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Item 9A. Controls and Procedures

2023-05-26 compared with 2022-03-10 · 55 added, 1517 removed, 115 unchanged (93% of the section changed)

Controls and Procedures

The Company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

Disclosure Controls and Procedures

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s independent registered public accounting firm due to an exemption established by the rules of the SEC for newly public companies.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that occurred during the Company’s last fiscal quarter ended March 31, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act).

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that:

● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

● provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our Board of Directors;

● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of March 31, 2023 .

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) .

Based on this evaluation, management concluded that, as of March 31, 2023 , our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of March 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included in this Annual Report on Form 10-K.

See “Report of Independent Registered Public Accounting Firm” on page 52 .

Other Information :

Section 13(r) Disclosure

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, we hereby incorporate by reference herein Exhibit 99.1 of this report, which includes disclosures regarding activities at International Business Machines Corporation, which was, during a portion of the period covered by this report, our affiliate.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections:

1 unchanged sentence

Directors, Executive Officers and Corporate Governance .

Set forth below is certain information regarding each of our current directors and executive officers as of March 10, 2022.

Martin Schroeter

Chief Executive Officer and Chairman of the Board

David Wyshner

Chief Financial Officer

Group President

Maryjo Charbonnier

Chief Human Resources Officer

Edward Sebold

General Counsel and Secretary

Vineet Khurana

Shirley Ann Jackson

Denis Machuel

Jana Schreuder

The following are brief biographies describing the backgrounds of our executive officers and directors.

Martin Schroeter.

Schroeter was appointed our first Chief Executive Officer in January 2021 and was appointed as Chairman of the Board in October 2021 in connection with the Spin-off.

Previously, Mr.

Schroeter served in a variety of business line and finance executive positions at IBM including Senior Vice President of Global Markets from 2018 until 2020, responsible for IBM’s global sales, customer relationships and satisfaction and worldwide geographic operations and overseeing IBM’s marketing and communication functions and building IBM’s brand and reputation globally, and Senior Vice President and Chief Financial Officer from 2014 until 2017, leading IBM’s shift in spending profile to align with IBM strategic initiatives.

Earlier in his career, Mr.

Schroeter served as General Manager of IBM global financing, managing a total asset base in excess of $37 billion, and had served numerous roles in Japan, the United States and Australia.

Previously, Mr.

Schroeter served as a director of the American Australian Association.

Schroeter received his MBA from Carnegie Mellon University and his undergraduate degree from Temple University.

Schroeter’s global business and leadership experience and financial expertise make him a well-qualified addition to our Board.

David Wyshner.

Wyshner was appointed our Chief Financial Officer in September 2021.

From March 2020 until his appointment as our Chief Financial Officer, Mr.

Wyshner served as the Chief Financial Officer at XPO Logistics, Inc., where he led all financial functions for the global transportation and contract logistics company that manages supply chains for customers worldwide.

Prior to that, Mr.

Wyshner served as the Chief Financial Officer at Wyndham Hotels & Resorts, Inc.

from May 2018 to December 2019, and as its senior advisor from December 2019 to March 2020.

He served as Executive Vice President and Chief Financial Officer of Wyndham Worldwide Corporation, from which Wyndham Hotels was spun-off, from August 2017 to May 2018.

From August 2006 to June 2017, Mr.

Wyshner served as the Chief Financial Officer of Avis Budget Group and also served as Avis Budget Group’s president from January 2016 to June 2017.

Wyshner received his MBA from the Wharton School of the University of Pennsylvania and his bachelor’s degree from Yale University.

Keinan was appointed our Group President in March 2021.

From September 2020 until his appointment as our Group President, Mr.

Keinan served as a venture partner at Pitango Venture Capital, Israel’s leading venture capital group, focused on scaling the success of growth stage technology companies.

Prior to that, Mr.

Keinan served a variety of executive roles at IBM from July 1987 to June 2020, including General Manager of IBM North America and Chairman of IBM Japan, and held top leadership roles in Latin America and Europe.

Keinan currently serves on the boards of Cellebrite, Ottopia and United Way of New York City.

Keinan received his MBA from University of Miami Herbert Business School and his Bachelor of Science in Computer Science and Electrical Engineering from Rensselaer Polytechnic Institute.

Maryjo Charbonnier.

Charbonnier was appointed our Chief Human Resources Officer in July 2021.

From January 2015 until her appointment, Ms.

Charbonnier served as the Chief Human Resources Officer at Wolters Kluwer, where she was responsible for the design and implementation of all human resources strategies, policies and processes.

Prior to that, Ms.

Charbonnier served as the Chief Human Resources Officer at Broadridge Financial Solutions from August 2008 to December 2014.

From August 1995 to August 2008, Ms.

Charbonnier was an HR executive in a variety of leadership roles at PepsiCo, including Vice President for Talent Sustainability for PepsiCo Foods Americas.

Charbonnier received her MBA from Southern Methodist University and her undergraduate degree from Catholic University.

Edward Sebold.

Sebold was appointed our General Counsel and Secretary in October 2021 in connection with the Spin-off.

From March 2012 until his appointment as our General Counsel, Mr.

Sebold served as Assistant General Counsel at IBM, leading several global legal functions at IBM, including teams that worked with services, IBM's Watson Health, litigation and mergers and acquisitions.

Prior to joining IBM in 2012, Mr.

Sebold was a partner at Jones Day in the firm’s Cleveland and Houston offices.

Sebold serves on the board of the Pro Bono Partnership.

Sebold received his JD from University of Michigan and his undergraduate degree from John Carroll University.

Vineet Khurana.

Khurana was appointed our Controller in May 2021.

Since July 2020, Mr.

Khurana had been serving as Chief Financial Officer of IBM’s Global Business Services.

Prior to assuming this role, Mr.

Khurana was the Chief Financial Officer of IBM Europe from March 2018 through July 2020 and the Vice President and Chief Financial Officer of IBM United Kingdom and Ireland from July 2016 until March 2018.

Earlier in his IBM tenure, Mr.

Khurana has held roles of increasing responsibility spanning financial strategy and IBM’s Global Financing division.

Khurana also serves as an External Governor and a member of the Infrastructure and Finance committee of the University of Portsmouth, United Kingdom.

Khurana received his MBA from University of Warwick and his undergraduate degree from Manipal Institute of Technology.

Caruso was elected to our Board in October 2021 in connection with the Spin-off.

Caruso served as the Executive Vice President and Chief Financial Officer of Johnson & Johnson from 2007 until his retirement in 2018.

Earlier in his career, Mr.

Caruso served Centocor, Inc.

as Vice President, Finance and Chief Financial Officer from 1994 to 1998, and as Senior Vice President and Chief Financial Officer from 1998 until the acquisition of Centocor by Johnson & Johnson in 1999.

Caruso then joined Johnson & Johnson and served in various executive positions until his appointment as the Executive Vice President and Chief Financial Officer in 2007.

Caruso is a director of McKesson Corporation.

Caruso previously served as the Co-Chair of the U.S.

Chamber of Commerce Global Initiative on Health and the Economy and currently serves on the Board of Trustees of The Children’s Hospital of Philadelphia and the Cystic Fibrosis Foundation.

Caruso received his BS from Drexel University.

Caruso’s global business experience and financial expertise make him a well-qualified member of our Board.

Harris was elected to our Board in October 2021 in connection with the Spin-off.

Harris served as Chief Executive Officer of Raytheon International Inc.

from 2013 until 2020.

Harris also served as Vice President of Business Development for Raytheon Company during his tenure.

Harris joined Raytheon in 1983 and held positions of increasing responsibility, including Vice President of Operations and Contracts for Raytheon’s former electronic systems business, Vice President of Contracts for the company’s government and defense businesses until 2003, and Vice President of Contracts and Supply Chain for Raytheon Company until 2010, when he was named president of the Raytheon Technical Services Company, a role he served until 2013.

Harris served on the Radio Technical Commission for Aeronautics NextGen Advisory Committee of the U.S.

Department of Transportation, the National Advisory Council on Minority Business Enterprise with the U.S.

Department of Commerce and the Association of the United States Army’s Council of Trustees.

Harris serves as a board member for Cisco Systems Inc.

and Flex Ltd.

He received his undergraduate degree from Boston University.

Harris’ global business experience and technology, digital and cybersecurity expertise make him a well-qualified member of our Board.

Hester was elected to our Board in October 2021 in connection with the Spin-off.

Hester joined RSA Insurance Group in 2014, and was the Chief Executive Officer until his retirement in June 2021.

Prior to joining RSA, he was group Chief Executive of Royal Bank of Scotland from 2008 to 2013, Chief Executive of British Land Plc from 2004 to 2008, and Chief Operating Officer and Chief Financial Officer of Abbey National plc from 2002 to 2004.

Hester began his career at Credit Suisse First Boston in 1982 and held positions of increasing responsibility including Chief Financial Officer and Head of Support Division from 1996 until 2000, when he was appointed as Global Head of the Fixed Income Division, a role he served until 2001.

Hester currently serves as a non-executive director of easyJet plc and a director of Centrica plc.

Additionally, during the past five years, he served as a director of RSA Insurance Group plc.

Hester was formerly a director of the Royal Bank of Scotland, Northern Rock and Abbey National plc.

Hester received his undergraduate degree from Oxford University.

Hester’s global business experience and financial expertise make him a well-qualified member of our Board.

Shirley Ann Jackson.

Jackson was elected to our Board in October 2021 in connection with the Spin-off.

Since 1999, Dr.

Jackson has served as the President of Rensselaer Polytechnic Institute.

From 1995 until she assumed her current position, Dr.

Jackson was the Chairwoman of the U.S.

Nuclear Regulatory Commission.

From 1991 to 1995 Dr.

Jackson served as a consultant to the former AT&T Bell Laboratories and was also a professor of theoretical physics at Rutgers University.

Prior to such roles, Dr.

Jackson was a theoretical physicist at the former AT&T Bell Laboratories from 1976 to 1991.

Jackson is a member of the United States Secretary of Energy Advisory Board.

She has been Co-Chair of the President’s Intelligence Advisory Board, a member of the International Security Advisory Board to the United States Secretary of State.

Jackson is a fellow of the Royal Academy of Engineering (U.K.), the American Academy of Arts and Sciences, and a member of the U.S.

National Academy of Engineering and the American Philosophical Society.

Jackson is a recipient of the National Medal of Science, the highest award in science and engineering awarded by the U.S.

Jackson is a member of the Council on Foreign Relations.

She is a Regent Emerita and former Vice-Chair of the Board of Regents of the Smithsonian Institution, a past president of the American Association for the Advancement of Sciences, and an honorary trustee of the Brookings Institution.

Jackson is a director of FedEx Corporation and Public Service Enterprise Group Incorporated.

Additionally, during the past five years, she served as a director of IBM.

Jackson received her PhD and BS degrees from MIT.

Jackson’s extensive leadership and technology experience make her a well-qualified member of our Board.

Janina Kugel.

Kugel was elected to our Board in October 2021 in connection with the Spin-off.

Kugel served as the Chief Human Resources Officer and member of the Managing Board of Siemens AG from 2015 until 2020.

Kugel joined Siemens AG in 2001 as Vice President of Communications Group Strategy and in 2005, was appointed Director of Global Commercial Excellence before becoming Director of Human Resources in 2009.

Kugel joined Osram in 2012, where she served as the Chief Human Resources Officer until 2013, when she was appointed Corporate Vice President of Human Resources and Chief Diversity Officer at Siemens AG.

Kugel serves on the Board of Konecranes plc and TUI AG and is a member of the supervisory board of the German Pension Benefit Guaranty Association (Pensions-Sicherungs-Verein) and the Executive Committee of the Supervisory Board of the Confederation of German Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände).

Kugel is also trustee of the Hertie School of Governance in Germany, a member of the International Advisory Board of the IESE Business School in Spain and, the University Council of the Technical University of Munich.

Since 2020, Ms.

Kugel has served as senior advisor to EQT, AB Group and Boston Consulting Group, Inc.

She received her MS from the Johannes Gutenberg University Mainz.

Kugel’s global business experience and government service make her a well-qualified member of our Board.

Denis Machuel.

Machuel was elected to our Board in October 2021 in connection with the Spin-off.

From 2018 to September 2021, Mr.

Machuel served as Chief Executive Officer of Sodexo S.A.

Machuel joined Sodexo in 2007 as the Managing Director of Benefits and Rewards Services for Central and Eastern Europe.

In 2012, he became Chief Executive Officer of Sodexo benefits and rewards worldwide.

Machuel joined the Sodexo Group Executive Committee in 2014, and from 2015 until 2018, served as Group Chief Digital Officer and since 2017, he has served as Deputy Chief Executive Officer of Sodexo.

Additionally, between 2016 and 2017, Mr.

Machuel served as Chief Executive Officer of Personal and Home Services at Sodexo.

Machuel has also been a member of the G7 Business for Inclusive Growth Coalition and the Consumer Goods Forum.

Machuel received his MS from Texas A&M University and his undergraduate degree from ENSIMAG College of Engineering.

Machuel’s global business experience and technology and digital expertise make him a well-qualified member of our Board.

Merchant was elected to our Board in October 2021 in connection with the Spin-off.

Merchant has served as Senior Executive Vice President and Head of Client Services and Technology at TIAA since 2015.

Prior to serving this role, Mr.

Merchant served as citywide Chief Information and Innovation Officer for the City of New York from 2012 until 2014.

From 2006 until 2009, Mr.

Merchant served as Executive Vice President, Chief Information and Operations Officer and member of the Executive Committee at the Federal National Mortgage Association (Fannie Mae), and Senior Vice President, Chief Information Officer and Chief Technology Officer at Merrill Lynch, Pierce, Fenner & Smith Incorporated from 2000 until 2006.

Merchant also serves as a director for Juniper Networks, Inc.

Merchant received his MBA from Temple University, his MS from Memphis State University and his BS from Bombay University.

Merchant’s global business and technology experience make him a well-qualified member of our Board.

Jana Schreuder.

Schreuder was elected to our Board in October 2021 in connection with the Spin-off.

Schreuder served as Executive Vice President and Chief Operating Officer of Northern Trust Corporation from 2014 until she retired from that role in 2018.

Schreuder joined Northern Trust in 1980 and during her tenure held multiple roles as a member of the management team, including service as Chief Risk Officer from 2005 to 2006, President of Operations and Technology from 2006 to 2011, and President of Wealth Management from 2011 to 2014.

Schreuder is a member of the Global Governance Committee of Women Corporate Directors.

Schreuder currently sits on the board of Blucora, Inc.

and The Bank of N.T.

Butterfield & Son Limited.

Additionally, during the past five years, she served as a director of LifePoint Health Inc.

Schreuder received her MBA from Northwestern University and her BA from Southern Methodist University.

Schreuder’s technology, digital and cybersecurity expertise make her a well-qualified member of our Board.

Ungerleider was elected to our Board in October 2021 in connection with the Spin-off.

Ungerleider has served as President and Chief Financial Officer of Dow Inc.

since April 2019.

In 1990, he joined The Dow Chemical Company and subsequently held various positions, including Chief Financial Officer from 2014 to 2015.

In 2016, he was appointed Chief Financial Officer of DowDuPont effective upon the merger of The Dow Chemical Company and E.I.

du Pont de Nemours and Company.

Ungerleider served in this role from 2017 until April of 2019, when Dow Inc.

separated from DowDuPont.

Ungerleider is Chairman of the Dow Company Foundation and serves on the board of directors of FCLTGlobal, the Michigan Israel Business Bridge and Keep America Beautiful.

