[Form of Face of Medium-Term Note]
Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) 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 such
other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.
CUSIP 459200 [ ]
INTERNATIONAL BUSINESS MACHINES CORPORATION
MEDIUM-TERM NOTE
(Due one year or more from date of issue)
(Floating Rate Non-Redeemable)
Registered No. R- Interest Reset Dates:
Designation: Floating Rate Original Issue Date:
Medium-Term Notes Due
Maturity Date:
Principal Amount: $
Regular Record Dates: Fifteenth
Issue Price (as a percentage of calendar day (whether or not a
Principal Amount): % Business Day) prior to the
corresponding Interest Payment
Initial Interest Rate: Date
Base Rate: Interest Reset Period:
Spread: Interest Payment Period:
[Spread Multiplier:] Index Maturity:
[Calculation Dates:] [Maximum Interest Rate:]
Interest Payment Dates: [Minimum Interest Rate:]
Interest Determination Dates: [Designated LIBOR Page:]
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 below), for value received, hereby promises to
pay to
or registered assigns the principal sum of
Dollars, at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York, on the Maturity Date specified
above in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts and to pay interest on the Interest Payment Dates specified above on
said principal sum at said office or agency, in like coin or currency, at
the Initial Interest Rate specified above until the first Interest Reset
Date specified above and thereafter in accordance with the applicable
provisions set forth below from the Interest Payment Date next preceding
the date of authentication of this Note to which interest has been paid on
the Notes, unless the date of authentication of this Note is a date to
which interest has been paid, in which case from the date of authentication
of this Note, or unless no interest has been paid on the Notes, in which
case from the Original Issue Date specified above, until payment of said
principal sum has been made or duly provided for. Notwithstanding the
foregoing, if the date of authentication of
this Note is after a Regular Record Date specified above and before the next
following Interest Payment Date, this Note shall bear interest from such
Interest Payment Date, unless the Company shall default in the payment of
interest due on such Interest Payment Date, in which case this Note shall
bear interest from the next preceding Interest Payment Date to which interest
has been paid on the Notes, or unless no interest has been paid on the Notes,
in which case this Note shall bear interest from the Original Issue Date. The
interest so payable on any Interest Payment Date will be paid to the person
in whose name this Note is registered at the close of business on the Regular
Record Date next preceding such Interest Payment Date, unless the Original
Issue Date is after a Regular Record Date and before the next following
Interest Payment Date, in which case interest will be paid on the Interest
Payment Date following the next succeeding Regular Record Date to the person
in whose name the Note is registered at the close of business on such next
succeeding Regular Record Date, unless the Company shall default in the
payment of interest due on such Interest Payment Date, in which case such
defaulted interest shall 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 10 days preceding such special record date. Payment of
interest may, at the option of the Company, be made by check mailed to the
registered address of the person entitled thereto. Notwithstanding the
foregoing, interest payable at maturity shall be payable to the person to
whom the principal is payable. If any Interest Payment Date or any Interest
Reset Date would otherwise be a day that is not a Business Day, such date
will be postponed to the next day that is a Business Day; provided, however
that when the Base Rate designated above is LIBOR, if such Business Day is in
the next succeeding calendar month, such Interest Payment Date or Interest
Reset Date shall be the next preceding Business Day. A Business Day is any
day on which commercial banks and foreign exchange markets settle payments in
The City of New York and, when the Base Rate designated above is LIBOR, is a
day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market (a "London Banking Day").
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, as amended by the First
Supplemental Indenture thereto dated as of December 15, 1995 (hereinafter
called the "Indenture"), duly executed and delivered by the Company to The
Chase Manhattan Bank (National Association), a national banking association
existing under the laws of the United States of America, as trustee
(hereinafter called the "Trustee"), to which Indenture 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 be subject to redemption provisions, covenants and
Events of Default and may otherwise vary as in the Indenture provided. This
Note is one of a series designated above (herein called the "Notes") issued
under the Indenture.
