Company Name: International Business Machines Corp.
Public Availability Date: December 5, 2006
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
[INQUIRY LETTER]
November 6, 2006
Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Subject: 2007 IBM Stockholder Proposal of Mr. Edward Foster
Ladies and Gentlemen:
Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, I am
enclosing six copies of this letter, together with an e-mail addressed to our
Chairman and Chief Executive Officer, Samuel J. Palmisano, dated June 28, 2006
from Mr. Edward Foster (the "Proponent"), which e-mail included a stockholder
proposal (the "Proposal"). The e-mail containing the Proposal is attached hereto
as Exhibit A.
The pertinent part of the e-mail to Mr. Palmisano sets forth the following
Proposal:
"I request a shareholder proposal for vote at the 2007 annual meeting for your
removal."
IBM believes the Proposal may properly be omitted from the proxy materials for
IBM's annual meeting of stockholders scheduled to be held on April 24, 2007 (the
"2007 Annual Meeting") for the reasons set forth below. To the extent that the
reasons for omission stated in this letter are based on matters of law, these
reasons are the opinion of the undersigned as an attorney licensed and admitted
to practice in the State of New York.
I. THE PROPOSAL MAY BE OMITTED UNDER RULES 14a-8(b)(1), (b)(2) and (f) BECAUSE
THE PROPONENT FAILED TO RESPOND WITH ANY INFORMATION REQUIRED UNDER SUCH RULES
REGARDING HIS ELIGIBILITY TO SUBMIT A PROPOSAL, DESPITE THE TIMELY AND SPECIFIC
REQUEST OF THE COMPANY FOR THE PROPONENT TO FURNISH SUCH REQUIRED INFORMATION.
Following receipt of the Proponent's e-mail stockholder proposal on June 28,
2006, the Company examined the submission, checked our stock records, and
determined that the Proponent was not an IBM stockholder of record. In this
connection, the Proponent, having submitted multiple proposals to IBM over the
years, knew from his prior correspondences with the undersigned that he was not
an IBM stockholder of record. As the subject of multiple no-action letter
requests from the undersigned on the very same question relating to providing
proper proof his own beneficial stock ownership in November 2005 and December
2003, the Proponent was already well aware of the fact that he needed to
properly prove his continuous beneficial ownership under Rule 14a-8(b).
International Business Machines Corporation (November 30, 2005) and
International Business Machines Corporation (December 29, 2003)(proposals from
Mr. Edward Foster were properly excluded from IBM's 2006 and 2004 proxy
statements with the staff's concurrence based upon the Proponent's failure to
supply, within 14 days of receipt of IBM's request, documentary support
sufficiently evidencing that he satisfied the minimum ownership requirement for
the one-year period required by rule 14a-8(b)).1
This year, as in the past, based upon the Proponent's prior history with the
undersigned on the issue of his IBM stock ownership, the Proponent stated, sua
sponte, in his 6-28-06 e-mail to Mr. Palmisano containing the proposal:
"In the past my proposals have been denied by S.S. Moskowitz on the based upon
an invalid claim I am not a shareholder. This year I will preempt Moskowitz by
writing the SEC with proof of my voting authorization based on stock ownership."
(sic)
"However, every year I receive a proxy card which I return usually voting in
favor of most shareholder proposals. The control # for my 2006 proxy is
1992634544508."
(Exhibit A)
The Proponent provided IBM with no other information concerning his stock
ownership at the time he filed the Proposal.
Since the Proponent was not a stockholder of record, and since the information
set forth in the Proponent's e-mail could not serve to confirm the Proponent's
continuous beneficial ownership of IBM stock under the SEC's regulations, the
undersigned timely sent a letter to the Proponent dated July 5, 2006, seeking
proper proof of his beneficial ownership.
(Exhibit B).