Ungerleider is also Chair of the Business Leaders for Michigan business roundtable and the Michigan Climate Executive Advisory Group.

Additionally, during the past five years, he served as a director of Wolverine Bancorp, Inc.

Ungerleider received his MBA from UCLA and his BBA from The University of Texas at Austin.

Ungerleider’s global business and leadership experience and financial expertise make him a well-qualified member of our Board.

Our Board of Directors

Our Board of Directors (our “Board”) consists of ten members.

Until the conclusion of the 2027 annual meeting, our Board will be divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of directors.

The directors designated as Class I directors have terms expiring at the annual meeting of stockholders in 2022.

The directors designated as Class II directors have terms expiring at the annual meeting of stockholders in 2023 and the directors designated as Class III directors have terms expiring at the annual meeting of stockholders in 2024.

Any director elected at the 2022, 2023 or 2024 annual meeting will belong to the class whose term expires at such annual meeting and will hold office for a three-year term until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal.

Machuel and Mr.

Merchant serve as Class I directors.

Schreuder and Mr.

Ungerleider serve as Class II directors.

Jackson and Mr.

Schroeter serve as Class III directors.

Beginning at the 2025 annual meeting and at each annual meeting thereafter, all of our directors up for election at such meeting will be elected annually and will hold office until the next annual meeting and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal.

Effective as of the conclusion of the 2027 annual meeting, our Board will therefore no longer be divided into three classes.

Before our Board is declassified, it would take at least two elections of directors for any individual or group to gain control of our Board.

Accordingly, while the classified board is in effect, these provisions could discourage a third party from initiating a proxy contest, making a tender offer or otherwise attempting to control us.

This temporary classified Board structure is intended to provide better continuity of leadership during Kyndryl’s first years of operation as an independent, publicly held business, versus annually elected directors.

Business Conduct Guidelines

Our Business Conduct Guidelines are applicable to all of our directors, officers and employees, including our Chairman and Chief Executive Officer, Chief Financial Officer, Controller and other senior financial officers.

Our Business Conduct Guidelines set forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws (including insider trading laws), use of our assets and business conduct and fair dealing.

Our Business Conduct Guidelines also satisfy the requirements for a code of ethics, as defined by Item 406 of Regulation S-K promulgated by the SEC.

The Business Conduct Guidelines may be found on our website at www.kyndryl.com under Investors:

Information about our executive officers may be found under the caption “Information about our Executive Officers” in Part I of this Form 10-K and is incorporated by reference in this Item 10.

Code of Ethics

The Kyndryl Code of Conduct (our Code of Ethics) is applicable to all of our directors, officers and employees, including our Chairman and Chief Executive Officer, Chief Financial Officer, Controller and other senior financial officers.

The Kyndryl Code of Conduct sets forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws (including insider trading laws), use of our assets and business conduct and fair dealing.

The Kyndryl Code of Conduct also satisfies the requirements for a code of ethics, as defined by Item 406 of Regulation S-K promulgated by the SEC.

The Kyndryl Code of Conduct may be found on our investor relations website at investors.kyndryl.com under Corporate Responsibility:

Governance Documents:

Business Conduct Guidelines.

To the extent applicable, we will disclose within four business days any substantive changes in, or waivers of, the Business Conduct Guidelines granted to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website as set forth above rather than by filing a Current Report on Form 8-K.

The Kyndryl Code of Conduct.

To the extent applicable, we will disclose within four business days any substantive changes in, or waivers of, the Kyndryl Code of Conduct granted to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website as set forth above rather than by filing a Current Report on Form 8-K.

In the case of a waiver for an executive officer or a director, the required disclosure also will be made available on our website within four business days of the date of such waiver.

Audit Committee

The Audit Committee of our Board consists entirely of independent directors, Mr.

Machuel and Mr.

Merchant, each of whom meets the independence requirements set forth in the listing standards of the New York Stock Exchange, Rule 10A-3 under the Exchange Act and our Audit Committee charter.

Caruso serves as Chair of the Audit Committee.

Each member of the Audit Committee is financially literate, and each of Mr.

Machuel and Mr.

Merchant has accounting and related financial management expertise and satisfies the criteria to be an “audit committee financial expert” under the rules and regulations of the SEC, as those qualifications are interpreted by our Board in its business judgment.

The Audit Committee is responsible for overseeing reports of our financial results, audit reporting, internal controls, and adherence to our Business Conduct Guidelines in compliance with applicable laws and regulations.

Concurrent with that responsibility, as set out more fully in the Audit Committee charter, the Audit Committee will perform other functions, including:

● selecting the independent registered public accounting firm, approving all related fees and compensation, overseeing the work of the independent accountant, and reviewing its selection with the Board;

● annually preapproving the proposed services to be provided by the accounting firm during the year;

● reviewing the procedures of the independent registered public accounting firm for ensuring its independence and other qualifications with respect to the services performed for us;

● reviewing any significant changes in accounting principles or developments in accounting practices and the effects of those changes on our financial reporting;

● assessing the effectiveness of our internal audit function and overseeing the adequacy of internal controls and risk management processes;

● meeting with management prior to each quarterly earnings release and periodically to discuss the appropriate approach to earnings press releases and the type of financial information and earnings guidance to be provided to analysts and rating agencies .

Except as set forth above, the information called for by this Item 10 will be included in our Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed within 120 days after March 31, 2023, the last day of our fiscal year covered by this Form 10-K.

Such information is incorporated herein by reference.

Executive Compensation.

Compensation Discussion and Analysis

Executive Summary

On November 3, 2021, Kyndryl was spun off from IBM and became a standalone publicly-traded company.

During 2021, IBM hired each of our named executive officers (our “NEOs,” as set forth under “⸺NEOs” below), other than Mr.

Sebold, for their roles with Kyndryl and agreed with Mr.

Sebold, who was an employee of IBM, that he would serve as our General Counsel and Secretary following the Spin-off.

In doing so, IBM and the Executive Compensation and Management Resources Committee of the IBM Board of Directors (the “IBM Compensation Committee”), with a view toward ensuring we would have a first-class executive team in place at the time of the Spin-off, reviewed peer group and other market data with its compensation consultant to determine the initial compensation arrangements of each of the NEOs.

See “⸺Executive Compensation Decision-Making and Oversight ⸺ Prior to the Spin-off” below.

For each NEO other than Mr.

Sebold, initial compensation arrangements were set forth in an offer letter which was assumed by Kyndryl following the Spin-off.

This Compensation Discussion and Analysis and the corresponding compensation tables include information regarding compensation decisions made by IBM and the IBM Compensation Committee with respect to the compensation of Kyndryl’s NEOs prior to the Spin-off and by Kyndryl’s Compensation Committee after the Spin-off.

Since the Spin-off, Kyndryl’s Compensation Committee has been responsible for determining Kyndryl’s compensation programs and policies for our executive officers and approving the compensation levels applicable to them.

In such capacity, following the Spin-off Kyndryl’s Compensation Committee:

● Approved Kyndryl’s compensation philosophy, which is described under “⸺Our Compensation Philosophy” below;

● Engaged its independent compensation consultant, as described under “Executive Compensation Decision-Making and Oversight⸺ After the Spin-off⸺ Role of Compensation Consultants” below, and, with the input of such compensation consultant and management’s compensation consultant, developed groups of peer companies to provide comparative executive compensation data as described under “⸺Executive Compensation Decision-Making and Oversight⸺ After the Spin-off⸺ Use of Competitive Data” below;

● Developed and recommended an Executive Compensation Clawback Policy that was adopted by Kyndryl’s Board and is described under “⸺Additional Compensation Information ⸺ Clawback Policy” below;

● Conducted a review and market check of each element of the initial total compensation arrangements of Kyndryl’s NEOs determined by IBM as described above, and based on that review:

Adopted the target total direct compensation and each component thereof as determined by IBM except for adjustments to the annual long-term incentives of Mr.

Keinan and Mr.

Sebold as described under “ ⸺ Elements of Compensation and Compensation Decisions ⸺ Long-Term Incentives ⸺ After the Spin-off ” ;

Determined to award a cash bonus for the partial year following the Spin-off as described under “ ⸺ Elements of Compensation and Compensation Decisions ⸺ Annual Cash Bonus ⸺ After the Spin-off ” ;

Determined to make one-time long-term, predominantly performance-based equity awards (the “ Launch Awards ” ) to certain executives, including our NEOs, expected to have the biggest impact on Kyndryl ’ s future success as described under “ ⸺ Elements of Compensation and Compensation Decisions ⸺ Long-Term Equity Incentives ⸺ After the Spin-off ⸺ Launch Awards ” ;

Determined the structure of future long-term equity incentive awards, as described under “⸺ Elements of Compensation and Compensation Decisions ⸺ Long-Term Equity Incentives ⸺ Going Forward.

Kyndryl’s NEOs for fiscal year 2021 were the following five executive officers:

● Martin Schroeter , our Chief Executive Officer

● David Wyshner , our Chief Financial Officer

● Elly Keinan , our Group President

● Edward Sebold , our General Counsel and Secretary

● Maryjo Charbonnier , our Chief Human Resources Officer

Our Compensation Philosophy

Our Compensation Committee bases its compensation decisions with respect to the compensation of our executive officers on the following principles:

Pay for performance – the majority of executive compensation opportunity is performance-based and tied to the Company’s business results and individual performance;

Align with stockholders – incentives are tied to both short-term and long-term performance goals to balance risk while rewarding for delivering financial, operating and strategic performance aligned with the Company’s business strategy and stockholder interests.

Furthermore, select executives are required to retain shares earned until minimum share ownership levels are achieved per our stock ownership guidelines (see “⸺Additional Compensation Information ⸺ Stock Ownership Guidelines” below);

Pay competitively – total target compensation levels are competitive to attract and retain the best, diverse talent;

actual pay levels will vary based on performance results.

How our NEOs are Paid

Prior to the Spin-off

Prior to the Spin-off, to attract top talent to serve in our key executive roles, IBM provided the following primary elements of compensation to our NEOs in 2021:

Performance and/or

Service Condition

Transaction Bonus

Completion of Spin-off by December 31, 2021

Active employment through completion of Spin-off

Long-Term Equity

Equity – Performance

Completion of Spin-off by January 1, 2023

Acceptance of employment by us in current role following the Spin-off

Vesting in increments of 33% on the six-month, 33% on the one-year and 34% on the two-year anniversary of the Spin-off, subject to the NEO’s active employment on each applicable vesting date

Equity – Retention

Restricted Share Units

(make-whole award)

Three years for CFO (vesting in three tranches on the first three anniversaries of the grant date, subject to active employment on each applicable vesting date, with the majority eligible to vest on the third anniversary)

Two years for CHRO (vesting on the second anniversary of the grant date, subject to active employment on such vesting date)

Other Compensation ⸺ Sign-On Bonus

Group President

Subject to repayment if employment ends within:

two years of hire date for Group President;

one year of hire date for CHRO

In addition, to provide competitive compensation at an actual cost to the Company lower than the perceived value to the executives, IBM also provided the NEOs with benefits generally available to all employees and certain limited perquisites.

See “⸺Other Compensation” below.

After the Spin-off

After the Spin-off, consistent with our compensation philosophy, our Compensation Committee adopted a compensation program that combines annual and long-term components, cash and equity, and fixed and variable payments, with a majority of executive compensation performance-based and tied to the Company’s business results and individual performance.

The table below presents the primary compensation elements our Compensation Committee determined to provide to our NEOs in 2021 following the Spin-off, including a partial-year cash bonus (see “⸺Elements of Compensation and Compensation Decisions ⸺Annual Cash Bonus ⸺After the Spin-off”) and the Launch Awards, which were special, one-time long-term equity incentive awards (see “⸺Elements of Compensation and Compensation Decisions ⸺Long-Term Equity Incentives ⸺After the Spin-off ⸺Launch Awards”).

While these elements were consistent with our Compensation Committee’s compensation philosophy, they are specific to the unique launch period and not representative of our executive compensation program going forward.

Performance and/or

Service Condition

Compensation Objective

Provide market-competitive, fixed level of compensation

● Attract and retain the best, diverse talent

Partial-year 2021 Bonus

Reward and retain key talent

Launch Awards

(special, one-time awards)

Equity – Launch Performance

Share Units (“Launch PSUs”)

Increase in share price over three-year performance period

Active employment through December 31, 2024

Tie compensation to business performance and stock price

Attract and retain the best, diverse talent

Align NEOs’ interests with that of stockholders

Equity – Stock Options

Vesting ratably over four years, subject to employment through each applicable vesting date

Tie compensation to business performance and stock price

Attract and retain the best, diverse talent

Align NEOs’ interests with that of stockholders

Equity – Restricted Stock Units

Vesting ratably over four years, subject to employment through each applicable vesting date

Attract and retain the best, diverse talent

Align NEOs’ interests with that of stockholders

In addition, the Compensation Committee determined that it was appropriate to provide the NEOs with benefits generally available to all employees and certain limited perquisites the Compensation Committee determined were necessary to perform their duties efficiently and minimize distractions.

See “⸺Other Compensation” below.

Going forward

While the table above reflects certain one-time compensation decisions our Compensation Committee made in connection with the Spin-off in 2021, the table below presents the primary compensation elements our Compensation Committee intends to provide to the NEOs beginning in 2022.

Performance and/or

Service Condition

Compensation Objective

Provide market-competitive, fixed level of compensation

Attract and retain the best, diverse talent

Annual Cash Bonus

Compensation Committee intends to annually evaluate a broad range of financial and non-financial metrics

Tie compensation to business performance

Attract and retain the best, diverse talent

Long-Term Equity

(expected award mix)

Equity – Performance

Compensation Committee intends to annually evaluate a broad range of financial and non-financial metrics

Tie compensation to business performance

Attract and retain the best, diverse talent

Align NEOs’ interests with that of stockholders

Equity – Restricted Stock Units

Time-based vesting

Attract and retain the best, diverse talent

Align NEOs’ interests with that of stockholders

In addition, our Compensation Committee determined that it is appropriate to provide the NEOs with benefits generally available to all employees and certain limited perquisites as described above under “⸺2021.”

Target Compensation Mix

Consistent with our compensation philosophy, the compensation of our NEOs is primarily long-term and performance-based.

The following pie charts show the annual compensation mix for our CEO and our other NEOs in 2021, excluding the one-time compensation items approved by IBM prior to the Spin-off (cash sign-on bonuses and make-whole retention restricted stock unit awards) and by our Compensation Committee following the Spin-off (Launch Awards and partial-year 2021 bonus).

CEO 2021 Pay Mix (excluding one-time items)

Average Other NEO Pay Mix (excluding one-time items)

Our Executive Compensation Practices

Our Compensation Committee plans to review the Company’s executive compensation program on an ongoing basis to evaluate whether it supports the Compensation Committee’s executive compensation philosophies and objectives and is aligned with stockholder interests.

