Obbligazione IBN 5.875% ( US459200BB69 ) in USD

Emittente IBN
Prezzo di mercato refresh price now   109.086 USD  ▲ 
Paese  Stati Uniti
Codice isin  US459200BB69 ( in USD )
Tasso d'interesse 5.875% per anno ( pagato 2 volte l'anno)
Scadenza 28/11/2032



Prospetto opuscolo dell'obbligazione IBM US459200BB69 en USD 5.875%, scadenza 28/11/2032


Importo minimo /
Importo totale /
Cusip 459200BB6
Standard & Poor's ( S&P ) rating A- ( Upper medium grade - Investment-grade )
Moody's rating A3 ( Upper medium grade - Investment-grade )
Coupon successivo 29/11/2025 ( In 31 giorni )
Descrizione dettagliata IBM č una multinazionale americana che opera nel settore dell'informatica, offrendo servizi e soluzioni in ambito hardware, software, cloud computing e intelligenza artificiale.

Un'analisi dettagliata rivela l'obbligazione emessa da International Business Machines (IBM), un colosso tecnologico fondato nel 1911 che si distingue a livello globale per le sue soluzioni innovative in hardware, software, servizi IT e consulenza. La sua lunga storia di trasformazione e adattamento ha consolidato la sua posizione di leadership nel settore, con una forte enfasi su aree emergenti come l'intelligenza artificiale, il cloud computing e la blockchain. Questa specifica obbligazione, identificata dal Codice ISIN US459200BB69 e dal Codice CUSIP 459200BB6, č stata emessa negli Stati Uniti e presenta un tasso d'interesse nominale del 5,875%. I pagamenti delle cedole avvengono con frequenza semestrale e la scadenza del titolo č fissata per il 28 novembre 2032. Attualmente, l'obbligazione č quotata sul mercato al 106,185% del suo valore nominale, con denominazione in Dollari USA (USD). La soliditā creditizia dell'emittente č ulteriormente confermata dai rating assegnati dalle principali agenzie: Standard & Poor's (S&P) ha attribuito un rating di A-, mentre Moody's ha assegnato un rating di A3, collocando entrambi i giudizi nella categoria "investment grade" e riflettendo una robusta capacitā di IBM di far fronte ai propri obblighi finanziari.







424B5 1 a2094101z424b5.htm 424B5
QuickLinks -- Click here to rapidly navigate through this document
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-37034
PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 20, 2000)
$2,000,000,000
International Business
Machines Corporation
Armonk, New York (914) 499-1900
$1,400,000,000 4.750% Notes due 2012
$600,000,000 5.875% Debentures due 2032
The Notes will bear interest at the rate of 4.750% per year. The Debentures will bear interest at the rate of 5.875% per
year. Interest on the Notes and Debentures is payable on May 29 and November 29 of each year, beginning on May 29,
2003. The Notes will mature on November 29, 2012. The Debentures will mature on November 29, 2032.
The Notes and Debentures will be senior obligations of our company and will rank equally with all of our other
unsecured senior indebtedness. International Business Machines Corporation may redeem the Notes and Debentures in
whole or in part at its option and in whole if certain events occur involving changes in United States taxation, as set forth
in this prospectus supplement.
Application has been made to list the Notes and Debentures on the Luxembourg Stock Exchange.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus supplement or the related prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Per
Per Note
Total
Debenture
Total





Public Offering Price

98.204% $
1,374,856,000
97.658% $
585,948,000
Underwriting Discount

0.425% $
5,950,000
0.875% $
5,250,000
Proceeds to IBM (before expenses)

97.779% $
1,368,906,000
96.783% $
580,698,000
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The underwriters expect to deliver the Notes and Debentures to purchasers in book entry form only through the
Depository Trust Company, Clearstream, Luxembourg or the Euroclear System, as the case may be, on or about
November 27, 2002.
JPMorgan

Morgan Stanley

Salomon Smith Barney
ABN AMRO Incorporated

Banc of America Securities LLC

Banc One Capital Markets, Inc.
Banca IMI

Banca Nazionale del Lavoro

Barclays Capital
Bear, Stearns & Co. Inc.