IBM's letter was timely posted on July 6 in Armonk, NY, using United States
Postal Service ("USPS") Express Mail (Tracking Number EK307189573 US) (Exhibit
C). The USPS office in Avon, Colorado attempted to deliver the letter to the
Proponent on July 7, leaving a notice for the Proponent. (Exhibit D).2 The USPS
subsequently confirmed in writing that IBM's July 5 letter was signed for on
July 13, 2006. (See Exhibit F).
The 14 day period set forth in the Commission's regulations for the Proponent to
respond to IBM with information responsive to our July 5 letter request has long
expired, and no response has ever been received to our request for information.
In our July 5, 2006 letter, we acknowledged receipt of the Proponent's June 28,
2006 e-mail. We courteously noted to the Proponent that we could not find him as
a stockholder of record, and that the information he provided was not sufficient
to substantiate proof of his continuous beneficial ownership of IBM stock under
the SEC's regulations. Since the information furnished by the Proponent in his
e-mail was insufficient to establish eligibility to file a stockholder proposal,
we clearly described such SEC rules to the Proponent, as well as the Proponent's
former record ownership history to him. We stated, in the second paragraph:
First, regarding your stockholder proposal, please understand that in order to
be eligible to submit a proposal for consideration at IBM's 2007 Annual Meeting,
SEC Regulation 14A requires that you must have continuously held at least $2,000
in market value, or 1% of the company's securities entitled to be voted on the
proposal at the meeting for at least one year by the date you submit the
proposal. You must continue to hold those securities through the date of the
meeting. Following receipt of your e-mail, we diligently searched our books and
records, but were unable to find you listed as a current IBM stockholder of
record. In this connection, while we were able to see that you used to maintain
three separate accounts of record, we also noted that you closed the last of
those accounts back in January 2002. At the present time, you do not appear to
be an IBM stockholder of record, and the information you provided does not
substantiate your ownership of stock in accordance with SEC regulations. In this
connection, please understand that any interest in IBM stock you may hold in a
brokerage account, the 401(k) Tax Deferred Savings Plan, or through some other
intermediary are not IBM shares of record, and as such, we have no way of
verifying beneficial ownership of those shares and your eligibility under
Regulation 14A.
(Exhibit B)
After stating that we needed for the Proponent to verify his share ownership,
the Company also clearly noted the specific defects in what the Proponent had
submitted to us. We again explained to him in the third paragraph of our letter
that any interest in IBM stock the Proponent may have held under the 401(k) Tax
Deferred Savings plan or a brokerage account were not IBM shares of record, and
as such, we could not verify his eligibility to submit a proposal from the
information he furnished. We also clearly pointed out to the Proponent that the
voting card number he referenced in his e-mail did not substantiate proof of
continuous beneficial ownership under the SEC's regulations, and his eligibility
to file a proposal. We wrote:
When I checked our earlier correspondences, in 2003, you informed us that you
then held shares in a brokerage account as well as in the 401(k) Tax Deferred
Savings Plan. Note that any IBM stock you may now hold in these entities are not
IBM shares of record. Moreover, while the control number you provided to Mr.
Palmisano may well be your voting instruction control number for the record
holder of your shares to vote shares you held as of the 2006 annual meeting
record date, this does not substantiate proof of beneficial ownership of IBM
stock under the SEC's regulations. Since those shares are not IBM shares of
record, and since the Company does not maintain the ownership records for the
401(k) Tax Deferred Savings Plan, we cannot verify your claim of eligibility to
submit a proposal in accordance with the SEC's regulations. I am therefore now
requesting from you proper proof of your stockholdings, as required under the
SEC's regulations, and as fully described for your reference in this letter.
