As filed with the Securities and Exchange Commission on December 18, 2020

 

Registration No. 333-232585

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

 

 

POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 REGISTRATION STATEMENT NO. 333-232585
UNDER THE SECURITIES ACT OF 1933

 

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

(Exact name of registrant as specified in its charter)

 

New York   13-0871985

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

New Orchard Road

Armonk, New York 10504

(Address of Principal Executive Offices)
 

IBM Red Hat Acquisition Long-Term Performance Plan

Red Hat, Inc. 2004 Long-Term Incentive Plan

Ansible, Inc. 2013 Stock Incentive Plan

Makara, Inc. 2008 Equity Incentive Plan

(Full title of the plan)
 

Frank P. Sedlarcik, Esq.
Vice President, Assistant General Counsel and Secretary
International Business Machines Corporation
Corporate Legal Department

Armonk, New York 10504

(914) 499-1900

(Name, address and telephone number, including area code, of agent for service)
 

Copies to:

Scott A. Barshay, Esq.

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

(212) 373-3000

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer x   Accelerated filer ¨
Non-accelerated filer ¨   Smaller reporting company ¨
      Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨

 

 

 

 

 

 

INTRODUCTORY STATEMENT

 

On July 9, 2019, International Business Machines Corporation (“IBM”) acquired all of the issued and outstanding common shares of Red Hat, Inc. (“Red Hat”), pursuant to the Agreement and Plan of Merger, dated as of October 28, 2018 (the “Merger Agreement”), among IBM, Red Hat and Socrates Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of IBM (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub merged with and into Red Hat (the “Merger”), with Red Hat surviving the Merger and becoming a wholly owned subsidiary of IBM. The Merger Agreement provided that, at the effective time of the Merger, each share of Red Hat common stock that remained available for issuance pursuant to the Red Hat Inc. 2004 Long-Term Incentive Plan, the Ansible, Inc. 2013 Stock Incentive Plan or the Makara, Inc. 2008 Equity Incentive Plan, in each case, as amended (the “Residual Shares”) was to be converted into shares of IBM capital stock available for issuance determined by multiplying the number of Residual Shares by a fraction, the numerator of which is $190.00 and the denominator of which was the closing price per share of IBM capital stock on the New York Stock Exchange Composite Transactions Tape on the trading day immediately preceding the date on which the Merger effective time occurred (rounded down to the nearest whole share).

 

On December 15, 2020, the independent Executive Compensation and Management Resources Committee of the Board of Directors of IBM unanimously approved the IBM Red Hat Acquisition Long-Term Performance Plan, filed as an exhibit to this post-effective amendment (the “New Plan”). The New Plan meets certain requirements set forth by the New York Stock Exchange for use without further shareholder approval, including that eligible participants in the New Plan are limited to individuals who were not employed by IBM as of the closing of the Merger. Accordingly, IBM is filing this post-effective amendment No. 1 to the Registration Statement on Form S-8 originally filed with the Securities and Exchange Commission on July 9, 2019 to provide for the issuance of equity awards under the New Plan. No additional shares of common stock, par value $.20 per share (“Common Stock”), of IBM are being registered hereby. Registration fees in connection with the Registration Statement were paid at the time of the filing of the initial Registration Statement.

 

PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

Item 1. Plan Information.

 

All information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of 1933, as amended (the “Securities Act”) and the Note to Part I of Form S-8.

 

Item 2. Registrant Information and Employee Plan Annual Information.

 

All information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act and the Note to Part I of Form S-8.

 

 

 

 

PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3. Incorporation of Documents by Reference.

 

The following documents previously filed with the Securities and Exchange Commission (the “Commission”) are incorporated by reference herein and shall be deemed a part hereof:

 

· The Annual Report of IBM on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on February 25, 2020.

 

· The Quarterly Reports of IBM on Form 10-Q for the fiscal quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, filed with the Commission on April 28, 2020, July 28, 2020 and October 27, 2020, respectively.

 

· The portions of IBM’s Definitive Proxy Statement on Schedule 14A for the 2020 annual meeting of stockholders filed on March 9, 2020 that are incorporated by reference in the Annual Report on Form 10-K for the year ended December 31, 2019.

