IBM Notice of 2008 Annual Meeting and Proxy Statement

(1) This column shows shares of IBM common stock beneficially owned by the named person. Unless otherwise noted, voting power and investment power in the shares are exercisable solely by the named person, and none of the shares are pledged as security by the named person. This column includes 475,678 shares in which voting and investment power are shared. Standard brokerage accounts may include nonnegotiable provisions regarding set-offs or similar rights. The directors and officers included in the table disclaim beneficial ownership of shares beneficially owned by family members who reside in their households. The shares are reported in such cases on the presumption that the individual may share voting and/or investment power because of the family relationship. The shares reported in this column do not include 1,028,032 shares held by the IBM Personal Pension Plan Trust Fund, over which the members of the Retirement Plans Committee, a management committee presently consisting of certain executive officers of the Company, have shared voting power, as well as the right to acquire shared investment power by withdrawing authority now delegated to various investment managers.

(2) For executive officers, this column includes the shares shown in the “Common Stock” column and, as applicable, restricted stock units (including retention restricted stock units), officer contributions into the IBM Stock Fund under the IBM Executive Deferred Compensation Plan (EDCP), and Company contributions into the IBM Stock Fund under the EDCP. Some of these restricted stock units may have been deferred under the EDCP and will be distributed to the executive officers after termination of employment as described below in 2007 Nonqualified Deferred Compensation Narrative.

(3) For non-management directors, this column includes the shares shown in the “Common Stock” column and, as applicable, the Promised Fee Shares payable in cash that were credited to the non-management directors in 1996 in connection with the elimination of the retirement plan for such directors, including dividend equivalents credited with respect to such shares (see 2007 Director Compensation Narrative above for additional information).

(4) Shares that can be purchased under an IBM stock option plan within 60 days after December 31, 2007.

(5) Shares earned and accrued under the IBM Deferred Compensation and Equity Award Plan as of December 31, 2007, including dividend equivalents credited with respect to such shares. Upon a director’s retirement, these shares are payable in cash or stock at the director’s choice (see 2007 Director Compensation Narrative above for additional information).

(6) Includes 324 shares in which voting and investment power are shared.

(7) Voting and investment power are shared.

(8) Includes 26,970 shares in which voting and investment power are shared.

(9) Includes 84,764 shares in which voting and investment power are shared.

(10) Includes 1,271 shares in which voting and investment power are shared.

(11) Includes 164,152 shares in which voting and investment power are shared.

(12) The total of these three columns represents less than 1% of the outstanding shares, and no individual’s beneficial holdings totaled more than 1/5 of 1% of the outstanding shares.

(13) Dr. Brody joined the Board effective July 31, 2007.