(See Exhibit B)
The Company then went on to outline, in detail, what the Proponent had to do to
establish proper proof of IBM stock ownership under the SEC's regulations. In
pertinent part, the Company wrote, in the fourth paragraph of our letter:
If you are not a registered stockholder, please understand that the company does
not know that you are a stockholder, or how many shares you own. In this case,
you must prove your eligibility to the company in one of two ways: The first way
is to submit to the company a written statement from the "record" holder of your
securities (usually a broker or bank) verifying that, at the time you submitted
your proposal, you continuously held the securities for at least one year. You
must also include your own written statement that you intend to continue to hold
the securities through the date of the meeting of shareholders. The second way
to prove ownership applies only if you have filed a Schedule 13D (17 C.F.R.
§240.13d-101), Schedule 13G (17 C.F.R. §240.13d-102), Form 3 (17 C.F.R.
§249.103), Form 4 (17 C.F.R. §249.104) and/or Form 5 (17 C.F.R. §249.105), or
amendments to those documents or updated forms, reflecting your ownership of the
shares as of or before the date on which the one-year eligibility period begins.
If you have filed one of these documents with the SEC, you may demonstrate your
eligibility by submitting to the company: (A) A copy of the schedule and/or
form, and any subsequent amendments reporting a change in your ownership level;
(B) Your written statement that you continuously held the required number of
shares for the one-year period as of the date of the statement; and (C) Your
written statement that you intend to continue ownership of the shares through
the date of the company's annual meeting. (See Exhibit B)
Finally, the Company called to the Proponent's attention the Commission's 14-day
time limitation to reply to the Company with all of the required information,
writing at the end of that same paragraph:
Please note that all of the required documentation I've requested from you in
this letter must be sent to directly to my attention at the above address within
14 calendar days of the date you receive this request, and that the Company
reserves the right to omit your submission in accordance with the SEC's
regulations. (See Exhibit B)
The Proponent never responded in any way to our July 5, 2006 letter.
ANALYSIS
A. The Proponent is not an IBM Stockholder of Record
In the first place, we wish to again make clearjust as we have done previously
in both our December 2003 and November 2005 no-action letter requests to the SEC
involving this same Proponentthat the Proponent is not an IBM stockholder of
record. Most recently, in the Company's July 5, 2006 letter, we informed the
Proponent that he was not listed as a stockholder of record of IBM common stock.
The Company's stock transfer records are maintained by Computershare Trust
Company, N.A. ("Computershare"), formerly known as Equiserve Trust Company. If
the Proponent was, in fact, an IBM stockholder of record, he would be so listed
on our books and records, as maintained by Computershare. He is not, in fact,
listed as a current IBM stockholder of record. In this connection, as we did
both last year as well as in 2003, we courteously noted that the Proponent had,
in the past, held three separate accounts of record for IBM common stock, but
that the last of these accounts was closed in January 2002. (See Exhibit B). As
a result, we asked the Proponent to provide proof of any beneficial ownership of
IBM shares, in accordance with Rule 14a-8.
B. Providing the Company with a control number from a voting instruction card
for shares owned beneficially on the record date cannot prove continuous
beneficial ownership or eligibility to submit a proposal under Rule 14a-8(b).
The Proponent never responded to our July 5 request. The Proponent may continue
to believe that furnishing us with a control number from a voting instruction
card he received for shares he holds beneficially as of the record date entitles
him to submit a stockholder proposal. It does not. The fact that the Proponent
may have held IBM stock beneficially as of a record datethe applicable Record
Date for the 2006 IBM Annual Meeting was February 24, 2006only serves to permit
him to vote shares he actually held on such date. In this connection, in 2003,
when the Proponent filed a stockholder proposal, in response to our request for
proper proof of his beneficial ownership, the Proponent informed IBM that he
held stock at Schwab as well as in the IBM Savings Plan, a 401(k) arrangement
(hereinafter, the "Savings Plan"). As the Proponent already knows, IBM is not
the record holder for either Schwab or the Savings Plan, as we've told him this
before. As we've also explained in earlier years, the Savings Plan is a 401(k)
arrangement which allows eligible employees to defer a portion of their pay on a
tax-favored basis into a tax exempt trust pursuant to Internal Revenue Service
guidelines. The contributions are invested by the Trustee of the Savings Plan in
a selection of investment funds, including an IBM Stock Fund, as directed by the
employee. To the extent the Proponent this year may still hold a beneficial
ownership interest in the IBM Stock Fund investment alternative under the
Savings Plan, it is important to understand that any such ownership interest
does not constitute record ownership in IBM common stock. The fact that the
Proponent received a Proxy/Voting Instruction Card for shares he may have held
in the Savings Plan as of the 2006 Record Date cannot in any way serve to prove
that Proponent continuously held the requisite amount of IBM securities for the
relevant period. In this connection, State Street Bank and Trust Company, the
Trustee of the Savings Plan, is the sole stockholder of record of IBM shares
which are held in the IBM Stock Fund investment alternative under the Savings
Plan, and the Proponent provided nothing from the record holder to verify his
eligibility to submit a stockholder proposal.
