Second Amendment To CEO Employment Agreement

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT


Agreement made and entered into as of the 17th day of November, 1997 by and between International Business Machines Corporation, a New York Corporation (the "Company"), and Louis V. Gerstner, Jr. (the "Executive").


Pursuant to Section 17 of the Employment Agreement dated as of March 26, 1993 between the Company and the Executive, and as amended on January 1, 1996, said Agreement is further amended as follows:


1. Section 2 shall be amended by adding at the end thereof: "The Executive
agrees that he will continue to serve as Chairman of the Board and Chief
Executive Officer of the Company until the date on which he attains age
60, subject to the provisions of this Agreement."


2. Section 3 shall be amended by adding a new Subsection 3(c): "If the
Executive reaches Retirement (as defined in Section 8 below), then he (i)
shall be retained for a period of ten years to provide consulting services
to the Company under appropriate terms and conditions; (ii) during said
ten year period, shall refrain from engaging in "Detrimental Activity" as
defined in the IBM 1997 Long-Term Performance Plan, and shall be subject
to the Company's then existing employment rules governing confidentiality,
non-competition and non-solicitation of employees; and (iii) during said
ten year period shall be provided with continued access to Company
facilities and services comparable to those provided to him prior to his
Retirement, including access to Company aircraft, cars, office,
apartments, and financial planning services. For such consulting services,
the Executive shall be paid a daily consulting fee, for each partial or
full day he renders services, equal to the daily equivalent of his Base
Salary rate at the time of his Retirement, and shall receive reimbursement
for reasonable expenses he incurs in providing such services."


3. Section 8 shall be amended by adding at the end thereof: "; provided,
however, that any benefit payable to the Executive under the
non-tax-qualified defined benefit plans of the Company shall be offset by
the benefit payable by the Company under Section 9 below. If the Executive
reach ...