BNP PARIBAS

Caboto IntesaBci
Credit Suisse First Boston

Deutsche Bank Securities

Dresdner Kleinwort Wasserstein
Fleet Securities, Inc.

Goldman, Sachs & Co.

HSBC
HVB Corporates and Markets

ING Financial Markets

Lehman Brothers
Merrill Lynch & Co.

RBC Capital Markets

The Royal Bank of Scotland
UBS Warburg

Utendahl Capital Partners, L.P.

The Williams Capital Group, L.P.
November 20, 2002
You should rely only on the information contained in or incorporated by reference in this prospectus
supplement and the accompanying prospectus. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any state where the offer is not permitted. You
should not assume that the information contained in this prospectus supplement or the accompanying prospectus is
accurate as of any date other than the date on the front of this prospectus supplement.
The Notes and Debentures are offered globally for sale in those jurisdictions in the United States, Canada,
Europe, Asia and elsewhere where it is lawful to make such offers. See "Offering Restrictions."
TABLE OF CONTENTS
Page


Prospectus Supplement
International Business Machines Corporation

S-3
Use of Proceeds

S-4
Capitalization

S-4
Ratio of Earnings From Continuing Operations to Fixed Charges

S-4
Selected Financial Data

S-5
Management

S-6
Description of Notes and Debentures

S-8
United States Taxation

S-16
Underwriting

S-21
Offering Restrictions

S-23
Legal Opinions

S-24
Listing and General Information

S-24
Prospectus
Summary

3
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and

Preferred Stock Dividends
4
Where You Can Find More Information

5
Description of the Company

6
Use of Proceeds

6
Description of the Debt Securities

6
Description of the Preferred Stock

18
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Description of the Depositary Shares

19
Description of the Capital Stock

22
Description of the Warrants

22
Plan of Distribution

24
Legal Opinions

24
Experts

24
This prospectus supplement and the accompanying prospectus include particulars given in compliance with the rules
governing the listing of securities on the Luxembourg Stock Exchange for the purpose of giving information with regard to
the Company. The Company accepts full responsibility for the accuracy of the information contained in this prospectus
supplement and the accompanying
S-2
prospectus and confirms, having made all reasonable inquiries, that to the best of its knowledge and belief, there are no
other facts the omission of which would make any statement herein or in the prospectus misleading in any material respect.
We cannot guarantee that listing will be obtained on the Luxembourg Stock Exchange. Inquiries regarding our listing
status on the Luxembourg Stock Exchange should be directed to our Luxembourg listing agent, Kredietbank S.A.,
Luxembourg, 43, Boulevard Royal, L-2955 Luxembourg.
The distribution of this prospectus supplement and prospectus and the offering of the Notes and Debentures in certain
jurisdictions may be restricted by law. Persons into whose possession this prospectus supplement and the prospectus come
should inform themselves about and observe any such restrictions. This prospectus supplement and the prospectus do not
constitute, and may not be used in connection with an offer or solicitation by anyone in any jurisdiction in which such
offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to
any person to whom it is unlawful to make such offer or solicitation. See "Offering Restrictions."
References herein to "$" and "dollars" are to the currency of the United States. The financial information presented
herein has been prepared in accordance with Generally Accepted Accounting Principles in the United States.
INTERNATIONAL BUSINESS MACHINES CORPORATION
International Business Machines Corporation (IBM or the "Company") was incorporated in the State of New York on
June 16, 1911, as the Computing-Tabulating-Recording Co. (C-T-R), a consolidation of the Computing Scale Co. of
America, the Tabulating Machine Co., and The International Time Recording Co. of New York. In 1924, C-T-R adopted
the name International Business Machines Corporation.
IBM uses advanced information technology to provide customer solutions. The Company operates primarily in a
single industry using several segments that create value by offering a variety of solutions that include, either singularly or
in some combination, technologies, systems, products, services, software and financing.
IBM is the ultimate parent for a group of companies, including subsidiaries and other organizations, operating in over
150 countries around the world. Organizationally, the Company's major operations comprise a Global Services segment;
three hardware products segments--Enterprise Systems, Personal and Printing Systems and Technology; a Software
segment; a Global Financing segment; and an Enterprise Investment segment. The segments are determined based on
several factors, including customer base, homogeneity of products, technology and delivery channels.
IBM offers its products through its global sales and distribution organizations. The sales and distribution organization
has both a geographic focus (in the Americas, Europe/Middle East/Africa, and Asia Pacific) and a specialized and global
industry focus. In addition, this organization includes a global sales and distribution effort devoted exclusively to small
and medium businesses. IBM also offers its products through a variety of third-party distributors and resellers, as well as
through its on-line channels.
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S-3
USE OF PROCEEDS
The net proceeds from the sale of the Notes and Debentures after deducting expenses are estimated to be
$1,949,054,000 and will be used for general corporate purposes.
CAPITALIZATION
The following table sets forth the consolidated capitalization of IBM at September 30, 2002, and as adjusted to give
effect to the issuance of the Notes and Debentures offered hereby.
September 30, 2002