The interest payable hereon on each Interest Payment Date will include
accrued interest from the Original Issue Date or from the last date in
respect of which interest has been paid on the Notes (subject to the
applicable provisions set forth above), as the case may be, to, but
excluding, such Interest Payment Date. The interest rate in effect on the
Notes from the Original Issue Date to the first Interest Reset Date will be
the Initial Interest Rate. Thereafter, the Notes will bear interest at a rate
reset for each period ending on and excluding an Interest Reset Date and
commencing on and including the immediately preceding Interest Reset Date
(or, if none, the Original Issue Date) (each an "Interest Reset Period")
determined by the Calculation Agent referred to below in accordance with this
paragraph. The interest rate per annum on this Note for each Interest Reset
Period shall be the Base Rate designated above (determined as set forth on
the reverse hereof), in each case adjusted by the addition or subtraction of
the Spread, if any, specified above and by the multiplication by the Spread
Multiplier, if any, specified above. Notwithstanding the foregoing, the
interest rate hereon
shall not be greater than the Maximum Interest Rate, if any, or less than
the Minimum Interest Rate, if any, shown above. In addition, the interest
rate hereon shall in no event be higher than the maximum rate permitted by
New York State law as the same may be modified by United States law of
general application.
Interest on the Notes will be calculated based on the actual number of
days elapsed over a year of 360 days.
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 hereon shall have been signed by
the Trustee under the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
By
This is one of the
Securities of the Series
designated herein issued -------------------------------
under the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
(National Association), as Trustee
By: By
Authorized Officer
[SEAL]
-------------------------------
The Base Rate applicable to this Note will be calculated as set forth
in the appropriate paragraph below.
If the Base Rate is LIBOR, LIBOR will be determined by the Calculation
Agent in accordance with the following provisions (i) with respect to an
Interest Determination Date, LIBOR will be: (a) if the Designated LIBOR
Page is Telerate Screen Page 3750 (as defined below), the rate for deposits
in U.S. dollars having the Index Maturity, commencing on the second London
Banking Day immediately following that Interest Determination Date, that
appears on the Telerate Page 3750 as of 11:00 a.m., London time, on that
Interest Determination Date or (b) if the Designated LIBOR Page is Reuters
Screen LIBO Page (as defined below), the arithmetic mean of the offered
rates for deposits in U.S. dollars having the Index Maturity, commencing on
the second London Banking Day immediately following such Interest
Determination Date, which appear on the Reuters Screen LIBO Page as of
11:00 a.m., London time, on the Interest Determination Date. In the case
where (a) above applies, if no rate appears, or in the case where (b) above
applies, if fewer than two offered rates appear, LIBOR in respect of the
Interest Determination Date will be determined as if the parties had
specified the rate in (ii) below, (ii) with respect to an Interest
Determination Date on which this provision applies, LIBOR will be
determined on the basis of the rates at which deposits in U.S. dollars are
offered by four major banks in the London interbank market selected by the
Calculation Agent (after consultation with the Company) at approximately
11:00 a.m., London time, on that Interest Determination Date to prime banks
in the London interbank market having the Index Maturity commencing on the
second London Banking Day immediately following that Interest Determination
Date and in a principal amount equal to an amount of not less than U.S. $1
million that is representative for a single transaction in such market at
such time. The Calculation Agent will request the principal London office
of each of such banks to provide a quotation of its rate. If at least two
such quotations are provided, LIBOR in respect of that Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR in respect of that Interest
Determination Date will be the arithmetic mean of the rates quoted by three
major money center banks in The City of New York selected by the
Calculation Agent (after consultation with the Company) at approximately
11:00 a.m., New York City time, on that Interest Determination Date for
loans in U.S. dollars to leading European banks, having the Index Maturity
commencing on the second London Banking Day immediately following that
Interest Determination Date and in a principal amount equal to an amount of
not less than U.S. $1 million that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR for the applicable period will be the
same as LIBOR for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the Initial Interest Rate).
