compensated Employee - shall mean an Employee who is neither
a Highly Compensated Employee nor a Family Member.
mm. Puerto Rico Highly Compensated Employee - shall mean an Employee
employed by IBM in Puerto Rico and subject to Puerto Rican income taxes who
is considered a "highly compensated employee" under Section 3165(e) of the
Puerto Rico Code.
nn. Puerto Rico Employee - shall mean an Employee employed by IBM in Puerto
Rico and subject to Puerto Rican income taxes.
ARTICLE 3 - Participation and Effect
An Employee may commence participation in the Plan at any time during service as
a Regular Employee by making application on forms provided by the Company for
the deferral of compensation. An Employee's application for participation in the
Plan shall become effective at the beginning of the first payroll period that
begins after the Company has received and processed the Employee's completed
application form. An Employee who has thus commenced participation in the Plan
shall be considered to be a Participant until his or her Account has been
distributed in full.
This Plan amends and restates the terms of the Plan, as last restated through
June 14, 1993. Language incorporated in this restatement that implements the
requirements of the Tax Reform Act of 1986, the Omnibus Budget Reconciliation
Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the Technical and
Miscellaneous Revenue Act of 1988, the Omnibus Budget Reconciliation Act of
1989, or other requirements specified in Section 4.01 of Revenue Procedure
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88-42, are effective as of the applicable effective dates described in the laws,
regulations, revenue rulings and notices.
ARTICLE 4 - Establishment of Fund
The Company has established a Trust Fund which constitutes the Trust Fund from
which Plan benefits are provided. The Trust Fund shall be held by one or more
Trustees, selected and appointed by the Committee, pursuant to an appropriate
trust indenture or indentures which may be amended or terminated from time to
time by the Committee in any manner that is not inconsistent with the applicable
provisions of ERISA, the Code or the Plan. The Committee may establish
additional trust funds, appoint additional Trustees and authorize execution of
additional trust indentures, as the Committee, in its sole discretion, deems
appropriate.
All expenses properly incurred in the administration of the Plan and the Trust
Fund may be paid by the Company out of its operating funds or, at the discretion
of the Committee, which discretion may be delegated, shall be paid out of the
assets or income of the Trust Fund. In the event expenses are paid out of the
Trust Fund, any expenses that the Plan Administrator determines to be
attributable to a particular Investment Fund or Funds shall be charged to such
Fund or Funds.
ARTICLE 5 - Management and Administration
The following persons and groups of persons shall severally have the authority
to control and manage the operation and administration of the Plan as herein
delineated and shall each be a named fiduciary with respect to the Plan within
the meaning of Section 402(a) of ERISA: (a) the Board of Directors, (b) the
Retirement Plans Committee, (c) the IBM Vice President responsible for Finance
and the IBM Vice President responsible for Human Resources and (d) the Plan
Administrator and each person on the committee serving as the Plan
Administrator. Each named fiduciary shall be responsible for discharging only
the duties assigned to it by the terms of the Plan and the trust indenture or
indentures described in ARTICLE 4.
The Board of Directors shall be responsible only for designating those persons
who will serve on the Committee.
The Committee shall be responsible for the appointment, retention and removal of
the Trustees which hold the assets of the Trust Fund, and the Trustees or
Investment Managers which direct or manage the investment, acquisition and
disposition of the assets of the Trust Fund or of any Investment Fund. The
Committee shall be responsible for the establishment of investment policy and
guidelines, including guidelines regarding the diversification of assets
pursuant to Section 404(a)(l)(C) of ERISA; however, the Committee, in its sole
discretion, may delegate all or part of such responsibility to Trustees and
Investment Managers or to employees of the Company or to Participants. The
Committee shall review the performance of the Plan Administrator and the
Trustees, Investment Managers and others appointed by it at least annually.
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The Committee may, pursuant to a duly adopted resolution, delegate to the IBM
Vice President responsible for Finance, the IBM Vice President responsible for
Human Resources, the IBM Treasurer, the Plan Administrator and/or any other
officer or employee of IBM, authority to carry out any decision, delegation,
directive or resolution of the Committee.
The IBM Vice President responsible for Finance and the IBM Vice President
responsible for Human Resources shall appoint one or more persons employed by
IBM as an Assistant Controller, the Director of Employee Benefits, or the
Director (or Manager) of U.S. Retirement Funds or such other person or persons
holding comparable positions as they deem appropriate, to serve as Plan
Administrator or as a committee to fulfill the function of Plan Administrator.
The Plan Administrator shall have the full authority and discretion to
promulgate and enforce such rules and regulations as it shall deem necessary or
appropriate for the administration of the Plan, to incorporate changes required
by law, interpret the Plan consistent with the intent thereof and resolve any
possible ambiguities, inconsistencies and omissions, and determine the amount,
timing, and recipients of benefits payable under the Plan. All such
determinations shall be conclusive and binding on all persons and in accordance
with the requirements of ERISA and the Code. The Plan Administrator shall report
to the Committee at least annually on its activities. Additionally, the
aforementioned Vice Presidents shall appoint and designate such other IBM
employees as may be needed to provide adequate staff services to the Committee
and the Plan Administrator.
The Committee and/or the Plan Administrator may engage the services of
accountants, attorneys, actuaries, investment consultants and such other
professional personnel as they deem necessary or advisable to assist them in
fulfilling their responsibilities under the Plan. The expenses of such services
may be paid by the Company out of its operating funds or, at the discretion of
the Committee, which discretion may be delegated, will be paid out of the assets
or income of the Trust Fund in accordance with ARTICLE 4. The Committee, the
Plan Administrator, all other fiduciaries with respect to the Plan, and their
delegates and assistants will be entitled to act on the basis of all tables,
valuations, certificates, opinions and reports furnished by such professional
personnel.
The named fiduciaries with respect to the Plan may, in their discretion, (a)
designate persons other than named fiduciaries to carry out fiduciary
responsibilities (other than trustee responsibilities within the meaning of
Section 405(c)(3) of ERISA) under the Plan, (b) allocate fiduciary
responsibilities (other than such trustee responsibilities) among named
fiduciaries, and (c) employ one or more persons to render advice with respect to
the Plan; provided, however, that fiduciary responsibilities may be delegated or
allocated in accordance with this ARTICLE 5 only pursuant to a written
instrument adopted by the named fiduciary making the delegation or allocation
and accepted in writing by the person assuming such fiduciary responsibilities.
Any person or group of persons may serve in more than one fiduciary capacity
with respect to the Plan.
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ARTICLE 6 - Compensation Deferrals and Contributions
A. Election to Reduce Compensation - Upon commencing participation in the Plan,
each Employee shall elect in writing to forego receipt of amounts equivalent to
1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, or 12% (10%, 11% and 12% effective
January 1, 1995) of the Employee's Compensation for service as a Regular or
Associate Employee for each pay period during which the election is in effect
and to have the Company contribute such amounts to the Employee's Account as
provided in ARTICLE 6B. Participation shall commence as soon as practicable
after receipt of the Employee's election by the Compensation Accounting
Department of the Company. The amount of the reduction may, in the discretion of
the Plan Administrator, be rounded to the next highest or lowest multiple of
$1.00 per pay period.
No Employee (who is not a Puerto Rico Employee) shall be permitted to elect
reductions in Compensation under this Article 6A, or to make Elective Deferrals
(as defined in Section 402(g)(3)) under any other qualified plan maintained by
the sponsoring employer, during any taxable year to the extent such Elective
Deferrals exceed the dollar limitation contained in Section 402(g) of the Code
in effect at the beginning of such taxable year. No Puerto Rico Employee shall
be permitted to elect reductions in Compensation under this Article 6A, or to
make Elective Deferrals (as defined in Section 3165(e) of the Puerto Rico Code)
under any other qualified plan maintained by the sponsoring employer, during any
taxable year to the extent such Elective Deferrals exceed the dollar limitation
contained in Section 3165(e)(7) of the Puerto Rico Code in effect at the
beginning of such taxable year.
An "Employee," as defined hereunder, who is on a leave of absence from the
Company and who, while on that leave of absence, is employed in a temporary
capacity by the Company is not eligible to make Elective Deferrals under this
Plan from the compensation received during that temporary employment.
After an Employee has made an initial election to reduce the Compensation that
the Employee receives, the Employee may change the elected percentage reduction
no more than four times during each Plan Year by giving written notification to
the Compensation Accounting Department. An Employee may suspend a prior election
to reduce the Compensation that the Employee receives at any time by giving
written notification to the Compensation Accounting Department. In order to make
an election, or change or suspend a prior election, the Employee must complete a
form prescribed by the Plan Administrator and must file the completed form at
such time and in such manner as the Plan Administrator shall prescribe.
B. Company Contributions (for other than Puerto Rico Employees) - The Company
shall make a Company Contribution to the Plan, on the condition that said
Contribution is deductible under Section 404 of the Code, with respect to each
Employee who elects to reduce the Compensation that the Employee would otherwise
receive pursuant to paragraph A of this ARTICLE 6 in an amount equal to the
elected reduction in the Employee's Compensation. The Company Contribution with
respect to an Employee shall be paid to the Trustee as soon as practicable and
shall be credited to the Employee's Account. All Company Contributions shall be
made out of the Company's current or accumulated earnings and profits.
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Distribution of Excess Elective Deferrals - A Participant may request
distribution from this Plan of any Excess Elective Deferrals made during a
taxable year of the Participant by notifying the Plan Administrator in writing
on or before March 1 of the amount of the Excess Elective Deferrals to be
distributed from the Plan. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any other plans of this
employer.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be distributed no later
than April 15 to any Participant who substantiates a claim of Excess Elective
Deferrals for such taxable year.
Definitions:
a. "Elective Deferrals", for purposes of Article 6B, shall mean any
Company Contributions made to the Plan at the election of the Participant,
in lieu of cash compensation, and shall include contributions made pursuant
to a salary reduction agreement or other deferral mechanism. With respect
to any taxable year, a Participant's Elective Deferral is the sum of all
employer contributions made on behalf of such Participant pursuant to an
election to defer under any qualified CODA as described in Section 401(k)
of the Code, any simplified employee pension cash or deferred arrangement
as described in Section 402(h)(l)(B), any plan as described under Section
501(c)(18), and any Company Contributions made on the behalf of a
Participant for the purchase of an annuity contract under Section 403(b)
pursuant to a salary reduction agreement.
b. "Excess Elective Deferrals", for purposes of Article 6(B), shall mean
those Elective Deferrals that are includible in a Participant's gross
income under Section 402(g) of the Code to the extent such Participant's
Elective Deferrals for a taxable year exceed the dollar limitation under
such Code Section.
Determination of income or loss: Excess Elective Deferrals shall be adjusted for
any income or loss up to the end of the taxable year in which the Deferrals were
made; the income or loss so allocable to Excess Elective Deferrals is the income
or loss allocable to the Participant's Elective Deferral account for the taxable
year multiplied by a fraction, the numerator of which is such Participant's
Excess Elective Deferrals for the year and the denominator is the Participant's
account balance attributable to Elective Deferrals without regard to any income
or loss occurring during such taxable year.
Accounting for Excess Elective Deferrals: Excess Elective Deferrals shall be
distributed from the Participant's Elective Deferral account. The corresponding
return of Matching Contribution shall be used to reduce the Company's Matching
Contributions under Article 6G in the same proportion as Excess Elective
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Deferrals are to Elective Deferrals for the taxable year of concern, with
adjustment for income or loss in the same manner as in the preceding paragraph.
The amount of Excess Deferrals to be distributed for a taxable year shall be
reduced by Excess Contributions previously distributed with respect to such
employee for the Plan Year beginning in such year.
