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 Extended Tax Deferred Savings Plan
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(Full title of the plan)
John E. Hickey, 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:<F1> registered: obligation: price:<F2> fee:
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IBM ETDSP
Obligations $100,000,000 100% $100,000,000 $34,482.76
[FN]
<F1> The IBM ETDSP Obligations are unsecured obligations of International
Business Machines Corporation to pay deferred compensation in the future in
accordance with the terms of the IBM Extended Tax Deferred Savings Plan.
<F2> Estimated solely for the purpose of determining the registration
fee.
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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 will 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 Extended Tax Deferred Savings
Plan (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, 1994 is
incorporated herein by reference. All other reports filed since
December 31, 1994 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.
The Plan has been approved by the Board of Directors of IBM to be
effective on and after January 1, 1995. $100,000,000 of IBM ETDSP
Obligations are being registered under this Registration Statement to
be offered to certain eligible employees of IBM pursuant to the Plan.
The IBM ETDSP Obligations (the "Obligations") are general unsecured
obligations of IBM to pay deferred compensation in the future in
accordance with the terms of the Plan from the general assets of IBM,
and rank pari passu with other unsecured and unsubordinated
indebtedness of IBM from time to time outstanding.
The amount of compensation deferred by each Participant is determined
in accordance with each Participant's Deferral Election Agreement
under the Plan. Obligations in an amount equal to each Participant's
Deferral Account (consisting of deferred amounts, IBM Matching
Contributions and any appreciation or depreciation in value thereon)
will be payable upon the Participant's termination or retirement if
the balance of the Participant's Accounts is less than $25,000, or
during the January following the calendar year of termination or
retirement if the balance of the Participant's Accounts is $25,000 or
more. Based on the Participant's election, balances in excess of
$25,000 at retirement may be paid in installments over a period of up
to 10 years.
Under the Plan, Obligations may be indexed, at the election of the
Participant, to one or more of five investment funds offered to
participants in the International Business Machines Tax Deferred
Savings Plan (the "TDSP"). Each Participant's Obligations (i.e.
Deferral Account) will be adjusted to reflect the investment
experience of the underlying TDSP investment fund(s), including any
appreciation or depreciation.
A Participant's Obligations cannot be alienated, sold, transfered,
assigned, pledged, attached, garnished, or otherwise encumbered, and
pass only to a survivor beneficiary designated under the TDSP or IBM's
Group Life Insurance Plan, or by written will or the laws of descent
and distribution.
The Obligations are not subject to redemption, in whole or in part,
prior to the termination, retirement or death of the Participant.
However, IBM reserves the right to amend or terminate the Plan at any
time, except that no such amendment or termination shall adversely
affect a Participant's right to Obligations in the amount of the
Participant's Accounts as of the date of such amendment or
termination.
The Obligations are not convertible into another security of IBM. The
Obligations will not have the benefit of a negative pledge or any
other affirmative or negative covenant on the part of IBM. No trustee
has been appointed having the authority to take action with respect to
the Obligations and each Participant will be responsible for acting
independently with respect to, among other things, the giving of
notices, responding to any requests for consents, waivers or
amendments pertaining to the Obligations, enforcing covenants and
taking action upon a default.
Item 5. Interests of Named Experts and Counsel.
Peter M. Acton, Associate General Counsel of IBM, who has passed upon the
legality of the IBM ETDSP Obligations offered hereby, is eligible for
participation in the Plan.
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 8. Exhibits.
Exhibit Number Reference
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(4) Instruments defining the rights of security
holders, including indentures
IBM Extended Tax Deferred Savings Plan........................Exhibit 4
(5) Opinion re: legality
The opinion, dated June 15, 1995, of Peter M. Acton,
duly admitted to practice in the State of New York and
Associate General Counsel of IBM, as to the legality of
the securities being registered...............................Exhibit 5
(15) Letter re: unaudited interim financial information................None
(23) Consents of experts and counsel
(a) the consent of Price Waterhouse LLP...................Exhibit 23(a)
(b) the consent of Peter M. Acton (included in Exhibit 5)
(24) Powers of attorney (filed with Registration Statement
No. 33-60225, dated June 14, 1995)
(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 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.
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, on the 15th day of June, 1995.