"Telerate Page 3750" means the display designated on page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates for U.S. dollar deposits). "Reuters Screen LIBO Page" means the
display designated as Page "LIBO" on the Reuters Monitor Money Rate Service
(or such other page as may replace the LIBO page on that service for the
purpose of displaying London Interbank offered rates of major banks).
If the Base Rate is Treasury Rate, Treasury Rate means, with respect
to any Interest Determination Date, the rate for the most recent auction of
direct obligations of the United States ("Treasury bills") having the Index
Maturity as published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519), Selected Interest Rates"
("H.15(519)"), or any successor publication of the Board of Governors of
the Federal Reserve System, under the heading "Treasury bills--auction
average (investment)" or, if not so published by 9:00 a.m., New York City
time, on the Calculation Date pertaining to such Interest Determination
Date, the auction average rate, expressed as a Bond Equivalent Yield (as
defined below), as otherwise announced by the United States Department of
the Treasury. In the event that the results of the auction of Treasury
bills having the Index Maturity are not published or reported as provided
above by 3:00 p.m., New York City time, on such Calculation Date or if no
such auction is held in a particular week, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be
a yield to maturity, expressed as a Bond Equivalent Yield, of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
pm.., New York City time, on such Interest Determination Date, of three
leading primary United States government securities dealers selected by the
Calculation Agent (after consultation with the Company) for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity;
provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Interest
Determination Date. "Bond Equivalent Yield" means a yield (expressed as a
percentage rounded to the nearest one-hundred thousandth of a percent)
calculated in accordance with the following formula:
D x N
Bond Equivalent Yield = ----------------- X 100
360 - (D x M)
where "D" refers to the per annum rate for Treasury bills, quoted on a bank
discount basis and expressed as a decimal; "N" refers to the actual number
of days in the year for which interest is being calculated; and "M" refers
to the actual number of days in the interest period for which interest is
being calculated.
If the Base Rate is Prime Rate, Prime Rate means, with respect to any
Interest Determination Date, the rate on such date as published by the
Board of Governors of the Federal Reserve System in H.15(519) under the
heading "Bank Prime Loan". If such rate is not published by 9:00 a.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Prime Rate will be determined by the Calculation
Agent and will be the arithmetic mean of the rates of interest publicly
announced by each bank named on the "Reuters Screen USPRIME1 Page" (as
defined below) as such bank's prime rate or base lending rate as in effect
for such Interest Determination Date. "Reuters Screen USPRIME1 Page" means
the display designated as page "USPRIME1" on the Reuters Monitor Money
Rates Service (such term to include such other page as may replace the
USPRIME1 page on that Service for the purpose of displaying prime rates or
base lending rates of major United States banks). If fewer than four such
rates but more than one such rate appear on the Reuters Screen USPRIME1
Page for such Interest Determination Date, the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic mean of the
prime rates quoted on the basis of the actual number of days in the year
divided by 360 as of the close of business on such Interest Determination
Date by four major money center banks in The City of New York selected by
the Calculation Agent from a list approved by the Company. If fewer than
two such rates appear on the Reuters Screen USPRIME1 Page, the Prime Rate
will be calculated by the Calculation Agent and will be determined as the
arithmetic mean of the prime rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and
doing business under the laws of the United States, or any State thereof,
in each case having total equity capital of at least U.S.$500,000,000 and
being subject to supervision or examination by federal or state authority,
selected by the Calculation Agent from a list approved by the Company to
provide such rate or rates; provided that if the banks or trust companies
selected as aforesaid by the Calculation Agent from a list approved by the
Company are not quoting as mentioned in this sentence, the rate of interest
in effect for the applicable period will be the rate of interest in effect
on such Interest Determination Date.