Our executive compensation practices include the following, each of which the Compensation Committee believes reinforces our executive compensation objectives:

What We Don’t Do

þ Significant percentage of target annual compensation delivered in the form of variable compensation tied to performance

⌧ We do not provide tax gross-ups*

þ Long-term objectives aligned with the creation of stockholder value

⌧ We do not provide “single-trigger” change in control severance benefits

þ Market comparison of executive compensation against a relevant peer group

⌧ We do not provide excessive severance benefits

þ Use of an independent compensation consultant reporting directly to the Compensation Committee and providing no other services to the Company

⌧ We do not provide “single-trigger” change in control equity vesting

þ Robust stock ownership guidelines

⌧ We do not allow hedging or pledging of Company shares by our executive officers

þ Clawback policy

⌧ We do not have an evergreen provision in our long-term incentive plan

þ Noncompetition and nonsolicitation agreements for senior executives

⌧ We do not permit repricing of underwater stock options without stockholder approval

þ Limited perquisites

⌧ We do not have multi-year employment agreements

þ One-year minimum vesting condition under our long-term incentive plan

⌧ We do not have guaranteed bonus or equity payments

þ Annual compensation risk review and assessment

* During the period prior to the Spin-off, pursuant to IBM’s compensation policies, the NEOs were entitled to tax gross-ups for perquisites provided to them by IBM.

We have not continued this policy following the Spin-off.

Executive Compensation Decision-Making and Oversight

Prior to the Spin-off

Because Kyndryl was an independent company for only a portion of the year, many of the decisions impacting 2021 compensation were made by IBM and were grounded in IBM’s compensation philosophies and policies.

Role of Management and the Compensation Committee of IBM

Kyndryl’s NEOs were employed by IBM prior to the Spin-off, but none of the NEOs were executive officers of IBM at the time of the Spin-off.

Prior to the Spin-off, IBM’s management and the IBM Compensation Committee developed compensation packages, including base salaries, target incentives and annual equity grant values, for Kyndryl’s NEOs in anticipation of their respective roles with Kyndryl following the Spin-off.

The compensation packages were based on a comprehensive market analysis of the anticipated roles and responsibilities with Kyndryl upon the Spin-off and were approved prior to the Spin-off by the IBM Compensation Committee in accordance with IBM policies and practices.

Role of Compensation Consultants to the Compensation Committee of IBM

Prior to the Spin-off, IBM engaged Semler Brossy Consulting Group, LLC and Equity Methods, LLC to provide consulting services in connection with certain executive and director compensation matters related to the Spin-off.

As discussed above under “⸺Introduction ⸺ Executive Summary” and below under “⸺After the Spin-off ⸺ Role of Compensation Consultants,” Kyndryl’s Compensation Committee and Nominating and Governance Committee conducted a review of executive and director compensation decisions, respectively, with Kyndryl’s independent compensation consultant, Frederic W.

Use of Competitive Data

In addition, in setting executive and director compensation, prior to the Spin-off, IBM reviewed data from the following peer group, which is similar to the peer group approved by Kyndryl’s Compensation Committee (described below under “⸺After the Spin-off⸺ Use of Competitive Data”) and generally comprised of companies with one-third to three times Kyndryl’s projected revenue and within similar industries:

Accenture plc

DXC Technology Company

Oracle Corporation

Automatic Data Processing, Inc.

Fidelity National Information Services, Inc.

Science Applications International Corporation

Booz Allen Hamilton Holding Corporation

Synnex Corporation

CACI International Inc.

Hewlett Packard Enterprise Company

Unisys Corporation

CDW Corporation

Leidos Holdings, Inc.

Cognizant Technology Solutions Corporation

After the Spin-off

Role of our Compensation Committee and Management.

In connection with the Spin-off, our Board of Directors established our Compensation Committee and delegated to it the responsibility of making executive compensation decisions.

Accordingly, since the Spin-off, our Compensation Committee has determined the compensation of our Chief Executive Officer and each of our other executive officers.

In setting the compensation of our other executive officers, going forward the Compensation Committee expects to take into account our Chief Executive Officer’s review of each executive officer’s performance and his recommendations with respect to his or her compensation.

The Chief Executive Officer does not participate in the determination of his own compensation.

Role of Compensation Consultants

In connection with the Spin-off, our Compensation Committee engaged FW Cook to serve as the Compensation Committee’s independent compensation consultant.

FW Cook and its affiliates do not provide any services to the Company or any of the Company’s affiliates other than advising the Compensation Committee on executive compensation and the Nominating and Corporate Governance Committee on director compensation.

With respect to executive compensation, as requested by the Compensation Committee, FW Cook advises the Compensation Committee on general marketplace trends in executive compensation, makes proposals for executive compensation programs, assists in the development of a group of peer companies for inclusion in competitive market analyses of compensation and otherwise advises the Compensation Committee with regard to the compensation of our Chief Executive Officer and other executives.

In addition, in 2021, FW Cook provided input to the Nominating and Governance Committee for its review of director compensation, which compensation is discussed under “Director Compensation.”

In order to give the Compensation Committee time to complete the evaluation process that led to the engagement of FW Cook as the Compensation Committee’s independent compensation consultant without delaying the

compilation of market data for the Compensation Committee’s review of executive compensation, management separately engaged Mercer LLC (“Mercer”) to provide market data with respect to our executive officers, as described under “—Use of Competitive Data.” While Mercer acted as management’s compensation consultant and assisted management in formulating its compensation recommendations for our executive officers, the Compensation Committee separately engaged FW Cook as its independent compensation consultant, as noted above, to provide it with independent advice and to avoid any conflicts of interest.

The Compensation Committee has assessed the independence of FW Cook pursuant to the applicable rules and determined that its engagement does not raise any conflict of interest.

Use of Competitive Data

Our Compensation Committee believes it is important to clearly understand the relevant market for executive talent to inform its decision-making and ensure that our compensation program for executive officers attracts and retains key talent.

Following the Spin-off and in preparation for the Compensation Committee’s post-Spin-off review of the compensation of our NEOs, management worked with Mercer to develop a peer group for purposes of assessing competitive compensation practices.

This peer group was then reviewed by FW Cook and refined by our Compensation Committee to arrive at the peer group below (the “Peer Group”).

Accenture plc

Cognizant Technology Solutions Corporation

Leidos Holdings, Inc.

DXC Technology Company

Marsh & McLennan Companies, Inc.

Automatic Data Processing, Inc.

Fidelity National Information Services, Inc.

salesforce.com, inc.

Booz Allen Hamilton Holding Corporation

Science Applications International Corporation

Cisco Systems, Inc.

Hewlett Packard Enterprise Company

The Compensation Committee selected the Peer Group companies based on several important criteria:

● the similarity of their industry classification to Kyndryl’s classification;

● the extent to which they compete with Kyndryl for executive talent and for investors;

● general comparability of key size measures, primarily revenue and market capitalization.

At the time the Peer Group was approved, the Company’s revenue was approximately at the 75th percentile of the Peer Group.

The Compensation Committee reviews the composition of our peer group annually to ensure that the companies constituting the peer group continue to provide meaningful and relevant compensation comparisons.

Our Compensation Committee reviewed a report prepared by Mercer for management that included a comparison of our NEOs’ compensation information to comparable roles within the Peer Group as part of their review of the compensation of our NEOs after the Spin-off.

Our Compensation Committee does not rely solely on data from the Peer Group in establishing the compensation for our executive officers.

Furthermore, our Compensation Committee does not target a specific competitive position versus the market in determining the compensation of our executive officers.

While our Compensation Committee considers the data from the Peer Group helpful in assessing our competitive position, our Compensation Committee refers to other resources, including published compensation data from other surveys.

The compensation data of the Peer Group and such other resources are considered alongside the Company’s pay-for-performance and long-term value creation objectives in determining the compensation for our executive officers that best aligns management’s interest with those of our stockholders.

In 2021, in addition to data from the Peer Group set forth above, the Compensation Committee reviewed data from similarly-situated spun-off companies (the “Spin-off Peers”) provided by Mercer when making its determinations

with respect to the Launch Awards, as described above under “⸺Elements of Compensation⸺Long-Term Equity Incentives⸺After the Spin-off⸺Launch Awards.” The Spin-off Peers include:

Hewlett Packard Enterprise Co.

Paypal Holdings, Inc.

Carrier Global Corp.

Corteva, Inc.

Otis Worldwide Corp.

Brighthouse Financial, Inc.

Yum China Holdings, Inc.

Science Applications International Corp.

Arconic Corp.

Resideo Technologies, Inc.

Fortive Corp.

Elements of Compensation and Compensation Decisions

Base Salaries

Link to Compensation Philosophy

Base salary is intended to provide a market-competitive, fixed level of compensation and attract and retain the best, diverse talent.

Base salaries are expected to be reviewed annually, and the Compensation Committee may adjust individual base salaries from time to time to recognize outstanding performance, changes in duties or roles with the Company, and/or changes in overall labor market dynamics.

Following the Spin-off, our Compensation Committee, with the input of FW Cook, conducted a review of the compensation of our NEOs, including a review of market data provided to management by Mercer.

Based on such review, our Compensation Committee determined to make no change to the annual base salaries of our NEOs.

The table below sets forth the annual base salaries determined for our NEOs by IBM prior to the Spin-off, as well as their annual base salaries following our Compensation Committee’s compensation review.

Annual Base Salary Prior to

Annual Base Salary as of

December 31, 2021

Martin Schroeter

David Wyshner

Edward Sebold

Maryjo Charbonnier

Annual Cash Bonus

Link to Compensation Philosophy

Annual cash bonus opportunities are intended to encourage NEOs, as well as other employees with management responsibility, to focus on multiple performance objectives that are key to creating stockholder value by delivering financial, operating and strategic performance that is aligned with our business strategy and stockholder interests.

The Compensation Committee annually evaluates a broad range of financial and non-financial metrics, including metrics relating to the Company’s environmental, social and governance (“ESG”) strategies, each year to determine the appropriate annual cash bonus award metrics.

Prior to the Spin-off

Prior to the Spin-off, to motivate the NEOs as they worked toward the timely completion of the complex Spin-off transaction, IBM provided the following cash incentive opportunities (the “Transaction Bonus” opportunities) for each of the NEOs:

Transaction Bonus

Percentage of Base

Martin Schroeter

David Wyshner

Edward Sebold

Maryjo Charbonnier

For each NEO other than Mr.

Sebold, the payment of the Transaction Bonus was subject to the closing of the Spin-off and his or her remaining actively employed through the closing of the Spin-off.

Pursuant to the terms of his/her respective offer letter, while the Spin-off was expected to occur prior to December 31, 2021, each of Messrs.

Schroeter, Wyshner and Keinan and Ms.

Charbonnier could have received payment of the Transaction Bonus if the Spin-off was not completed by such date if either:

● IBM’s Chief Executive Officer, in his sole discretion, decided to pay the bonus in full prior to February 1, 2022 (provided such NEO was an active employee on the payment date);

● the Spin-off was not completed for reasons beyond the NEO’s reasonable control and his/her employment was terminated by IBM without Cause (as defined under “⸺Potential Payments upon Termination or Change in Control” below).

In addition, if prior to December 31, 2021, for strategic business reasons, IBM formally announced it would not complete the Spin-off or if the Company was sold to another buyer, and IBM’s Chief Executive Officer determined that such announcement or sale was not made as a result of the NEO’s performance in moving the Spin-off to closure, and, in the case of Mr.

Wyshner and Ms.

Charbonnier, their performance was otherwise satisfactory, then such NEO would still be eligible to receive the Transaction Bonus within one month after the later of (a) the announcement of IBM’s decision not to complete the Spin-off or (b) the closing of the sale to another buyer, subject to the NEO’s continued employment through such announcement or closing, as applicable.

Pursuant to the terms of Ms.

Charbonnier’s offer letter, IBM, in its sole discretion, may have provided Ms.

Charbonnier with a partial payment of $200,000 if she was terminated without Cause prior to the closing of the Spin-off.

Sebold, the payment of the Transaction Bonus was subject to the successful completion of the Spin-off by December 31, 2021, and his remaining an active employee through such date.

Had the Spin-off not been completed by December 31, 2021, IBM’s Chief Executive Officer could have, in his discretion, decided to pay Mr.

Sebold’s Transaction Bonus in full or in part no later than February 1, 2022, so long as Mr.

Sebold remained an active employee of IBM or Kyndryl on such payment date.

Because the Spin-off was completed on November 3, 2021, the Transaction Bonuses were earned in full.

Following the successful completion of the Spin-off on November 3, 2021, IBM paid the Transaction Bonuses in January 2022, and the amounts of the Transaction Bonus payouts are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

After the Spin-off

Following the Spin-off, in January 2022, the Compensation Committee determined to award a cash bonus (the “Partial-Year 2021 Bonus”) to each of the NEOs for their performance in the fourth quarter of 2021 following the Spin-off in the following amounts, which amounts represent 15% of their respective Transaction Bonus payments:

Partial-Year 2021 Bonus

Martin Schroeter

David Wyshner

Edward Sebold

Maryjo Charbonnier

In determining to pay these bonus amounts, the Compensation Committee considered the fact that the Transaction Bonus awards did not provide the NEOs any opportunity to earn any performance-based upside in 2021, nor were they given the opportunity to participate in IBM incentive compensation programs that could have provided such an opportunity.

The Compensation Committee further considered the significant effort required to successfully complete the Spin-off, the significant efforts required immediately following the Spin-off to establish standalone policies, processes, strategies and operating practices, and the fact that the NEOs had been given no bonus opportunity for the portion of the fourth quarter of 2021 following the Spin-off.

The Partial-Year 2021 Bonus amounts are expected to be paid to the NEOs in March 2022, and are included in the “Bonus” column of the Summary Compensation Table.

Going Forward

In 2022, the Compensation Committee considered its approach to cash incentive compensation in light of the Company’s decision to change its fiscal year-end from December 31 to March 31.

The Compensation Committee intends to award two cash bonus opportunities under the Kyndryl Annual Incentive Plan for Executives to the NEOs in calendar year 2022 to align with the three-month transition period and our new fiscal year, in a target amount equal to 200% of their respective base salaries for Messrs.

Schroeter and Keinan and 125% of their respective base salaries for Messrs.

Wyshner and Sebold and Ms.

The NEOs’ target cash bonus opportunity for the three-month transition period is prorated to reflect the three-month performance period (January 1, 2022, through March 31, 2022) and the payout, which is capped at 200% of target, will be based on the Company’s achievement of financial goals, subject to adjustment upwards or downwards based on the Company’s achievement of strategic goals.

The Compensation Committee plans to review and approve separate goals that align with the Company’s fiscal 2023 business and ESG objectives in connection with the bonus opportunity for the Company’s new fiscal year beginning April 1, 2022 and ending March 31, 2023.

Long-Term Equity Incentives

Link to Compensation Philosophy

Long-term equity incentive awards are intended to ensure that our NEOs have a continuing stake in our long-term success, motivate them to achieve longer-term performance objectives linked to our business strategy, and tie their compensation to stockholder value.

We grant long-term equity incentive awards under the Kyndryl 2021 Long-Term Performance Plan (the “LTPP”).

In determining the size and award mix of the annual long-term incentive opportunity, the Compensation Committee intends to consider a number of factors, including competitive market data.

The Compensation Committee currently expects to award a mix of performance share units and time-vesting restricted stock units to NEOs as part of the annual long-term incentive opportunity.

Once performance share unit awards have been granted, the number of shares that an NEO will receive on vesting, if any, depends on the Company’s attainment of specific financial or strategic targets.

Finally, the Compensation Committee considers time-vesting restricted stock units an important tool to retain key talent and ensure that executives have a continuing stake in our long-term success.

Prior to the Spin-off

Prior to the Spin-off, to attract and retain key executive leadership for Kyndryl and provide incentive to them to timely complete the Spin-off, IBM granted equity awards to each of the NEOs.

IBM granted each NEO a performance share unit (“PSU”) award.

In addition, IBM granted each of Mr.

Wyshner and Ms.

