The Notes of each series will be redeemable, as a whole or in part, at IBM’s option, at any time or from time to time, on at least 10 days, but not more than 60 days, prior notice (by mail, electronic delivery or otherwise in accordance with the depositary’s procedures) to holders of the Notes to be redeemed. Prior to the applicable Par Call Date, the redemption price for a series of Notes will be equal to the greater of:

• 100% of the principal amount of the Notes to be redeemed; and

• the sum of the present values of the Remaining Scheduled Payments, as defined below, discounted, on an annual basis (ACTUAL/ACTUAL (ICMA)) at the Comparable Government Bond Rate, as defined below, plus 20 basis points in the case of the 2027 Notes, 25 basis points in the case of the 2031 Notes, 25 basis points in the case of the 2035 Notes, 25 basis points in the case of the 2043 Notes and 20 basis points in the case of the Sterling Notes,

plus, in each case, accrued and unpaid interest on the Notes to be redeemed to, but excluding, the redemption date.

“Par Call Date” means, with respect to the 2027 Notes, January 6, 2027 (one month prior to the maturity date of the 2027 Notes), with respect to the 2031 Notes, November 6, 2030 (three months prior to the maturity date of the 2031 Notes), with respect to the 2035 Notes, November 6, 2034 (three months prior to the maturity date of the 2035 Notes), with respect to the 2043 Notes, August 6, 2042 (six months prior to the maturity date of the 2043 Notes) and with respect to the Sterling Notes, November 6,2037 (three months prior to the maturity date of the Sterling Notes).