Beneficial ownership

The following sets forth information as to any person known to the Company to be the beneficial owner of more than five percent of the Company's common stock as of December 31, 2008.

	Voting Power		Investment Power
Name and address	Sole	Shared	Sole	Shared	Total	Percent of Class
State Street Bank and Trust Company, Trustee(1) State Street Financial Centre One Lincoln Street Boston, MA 02111	58,467,572	15,941,533	0	74,409,105	74,409,105	5.5%

⁽¹⁾ Based on the Schedule 13G filed with the Securities and Exchange Commission on February 17, 2009 by State Street Bank and Trust Company, acting in various fiduciary capacities. The Schedule 13G does not identify any shares with respect to which there is a right to acquire beneficial ownership. The Schedule 13G states that the report is not an admission that State Street Bank and Trust Company is the beneficial owner of any securities covered by the report, and that State Street Bank and Trust Company expressly disclaims beneficial ownership of all shares reported.

(This information reflects the 2009 Proxy Statement.)

The following table sets forth the beneficial ownership of shares of the Company's common stock as of December 31, 2008 by IBM's current directors and nominees, the executive officers named in the Summary Compensation Table, and such directors and all of the Company's executive officers as of December 31, 2008 as a group. Also shown are shares over which the named person could have acquired voting power or investment power within 60 days. Voting power includes the power to direct the voting of shares held, and investment power includes the power to direct the disposition of shares held.

			Acquirable within 60 days
Name	Common Stock(1)	Stock-based Holdings(2)(3)	Options(4)	Directors’ DCEAP Shares(5)
A.J.P. Belda(13)	0	0	0	1,000
C. Black	4,324(6)	4,711	29,000	17,384
W.R. Brody	0	0	0	2,759
K.I. Chenault	1,000(7)	1,000	29,000	11,150
M.E. Daniels	42,846(8)	132,273	209,860	N/A
M.L. Eskew	0	0	5,000	6,502
S.A. Jackson	0	0	2,000	5,499
M. Loughridge	32,270	132,993	172,334	N/A
S.A. Mills	62,237(9)	134,583	337,441	N/A
T. Nishimuro(14)	0	0	0	736
J.W. Owens	1,000(7)	1,000	2,000	4,952
S.J. Palmisano	230,440(10)	530,970	1,044,390	N/A
V.M. Rometty	12,647(11)	133,863	159,839	N/A
J.E. Spero	1,000	1,000	9,000	7,266
S. Taurel	5,265	5,265	21,000	10,021
L.H. Zambrano	4,000	4,000	9,000	7,695
Directors and executive officers as a group	676,365(12)	1,989,852	3,522,432(12)	74,964(12)

⁽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.

(This information reflects the 2009 Proxy Statement.)