C. Company Contributions (for Puerto Rico Employees) - The Company shall make a
Company Contribution to the Plan, on the condition that said contribution is
deductible under Section 3023(p) of the Puerto Rico Code, with respect to each
Puerto Rico Employee who elects to reduce the Compensation that the Puerto Rico
Employee would otherwise receive pursuant to paragraph A of this ARTICLE 6 in an
amount equal to the elected reduction in the Puerto Rico Employee's
Compensation. The Company Contribution with respect to a Puerto Rico Employee
shall be paid to the Trustee as soon as practicable and shall be credited to the
Puerto Rico Employee's Account. All Company Contributions shall be made out of
the Company's current or accumulated earnings and profits.
Distribution of Excess Elective Deferrals - A Participant who is a Puerto Rico
Employee may request distribution from this Plan of any Excess Elective
Deferrals made during a taxable year of the Participant by notifying the Plan
Administrator in writing on or before March 1 of the amount of the Excess
Elective Deferrals to be distributed from the Plan.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be distributed no later
than April 15 to any Participant who substantiates a claim of Excess Elective
Deferrals for such taxable year.
Definitions:
a. "Elective Deferrals", for purposes of Article 6C (for Puerto Rico
Employees) shall include any Company Contributions made to the Plan at the
election of the Participant, in lieu of cash compensation. With respect to
any taxable year, a Participant's Elective Deferral is the sum of all
employer contributions made on behalf of such Participant pursuant to an
election to defer under any qualified cash-or-deferred arrangement as
described in Section 3165(e) of the Puerto Rico Code.
b. "Excess Elective Deferrals", for purposes of Article 6C, shall mean
those Elective Deferrals that are includible in a Participant's gross
income under Section 3165(e)(7) of the Puerto Rico Code to the extent such
Participant's Elective Deferrals for a taxable year exceed the dollar
limitation under such Code Section.
Excess Elective Deferrals shall be distributed from the Participant's Elective
Deferral account. The corresponding return of Matching Contribution shall be
used to reduce the Company's Matching Contributions under Article 6G.
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The amount of Excess Deferrals to be distributed for a taxable year shall be
reduced by Excess Contributions previously distributed with respect to such
employee for the Plan Year beginning in such year.
D. Average Actual Deferral Percentage
(i) General Rules
(a) The Average Actual Deferral Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 1.25; or
(b) The Average Actual Deferral Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 2, provided that the
Average Actual Deferral Percentage for Eligible Participants who are Highly
Compensated Employees shall not exceed the Average Actual Deferral Percentage
for Eligible Participants who are Non-Highly Compensated Employees by more than
two (2) percentage points or such lesser amount as the Secretary of the Treasury
shall prescribe to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
(c) For purposes of Article 6D, "Total Compensation" shall mean
compensation paid by the Company to a Participant during the Plan Year which is
required to be reported as wages on the Participant's Form W-2 and shall also
include compensation which is not currently includable in the Participant's
gross income by reason of the application of Sec. 402(a)(8) of the Code pursuant
to a deferral election made by the Participant pursuant to Article 6A of the
Plan.
(ii) For purposes of Articles 6C and 6D the following meanings shall be applied:
(a) "Actual Deferral Percentage" shall mean the ratio (expressed as a
percentage), of reductions in Compensation pursuant to Article 6A (hereinafter
in this Article 6D termed "Elective Deferrals") and Qualified Employer Deferral
Contributions on behalf of the Eligible Participant for the Plan Year to the
Eligible Participant's Total Compensation for the Plan Year.
(b) "Average Actual Deferral Percentage" shall mean the average (expressed
as a percentage) of the Actual Deferral Percentage of the Eligible Participants
in a group.
(c) "Qualified Employer Deferral Contributions" shall mean Qualified
Nonelective Contributions taken into account under the terms of the Plan without
regard to this Article 6D in determining the Actual Deferral Percentage.
(d) "Eligible Participant" shall mean any Employee who is authorized under
the terms of the Plan to have Elective Deferrals or Qualified Elective Deferral
Contributions allocated to the Participant's Account for the Plan Year. For
purposes of computing Actual Deferral Percentages, an employee who
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would be a Participant but for the failure to make Elective Deferrals shall be
treated as a Participant on whose behalf no Elective Deferrals are made.
(iii) Special Rules
(a) For purposes of the test in Article 6D, Employer Matching Contributions
made by the Company pursuant to Article 6G shall be aggregated with the "Average
Actual Deferral Percentage" wherever such term appears.
(b) For purposes of this Article 6D, the Actual Deferral Percentage for any
Eligible Participant who is a Highly Compensated Employee for the Plan Year who
is eligible to have Elective Deferrals or Qualified Employer Deferral
Contributions allocated to his account under two or more plans or arrangements
described in Section 401(k) of the Code that are maintained by the Employer or
an Affiliate shall be determined as if all such Elective Deferrals or Qualified
Employer Deferral Contributions were made under a single arrangement. If a
Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement.
(c) For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is one of the ten most highly-paid Highly Compensated
Employees (or who is a 5% owner), the Elective Deferrals, Qualified Employer
Deferral Contributions and Total Compensation of such participant shall include
the Elective Deferrals, Qualified Employer Deferral Contributions and Total
Compensation for the Plan Year of Family Members (as defined in Section
414(q)(6) of the Code). Except to the extent taken into account in the preceding
sentence, such family members shall be disregarded as separate employees in
determining the Actual Deferral Percentages for the groups of Highly Compensated
Employees and Non-Highly Compensated Employees.
(If an employee is required to be aggregated as a member of more than one family
group, all Eligible Participants who are members of those family groups that
include that employee are aggregated as one family group.)
(d) The determination and treatment of the Elective Deferrals, Qualified
Nonelective Contributions and Actual Deferral Percentage of any Participant
shall satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.
(e) Elective Deferrals taken into account under Article 6D for any Plan
Year must be allocated to the Eligible Participant as of a date within such Plan
Year. For this purpose, an Elective Deferral is considered to have been
allocated as of a date within the Plan Year only if it is actually paid to the
Trustee no later than 12 months after such Plan Year.
(f) For purposes of determining whether the Plan satisfies the actual
deferral percentage test under Article 6D, Elective Deferrals that are made
under two or more plans that are aggregated for purposes of Section 401(a)(4) or
410(b) (other than Section 410(b)(2)(A)(ii)) are to be treated as made under a
single plan. If two or more plans are permissively aggregated for purposes of
satisfying the actual deferral percentage test under Article 6D, such
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aggregated plans must satisfy Code Sections 401(a)(4) and 410(b) as though they
were a single plan.
(iv) Puerto Rico Nondiscrimination Rule
With respect to Puerto Rico Employees, Company Contributions made on behalf
of Puerto Rico Highly Compensated Employees shall not exceed the limits set
forth in Section 3165(e)(3) of the Puerto Rico Code. At the Company's option,
Employer Matching Contributions may be included in meeting the Section
3165(e)(3) limits.
E. Required Revisions in Elections - The Plan Administrator may direct that the
elections made by Participants pursuant to paragraph A of this ARTICLE 6, with
respect to Compensation receivable by Participants in the future, and
corresponding Company Contributions scheduled to be made by the Company in the
future pursuant to paragraph B and C of this ARTICLE 6, shall be reduced or
eliminated in such manner as the Plan Administrator designates in its
discretion, if the Plan Administrator determines that such action is necessary
or appropriate to preserve the qualification of the Plan under Section 401(a) of
the Code or the status of the Plan as a qualified cash or deferred arrangement
under Section 401(k) of the Code.
The Plan Administrator may determine that some or all of the Company
Contributions previously made on behalf of a Participant, pursuant to paragraph
B or C of this ARTICLE 6, shall be returned to such Participant in cash, as
permitted by the Code and regulations thereunder, to the extent designated by
the Plan Administrator in its discretion, if the Plan Administrator determines
that such action is necessary or appropriate to preserve the qualification of
the Plan under Section 401(a) of the Code or the status of the Plan as a
qualified cash or deferred arrangement under Section 401(k) of the Code.
In addition, the Plan Administrator may direct that the elections made by
Participants (who are Puerto Rico Employees) pursuant to paragraph A of this
Article 6 with respect to Compensation receivable by Participants in the future
shall be reduced or eliminated or that some or all of the Company Contributions
previously made on behalf of a Participant (who is a Puerto Rico Employee) shall
be returned to such Participant in cash, if the Plan Administrator determines
that such action is necessary or appropriate to comply with the requirements of
Section 3165(e) of the Puerto Rico Code.
Any action by the Plan Administrator pursuant to this paragraph D shall apply to
all of the Participants who have elected to reduce their Compensation pursuant
to paragraph A of this ARTICLE 6 or only to such Participants as the Plan
Administrator shall designate in its discretion.
The Accounts of the Participants affected by any action of the Plan
Administrator pursuant to this paragraph D shall be revised appropriately in
order to reflect the Plan Administrator's action.
F. Distribution of Excess Contributions
Specifically, the Plan Administrator could authorize the distribution of Excess
Contributions in accord with the following:
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Excess Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax may be imposed on the Company with respect to such
amounts. Such distributions shall be made to Highly Compensated Employees on the
basis of the respective portions of the Excess Contributions attributable to
each of such employees. Excess Contributions of Participants who are subject to
the family member aggregation rules of Section 414(q)(6) of the Code shall be
allocated among the family members in proportion to the Elective Deferrals (and
amounts treated as Elective Deferrals) of each family member that is combined to
determine the combined ADP.
Determination of Income or Loss: Excess Contributions shall be adjusted for any
income or loss up to the end of the Plan Year in which the Contributions were
made; the income or loss so allocable to Excess Contributions is the income or
loss allocable to the Participant's Elective Deferral account (and, if
applicable, the Qualified Non-elective Contribution account or the Qualified
Matching Contributions account or both) for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess Contributions for
the Year and the denominator is the Participant's account balance attributable
to Elective Deferrals (and Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, if any of such Contributions are included in
the ADP test) without regard to any income or loss occurring during such Plan
Year.
Accounting for Excess Contributions: Excess Contributions shall be distributed
from the Participant's Elective Deferral account and Qualified Matching
Contribution account (if applicable) in proportion to the Participant's Elective
Deferrals and Qualified Matching Contributions (to the extent used in the ADP
test) for the Plan Year; said Contributions shall be distributed to the
Participant and shall be used to reduce the Company's Matching Contributions
under Article 6G, respectively. Excess Contributions shall be distributed from
the Participant's Qualified Non-elective Contribution account only to the extent
that such Excess Contributions exceed the balance in the Participant's Elective
Deferral account and Qualified Matching Contribution account.
Definition:
1. "Excess Contributions" shall mean, with respect to any Plan Year, the
excess of:
i. The aggregate amount of employer Contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such Plan Year,
over
ii. The maximum amount of such Contributions permitted by the ADP test
(determined by reducing Contributions made on behalf of Highly Compensated
Employees in order of the ADPs, beginning with the highest of such percentages).
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The amount of Excess Contributions to be distributed shall be reduced by Excess
Deferrals previously distributed for the taxable year ending in the same Plan
Year.
2. Distribution of Excess Contributions (Puerto Rico)
Notwithstanding any other provision of the Plan, Excess Contributions (for
Puerto Rico Employees) within the meaning of Section 3165(e)(6) of the Puerto
Rico Code, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of any Plan Year to Participants to whose
accounts Contributions were allocated for the preceding Plan Year. These Excess
Contributions shall be adjusted for income or loss up to the date of
distribution. A corresponding reduction in the Participant's Qualified Matching
Contribution account (if applicable) shall reduce the Company's Matching
Contributions under Article 6G.