 

· The Current Reports of IBM on Form 8-K, or filed portions of those reports, filed (but not portions of those reports which were furnished) with the Commission on January 21, 2020, January 22, 2020, January 29, 2020, January 31, 2020, February 3, 2020, February 10, 2020, April 7, 2020, April 20, 2020, April 21, 2020, April 29, 2020, May 1, 2020, May 6, 2020, July 2, 2020, July 20, 2020, October 19, 2020, December 16, 2020 and December 18, 2020.

 

· The description of IBM’s capital stock contained in IBM’s registration statements filed pursuant to Section 12 of the Exchange Act, and any amendment or report filed for the purpose of updating any such description.

 

All documents filed by IBM pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. In no event, however, shall any information that IBM discloses under Item 2.02 or Item 7.01 of any Current Report on Form 8-K and any corresponding exhibits thereto, which IBM may furnish to the Commission from time to time, be incorporated by reference into, or otherwise become a part of, this Registration Statement. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

 

Item 4. Description of Securities.

 

Not applicable.

 

Item 5. Interests of Named Experts and Counsel.

 

The validity of the IBM capital stock, par value $.20 per share, offered hereby has been passed upon by Mr. Frank P. Sedlarcik, Esq., Vice President, Assistant General Counsel and Secretary of IBM. As of December 18, 2020, Mr. Frank P. Sedlarcik beneficially owns shares of Common Stock.

 

 

 

 

Item 6. Indemnification of Directors and Officers.

 

The By-Laws of IBM (Article VI, Section 6) provide the following:

 

“The Corporation shall, to the fullest extent permitted by applicable law as in effect at any time, indemnify any person made, or threatened to be made, a party to an action or proceeding whether civil or criminal (including an action or proceeding by or in the right of the Corporation) by reason of the fact that such person is (i) an officer or director of the Corporation or (ii) an officer or director of the Corporation who is asked to serve in any capacity at the request of the Corporation in any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against, in each case, judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein. Such indemnification shall be a contract right that vests upon the occurrence or alleged occurrence of any act or omission to act that forms the basis for or is related to the claim for which indemnification is sought and shall include the right to be paid advances of any expenses incurred by such person in connection with such action, suit or proceeding, and the right to be indemnified for expenses incurred by such person in connection with successfully establishing a right to indemnification, in each case consistent with the provisions of applicable law in effect at any time. Indemnification shall be deemed to be ‘permitted’ within the meaning of the first sentence hereof if it is not expressly prohibited by applicable law as in effect at the time. The indemnification rights hereunder shall continue as to any such person who has ceased to be an officer or director of the Corporation and shall inure to the benefit of the heirs, executors and administrators of any such person. If the right of indemnification provided for in this Section 6 is amended or repealed, such amendment or repeal will not limit the indemnification provided for herein with respect to any acts or omissions to act occurring prior to any such amendment or repeal.”

 

The Certificate of Incorporation of IBM (Article Eleven) provides the following:

 

“Pursuant to Section 402(b) of the Business Corporation Law of the State of New York, the liability of the Corporation’s directors to the Corporation or its stockholders for damages for breach of duty as a director shall be eliminated to the fullest extent permitted by the Business Corporation Law of the State of New York, as it exists on the date hereof or as it may hereafter be amended. No amendment to or repeal of this Article shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.”

 

With certain limitations, Sections 721 through 726 of the New York Business Corporation Law permit a corporation to indemnify a director or officer made a party to an action (i) by a corporation or in its right in order to procure a judgment in its favor unless he shall have breached his duties, or (ii) other than an action by or in the right of the corporation in order to procure a judgment in its favor, if such director or officer acted in good faith and in a manner he reasonably believed to be in or, in certain cases not opposed to, such corporation’s interest and additionally, in criminal actions, had no reasonable cause to believe his conduct was unlawful.

 

In addition, IBM maintains directors’ and officers’ liability insurance policies.

 

Item 7. Exemption from Registration Claimed.