Charbonnier a sign-on retention restricted share unit (“RRSU”) award to offset equity foregone when they left their prior employers.

These awards were made in the following amounts:

Fair Value (1) of RRSU

Target Value (1) of PSU

Total Planned Value (1)

of Equity Awards

Martin Schroeter

David Wyshner

Edward Sebold

Maryjo Charbonnier

(1) RRSU and PSU grant values reflect the fair or target value of the grant.

In the case of the fair or target grant value, the number of shares granted was determined by dividing the fair or target value by the average of IBM’s closing stock price for the 30 active trading days prior to the date of grant.

(2) If, as of the closing of the Spin-off, the fair market value of the IBM shares underlying Mr.

Schroeter’s or Mr.

Keinan’s target PSU award (“IBM PSU Share Value”) had been less than the target value of the PSU award by $50,000 or more, then immediately after the closing of the Spin-off, provided that the applicable performance criteria had been met or excused, such executive officer would have been entitled to receive a Restricted Share Unit (“RSU”) award with respect to the number of shares of our common stock with a value on the date of grant equal to the difference between the target value of his PSU award and the IBM PSU Share Value.

Because the IBM PSU Share Value exceeded the target value of their PSU awards as of the closing of the Spin-off, no RSU awards were issued to Messrs.

Schroeter and Keinan.

Performance Share Units (“PSUs”) .

To tie Kyndryl’s NEOs’ interests to that of IBM’s stockholders by providing an incentive to Kyndryl’s NEOs to work toward timely completion of the Spin-off and remain with Kyndryl following the Spin-off, for each of the NEOs, the PSU award would become eligible to vest if (a) the Spin-off was completed as envisioned by January 1, 2023, and (b) immediately following the completion of the Spin-off such NEO accepted employment with Kyndryl in their current roles.

Once the performance criteria were achieved upon completion of the Spin-off and the NEOs’ acceptance of employment with Kyndryl in their current roles, the NEOs’ PSU awards became eligible to vest with respect to 33% of the PSUs on the six-month anniversary of the Spin-off closing date (i.e.

May 3, 2022), 33% on the first anniversary of

the Spin-off closing date (i.e.

November 3, 2022) and 34% on the second anniversary of the Spin-off closing date (i.e., November 3, 2023), in each case subject to continued employment on each such date (except as provided below).

In addition, in the case of the NEOs other than Mr.

Sebold, if for strategic business reasons, IBM had formally announced it would not complete the Spin-off or if Kyndryl were sold to another buyer, and IBM’s Chief Executive Officer determined that such announcement or sale was not made as a result of such NEO’s performance in progressing the Spin-off to such closure, then such NEO’s PSUs would have been eligible to vest on the six-month, first and second anniversaries of (i) the announcement not to complete the Spin-off or (ii) the closing of the sale to another buyer (and, in the case of a sale, (x) if the NEO (other than Mr.

Schroeter) was not selected to serve in their current role or a substantially comparable role and (y) in the case of Mr.

Schroeter, if he was selected to become our Chief Executive Officer but declined the offer), as applicable.

For information regarding the treatment of the PSUs granted to each NEO other than Mr.

Sebold in the event of certain qualifying terminations, see the description of such awards in their respective offer letters under “Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards in 2021 Table.”

The PSUs were converted to Kyndryl RSUs in connection with the Spin-off as described below under “⸺Treatment of Outstanding IBM Equity Awards in connection with the Spin-off.” For information regarding the vesting of the Kyndryl RSUs upon certain qualifying terminations, see “Potential Payments upon Termination or Change in Control” below.

The RRSUs are time-vesting awards.

Wyshner’s sign-on RRSU award was granted on October 1, 2021 and will vest as to 7% of the RRSUs on the first anniversary of the grant date, 7% of the RRSUs on the second anniversary of the grant date and 86% of the RRSUs on the third anniversary of the grant date, subject to his continued employment through each applicable vesting date.

Charbonnier’s sign-on RRSU award was granted on August 2, 2021, and will vest on the second anniversary of the grant date, subject to her continued employment through such date.

The RRSUs were converted to Kyndryl RSUs in connection with the Spin-off as described below under “⸺Treatment of Outstanding IBM Equity Awards in connection with the Spin-off.” For information regarding the vesting of the converted RRSUs upon certain qualifying terminations, see “Potential Payments upon Termination or Change in Control” below.

Treatment of Outstanding IBM Equity Awards in connection with the Spin-off

In connection with the Spin-off, each outstanding IBM equity award held by a Kyndryl employee was converted into a Kyndryl equity award by multiplying the number of shares of IBM common stock to which such equity award related by a quotient obtained by dividing (a) the closing price of IBM common stock on the last trading day prior to the Spin-off ($127.13) by (b) the opening price of Kyndryl common stock on the first trading day following the Spin-off ($28.41), carried out to six decimal places (4.474833, such quotient, the “equity award exchange ratio”).

The following table provides additional information regarding the adjustments that were made to each type of outstanding IBM equity award held by Kyndryl’s NEOs.

Type of IBM Equity Award

Adjustment for Kyndryl Employees (Including our NEOs)

IBM RSUs were converted according to the formula above into RSUs relating to Kyndryl common stock with the same terms and conditions (including the vesting schedule)

IBM PSUs were converted according to the formula above into RSUs relating to Kyndryl common stock subject solely to time-based vesting conditions and otherwise subject to the same terms and conditions (including vesting schedule, but not any performance conditions), assuming actual achievement of the relevant performance goals as of the Spin-off as determined by the IBM Compensation Committee

Under applicable accounting guidance, the conversion of certain IBM equity awards held by Mr.

Sebold at the time of the Spin-off resulted in a grant modification that caused incremental compensation expense determined by comparing the aggregate fair value of the outstanding awards immediately before and after the modification.

The aggregate incremental compensation expense resulting from the conversion is included in the “Stock Awards” column of the Summary Compensation Table and in the Grants of Plan-Based Awards in 2021 table.

After the Spin-off

Following the Spin-off, as part of the review of the compensation of our NEOs undertaken by the Compensation Committee and described under “⸺Base Salaries” above, our Compensation Committee reviewed the target long-term equity incentives of each of the NEOs, including in comparison to market data.

Following such review, in light of market data for executive officers in Mr.

Sebold’s role and in recognition of Mr.

Keinan’s significant role with Kyndryl and his prior experience and performance at IBM, the Compensation Committee determined to increase the target long-term equity incentives (“LTI”) for Mr.

Keinan and Mr.

Sebold as follows:

Old Target LTI

New Target LTI

(% of Total Target

Old Target LTI

Compensation)

New Target LTI

Compensation)

Edward Sebold

As demonstrated in the table above, this change to their target long-term incentives had the effect of increasing the weight of Mr.

Keinan’s and Mr.

Sebold’s long-term equity compensation relative to their total compensation, consistent with our compensation philosophy of aligning the interests of our executive officers with those of our stockholders.

Launch Awards .

In November 2021, the Compensation Committee reviewed data regarding the equity compensation practices of the Spin-off Peers set forth under “⸺Executive Compensation Decision-Making and Oversight⸺ After the Spin-Off⸺ Use of Competitive Data” above.

These companies were, with one exception, spun off from their parent companies since 2015, had revenue of at least $4.5 billion and had disclosed compensation for the fiscal year of their Spin-off.

Following such review, in December 2021, based in part on consideration of the recommendation of FW Cook, the Compensation Committee granted long-term equity incentive awards pursuant to the LTPP to certain executives expected to have the greatest impact on our future success, including the NEOs.

In recognition of the scale and complexity of the Spin-off, and in order to ensure retention of key talent and further align the interests of Kyndryl’s executives with that of Kyndryl’s stockholders, the Compensation Committee determined that the total target Launch Award amounts would be equal to 1.2 times an executive’s target long-term incentive opportunity (excluding the sign-on RRSU awards to Mr.

Wyshner and Ms.

Charbonnier).

The Launch Awards were composed of an approximately equally-weighted mix of RSUs, stock options and Launch PSUs.

Launch Awards Mix

Options (33.3%)

Launch PSUs (33.3%)

Time Vesting (66.7%)

Performance Vesting (33.3%)

Performance Based (66.6%)

The Compensation Committee chose to closely tie the value that can be realized by the NEOs and other Launch Award recipients to the creation of stockholder value by granting approximately one-third of the total Launch Award amount in the form of stock options (which only have value to the extent our stock price increases from the date of grant) and approximately one-third of the total Launch Award amount in the form of PSUs that vest based on the increase in the value of our common stock, as described in more detail below.

In each case, our NEOs will only be able to realize value in these awards if our investors realize an increase in the value of their Kyndryl stock.

The Compensation Committee determined to balance the goal of aligning the interests of the Launch Award recipients with that of stockholders with the goal of retaining these executives by granting approximately one-third of the total Launch Award amount in the form of time-vesting RSUs.

The table below sets forth the total target value of the Launch Awards as well as the fair market value on the grant date of the RSUs and the stock options and the target value of the PSUs, assuming that the target level of performance is achieved.

Target Launch

RSU Value (1)

PSU Value (2)

Martin Schroeter

David Wyshner

Edward Sebold

Maryjo Charbonnier

(1) The number of RSUs our NEOs received was determined by dividing the values in the table above by the closing price of our common stock on the New York Stock Exchange on the day prior to the grant date ($17.78).

(2) The target number of Launch PSUs our NEOs received was determined by dividing the values in the table above by the product of the closing price of our common stock on the New York Stock Exchange on the day prior to the grant date and a Monte Carlo valuation percentage.

(3) The number of stock options our NEOs received was determined by dividing the values in the table above by the product of the closing price of our common stock on the New York Stock Exchange on the day prior to the grant date and a Black-Scholes valuation percentage.

The RSUs vest in four equal annual installments beginning on the anniversary of the grant date, subject to the NEO’s continued employment with the Company through each applicable vesting date.

Stock Options .

The stock options have an exercise price of $17.78 and vest in four equal annual installments beginning on the anniversary of the grant date, subject to the NEO’s continued employment with the Company through each applicable vesting date.

Launch PSUs .

The Launch PSUs vest based on the increase in the Company’s share price from the “Initial Share Price” of $19.338, which represents the average closing share price of the Company’s common stock on the New York Stock Exchange (the “NYSE”) from November 4, 2021 (the initial day of regular way trading), through December 3, 2021, during the performance period beginning on December 16, 2021, and ending on December 15, 2024 (the “Performance Period”).

The actual number of Launch PSUs that become vested is based on the highest multiple of the Initial Share Price set out in the tiers below which is maintained for at least 90 consecutive calendar days during the Performance Period.

Multiple of Initial Share

Performance Vesting

Share Price Target

In the event of actual performance that falls between the tiers set forth above, the number of Launch PSUs that vest will be based on the vesting level of the tier actually achieved (i.e., the tier below the performance achieved).

In the event of performance that falls below Tier 1, no Launch PSUs will vest.

Following the last day of the Performance Period, the Compensation Committee will calculate the payout and the Launch PSUs determined to be earned, if any, will vest on December 31, 2024, subject to the NEO’s continued employment through such date.

As of December 31, 2021, our performance was below Tier 1.

For our NEOs to earn any vesting of their Launch PSUs, we would have to achieve an approximately 33% increase in our stock price from the closing price of our common stock on the New York Stock Exchange on December 31, 2021, and maintain such increased stock price for at least 90 consecutive calendar days.

For information about the treatment of the Launch Awards in the event of certain terminations or a change in control, see “Potential Payments upon Termination or Change in Control” below.

Going Forward

Beginning in 2022, the Compensation Committee intends to make annual long-term equity incentive awards under the LTPP in the form of PSUs and RSUs.

The Compensation Committee intends to balance its goals of tying our NEOs’ compensation to achievement of business objectives and attracting and retaining the best, diverse talent by awarding 65% of the total target award opportunity in the form of PSUs and 35% of the total target award opportunity in the form of time-vesting RSUs for each of our executive officers.

Target LTI Mix

Other Compensation

Sign-On Bonuses

In recognition of their expected contributions to the Company and to recognize the compensation they forfeited by separating from their prior employers to join the Company, the IBM Compensation Committee awarded each of Mr.

Keinan and Ms.

Charbonnier a cash sign-on bonus.

Keinan’s $2,000,000 sign-on bonus must be repaid if his employment with us ends within two years after his IBM hire date, except in the event he is terminated without Cause.

Charbonnier’s $875,000 sign-on bonus must be repaid if her employment with us ends within one year after her IBM hire date, except in the event she is terminated without Cause.

Keinan or Ms.

Charbonnier, as applicable, would not have been required to repay the sign-on bonus in the event of a termination of employment from IBM and us in certain situations where the Spin-off was not completed or we were purchased by another buyer, or in the event such termination was without Cause.

The sign-on bonuses are included in the “Bonus” column of the Summary Compensation Table.

Executive Severance and Retirement Plan

In December 2021 the Compensation Committee reviewed market data with respect to the prevalence and design of executive severance plans.

In addition to the market data, the Compensation Committee considered the Company’s desire not to engage in case-by-case negotiations with respect to executive departures, the importance of having a severance plan to the Company’s ability to attract and retain talented executives, that being covered under the terms of a severance plan would allow executives to focus on their duties and provide them security in the event of proposed extraordinary transactions, and the recommendation of FW Cook.

Based on such review and considerations, the Compensation Committee adopted the Kyndryl Executive Severance and Retirement Plan (the “Severance Plan”), which is described in detail under “Potential Payments upon Termination or Change in Control” below.

Each of the NEOs is entitled to benefits under the Severance Plan, as set forth under “Potential Payments upon Termination or Change in Control.”

Limited Perquisites

In November 2021, our Compensation Committee approved the provision of limited perquisites not generally available to all employees for our NEOs.

The Compensation Committee determined that the perquisites set forth in the table below are necessary to enable the NEOs to perform their duties efficiently and to minimize distractions, and that the benefits the Company receives from providing these perquisites significantly outweighs the cost of providing them.

Description and Business Rationale

Executive Wellbeing Program

Executive health exams are offered to encourage senior leaders of the Company to set an example by living healthfully and actively.

Executive Financial Wellness Programs

Financial planning and tax preparation services are offered to allow our NEOs to focus more fully on their service to the Company without the distraction of sometimes complex tax compliance and financial planning.

Personal Use of Aircraft

We permit Mr.

Schroeter, but do not permit any of the other NEOs, to fly on a Company-provided aircraft for personal travel in an amount limited to an aggregate incremental cost to the Company of $200,000 per calendar year.

We provide this benefit to Mr.

Schroeter so he can use his travel time more productively for the Company, for security purposes and to ensure that he can be immediately available to respond to business priorities.

Company Car and Driver

Group President

A Company car and driver are provided when necessary for security and/or productivity reasons.

Schroeter and Keinan (and their families) are provided use of a Company car and driver.

No other NEO is provided with a Company car or driver.

It is our policy not to provide tax gross-ups for the perquisites we provide to our NEOs.

The incremental cost to the Company to provide these limited perquisites is included in the “All Other Compensation” column of the Summary Compensation Table.

Other Benefits

Our executives, including our NEOs, are eligible to participate in the following broad-based employee benefit plans, which are generally available to all U.S.

salaried employees and do not discriminate in scope in favor of our NEOs:

● Group medical insurance

● Group AD&D insurance

● Flexible spending accounts

● Group dental insurance

● Group life insurance

● Kyndryl 401(k) Plan

● Group vision insurance

In addition, in connection with the Spin-off, we adopted the Kyndryl Excess Plan (the “Kyndryl Excess Plan”), a nonqualified deferred compensation plan that, starting in 2022, offers eligible employees, including the NEOs, an opportunity to defer up to 80% of their eligible compensation (including base and performance pay, but not any non-recurring compensation) in excess of the limits imposed by the Code, under the Kyndryl 401(k) Plan.