Outstanding
As Adjusted




(Dollars in millions)



Short-term debt
$
7,971 $
7,971




Long-term debt:



International Business Machines Corporation

15,608
17,608
Consolidated subsidiaries

2,165
2,165




Total long-term debt
$
17,773 $
19,773




Stockholders' equity



Common stock--par value $0.20 per share

14,572
14,572
Shares authorized: 4,687,500,000



Shares issued: 1,918,678,874



Retained earnings

31,653
31,653
Treasury stock--at cost

(23,322)
(23,322)
Shares: 228,591,098



Accumulated gains and losses not affecting retained earnings

(811)
(811)




Total stockholders' equity

22,092
22,092




Total capitalization
$
47,836 $
49,836




Notes:--
Except as described in this prospectus supplement, the accompanying prospectus or the documents we incorporate by
reference, there has been no material change to the consolidated capitalization and indebtedness of IBM since
September 30, 2002 to the date of this document, other than an issuance of $400 million of indebtedness by a subsidiary of
IBM.
From January 31, 1995 through September 30, 2002 IBM repurchased approximately $48.1 billion of its capital stock
under a series of authorizations from IBM's Board of Directors that total $52.0 billion.
RATIO OF EARNINGS FROM CONTINUING OPERATIONS TO FIXED CHARGES
The ratio of earnings from continuing operations to fixed charges has been computed by dividing earnings from
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continuing operations before income taxes (which excludes (a) amortization of capitalized interest and (b) IBM's share in
the income and losses of less than 50% owned affiliates) and fixed charges (excluding capitalized interest) by fixed
charges. "Fixed charges" consist of interest expense, capitalized interest and that portion of rental expense deemed to be
representative of interest.
Year Ended December 31,



Nine Months Ended
September 30, 2002
2001
2000
1999
1998
1997







Ratio of earnings from continuing operations
to fixed charges

5.9
7.9
7.0
7.0
4.9
5.1
S-4
SELECTED FINANCIAL DATA
The following consolidated summary sets forth selected financial data for IBM and its subsidiaries for the nine-month
period ended September 30, 2002 and each of the years in the five-year period ended December 31, 2001. The selected
financial data for the interim period ended September 30, 2002 was derived from IBM's unaudited interim financial
statements for the nine-month period ended September 30, 2002. The selected financial data for the years ended
December 31, 1997 through December 31, 2001 has been derived from audited financial statements included in the
Current Report on Form 8-K dated November 4, 2002. The following summary should be read in conjunction with the
financial information incorporated in this prospectus supplement and accompanying prospectus by reference to other
documents. See "Where You Can Find More Information" in the accompanying prospectus.