 

Not applicable.

 

   
Item 8. Exhibits.

 

Exhibit

Number

  Description
     
4.1   Certificate of Incorporation of IBM (incorporated by reference to Exhibit 3.2 to Form 8-K filed on April 27, 2007)
     
4.2   By-laws of IBM (incorporated by reference to Exhibit 3.2 to Form 10-K filed on February 25, 2020)
     
4.3   Amended and Restated Red Hat, Inc. 2004 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to Form S-8 filed by Red Hat, Inc. on September 25, 2012)
     
4.4   Ansible, Inc. 2013 Stock Incentive Plan, as Amended (incorporated by reference to Exhibit 99.1 to Form S-8 filed by Red Hat, Inc. on November 6, 2015)
     
4.5   Makara, Inc. 2008 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to Form S-8 filed by Red Hat, Inc. on December 7, 2010)
     
4.6   Amendment No. 1 to Makara, Inc. 2008 Equity Incentive Plan (incorporated by reference to Exhibit 99.2 to Form S-8 filed by Red Hat, Inc. on December 7, 2010)
     
4.7   Amendment No. 2 to Makara, Inc. 2008 Equity Incentive Plan (incorporated by reference to Exhibit 99.3 to Form S-8 filed by Red Hat, Inc. on December 7, 2010)
     
4.8   IBM Red Hat Acquisition Long-Term Performance Plan
     
5.1   Opinion of Frank P. Sedlarcik, Esq., Vice President, Assistant General Counsel and Secretary, regarding the legality of the securities being issued
     
23.1   Consent of PricewaterhouseCoopers LLP
     
23.2   Consent of Frank P. Sedlarcik, Esq., Vice President, Assistant General Counsel and Secretary (included in Exhibit 5.1)
     
24.1   Powers of Attorney
     
24.2   Certified Resolutions of the IBM Board of Directors authorizing execution of this registration statement by Power of Attorney

 

 

 

 

Item 9. Undertakings.

 

The undersigned registrant hereby undertakes:

 

(a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

 

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;

 

(ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and

 

(iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;

 

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.

 

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of North Castle, State of New York, on the 18th day of December, 2020.

 

 

INTERNATIONAL BUSINESS

MACHINES CORPORATION

       
  By: /s/ Frank P. Sedlarcik
     
    Name:  Frank P. Sedlarcik
       
    Title: Vice President, Assistant General Counsel and Secretary
       

 

 

 

 

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated, on the 18th day of December, 2020.

 

Signature   Title
     
/s/ Arvind Krishna   Chief Executive Officer
Arvind Krishna   (Principal Executive Officer)
     
*   Senior Vice President and Chief Financial Officer
James J. Kavanaugh   (Principal Financial Officer)
     
*   Vice President and Controller
Robert F. Del Bene   (Principal Accounting Officer)
     
*   Director
Michael L. Eskew    
     
*   Director
David N. Farr    
     
*   Director
Alex Gorsky    
     
*   Director
Michelle Howard    
     
*   Director
Andrew N. Liveris    
     
*   Director
Martha E. Pollack    
     
*   Director
Joseph R. Swedish    
     
*   Director
Sidney Taurel    
     
*   Director
Peter R. Voser    
     
*   Director
Frederick H. Waddell    

 

 

 

 

* The undersigned, by signing her name hereto, does hereby execute this Registration Statement pursuant to powers of attorney filed as Exhibit 24.1 to this Registration Statement.

 

       
  By: /s/ Michelle H. Browdy
       
    Name:  Michelle H. Browdy
       
    Title: Attorney-in-Fact

 

 

 

Exhibit 4.8

 

PROSPECTUS

 

International Business Machines Corporation

 

IBM Red Hat Acquisition Long-Term Performance Plan

 

20,000,000 shares

 

Capital Stock, $.20 Par Value

 

THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES

REGULATORS HAVE NOT APPROVED OR DISAPPROVED THESE

SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR

COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL

OFFENSE.

 

This document constitutes part of a prospectus covering securities that have been registered

under the Securities Act of 1933.

