IBM Notice of 2009 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 429,520 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 982,353 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 Excess 401(k) Plus Plan (Excess Plan, formerly the Executive Deferred Compensation Plan), and Company contributions into the IBM Stock Fund under the Excess Plan. Some of these restricted stock units may have been deferred under the Excess Plan and will be distributed to the executive officers after termination of employment as described in the 2008 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 2008 Director Compensation Narrative for additional information).

⁽⁴⁾ Shares that can be purchased under an IBM stock option plan within 60 days after December 31, 2008.

⁽⁵⁾ Shares earned and accrued under the IBM Deferred Compensation and Equity Award Plan (DCEAP) as of December 31, 2008, 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 2008 Director Compensation Narrative for additional information).

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

⁽⁷⁾ Voting and investment power are shared.

⁽⁸⁾ Includes 42,158 shares in which voting and investment power are shared.

⁽⁹⁾ Includes 52,073 shares in which voting and investment power are shared.

⁽¹⁰⁾ Includes 197,412 shares in which voting and investment power are shared.

⁽¹¹⁾ Includes 12,005 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⁾ Mr. Belda joined the Board in July 2008.

⁽¹⁴⁾ Mr. Nishimuro joined the Board in September 2008.