The amount of Excess Contributions to be distributed shall be reduced by Excess
Deferrals previously distributed for the taxable year ending in the same Plan
Year.
G. Matching Contributions By The Company And Allocations To Participants
(1) As soon as practicable after the close of each calendar quarter
or, more frequently in the discretion of the Plan Administrator,
effective January 1, 1995, the Company shall make a Matching
Contribution to the Plan, on the condition that said Contribution is
deductible under Section 404 of the Code, out of its current or
accumulated profits in an amount equal to 50% of each Participant's
Matched Deferrals (100% in the case of Technology Service Solutions).
The amount of the Matching Contribution shall be reduced by the amount
of any forfeitures applied in accordance with ARTICLE 8(C)(1).
(2) In order to meet the actual deferral percentage limitation of
Section 401(k)(3) of the Code, the Company may contribute, on the
condition that said Contribution is deductible under Section 404 of
the Code, during a Plan Year (or with respect to a Plan Year) to the
Eligible Participant's account, additional amounts out of its current
or accumulated profits allocated in proportion to the Matched
Deferrals already made during the Plan Year by Eligible Participants
who are Non-Highly Compensated Employees.
(3) Each Matching Contribution shall be allocated to the Matching
Account of each Participant in respect of whom the Matching
Contribution is made and shall be invested in the same Funds and in
the same proportions as designated by the Participant with respect to
the Company Contributions on the Participant's behalf pursuant to
ARTICLES 6A and B.
(4) Matching Contributions under Article 6G(1) and additional Matching
Contributions under Article
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6G(2) shall be treated (as specified in Article 6B and C as Elective
Deferrals for purposes of determining the Actual Deferral Percentage
of an Eligible Participant; in that regard these Contributions shall
satisfy the requirements for so treating such Contributions as stated
in Section 1.401(k)-1(b)(3) and Section 1.401(k)-1(g)(7) of the
applicable regulations. In particular, such Contributions are
nonforfeitable when made as specified by Article 8B and are
distributable in accord with Article 16.
(5) In order to meet the actual deferral percentage limitation of
Section 401(k)(3) of the Code, the Company may also contribute, on the
condition that said Contribution is deductible under Section 404 of
the Code, during a Plan Year (or with respect to a Plan Year) to the
Eligible Participant's account, additional amounts out of its current
or accumulated profits as Qualified Nonelective Contributions; such
Contributions shall be treated as Elective Contributions (as specified
in Article 6 B and C for purposes of meeting the actual deferral
percentage test. In that regard these Contributions shall satisfy the
requirements for so treating such Contributions as stated in Section
1.401(k)-1(b)(3) and Section 1.401(k)-1(g)(7) of the applicable
regulations. In particular, such Contributions are nonforfeitable when
made and are distributable in accord with Article 16.
(6) Subparagraphs G(1) through G(5) apply only to Participants who are
not Puerto Rico Employees; this subparagraph applies only to
Participants who are Puerto Rico Employees. As soon as practicable
after the close of each calendar quarter or, more frequently in the
discretion of the Plan Administrator, the Company shall make a
Matching Contribution to the Plan, on the condition that said
Contribution is deductible under Section 3023(p) of the Puerto Rico
Code, out of its current or accumulated profits in an amount equal to
30% of each Participant's Matched Deferrals.
In order to meet the nondiscrimination limits set forth in Section
3165(e)(3) of the Puerto Rico Code, the Company may contribute, on the
condition that said Contribution is deductible under Section 3023(p)
of the Puerto Rico Code, during a Plan Year (or with respect to a Plan
Year) to the Eligible Participant's account, additional amounts out of
its current or accumulated profits allocated in proportion to the
Matched Deferrals already made during the Plan Year by Eligible
Participants who are not Puerto Rico
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Highly Compensated Employees.
(7) Each Matching Contribution shall be allocated to the Matching
Account of each Participant in respect of whom the Matching
Contribution is made and shall be invested in the same Funds and in
the same proportions as designated by the Participant with respect to
the Company Contributions on the Participant's behalf pursuant to
Articles 6A and B.
Matching Contributions and additional Matching Contributions (as
described in the second paragraph of this subparagraph) may be treated
as Elective Deferrals for purposes of determining the actual deferral
percentage of an Eligible Participant; such Contributions are
nonforfeitable when made as specified by Article 8B and are
distributable in accord with Article 16.
In order to meet the limitations of Section 3165(e)(3) of the Puerto
Rico Code, the Company may also contribute, on the condition that said
Contribution is deductible under Section 3023(p) of the Puerto Rico
Code, during a Plan Year (or with respect to a Plan Year) to the
Eligible Participant's account, additional amounts out of its current
or accumulated profits as nonelected qualified Contributions; such
Contributions shall be treated as Elective Contributions for purposes
of meeting the Section 3165(e)(3) nondiscrimination percentage test;
such Contributions are nonforfeitable when made and are distributable
in accord with Article 16.
H. Return of Company Contributions - In the event that a Company or Matching
Contribution to the Plan was made (i) by a mistake of fact, or (ii) on the
condition that it was deductible under Section 404 of the Code (or Section
3023(p) of the Puerto Rico Code) and such deduction is disallowed, or (iii) on
the condition that the Plan initially qualified under Section 401(a) of the Code
and the Plan does not so qualify, the Contribution shall be refunded to the
Company; provided, that in the case of a contribution made by a mistake of fact,
the refund may be made only within one year after the payment of the
contribution, and in the case of a contribution conditioned upon deductibility,
the refund may be made only within one year after the disallowance of the
deduction has become final and may be made only to the extent that the deduction
was disallowed, and in the case of a contribution conditioned on the initial
qualification of the Plan, the refund may be made only within one year after the
date of the denial of the Plan's qualification.
I. Annual Additions - In accordance with Appendix A, the Annual Additions to the
Accounts of a Participant with respect to any Plan Year shall not exceed the
limitations imposed by Section 415 of the Code.
J. Definition of Highly Compensated Employee
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(1) A "Highly Compensated Employee" shall mean any employee who performs
services during the determination year and is described in one or more of
the following groups:
(a) An employee who is a 5% owner, as defined in Section 416(i)(1), at
any time during the determination year or the look-back year.
(b) An employee who receives compensation from the employer in excess
of $75,000, adjusted at the same time and in the same manner as under
Code Section 415(d), during the look-back year.
(c) An employee who receives compensation from the employer in excess
of $50,000, adjusted at the same time and in the same manner as under
Code Section 415(d), during the look-back year and is a member of the
top-paid group for the look-back year.
(d) An employee who is an officer, within the meaning of Code Section
416(i), during the look-back year and who receives compensation during
the look-back year greater than 50% of the dollar limitation in effect
under Code Section 415(b)(1)(A) for the calendar year in which the
look-back year begins.
(e) An employee who is both described in subparagraphs (b), (c) or
(d), above, when these subparagraphs are modified to substitute the
determination year for the look-back year and one of the 100 employees
who receives the most compensation from the employer during the
determination year.
(2) For purposes of the definition of "Highly Compensated Employee" the
following will apply:
(a) The determination year is the Plan Year for which the
determination of who is highly compensated is being made.
(b) The look-back year is the 12-month period immediately preceding
the determination year, or, if the employer elects, the calendar year
ending with or within the determination year.
(c) The top-paid group consists of the top 20% of employees ranked on
the basis of compensation received during the year. Solely for
purposes of determining the number of employees in the top-paid group,
employees who have not completed 6 months of service by the end of
such year (including service in the immediately preceding year), who
normally work less than 17 1/2 hours per week, who normally work less
than 6 months during any year or who have not had their 21st birthday
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by the end of such year shall be excluded; the employer may elect to
modify these exclusions by substituting shorter periods of service or
lower ages for those specified.
(d) The number of officers is limited to 50 (or, if less, the greater
of 3 employees or 10% of the employees).
(e) When no officer has compensation in excess of 50% of Code Section
415(b)(1)(A) limit, the highest paid officer is treated as highly
compensated.
(f) Compensation is compensation within the meaning of Section
415(c)(3), including elective or salary reduction contributions to a
cafeteria plan, cash or deferred arrangement or tax-sheltered annuity.
(g) Employers aggregated under Code Section 414(b), (c), (m) or (o),
are treated as a single employer.
(3) A highly compensated former employee is a former employee who had a
separation year prior to the determination year and who was a highly compensated
active employee for either (a) such employee's separation year or (b) any
determination year ending on or after the employee's 55th birthday. Generally, a
separation year is the determination year the employee separates from service.
The employer may elect, with respect to an employee who separated from service
before January 1, 1987, that such an employee will be included as a highly
compensated former employee only if the employee was a 5% owner or received
compensation in excess of $50,000 during either the employee's separation year
(or the year preceding such separation year) or any year ending on or after such
individual's 55th birthday (or the last year ending before such employee's 55th
birthday).
(4) Elections
(a) The Company elects to make the look-back year calculation for a
determination year on the basis of the calendar year ending with the applicable
determination year, except that effective with the 1991 Plan Year this calendar
year calculation election no longer applies.
(b) Effective January 1, 1991, the Company elects to modify the exclusions
specified in subparagraph (H)(2)(c) of this Article by substituting a zero
service requirement and by substituting no age requirement.
ARTICLE 7 - Accounts
A. Accounts - The Plan Administrator shall establish and maintain or cause to be
established and maintained a Participant's Account and Matching Account in the
name of each Participant to which the Plan Administrator shall credit the
Company Contributions and Matching Contributions respectively on behalf of the
Participant and the share of the net gains and losses, if any, of the Trust Fund
and the Investment Funds thereunder allocable to such contributions.
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B. Allocations - Allocation of Trust Fund income and valuation of the Trust Fund
and Investment Funds shall be made as of each Valuation Date, with the Account
balances of all Participants adjusted appropriately upward or downward, so that
the total of such balances shall equal the net worth of the Trust Fund as of
each Valuation Date.
C. Terminated Plan Funds - The Plan Administrator is authorized to accept funds
that remain undistributed upon the termination of other defined contribution
plans formerly offered by IBM. Account balances representing such funds shall be
invested in the IBM Money Market Fund.
ARTICLE 8 - Vesting and Forfeiture
A. Each Participant shall at all times have a nonforfeitable interest in the
value of the Participant's Account.
B. Effective November 23, 1987, all Participants shall at all times have a 100%
nonforfeitable interest in the Participants Matching Account.
C. (1) If a Participant's employment with the Company terminated before the
Participant had obtained a nonforfeitable interest in the Participant's Matching
Account before November 23, 1987, the Participant's Matching Account was
immediately forfeited, and the forfeited amounts were used to reduce the
Company's Matching Contributions under ARTICLE 6G.
(2) If a Participant or former Participant whose Matching Account has been
forfeited in accordance with subparagraph C(1) above resumes employment with the
Company before incurring a break in Continuous Service of at least five years in
duration or a break in Continuous Service of duration equal to or more than
Prior Continuous Service, the forfeited Matching Account shall be reinstated
immediately under the Plan. The value of the Participant's Matching Account that
shall be reinstated shall not be less than the value of his or her Matching
Account at the time that it was forfeited, and shall, to the extent practicable,
be invested proportionately in each Fund in which the Matching Account was
invested immediately before it was forfeited.
ARTICLE 9 - Investment of Contributions
A. Trust Fund Investments; Participant Control - The Participant shall designate
the proportions in which the Company Contributions to the Plan on his or her
behalf shall be allocated among the Investment Funds then being offered under
the Plan, subject to the right of the Trustee to make investments in short-term
obligations of the United States Government or agencies thereof or in other
types of short-term investments including commercial paper as may from time to
time be determined by the Plan Administrator to be in the best interest of the
Plan Participants during periods when, for administrative reasons, contributions
cannot be placed immediately into a Fund. The Participant may allocate the
Company Contributions among whichever of the following Investment Funds are then
being offered under the Plan:
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(i) Money Market Fund - A fund together with the earnings thereon invested
in short-term money market securities including obligations of the United States
Government and agencies thereof, bank obligations, commercial paper, short-term
corporate debt obligations and other short-term debt securities.