 

December  18, 2020

 

 

 

 

GENERAL INFORMATION ABOUT THE PLAN

 

For detailed information regarding the IBM Red Hat Acquisition Long-Term Performance Plan (the “Plan”), reference is made to the terms of the Plan itself, which is included in this Prospectus in its entirety. Terms used herein without definition shall have the definitions set forth in the Plan. IBM has also filed a registration statement with the SEC (SEC File 333-232585) registering the shares of IBM common stock to be offered under the Plan.

 

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus.

 

Administration

 

The Plan is administered by a Committee designated by the IBM Board of Directors, currently the Executive Compensation and Management Resources Committee. This Committee is composed entirely of outside directors, who are elected to hold office until the next Annual Meeting of Stockholders and until their successors shall have qualified. The Plan is not subject to the Employee Retirement Income Security Act of 1974 and is not qualified under Section 401(a) of the Code. Additional information about the Plan and its administration may be obtained from the Vice President, Compensation & Benefits, IBM Corporation, New Orchard Road, Armonk, New York 10504, (914) 499-4148.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public at the SEC's web site at (http://www.sec.gov).

 

The SEC allows us to "incorporate by reference" into this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our offering is completed:

 

i. Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 25, 2020;

 

ii. Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on April 28, 2020;

 

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iii. Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed on July 28, 2020; and

 

iv. Current Reports on Form 8-K, filed on January 21, 2020, January 29, 2020, January 31, 2020, February 3, 2020, February 10, 2020, April 7, 2020, April 20, 2020, April 21, 2020, April 29, 2020, May 1, 2020, May 6, 2020, July 2, 2020, July 20, 2020 (in each case, other than information furnished pursuant to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K).

 

You may request a copy of these filings at no cost, by writing to or telephoning our transfer agent at the following address:

 

Computershare Trust Company, N.A.
P.O. Box 43072
Providence, Rhode Island 02940
(781) 575-2727

 

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IBM Red Hat Acquisition Long-Term Performance Plan

 

1. Objectives.

 

The IBM Red Hat Acquisition Long-Term Performance Plan (the "Plan") is designed to attract, motivate and retain selected employees of, and other individuals providing services to, the Company in connection with the Company’s acquisition of Red Hat, Inc., a Delaware corporation (“Red Hat”). These objectives are accomplished by making long-term incentive and other awards under the Plan, thereby providing Participants with a proprietary interest in the growth and performance of the Company.

 

2. Definitions.

 

(a) "Awards"--The grant of any form of stock option, stock appreciation right, stock or cash award, whether granted singly, in combination or in tandem, to a Participant pursuant to such terms, conditions, performance requirements, limitations and restrictions as the Committee may establish in order to fulfill the objectives of the Plan.

 

(b) "Award Agreement"--An agreement between the Company and a Participant that sets forth the terms, conditions, performance requirements, limitations and restrictions applicable to an Award.

 

(c) "Board"--The Board of Directors of International Business Machines Corporation ("IBM").

 

(d) "Capital Stock" or "stock"--Authorized and issued or unissued Capital Stock of IBM, at such par value as may be established from time to time.

 

(e) "Code"--The Internal Revenue Code of 1986, as amended from time to time.

 

(f) "Committee"--The committee designated by the Board to administer the Plan.

 

(g) "Company"--IBM and its affiliates and subsidiaries including subsidiaries of subsidiaries and partnerships and other business ventures in which IBM has an equity interest.

 

(h) "Fair Market Value"--The average of the high and low prices of Capital Stock on the New York Stock Exchange for the date in question, provided that, if no sales of Capital Stock were made on said exchange on that date, the average of the high and low prices of Capital Stock as reported for the most recent preceding day on which sales of Capital Stock were made on said exchange.

 

(i) "Participant"--An individual to whom an Award has been made under the Plan. Awards may be made to any individual who was not an employee of the Company as of the closing of the Company’s acquisition of Red Hat.

