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IBM Reaches Settlement With SEC

IBM resolves all issues regarding two open investigations; IBM pays $7 million into a Dollar General shareholder fund

ARMONK, NY - 25 Jun 2007: BM (NYSE: IBM) today announced that it has reached an agreement with the U.S. Securities and Exchange Commission (SEC) to resolve all issues regarding two previously disclosed matters:

Dollar General Corporation is a client of IBM's Retail Store Solutions unit, which markets and sells point-of-sale products.

IBM has consented, without admitting or denying any wrongdoing, to entry of an administrative order by the SEC directing that IBM cease and desist from committing or causing any violations of certain provisions of the federal securities laws and related SEC rules. An IBM employee in the company's Sales and Distribution unit also has resolved all issues with the SEC relating to the separate Wells Notice he received in connection with the staff's investigation of Dollar General Corporation.

In connection with the agreement, IBM will pay $7 million into a fund to be established in connection with the SEC's action against Dollar General. IBM will not restate any of its business results due to this settlement. The SEC's administrative order notes that the revenue recognition errors at issue were, in many cases, errors with respect to the recognition of revenue as between quarters, and in most cases, were discovered and corrected by IBM in advance of the Commission's investigation.

Contact(s) information

John Bukovinsky
IBM
914-499-6212
jbuko@us.ibm.com

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