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Item 9A. Controls and Procedures

2025-02-25 compared with 2024-02-26 · 34 added, 41 removed, 265 unchanged (22% of the section changed)

5 unchanged sentences

Other Information:

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections:

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Executive Compensation:

Refer to the information under the captions “2023 Summary Compensation Table and Related Narrative,” “2023 Summary Compensation Table,” “2023 Compensation Discussion and Analysis,” “2023 Grants of Plan-Based Awards Table,” “2023 Outstanding Equity Awards at Fiscal Year-End Table,” “2023 Option Exercises and Stock Vested Table,” “2023 Retention Plan Table,” “2023 Pension Benefits Narrative,” “2023 Pension Benefits Table,” “2023 Nonqualified Deferred Compensation Narrative,” “2023 Nonqualified Deferred Compensation Table,” “2023 Potential Payments Upon Termination Narrative,” “2023 Potential Payments Upon Termination Table,” “Governance and the Board—Compensation Committee Interlocks and Insider Participation:

None,” “Compensation Program as It Relates to Risk,” “2023 Executive Compensation—Report of the Executive Compensation and Management Resources Committee of the Board of Directors,” “Pay Ratio, ” and "Pay Versus Performance" in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024, all of which information is incorporated herein by reference.

Refer to the information under the captions “2024 Summary Compensation Table and Related Narrative,” “2024 Summary Compensation Table,” “2024 Compensation Discussion and Analysis,” “2024 Grants of Plan-Based Awards Table,” “2024 Outstanding Equity Awards at Fiscal Year-End Table,” “2024 Option Exercises and Stock Vested Table,” “2024 Retention Plan Table,” “2024 Pension Benefits Narrative,” “2024 Pension Benefits Table,” “2024 Nonqualified Deferred Compensation Narrative,” “2024 Nonqualified Deferred Compensation Table,” “2024 Potential Payments Upon Termination Narrative,” “2024 Potential Payments Upon Termination Table,” “2024 Director Compensation Table,” “Director Compensation under the IBM Deferred Compensation and Equity Award Plan (DCEAP),” “Governance and the Board—Compensation Committee Interlocks and Insider Participation:

None,” “Compensation Program as It Relates to Risk,” “2024 Executive Compensation—Report of the Executive Compensation and Management Resources Committee of the Board of Directors,” “Pay Ratio, ” "Pay Versus Performance," and "Equity Award Grant Practices" in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 29, 2025, all of which information is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters:

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Upon a director’s retirement or other completion of service as a director, amounts deferred into Promised Fee Shares are payable in either cash and/or shares of the company’s stock either as lump sum or installments pursuant to the director’s distribution election.

For additional information about the DCEAP, refer to “Director Compensation” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024.

For additional information about the DCEAP, refer to “Director Compensation under the IBM Deferred Compensation and Equity Award Plan (DCEAP)” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 29, 2025.

Certain Relationships and Related Transactions, and Director Independence:

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Consolidated Statement of Cash Flows for the years ended December 31, 2024, 2023 and 2022 (page 49).

Consolidated Statement of Equity at December 31, 2023, 2022 and 2021 (pages 48 and 49).

Consolidated Statement of Equity at December 31, 2024, 2023 and 2022 (pages 50 through 51).

Notes to Consolidated Financial Statements (pages 52 through 121).

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The Certificate of Incorporation of IBM, is Exhibit 3.1 to Form 10-K, filed February 22, 2022, and is hereby incorporated by reference.

The By-Laws of IBM, as amended through December 12 , 202 3 , is Exhibit 3.2 to Form 8-K , filed December 12 , 202 3 , and is hereby incorporated by reference.

The By-Laws of IBM, as amended through April 30, 2024 , is Exhibit 3.2 to Form 10-Q , filed A p ril 30, 2024 , and is hereby incorporated by reference.

(4) Instruments defining the rights of security holders

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The instruments defining the rights of the holders of the 3.450% Notes due 2026 and the 4.700% Notes due 2046 are Exhibits 4.4 and 4.5 to Form 8-K, filed February 18, 2016, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 1.125% Notes due 2024 and the 1.750% Notes due 2028 are Exhibits 4.2 and 4.3 to Form 8-K, filed March 4, 2016, and are hereby incorporated by reference.

The instrument defining the rights of the holders of the 1.750% Notes due 2028 is Exhibit 4.3 to Form 8-K, filed March 4, 2016, and is hereby incorporated by reference.

The instrument defining the rights of the holders of the 0.300% Notes due 2026 is Exhibit 4 to Form 8-K, filed November 1, 2016, and is hereby incorporated by reference.