 

(j) "Performance Period" -- A multi-year period of no more than five consecutive calendar years over which one or more of the performance criteria listed in Section 6 shall be measured pursuant to the grant of Long-Term Performance Incentive Awards (whether such Awards take the form of stock, stock units or equivalents or cash). Performance Periods may overlap one another, but no two Performance Periods may consist solely of the same calendar years.

 

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3. Capital Stock Available for Awards.

 

The number of shares that may be issued under the Plan for Awards granted wholly or partly in stock during the term of the Plan is 20,000,000 Shares of Capital Stock may be made available from the authorized but unissued shares of the Company or from shares held in the Company's treasury and not reserved for some other purpose. For purposes of determining the number of shares of Capital Stock issued under the Plan, no shares shall be deemed issued until they are actually delivered to a Participant, or such other person in accordance with Section 10. Shares covered by Awards that either wholly or in part are not earned, or that expire or are forfeited, terminated, canceled, settled in cash, payable solely in cash or exchanged for other awards, shall be available for future issuance under Awards. Further, shares tendered to or withheld by the Company in connection with the exercise of stock options, or the payment of tax withholding on any Award, shall also be available for future issuance under Awards.

 

4. Administration.

 

The Plan shall be administered by the Committee, which shall have full power to select Participants, to interpret the Plan, to grant waivers of Award restrictions, to continue, accelerate or suspend exercisability, vesting or payment of an Award and to adopt such rules, regulations and guidelines for carrying out the Plan as it may deem necessary or proper. These powers include, but are not limited to, the adoption of modifications, amendments, procedures, subplans and the like as necessary to comply with provisions of the laws and regulations of the countries in which the Company operates in order to assure the viability of Awards granted under the Plan and to enable Participants regardless of where employed to receive advantages and benefits under the Plan and such laws and regulations.

 

5. Delegation of Authority.

 

The Committee may delegate to officers of the Company its duties, power and authority under the Plan pursuant to such conditions or limitations as the Committee may establish.

 

6. Awards.

 

The Committee shall determine the type or types of Award(s) to be made to each Participant and shall set forth in the related Award Agreement the terms, conditions, performance requirements, and limitations applicable to each Award. Awards may include but are not limited to those listed in this Section 6. Awards may be granted singly, in combination or in tandem. Awards may also be made in combination or in tandem with, in replacement or payment of, or as alternatives to, grants, rights or compensation earned under any other plan of the Company, including the plan of any acquired entity.

 

(a) Stock Option--A grant of a right to purchase a specified number of shares of Capital Stock the exercise price of which shall be not less than 100% of Fair Market Value on the date of grant of such right, as determined by the Committee, provided that, in the case of a stock option granted retroactively in tandem with or as substitution for another award granted under any plan of the Company, the exercise price may be the same as the purchase or designated price of such other award.

 

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(b) Stock Appreciation Right--A right to receive a payment, in cash and/or Capital Stock, equal in value to the excess of the Fair Market Value of a specified number of shares of Capital Stock on the date the stock appreciation right (SAR) is exercised over the grant price of the SAR, which shall not be less than 100% of the Fair Market Value on the date of grant of such SAR, as determined by the Committee, provided that, in the case of a SAR granted retroactively in tandem with or as substitution for another award granted under any plan of the Company, the grant price may be the same as the exercise or designated price of such other award.

 

(c) Stock Award--An Award made in stock and denominated in units of stock. All or part of any stock award may be subject to conditions established by the Committee, and set forth in the Award Agreement, which may include, but are not limited to, continuous service with Company, achievement of specific business objectives, increases in specified indices, attaining growth rates, and other comparable measurements of Company performance. An Award made in stock or denominated in units of stock that is subject to restrictions on transfer and/or forfeiture provisions may be referred to as an Award of "Restricted Stock," "Restricted Stock Units" or "Long-Term Incentive Program" units.

 

(d) Cash Award--An Award denominated in cash with the eventual payment amount subject to future service and such other restrictions and conditions as may be established by the Committee, and as set forth in the Award Agreement, including, but not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates, and other comparable measurements of Company performance.

 

7. Payment of Awards.

 

Payment of Awards may be made in the form of cash, stock or combinations thereof and may include such restrictions as the Committee shall determine. Further, with Committee approval, payments may be deferred, either in the form of installments or as a future lump-sum payment, in accordance with such procedures as may be established from time to time by the Committee. Any deferred payment, whether elected by the Participant or specified by the Award Agreement or the Committee, may require the payment to be forfeited in accordance with the provisions of Section 13. Dividends or dividend equivalent rights may be extended to and made part of any Award denominated in stock or units of stock, subject to such terms, conditions and restrictions as the Committee may establish. The Committee may also establish rules and procedures for the crediting of interest on deferred cash payments and dividend equivalents for deferred payments denominated in stock or units of stock. At the discretion of the Committee, a Participant may be offered an election to substitute an Award for another Award or Awards of the same or different type.

 

8. Stock Option Exercise.

 

The price at which shares of Capital Stock may be purchased under a stock option shall be paid in full in cash at the time of the exercise or, if permitted by the Committee, by means of tendering Capital Stock or surrendering another Award or any combination thereof. The Committee shall determine acceptable methods of tendering Capital Stock or other Awards and may impose such conditions on the use of Capital Stock or other Awards to exercise a stock option as it deems appropriate.

 

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9. Tax Withholding.

 

Prior to the payment or settlement of any Award, the Participant must pay, or make arrangements acceptable to the Company for the payment of, any and all federal, state and local tax withholding that in the opinion of the Company is required by law. The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of shares under the Plan, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes.

 

10. Transferability.

 

No Award shall be transferable or assignable, or payable to or exercisable by, anyone other than the Participant to whom it was granted, except (i) by law, will or the laws of descent and distribution, (ii) as a result of the disability of a Participant or (iii) that the Committee (in the form of an Award Agreement or otherwise) may permit transfers of Awards by gift or otherwise to a member of a Participant's immediate family and/or trusts whose beneficiaries are members of the Participant's immediate family, or to such other persons or entities as may be approved by the Committee.

 

11. Amendment, Modification, Suspension or Discontinuance of the Plan.

 

The Board may amend, modify, suspend or terminate the Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law.

 

12. Termination of Employment.

 

If the employment of a Participant terminates, other than as a result of the death or disability of a Participant, all unexercised, deferred and unpaid Awards shall be canceled immediately, unless the Award Agreement provides otherwise. In the event of the death of a Participant or in the event a Participant is deemed by the Company to be disabled and eligible for benefits under the terms of the IBM Long-Term Disability Plan (or any successor plan or similar plan of another employer), the Participant's estate, beneficiaries or representative, as the case may be, shall have the rights and duties of the Participant under the applicable Award Agreement.

 

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13. Cancellation and Rescission of Awards.

 

(a) Unless the Award Agreement specifies otherwise, the Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or deferred Awards at any time if the Participant is not in compliance with all applicable provisions of the Award Agreement and the Plan, or if the Participant engages in any "Detrimental Activity." For purposes of this Section 13, "Detrimental Activity" shall include: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company's business, without prior written authorization from the Company, of any confidential information or material, as defined in the Company's Agreement Regarding Confidential Information and Intellectual Property, relating to the business of the Company, acquired by the Participant either during or after employment with the Company; (iii) the failure or refusal to disclose promptly and to assign to the Company, pursuant to the Company's Agreement Regarding Confidential Information and Intellectual Property, all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company or the failure or refusal to do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in other countries; (iv) activity that results in termination of the Participant's employment for cause; (v) a violation of any rules, policies, procedures or guidelines of the Company, including but not limited to the Company's Business Conduct Guidelines; (vi) any attempt directly or indirectly to induce any employee of the Company to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company; (vii) the Participant being convicted of, or entering a guilty plea with respect to, a crime, whether or not connected with the Company; or (viii) any other conduct or act determined to be injurious, detrimental or prejudicial to any interest of the Company.