(ii) Large Company Index Fund - A portfolio of common stocks constructed
and maintained by the Trustee or an Investment Manager with the objective of
providing investment results which approximate the overall performance of the
common stocks included in the Standard & Poor's Composite Index of 500 stocks
("S&P 500").
(iii) Equity I Fund - A fund consisting of interests in one or more
equity-oriented mutual funds or other equity investment vehicles whose
investment objective is to generate above average total return through emphasis
on capital appreciation and dividend income. Effective January 1, 1986, this
fund was closed to new investment. Effective July 1, 1993, this fund is
terminated.
(iv) Equity II Fund - A fund consisting of interests in one or more
equity-oriented mutual funds or other equity investment vehicles whose
investment objective is to maximize total return primarily through emphasis on
capital appreciation with income of secondary importance. Effective January 1,
1986, this fund was closed to new investment. Effective July 1, 1993, this fund
is terminated.
(v) The Fixed Income Fund - A fund designed for the Employee who wants to
earn a minimum rate of interest over a specific period of time. The money
invested in this fund will be deposited with one or more financial institutions,
banks or insurance companies that have agreed to guarantee principal and to pay
a fixed rate of interest during a fixed term of one or more years. After July 1,
1986 the investments within the fund may be diversified by adding high-quality
financial instruments, including but not limited to U.S. government securities.
(vi) Small Company Stock Fund - Effective April 1, 1990, a portfolio of
common stocks constructed or maintained by the Trustee or an Investment Manager
with the objective of providing investment results approximating the price and
yield performance of medium- and small-company common stocks generally not
represented in the Standard & Poor's 500 Index.
(vii) IBM Stock Fund - Effective April 1, 1990, this fund permits
investment in a fund holding IBM $1.25 par value capital stock, with dividends
being reinvested also in this IBM capital stock. A small portion of the Fund is
maintained in cash for purposes of liquidity. Article 9 (D) describes
additional provisions applicable to this fund.
(viii) U.S. Government Securities Fund - Effective January 1, 1992, a fund
investing primarily in a diversified portfolio of U.S. Treasury notes and bonds
that have an average maturity between one and three years. Effective June 28,
1996, this fund is terminated.
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(ix) International Stock Fund - Effective April 2, 1993, a fund investing
primarily in long-term capital growth equity opportunities in the global
economy.
(x) Balanced Asset Fund - Effective April 2, 1993, a fund offering
preservation of capital through a combination of equity and fixed-income
investment options.
(xi) Total Bond Market Fund - Effective May 1, 1996, a fund investing in
U.S. Treasury and agency securities, corporate investment grade bonds and
mortgage-backed securities, each with maturities greater than one year.
The Committee may, in its discretion (which discretion may be delegated to the
Treasurer of the Company), from time to time establish additional Investment
Funds, including Funds whose investments can be directed by Participants, and
may determine that any existing Investment Fund, including any of the Funds
described above, shall be modified, curtailed, terminated, or liquidated.
The earnings on the assets held in each Fund and all of the proceeds from the
sale of such assets shall be held and invested in that Fund. Each Fund shall be
managed by the Trustee and/or one or more Investment Managers, as determined by
the Retirement Plans Committee.
A Participant may elect to invest Company Contributions on behalf of the
Participant entirely in any one of the Funds or may elect any combination in 5%
multiples (5%, effective September 1, 1992).
In accord with Section 407 of ERISA and as an eligible individual account plan
under ERISA, the Plan provides for the acquisition and holding of IBM stock, as
specified above in regard to the IBM Stock Fund and as considered qualifying
employer securities under ERISA.
B. Change of Investment Selection on Future Contributions - A Participant may
elect to change his or her investment selection for future contributions made on
the Participant's behalf during any payroll period. The Participant must make
this election in the manner prescribed by the Plan Administrator.
C. Change of Investment Selection on Existing Accounts - With regard to existing
Account balances attributable to previous contributions made on the
Participant's behalf, a Participant may elect to transfer balances in his or her
Account among the Investment Funds. Such transfers, if among more than one
Investment Fund, must be made in 5% multiples. The Participant must make this
election in the manner prescribed by the Plan Administrator. The Plan
Administrator may impose such additional rules and limitations upon transfers
between funds, including imposing transaction fees, as the Plan Administrator
may consider necessary or appropriate.
D. IBM Stock Fund Specific Provisions - Effective May 18, 1995, assets invested
by a Participant in the IBM Stock Fund will be expressed in units, representing
a Participant's pro rata share in the IBM Stock Fund, with the unit value
changing on a daily basis as and when the Fund's market value changes. The value
of a unit is determined by dividing the total value of the Fund by the total of
number of units within the Fund. The total value of the
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Fund is equal to the value of IBM stock and cash held by the Fund including
accrued dividends and interest, less expenses charged to the Fund. The Trustee
is responsible for ensuring that the contributions, dividends and assets
transferring into the Fund are invested in a timely and accurate manner, given
the liquidity needs of the Fund. Stock will be purchased on an ongoing basis.
Participants receiving distributions in cash or transferring assets to another
fund receive the valuation price per share at the time of the distribution or
transfer. The valuation price is the closing price as reported on the New York
Stock Exchange Composite Tape at the time the transaction is effective. Units
purchased when assets are transferred into this fund are also based on the
valuation price.
IBM stock acquired by the Trustee may be obtained by purchases on the open
market or obtained from IBM by purchase. Stock purchased by the Trustee from IBM
will be purchased at the closing price of IBM stock as reported on the New York
Stock Exchange Composite Tape for that date, or, if there were no transactions
for that date, for the preceding date for which the tape has reported such
transactions.
Upon any withdrawal or distribution from a participant's account, assets may be
settled in cash or, at the participant's election, in the form of a stock
certificate for whole shares and cash for fractional shares.
Effective January 1, 1995, IBM corporate officers are eligible to invest in the
IBM Stock Fund, subject to such restrictions as may be imposed by the Company's
chief human resources officer.
Shares held in the IBM Stock Fund are voted by the Trustee in accordance with
instructions received from each participant who has an investment in the fund.
Upon receipt of such instructions, the Trustee shall vote the IBM shares as
instructed. The Trustee shall vote IBM shares for which it does not receive such
instructions in the same proportion as it votes the IBM shares for which it does
receive such instructions.
ARTICLE 10 - Allocation of Contributions
As of each Valuation Date, contributions since the last preceding Valuation Date
shall be allocated to the Accounts of the Participants on whose behalf
contributions were made in a manner determined to be practical by the Trustee or
the Plan Administrator in its discretion.
ARTICLE 11 - Plan Accounting and Recording
A. Allocation of Income or Loss of the Trust Fund - As of each Valuation Date,
the Trustee shall determine the net income or loss of each Fund in the Trust
Fund. As soon as practicable after each Valuation Date, the Trustee shall
deliver to the Plan Administrator a written statement of such determination. The
net income or loss of each Fund within the Trust Fund shall be determined on the
accrual basis of accounting, shall be reflected in a new Unit value, as
prescribed by paragraph B of this ARTICLE 11, below, and shall include any net
increase or decrease in the value of the assets of each Fund since the last
preceding Valuation Date to the extent not previously accrued.
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B. Recording Participants' Interests - The interest of each Participant in each
of the Funds shall be represented by Units credited to his or her Account. The
initial value of each Unit on the first Valuation Date as of which the Plan is
established shall be such value as the Plan Administrator determines in its
discretion. On each succeeding Valuation Date, the value of a Unit in each Fund
shall be determined by dividing the value of the Fund on that date by the number
of outstanding Units in the Fund. In determining the value of any Fund, any
contributions made after the preceding monthly Valuation Date shall be
disregarded; any contributions made after any specified weekly Valuation Date
shall be applied as determined in accord with Article 10.
The number of additional Units to be credited to a Participant's Account for
each Fund due to contributions made after the preceding Valuation Date shall be
equal to the amount of such contributions to the applicable Fund divided by the
Unit value for the Fund as of the next following Valuation Date. Each Unit in
each Fund shall represent a proportionately equal beneficial interest, and no
Unit shall have priority or preference over any other. Payments or distributions
from any Fund shall be made only as of a Valuation Date and shall be calculated
using the Unit value for each Fund as of that date.
C. Undeliverable Benefit - If a distribution under the Plan to a Participant or
a Beneficiary cannot be made because the proper recipient cannot be located
after reasonable efforts to do so, and if the amount payable remains
undistributed for a period of three years after the date on which the benefit
was initially to be distributed, the Plan Administrator may direct that the
amount that was to be distributed and any earnings thereon shall be returned to
the Trust Fund as a credit to reduce contributions that would otherwise be
required to be made by the Company; in this circumstance liability for payment
of the applicable benefit is thereupon terminated. However, if subsequently the
proper recipient is located or makes a valid claim for the benefit, the amount
of the distribution and any earnings thereon that were so credited to reduce
Company contributions shall be restored to the Trust Fund by the Company and the
applicable benefit shall be reinstated accordingly.
ARTICLE 12 - Claims Procedure
The Company's Benefits Administration Department is responsible for advising
Participants and Beneficiaries of their benefits under the Plan. In the event a
Participant or Beneficiary believes he or she is entitled to benefits and has
not received them, the Participant or Beneficiary must submit a written claim to
the Office of the Plan Administrator, Benefits Administration Department, IBM
Corporation, National Human Resource Service Center, P.O. Box 12195, Research
Triangle Park, North Carolina 27709. Within 90 days after receipt of such claim,
if the Benefits Administration Department denies the claim, it will provide a
written explanation to the Participant or Beneficiary of the reasons for the
denial of the claim, a specific reference to the pertinent Plan provisions on
which the denial is based, any additional material which is necessary to perfect
the claim (and an explanation of why such material is necessary) and a statement
that within 60 days after receipt of such written explanation, the Participant
or Beneficiary may request, in writing, that the Plan Administrator review the
claim. When so requested, the Plan Administrator shall conduct a full and fair
review of the claim. As part of the review, the
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Participant or Beneficiary will be allowed to review pertinent documents and
submit written comments. A written decision setting forth its conclusions will
be furnished by the Plan Administrator to the Participant or Beneficiary within
60 days after the request for review is received.
ARTICLE 13 - Amendment
A. Subject to ARTICLE l4, the Committee reserves the right, pursuant to
resolutions duly adopted by the Committee, to amend the Plan from time to time
for any purpose permitted by law.
B. Effective August 1, 1984, no Plan amendment, other than an amendment
described in Section 412(c)(8) of the Code or Section 4281 of ERISA, shall
decrease the accrued benefit of any Participant. For purposes of this Article
13B, a Plan amendment which has the effect of the following:
(i) eliminating or reducing an early retirement benefit or a
retirement-type subsidy as defined by Treasury regulations, or
(ii) eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment, shall be treated as
reducing accrued benefits. In the case of a retirement-type subsidy,
the preceding sentence shall apply only with respect to a Participant
who satisfies (either before or after the amendment) the
pre-retirement conditions for the subsidy. This subparagraph shall not
apply to a Plan amendment of a type which is exempted from the
application of Section 411(d)(6)(B)(ii) by regulation or ruling of the
Secretary of Treasury.