As in both our 2003 and 2005 no-action letter requests, there continues to be no
valid basis for the Proponent to assume that IBM should go out to the record
holder of his stock and verify for him whether he maintained continuous
beneficial ownership of the requisite securities for Rule 14a-8 purposes. It is
axiomatic that a registrant cannot be charged with the responsibility of
tracking down the beneficial holdings of individual participants in a fund where
record ownership is held by a wholly unrelated entity. In this connection, the
SEC has made clear that it is up to each individual beneficial holder of shares
to secure, upon the Company's request, proper proof of their continuous
beneficial holdings from the record holder of their shares. The Proponent has
never done this, despite our specific requests. The fact that the Proponent has
again this year furnished us with a Voting Instruction Card control number under
which he may have provided voting instructions to the Trustee for shares he held
as of the record date does not constitute proper proof of beneficial ownership
under the SEC's regulations. International Business Machines Corporation
(November 30, 2005).
Moreover, even if the Proponent held a sufficient amount of IBM shares as of the
2006 Record Date, that information does not in any event serve to verify that he
continuously held shares for the relevant time period required under Rule 14a-8,
as described in our July 5, 2006 letter. In fact, the Proponent provided no
evidence proving that he owned IBM stock sufficient to support the filing of a
proposal under Rule 14a-8(b), and there is nothing in the Proponent's own
correspondence to IBM which can properly serve to satisfy the SEC regulations we
pointed out to the Proponent, since statements from a beneficial owner about his
own stock ownership cannot, in any event, serve to satisfy the Commission's
regulatory requirements for independent corroborative proof of continuous
beneficial ownership. In this connection, the staff has made it clear on
numerous occasions that assertions by a putative beneficial owner as to his/her
own stock ownership and/or the required holding period for such shares cannot
serve to establish the requisite proof of beneficial ownership under Rule 14a-8.
See International Business Machines Corporation (November 30, 2005)(also
involving Mr. Foster); International Business Machines Corporation (January 11,
2005); International Business Machines Corporation (December 29, 2003)(also
involving Mr. Foster); International Business Machines Corporation (January 14,
2002) Oracle Corporation (June 22, 2001); AT&T Corp. (January 24, 2001)
(stockholder's own statements insufficient, even when coupled with brokerage
statements); International Business Machines Corporation (December 16,
1998)(statements by proponent as to efficacy of his own brokerage documentation
determined by staff to be insufficient to prove that proponent in fact satisfied
the continuous minimum ownership requirement for the one year period required by
current Rule 14a-8(b)).