 

(b) Upon exercise, payment or delivery pursuant to an Award, the Participant shall certify in a manner acceptable to the Company that he or she is in compliance with the terms and conditions of the Plan. In the event a Participant fails to comply with the provisions of paragraphs (a)(i)-(viii) of this Section 13 prior to, or during the Rescission Period, then any exercise, payment or delivery may be rescinded within two years after such exercise, payment or delivery. In the event of any such rescission, the Participant shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery, in such manner and on such terms and conditions as may be required, and the Company shall be entitled to set-off against the amount of any such gain any amount owed to the Participant by the Company. As used herein, Rescission Period shall mean that period of time established by the Committee which shall not be less than 6 months after any exercise, payment or delivery pursuant to an Award.

 

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14. Adjustments.

 

In the event of any change in the outstanding Capital Stock of the Company by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Committee may adjust proportionately: (a) the number of shares of Capital Stock (i) available for issuance under the Plan, (ii) for which Awards may be granted to an individual Participant set forth in Section 6, and (iii) covered by outstanding Awards denominated in stock or units of stock; (b) the exercise and grant prices related to outstanding Awards; and (c) the appropriate Fair Market Value and other price determinations for such Awards. Notwithstanding the foregoing, in the event of any change in the outstanding Capital Stock of the Company by reason of a stock split or a reverse stock split, the above-referenced proportionate adjustments, if applicable, shall be mandatory.

 

In the event of any other change affecting the Capital Stock or any distribution (other than normal cash dividends) to holders of Capital Stock, such adjustments in the number and kind of shares and the exercise, grant and conversion prices of the affected Awards as may be deemed equitable by the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Committee shall be authorized to cause IBM to issue or assume stock options, whether or not in a transaction to which section 424(a) of the Code applies, by means of substitution of new stock options for previously issued stock options or an assumption of previously issued stock options. In such event, the aggregate number of shares of Capital Stock available for issuance under Awards under Section 3, including the individual Participant maximums set forth in Section 6 will be increased to reflect such substitution or assumption.

 

15. Miscellaneous.

 

(a) Any notice to the Company required by any of the provisions of the Plan shall be addressed to the chief human resources officer of IBM in writing, and shall become effective when it is received.

 

(b) The Plan shall be unfunded and the Company shall not be required to establish any special account or fund or to otherwise segregate or encumber assets to ensure payment of any Award.

 

(c) Nothing contained in the Plan shall prevent the Company from adopting other or additional compensation arrangements or plans, subject to shareholder approval if such approval is required, and such arrangements or plans may be either generally applicable or applicable only in specific cases.

 

(d) No Participant shall have any claim or right to be granted an Award under the Plan and nothing contained in the Plan shall be deemed or be construed to give any Participant the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge any Participant at any time without regard to the effect such discharge may have upon the Participant under the Plan. Except to the extent otherwise provided in any plan or in an Award Agreement, no Award under the Plan shall be deemed compensation for purposes of computing benefits or contributions under any other plan of the Company.

 

9

 

 

(e) The Plan and each Award Agreement shall be governed by the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of New York, County of Westchester, to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement.

 

(f) In the event that a Participant or the Company brings an action to enforce the terms of the Plan or any Award Agreement and the Company prevails, the Participant shall pay all costs and expenses incurred by the Company in connection with that action, including reasonable attorneys' fees, and all further costs and fees, including reasonable attorneys' fees incurred by the Company in connection with collection.

 

(g) The Committee and any officers to whom it may delegate authority under Section 5 shall have full power and authority to interpret the Plan and to make any determinations thereunder, including determinations under Section 13, and the Committee's or such officer's determinations shall be binding and conclusive. Determinations made by the Committee or any such officer under the Plan need not be uniform and may be made selectively among individuals, whether or not such individuals are similarly situated.

 

(h) If any provision of the Plan is or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it shall be stricken and the remainder of the Plan shall remain in full force and effect.

 

(i) The Plan shall become effective on the date it is approved by the Board. Awards may be granted under the Plan at any time and from time to time on or prior to August 7, 2022, on which date the Plan will expire except as to Awards then outstanding under the Plan.