ARTICLE 14 - Use of Funds
A. Exclusive Benefit - Neither the Company nor the Committee shall take any
action which will make it possible at any time under the Plan for any part of
the assets of the Trust Fund to be used for or diverted to purposes other than
the exclusive benefit of Participants and Beneficiaries and the payment of Plan
and Trust Fund expenses. Notwithstanding any other provisions to the contrary,
no part of the Trust Fund shall revert to the Company except as provided in
ARTICLE 6H or ARTICLE 8C, and no part of the Trust Fund, other than such part as
is required to pay taxes, if any, or administrative expenses chargeable against
the Trust Fund, shall be used for any purpose other than the exclusive benefit
of Participants and their Beneficiaries, pursuant to the provisions of the Plan.
B. Maintenance of Benefit on Plan Merger - To the extent that Section 208 of
ERISA and Section 4l4(l) of the Code are applicable, and in accordance with such
Sections, in the case of any merger or consolidation of the Plan with any
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other plan, or transfer of assets or liabilities of the Plan to any other plan,
such merger, consolidation or transfer shall not be effected unless each
Participant in the Plan would receive a benefit, immediately after the merger,
consolidation or transfer, if the transferee plan then terminated, which is
equal to or greater than the benefit that the Participant would have been
entitled to receive immediately before the merger, consolidation or transfer if
the Plan had then terminated, or alternatively, unless such other requirements
that may be imposed by the regulations under Section 414(l) of the Code are
satisfied.
ARTICLE 15 - Designation of Beneficiaries
A. Beneficiaries - At the time of initial application for participation and at
any time subsequent thereto, the Participant shall have the right to designate
his or her Beneficiary or Beneficiaries and successor Beneficiaries under the
Plan, or to change any previous designation provided that for a married
Participant to designate anyone other than a spouse such Spouse's consent,
witnessed by a notary, to the Participant's designation must be obtained. Until
such time as a Participant designates a Beneficiary, the Beneficiary under this
Plan shall be deemed to be the spouse of the Participant if married at the time
of death, otherwise the beneficiary or beneficiaries designated under the IBM
Group Life Insurance Plan unless the Participant has assigned ownership of such
insurance. Such designation or change of designation shall be in writing in a
form satisfactory to the Plan Administrator and shall be submitted to the
Company's Benefits Payroll Department and shall be effective upon receipt by
that Department.
In the absence of an effective designation (i.e., if no designation is made, or
if no person or persons designated are still alive or if the Participant
assigned his or her insurance under the IBM Group Life Insurance Plan) at the
time of the Participant's death, the Plan Administrator shall designate a
Beneficiary or Beneficiaries from among the following, in the order named: (l)
the Participant's spouse; (2) the Participant's surviving children in equal
shares; (3) the Participant's surviving parents in equal shares; or (4) the
Participant's estate.
B. Spousal Consent - Any consent by the Participant's Spouse to the
Participant's designation of a Beneficiary under ARTICLE 15A shall (1) be in
writing on a form prescribed by the Plan Administrator, (2) acknowledge the
effect of such waiver or designation on the Spouse, and (3) be witnessed by a
notary public (or witnessed by a Plan representative when approved by the Plan
Administrator). Notwithstanding the foregoing, spousal consent under this
ARTICLE 15 shall not be required if it is established to the satisfaction of a
Plan official that such consent cannot be obtained because there is no Spouse,
because the Spouse cannot be located or because of such other circumstances as
may be prescribed by regulations issued by the Secretary of the Treasury. Any
consent by a Spouse under this ARTICLE 15B or any determination that such
consent is not required as hereinbefore provided shall be effective only with
respect to the Spouse who signs the consent or the Spouse with respect to whom
such determination is made, whichever is applicable. Any consent by the Spouse
under this ARTICLE 15 shall be irrevocable.
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C. Notice Requirements - The Plan Administrator shall provide each Participant
who designates a beneficiary other than a Spouse pursuant to ARTICLE 15A with a
written explanation of (1) the terms and conditions of the Beneficiary
designation, (2) the Participant's right to make, and the effect of, an election
to change such designation, (3) the rights of the Participant's Spouse and (4)
the right to make, and the effect of, a revocation of such election. Such
information shall be provided to the Participant within a reasonable period of
time before the date his benefits would otherwise commence.
ARTICLE 16 - Withdrawals and Distributions
A. Withdrawals - A Participant who has attained age 59 1/2 may withdraw in cash
all or part of the balance in the Participant's Account or Matching Account to
the extent that the balance is nonforfeitable by giving written notice at such
time and in such manner as the Plan Administrator shall prescribe. A Participant
may make up to four withdrawals under this paragraph A in any Plan Year. The
amount of any such withdrawal may not be less than $500 or the maximum amount
that the Participant may then withdraw pursuant to this paragraph A, whichever
is less.
Any withdrawal shall be made as of the last Valuation Date that occurs prior to
the receipt by the Trustee of written notification of the withdrawal. A
withdrawal shall, to the extent practicable, be made pro rata from each of the
Investment Funds in which the applicable Account is invested and shall be
allocated among the contributions made on the Participant's behalf (after taking
into account the gains and losses thereon), in the following sequence: Company
Contributions excluding Matched Deferrals, Matching Contributions, if vested,
and Matched Deferrals. The Plan Administrator may impose such additional rules
and limitations upon withdrawals from the Fixed Income Fund as the Plan
Administrator may consider necessary or appropriate. The amount withdrawn shall
be distributed as soon as practicable after the Valuation Date as of which the
withdrawal is made. The Accounts maintained with respect to the Participant
shall be adjusted appropriately to reflect a withdrawal.
B. Retirement or Disability - In the event that the Participant retires under
the IBM Retirement Plan or becomes eligible for benefits under the IBM Long Term
Disability Plan (or is otherwise determined to be totally and permanently
disabled pursuant to the Code), the Participant may elect, under rules
established by the Plan Administrator, to receive commencing within 60 days of
the receipt of the election by the Trustee the balance of his or her Accounts
either (i) in a lump sum cash payment or (ii) in a specified number of annual
cash installments, payable over a period up to ten years--unless a longer period
is determined by the Plan Administrator, but in no event longer than the life
expectancy of the Participant in accordance with the regulations under Section
401(a)(9) of the Code.
If a participant retires under the IBM Retirement Plan or becomes eligible for
benefits under the IBM Long Term Disability Plan, the Participant also may elect
to defer receipt of either form of distribution until a later date, provided
that the distribution shall not be made or begin later than April 1 of the
calendar year following the calendar year in which the Participant attains
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age 70 1/2. If payment of the balance of the Participant's Account is deferred,
or if the balance of the Participant's Account is distributed in installments,
the unpaid balance of the Participant's Account shall continue to be invested in
the Investment Funds designated by the Participant and to reflect any investment
gains and losses thereunder.
C. Death Benefits - Upon the death of a Participant before retirement or other
termination of employment with the Company, or before the entire balance of his
or her vested Accounts has been distributed in accordance with paragraphs B or D
of this ARTICLE 16, the remaining balance of the Accounts shall be distributed
to the Participant's Beneficiary in a lump sum cash payment. Before authorizing
a distribution in respect of a deceased Participant, the Plan Administrator may
require such proof of death and such other evidence, documents and information
as it may deem to be necessary or desirable. Payment shall be made as soon as is
practicable, but in any event distribution of the Participant's entire interest
shall be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death. Pending the determination of a proper
Beneficiary, the balance of the Account may be placed in such Investment Fund as
the Plan Administrator may direct and shall participate in any investment gains
and losses thereunder.
D. Termination of Employment and General Distribution Procedures
(1) Termination of employment.-- Notwithstanding anything in the preceding
provisions of this Article 16 to the contrary and except as set out in
subparagraph (2) of this paragraph (D) infra, as soon as practicable following
the termination of a Participant's employment with the Company for any reason
other than retirement, medical disability or death, the value of the
Participant's vested Accounts shall be distributed to the Participant in a lump
sum cash payment within 60 days after notification of the Trustee by the
Company--if the present value of the Participant's account is $3,500 or less; in
the preceding circumstances if the value of that account is over $3,500, the
value of said Accounts may be so distributed to the Participant in a lump sum if
consent is obtained from the Participant in accordance with subparagraph (4).
If upon termination of employment the Participant has in excess of $3,500 in his
account and if he does not consent to a lump sum distribution at that time, he
may retain his funds in the Plan and defer receipt of the lump sum distribution
until later; however, distribution must commence in accordance with Section
401(a)(9) as specified in subparagraph (5) if he has not received a lump sum
distribution prior thereto.
(2) Transfer of assets by the Company. Where the Company has transferred
assets used by it in a particular trade or business (or in particular trades or
businesses) to a Domestic Subsidiary not covered by this Plan or to another
business organization not constituting a Domestic Subsidiary (including a
jointly-owned enterprise, an unrelated corporation or a partnership); where such
transfer involves the transfer of a part of the Company's business operations
along with affected employees; and where the Plan Administrator has authorized
the transfer of the assets and liabilities applicable to the transferred
employees to a qualified Section 401(k) plan in the Domestic Subsidiary or other
business organization to which the employees are being or
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have been transferred, no distributions to affected employees shall be permitted
as a result of this occurrence. Such a transfer of assets and liabilities shall
be in accord with the requirements of Internal Revenue Code Section 401(a)(12).
(3) Failure of election distributions.-- If a participant who has retired
or has become covered by the IBM Long Term Disability Plan fails to elect a
method of distribution of the Participant's vested Accounts under the preceding
provisions of Article 16B, the value of the Participant's vested Accounts shall
be distributed to the Participant in a lump sum cash payment--if the present
value of the Participant's account is $3,500 or less.
Unless the Participant elects otherwise, in no event shall a distribution be
made or commence later than the 60th day after the close of the Plan Year in
which the last of the following occurs: (a) the Participant's 65th birthday; (b)
the tenth anniversary of the Participant's initial participation in the Plan;
or, the Participant's termination of employment with the Company. However, if
the present value of the Participant's account is in excess of $3,500 and if the
Participant does not consent to a distribution or the commencement of
distributions, his failure to so consent shall be deemed to be an election
otherwise.
(4) Consent requirements.-- If the present value of the Participant's
account is in excess of $3,500, if the distribution is not required by Section
401(a)(9) or Section 415 and if the distribution is not being made pursuant to a
QDRO, then consent from the Participant for the distribution must be obtained.
Such consent is valid only if the Participant has previously received a general
description of the material features, and an explanation of the relative values
of, the optional forms of benefit available under the Plan in a manner that
would satisfy the notice requirements of Section 417(a)(3). The Participant must
be informed of his right, if any, to defer receipt of any distribution.
Where the Participant's consent is being requested with regard to an annuity
starting date, the preceding description of the Participant's rights must be
provided no less than 30 days and no more than 90 days before the annuity
starting date.
(5) Required distributions.-- Effective January 1, 1989, if a Participant
on April 1 of the calendar year following the taxable year in which the
Participant attained age 70 1/2 (on or after January 1, 1988) retains an account
balance in the Plan and if the Participant had not previously elected a method
of distribution in accordance with the provisions of Article 16(B) that are
applicable to those who retire or become covered by the IBM Long Term Disability
Plan, then the value of the Participant's account shall be distributed to the
Participant commencing on that date in a specified number of annual cash
installments, payable over a period of ten years--unless a longer period is
determined by the Plan Administrator, but in no event longer than the life
expectancy of the Participant in accordance with the regulations under Section
401(a)(9) of the Code.
The distribution required for the Participant's first distribution calendar year
must be made on or before the Participant's required beginning date, as
specified in the preceding paragraph of this Article 16D(5). The distribution
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for other calendar years, including the distribution for the distribution
calendar year in which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar year.