For eligible employees that transferred from IBM, including Messrs.

Schroeter, Keinan and Sebold and Ms.

Charbonnier, we will make an annual contribution to the Excess Plan equal to 6% of the eligible pay in excess of the limits under the Code, but will not make any contributions to the Kyndryl Excess Plan for new hires.

With respect to participants in IBM’s excess plan who became participants in the Kyndryl Excess Plan in 2021, including Messrs.

Schroeter, Keinan and Sebold, the applicable deferral elections and automatic and matching contributions that would have applied under IBM’s excess plan for the remainder of 2021 will instead apply to the Kyndryl Excess Plan.

Distributions are made following death (in a lump sum) or following a separation from service (in a lump sum or installments, based on the employee’s distribution election), subject to certain exceptions for compliance with Section 409A of the Code.

For additional information about the Kyndryl Excess Plan, as well as IBM’s excess plan (in which Messrs.

Schroeter, Keinan and Sebold participated in 2021), see “Nonqualified Deferred Compensation for 2021.”

Additional Compensation Information

Employment Agreements

We generally do not enter into employment agreements with our executives.

In connection with the Spin-off, we assumed the offer letters each of Messrs.

Schroeter, Wyshner and Keinan and Ms.

Charbonnier had with IBM, which set forth their initial compensation, as described in this Compensation Discussion and Analysis.

The terms of the offer letters are described under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2021 Table.”

Noncompetition and Nonsolicitation Agreements

Certain of our executives, including the NEOs, have signed noncompetition and nonsolicitation agreements.

The agreements contain a noncompetition covenant that applies during the executive’s employment and for twelve months following termination of employment (except in the case where such termination is a direct result of a resource action or similar restructuring action and not for Cause) and a nonsolicitation covenant that applies during the executive’s employment and for two years following termination of employment.

Clawback Policy

To protect Company and stockholder interests in the case of an event that causes significant damage to the Company and deter inappropriate actions or decisions by our executives, we maintain an Executive Compensation Clawback Policy (the “Clawback Policy”) applicable to the NEOs and certain other senior executives of the Company (each, a “covered individual”).

Under the Clawback Policy:

● in the event of a restatement of the Company’s financial statements (other than a restatement caused by a change in applicable accounting rules or interpretations), the Compensation Committee may, in its sole discretion, recoup incentive compensation paid to a covered individual during the three-year period preceding the announcement of the restatement that would not have been paid based upon the restated results;

● in the event a covered individual engages directly or indirectly in, or contributes to, fraudulent or other wrongful conduct by action or omission, which causes material harm to the finances, business, reputation, condition, assets or results of operations of the Company, the Committee may, in its sole discretion, recoup incentive compensation paid to such covered individual at any time since the act of misconduct.

In addition, under the terms of the LTPP, our Compensation Committee may:

● cancel, rescind, suspend, withhold or otherwise limit any outstanding awards held by any plan participant if the participant engages in “Detrimental Activity” (as defined in the LTPP) or is otherwise not in compliance with the terms of the applicable award agreement or the LTPP;

● during the two-year period following any exercise, payment or delivery of an award, rescind such exercise, payment or delivery if the participant engages in Detrimental Activity during the rescission period established by the Compensation Committee (which rescission period shall not be less than six months after any exercise, payment or delivery pursuant to an Award).

Stock Ownership Guidelines

To further align management and stockholder interests and discourage inappropriate or excessive risk-taking, our stock ownership guidelines require each of our NEOs, certain other executives and non-employee directors to obtain a substantial equity stake in our common stock within five years of first becoming subject to the guidelines.

The multiples of base salary required by the guidelines for our NEOs, other executives subject to the stock ownership guidelines and non-employee directors are as follows:

six times base salary

● NEOs (other than CEO):

three times base salary

● Next layers of management, generally encompassing our top 100 non-NEO executives:

two times base salary or 100% of base salary, depending on level within organization

● Non-employee directors:

five times annual cash retainer

Executives subject to our stock ownership guidelines, including our NEOs, and our non-employee directors are required to retain 100% of any Company stock received as part of their compensation, net of any amounts required to pay taxes and exercise prices, until the stock ownership guidelines are achieved.

For purposes of determining compliance with the stock ownership guidelines, the following are included:

● Shares held directly by the covered person

● Shares held by members of the covered person’s household

● Deferred stock units, so long as not forfeitable

● Unvested restricted stock or RSU awards

Unexercised stock options and unvested PSUs are excluded for purposes of determining compliance with the stock ownership guidelines.

Once a person subject to the stock ownership guidelines has acquired a number of shares that satisfies the ownership multiple then applicable to him or her, such number of shares then becomes his or her minimum ownership requirement (even if the fair market value of such shares subsequently changes) unless and until his or her ownership target increases due to an increase in base salary or annual retainer or such individual sells any such holdings.

In the event of an increase in base salary or annual retainer, a covered individual is expected to meet the applicable ownership target within the later of the original five-year deadline or three years following such increase.

Each of our NEOs and non-employee directors was in compliance with the stock ownership guidelines as of December 31, 2021, having acquired the required number of shares or having more time to do so.

Hedging and Pledging of Company Stock

Pursuant to our Securities Trading Policy, directors and officers who are subject to Section 16 under the Exchange Act (“Section 16 officers”), as well as their spouses, minor children, anyone living in their household, and any of their family members who do not live in their household but whose transactions in Kyndryl securities are directed by them or are subject to their influence or control, partnerships in which they are a general partner, trusts of which they are a trustee, estates of which they are an executor and other entities that they control (collectively, their “Related Parties”) are prohibited from engaging in hedging or monetization transactions with respect to the Company’s securities, such as short-sales, prepaid variable forward contracts, equity swaps, collars and exchange funds and other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Kyndryl securities.

Pursuant to our Securities Trading Policy, directors and officers who are subject to Section 16 under the Exchange Act and their Related Parties are also prohibited from pledging Kyndryl securities at any time, which includes having Kyndryl securities in a margin account or using Kyndryl securities as collateral for a loan.

Risk Management and Mitigation of Compensation Policies and Practices

The Compensation Committee has reviewed our executive and non-executive compensation programs, discussed the concept of risk as it relates to our compensation programs, considered various mitigating factors, and reviewed these items with its independent compensation consultant, FW Cook.

In addition, our Compensation Committee asked FW Cook to conduct an independent risk assessment of our compensation programs.

In particular, the Compensation Committee considered that there is appropriate balance in the Company’s compensation mix, that policies are in place to mitigate compensation-related risk and that Compensation Committee oversight extends below the executive level.

Based on these reviews and discussions, the Compensation Committee does not believe our compensation program creates risks that are reasonably likely to have a material adverse effect on our business.

In particular, the Compensation Committee considered:

Risk-Mitigating Effect

Emphasis on long-term, equity-based compensation at the executive level

Discourages risk-taking that produces short-term results at the expense of building long-term stockholder value

Stock options and RSUs vest over four years and PSUs are subject to a three-year performance and vesting period;

all are subject to our Clawback Policy

Helps ensure our executives realize their compensation over a time horizon consistent with achieving long-term stockholder value

Number of shares that may be earned under our PSU awards are capped

Reduces the possibility that extraordinary events or formulaic payments could distort incentives or over-emphasize short-term over long-term performance

Payments under our Annual Incentive Plan awards are capped

Reduces the possibility that extraordinary events or formulaic payments could distort incentives

Robust stock ownership guidelines

Helps ensure our executives’ economic interests are aligned with the long-term interests of our stockholders

Prohibition on hedging transactions by Section 16 officers and their Related Parties

Helps ensure the alignment of interests generated by our executive officers’ equity holdings is not undermined by hedging or similar transactions

Clawback Policy

Deters inappropriate actions or decisions by our executives by reducing the potential financial gain to be realized as a result of such actions or decisions

Use of an independent compensation consultant that performs no other services for the Company

Helps ensure advice will not be influenced by conflicts of interest

For the foregoing reasons, the Compensation Committee has concluded that the programs by which our executives are compensated strike an appropriate balance between short-term and long-term compensation and incentivize our executives to act in a manner that prudently manages enterprise risk.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the foregoing “Compensation Discussion and Analysis” with management.

Based upon this review and discussion, the Compensation Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Submitted by the Compensation Committee of the Board:

Jana Schreuder, Chair

Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of our NEOs for their service in fiscal 2021.

Prior to November 3, 2021, such amounts were paid by IBM.

Beginning November 3, 2021, such amounts were paid by us.

Pension Value

Martin Schroeter

Chief Executive Officer

David Wyshner

Chief Financial Officer

Group President

Edward Sebold

General Counsel and Secretary

Maryjo Charbonnier

Chief Human Resources Officer

(1) Amounts in this column reflect the salary earned during the fiscal year, whether paid or deferred under our Excess Plan.

(2) Amounts in this column reflect sign-on bonuses paid to Mr.

Keinan and Ms.

Charbonnier of $2,000,000 and $875,000, respectively, and the Partial-Year 2021 Bonus amounts paid to each of the NEOs.

(3) Amounts in this column reflect the aggregate grant date fair value of stock awards granted to the NEOs during 2021, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“Topic 718”) using the assumptions discussed under “Stock-Based Compensation” in Note 1 to the accompanying financial statements for the fiscal year ended December 31, 2021.

The fiscal 2021 stock awards consist of the RRSUs and PSUs granted to the NEOs by IBM prior to the Spin-off and the RSUs and Launch PSUs granted to the NEOs by us under the LTPP following the Spin-off.

The terms of the 2021 stock awards are summarized under “Compensation Discussion and Analysis— Elements of Compensation and Compensation Decisions⸺ Long-Term Equity Incentives.” Because they are subject solely to market conditions, the Launch PSUs have no maximum grant date fair values that differ from the fair values presented in the table.

In addition, amounts shown include $152,700 in incremental compensation expense resulting from the conversion of IBM equity awards held by Mr.

Sebold into Kyndryl equity awards.

Pursuant to accounting guidance prescribed under Topic 718, the conversion resulted in a grant modification that caused incremental compensation expense determined by comparing the aggregate fair value of the outstanding awards immediately before and after the modification.

(4) Amounts in this column reflect the aggregate grant date fair value of options granted to the NEOs during fiscal 2021, computed in accordance with Topic 718 using the assumptions discussed under “Stock-Based Compensation” in Note 1 to the accompanying financial statements for the fiscal year ended December 31, 2021.

The fiscal 2021 option awards consist of the stock options granted to the NEOs by us under the LTPP following the Spin-off.

The terms of the fiscal 2021 option awards are summarized under “Compensation Discussion and Analysis— Elements of Compensation and Compensation Decisions⸺ Long-Term Equity Incentives.”

(5) Reflects the Transaction Bonuses earned by the NEOs.

See “Compensation Discussion and Analysis— Elements of Compensation and Compensation Decisions⸺ Annual Cash Bonus.”

(6) We do not provide any of our executives with any above-market or preferential earnings on non-qualified deferred compensation.

(7) Amounts shown in this column include the following for 2021:

Schroeter, Keinan and Sebold, 401(k) matching contributions by IBM of $8,061, $13,591 and $14,500, respectively and 401(k) automatic contributions by IBM of $2,900;

Schroeter, Keinan and Sebold and Ms.

Charbonnier, 401(k) matching contributions by Kyndryl of $9,339, $3,809, $2,900 and $11,019, respectively;

Sebold, matching contributions by IBM to the IBM Excess Plan of $20,371;

Schroeter, Keinan and Sebold, automatic contributions by IBM to the IBM Excess Plan of $8,636, $2,282 and $4,074, respectively;

Sebold, matching contributions by us to the Kyndryl Excess Plan of $5,556;

Schroeter, Keinan and Sebold, automatic contributions by us to the Kyndryl Excess Plan of $1,667, $1,333 and $1,111, respectively;

and, for each of the NEOs, life insurance premiums paid by the Company.

Amounts shown in this column also include the following perquisites for 2021:

Schroeter, personal financial planning, ground transportation, personal use of aircraft and participation in an IBM company-sponsored event;

Keinan, personal financial planning and ground transportation;

Sebold, personal financial planning.

The aggregate incremental cost to the Company of Mr.

Schroeter’s personal use of company-provided aircraft reported above is based on IBM’s actual invoiced amount from a third-party provider for the variable costs incurred on each trip.

Since the aircraft is used

primarily for business travel, this methodology excludes fixed costs that do not change based on usage, such as management fees.

Schroeter did not have any personal use of a Company-provided aircraft between the completion of the Spin-off and the end of 2021.

Schroeter’s personal travel on Company-provided aircraft is limited to an aggregate incremental cost to the Company not to exceed $200,000 per year.

In addition to the above, on certain occasions, an executive’s spouse or other family member may accompany the executive on a flight when such person is invited to attend the event for appropriate business purposes.

The aggregate incremental cost to IBM and the Company, as applicable, of Mr.

Schroeter’s and Mr.

Keinan’s personal use of company-provided ground transportation is calculated, for use of a company-leased car and company driver, by multiplying the variable rate by the applicable driving time.

The variable rate includes a driver’s salary and overtime payments, plus a cost per mile calculation based on fuel and maintenance expense.

For use of an authorized car service, the incremental cost is the full cost to the company for such service.

(8) To supplement the SEC-required disclosure in the Summary Compensation Table, we have included this additional column, “Adjusted Total (Excluding One-Time Awards),” to the right of the Summary Compensation Table.

The additional column, “Adjusted Total (Excluding One-Time Awards),” reflects the “Total” excluding the following one-time awards and compensation items:

Schroeter, his Partial-Year 2021 Bonus and his Launch Awards;

Wyshner, his Partial-Year 2021 Bonus, the make-whole RRSU award granted to him by IBM and his Launch Awards;

Keinan, his sign-on bonus, his Partial-Year 2021 Bonus and his Launch Awards;

Sebold, his Partial-Year 2021 Bonus, his Launch Awards and the incremental fair value in connection with the conversion of his IBM equity awards;

Charbonnier, her sign-on bonus, her Partial-Year 2021 Bonus, the make-whole RRSU award granted to her by IBM and her Launch Awards.

Sign-on bonus and Partial-Year 2021 Bonus amounts are set forth in the “Bonus” column of the Summary Compensation Table.

The grant date fair values of the make-whole RRSU awards and the Launch PSU, RSU and option awards comprising the Launch Awards, as well as the aggregate incremental fair values in connection with the conversion of Mr.

Sebold’s equity awards, are set forth in the “Grants of Plan-Based Awards in 2021” table below.

Amounts reported in the “Adjusted Total (Excluding One-Time Awards)” column differ substantially from the amounts determined under SEC rules as reported in the “Total” column, and are not a substitute for “Total Compensation” as determined under SEC rules.

Grants of Plan-Based Awards in 2021

The following table sets forth grants of plan-based awards to the NEOs during the fiscal year that ended December 31, 2021, including equity and non-equity awards granted to our NEOs by IBM prior to the Spin-off.

Equity awards originally granted by IBM were converted to Kyndryl awards in connection with the Spin-off with vesting dates consistent with the original awards from IBM and are presented on an as-converted basis.