Year Ended December 31,
Nine Months
Ended


September 30,
For the Period:
2002
2001
2000
1999
1998
1997







(Dollars in millions except ratios and per share amounts)



Revenue
$
57,502
$
83,067
$
85,089
$
83,334
$
77,548
$
75,802
Income from continuing
operations

3,423

8,146

7,874

7,359

5,469

5,528
(Loss)/Income from
discontinued operations

(862)
(423)
219

353

859

565
Net income

2,561

7,723

8,093

7,712

6,328

6,093
Earnings/(loss) per share of
common stock:












Assuming dilution












Continuing operations
1.97

4.59

4.32

3.93

2.84

2.72
Discontinued
operations

(0.50)
(0.24)
0.12

0.19

0.45

0.28








Total

1.47

4.35

4.44

4.12

3.29

3.00
Basic












Continuing operations
2.01

4.69

4.45

4.06

2.92

2.80
Discontinued
operations

(0.51)
(0.24)
0.12

0.20

0.46

0.29








Total

1.50

4.45

4.58

4.25

3.38

3.09
Cash dividends paid on
common stock

751

956

909

859

814

763
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Per share of common
stock

0.44

0.55

0.51

0.47

0.43

0.3875
Investment in plant, rental
machines and other
property

3,644

5,660

5,616

5,959

6,520

6,793
Return on stockholders'
equity

22.2%
35.1%
39.7%

39.0%

32.6%
29.7%












At End of Period:
Total assets
$
83,956
$
88,313
$
88,349
$
87,495
$
86,100
$
81,499
Net investment in plant,
rental machines and other
property

14,451

16,504

16,714

17,590

19,631

18,347
Working capital

7,077

7,342

7,474

3,577

5,533

6,911
Total debt

25,744

27,151

28,576

28,354

29,413

26,926
Stockholders' equity

22,092

23,614

20,624

20,511

19,433

19,816

Does not total due to rounding.
The documents incorporated by reference in this prospectus supplement and prospectus include IBM's annual
consolidated financial statements for the years ended December 31, 2000 and 2001 and IBM's interim consolidated
financial statements for the nine-month period ended September 30, 2002. Financial Statements which are incorporated by
reference in the prospectus supplement may be obtained free of charge at the offices of the Paying Agent in Luxembourg.
S-5
MANAGEMENT
Board of Directors
The composition of IBM's Board of Directors as of the date of this prospectus supplement was:
Name
Principal Activities Outside of IBM

Cathleen Black

President, Hearst Magazines, a division of The Hearst Corporation
Kenneth I. Chenault

Chairman and Chief Executive Officer, American Express Company
Juergen Dormann

Chairman of the Board, President and Chief Executive Officer, ABB Ltd.
Louis V. Gerstner, Jr.

Member, Board of Directors, Bristol-Myers Squibb Company
Nannerl O. Keohane

President and Professor of Political Science, Duke University
Charles F. Knight

Chairman of the Board, Emerson Electric Company
Minoru Makihara

Chairman, Mitsubishi Corporation
Lucio A. Noto

Managing Partner, Midstream Partners LLC
Samuel J. Palmisano

Member, Board of Trustees, The Johns Hopkins University
John B. Slaughter

President and Chief Executive Officer, National Action Council for
Minorities in Engineering, Inc.
Sidney Taurel

Chairman of the Board, President and Chief Executive, Eli Lilly and
Company
Alex Trotman

Chairman, Imperial Chemical Industries, PLC
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Charles M. Vest

President and Professor of Mechanical Engineering, Massachusetts
Institute of Technology
The business address of each director is New Orchard Road, Armonk, New York 10504.
S-6
Executive Officers of IBM (as of the date of this prospectus supplement)
Chairman of the Board:
Louis V. Gerstner, Jr.(1)


President and Chief Executive Officer:
Samuel J. Palmisano(1)

Senior Vice Presidents:

Nicholas M. Donofrio, Group Executive

Douglas T. Elix, Group Executive

J. Bruce Harreld, Strategy

Paul M. Horn, Research

Jon C. Iwata, Communications

John R. Joyce, Chief Financial Officer

John E. Kelly III, Group Executive

Abby F. Kohnstamm, Marketing

J. Michael Lawrie, Group Executive

Edward M. Lineen, General Counsel

Mark Loughridge, Group Executive


J. Randall MacDonald, Human Resources

Steven A. Mills, Group Executive

Robert W. Moffat, Jr., Group Executive

Linda S. Sanford, Group Executive

William M. Zeitler, Group Executive

Vice Presidents:

Jesse J. Greene, Jr., Treasurer


Daniel E. O'Donnell, Secretary


Robert F. Woods, Controller


(1)
Member of the Board of Directors.
S-7
DESCRIPTION OF NOTES AND DEBENTURES
The following description of the particular terms of the Notes and Debentures supplements, and to the extent
inconsistent, replaces the description of the general terms and provisions of the debt securities set forth in the prospectus.
General
The Notes and Debentures will be issued under an Indenture (the "Senior Indenture") dated as of October 1, 1993,
between the Company and JPMorgan Chase Bank, as Trustee, as supplemented by the First Supplemental Indenture dated
as of December 15, 1995, filed as an exhibit to the Registration Statement of which the accompanying prospectus is a part.
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The Notes and Debentures will be unsecured and will have the same rank as all of IBM's other unsecured and
unsubordinated debt. The Notes and Debentures will bear interest from November 27, 2002, at the respective rates of
interest stated on the cover page of this prospectus supplement. Interest on the Notes and Debentures will be payable
semiannually on May 29 and November 29 commencing May 29, 2003, to the persons in whose names such securities are
registered at the close of business on the May 14 or November 14 preceding each May 29 or November 29 payable in
equal semi-annual installments. Interest on the Notes and Debentures will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Unless previously redeemed, repurchased or cancelled as provided below, the Notes
will mature at par on November 29, 2012 and the Debentures will mature at par on November 29, 2032.
The Notes and Debentures will be subject to defeasance and covenant defeasance as provided in "Description of the
Debt Securities--Satisfaction and Discharge; Defeasance" in the accompanying prospectus. The Notes and Debentures
will be issued in denominations of $1,000 and integral multiples of $1,000.
IBM may, without the consent of the holders of Notes or Debentures, issue additional securities having the same
ranking and the same interest rate, maturity and other terms as the applicable Notes or Debentures, provided however, that
no such additional securities may be issued unless such additional securities are fungible with the applicable Notes or
Debentures, as the case may be, for U.S. federal income tax purposes. Any additional securities having such similar terms,
together with the applicable Notes or Debentures, as the case may be, will constitute a single series of securities under the
Senior Indenture. No additional securities may be issued if an event of default has occurred with respect to the applicable
series of Notes or Debentures.
IBM has appointed J.P. Morgan Bank Luxembourg S.A., as paying agent and transfer agent in Luxembourg with
respect to the Notes and Debentures in definitive form. As long as the Notes or Debentures are listed on the Luxembourg
Stock Exchange, the Company will maintain a paying agent and transfer agent in Luxembourg, and any change in the
Luxembourg paying agent and transfer agent will be published in Luxembourg. See "--Notices" below.
Optional Redemption
The Notes and Debentures will be redeemable, as a whole or in part, at IBM's option, at any time or from time to
time, on at least 30 days, but not more than 60 days, prior notice to holders of the Notes or Debentures given in accordance
with "--Notices" below, at a redemption price equal to the greater of:
·
100% of the principal amount of the Notes or Debentures, as the case may be, to be redeemed, plus accrued
interest, if any, to the redemption date; or
·
the sum of the present values of the Remaining Scheduled Payments, as defined below, discounted, on a
semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate, as
defined below, plus 12.5 basis points in the case of the Notes and
S-8
15 basis points in the case of the Debentures, plus, in each case, accrued interest to the date of redemption
which has not been paid.
"Treasury Rate" means, with respect to any redemption date for the Notes or Debentures:
·
the yield, under the heading which represents the average for the immediately preceding week, appearing in
the most recently published statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue; provided that if no
maturity is within three months before or after the maturity date for the Notes or Debentures, as the case
may be, yields for the two published maturities most closely corresponding to the Comparable Treasury
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Issue will be determined and the Treasury Rate will be interpolated or extrapolated from those yields on a
straight line basis rounding to the nearest month; or
·
if that release, or any successor release, is not published during the week preceding the calculation date or
does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.
The Treasury Rate will be calculated on the third business day preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of the Notes or Debentures to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of such Notes or Debentures.
"Independent Investment Banker" means one of the Reference Treasury Dealers, to be appointed by IBM.
"Comparable Treasury Price" means, with respect to any redemption date for the Notes or Debentures:
·
the average of four Reference Treasury Dealer Quotations for that redemption date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations; or