E. Hardship - (1) Effective 1/1/89, a Participant may apply in writing, in
accordance with written procedures prescribed by the Plan Administrator, for a
hardship distribution not exceeding the Participant's distributable amount; this
distributable amount is the Participant's total Company Contributions as of the
date of distribution, reduced by the amount of previous hardship distributions
to the Participant. The Participant may not obtain any income allocable to this
Company Contribution; nor may the Participant obtain the Matching Contribution
made by IBM as a result of his or her participation or any income allocable
thereto. The Plan Administrator in his discretion may grant a hardship
distribution to the Participant if said distribution is necessary to satisfy an
immediate and heavy financial need of the Participant, in accordance with the
remaining provisions of this Paragraph E.
(2) Immediate and heavy financial need.-- In order to allow a hardship
distribution, the Plan Administrator must determine that the Participant has
incurred a hardship that creates an immediate and heavy financial need.
(a) the Plan Administrator may deem that the Participant has incurred
a hardship that creates an immediate and heavy financial need if the
distribution requested would be made on account of:
(i) Expenses for medical care described in Section 213(d) of the Internal
Revenue Code previously incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as defined in Section 152 of
the Code) or necessary for these persons to obtain such medical care;
(ii) Costs (excluding mortgage payments) related to the purchase of a
principal residence of the Participant;
(iii) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his or her spouse,
children, or dependents (as defined in Section 152); or
(iv) Payments necessary to prevent the eviction of the Participant from his
or her principal residence or the foreclosure on the mortgage of the
Participant's principal residence.
(3) Distribution necessary to satisfy financial need. A distribution will
be considered necessary to satisfy the immediate and heavy financial need
of the participant only if:
(a) the distribution is not in excess of the amount of the
participant's specified financial need. The amount of the need may include
any amounts necessary to pay federal, state or local income taxes or
penalties
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reasonably anticipated to result from the distribution;
(b) the participant has obtained all distributions, other than
hardship distributions, and all non-taxable loans under all plans
maintained by the Company;
(c) the participant is suspended for twelve months after receipt of
the hardship distribution from making Elective Deferrals under the Plan, as
well as being suspended for that period from making contributions (or
Elective Deferrals) under all other deferred compensation plans maintained
by the Company; and,
(d) the participant may not make Elective Deferrals for the calendar
year immediately following the calendar year of the hardship distribution
in excess of the applicable limit under Section 402(g) for that following
calendar year less the amount of such participant's Elective Deferrals for
the year of the hardship distribution.
(e) The restrictions on the participant in the preceding (b), (c) and
(d) would apply as well to plans maintained by employers required to be
aggregated with the Company under the applicable rules of Section 414.
(f) The suspension in the preceding (c) with respect to other deferred
compensation plans may be implemented by a legally enforceable agreement
prohibiting the employee from making contributions or Elective Deferrals
under such deferred compensation plans during the twelve-month period.
(4) The Participant satisfies such other requirements as the Plan
Administrator may establish in his discretion.
(5) In determining whether a Participant may receive a hardship
distribution under this Paragraph E, the Plan Administrator shall apply the
criteria set forth above in a uniform and nondiscriminatory manner to all
persons similarly situated.
F. QDROs - Only lump sum distributions are permitted pursuant to a QDRO. They
may be made immediately upon proper approval. If an alternate payee dies
subsequent to the issuance of a proper court order, the Plan shall make the
applicable distribution to the alternate payee's estate.
G. Account Value - For purposes of making distributions under this ARTICLE 16,
the value of the Participant's Account shall be determined as of the Valuation
Date as of which the distribution is made as determined by the Plan
Administrator in its discretion.
H. Loans - (1) Eligibility.-- Effective May 1990, regular full-time and
part-time employees of the Company, or employees on approved leaves of absence,
who have a TDSP account may borrow funds for any reason from their TDSP
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account. In addition, any other participant who is considered a
party-in-interest under ERISA is eligible for the loan program.
(2) Maximum loan amount.-- No loan to any eligible participant shall be
made to the extent that such loan (when added to the outstanding balance of all
other loans to the participant) would exceed the lesser of: (i) $50,000 reduced
by the excess (if any) of the highest outstanding balance of loans during the
one-year period ending on the day before the loan is made, over the outstanding
balance of loans on the date the loan is made, or (ii) one-half of the vested
accrued benefit of the participant. For the purpose of the preceding limitation,
all loans from all plans of the Company and other members of a group of
employers described in Sections 414(b), 414(c) and 414(m) of the Code are
aggregated.
Furthermore, any loan shall, by its terms, require that repayment (principal and
interest) be amortized in substantially level payments, not less frequently than
quarterly, over a period not extending beyond five years from the date of the
loan; in particular, this shall be implemented by granting loans for a minimum
term of one year, or in whole year increments up to a maximum of four years,
from the commencement of repayment.
Loans will be granted in fifty dollar increments. Each eligible participant may
have up to two outstanding loans at any one time. An administrative fee for the
origination of the loan will be charged, and deducted from the loan check.
(3) Interest rate.-- The loan shall bear a fixed rate of interest at a rate
determined by the Administrator based upon comparable rates offered by
commercial lending institutions and the interest shall be credited to the
participant's account as the monthly repayments of principal and interest are
made.
(4) Liquidation of assets and repayment.-- Cash equal to the value of the
loan granted shall be obtained by liquidating assets in the participant's
account on either a proportional basis from the investment funds open to
contributions, or as specified in writing by the Participant in accordance with
procedures established by the Plan Administrator. No earnings will accrue to the
assets liquidated for the loan.
Repayment of a loan shall be through regular payroll deductions taken once per
month. Payments of principal and interest shall be allocated on a monthly basis
to the participant's account as elected for current contributions. (Employees
who are on a leave of absence may elect to make monthly loan payments directly
to the Trustee.)
Employees may prepay an outstanding loan in full with a single payment for
principal and accrued interest directly to the Trustee no sooner than three
months after repayments commence.
All outstanding loans shall be due and payable as of the last date of employment
in the case of retirement, separation, or death unless the Participant, by
written election, chooses to continue to repay his or her loan under the
original amortization schedule in accordance with procedures established by the
Plan Administrator. In the event no election is made by the Participant and
payment is not made within forty-five days of notification by
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the Trustee, the participant shall be deemed to have received a distribution
from the trust in an amount equal to the remaining outstanding principal and
accrued interest on the loan.
(5) General provisions.--
(a) Loans shall be made available to all eligible participants on a
reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated Employees
in an amount greater than the amount made available to other employees.
(c) Loans shall be adequately secured and bear a reasonable rate of
interest, as specified further in this paragraph (H) infra.
(6) Administration of the loan program.-- The Plan Administrator is
authorized to administer the loan program.
(7) Procedure for applying for loans.--An eligible participant may apply
for a loan by executing and submitting: (a) a written application and (b) a
promissory note payable to the Trustee in the amount of the loan and on a form
prescribed by the Administrator.
(8) Basis for approving loans.--An application for a loan shall be granted
based upon the requested loan amount being within the restrictions specified in
(2), i.e., on amount and term of repayment; the applicant having properly
completed the documents specified in (7); and the applicant being in compliance
with any other applicable requirement of the loan program.
(9) Limitations on the types and amounts of loans offered.--The only type
of loan offered hereunder is one that is based upon a security interest in the
eligible participant's account in the Plan and that is within the dollar and
repayment limitations specified in (2).
(10) Procedure for determining a reasonable rate of interest.--The Plan
Administrator shall determine a rate of interest to be charged which rate of
interest provides the Plan with a return on the loan commensurate with interest
rates charged by persons in the business of lending money in similar
circumstances.
(11) Types of collateral which may be used to secure a loan.--A loan is
granted based upon a security interest in the eligible participant's account to
cover principal, subsequently accrued interest and any potential federal income
tax withholding liability; however, immediately after the granting of a loan
hereunder, the amount of the participant's vested accrued benefit being
considered as security for the outstanding balance of that participant's loans
may not exceed 50% of the present value of the participant's vested accrued
benefit.
(12) Events constituting default and the consequences thereof.--In the
event a participant is delinquent on a loan and not making the required loan
payments, the Trustee will notify the participant of the amount of repayment
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required to prevent the loan from being declared in default. If payment is not
received within 30 days of notification by the Trustee, the participant's loan
will be in default. A participant in default shall be restricted from any future
Plan loan until the loan is repaid. In addition, Elective Deferrals under the
Plan for a participant in default, as well as the corresponding employer
contribution and employer matching contribution, will be suspended for a minimum
of one year, and subsequently until the defaulted loan is repaid.
At the earliest occurrence of a distributable event under Section 401(k) of the
Code, such as attainment of age 59 1/2 or the last day of employment, the
participant in default will be deemed to have received a distribution from the
Trust in an amount equal to the remaining outstanding principal and accrued
interest on the loan. Such a distribution is not reversible.
If a participant defaults on the repayment of a loan and if the default
continues five years after the issuance of the loan, or if otherwise the
participant's loan remains outstanding five years after the issuance of the
loan, the participant will be deemed to have received a taxable distribution
that is to be reported as being subject to federal income taxation.
ARTICLE 17 - Termination of the Plan
The Company reserves the right to terminate this Plan at any time by action of
its Retirement Plans Committee. In such event, each Participant or Beneficiary
receiving or entitled to receive payments under ARTICLE l6 shall receive the
balance of his or her Account at such time and in such manner as the Retirement
Plans Committee shall determine in its discretion. In the event of a full or
partial termination of the Plan, or upon complete discontinuance of
Contributions under the Plan, the rights of all affected Participants in the
value of their Matching Accounts shall be nonforfeitable.
Where a transfer of part of the Company's business operations with affected
employees has occurred in the circumstances identified in Article 16D(2), the
Plan Administrator may authorize the transfer of assets and liabilities--as
specified in the referenced subparagraph.
ARTICLE 18 - Alienation of Benefits
No benefits payable under the Plan shall be subject to alienation, sale,
transfer, assignment, pledge, attachment, garnishment, lien, levy or like
encumbrance. No benefit under the Plan shall in any manner be liable for or
subject to the debts or liabilities of any person entitled to benefits under the
Plan. The preceding sentences shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
"qualified domestic relations order", as defined in Section 206(d)(3) of ERISA
and Section 414(p) of the Code. The Plan Administrator shall develop a procedure
to determine the status of a domestic relations order as a qualified domestic
relations order and to administer Plan distributions in accordance with
qualified domestic relations orders.
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ARTICLE 19 - Distributions to Minors and Incompetents
In the event the Plan Administrator determines that any Participant or
Beneficiary receiving or entitled to receive benefits under the Plan is
incompetent to care for his or her affairs, and in the absence of the
appointment of a legal guardian of the property of the incompetent, benefit
payments due under the Plan (unless prior claim thereto has been made by a duly
qualified guardian, committee or other legal representative) may be made to the
spouse, parent, brother or sister or other person, including a hospital or other
institution, deemed by the Plan Administrator to have incurred or to be liable
for expenses on behalf of such incompetent. In the absence of the appointment of
a legal guardian of the property of a minor, any minor's share of benefits
payable under the Plan may be paid to such adult or adults as in the opinion of
the Plan Administrator have assumed the custody and principal support of such
minor.
The Plan Administrator, however, in its sole discretion, may require that a
legal guardian for the property of any such incompetent or minor be appointed
before authorizing the payment of benefits in such situation. Benefit payments
made under the Plan in accordance with determinations of the Plan Administrator
pursuant to this ARTICLE 19 shall be a complete discharge of any obligation
arising under the Plan with respect to such benefit payments.