Estimated Possible Payouts

Estimated Future Payouts

Under Non-Equity

Incentive Plan Awards (1)

Incentive Plan Awards

Martin Schroeter

Transaction Bonus

12/16/2021 (3)

Launch Option

David Wyshner

Transaction Bonus

10/1/2021 (2)

10/1/2021 (4)

12/16/2021 (3)

Launch Option

Transaction Bonus

12/16/2021 (3)

Launch Option

Edward Sebold

Transaction Bonus

12/16/2021 (3)

Launch Option

11/3/2021 (7)

Equity Conversion – IBM PSU

11/3/2021 (7)

Equity Conversion – IBM PSU

11/3/2021 (8)

Equity Conversion – IBM RSU

11/3/2021 (8)

Equity Conversion – IBM RSU

11/3/2021 (8)

Equity Conversion – IBM RSU

11/3/2021 (9)

Equity Conversion – IBM RRSU

Maryjo Chabonnier

Transaction Bonus

12/16/2021 (3)

Launch Option

Reflects the possible payout under the Transaction Bonus awarded to the NEO by IBM.

The amount paid out is included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

Reflects the PSU award granted to the NEO by IBM.

The PSUs were converted to Kyndryl RSUs in connection with the Spin-off.

In the case of Messrs.

Schroeter and Keinan, if, as of the closing of the Spin-off, the IBM PSU Share Value of his PSU award was less than the PSU target grant value by $50,000 or more, then immediately after the closing of the Spin-off, provided that the applicable performance criteria had been met or excused, such NEO would have received an RSU award with respect to a number of Kyndryl shares with a fair market value equal to the difference between such PSU target grant value and the IBM PSU Share Value.

Because the IBM PSU Share Value exceeded the target value of their PSU awards as of the closing of the Spin-off no RSU awards were issued to Messrs.

Schroeter and Keinan.

Reflects the Launch PSU award granted to the NEO as part of the Launch Awards.

Amounts reported in the “Threshold” column assume that 50% of the target PSUs will vest and amounts reported in the “Maximum” column assume that 200% of the target PSUs will vest.

Reflects the sign-on RRSU award granted to the NEO by IBM.

The RRSUs were converted to Kyndryl RSUs in connection with the Spin-off.

The stock options have an exercise price per share equal to the closing price of the Company’s common stock as reported on the NYSE on the day immediately prior to the date of grant.

Computed in accordance with Topic 718 using the assumptions discussed under “Stock-Based Compensation” in Note 1 to the accompanying financial statements for the fiscal year ended December 31, 2021.

The amount shown reflects the incremental compensation expense associated with the conversion of the outstanding IBM PSU award granted prior to 2021 into a Kyndryl RSU award in connection with the Spin-off.

The amount shown reflects the incremental compensation expense associated with the conversion of the outstanding IBM RSU award granted prior to 2021 into a Kyndryl RSU award in connection with the Spin-off.

The amount shown reflects the incremental compensation expense associated with the conversion of the outstanding IBM RRSU award granted prior to 2021 into a Kyndryl RSU award in connection with the Spin-off.

Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards in 2021 Table

Offer Letters with our NEOs

We have no multi-year employment agreements with our NEOs.

In 2021, IBM entered into offer letters with each of Mr.

Schroeter, Mr.

Keinan and Ms.

Charbonnier setting forth the initial terms of their compensation, which we assumed in connection with the Spin-off.

CEO Offer Letter .

On January 2, 2021, IBM entered into an offer letter with Mr.

Schroeter, which became effective when he was hired on January 15, 2021.

The offer letter provides that Mr.

Schroeter will serve as our Chief Executive Officer and for such service is entitled to:

● an annual base salary of $1,000,000, prorated for 2021 based on Mr.

Schroeter’s actual service during such year;

● a $2,000,000 transaction bonus (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Prior to the Spin-off⸺ Transaction Bonuses”);

● a new-hire PSU award of $10,500,000 in target value.

Schroeter’s new-hire PSU award was granted on February 1, 2021, and became eligible to vest when (i) the Spin-off was completed as envisioned by January 1, 2023, and (ii) immediately following the closing of the Spin-off, Mr.

Schroeter accepted employment as our Chief Executive Officer.

Once the performance criteria were achieved, the PSU award vests 33% on the six-month anniversary of the Spin-off closing date, 33% on the first anniversary of the

Spin-off closing date and 34% on the second anniversary of the Spin-off closing date, subject to continued employment on such dates (except as provided below).

In addition, if for strategic business reasons, IBM formally announced it would not complete the Spin-off or if we were sold to another buyer, and IBM’s Chief Executive Officer determined that such announcement or sale was not made as a result of Mr.

Schroeter’s performance in moving the Spin-off to closure, then Mr.

Schroeter would still have been eligible to receive the PSUs on the six-month, first and second anniversaries of (i) the announcement not to complete the Spin-off or (ii) the closing of the sale to another buyer (in the case of a sale, also if Mr.

Schroeter was not selected to become our Chief Executive Officer or was selected to become the Chief Executive Officer, but declined the offer), as applicable.

Furthermore, if Mr.

Schroeter’s employment was terminated without Cause (as defined under “Potential Payments upon Termination or Change in Control”) prior to the Spin-off or the sale to a third party, or if the Spin-off was completed and Kyndryl’s offer of employment was not comparable in the aggregate to the terms of his offer letter (including with respect to annual salary, bonus and equity awards) or our Board did not appoint Mr.

Schroeter as Chairman of our Board, then Mr.

Schroeter would have still been eligible to receive the PSUs on the six-month, first and second anniversaries of the termination date.

If, other than by death or disability, the performance conditions were not met for any other reason by January 1, 2023, the PSUs would have been canceled.

Schroeter’s death or disability, the PSU award will remain eligible to vest in accordance with its terms and would have vested if the Spin-off did not occur as envisaged by January 1, 2023.

If, as of the closing of the Spin-off, the IBM PSU Share Value of Mr.

Schroeter’s PSU award was less than $10,500,000 by $50,000 or more, then immediately after the closing of the Spin-off, provided that the applicable performance criteria had been met or excused, Mr.

Schroeter would have received an RSU award with respect to the number of shares of Kyndryl common stock with a value on the date of grant equal to the difference between $10,500,000 and the IBM PSU Share Value, with such RSUs vesting on the same schedule as the PSU award.

If the Spin-off did not occur and we were instead sold to another buyer and as of the sale date the IBM PSU Share Value of Mr.

Schroeter’s PSU award was less than $10,500,000 by $50,000 or more, and Mr.

Schroeter accepted employment with the buyer, then the buyer would have granted an RSU award, or substantially equivalent cash or equity-based award in an affiliate of the buyer, with a value equal to the difference between $10,500,000 and the IBM PSU Share Value, with the award vesting on the same schedule as the PSU award.

CFO Offer Letter .

On July 25, 2021, IBM entered into an offer letter with Mr.

Wyshner which became effective on September 9, 2021.

The offer letter provides that Mr.

Wyshner will serve as our Chief Financial Officer and for such service is entitled to:

● an annual base salary of $780,000, prorated for 2021 based on Mr.

Wyshner’s actual service during such year;

● a $975,000 transaction bonus (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Annual Cash Bonus⸺ Prior to the Spin-off”);

● a new-hire PSU award of $4,000,000 in target value;

● a sign-on equity RRSU award of $3,500,000 in planned value (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Long-Term Incentives⸺ Prior to the Spin-off”).

Wyshner’s new-hire PSU award was granted on October 1, 2021, and became eligible to vest when (i) the Spin-off was completed as envisioned by January 1, 2023, and (ii) immediately following the closing of the Spin-off, Mr.

Wyshner accepted employment as our Chief Financial Officer.

Once the performance criteria were achieved, the PSU award vests 33% on the six-month anniversary of the Spin-off closing date, 33% on the first anniversary of the Spin-off closing date and 34% on the second anniversary of the Spin-off closing date, subject to continued employment on such dates (except as provided below).

Wyshner’s performance in moving the Spin-off to such closure, then Mr.

Wyshner would still have been eligible to receive the PSUs on the six-month, first and second anniversaries of (i) the announcement not to complete the Spin-off or (ii) the closing of the sale to another buyer (in the case of a sale, also if Mr.

Wyshner was not selected to become our Chief Financial Officer or a substantially comparable

role), as applicable.

Furthermore, if Mr.

Wyshner’s employment was terminated without Cause prior to the Spin-off or the sale to a third party, or if the Spin-off was completed and our offer of employment was not comparable in the aggregate to the terms of his offer letter (including with respect to annual salary, bonus and equity awards or Mr.

Wyshner was not selected to become our Chief Financial Officer or a substantially comparable role), then Mr.

Wyshner would still have been eligible to receive the PSUs on the six-month, first and second anniversaries of the termination date.

If, other than by death or disability, the performance conditions were not met for any other reason by January 1, 2023, the PSUs would have been canceled.

Wyshner’s death or disability, the PSU award will remain eligible to vest in accordance with its terms and would have vested if the Spin-off did not occur as envisaged by January 1, 2023.

Group President Offer Letter .

On March 1, 2021, IBM entered into an offer letter with Mr.

Keinan which became effective on March 8, 2021.

The offer letter provides that Mr.

Keinan will serve as our Group President and for such service is entitled to:

● an annual base salary of $800,000, prorated for 2021 based on Mr.

Keinan’s actual service during such year;

● a $1,600,000 transaction bonus (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Annual Cash Bonus⸺ Prior to the Spin-off”);

● a new-hire equity PSU award of $5,600,000 in target value;

● a $2,000,000 sign-on bonus (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Other Compensation⸺ Sign-on Bonuses”).

Keinan’s new-hire PSU award was granted on April 1, 2021, and became eligible to vest when (i) the Spin-off was completed as envisioned by January 1, 2023, and (ii) immediately following the closing of the Spin-off, Mr.

Keinan accepted employment as our Group President.

Keinan’s performance in moving the Spin-off to such closure, then Mr.

Keinan would still have been eligible to receive the PSUs on the six-month, first and second anniversaries of (i) the announcement not to complete the Spin-off or (ii) the closing of the sale to another buyer (in the case of a sale, also if Mr.

Keinan was not selected to become our Group President or a substantially comparable role), as applicable.

Furthermore, if Mr.

Keinan’s employment was terminated without Cause prior to the Spin-off or the sale to a third party, or if the Spin-off was completed and our offer of employment was not comparable in the aggregate to the terms of his offer letter (including with respect to annual salary, bonus and equity awards), then Mr.

Keinan would still have been eligible to receive the PSUs on the six-month, first and second anniversaries of the termination date.

If, other than by death or disability, the performance conditions were not met for any other reason by January 1, 2023, the PSUs would have been canceled.

Keinan’s death or disability, the PSU award will remain eligible to vest in accordance with its terms and would have vested if the Spin-off did not occur as envisaged by January 1, 2023.

If, as of the closing of the Spin-off, the IBM PSU Share Value of Mr.

Keinan’s PSU award was less than $5,600,000 by $50,000 or more, then immediately after the closing of the Spin-off, provided that the applicable performance criteria had been met or excused, Mr.

Keinan would have received an RSU award with respect to the number of shares of Kyndryl common stock with a value on the date of grant equal to the difference between $5,600,000 and the IBM PSU Share Value, with such RSUs vesting on the same schedule as the PSU award.

If the Spin-off did not occur and we were instead sold to another buyer and as of the sale date the IBM PSU Share Value of Mr.

Keinan’s PSU award was less than $5,600,000 by $50,000 or more, and Mr.

Keinan accepted employment with the buyer, then the buyer would have granted an RSU award or substantially equivalent cash or equity-based award in an affiliate of the buyer, with a value equal to the difference between $5,600,000 and the IBM PSU Share Value, with the award vesting on the same schedule as the PSU award.

Chief Human Resources Officer Offer Letter .

On May 28, 2021, IBM entered into an offer letter with Ms.

Charbonnier which became effective on July 6, 2021.

The offer letter provides that Ms.

Charbonnier will serve as our Chief Human Resources Officer and for such service is entitled to:

● an annual base salary of $615,000, prorated for 2021 based on Ms.

Charbonnier’s actual IBM start date during such year;

● a $770,000 transaction bonus (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Annual Cash Bonus⸺ Prior to the Spin-off”);

● a new-hire equity PSU award of $1,000,000 in target value;

● a sign-on equity RRSU award of $700,000 in planned value (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Long-Term Incentives⸺ Prior to the Spin-off”);

● a $875,000 sign-on bonus (the terms of which are set forth under “Compensation Discussion and Analysis⸺ Compensation Elements and Decisions⸺ Other Compensation⸺ Sign-on Bonuses”).

Charbonnier’s new-hire PSU award was granted on August 1, 2021, and became eligible to vest when (i) the Spin-off was completed as envisioned by January 1, 2023, and (ii) immediately following the closing of the Spin-off, Ms.

Charbonnier accepted employment as our Chief Human Resources Officer.

Charbonnier’s performance in moving the Spin-off to such closure, then Ms.

Charbonnier would still have been eligible to receive the PSUs on the six-month, first and second anniversaries of (i) the announcement not to complete the Spin-off or (ii) the closing of the sale to another buyer (in the case of a sale, also if Ms.

Charbonnier was not selected to become our Chief Human Resources Officer or a substantially comparable role), as applicable.

Furthermore, if Ms.

Charbonnier’s employment was terminated without Cause prior to the Spin-off or the sale to a third party, if the Spin-off was completed and our offer of employment was not comparable in the aggregate to the terms of her offer letter (including with respect to annual salary, bonus and equity awards) or the Spin-off was completed and her geographic location was greater than 50 miles from her work location, then Ms.

Charbonnier would still have been eligible to receive the PSUs on the six-month, first and second anniversaries of the termination date.

If, other than by death or disability, the performance conditions were not met for any other reason by January 1, 2023, the PSUs would have been canceled.

Charbonnier’s death or disability, the PSU award will remain eligible to vest in accordance with its terms and would have vested if the Spin-off did not occur as envisaged by January 1, 2023.

Outstanding Equity Awards at December 31, 2021

The following table sets forth the number of securities underlying outstanding equity awards for each of our NEOs as of December 31, 2021.

The information set forth below with respect to outstanding equity awards made by IBM prior to the Spin-off reflect the conversion of such awards in connection with the Spin-off.

Option Awards (1)(2)

Stock Awards (2)

Unexercisable

Martin Schroeter

12/16/2021 (4)

12/16/2021 (5)

David Wyshner

10/1/2021 (6)

10/1/2021 (3)

12/16/2021 (4)

12/16/2021 (5)

12/16/2021 (4)

12/16/2021 (5)

Edward Sebold

6/8/2020 (10)

6/3/2019 (11)

12/16/2021 (4)

12/16/2021 (5)

Maryjo Charbonnier

8/2/2021 (12)

12/16/2021 (4)

12/16/2021 (5)

(1) Stock options vest in four equal annual installments beginning on the anniversary of the grant date.

(2) For information on vesting upon specified termination events or a change in control, see “Potential Payments upon Termination or Change in Control.”

(3) These RSUs vest as follows:

33% on May 3, 2022;

33% of November 3, 2022;

and 34% on November 3, 2023.

(4) These RSUs vest in four equal annual installments beginning on the anniversary of the grant date.

(5) The number of shares reflected for each of the NEOs represents the threshold number of shares that may be earned under the Launch PSU awards.

We have reflected the threshold number of shares for each of the NEOs because our performance as of December 31, 2021 was below threshold.

The actual number of shares that will be distributed with respect to the Launch PSU awards is not yet determinable.

The Launch PSU awards vest in proportion to actual performance over the three-year performance period ending on December 16, 2024.