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The instruments defining the rights of the holders of the 0.950% Notes due 2025, and the 1.500% Notes due 2029 are Exhibits 4.1 and 4.2 to Form 8-K, filed May 22, 2017, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 0.875% Notes due 2025, the 1.250% Notes due 2027 and the 1.750% Notes due 2031 are Exhibits 4.2, 4.3 and 4.4 to Form 8-K, filed January 30, 2019, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 3.000% Notes due 2024, the 3.300% Notes due 2026, the 3.500% Notes due 2029, the 4.150% Notes due 2039 and the 4.250% Notes due 2049 are Exhibits 4.4, 4.5, 4.6, 4.7 and 4.8 to Form 8-K, filed May 14, 2019, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 1.250% Notes due 2027 and the 1.750% Notes due 2031 are Exhibits 4.3 and 4.4 to Form 8-K, filed January 30, 2019, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 3.300% Notes due 2026, the 3.500% Notes due 2029, the 4.150% Notes due 2039 and the 4.250% Notes due 2049 are Exhibits 4.5, 4.6, 4.7 and 4.8 to Form 8-K, filed May 14, 2019, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 0.300% Notes due 2028, the 0.650% Notes due 2032 and the 1.200% Notes due 2040 are Exhibits 4.1, 4.2 and 4.3 to Form 8-K, filed February 10, 2020, and are hereby incorporated by reference.

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The instruments defining the rights of the holders of the 3.375% Notes due 2027, the 3.625% Notes due 2031, the 3.750% Notes due 2035, the 4.000% Notes due 2043, the 4.875% Notes due 2038, the 4.500% Notes due 2026, the 4.500% Notes due 2028, the 4.750% Notes due 2033 and the 5.100% Notes due 2053 are Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8 and 4.9 to Form 8-K, filed February 3, 2023, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 4 .

700 % Notes due 202 6 , the 4 .6 00 % Notes due 20 27 , the 4 .

60 0% Notes due 20 29 , the 4.

750 % Notes due 20 31 , the 4.

900 % Notes due 203 4 , the 5 .

250 % Notes due 20 44 and the 5.

3 00% Notes due 205 4 are Exhibits 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 to Form 8-K, filed February 2 , 202 4 , and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 4.700% Notes due 2026, the 4.600% Notes due 2027, the 4.600% Notes due 2029, the 4.750% Notes due 2031, the 4.900% Notes due 2034, the 5.250% Notes due 2044 and the 5.300% Notes due 2054 are Exhibits 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 to Form 8-K, filed February 2, 2024, and are hereby incorporated by reference.

The instruments defining the rights of the holders of the 2.900% Notes due 2030, the 3.150% Notes due 2033, the 3.450% Notes due 2037, the 3.800% Notes due 2045, the 4.650% Notes due 2028, the 4.800% Notes due 2030, the 5.000% Notes due 2032, the 5.200% Notes due 2035 and the 5.700% Notes due 20 5 5 are Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, and 4.9 to Form 8-K, filed February 7, 2025, and are hereby incorporated by reference.

Indenture dated as of October 1, 1993 between IBM and The Bank of New York Mellon, (as successor to The Chase Manhattan Bank (National Association)) as Trustee, is Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2017, and is hereby incorporated by reference.

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333-30424 on Form S-8, as such amended plan was filed as Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2007, is hereby incorporated by reference.

The IBM 1997 Long-Term Performance Plan, a compensatory plan, contained in Registration Statement No.

333-31305 on Form S-8, as such amended plan was filed as Exhibit 10.4 to Form 10-Q for the quarter ended September 30, 2007, is hereby incorporated by reference.

The VMTurbo, Inc.

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333-259965 on Form S-8, as such amended and restated plan was filed as Exhibit 4.3 to Form S-8, filed on October 1, 2021, is hereby incorporated by reference.

Forms of equity award agreements for (i) stock options, restricted stock, restricted stock units, cash-settled restricted stock units, SARS, (ii) performance share units and (iii) retention restricted stock unit awards as well as the Terms and Conditions of LTPP Equity Awards, effective October 1, 2018, in connection with the foregoing award agreements, filed as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2018 are hereby incorporated by reference.

Terms and Conditions of LTPP equity award agreements was filed as Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2019, and is hereby incorporated by reference.

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Forms of LTPP equity award agreements for (i) stock options, restricted stock, restricted stock units, cash-settled restricted stock units, SARS, and (ii) performance share units, as well as the Terms and Conditions of LTPP Equity Awards, effective January 1, 2022, in connection with the foregoing award agreements, filed as Exhibit 10.1 to Form 10-K for the year ended December 31, 2021, are hereby incorporated by reference.

