Proxy Letter

Important note!

The letter below was sent out in 2000. The Pension and Medical Resolution from 2000 is proposal #4 for 2001. Be sure to vote YES to urge the board of directors (who are supposed to answer to shareholders, NOT LOU!) to restore pension and medical benefits that were promised to thousands of IBMers.

Send another message to Lou, too. Show him you've lost confidence in him. On proposal #1, Election of Directors, WITHHOLD your vote from Lou Gerstner!

On April 24 in Savannah, please consider joining your fellow employees and retirees for a protest on retirement cut-backs.

For information about the 2001 stockholders' meeting, please check the "2001 Stockholders Meeting Information" page on the Alliance@IBM web site.

After learning of IBM's unprecedented second proxy mailing, I sent the following letter out in the hopes that it would reach as many IBM shareholders as possible before the IBM stockholder meeting on April 25, 2000:

Subject: IBM's unprecedented second proxy mailing

Hello.

My name is James J. Mangi. I am an IBM shareholder, and an IBM Global Services employee with over ten years working for IBM.

If you are an IBM shareholder, you will soon be receiving an unprecedented second proxy mailing from IBM. The purpose of this second mailing is to persuade you, the IBM shareholder, to vote against Stockholder Proposal #5, Pension and Retirement Medical. Why is IBM doing this? I believe it is because they are worried that the resolution will receive a sizable vote, resulting in the passage of the resolution (if more than 50% vote FOR it), or that the resolution will automatically appear on next year's proxy (if more than 3% vote FOR it).

It is VITALLY important that you understand why you need to vote FOR this resolution.

In 1999, IBM reduced employee pension plans by up to 50%, and practically eliminated retirement medical coverage. This was a morally reprehensible act, and the board of directors needs to be told this loud and clear by having people vote FOR Stockholder Proposal #5.

Many people question how badly IBMers have been affected by the retirement pension and medical changes. They don't believe a company that was once such a good corporate citizen would do such a thing. Others believe that the figures used by outside groups to show the differences are just plain wrong. Let me assure you, they are not.

My personal pension was reduced by just over 40%. Did I come to this conclusion with the aid of an outside group? NO! I used IBM's OWN BENEFITS CALCULATORS! For the new pension plan, IBM made an on-line tool available to calculate estimated pension income. At the same time, they disabled the old on-line tool so that IBMers could not easily compare the old and new plans! But... OOPS!... they FORGOT that many of us still had a DOS based tool, available on diskette, that still would calculate the estimated retirement income under the old plan. BOTH of these tools were created BY IBM, and use IBM's OWN ASSUMPTIONS. After using both of these tools to calculate my annual retirement income after working 30 years (I think that's long enough, don't you?), my annual pension income under the new plan was over 41% LESS than the old plan!

At the same time that my pension was cut, my retirement medical plan was changed. Now, instead of the old plan that guaranteed you would have medical insurance, the new plan provides you with an account that you use after retirement to BUY insurance. Sounds good so far, except that actuaries calculate that, in my case, the money in the account will run out after just ONE YEAR! So... as long as I die one year after retirement, I should not have any worries about paying for health care.

Now, many of you who receive this will be shareholders, but will not be employees. You may think that reducing benefits helps the bottom line. It does... but only in the short run! I have NEVER seen morale among my fellow workers as bad as it is now, even during the layoffs of the early 1990's (at least then they told you straight out, instead of trying to bury the news in fine print). What do you think happens to a company's stock when employee morale sinks? I'm no expert... but common sense says... it ain't good!

What can you do? If you have not yet voted your shares, be sure to vote FOR Stockholder Proposal #5. In my case, I not only voted FOR #5, but I also WITHHELD my vote for L.V. Gerstner, Jr. as a show of 'no confidence' in his performance, and I urge you to do the same.

In addition to voting their shares, IBM employees have contacted their representatives, given testimony before the senate, and created an organization of employees called Alliance@IBM (http://www.allianceibm.org/). I am a voting core member of Alliance@IBM. I represent the Southbury, CT, site. Alliance@IBM is working to build majority employee support at IBM sites so that IBM employees can obtain collective bargaining rights and negotiate legally-binding contracts (just like our CEO Lou Gerstner has). Without a contract, employees can be taken advantage of at management's whim, and morale will continue to deteriorate.

Sincerely,

James J. Mangi