IBM's New Children's Health Rebate for Employees Helps Families Attain a Healthy Lifestyle

Extends Company's Wellness Incentive Programs, Enabling Employees to Earn $150 Cash Incentive

ARMONK, NY - 24 Oct 2007: IBM (NYSE: IBM) today announced a new wellness incentive for U.S. employees that encourages healthy living for families and children. The Children's Health Rebate, which is being offered as part of IBM's annual benefits enrollment, is to reward good nutrition and physical activity for the entire family, which is key to helping children develop healthy habits for a lifetime. IBM pioneered the concept of healthy living rebates for its employees in 2004, and the new Children's Health Rebate is one of four $150 cash rebates available to IBM employees in the U.S.

One-third of American children and youth are either obese or at risk of becoming obese, according to research from the National Academy of Sciences' Institute of Medicine. The last three decades have produced significant increases in obesity rates among children -- rates nearly tripled among those aged 2-5, more than quadrupled among those 6-11 and more than tripled among those 12-19*. This notable rise in overweight and obesity rates among American youth signifies one of the leading public health challenges of the 21st century.** Several issues are fueling this rise, including fewer opportunities for children to walk and exercise, and an increase in families' reliance on unhealthy "convenience foods."

IBM's new Children's Health Rebate reflects the growing national concern over children's health, as the demands on families and children in today's home, school and work environments continue to grow.

"Healthy families mean healthy and productive employees, and IBM has always tackled employee wellness concerns head on," said Randy MacDonald, Senior Vice President, IBM Human Resources. "We believe that employers today have to join the medical community, government and the food industry to respond to the issue of children's health. It is essential for the health of their workforce and the nation as a whole."

The program is available online to U.S. employees, and offers participants a wide range of educational resources, such as sample menus, exercise suggestions and nutritional value of popular foods. Resources and recommendations are available from leading health professionals and organizations, including the American Academy of Pediatrics, the American Academy of Family Physicians, the US Preventive Services Task Force and the Centers for Disease Control and Prevention. Employees also receive the book, "Family Power" by Karen Miller-Kovach, Chief Scientific Officer at Weight Watchers.

To qualify for the Children's Health Rebate, IBM employees use an interactive online tool to manage their family's eating and exercise habits with self-paced tracking plans that can be securely accessed only by the employee's family. The program does not have weight loss targets or exercise requirements. It suggests activities for families such as preparing family dinners together, and spending time on family walks and active games. Families take an inventory of their eating and activity habits, considering such points as how often they eat dinner together, how many servings of fruits and vegetables they eat each day and how often they exercise. Participants then set goals to build on those healthy habits, and keep a daily diary over any 12-week period using the site's "healthy lifestyle planner." The planner can be printed out and children can mark their success with gold stickers provided by IBM. At the end of the 12 weeks, families complete a brief online inventory to evaluate their progress.

In its reports on preventing childhood obesity, the Institute of Medicine notes, "U.S. children live in a society that has changed dramatically in the three decades over which the obesity epidemic has developed. Many of these changes affect what children eat, where they eat, how much they eat, and the amount of energy they expend in school and leisure time activities. Addressing the childhood obesity epidemic is a collective responsibility involving the federal government, state and local governments, communities, schools, industry, media, and families."

About IBM's Wellness Rebates
IBM launched its wellness incentive programs in 2004 in an effort to help its workforce become healthier. Through wellness, employees feel better, are more productive, have fewer absences and are more physically active. The rebate programs, available to IBM U.S. employees, focus on such issues as exercise, healthy eating/weight loss, smoking cessation and health risk appraisal. Each rebate is $150 in cash, and employees can chose any two rebates to receive up to $300 in cash per year.

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With children's health such a big concern, IBM says it's time for employers to get involved and give employees incentives to encourage their kids to eat right and exercise. IBM is announcing a new wellness incentive for employees for 2008 -- the Children's Health Rebate -- to help families focus on good nutrition and physical activity that encourage a balanced approach to healthy living for children. IBM employees can earn $150 in cash by participating in the program, joining other IBM wellness rebates for employees.

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1 *9/06 report brief: "Progress in Preventing Childhood Obesity: How Do We Measure Up?" National Academy of Sciences, Institute of Medicine

2 **2007 Executive Summary, "Progress in Preventing Childhood Obesity: How Do We Measure Up?" National Academy of Sciences, Institute of Medicine