Forms of LTPP equity award agreements for (i) stock options, restricted stock, restricted stock units, cash-settled restricted stock units, SARS, and (ii) performance share units, as well as the Terms and Conditions of LTPP Equity Awards, effective February 1, 2023, in connection with the foregoing award agreements , filed as Exhibit 10.

1 to Form 10 - K for the year en ded December 31, 2022, are he reby incorporated by reference .

Forms of LTPP equity award agreements for (i) stock options, restricted stock units, cash-settled restricted stock units, SARS, (ii) retention restricted stock units, cash-settled retention restricted stock units, and ( i ii) performance share units, as well as the Terms and Conditions of LTPP Equity Awards, effective July 1, 2023, in connection with the foregoing award agreements, filed as Exhibit 10.

2 to Form 10- Q for the quarter ended June 3 0 , 202 3 , are hereby incorporated by reference.

Annual Incentive Program, effective January 1, 2023, filed as Exhibit 10.3 for t he quarter ended June 30, 2023, are hereby incorporated by reference.

Forms of LTPP equity award agreements for (i) stock options, restricted stock, restricted stock units, cash-settled restricted stock units, SARS, and (ii) performance share units, as well as the Terms and Conditions of LTPP Equity Awards, effective February 1, 2023, in connection with the foregoing award agreements, filed as Exhibit 10.1 to Form 10-K for the year ended December 31, 2022, are hereby incorporated by reference.

Forms of LTPP equity award agreements for (i) stock options, restricted stock units, cash-settled restricted stock units, SARS, (ii) retention restricted stock units, cash-settled retention restricted stock units, and (iii) performance share units, as well as the Terms and Conditions of LTPP Equity Awards, effective July 1, 2023, in connection with the foregoing award agreements, filed as Exhibit 10.2 to Form 10-Q for the quarter ended June 30, 2023, are hereby incorporated by reference.

Forms of LTPP equity award agreements for (i) stock options, restricted stock, restricted stock units, cash-settled restricted stock units, SARs, (ii) performance share units, and (iii) retention restricted stock unit awards, cash-settled retention restricted stock units, effective February 19, 2024, filed as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2024, is hereby incorporated by reference.

Terms and Conditions of IBM LTPP Equity Awards, effective April 1, 2024, filed as Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2024, is hereby incorporated by reference.

Annual Incentive Program, effective January 1, 2023, as amended through January 1, 2024, filed as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2024, is hereby incorporated by reference.

Board of Directors compensatory plans, as described under the caption “Governance of the Board—Director Compensation” in IBM’s definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 29, 2025, are hereby incorporated by reference.

The IBM Non-Employee Directors Stock Option Plan, contained in Registration Statement 33-60227 on Form S-8, is hereby incorporated by reference.

The IBM Board of Directors Amended and Restated Deferred Compensation and Equity Award Plan, a compensatory plan, as amended and restated effective January 1, 2014, which was filed as Exhibit 10.1 to Form 10-K for the year ended December 31, 2013, and is hereby incorporated by reference.

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Amendment No.

2 to the Amended and Restated Deferred Compensation and Equity Award Plan, effective December 13, 2022 , filed as Exhibit 10.2 to Form 10-K for the year ended December 31, 2022, are he reby incorporated by reference .

2 to the Amended and Restated Deferred Compensation and Equity Award Plan, effective December 13, 2022, filed as Exhibit 10.2 to Form 10-K for the year ended December 31, 2022, are hereby incorporated by reference.

The IBM Supplemental Executive Retention Plan, a compensatory plan, as amended and restated through December 31, 2008, which was filed as Exhibit 10.2 to Form 10-K for the year ended December 31, 2008, is hereby incorporated by reference.

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Amendment No.

2 to the IBM Supplemental Executive Retention Plan, a compensatory plan, effective December 31 , 20 23 .

The IBM Excess Savings Plan, a compensatory plan (formerly the IBM Excess 401(k) Plus Plan), as amended and restated through January 1, 202 4 .

The IBM 2003 Employees Stock Purchase Plan, contained in Registration Statement 333-104806 on Form S-8, as amended through April 1, 2005, which was filed as Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2005, is hereby incorporated by reference.

2 to the IBM Supplemental Executive Retention Plan, a compensatory plan, effective December 31, 2023 , which was filed as Exhibit 10.1 to Form 10-K for the year ended De cember 31, 202 3, and is hereby incorporated by reference .