If the Base Rate is Commercial Paper Rate, Commercial Paper Rate
means, with respect to any Interest Determination Date, the Money Market
Yield (as defined below) of the rate on that date for commercial paper
having the Index Maturity as published in H.15(519), under the heading
"Commercial Paper". In the event that such rate is not published by 9:00
a.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on that Interest Determination Date for
commercial paper having the Index Maturity as published by the Federal
Reserve Bank of New York in its daily statistical release, "Composite 3:30
p.m. Quotations for U.S. Government Securities"
("Composite Quotations") under the heading "Commercial Paper". If by 3:00
p.m., New York City time, on such Calculation Date such rate is not yet
published in Composite Quotations, the Commercial Paper Rate for that
Interest Determination Date shall be calculated by the Calculation Agent
and shall be the Money Market Yield of the arithmetic mean (rounded to the
nearest one- hundred thousandth of a percent) of the offered rates of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent (after consultation with the Company) as of 11:00 a.m.,
New York City time, on that Interest Determination Date, for commercial
paper having the Index Maturity placed for an industrial issuer whose bond
rating is "AA", or the equivalent, from a nationally recognized rating
agency; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Interest Determination Date. "Money Market Yield" means a yield (expressed
as a percentage rounded to the nearest one-hundred thousandth of a percent)
calculated in accordance with the following formula:
D x 360
Bond Equivalent Yield = ----------------- X 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
If the Base Rate is Federal Funds Rate, Federal Funds Rate means, with
respect to any Interest Determination Date, the rate on such date for
federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or if not published by 3:00 p.m., New York City time, on the
related Calculation Date, the rate on such Interest Determination Date as
published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If by 3:00 p.m., New York City time, on the related
Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, then the Federal Funds Rate on such Interest
Determination Date will be calculated by the Calculation Agent and will be
the arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of
federal funds transactions in overnight transactions in The City of New
York (which may include the Agents or their affiliates) selected by the
Calculation Agent (after consultation with the Company) prior to 9:00 a.m.,
New York City time, on such Interest Determination Date; provided, however,
that if the brokers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate determined as of such
Interest Determination Date will be the Federal Funds Rate then in effect
on such Interest Determination Date.
All percentages resulting from any calculation will be rounded, if
necessary, to the nearest one-hundred thousandth of a percent, with five
one- millionths of a percent rounded upwards (e.g, 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being
rounded to 9.87654% (or .0987654)), and all dollar amounts used in or
resulting from such calculation will be rounded to the nearest cent (with
one-half cent being rounded upwards).
shall be the initial Calculation Agent. The Calculation
Agent will, upon the request of the holder hereof, provide the interest rate
hereon then in effect and, if determined, the interest rate which will become
effective as of the next Interest Reset Date.
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 accrued interest 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 modifying in any manner the rights of the holders of the
Securities of such series; 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, 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 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 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 or waiver by 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, premium, 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 U.S. Government Obligations 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.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. 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 of other authorized denominations at the office or
agency of the Company maintained for such purpose in the Borough of
Manhattan, The City and State of New York.
Upon due presentment 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, 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
treat the registered holder hereof as the owner of this Note (whether or
not this Note shall be overdue) for the purpose of receiving payment of the
principal 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 to 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 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 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.
Terms used but not defined in this Note shall have the same meanings
assigned in the Indenture. This Note shall be governed by and construed in
accordance with the laws of the State of New York.
---------------------------------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in UNIF GIFT MIN ACT--
common __________Custodian__________
TEN ENT -- as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts to Minors
JT TEN -- as joint tenants Act_________________________
with right of (State)
survivorship and
not as tenants in
common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------
- ---------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP
CODE OF ASSIGNEE
- ---------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing
- ---------------------------------------------------------------------------
- ------------------------------------------------------------attorney
to transfer said Note on the books of the Company with full power of
substitution in the premise.
Dated:_________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within instrument in every
particular, without alteration or
enlargement or any change whatever.