 

Federal Income Tax Consequences

 

The Company has been advised by counsel that, in general, under the Internal Revenue Code, as presently in effect, a Participant will not be deemed to recognize any income for federal income tax purposes at the time an option or SAR is granted or a restricted stock award is made, nor will the Company be entitled to a tax deduction at that time. However, when any part of an option or SAR is exercised, when restrictions on restricted stock lapse, or when an unrestricted stock award is made, the federal income tax consequences may be summarized as follows:

 

1. In the case of an exercise of a stock option, the optionee will generally recognize ordinary income in an amount equal to the excess of the fair market value of the shares on the exercise date over the option price.

 

2. In the case of an exercise of a SAR, the Participant will generally recognize ordinary income on the exercise date in an amount equal to any cash and the fair market value of any unrestricted shares received.

 

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3. In the case of an exercise of an option or SAR payable in restricted stock, or in the case of an award of restricted stock, the immediate federal income tax effect for the recipient will depend on the nature of the restrictions. Generally, the fair market value of the stock will not be taxable to the recipient as ordinary income until the year in which his or her interest in the stock is freely transferable or is no longer subject to a substantial risk of forfeiture. However, the recipient may elect to recognize income when the stock is received, rather than when his or her interest in the stock is freely transferable or is no longer subject to a substantial risk of forfeiture. If the recipient makes this election, the amount taxed to the recipient as ordinary income is determined as of the date of receipt of the restricted stock.

 

4. Upon the exercise of a stock option, the exercise of a SAR, the award of stock, or the recognition of income on restricted stock, the Company will generally be allowed an income tax deduction equal to the ordinary income recognized by a Participant. When a cash payment is made pursuant to the Award, the recipient will recognize the amount of the cash payment as ordinary income, and the Company will generally be entitled to a deduction in the same amount.

 

[END OF PROSPECTUS]

 

11

 

Exhibit 5.1

 

International Business Machines Corporation

 

New Orchard Road

 

Armonk, NY

 

 

December 18, 2020

 

 

International Business Machines Corporation

 

New Orchard Road

 

Armonk, New York 10504

 

 

Ladies and Gentlemen:

 

 

I am the Vice President, Assistant General Counsel and Secretary of International Business Machines Corporation (herein called the “Corporation”) and an attorney duly admitted to practice in the State of New York. This opinion is furnished in connection with the filing with the Securities and Exchange Commission (the “SEC”) of a Post-Effective Amendment to Form S-8 (File No. 333-232585) filed by International Business Machines Corporation under the Securities Act of 1933 (the “Securities Act”) regarding the shares of common stock, par value $.20 per share, of the Corporation (the “Shares”) to be issued pursuant to the IBM Red Hat Acquisition Long-Term Performance Plan, Red Hat, Inc. 2004 Long-Term Incentive Plan, Ansible, Inc. 2013 Stock Incentive Plan and Makara, Inc. 2008 Equity Incentive Plan (the “Plans”).

 

 

I, working together with members of the Corporation’s legal department, have reviewed such documents and records as I have deemed necessary or appropriate to enable me to express an informed and reasoned legal opinion with respect to the matters covered hereby.

 

 

Based upon the foregoing, I am of the opinion that, when issued or sold in accordance with the terms of the Plans, the Shares will be duly authorized, validly issued, fully paid and non-assessable.

 

 

I hereby consent to the use of my name in the Registration Statement as the legal counsel who has passed upon the legality of the Shares, as well as to the use of this legal opinion as part of the Registration Statement, as an Exhibit to the Registration Statement.

 

 

Sincerely,
/s/Frank P. Sedlarcik
Frank P. Sedlarcik
Vice President, Associate General Counsel and Secretary

 

 

 

Exhibit 23.1

 

 

Consent of Independent Registered Public Accounting Firm

 

We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of International Business Machines Corporation of our report dated February 25, 2020 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the 2019 Annual Report to Shareholders, which is incorporated by reference in International Business Machines Corporation's Annual Report on Form 10-K for the year ended December 31, 2019. We also consent to the incorporation by reference of our report dated February 25, 2020 relating to the financial statement schedule, which appears in such Annual Report on Form 10-K.

 

PricewaterhouseCoopers LLP

 

New York, New York

 

December 18, 2020