See the description of the Launch PSU awards in “Compensation Discussion and Analysis ⸺ Elements of Compensation and Compensation Decisions ⸺ Long-Term Equity Incentives ⸺ After the Spin-off ⸺ Launch Awards.”

(6) These RRSUs vest in three installments as follows:

8,108 on October 1, 2022, 8,113 on October 1, 2023, and 97,333 on October 1, 2024.

(7) These RSUs vest on June 8, 2022.

(8) These RSUs vest in substantially equal installments on June 7, 2022 and June 7, 2023.

(9) These RSUs vest in full on December 31, 2022.

(10) These RSUs vest as follows:

33% on June 8, 2022, 33% on June 8, 2023, and 34% on June 8, 2024.

(11) These RRSUs vest in full on June 3, 2023.

(12) These RRSUs vest in full on August 2, 2023.

(13) The market value is based on the closing price on the NYSE of our common stock on December 31, 2021, the last trading day of 2021 ($18.10), multiplied by the number of outstanding shares.

Option Exercises and Stock Vested in 2021

The following table provides information regarding RSUs that vested during 2021 for our NEOs.

Our NEOs did not exercise any options during 2021.

Number of Shares Acquired on

Value Realized on Vesting (2)

Martin Schroeter (3)

David Wyshner

Elly Keinan (3)

Edward Sebold

Maryjo Charbonnier

The shares acquired on vesting represent RSUs that vested on December 31, 2021.

The value realized on vesting is based on the closing price of our common stock on the NYSE on the vesting date.

If vesting occurs on a day on which the NYSE is closed, the value realized on vesting is based on the closing price on the last trading day prior to the vesting date.

This table does not include Kyndryl RSUs that vested during 2021 and that relate to equity awards granted to Messrs.

Schroeter and Keinan prior to their respective retirements from IBM which, upon their respective retirements, remained outstanding and subject to vesting as if they had been employed by IBM on each applicable vesting date.

Pension Benefits in 2021

During 2021, no NEOs participated in either a tax-qualified or non-qualified defined benefit plan sponsored by the Company.

Non-Qualified Deferred Compensation for 2021

The following table provides information regarding contributions, earnings and balances for our NEOs under the Kyndryl Excess Plan, as well as under the IBM Excess 401(k) Plus Plan, in which they participated in 2021 and maintain balances, but to which they may not make further contributions.

Under each of the plans, deferred account balances are fully vested at all times.

In addition, neither plan provides any opportunity for above-market or preferential earnings, nor does either plan provide any minimum internal rate of return.

Additionally, the Kyndryl Excess Plan and the IBM Excess 401(k) Plus Plan do not permit “hardship” withdrawals.

The Kyndryl Excess Plan and the IBM Excess 401(k) Plus Plan are not funded, and plan participants have only an unsecured contractual commitment by the applicable company to pay amounts owed under each plan.

Each of these plans is further described below.

Contributions

Distributions

Martin Schroeter (4)

Kyndryl Excess Plan

IBM Excess 401 (k) Plus Plan

David Wyshner

Kyndryl Excess Plan

IBM Excess 401 (k) Plus Plan

Elly Keinan (4)

Kyndryl Excess Plan

IBM Excess 401 (k) Plus Plan

Edward Sebold

Kyndryl Excess Plan

IBM Excess 401 (k) Plus Plan

Maryjo Charbonnier

Kyndryl Excess Plan

IBM Excess 401 (k) Plus Plan

The amounts in this column are reported as compensation for fiscal 2021 in the “Base Salary” column of the Summary Compensation Table.

Represents the amount of the automatic and/or matching contribution made by us in accordance with the Kyndryl Excess Plan or the amount of the automatic contribution and/or matching contribution made by IBM in accordance with IBM’s Excess 401(k) Plus Plan, as applicable.

Matching contributions are reported for the year in which the compensation against which the applicable deferral election is applied has been earned (regardless of whether such matching contribution is actually credited to the NEO’s non-qualified deferred compensation account in that year or the following year).

The amounts in this column are reported as compensation for fiscal 2021 in the “All Other Compensation” column of the Summary Compensation Table.

Amounts in this column are not reported as compensation for fiscal 2021 in the Summary Compensation Table since they do not reflect above-market or preferential earnings.

This table does not include Kyndryl RSUs that relate to equity awards granted to Messrs.

Schroeter and Keinan prior to their respective retirements from IBM and which, upon their respective retirements, remained outstanding and subject to vesting as if they had been employed by IBM on each applicable vesting date.

IBM Excess 401(k) Plus Plan

IBM maintains the IBM Excess 401(k) Plus Plan (the “IBM Excess Plan”), in which each of our NEOs other than Mr.

Wyshner and Ms.

Charbonnier participated in 2021.

Under the IBM Excess Plan, a n eligible employee may elect to defer up to 80% of salary and eligible performance pay, which includes annual incentive program payments.

In both cases, the deferral elections must be made prior to the year in which the deferred amounts are earned.

Sebold was eligible to elect any deferrals under the IBM Excess Plan in 2021.

For eligible participants who defer salary or eligible performance pay under the IBM Excess Plan, IBM credits matching contributions to their accounts.

Sebold, who was the only NEO eligible for a matching contribution in 2021, IBM’s matching contribution to his account equaled 5% of the sum of (i) the amount he elected to defer under the IBM Excess Plan and (ii) his eligible compensation after reaching the compensation limits in the Code.

IBM also credits automatic contributions to the accounts of eligible participants including, in 2021, Messrs.

Schroeter, Keinan and Sebold.

Wyshner and Ms.

Charbonnier were not eligible for automatic contributions in 2021.

In each case, the automatic contributions were equal to 1% of the sum of (i) the amount the participant elected to defer under the IBM Excess Plan and (ii) the participant’s eligible compensation after reaching the compensation limits in the Code.

Deferrals under the IBM Excess Plan may be allocated among 34 notional investment choices, each of which replicates the performance of the comparable investment funds in the IBM 401(k) Plan.

Schroeter, Keinan and Sebold, their transfer to Kyndryl in connection with the Spin-off did not trigger a distribution of the amounts in their accounts in the IBM Excess Plan.

Rather, upon their separation of service from Kyndryl, they will receive a distribution of the amounts in their accounts in a lump sum or installments based upon their distribution election.

Schroeter’s account under the IBM Excess Plan was distributed to him in February 2021 in connection with his separation of service from IBM in 2020.

Kyndryl Excess Plan

In connection with the Spin-Off, we adopted the Kyndryl Excess Plan, a nonqualified deferred compensation plan that, starting in 2022, offers eligible employees an opportunity to defer up to 80% of their eligible compensation (including base and performance pay, but not any non-recurring compensation) in excess of the limits imposed by the Code under the Kyndryl 401(k) Plan.

Employees are eligible to participate in the Kyndryl Excess Plan if they (i) were hired as an executive or promoted to an executive position by Kyndryl after September 1, 2021 and prior to November 15, 2021 or (ii) directly transferred from IBM to Kyndryl and either (a) made elective deferrals under the IBM Excess plan for the 2021 plan year or (b) were hired as an executive by IBM between November 15, 2020 and September 1, 2021.

Each of the NEOs is eligible to participate in the Kyndryl Excess Plan.

For certain eligible employees that transferred from IBM, including Messrs.

Schroeter, Keinan and Sebold and Ms.

Charbonnier, we will make an annual automatic contribution to the Kyndryl Excess Plan equal to 6% of their eligible pay in excess of the limits under the Code.

With respect to participants in the IBM Excess Plan who became participants in the Kyndryl Excess Plan in 2021, including Messrs.

Schroeter, Keinan and Sebold, the applicable deferral elections and automatic and matching contributions that would have applied under the IBM Excess Plan for the remainder of 2021 following the Spin-off instead applied to the Kyndryl Excess Plan.

However, the Kyndryl Excess Plan will not provide for matching contributions commencing in 2022.

Deferrals under the Kyndryl Excess Plan may be allocated among hypothetical investment options that mirror the investment options available under our qualified Kyndryl 401(k) Plan.

Schroeter, Keinan and Sebold were the only NEOs who had balances under the Kyndryl Excess Plan as of December 31, 2021.

Potential Payments upon Termination or Change in Control

The following table describes the potential payments and benefits under the Company’s compensation and benefit plans and contractual agreements to which the NEOs would have been entitled if a termination of employment or change in control occurred on the last business day of fiscal 2021.

The only agreements, arrangements or plans that entitle the NEOs to severance, perquisites or other enhanced benefits upon termination of their employment or a change in control are:

● the Severance Plan;

● the terms of the NEOs’ equity awards.

The amounts shown in the table do not include:

● payments and benefits to the extent they are provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the NEOs;

● distributions of previously vested plan balances under the Kyndryl 401(k) Plan, the Kyndryl Excess Plan and the IBM Excess Plan (see “⸺Non-Qualified Deferred Compensation for 2021” above for information about the Kyndryl Excess Plan and the IBM Excess Plan).

Potential Payments to NEOs upon Termination of Employment or Change in Control Table

without Cause

Martin Schroeter

Cash Severance Payment (1)

Acceleration of Equity Awards (2)

Value of Continuing Benefits (3)

Outplacement Benefit (4)

David Wyshner

Cash Severance Payment (1)

Acceleration of Equity Awards (2)

Value of Continuing Benefits (3)

Outplacement Benefit (4)

Cash Severance Payment (1)

Acceleration of Equity Awards (2)

Value of Continuing Benefits (3)

Outplacement Benefit (4)

Edward Sebold

Cash Severance Payment (1)

Acceleration of Equity Awards (2)

Value of Continuing Benefits (3)

Outplacement Benefit (4)

Maryjo Charbonnier

Cash Severance Payment (1)

Acceleration of Equity Awards (2)

Value of Continuing Benefits (3)

Outplacement Benefit (4)

(1) Cash Severance Payments:

● Under the Severance Plan, as described more fully below, each NEO is entitled to cash severance in the event of a termination without Cause or, solely following a Change in Control, with Good Reason, subject to certain conditions;

● The amounts of the cash severance payments included in the table assume that there is no notice period prior to the termination without Cause;

● The cash severance payments included in the table assume there would be no cutback of payments to avoid subjecting the NEOs to an excise tax under Section 280G of the Code.

(2) Acceleration of Equity Awards:

● The values under “Acceleration of Equity Awards” are presented as the sum of the values as of the last business day of 2021 of the additional benefit from the acceleration of vesting, if any, of RSUs, stock options and performance shares that would have occurred as a result of termination under the different circumstances presented.

● The value of accelerated stock options, for purposes of this table, was determined by subtracting the exercise price of the original stock option from the closing stock price on the NYSE of $18.10 at December 31, 2021, and multiplying the result, if a positive number (in-the-money), by the number of option shares that would vest as a result of termination.

● With respect to Messrs.

Schroeter and Keinan, a termination without cause would constitute a “qualifying LTPP retirement” as described under “⸺Treatment of Outstanding Equity Awards in the Event of Certain Qualifying Terminations” below.

(3) Value of Continuing Benefits:

● Reflects the cost of providing continued group health coverage (on the same basis as actively employed employees of the Company), for a period of 24 months in the case of Mr.

Schroeter or 18 months in the case of each of the other NEOs, assuming 2021 rates;

● The amounts included in the table assume that there is no notice period prior to the termination without Cause.

(4) Reflects the estimated cost of six months of outplacement services.

Severance Plan

The Severance Plan provides for payment of severance and other benefits to eligible executives, including the NEOs, in the event of a termination of employment with the Company without Cause (as that term is defined in the LTPP and as set forth below) or, solely in connection with a change in control, with Good Reason (as defined below, and each of a termination without Cause and a termination with Good Reason, a “covered termination”), in each case, subject to the executive’s (i) execution and non-revocation of a general release of claims in favor of the Company, (ii) execution of a two-year noncompetition and nonsolicitation agreement and (iii) continued compliance with the executive’s Agreement Regarding Confidential Information and Intellectual Property with the Company.

The Severance Plan also provides for continued vesting of certain equity awards upon a “qualifying retirement” (as defined below).

In the event of a covered termination, in addition to certain accrued obligations, as of December 31, 2021, the Severance Plan provided for the following payments and benefits to the NEOs:

● a lump-sum pro-rata bonus for the year of termination, based on actual performance;

● continued payment over a 24-month period in the case of Mr.

Schroeter, or an 18-month period in the case of each of the other NEOs, of such NEO’s base salary, in each case inclusive of any notice period;

● continued health insurance coverage, or reimbursement of premiums for coverage, at substantially the same level as provided immediately prior to such termination, at the same cost as generally provided to similarly situated active Company employees, for a period of 24 months for Mr.

Schroeter or 18 months for each of the other NEOs (the “welfare benefit”), in each case inclusive of any notice period;

● payment of, or reimbursement for, six months of outplacement services (the “outplacement benefit”).

Notwithstanding the foregoing, in the event such covered termination occurs within the 24-month period following a change in control (as defined in the LTPP), in addition to certain accrued obligations, the Severance Plan provides for the following payments and benefits to the NEOs:

● a lump-sum pro-rata bonus for the year of termination, based on target performance;

● a lump-sum cash severance amount equal to the sum of the NEO’s annual base salary and target annual bonus amount times the multiplier applicable to such executive (which is 2.0 for Mr.

Schroeter and 1.5 for each of the other NEOs);

● the welfare benefit;

● the outplacement benefit.

In addition, the Severance Plan provides that, upon a termination in connection with a “qualifying retirement,” subject to the NEO’s (i) provision of six months’ notice of intent to retire, (ii) execution and non-revocation of a general release of claims in favor of the Company, (iii) execution of a two-year noncompetition agreement and (iv) continued compliance with the Agreement Regarding Confidential Information and Intellectual Property with the Company, notwithstanding anything to the contrary in the LTPP or the award agreements relating to the NEO’s outstanding RSU awards, such outstanding RSU awards will not be canceled but will instead remain outstanding and subject to vesting in accordance with their terms as if the NEO remained an active employee of the Company through each applicable vesting date.

The Severance Plan provides that if any payments and/or benefits due to a participant (including any NEO) under the Severance Plan and/or any other arrangements will constitute “excess parachute payments” (as defined in Section 280G (“Section 280G”) of the Code), the Company will reduce the amount of payments under the Severance Plan by the minimum amount necessary such that the present value of the participant’s “parachute payments” (as defined in Section 280G) is below 300% of such participant’s “base amount” (as defined in Section 280G), calculated in accordance with the Treasury Regulations promulgated under Section 280G;

provided, however, in no event will the amount of any severance payments be reduced unless (a) the net after-tax amount of such payments and benefits as so reduced is greater than or equal to (b) the net after-tax amount of such payments and benefits without such reduction.

For purposes of the Severance Plan:

● a “qualifying retirement” is a termination of employment (other than for Cause as defined the LTPP and set forth below) after attaining the age of 55 and completing at least ten years of service with the Company at the time of termination.

For purposes of calculating years of service, (a) in certain circumstances, years of service to IBM will be counted for participants who transfer employment directly to the Company from IBM and (b) years of service will include years of service with an entity acquired by the Company for participants whose employment is transferred directly to the Company in connection with such acquisition;

● a termination with “Good Reason” is a termination of employment due to (a) a material diminution in the participant’s authority, duties or responsibilities, (b) a reduction in the participant’s then current base salary or bonus opportunity, (c) a material breach by the Company of an existing agreement between the Company and the participant, (d) the failure of the Company’s successor to assume in writing the Company’s obligations under the Severance Plan or any other agreement with the participant if not assumed by successor by operation of law, or (e) a relocation of more than 40 miles from both the participant’s then current primary place of employment and their assigned primary Company office;

provided, however, that the participant must provide the Company with written notice of the circumstance that the participant claims to be good reason within 90 days after such circumstance first occurs, such circumstance is not remedied within 30 days after the Company receives the written notice, and the participant’s termination of employment is effective as soon as practicable after the end of such 30-day cure period.

