[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 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 calendar
Issue Price (as a percentage of day (whether or not a Business Day)
Principal Amount): % prior to the corresponding Interest
Payment Date
Initial Interest Rate:
Interest Reset Period:
Base Rate:
Interest Payment Period:
Spread:
Index Maturity:
[Spread Multiplier:]
[Maximum Interest Rate:]
[Calculation Dates:]
[Minimum Interest Rate:]
Interest Payment Dates:
[Designated LIBOR Page:]
Interest Determination Dates:
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.
This Note is redeemable by the Company on any Interest Payment Date
occurring on or after [ ] in whole [but not in] [or in] part, on at least 30
days' prior notice at a redemption price of .
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 issued under the
within-mentioned Indenture. ---------------------------------
THE CHASE MANHATTAN BANK
(National Association),
as Trustee By
[SEAL]
---------------------------------
By:
Authorized Officer
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
Money Market 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
Money Market 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 dec- laration 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 with Act_________________________
right of survivorship (State)
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.