ARTICLE 20 - No Right to Employment
Nothing herein contained shall be deemed to give any employee the right to be
retained in the service of the Company or an Affiliate or to interfere with the
right of the Company or an Affiliate to discharge any employee at any time
without regard to the effect that such discharge may have upon the employee
under the Plan. Nothing appearing in or done pursuant to the Plan shall be held
or construed to create a contract of employment with the Company, to obligate
the Company to continue the services of any Employee, or to affect or modify any
Employee's terms of employment in any way; or to give any person any legal or
equitable right or interest in the Fund or any part thereof or distribution
therefrom, or against the Company except as expressly provided herein.
ARTICLE 21 - No Guarantee
Neither the Company, the Committee, the Plan Administrator nor the Trustee
guarantees the Trust Fund or any Investment Fund in any manner against loss or
depreciation.
ARTICLE 22 - Withholding Taxes and Rollovers
A. Withholding Taxes. The Trustee and the Plan Administrator shall have the
right to withhold all applicable taxes or other payments from benefits hereunder
and to report information to government agencies when required to do so by law.
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B. Rollovers out of Plan. For distributions made on or after January 1, 1993,
notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Article, a distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
Definitions:
(1) Eligible Rollover Distribution - An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of
the distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
(2) Eligible Retirement Plan - An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.
(3) Distributee - A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse
and the employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of
the spouse or former spouse.
(4) Direct Rollover - A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
C. Rollover of funds from other Plans. Effective January 1, 1996, the Plan will
accept certain types of rollover contributions for the benefit of a
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Participant, said types being limited to taxable distributions either from the
Participant's former employer's qualified savings plan under Section 401(a) of
the Code or from a conduit individual retirement account as described in
Sections 402(a)(5) or 408(d)(3)(A)(ii) of the Code, each in accordance with
procedures approved by the Plan Administrator, provided that any such
contributions shall not adversely affect the qualified status of the Plan. The
Plan Administrator shall empower the Trustee to solicit all information it deems
necessary or desirable to enable it to determine the eligibility of any proposed
contribution into the Plan. All rollover contributions shall be 100% vested in
the Participant's account, but shall receive no Matching Contributions.
ARTICLE 23 - Situs of Plan
For purposes of ERISA and any other applicable laws, the situs of the Plan and
the Trust Fund shall be New York State.
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APPENDIX A -- Limitations
1. The following provisions shall limit the Annual Additions to the
Accounts of a Participant for any Plan Year.
(a) The maximum Annual Addition to the Accounts of a Participant in any
Plan Year under the Plan and all other tax-qualified defined contribution plans
of the Company, may not exceed the lesser of (i) $30,000 (or, if greater,
one-fourth of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the calendar year) or (ii) 25% of the
Participant's Total Compensation for such Plan Year.
(b) When the Annual Additions under the Plan are combined with a
Participant's interest in all other tax-qualified defined benefit and
defined contribution plans of the Company, the sum of the Participant's
Defined Benefit Plan Fraction and the Participant's Defined Contribution
Plan Fraction for any Plan Year may not exceed 1.0.
(c) If this Plan satisfied the applicable requirements of Sec. 415 of the
Code as in effect for all calendar years beginning before January 1, 1987,
an amount shall be subtracted from the numerator of the defined
contribution plan fraction (not exceeding such numerator) as prescribed by
the Secretary of the Treasury so that the sum of the defined benefit plan
fraction and defined contribution plan fraction computed under Sec.
415(e)(1) of the Code (as revised by this paragraph 1) does not exceed 1.0
for such calendar year.
2. In the event contributions cannot be allocated to the Accounts of a
Participant because of the provisions of this APPENDIX A, and benefits and/or
contributions must be discontinued, reduced or returned, benefits and/or
contributions shall first be discontinued, reduced or returned under defined
benefit plans, then under defined contribution plans other than this Plan, and
then, to the extent necessary, under this Plan. Any contributions made in excess
of this Appendix A, if any, will be placed in a suspense account and allocated
to all other Plan Participants on a pro rata basis.
3. For purposes of this APPENDIX A, the "Annual Addition" for any Plan Year
means, the Company Contributions and Matching Contributions with respect to the
Participant for the Plan Year (including any forfeitures in lieu thereof), plus,
if applicable, the Participant's voluntary contributions for the same Plan Year
and amounts described in Sections 415(l)(1) and 419 A(d)(2) of the Code.
However, amounts described in Sections 415(l)(1) and 419 A(d)(2) of the Code
shall not be treated as part of the annual addition for purposes of the limit
specified in subsection (1)(a)(ii) of this Appendix. In addition, if applicable,
the limit specified in subsection (1)(a)(ii) of this Appendix shall not apply to
any contribution for medical benefits (as such contribution is defined in
Section 419A (f)(2) of the Code) after separation from service which is treated
as an annual addition.
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4. For purposes of this APPENDIX A, "Total Compensation" means a
Participant's compensation for the Plan Year as defined by Section 415(c)(3) of
the Code and the regulations promulgated thereunder.
5. For purposes of this APPENDIX A, "Defined Benefit Plan Fraction" means a
fraction, where the numerator is the Participant's projected annual benefit
under the defined benefit plan (determined as of the close of the Plan Year),
and the denominator is the lesser of
(a) 1.25 multiplied by the dollar limitation in effect under Section
415(b)(1)(A) of the Code for that Plan Year, or
(b) 1.4 multiplied by the amount that may be taken into account under
Section 415(b)(1)(B) of the Code with respect to the Participant for the
Plan Year.
6. For purposes of this APPENDIX A, "Defined Contribution Plan Fraction"
means a fraction, where the numerator is the sum of the Annual Additions to the
Accounts of the Participant as of the close of the Plan Year, and the
denominator is the sum of the lesser of the following amounts for such Plan Year
and for each prior Plan Year of service with the Company:
(a) 1.25 multiplied by the dollar limitation in effect under Section
415(c)(1)(A) of the Code for that Plan Year (determined without regard to
Section 415(c)(6) of the Code), or
(b) 1.4 multiplied by the amount that may be taken into account under
Section 415(c)(1)(B) of the Code with respect to the Participant for the
Plan Year.
7. The provisions of this APPENDIX A are intended to apply the limitations
imposed by Section 415 of the Code and shall be construed in a manner that will
effectuate this intent. In no event shall this APPENDIX A be construed in a
manner that would impose limitations that are more stringent than those imposed
by Section 415.
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APPENDIX B -- Top Heavy Requirements
1. Application of Appendix B
(a) This Appendix B shall apply only if the Plan becomes Top-Heavy. A plan
shall be deemed to be "Top-Heavy" if and only if it is included in a Top-Heavy
Group; provided, however, that if such Top-Heavy Group is a Permissive
Aggregation Group and the Plan is not included in the Required Aggregation
Group, the Plan shall not be deemed to be Top-Heavy. Solely for the purpose of
determining if the Plan, or any other plan included within a required
aggregation group of which this Plan is a part, is top-heavy (within the meaning
of Sec. 416(g) of the Code) the accrued benefit of an employee other than a key
employee (within the meaning of Sec. 416(i)(l) of the Code) shall be determined
under (a) the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Affiliates, or (b) if there is no such method, as if
the benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rule of Sec. 411(b)(1)(C) of the Code.
(b) If the Plan is Top-Heavy as of any Determination Date, the provisions
of paragraphs 3 through 6 of this Appendix B shall become effective as of the
first day of the Plan Year next following that Determination Date and shall
continue in effect until (and including) the first subsequent Determination Date
as of which the Plan no longer is Top-Heavy.
2. Definitions
For purposes of this Appendix B, the following definitions shall apply, and
shall be interpreted in accordance with the provisions of Code Section 416 and
the regulations promulgated thereunder:
(a) "Compensation" has the meaning ascribed thereto by Treas. Regs. Section
1.415-2(d), but shall not exceed $150,000 (as adjusted from time to time by
the Secretary of the Treasury pursuant to Code Section 416(d)(2)).
(b) "Determination Date" means, with respect to any Plan Year commencing
after 1983, (1) the last day of the next preceding Plan Year, or (2) in the
case of the first Plan Year of any plan, the last day of such first Plan
Year.
(c) "First Post-Top Heavy Plan Year" means a Plan Year for which the Plan
is not Top-Heavy that immediately follows the most recent Top-Heavy Year.
(d) "IBM Plan" means any plan sponsored by the Company that is qualified
under Section 401(a) of the Code.
(e) "Key Employee" means any Employee of the Company (or, for purposes of
paragraphs 1 and 2 of this Appendix B, any beneficiary thereof) who, at any
time
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during the Plan Year or any of the four next preceding Plan Years, meets
the criteria set forth in Code Section 416(i)(1).
(f) "Permissive Aggregation Group" means a group of IBM Plans comprising
each IBM Plan that is included in the Required Aggregation Group and each
other IBM Plan selected by the Plan Administrator for inclusion in the
Permissive Aggregation Group that would not, by its inclusion, prevent the
group of IBM Plans included in the Permissive Aggregation Group from
continuing to meet the requirements of Code Sections 401(a) and 410.
(g) "Required Aggregation Group" means one or more IBM Plans comprising
each IBM Plan in which a Key Employee is a participant and each IBM Plan
that enables any IBM Plan in which a Key Employee is a participant to meet
the requirements of Code Section 401(a)(4) or 410.
(h) "Top-Heavy" means that the Plan is deemed to be Top-Heavy in accordance
with paragraph 1(a) of this Appendix B.
(i) "Top-Heavy Group" means a Required Aggregation Group or a Permissive
Aggregation Group for which the Top-Heavy Ratio exceeds 60 percent.
(j) "Top-Heavy Ratio" means the percentage computed in accordance with Code
Section 416(g)(2) and the Treasury Department regulations promulgated
thereunder; provided that such ratio shall be computed as of a
Determination Date and the Valuation Date coincident therewith.
(k) "Top-Heavy Year" means a Plan Year for which the Plan is deemed to be
Top-Heavy.
(l) "Non-Key Employee" means any Employee of the Company (or, for purposes
of paragraphs 1 and 2 of this Appendix B, any beneficiary thereof) who is
not a Key Employee.
(m)"Participant," as used in Appendix B, includes employees who although
eligible to participate in the Plan have not elected to defer compensation
under the Plan.
Unless otherwise specified herein, other terms used in this Appendix B have the
respective meanings ascribed thereto by the other provisions of the Plan.
References in this Appendix B to provisions "hereof" refer to provisions of this
Appendix B.
3. Minimum Contribution Requirements
For each Top-Heavy Year:
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(a) As of a date not later than the last day of the Top-Heavy Year, the
Company shall make, under the Plan, for each Participant described in paragraph
3(b) hereof, (i) the Matching Contributions it otherwise would have made under
the Plan for such Plan Year, or, if greater, (ii) contributions for such Plan
Year that, when added to the contributions made by the Company for such
Participant (any forfeitures allocated to the accounts of such Participant) for
such Top-Heavy Year under all other defined contribution plans of the Company,
aggregate not less than the lesser of
(A) three percent (3%) of Compensation, or
(B) the highest percentage of Compensation at which employer
contributions plus forfeitures are allocated (or required to be allocated)
for the Plan Year for any Key Employee; provided that the provisions of
this clause (B) shall not apply if the Plan is in the Required Aggregation
Group and enables a defined benefit plan in the Required Aggregation Group
to meet the requirements of Code Section 401(a)(4) or 410.
For purposes of this clause all defined contribution plans in the Required
Aggregation Group shall be treated as one plan.
Any contribution made under the Plan pursuant to this paragraph (3)(a)
shall be credited to the Participant's Matching Contribution Account.
