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IBM chief's $20 million stock sale

Louis Gerstner files to sell shares valued at more than $20.2 million, according to an SEC document.

IBM chief executive Louis Gerstner has filed to sell shares valued at more than $20.2 million, according to a Securities and Exchange Commission document.

Big Blue's CEO filed to sell 142,000 shares, nearly a third of his holdings, though he still has 3 million shares of IBM stock that have yet to vest, the company's latest proxy shows.

Gerstner's plans to sell come as Big Blue's stock has soared in the past month. The stock climbed from around $120 a share earlier this month to close at 148.75 today, up 2.5625 over yesterday.

Fueling the stock's rise has been a strong earnings performance. The company posted better-than-expected third-quarter earnings last week, citing improvements in its PC unit and strong sales of its servers.

Gerstner's sale will add to the lucrative compensation package last year. He received $6 million in salary and bonuses and was granted a "special" stock option for 2 million shares that will vest over five years.

That options package, with an exercise price of $103.56 per share, will have a potential realized value of $330.1 million if IBM's stock price appreciates at ten percent annually for the ten-year option term; or $130.3 million for a five percent annual appreciation.