INTERNATIONAL BUSINESS MACHINES CORPORATION
By
/s/ JOHN E. HICKEY
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(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
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Louis V. Gerstner, Jr. Chairman of the Board )
of Directors and Chief )
Executive Officer )
(Principal Executive )
Officer) )
)
Jerome B. York Director and )
Senior Vice President ) By:
and Chief Financial ) /s/JOHN E. HICKEY
Officer (Principal ) -----------------
Financial Officer) ) (John E. Hickey,
) Attorney-in-Fact)
Jerome B. York Acting Controller ) June 15, 1995
(Principal Accounting )
Officer) )
)
Harold Brown Director )
Fritz Gerber 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 )
EXHIBIT INDEX
EXHIBIT NO.
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4 IBM Extended Tax Deferred Savings Plan
5 Opinion of Peter M. Acton, Associate General Counsel
23(a) Consent of Independent Accountants
23(b) Consent of Counsel (included in Exhibit 5)
24 Powers of Attorney (filed with Registration Statement
No. 33-60225, dated June 14, 1995
EXHIBIT 4
IBM EXTENDED TAX DEFERRED SAVINGS PLAN
ARTICLE 1. DEFINITIONS
The following words and phrases as used herein have the following meanings
unless a different meaning is required by the context:
1.01 "Accounts" shall mean the Company Account and the Deferral
Account.
1.02 "Beneficiary" shall mean 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.
1.03 "Board" shall mean the Board of Directors of IBM.
1.04 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. All citations to sections of the
Code are to such sections as they may from time to time be
amended or renumbered.
1.05 "Committee" shall mean the Executive Compensation and
Management Resources Committee appointed by the Board.
1.06 "Company" shall mean 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.
1.07 "Company Account" shall mean, with respect to a Participant,
all amounts credited to the Participant under Sections 3.02
and 3.03, and earnings, gains, or losses on those amounts
pursuant to Section 3.04.
1.08 "Company Contributions" shall mean the amount credited to a
Participant under Sections 3.02 and 3.03.
1.09 "Compensation" shall mean the Participant's salary and
annual incentive payment for a calendar year which would be
payable to a Participant for services rendered to the
Company after the Participant is no longer able to actively
participate in the TDSP (or would have been unable to
actively participate in the TDSP if the Participant was not
an active participant in the TDSP) during the calendar year
by reason of Code Section 401(a)(17) or Code
Section 401(a)(30). A Participant's Compensation will be
determined without regard to a Participant's election to
make compensation reduction contributions under the TDSP (or
under a cafeteria plan pursuant to Code Section 125) or to
make Deferrals under this Plan.
1.10 "DCP Participant" shall mean a Participant who, for a
calendar year, was offered the opportunity by the Company to
defer up to 100% of his or her annual incentive payment
payable for that calendar year.
1.11 "Deferral Account" shall mean, with respect to a
Participant, the Participant's account balance under the
Deferred Compensation Plan that has been transferred to this
Plan, all amounts credited to a Participant under Section
3.01 and earnings, gains, or losses on those amounts
pursuant to Section 3.04.
1.12 "Deferral Election Agreement" shall mean the agreement
entered into by the Participant pursuant to Section 2.02
under which he or she elects to defer a portion of his or
her Compensation under this Plan.
1.13 "Deferrals" shall mean the amount credited to a Participant
under Section 3.01.
1.14 "Deferred Compensation Plan" shall mean the incentive
compensation deferral program established by IBM in November
1993.
1.15 "Domestic Subsidiary" shall mean 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 unless authorized by the Company's chief
human resources officer.
1.16 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.17 "Effective Date" shall mean January 1, 1995.
1.18 "Eligible Employee" shall mean, for a calendar year, a
domestic executive employee of the Company who is eligible
for the IBM Retirement Plan whose annual rate of salary and
annual incentive payment is expected to exceed (or solely
for purposes of Section 3.03 did exceed in the immediately
preceding calendar year) the compensation limit under Code
Section 401(a)(17), as determined by the Committee in the
relevant year.
1.19 "IBM" shall mean International Business Machines
Corporation, any predecessor, or any successor by merger,
purchase, or otherwise.
1.20 "Participant" shall mean each Eligible Employee who has made
the election described in Section 2.02(a), is credited with
an amount under Section 3.03, or whose account balance under
the Deferred Compensation Plan has been transferred to the
employee's Deferral Account under this Plan.
1.21 "Plan" shall mean this IBM Extended Tax Deferred Savings
Plan, as now in effect or as hereafter amended.
1.22 "Plan Administrator" shall mean a person or a committee
appointed pursuant to Article 7 which shall be responsible
for reporting, 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 duties. As of the
Effective Date, the Director of Executive Compensation has
been appointed as the Plan Administrator.