The IBM Excess Savings Plan, a compensatory plan (formerly the IBM Excess 401(k) Plus Plan), as amended and restated through January 1, 2024 , filed as Exhibit 10.2 t o Form 10-K for the year ended D e cember 31, 202 3 , is hereby incorporated by reference (1)

The IBM 2014 Employees Stock Purchase Plan contained in Registration Statement 333-190160 on Form S-8, as such plan was filed as Exhibit 4 to Form S-8, filed on June 13, 2014, is hereby incorporated by reference.

Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2009, is hereby incorporated by reference.

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Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-K for the year ended December 31, 2021, is hereby incorporated by reference.

Form of Noncompetition Agreement , filed as Exh ibit 10.4 to F orm 10-K for the year ended D ecember 31, 2022, is hereby incorporate by reference .

Form of Noncompetition Agreement, filed as Exhibit 10.4 to Form 10-K for the year ended December 31, 2022, is hereby incorporate d by reference.

Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2024, is hereby incorporated by reference.

Form of Noncompetition Agreement .

Letter Agreement, signed by Gary Cohn and IBM, dated December 24, 2020, filed as Exhibit 10.3 to Form 10-K for the year ended December 31, 2021, is hereby incorporated by reference.

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Amendment No.

1 to Five-Year Credit Agreement dated as of June 30, 2022, among International Business Machiness Corporation, the several banks and other financial institutions from time to time parties to such agreement and JPMorgan Chase Bank, N.A., as Administrative Agent, filed as Exhibit 10.2 to Form 8-K, filed July 1, 2022, is hereby incorporated by reference.

1 to Five-Year Credit Agreement dated as of June 30, 2022, among International Business Machines Corporation, the several banks and other financial institutions from time to time parties to such agreement and JPMorgan Chase Bank, N.A., as Administrative Agent, filed as Exhibit 10.2 to Form 8-K, filed July 1, 2022, is hereby incorporated by reference.

Confirmation of Termination Date Extension dated June 17, 2024 to $7,500,000,000 Five-Year Credit Agreement dated as of June 22, 2021 (as amended by Amendment No.

1 to Five-Year Credit Agreement, dated as of June 30, 2022), among IBM, the several banks and other financial institutions from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, BNP Paribas, Citibank N.A.

and Royal Bank of Canada, as Syndication Agents, and the Documentation Agents named therein , filed as Exhibit 10.2 to Form 8-K, filed June 16, 20 23, is hereby incorporated by reference.

and Royal Bank of Canada, as Syndication Agents, and the Documentation Agents named therein , filed as Exhibit 10.

2 to Form 8-K, filed June 17, 2024, is hereby incorporated by reference

(13) Annual Report to Security Holders (2)

(19) Securities Trading Policy

(21) Subsidiaries of the registrant

(22) Subsidiary Issuer of Guaranteed Securities, filed as Exhibit 22 for the quarter ended March 31, 2024, is hereby incorporated by reference.

(23) Consent of Independent Registered Public Accounting Firm

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(97) International Business Machines Corporation Executive Officer Compensation Recovery Policy

(97) International Business Machines Corporation Executive Officer Compensation Recovery Policy , filed as Exhibit 9 7 to Form 10-K for the year ended December 31, 202 3 , is hereby incorporate d by reference.

101.INS XBRL Instance Document – the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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/s/ ARVIND KRISHNA

Chairman of the Board

Chairman of the Board, President

and Chief Executive Officer

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Arvind Krishna

KAVANAUGH Senior Vice President and Chief

Financial Officer, Finance and Operations

KAVANAUGH Senior Vice President, Finance and Operations, and Chief Financial Officer

February 25, 2025

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Board of Directors

/s/ FRANK SEDLARCIK

Frank Sedlarcik

Director Attorney-in-fact

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Pollack Director

Swedish Director

Voser Director

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Allowance For Credit Losses (1) (2)

$ 467 $ 13 $ ( 97 ) $ 48 $ 431

–Current $ 431 $ ( 11 ) $ ( 146 ) $ ( 20 ) $ 254

–Noncurrent $ 27 $ ( 7 ) $ 0 $ ( 1 ) $ 19

$ 418 $ 59 $ ( 55 ) $ 45 $ 467

–Current $ 467 $ 13 $ ( 97 ) $ 48 $ 431

–Noncurrent $ 28 $ ( 2 ) $ — $ 0 $ 27

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2022 $ 435 $ 620 $ ( 629 ) $ ( 2 ) $ 424

(1) The majority of the write-offs during the period related to receivables which had been previously reserved.

(2) Other includes reserves related to discontinued operations.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures