24


     [FOR DTC NOTES ONLY---Unless this certificate is presented by an
authorized representative of The Depository Trust Company, a New York
corporation ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]

                  INTERNATIONAL BUSINESS MACHINES CORPORATION

                              0.90% Note due 2003

                                                              CUSIP 459200 AU5
                                                              ISIN 459200 AU59
                                                             ISIN XS0110442398
                                                          COMMON CODE 11044239


No.: R-[ ]

     INTERNATIONAL BUSINESS MACHINES CORPORATION, a corporation duly organized
and existing under the laws of the State of New York (herein called the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to [CEDE & CO.][CHASE NOMINEES LIMITED], or registered assigns, the principal
sum as set forth in the attached Schedule of Increases and Decreases, at the
office or agency of the Company in the Borough of Manhattan, The City and
State of New York, or any other office or agency designated by the Company for
that purpose, on April 14, 2003, in such coin or currency of Japan as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semi-annually on April 14 and October 14 of each
year, on said principal sum at said office or agency, in like coin or
currency, at the rate of 0.90% per annum, from the April 14 or October 14, as
the case may be, next preceding the date of this Note to which interest has
been paid, unless the date hereof is a date to which interest has been paid,
in which case from the date of this Note, or unless no interest has been paid
on the Notes (as defined on the reverse hereof), in which case from April 14,
2000, until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after March 31 or
September 30, as the case may be, and before the following April 14 or October
14, this Note shall bear interest from such April 14 or October 14; provided,
however, that if the Company shall






                                                                             25


default in the payment of interest due on such April 14 or October 14, then
this Note shall bear interest from the next preceding April 14 or October 14
to which interest has been paid, or, if no interest has been paid on the
Notes, from April 14, 2000. The interest so payable on any April 14 or October
14 will, subject to certain exceptions provided in the Indenture referred to
on the reverse hereof, be paid to the person in whose name this Note is
registered at the close of business on such March 31 or September 30, as the
case may be, next preceding such April 14 or October 14, unless the Company
shall default in the payment of interest due on such interest payment date, in
which case such defaulted interest, at the option of the Company, may be paid
to the person in whose name this Note is registered at the close of business
on a special record date for the payment of such defaulted interest
established by notice to the registered holders of Notes not less than ten
days preceding such special record date or may be paid in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed. Payment of interest may, at the option of the
Company, be made by check mailed to the registered address of the person
entitled thereto.

     Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.

     This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication






                                                                             26


hereon shall have been signed by the Trustee under the Indenture referred to
on the reverse hereof.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated: April 14, 2000                     INTERNATIONAL BUSINESS MACHINES
                                          CORPORATION

                                              [SEAL]

TRUSTEE'S CERTIFICATE
OF AUTHENTICATION                         by______________________________

     This is one of the
Securities of the Series
designated herein issued
under the within-
mentioned Indenture.                      by______________________________


THE CHASE MANHATTAN BANK, as Trustee


   by ______________________________
       Authorized Signatory


         This Note is one of a duly authorized issue of unsecured debentures,
notes or other evidences of indebtedness of the Company (hereinafter called
the "Securities"), of the series hereinafter specified, all issued or to be
issued under an indenture dated as of October 1, 1993 (hereinafter called the
"Indenture"), duly executed and delivered by the Company to The Chase
Manhattan Bank, a New York banking corporation, as trustee (hereinafter called
the "Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the respective rights and duties
thereunder of the Trustee, the Company and the holders of the Securities. The
Securities may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest at different rates, may have different conversion prices (if
any), may be subject to different redemption provisions, may be subject to
different sinking, purchase or analogous funds, may be subject to different
covenants and Events of Default and may otherwise vary as in





                                                                             27


the Indenture provided. This Note is one of a series designated as the 0.90%
Notes due 2003 of the Company (hereinafter called the "Notes") issued under
the Indenture.

     In case an Event of Default with respect to the Notes, as defined in the
Indenture, shall have occurred and be continuing, the principal hereof
together with interest accrued thereon, if any, may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.

     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Securities at the time outstanding of all series to be
affected (acting as one class), to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner
the rights of the holders of the Securities of such series to be affected;
provided, however, that no such supplemental indenture shall, among other
things, (i) change the fixed maturity of the principal of, or any installment
of principal of or interest on, or the currency of payment of, any Security;
(ii) reduce the principal amount thereof or the rate of interest thereon or
any premium payable upon the redemption thereof; (iii) impair the right to
institute suit for the enforcement of any such payment on or after the fixed
maturity thereof (or, in the case of redemption, on or after the redemption
date); (iv) reduce the percentage in principal amount of the outstanding
Securities of any series, the consent of whose holders is required for any
such supplemental indenture, or the consent of whose holders is required for
any waiver (of compliance with certain provisions of the Indenture or certain
defaults thereunder and their consequences) provided for in the Indenture; (v)
change any obligation of the Company, with respect to outstanding Securities
of a series, to maintain an office or agency in the places and for the
purposes specified in the Indenture for such series; or (vi) modify any of the
foregoing provisions or the provisions for the waiver of certain covenants and
defaults, except to increase any applicable percentage of the aggregate
principal amount of outstanding Securities the consent of the holders of which
is required or to provide with respect to any particular series the right to
condition the effectiveness of any supplemental indenture as to that series on
the consent of the holders of a specified percentage of the aggregate
principal amount of outstanding Securities of such series or to provide that
certain other provisions of the Indenture







                                                                             28


cannot be modified or waived without the consent of the holder of each
outstanding Security affected thereby. It is also provided in the Indenture
that the holders of a majority in aggregate principal amount of the Securities
of a series at the time outstanding may on behalf of the holders of all the
Securities of such series waive any past default under the Indenture with
respect to such series and its consequences, except a default in the payment
of the principal of, premium, if any, or interest, if any, on any Security of
such series or in respect of a covenant or provision which cannot be modified
without the consent of the Holder of each outstanding Security of the series
affected. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Note and any Notes which may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Note or such other Notes.

     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, if any, and interest on
this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.

     The Indenture permits the Company to Discharge its obligations with
respect to the Notes on the 91st day following the satisfaction of the
conditions set forth in the Indenture, which include the deposit with the
Trustee of money or Foreign Government Securities or a combination thereof
sufficient to pay and discharge each installment of principal of (including
premium, if any, on) and interest, if any, on the outstanding Notes.

     If the Company shall, in accordance with Section 901 of the Indenture,
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, the
successor shall succeed to, and be substituted for, the Person named as the
"Company" on the face of this Note, all on the terms set forth in the
Indenture.

     The Notes are issuable in registered form without coupons in
denominations of Yen1,000,000 and any integral multiple of Yen1,000,000. In
the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, Notes may be exchanged for an equal
aggregate principal amount of Notes other authorized denominations at the
office or agency of the Company





                                                                             29

maintained for such purpose in the Borough of Manhattan, The City and State of
New York.

     The Company will, subject to the exceptions and limitations set forth
below, pay as additional interest on this Note such additional amounts as are
necessary in order that the net payment by the Company or a paying agent of
the principal of and interest on the Notes 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 this Note 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 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 the
          Company 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 the ordinary course
          of its trade or business;





                                                                             30


          (2) to any holder that is not the sole beneficial owner of this
     Note, or a portion of this Note, or that is a fiduciary or partnership,
     but only to the extent that a beneficiary or settlor with respect to the
     fiduciary, a beneficial owner or member of the partnership would not have
     been entitled to the payment of an additional amount had the beneficiary,
     settlor, beneficial owner or member received directly its beneficial or
     distributive share of the payment;

          (3) to any tax, assessment or other governmental charge that is
     imposed otherwise or withheld solely by reason of a failure of the holder
     or any other person to comply with certification, identification or
     information reporting requirements concerning the nationality, residence,
     identity or connection with the United States of the holder or beneficial
     owner of this Note, if compliance is required by statute, by regulation
     of the United States Treasury Department or by an applicable income tax
     treaty to which the United States is a party as a precondition to
     exemption from such tax, assessment or other governmental charge;

          (4) to any tax, assessment or other governmental charge that is
     imposed otherwise than by withholding by the Company or a paying agent
     from the payment;

          (5) to any tax, assessment or other governmental charge that is
     imposed or withheld solely by reason of a change in law, regulation, or
     administrative or judicial interpretation that becomes effective more
     than 15 days after the payment becomes due or is duly provided for,
     whichever occurs later;

          (6) to any estate, inheritance, gift, sales, excise, transfer,
     wealth or personal property tax or similar tax, assessment or other
     governmental charge;

          (7) to any tax, assessment or other governmental charge required to
     be withheld by any paying agent from any payment of principal of or
     interest on this Note, if such payment can be made without such
     withholding by any other paying agent; or

          (8) in the case of any combination of items (1), (2), (3), (4), (5),
     (6) and (7).

     This Note is subject in all cases to any tax, fiscal or other law or
regulation or administrative or judicial interpretation applicable to this
Note. Except as specifically provided in this Note, the Company shall not be





                                                                             31


required to make any payment with respect to any tax, assessment or other
governmental charge imposed by any government or a political subdivision or
taxing authority of or in any government or political subdivision.

     As used in this Note, the term "United States" means the United States of
America (including the states and the District of Columbia) and its
territories, possessions and other areas subject to its jurisdiction, "United
States person" means any individual who is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States, any state of the United States or the
District of Columbia (other than a partnership that is not treated as a United
States person under any applicable Treasury regulations), or any estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.

     If, as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated under the laws) of the United States (or
any political subdivision or taxing authority of or in the United States), or
any change in, or amendments to, an official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment is announced or becomes effective on or after April 6,
2000, the Company becomes or, based upon a written opinion of independent
counsel selected by the Company, will become obligated to pay additional
amounts as described above with respect to this Note, then the Company may at
its option redeem, in whole, but not in part, this Note on not less than 30
nor more than 60 days prior notice, at a redemption price equal to 100% of its
principal amount, together with interest accrued but unpaid on this Note to
the date fixed for redemption.

     Upon due presentation for registration of transfer of this Note at the
office or agency of the Company for such registration in the Borough of
Manhattan, The City and State of New York, or any other office or agency
designated by the Company for such purpose, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.

     Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee and any agent of the Company or the Trustee may deem and
treat the registered holder hereof as the absolute owner of this Note (whether
or not this Note shall be overdue) for the purpose of receiving





                                                                             32


payment of the principal of, premium, if any, and interest on this Note, as
herein provided, and for all other purposes, and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice of the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, effectually
satisfy and discharge liability for moneys payable on this Note.

     No recourse for the payment of the principal of, premium, if any, or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether
by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.

     Unless otherwise defined in this Note, all terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.





                                                                            33


                      SCHEDULE OF INCREASES OR DECREASES

          The initial principal amount of this Global Note is Yen[ ]. The
following increases or decreases in this Global Note have been made:


Date of   Amount of decrease  Amount of increase  Principal amount  Signature of
Exchange  in Principal        in Principal        of this Global    authorized
          Amount of this      Amount of this      Note following    signatory of
          Global Note         Global Note         such decrease or  Trustee or
                                                  increase          Securities
                                                                    Custodian