1.23 "Plan Year" shall mean the calendar year with the first Plan
Year commencing on January 1, 1995.
1.24 "Subsidiary" shall mean a corporation or other form of
business organization the majority interest of which is
owned, directly or indirectly, by the Company.
1.25 "TDSP" shall mean the International Business Machines Tax
Deferred Savings Plan, established by the Company by
resolution of its Retirement Plans Committee, effective July
1, 1983, as amended from time to time.
ARTICLE 2. PARTICIPATION
2.01 Eligibility
Eligibility is limited to US executive level Eligible
Employees of IBM and selected Domestic Subsidiaries whose
rate of annual Compensation (defined as salary and annual
incentive rate) is $150,000 or more for calendar year 1995
(adjusted periodically thereafter based on industry trends
and government guidelines). For this purpose, "selected
Domestic Subsidiaries" and the "executive level" are defined
by the chief human resources officer in his or her sole
discretion and is subject to change. The Committee shall
notify employees of their eligibility for participation in
the Plan as soon as practicable after the chief human
resources officer has made its determination that such
employees qualify as Eligible Employees for a calendar year.
2.02 Participation
(a) No later than one month before the first day of the calendar
year during which an Eligible Employee desires to have
contributions credited on his or her behalf pursuant to
Section 3.01, an Eligible Employee must execute a Deferral
Election Agreement authorizing Deferrals under this Plan for
such year in accordance with the provisions of Section 3.01.
(b) If an Eligible Employee becomes an employee of the Company
during a calendar year, he or she may execute a Deferral
Election Agreement within 30 days of his or her date of
hire. The Deferral Election Agreement shall apply to
Compensation earned by the Eligible Employee in the payroll
periods beginning after such agreement is submitted to the
Committee.
(c) Each Deferral Election Agreement under the Plan shall be
irrevocable for the calendar year to which it relates.
(d) Irrespective of whether an employee has made the election
described above, any employee who has been selected by the
Committee to have Company Contributions credited on his or
her behalf pursuant to Section 3.03 shall be a Participant.
(e) As a condition to participation in the Plan, a Participant
may also be required by the Committee to provide such other
information as the Committee may deem necessary to properly
administer the Plan.
ARTICLE 3. CONTRIBUTIONS
3.01 Amount of Deferral Contributions
For each payroll period that an Eligible Employee has
Compensation beginning on or after the effective date of an
Eligible Employee's Deferral Election Agreement, his or her
Deferral Account shall be credited with an amount of
Deferrals. The amount of Deferrals shall be equal to the
designated percentage of Compensation elected by the
Participant in his or her Deferral Election Agreement. Under
the Deferral Election Agreement, the Eligible Employee may
elect to forego receipt of amounts equivalent to 1%, 2%, 3%,
4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, or 12% of the Employee's
Compensation for each pay period during which the election
is in effect, and in the event an Eligible Employee is a DCP
Participant for the calendar year, he or she may defer up to
100% of his or her annual incentive payment for the calendar
year.
Deferrals shall be made under this Section 3.01 shall
commence for payroll periods for a calendar year at such
time as the Participant may no longer actively participate
in the TDSP for the calendar year (or would have been unable
to actively participate in the TDSP if the Participant was
an active participant in the TDSP for the calendar year) by
reason of Code Section 401(a)(17) or Code Section 401(a)(30)
and has Compensation. No Deferrals may be made hereunder
prior to such time, except for the deferral of a DCP
Participant's annual incentive payment.
3.02 Matching Contributions
The amount of Company Matching Contributions credited to a
Participant for each payroll period shall be equal to 50% of
the Participant's Deferrals for the payroll period; provided
however, that no Company Matching Contributions will be made
for a Participant's Deferrals in excess of 6% of the
Participant's Compensation for that payroll period. Company
Matching Contributions will be made in units of IBM Stock
with no right to transfer such units, except as otherwise
provided in this Plan.
3.03 Additional Company Contributions
IBM may cause the Committee to credit on behalf of any
Participant or any Eligible Employee who is not yet a
Participant for a particular calendar year an additional
amount of Company Matching Contributions or other Company
Contributions, which will be made only in units of IBM Stock
with no right to transfer such units, except as otherwise
provided in this Plan; provided
however, that any employee who was not eligible for a given
calendar year because his or her rate of Compensation was
expected to be below the $150,000 threshold (as adjusted)
will nonetheless be credited with Company Matching
Contributions (but may not make Elective Deferrals) under
the Plan without any further action by IBM or the Committee,
based upon such employee's Elective Deferral rate under the
TDSP at the end of the calendar year, if the employee's
actual Compensation for that calendar year exceeds $150,000
(as adjusted and only to the extent that the Company
Matching Contributions would have been at least $300).
3.04 Investment of Accounts
A Participant's Deferral Account shall be treated as if the
Participant had invested it in certain TDSP Investment Funds
in accordance with Article 4. A Participant's Company
Account shall be treated as if it had been invested in the
IBM Stock Fund under the TDSP; provided however, that in the
event a Participant retires from the Company and does not
elect to have the entire amount of his or her Accounts then
paid to him or her, any amounts credited to the
Participant's Company Account after retirement will be
treated as if they were transferred to the Participant's
Deferral Account for purposes of this Section 3.04 and
Article 4.
3.05 Vesting of Accounts
A Participant always shall be fully vested in his or her
Accounts.
3.06 Individual Accounts
The Committee shall maintain, or cause to be maintained,
records showing the individual balances of each
Participant's Accounts. Periodically, each Participant shall
be furnished with a statement setting forth the value of his
or her Accounts.
ARTICLE 4. INVESTMENT OF DEFERRALS AND DEFERRAL ACCOUNTS
4.01 Deemed TDSP Investments; Participant Control
A Participant shall designate the proportions in which his or her
Deferrals shall be treated as if they had been allocated among
certain Investment Funds under the TDSP. Those Investment Funds
are:
(a) The Fixed Income Fund
This fund's objective is to preserve principal (the amount
invested) and to provide a relatively stable rate of
interest. Under TDSP, the fund invests in interest-bearing
instruments, including contracts with highly rated insurance
companies, banks, and other financial institutions.
(b) The Large Company Index Fund
This fund is for investors seeking long-term growth of
capital by achieving a market rate of return from a
diversified group of large- and medium-sized company common
stocks in the United States. Under TDSP, the fund invests in
a broad range of common stocks to produce investment results
approximating the price and yield performance of Standard &
Poor's 500 Index.
(c) The Small Company Stock Fund
Investors who would like to pursue long-term capital growth
from a diversified group of small- and medium-sized company
common stocks in the United States may want to consider this
fund. Under TDSP, the fund seeks to produce results that
substantially duplicate the price and yield performance of
small- and medium-sized company stocks generally not
represented in the Standard & Poor's 500 Index.
(d) The International Stock Fund
This fund is for aggressive investors seeking long-term
capital appreciation and diversification through investments
in stocks based outside of the United States. Under TDSP,
the fund invests in equity market investments outside North
America, based on the Morgan Stanley Capital International
Europe, Australia, and Far East (EAFE) Index, with a
modified country weighting that limits investments in
securities of any one country to approximately 25% of the
fund.
(e) The IBM Stock Fund
The IBM Stock Fund will appeal to aggressive investors
looking for capital appreciation from a single stock
investment. The objective of the fund is participation in
IBM's future stock performance. IBM corporate officers who
elect this investment are subject to such restrictions which
are necessary for compliance with securities laws.
The Committee may, in its discretion (which discretion may be
delegated to the Treasurer or other executive officer of IBM),
from time to time make additional TDSP Investment Funds available
as an investment measure under this Plan and may determine that
any TDSP Investment Fund, including any of the Funds described
above, may be terminated as an investment measure under this
Plan.
A Participant may elect to invest his or her Deferrals entirely
in any one of the funds or may elect any combination in 5%
multiples.
4.02 Change of Investment Selection on Future Deferrals
A Participant may elect to change his or her investment selection
for future Deferrals once per month. The Participant must make
this election in the manner prescribed by the Committee.
4.03 Change of Investment Selection on Existing Deferral Accounts
With regard to a Participant's existing Deferral Account balance,
a Participant may elect to transfer balances among the Investment
Funds once per month; provided however, that the portion of the
Deferral Account of a Company officer that is allocated to the
IBM Stock Fund may not be transferred to another Investment Fund
while the officer remains in Company employment. Any permissible
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 Committee, and the Committee may impose
such additional rules and limitations upon transfers between
Investment Funds as the Committee may consider necessary or
appropriate.
ARTICLE 5. PAYMENT OF ACCOUNTS
5.01 Commencement of Deferral Payments
A Participant shall be entitled to receive payment of his or her
Accounts upon the Participant's (1) termination of employment
from the Company for any reason other than retirement from the
Company or (2) retirement from the Company with a balance of less
than $25,000 in his or her Accounts. Any other Participant who is
a DCP Participant and who has a termination of employment from
the Company while a DCP Participant or any other Participant who
retires from the Company shall be entitled to receive payment of
his or her Accounts during the January following the calendar
year during which the Participant had a termination of employment
from the Company.
5.02 Method of Payment
Payment of Accounts shall be made in a single lump sum payment.
Notwithstanding the foregoing, a Participant with a balance of at
least $25,000 in his or her Accounts who either retires from the
Company or is a DCP Participant for the calendar year in which he
or she no longer works for the Company may elect to receive (1) a
lump sum payment upon his or her termination of employment from
the Company or (2) up to ten ratable annual installment payments
of the balance in his or her Accounts commencing during the
January following the calendar year during which the Participant
had a termination of employment from the Company. For this
election to be effective, at least one full calendar year must
pass between the calendar year the Participant makes the election
and the calendar year the Participant has a termination of
employment from the Company. The Participant must make this
election in the manner prescribed by the Committee.
Upon application of a Participant, the Committee may authorize
earlier payment to the Participant after termination of
employment with the Company of an amount reasonably needed to
satisfy the emergency need caused by an unforeseeable emergency
that causes severe financial hardship to the Participant. If a
Participant dies before payment of the entire balance of his or
her Accounts, an amount equal to the unpaid portion thereof as of
the date of his or her death shall be payable in one lump sum to
his or her Beneficiary.
5.03 Designation of Beneficiary
Each Participant's Beneficiary under this Plan shall
automatically be the person or persons designated as the
Participant's beneficiary under the TDSP even if such designation
is found to be invalid under the provisions of ERISA or the Code.
Such Beneficiary shall be entitled to receive the lump sum
amount, if any, payable under the Plan upon the Participant's
death pursuant to this Section 5.03 (except if that Participant
was a DCP Participant and had made an election pursuant to
Section 5.02); provided however, that the beneficiary is alive at
the time of the Participant's death. If no such Beneficiary
designation is in effect at the time of the Participant's death,
or if no designated Beneficiary survives the Participant, the
Participant's Beneficiary shall be deemed to be the Participant's
beneficiary under IBM's Group Life Insurance Plan.
ARTICLE 6. GENERAL PROVISIONS
6.01 Funding
(a) All amounts payable in accordance with this Plan shall
constitute a general unsecured obligation of the Company. Such
amounts, as well as any administrative costs relating to the
Plan, shall be paid out of the general assets of the Company, to
the extent not paid by a grantor trust established pursuant to
paragraph (b) below. In the sole discretion of the Committee, a
Participant's Accounts may be reduced to reflect allocable
administrative expense.
(b) IBM may, for administrative reasons, establish a grantor trust
for the benefit of Participants participating in the Plan. The
assets of said trust will be held separate and apart from other
Company funds and shall be used exclusively for the purposes set
forth in the Plan and the applicable trust agreement, subject to
the following conditions:
(i) The creation of said trust shall not cause the Plan to be
other than "unfunded" for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended;
(ii) The Company shall be treated as "grantor" of said trust for
purposes of Section 677 of the Code; and
(iii) Said trust agreement shall provide that its assets may be used
to satisfy claims of the Company's general creditors in the
event of its insolvency, and the rights of such general
creditors are enforceable by them under federal and state law.
(c) Neither the Company nor the Committee guarantees the investment
alternatives available under the Plan in any manner against loss or
depreciation.
6.02 No Contract of 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 Plan or any part thereof or
distribution therefrom or against the Company except as expressly
provided herein.
6.03 Facility of Payment
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 6 shall be a complete discharge or any
obligation arising under the Plan with respect to such benefit
payments.
6.04 Withholding Taxes
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.
6.05 Nonalienation
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.
6.06 Administration
All decisions, determinations, or interpretations the Board, the
Committee, the Plan Administrator, the Company or any member,
officer or employee thereof are authorized to make under the Plan
(including the delegation of any authority hereunder to another
party) shall be made in that party's sole discretion and shall be
final, binding, and conclusive on all interested persons.
6.07 Construction
The Plan is intended to constitute an unfunded deferred
compensation arrangement for a select group of management or
highly compensated employees, and all rights hereunder shall be
governed by and construed in accordance with the laws of the
State of New York to the extent not governed by the Employee
Retirement Income Security Act of 1974, as amended.