(b) The contributions required by paragraph 3(a) hereof shall be made for
the entire Plan Year for each Participant including any Participant who severed
from service before the last day of the Plan Year referred to in paragraph 3(a)
hereof except to the extent that such Participant is covered by the Top-Heavy
provision of the IBM Retirement Plan.
(c) The Plan shall meet the requirements of paragraph 3(a) and 4 hereof
without taking into account Company Contributions or other contributions
attributable to a salary reduction or similar arrangement or, in accordance with
Code Section 416(e), contributions or benefits under chapter 21 of the Code
(relating to the Federal Insurance Contributions Act), Title II of the Social
Security Act, or any other Federal or state law.
(d) If any Participant described in paragraph 3(b) hereof also is a
participant in a defined benefit plan of the Company that is Top-Heavy, then the
requirements of paragraph 3(a) hereof shall not apply with respect to such
Participant.
(e) Notwithstanding anything herein to the contrary, the Company shall not
make contributions to the Plan that exceed the current or accumulated profits of
the Company at the time of such contribution.
4. Vesting Requirements
Effective as of the first day of any Top-Heavy Year:
(a) A Participant shall have at all times a 100% nonforfeitable interest in
his or her Accounts.
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(b) The aggregate amount of any minimum contributions that are made
pursuant to the requirements of paragraph 3(a) hereof and vested pursuant to the
provisions of paragraph 4(a) hereof shall not be forfeitable under provisions
that otherwise would be permitted by Code Section 411(a)(3)(B) (relating to
suspension of benefits upon reemployment) or 411(a)(3)(D) (relating to
forfeitures upon withdrawal of mandatory contributions).
5. Compensation Limitation
For each Top-Heavy Year, the annual earnings of each Participant taken into
account under the Plan shall not exceed his or her Compensation provided that
the value before such Plan Year of a Participant's Accounts (to the extent
attributable to earnings in excess of $200,000) shall not be reduced by the
provisions of this paragraph 5.
6. Modification of Limitations imposed by Appendix A
(a) Subject to the provisions hereof, for each Top-Heavy Year, the
provisions of paragraphs 5(a) and 6(a) of Appendix A shall be applied by
substituting "1.0" for "1.25" therein.
(b) If the application of the provisions of paragraph 6(a) hereof would
cause any Participant to exceed the limitation imposed by paragraph 1(b)
Appendix A, the application of the provisions of paragraph 6(a) hereof shall be
suspended with respect to such Participant until he or she no longer exceeds
such limitation as modified by the application of the provisions of paragraph
6(a) hereof; provided that, during the period of such suspension, there shall
be, in accordance with Code Section 416(h)(3) and the Treasury Department
regulations promulgated thereunder, no employer contributions, forfeitures or
voluntary nondeductible contributions allocated to such Participant's accounts
under the Plan or any other defined contribution plan of the Company and no
accruals for such Participant under any defined benefit plan of the Company.
7. Termination of Top-Heavy Status - If, for any Plan Year after a Top-Heavy
Year, the Plan no longer is Top-Heavy, the provisions of paragraphs 3 through 6
hereof shall not apply (except as otherwise provided in paragraph 4 hereof) with
respect to such Plan Year; provided that (i) the accrued benefit of any
Participant shall not be reduced on account of the operation of this paragraph
7, (ii) each Participant shall remain fully vested in any portion of his or her
Accounts in which the participant was fully vested before the Plan ceased to be
Top-Heavy, and (iii) any Participant who has completed at least five years of
Continuous Service as of the first day of the First Post-Top-Heavy Plan Year
shall remain subject to the provisions of paragraph 4(a) hereof.
8. Intent of Appendix B - This Appendix B is intended to satisfy the
requirements imposed by Code Section 416 and shall be construed in a manner that
will effectuate this intent.
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APPENDIX C -- Puerto Rico Supplement
With respect to the provisions of this consolidated Plan document that are
effective on July 1, 1992, these constitute the "Puerto Rico Supplement" and are
subject to the following provisions:
1. Amendment Required for Qualification - All provisions of this Puerto Rico
Supplement, and all benefits and rights granted hereunder, are subject to any
amendments that are necessary to qualify the Plan and Puerto Rico Supplement
under Section 401(a) of the Code or under Section 3165(e) of the Puerto Rico
Code, to continue the Plan as so qualified, or to comply with any other
provision of the law. Accordingly, notwithstanding any other provision of this
Plan, the Company may amend the Plan in any respect or manner necessary to
qualify the Plan and Puerto Rico Supplement under Section 401(a) of the Code or
under Section 3165(e) of the Puerto Rico Code.
2. Return of Funds - (a) All employer contributions are expressly conditioned on
their deductibility under Section 404 of the Code and Section 3023(p) of the
Puerto Rico Code. Any employer contribution shall be returned to the Company,
upon its written request, to the extent that the contribution is disallowed as a
deduction, within one year after such deduction;
(b) In the event that, due solely to the inclusion of this Puerto Rico
Supplement, the Commissioner of the Internal Revenue Service determines that the
Plan would cease to be qualified under the Code or the Secretary of the Puerto
Rico Treasury determines that the Plan is not initially qualified under the
Puerto Rico Code, any contributions made on behalf of a Participant who was at
the time a Puerto Rico Employee shall be returned to the appropriate Participant
and to the Company within one year after the date of such determination. The
return of contributions to the Company is further conditioned upon the Company's
having made the application for the qualification by the time prescribed by law.
55
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 19, 1996 appearing on page 35
of the 1995 Annual Report to Shareholders of International Business Machines
Corporation which is incorporated by reference in International Business
Machines Corporation's Annual Report on Form 10-K for the year ended December
31, 1995, as well as to our report on the Financial Statement Schedule, which
appears on page 8 of such Annual Report on Form 10-K. We also consent to the
incorporation by reference in the Registration Statement of our report dated
June 17, 1996, included in the Annual Report on Form 11-K of the IBM Tax
Deferred Savings Plan for the year ended December 31, 1995.
/s/ PRICE WATERHOUSE LLP
-------------------------
PRICE WATERHOUSE LLP
New York, N.Y. July 29, 1996
56
EXHIBIT 24-(1)
POWER OF ATTORNEY OF LOUIS V. GERSTNER, JR.
KNOW ALL PERSONS BY THESE PRESENTS, that I, Louis V. Gerstner, Jr.,
Chairman of the Board of Directors and Chief Executive Officer of International
Business Machines Corporation, a New York corporation (the "Corporation"), which
is to file with the Securities and Exchange Commission (the "SEC"), Washington,
D.C., under the provisions of the Securities Act of 1933 one or more
Registration Statements on Form S-8, or other appropriate Form, for up to ten
million (10,000,000) shares of capital stock of the Corporation under the IBM
Tax Deferred Savings Plan (the "Plan"), together with Plan interests, hereby
constitute and appoint Lawrence R. Ricciardi, G. Richard Thoman, Jeffrey D.
Serkes, John R. Joyce and John E. Hickey, and each of them, my true and lawful
attorneys-in-fact and agents, with full power to act, together or each without
the others, for me and in my name, place and stead, in any and all capacities,
to sign, or cause to be signed electronically, any and all of said Registration
Statements and any and all amendments to the aforementioned Registration
Statements and to file said Registration Statements and amendments thereto so
signed with all exhibits thereto, as well as to prepare, execute and file any
and all other documents in connection with such Plan with the SEC, all state
securities authorities under the Blue Sky and securities laws of the States of
the United States of America, and the New York Stock Exchange (and other stock
exchanges), hereby granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as I might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ LOUIS V. GERSTNER, JR.
--------------------------
Louis V. Gerstner, Jr.
Chairman of the Board of
Directors and
Chief Executive Officer
57
<PAGE>
EXHIBIT 24-(2)
POWER OF ATTORNEY OF G. RICHARD THOMAN
KNOW ALL PERSONS BY THESE PRESENTS, that I, G. Richard Thoman, Senior Vice
President and Chief Financial Officer of International Business Machines
Corporation, a New York corporation (the "Corporation"), which is to file with
the Securities and Exchange Commission (the "SEC"), Washington, D.C., under the
provisions of the Securities Act of 1933 one or more Registration Statements on
Form S-8, or other appropriate Form, for up to ten million (10,000,000) shares
of capital stock of the Corporation under the IBM Tax Deferred Savings Plan (the
"Plan"), together with Plan interests, hereby constitute and appoint Louis V.
Gerstner, Jr., Lawrence R. Ricciardi, Jeffrey D. Serkes, John R. Joyce and John
E. Hickey, and each of them, my true and lawful attorneys-in-fact and agents,
with full power to act, together or each without the others, for me and in my
name, place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ G. RICHARD THOMAN
---------------------
G. Richard Thoman
Senior Vice President and
Chief Financial Officer
58
<PAGE>
EXHIBIT 24-(3)
POWER OF ATTORNEY OF JOHN R. JOYCE
KNOW ALL PERSONS BY THESE PRESENTS, that I, John R. Joyce, Vice President
and Controller of International Business Machines Corporation, a New York
corporation (the "Corporation"), which is to file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of the
Securities Act of 1933 one or more Registration Statements on Form S-8, or other
appropriate Form, for up to ten million (10,000,000) shares of capital stock of
the Corporation under the IBM Tax Deferred Savings Plan (the "Plan"), together
with Plan interests, hereby constitute and appoint Louis V. Gerstner, Jr.,
Lawrence R. Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, and John E. Hickey,
and each of them, my true and lawful attorneys-in-fact and agents, with full
power to act, together or each without the others, for me and in my name, place
and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 11th day of July 1996.
/s/ JOHN R. JOYCE
-----------------
John R. Joyce
Vice President and Controller
59
<PAGE>
EXHIBIT 24-(4)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ CATHLEEN BLACK
------------------
Director
60
<PAGE>
EXHIBIT 24-(5)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ HAROLD BROWN
----------------
Director
61
<PAGE>
EXHIBIT 24-(6)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
62
/s/ JUERGEN DORMANN
-------------------
Director
<PAGE>
EXHIBIT 24-(7)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ NANNERL O. KEOHANE
----------------------
Director
63
<PAGE>
EXHIBIT 24-(8)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ CHARLES F. KNIGHT
---------------------
Director
64
<PAGE>
EXHIBIT 24-(9)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ LUCIO A. NOTO
-----------------
Director
65
<PAGE>
EXHIBIT 24-(10)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ JOHN B. SLAUGHTER
---------------------
Director
66
<PAGE>
EXHIBIT 24-(11)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ ALEX TROTMAN
----------------
Director
67
<PAGE>
EXHIBIT 24-(12)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ LODEWIJK C. VAN WACHEM
--------------------------
Director
68
<PAGE>
EXHIBIT 24-(13)
POWER OF ATTORNEY OF IBM DIRECTOR
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which is to file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act of
1933 one or more Registration Statements on Form S-8, or other appropriate Form,
for up to ten million (10,000,000) shares of capital stock of the Corporation
under the IBM Tax Deferred Savings Plan (the "Plan"), together with Plan
interests, hereby constitute and appoint Louis V. Gerstner, Jr., Lawrence R.
Ricciardi, G. Richard Thoman, Jeffrey D. Serkes, John R. Joyce and John E.
Hickey, and each of them, my true and lawful attorneys-in-fact and agents, with
full power to act, together or each without the others, for me and in my name,
place and stead, in any and all capacities, to sign, or cause to be signed
electronically, any and all of said Registration Statements and any and all
amendments to the aforementioned Registration Statements and to file said
Registration Statements and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the Blue Sky and securities laws of the States of the United States of America,
and the New York Stock Exchange (and other stock exchanges), hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 25th day of June 1996.
/s/ CHARLES M. VEST
-------------------
Director
69
