Chief Executive Officer Amendment to Employment Agreement - Louis Gerstner

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT


Agreement made and entered into as of the 29th day of January 2002 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, as amended on January 1, 1996 and November 17, 1997, said Agreement is further amended as follows:


1. Section 2 shall be amended by deleting "60" in clause (a) thereof and substituting therefor "61" and by deleting the last sentence therefrom.


2. Section 3(a) shall be amended by restating the first sentence thereof to read: "Until March 1, 2002, the Executive shall be employed as the Chairman and Chief Executive Officer of the Company, and for the remainder of the Term of Employment the Executive shall be employed as the Chairman of the Company."


3. Section 3(c) shall be amended by restating the first sentence thereof to read: "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; and (ii) during said ten year consulting period and for a period of ten years thereafter, (a) shall refrain from engaging in "Detrimental Activity" as defined in the IBM 1999 Long-Term Performance Plan, including those provisions prohibiting service on the board of directors of, or the performance of consulting or other services for, any company deemed competitive to the Company in its sole discretion, and shall be subject to the Company's then existing employment rules governing confidentiality, non-competition and non-solicitation (provided the Company has given the Executive written notice of any changes to such rules made after the date of this Amendment); and (b) shall continue to be provided with access to Company aircraft (as set forth on Exhibit C to the Agreement), cars, office, and apartment, and to financial planning and home security se ...