ARTICLE 7. MANAGEMENT AND ADMINISTRATION
7.01 Amendment or Termination
This Plan may be amended from time to time for any purpose
permitted by law or terminated at any time by written resolution
of the Board or the Committee, but only if the Committee's action
is not materially inconsistent with a prior action of the Board.
The authority to amend or terminate the Plan shall include the
authority to amend the procedure for amending or terminating the
Plan and the authority to amend or terminate any related
instrument or agreement.
7.02 Responsibilities
(a) 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:
(i) the Board,
(ii) the Committee,
(iii) the chief human resources officer, and
(iv) the Plan Administrator and each person on any committee
serving as the Plan Administrator.
Each person or group of persons shall be responsible for discharging
only the duties assigned to it by the terms of the Plan.
(b) The Board shall be responsible only for designating those persons
who will serve on the Committee and for approval of any
resolution to amend or terminate the Plan.
(c) The Committee may, pursuant to a duly adopted resolution,
delegate to the chief financial officer or the chief human
resources officer, the Treasurer, the Plan Administrator or any
other officer or employee of IBM, authority to carry out any
decision, directive, or resolution of the Committee.
(d) The Committee shall appoint one or more executives employed by
IBM to serve as Plan Administrator or as a committee to fulfill
the function of Plan Administrator. In the sole discretion of the
Plan Administrator, the Plan Administrator shall have the full
power and authority to:
(i) promulgate and enforce such rules and regulations as shall
be deemed be necessary or appropriate for the administration
of the Plan;
(ii) adopt any amendments to the Plan that are required by law;
(iii) interpret the Plan consistent with the terms and intent
thereof; and
(iv) resolve any possible ambiguities, inconsistencies, and
omissions.
All such determinations and interpretations shall be in
accordance with the terms and intent of the Plan, and the Plan
Administrator shall report such actions to the Committee on a
regular basis. Additionally, the chief human resources officer
shall appoint and designate such other IBM employees as may be
needed to provide adequate staff services to the Committee and
the Plan Administrator.
(e) The Committee and the Plan Administrator may engage the services
of accountants, attorneys, actuaries, investment consultants, and
such other professional personnel as are deemed necessary or
advisable to assist them in fulfilling their responsibilities
under the Plan. The Committee, the Plan Administrator, 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.
ARTICLE 8. CLAIMS PROCEDURE
IBM's Executive Compensation 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 claim to the Director of Executive Compensation, IBM
Corporation, Old Orchard Road, Armonk, New York 10504. 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. Failure of the Plan Administrator
to follow this procedure shall not, in and of itself, give rise to a
cause of action for benefits hereunder.
EXHIBIT 5
June 15, 1995
International Business Machines Corporation
Old Orchard Road
Armonk, NY 10504
Dear Sirs:
As Associate General Counsel of International Business Machines
Corporation (herein called the "Corporation") and an attorney duly
admitted to practice in the State of New York, I am familiar with the
proceedings by which it was organized, the proceedings by which its
Certificate of Incorporation has from time to time been amended, the
proceedings by which the IBM Extended Tax Deferred Savings Plan
(herein called the "Plan") was adopted by the Board of Directors and
authorized to issue the IBM ETDSP Obligations requiring this
registration.
I have also reviewed such documents and records as I have deemed
necessary to enable me to express an informed opinion with respect to
the matters covered hereby.
Based upon the foregoing, I am of the opinion that:
1. The Corporation has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of New
York; and,
2. The Plan has been duly and validly authorized and adopted, and the
IBM ETDSP Obligations being registered hereunder that may be issued to
its participants, when issued or sold in accordance with the Plan,
will be valid and binding obligations of the Corporation, enforceable
in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other laws of general
applicability relating to or affecting enforcement of creditors'
rights or by general principles of equity.
I hereby consent to the use of my name in the Registration Statement
as counsel who has passed upon the legality of the IBM ETDSP
Obligations that may be offered under this registration, and to the
use of this opinion as a part of the Registration Statement as
required by Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
/s/PETER M. ACTON
------------------------
Peter M. Acton
Associate General Counsel
EXHIBIT 23(a)
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 20,
1995 appearing on page 35 of the 1994 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, 1994. Furthermore,
we consent to the incorporation by reference of our report on the
Financial Statement Schedule which appears on page 7 of such Annual
Report on Form 10-K.
/s/PRICE WATERHOUSE LLP
------------------------
PRICE WATERHOUSE LLP
New York, N.Y.
June 13, 1995