The staff has regularly granted no-action relief to registrants where proponents
have failed, following a timely and proper request by a registrant, to furnish
the full and proper evidence of continuous beneficial ownership called for under
the regulations in a timely fashion. International Business Machines Corporation
(January 11, 2005); International Business Machines Corporation (January 7,
2004); International Business Machines Corporation (January 22, 2003);
International Business Machines Corporation (January 8, 2002); Oracle
Corporation (June 22, 2001); Bank of America (February 12, 2001); Eastman Kodak
Company (February 7, 2001) (statements deemed insufficient); Bell Atlantic
Corporation (July 21, 1999)(proponent's brokerage documentation found by staff
insufficient to prove continuous beneficial ownership); Skaneateles Bancorp,
Inc. (March 8, 1999)(letter by proponent as to stock ownership coupled with
broker's letter also properly determined to be insufficient proof of beneficial
ownership under Rule 14a-8(b)). The same result should again apply here.
Under the Commission's rules, the burden of establishing proof of continuous
beneficial ownership under Rule 14a-8 is on the stockholder, and here, the
Proponent utterly failed to meet that burden. Under Rule 14a-8(f), the Company
timely and courteously notified the Proponent that the Company required proper
proof of continuous beneficial ownership of IBM stock, as required by Rule
14a-8(b), and we further advised specifically what would constitute such proper
proof. The Company also advised the Proponent of the 14 day time period in the
Commission's regulations for furnishing such information to the Company. In
fact, a duplicate copy of the Company's July 5 letter request was also timely
furnished to the Proponent for this purpose via e-mail. After having received
timely, clear and specific requests for all of the information required by the
SEC's regulations, the Proponent failed to provide any of the information called
out by the Company which would prove that the Proponent continuously held the
minimum amount of IBM shares for the requisite period. Because the Proponent
failed to respond with the requested information required by Rule 14a-8(b) to
substantiate continuous beneficial ownership of IBM stock, IBM now respectfully
requests your advice that the Division will not recommend any enforcement action
to the Commission if IBM omits the instant Proposal from our proxy materials
being prepared for the 2007 Annual Meeting under Rules 14a-8(b) and (f).
II. CABOT RELIEF IS ALSO WARRANTED WITH RESPECT TO THE INSTANT PROPOSAL, AND THE
COMPANY RESPECTFULLY RENEWS ITS REQUEST FOR SUCH RELIEF.
Over the years, the Proponent continues to e-mail multiple proposals to IBM with
the same themeto have IBM terminate Mr. Palmisano, our Chairman and CEO. In
addition, notwithstanding the Proponent's knowledge of the stockholder proposal
process, the Proponent continues to ignore the rules as have been clearly
pointed out to him in multiple correspondences over the last 4 years asking him
to properly substantiate his stock ownership. Indeed, since July 2002, the
Proponent has e-mailed the Company more than 25 times, including among such
e-mails multiple complaints about Mr. Palmisano's performance, and multiple
stockholder proposals that seek to have IBM terminate Mr. Palmisano. But each
year, when we seek information to substantiate his eligibility under Rule 14a-8,
the Proponent utterly ignores those requests. In addition, last season, the
Proponent also ignored the Commission's one-proposal rule as well as the staff's
November 30, 2005 no-action letter3, electing to file three additional proposals
trumpeting the same issues. See International Business Machines Corporation
(March 7, 2006). This is a gross abuse of the stockholder proposal process, and
clearly not what Rule 14a-8 was designed to achieve. Indeed, the Proponent, an
intelligent man and former IBM employee, knowingly continues to waste the time
and resources of the staff of the SEC as well as the Company to address his
issues. Hence, in addition to requesting staff concurrence to exclude the
instant Proposal under Rules 14a-8(b)(1), (b)(2) and (f), the Company is also
renewing its request for Cabot relief with respect to any future submissions of
a same or similar nature from the instant Proponent. See Cabot Corporation
(November 4, 1994); International Business Machines Corporation (December 12,
2005); Cabot Corporation (January 16, 2002); Exxon Mobil Corporation (March 5,
2001); Unocal Corporation (March 30, 2000).
We are sending the Proponent a copy of this letter, advising him of our intent
to exclude the Proposal from the proxy materials for the 2007 Annual Meeting.
The Proponent is respectfully requested to copy the undersigned on any response
that the Proponent may choose to make to the staff. If you have any questions
relating to this submission, please do not hesitate to contact the undersigned
at (914) 499-6148. Thank you for your attention and interest in this matter.
Very truly yours,
/s/
Stuart S. Moskowitz
Senior Counsel
Attachments
copy, with attachments, to:
Mr. Edward Foster
P.O. Box 4404
Avon, CO 81620
[APPENDIX]
Attachment: Original Letter
From: email-sjp@www.ibm.com.cs186.net on 06-28-2006 09:33 AM
To: undisclosed-recipients:;
cc:
Subject: General comments:
Unless you announce some sensational 2 Q earnings it appears you will have taken
IBM stock to a new 52 week low. Congratulations.
Thus far since taking over a CEO you have reduced the share price by $50 a 40%
loss in shareholder value. Again congratulations.
I request a shareholder proposal for vote at the 2007 Annual meeting for your
removal.
In the past my proposals have been denied by S.S. Moskowitz on the based upon an
invalid claim I am not a shareholder. This year I will preempt Moskowitz by
writting the SEC with proof of my voting authorization based upon stock
ownership.
However, every year I receive a proxy card which I return usually voting in
favor of most shareholder proposals.
The control # for my 2006 proxy is 1992634544508. I would like a response as to
the out come of the voting on all 2006 proposals, especialy the proposal for
majority voting of directors. As soon as shareholders take control of the Board
they will be able to determine executive compensation and continued employment
which is currently being legistated by you office.
This information has been provided by users of the IBM World Wide Web Home Page
for Office.
Originated on: 2006/06/28 13:33:10 CUT
Category/Subject: Category: General comments
Originated by: ed foster
E-Mail: efosteraz@aol.com
Delivered To: Principal 017
-----FOOTNOTES-----
1 Three additional proposals from the instant Proponent were also excluded with
staff concurrence last season under 14a-8(c). See International Business
Machines Corporation (March 7, 2006).
2 On July 11, 2006, when we had not received confirmation that the Proponent
received our July 5 letter, the Company again sent the Proponent a duplicate
copy of our July 5 letter to him, this time via e-mail. (See Exhibit E) The
Proponent never responded in any way to our e-mail.
3 International Business Machines Corporation (November 30, 2005).
[INQUIRY LETTER]
VIA EXPRESS MAIL
July 5, 2006
Mr. Ed Foster
P.O. Box 4404
Avon, CO 81620
Re: Your E-Mail of June 28, 2006 to Mr. S. J. Palmisano
Dear Mr. Foster:
I am responding to your e-mail to Mr. Samuel J. Palmisano, IBM CEO, dated June
28, 2006, which included a stockholder proposal for our 2007 Proxy Statement
seeking for Mr. Palmisano to be removed. You also requested a copy of the voting
results from the 2006 Annual Meeting.
First, regarding your stockholder proposal, please understand that in order to
be eligible to submit a proposal for consideration at IBM's 2007 Annual Meeting,
SEC Regulation 14A requires that you must have continuously held at least $2,000
in market value, or 1% of the company's securities entitled to be voted on the
proposal at the meeting for at least one year by the date you submit the
proposal. You must continue to hold those securities through the date of the
meeting. Following receipt of your e-mail, we diligently searched our books and
records, but were unable to find you listed as a current IBM stockholder of
record. In this connection, while we were able to see that you used to maintain
three separate accounts of record, we also noted that you closed the last of
those accounts back in January 2002. At the present time, you do not appear to
be an IBM stockholder of record, and the information you provided does not
substantiate your ownership of stock in accordance with SEC regulations. In this
connection, please understand that any interest in IBM stock you may hold in a
brokerage account, the 401(k) Tax Deferred Savings Plan, or through some other
intermediary are not IBM shares of record, and as such, we have no way of
verifying beneficial ownership of those shares and your eligibility under
Regulation 14A.
When I checked our earlier correspondences, in 2003, you informed us that you
then held shares in a brokerage account as well as in the 401(k) Tax Deferred
Savings Plan. Note that any IBM stock you may now hold in these entities are not
IBM shares of record. Moreover, while the control number you provided to Mr.
Palmisano may well be your voting instruction control number for the record
holder of your shares to vote shares you held as of the 2006 annual meeting
record date, this does not substantiate proof of beneficial ownership of IBM
stock under the SEC's regulations. Since those shares are not IBM shares of
record, and since the Company does not maintain the ownership records for the
401(k) Tax Deferred Savings Plan, we cannot verify your claim of eligibility to
submit a proposal in accordance with the SEC's regulations. I am therefore now
requesting from you proper proof of your stockholdings, as required under the
SEC's regulations, and as fully described for your reference in this letter.
If in fact you are an IBM stockholder of record with other account(s) we are
unaware of, we apologize for not locating you in our own records. In such case,
we will need for you to advise me precisely how your IBM shares are listed on
our records, and to provide the company with a written statement that you intend
to continue to hold the securities required above through the date of the 2007
meeting of shareholders. If you are not a registered stockholder, please
understand that the company does not know that you are a stockholder, or how
many shares you own. In this case, you must prove your eligibility to the
company in one of two ways: The first way is to submit to the company a written
statement from the "record" holder of your securities (usually a broker or bank)
verifying that, at the time you submitted your proposal, you continuously held
the securities for at least one year. You must also include your own written
statement that you intend to continue to hold the securities through the date of
the meeting of shareholders. The second way to prove ownership applies only if
you have filed a Schedule 13D (17 C.F.R. §240.13d-101), Schedule 13G (17 C.F.R.
§240.13d-102), Form 3 (17 C.F.R. §249.103), Form 4 (17 C.F.R. §249.104) and/or
Form 5 (17 C.F.R. §249.105), or amendments to those documents or updated forms,
reflecting your ownership of the shares as of or before the date on which the
one-year eligibility period begins. If you have filed one of these documents
with the SEC, you may demonstrate your eligibility by submitting to the company:
(A) A copy of the schedule and/or form, and any subsequent amendments reporting
a change in your ownership level; (B) Your written statement that you
continuously held the required number of shares for the one-year period as of
the date of the statement; and (C) Your written statement that you intend to
continue ownership of the shares through the date of the company's annual
meeting. Please note that all of the required documentation I've requested from
you in this letter must be sent to directly to my attention at the above address
within 14 calendar days of the date you receive this request, and that the
Company reserves the right to omit your submission in accordance with the SEC's
regulations.
With regard to your request for the voting results for the 2006 Annual Meeting,
you should be aware that we post those results on our Company's web site
promptly after the meeting. See http://www.ibm.com/investor/services/pdf/2006vote.pdf.
For your convenience, however, I am also enclosing a copy of these results, in
case you do not have ready Internet access. IBM's Internet web site contains a
host of interesting and exciting information about our Company, and, as an IBM
retiree, we encourage you to visit our web site at http://www.ibm.com. We also
thank you for taking the time to write and for your continuing interest and
attention in these matters.
Very truly yours,
/s/
Stuart S. Moskowitz
Senior Counsel
Enclosure
[STAFF REPLY LETTER]
December 5, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: International Business Machines Corporation Incoming letter dated November
6, 2006
The proposal relates to IBM's chairman and chief executive officer.
There appears to be some basis for your view that IBM may exclude the proposal
under rule 14a-8(f). We note that the proponent appears not to have responded to
IBM's request for documentary support indicating that he has satisfied the
minimum ownership requirement for the one-year period required by rule 14a-8(b).
Accordingly, we will not recommend enforcement action to the Commission if IBM
omits the proposal from its proxy materials in reliance on rules 14a-8(b) and
14a-8(f).
Sincerely,
/s/
Ted Yu
Special Counsel
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