·
if the trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all quotations
obtained by the trustee.
"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in
each case as a percentage of its principal amount, quoted in writing to the trustee by such Reference Treasury Dealer at
3:30 p.m., New York City time on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Smith Barney Inc. and one other treasury dealer selected by IBM, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer, which we refer to as a
"Primary Treasury Dealer," IBM will substitute therefor another nationally recognized investment banking firm that is a
Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Note or Debenture to be redeemed, the remaining
scheduled payments of the principal thereof and interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date
S-9
is not an interest payment date with respect to such Note or Debenture, the amount of the next succeeding scheduled
interest payment thereon will be deemed to be reduced by the amount of interest accrued thereon to such redemption date.
On and after the redemption date, interest will cease to accrue on the Notes or Debentures or any portion thereof
called for redemption, unless IBM defaults in the payment of the redemption price and accrued interest. On or before the
redemption date, IBM will deposit with a paying agent, or the trustee, money sufficient to pay the redemption price of and
accrued interest on the Notes or Debentures to be redeemed on such date. If less than all of the Notes or Debentures are to
be redeemed, the Notes or Debentures to be redeemed shall be selected by the trustee by such method as the trustee shall
deem fair and appropriate.
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Notices
Notices to holders of the Notes and Debentures will be sent by mail to the registered holders and will be published,
whether the Notes and Debentures are in global or definitive form, and so long as the Notes or Debentures are listed on the
Luxembourg Stock Exchange, in a daily newspaper of general circulation in Luxembourg. It is expected that publication
will be made in Luxembourg in the Luxemburger Wort. Any such notice shall be deemed to have been given on the date of
such publication or, if published more than once, on the date of the first such publication. So long as the Notes or
Debentures are listed on the Luxembourg Stock Exchange, any appointment of or change in the Luxembourg paying agent
and transfer agent will be published in Luxembourg in the manner set forth above.
Replacement Notes and Debentures
In case of mutilation, destruction, loss or theft of any definitive Note or Debenture, application for replacement is to
be made at the office of the Trustee. Any such definitive Note or Debenture will be replaced by the Trustee in compliance
with such procedures, and on such terms as to evidence any indemnity, as the Company and the Trustee may require and
subject to applicable laws and regulations of the Luxembourg Stock Exchange. All costs incurred in connection with the
replacement of any definitive Note or Debenture will be borne by the holder of the Note or Debenture. Mutilated or
defaced definitive Notes or Debentures must be surrendered before new ones will be issued.
Applicable Law
The Notes and Debentures will be governed by and construed in accordance with the internal laws of the State of
New York.
Payments of Additional Amounts
IBM will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes and
Debentures such additional amounts as are necessary in order that the net payment by us or a paying agent of the principal
of and interest on the Notes or Debentures to a holder who is not a United States person (as defined below), after deduction
for any present or future tax, assessment or other governmental charge of the United States or a political subdivision or
taxing authority of or in the United States, imposed by withholding with respect to the payment, will not be less than the
amount provided in the Notes or Debentures to be then due and payable; provided, however, that the foregoing obligation
to pay additional amounts shall not apply:
(1) to any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the
holder, or a fiduciary, settlor, beneficiary, member or shareholder of the holder if
S-10
the holder is an estate, trust, partnership or corporation, or a person holding a power over an estate or trust
administered by a fiduciary holder, being considered as:
(a) being or having been present or engaged in a trade or business in the United States or having had a
permanent establishment in the United States;
(b) having a current or former relationship with the United States, including a relationship as a citizen
or resident of the United States;
(c) being or having been a foreign or domestic personal holding company, a passive foreign
investment company or a controlled foreign corporation with respect to the United States or a corporation
that has accumulated earnings to avoid United States federal income tax;
(d) being or having been a "10-percent shareholder" of IBM as defined in section 871(h)(3) of the
United States Internal Revenue Code or any successor provision; or
(e) being a bank receiving payments on an extension of credit made pursuant to a loan agreement
entered into in the ordinary course of its trade or business;
file:///Q|/Internet Temp/OK/153120.htm (10 of 56) [12/13/2002 11:06:52 AM]


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