any deletion, modification or addition to the Events of Default or Restrictive Covenants;

if not in US dollars, the currency, currencies or compound currencies in which payments on the debt securities will be payable and the holder may elect to make payment in a different currency;

the method for determining the amount of contingent payments on index-linked debt securities;

whether the debt securities will be issued in pure registered form without coupon or in bearer form, with or without coupon, or any combination thereof, and whether they will be issued in the form of one or more global securities in temporary form or definitive;

any terms relating to the delivery of the debt securities if they are to be issued upon exercise of the warrants;

whether and on what terms we will pay additional amounts to holders of debt securities who are non-U.S. persons for any taxes, assessments or governmental charges withheld or deducted and, if so, whether and on what terms we will be able repurchase the debt securities rather than pay the additional amounts; and

any other specific terms of the debt securities. (sections 202 and 301)

Unless otherwise specified in the Prospectus Supplement:

the debt securities will be registered debt securities;

registered debt securities denominated in US dollars will be issued in denominations of $1,000 or integral multiples of $1,000; and

bearer debt securities denominated in US dollars will be issued in denominations of $5,000.

Debt securities may bear the designations required by US federal tax laws and regulations. (section 401)

If any of the debt securities are sold for a foreign currency or currency unit, or if payments on the debt securities are payable in a foreign currency or currency unit, the prospectus supplement will contain the restrictions, choices, tax consequences, special terms and other information relating to the debt securities and the foreign currency or monetary unit.

Certain of the debt securities may be issued as initial issue discount debt securities. Initial issue discount securities do not bear interest or bear interest at below market rates. These are sold for less than their stated principal amount. If we issue these securities, the prospectus supplement will describe any tax, accounting or other information that we believe is important. We encourage you to consult your own competent tax and financial advisors on these important matters.

IBM may in the future, without the consent of the holders, increase the principal amount outstanding of any series of debt securities on the same terms and conditions and with the same CUSIP numbers as the debt securities of that series previously issued. All such additional debt securities will vote with all other debt securities of the same series for purposes of amendments, waivers and all other matters relating to that series.

Exchange, registration and transfer

Debt securities may be transferred or exchanged at the trustee office of the custodian of securities or at any other office or agency maintained for such purposes. No service fees will be payable upon transfer or exchange, other than any applicable government tax or charge.

The designated United States Registrar of Securities for senior debt securities is The Bank of New York Mellon, located at 240 Greenwich Street, Floor 7 West, New York, New York 10286. The Registrar of Securities for Subordinated Debt Securities will be designated in a Prospectus Supplement.

If debt securities are issued in both registered and bearer form, the bearer securities will be exchangeable for registered securities. If a bearer security with coupons is delivered in exchange for a registered security


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