In February 2022, our Compensation Committee amended the Severance Plan to provide that (i) the base salary amount payable to our NEOs upon a covered termination described above would be paid in a lump sum, rather than over a 24-month period, in the case of Mr.

Schroeter, or an 18-month period, in the case of the other NEOs and (ii) continued health insurance coverage, or reimbursement of premiums for coverage, at substantially the same level as provided immediately prior to such termination, for Mr.

Schroeter would be limited to a period of 18 months.

Treatment of Outstanding Equity Awards in the Event of Certain Qualifying Terminations (Other than Terminations in Connection with a Change in Control)

Except as provided in the case of a “qualifying retirement” under the Severance Plan, in the event of termination of employment other than on account of death or disability, all unvested RSUs will be canceled.

of the NEO’s death, all unvested RSUs will immediately vest.

In the event the NEO becomes disabled (as described in the LTPP), unvested RSUs will remain outstanding and continue to vest in accordance with their terms as if the NEO remained an active employee of the Company through each applicable vesting date.

Stock Options

In the event of termination of employment other than in connection with a “qualifying LTPP retirement” or on account of death or disability, any stock options that are not exercisable will be canceled immediately, and any stock options that are exercisable as of the date of termination of employment (other than for Cause (as defined in the LTPP and set forth below)) will remain exercisable for 90 days after the date of termination, after which any unexercised stock options will be canceled.

In the event of termination of employment in connection with a “qualifying LTPP retirement” (which is a termination of employment (other than for Cause) after attaining the age of 55 and completing at least ten years of service with the Company at the time of termination), any unvested stock options will vest and become exercisable, and all stock options that are exercisable as of the date of termination will remain exercisable until the earlier of the expiration of the full term and the fifth anniversary of the date the NEO’s employment terminates.

In the event of the NEO’s death or in the event the NEO becomes disabled, all stock options will become fully exercisable and remain exercisable until the earlier of the expiration of their full term and the third anniversary of the date the NEO’s employment terminates.

In the event of a termination of employment other than in connection with a “qualifying LTPP retirement” or on account of death or disability, all unvested PSUs will be canceled.

In the event of termination of employment in connection with a “qualifying LTPP retirement” at least one year after the grant date of the PSUs, the NEO will receive a payout that is prorated for the time worked as an active executive during the Performance Period following the Compensation Committee’s calculation of the PSU payout.

In the event of a NEO’s death or in the event the NEO becomes disabled, the PSUs will remain outstanding and continue to vest in accordance with their terms.

Treatment of Outstanding Equity Awards in the Event of a Change in Control

In the event of a change in control (as defined in the LTPP)

● if the acquirer or successor company in such change in control has agreed to provide for the substitution, assumption, exchange or other continuation of awards granted pursuant to the LTPP, then, if the participant’s employment with or service to the Company or an affiliate is terminated by the Company or affiliate without cause (and other than due to death or disability) on or within 24 months following a change in control, then unless otherwise provided by the Compensation Committee, all options and stock appreciation rights held by such participant will become immediately exercisable with respect to 100% of the shares subject to such options and stock appreciation rights, and the restricted period (and any other conditions) will expire immediately with respect to 100% of the shares of restricted stock and restricted stock units and any other awards (other than other cash-based awards) held by such participant (including a waiver of any applicable performance conditions);

provided that if the vesting or exercisability of any award would otherwise be subject to the achievement of performance conditions, the portion of such award that will become fully vested and immediately exercisable will be based on the assumed achievement of actual or target performance as determined by the Compensation Committee;

● if the acquirer or successor company in such change in control has not agreed to provide for the substitution, assumption, exchange or other continuation of awards granted pursuant to the LTPP, then unless otherwise provided by the Compensation Committee, all stock options and stock appreciation rights held by such participant will become immediately exercisable with respect to 100% of the shares subject to such stock options and stock appreciation rights, and the restricted period (and any other conditions) will expire immediately with respect to 100% of the shares of restricted stock and restricted stock units and any other awards (other than other cash-based award) held by such participant (including a waiver of any applicable performance conditions);

provided that if the vesting or exercisability of any award would

otherwise be subject to the achievement of performance conditions, the portion of such award that will become fully vested and immediately exercisable will be based on the assumed achievement of actual or target performance as determined by the Compensation Committee;

● the Compensation Committee may upon at least ten days’ advance notice to the affected participants, cancel any outstanding award and pay to the holders thereof, in cash, securities or other property (including of the acquiring or successor company), or any combination thereof, the value of such awards based upon the price per share received or to be received by other stockholders of the Company in the event (it being understood that any stock option or stock appreciation right having a per-share exercise or hurdle price equal to, or in excess of, the fair market value (as of the date specified by the Compensation Committee) of a share subject thereto may be canceled and terminated without any payment or consideration therefor).

Notwithstanding the above, the Compensation Committee will exercise such discretion over the timing of settlement of any award subject to Code Section 409A at the time such award is granted.

To the extent practicable, these provisions will occur in a manner and at a time that allows affected participants the ability to participate in the change in control transaction with respect to the shares subject to their awards.

Definition of Cause

“Cause” means, as reasonably determined by Kyndryl, the occurrence of any of the following:

(i) embezzlement, misappropriation of corporate funds or other material acts of dishonesty;

(ii) commission or conviction of any felony or of any misdemeanor involving moral turpitude, or entry of a plea of guilty or nolo contendere to any felony or misdemeanor (other than a minor traffic violation or other minor infraction);

(iii) engagement in any activity that the employee knows or should know could harm the business or reputation of the Company;

(iv) failure to adhere to the Company’s corporate codes, policies or procedures;

(v) a breach of any covenant in any employment agreement or any intellectual property agreement, or a breach of any other provision of the employment agreement, in either case if the breach is not cured to the Company’s satisfaction within a reasonable period after notice of the breach (no notice and cure period is required if the breach cannot be cured);

(vi) failure to perform duties or follow management direction, which failure is not cured to the Company’s satisfaction within a reasonable period of time after a written demand for substantial performance is delivered to the employee (no notice or cure period is required if the failure to perform cannot be cured);

(vii) violation of any statutory, contractual or common law duty or obligation to the Company, including, without limitation, the duty of loyalty;

(viii) rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company;

or (ix) acceptance of an offer to engage in or associate with any business which is or becomes competitive with the Company;

provided , however , that the mere failure to achieve performance objectives shall not constitute Cause.

Director Compensation in 2021

The table below sets forth information regarding the compensation of each of our non-employee directors for the fiscal year ended December 31, 2021.

Fees Earned or Paid in Cash

Shirley Ann Jackson

Denis Machuel

Jana Schreuder

Represents the aggregate grant date fair value of RSUs granted during 2021 computed in accordance with Topic 718.

The assumptions used in the valuation are discussed under the heading “Stock-Based Compensation” in Note 1 to the accompanying financial statements for the fiscal year ended December 31, 2021.

As of December 31, 2021, each of our non-employee directors had 10,990 RSUs outstanding, which will vest on December 16, 2022, subject to continued service through such date.

Board and Committee Fees in 2021

In connection with the Spin-off, our Board adopted the following director compensation program for our non-employee directors:

● An annual cash retainer of $100,000, payable in installments and prorated for partial years of service.

● An additional annual cash retainer for service as the chair of a Board committee or as Lead Independent Director payable in installments and prorated for partial years of service as follows:

Audit Committee Chair:

Compensation Committee Chair:

Nominating and Governance Committee Chair:

and Lead Independent Director:

● An annual RSU grant with a target value of $200,000 and vesting on the first anniversary of the date of grant.

Accordingly, in December 2021, we granted each of our non-employee directors 10,990 RSUs that vest in full on the first anniversary of the grant date, subject to the director’s continued service through such date.

Our directors are subject to the Stock Ownership Guidelines described under “Compensation Discussion and Analysis⸺ Additional Compensation Information⸺ Stock Ownership Guidelines.” Pursuant to such guidelines, our non-employee directors are required to retain 100% of the shares of our common stock underlying such RSUs, net of any amounts required to pay taxes, until they achieve the ownership required by the guidelines.

Prior to the completion of the Spin-off, IBM employees Simon J.

Beaumont, Nicholas Fehring and Frank Sedlarcik served as interim directors of Kyndryl.

Beaumont, Fehring and Sedlarcik resigned prior to the Spin-off.

The interim directors did not receive any incremental compensation for their service as interim directors.

Compensation Committee Interlocks and Insider Participation

The members of our Compensation Committee during 2021 included Janina Kugel, Jana Schreuder and Howard I.

None of the members of our Compensation Committee during 2021 has at any time been one of our executive officers or employees.

None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board or Compensation Committee.

The information called for by this Item 11 will be included in our Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed within 120 days after March 31, 2023, the last day of our fiscal year covered by this Form 10-K.

Such information is incorporated herein by reference.

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

Equity Compensation Plan Information

The following table sets forth, as of December 31, 2021, certain information regarding our equity compensation plans.

The only plan pursuant to which we may currently make equity grants is the Kyndryl 2021 Long-Term Performance Plan.

The following table sets forth, as of March 31, 2023, certain information regarding our equity compensation plans.

The only plan pursuant to which we may currently make equity grants is the Amended and Restated Kyndryl 2021 Long-Term Performance Plan.

Available for

14 unchanged sentences

The calculation of the weighted-average exercise price does not include outstanding equity awards that are received or exercised for no consideration.

These shares are available for grant as of December 31, 2021, under the Kyndryl 2021 Long-Term Performance Plan pursuant to which the Compensation Committee of the Board of Directors may make various stock-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units and other awards based, in whole or in part, on the value of our common stock.

Ownership of Securities

Directors and Executive Officers

The following table sets forth information regarding the beneficial ownership of shares of our common stock as of December 31, 2021, by each of our directors and named executive officers and all of our directors and executive officers as a group.

Number of Shares or Units Beneficially Owned as

of December 31, 2021 (1)

Stock Options

and Restricted

Indirectly (2)

Ownership (4)

Martin Schroeter

David Wyshner

Edward Sebold

Maryjo Charbonnier

Shirley Ann Jackson

Denis Machuel

Jana Schreuder

Directors and executive officers as a group (15 persons)

(1) Each individual and member of the group has sole investment power with respect to the shares owned.

As of December 31, 2021, (i) no director or executive officer beneficially owned 1% or more of the outstanding common stock of the Company and (ii) the directors and executive officers as a group beneficially owned approximately less than 1% of the outstanding common stock of the Company (including common stock they can acquire within 60 days).

(2) Included are shares of common stock owned outright.

(3) The number of shares shown in this column are not currently outstanding but are deemed beneficially owned because the individual has the right to acquire them pursuant to options exercisable or restricted stock units settling within 60 days of December 31, 2021.

(4) These amounts are the sum of the number of shares shown in the prior columns.

The following table provides information about stockholders known to us to beneficially own more than 5% of our outstanding common stock as of December 31, 2021.

Amount and Nature of

Percent of Company

Beneficial Owner

Beneficial Ownership

International Business Machines Corporation

44,603,072 (1)

One New Orchard Road

Armonk, NY 10504

The Vanguard Group

17,928,827 (2)

100 Vanguard Blvd

Malvern, PA 19355

BlackRock, Inc.

15,320,271 (3)

55 East 52nd Street

New York, NY 10055

As of December 31, 2021, International Business Machines Corporation had sole dispositive power with respect to 44,603,072 shares of common stock.

As of December 31, 2021, and based on the Schedule 13G filed by The Vanguard Group (“Vanguard”) with the SEC on February 11, 2022, Vanguard had (i) shared voting power with respect to 116,137 shares of common stock, (ii) sole dispositive power with respect to 17,529,027 shares of common stock and (iii) shared dispositive power with respect to 399,800 shares of common stock.

As of December 31, 2021, and based on the Schedule 13G filed by BlackRock, Inc.

(“BlackRock”) with the SEC on February 7, 2022, BlackRock had (i) sole voting power with respect to 14,326,465 shares of common stock and (ii) sole dispositive power with respect to 15,320,271 shares of common stock held by BlackRock Life Limited, BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock (Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, FutureAdvisor, Inc., BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Asset Management Deutschland AG, BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock Asset Management North Asia Limited and BlackRock Fund Managers Ltd.

These shares are available for grant as of March 31, 2023, under the Amended and Restated Kyndryl 2021 Long-Term Performance Plan pursuant to which the Compensation and Human Capital Committee of the Board of Directors may make various stock-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units and other awards based, in whole or in part, on the value of our common stock.

Except as set forth above, the information called for by this Item 12 will be included in our Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed within 120 days after March 31, 2023, the last day of our fiscal year covered by this Form 10-K.

Such information is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

Policy on Related Person Transactions

The Board has adopted a written Policy on Related Person Transactions to assist it in reviewing, approving and ratifying related person transactions and to assist us in the preparation of related disclosures required by the SEC.

The Policy on Related Person Transactions does not prohibit related person transactions covered by the policy, but provides that such transactions must be reviewed, approved or ratified and disclosed in accordance with the SEC’s rules regarding related person transactions.

Under our Policy on Related Person Transactions, information about transactions involving related persons is assessed by the independent directors on our Board.

Related persons include our directors and executive officers, as well as immediate family members of directors and officers, and beneficial owners of more than five percent of our common stock.

If the determination is made that a related person has a material interest in any transaction with the Company, then our independent directors will review, approve or ratify it, and the transaction is required to be disclosed in accordance with the SEC rules.

If the related person at issue is a director, or a family member of a director, then that director may not participate in those discussions.

In general, we are of the view that the following transactions with related persons are not significant to investors because they take place under our standard policies and procedures:

the sale or purchase of products or services in the ordinary course of business and on an arm’s-length basis;

the employment by us where the compensation and other terms of employment are determined on a basis consistent with our human resources policies;

and any grants or contributions made by us under one of our grant programs and in accordance with our corporate contributions guidelines.

In addition to our Policy on Related Person Transactions, our Business Conduct Guidelines require that all employees, officers and directors avoid any situation that involves or appears to involve a conflict of interest between their personal and professional relationships.

Our Audit Committee provides oversight regarding compliance with our Business Conduct Guidelines.

Our Business Conduct Guidelines also require that all employees seek approval from senior management and Kyndryl counsel prior to accepting membership on the board of directors, advisory board, advisory council or similar position at another company.

Agreements with IBM

In order to govern the ongoing relationships between us and IBM after the Spin-off and to facilitate an orderly transition, we and IBM entered into agreements providing for various services and rights following the Spin-off, and under which we and IBM agreed to indemnify each other against certain liabilities arising from our respective businesses.

The following summarizes the terms of the material agreements we entered into with IBM.

Separation and Distribution Agreement

We entered into a Separation and Distribution Agreement with IBM in advance of the Distribution.

The Separation and Distribution Agreement sets forth our agreements with IBM regarding the principal actions to be taken in connection with the Spin-off.

It also sets forth other agreements that govern aspects of our relationship with IBM following the Spin-off.

Transfer of Assets and Assumption of Liabilities

The Separation and Distribution Agreement identifies certain transfers of assets and assumptions of liabilities that were necessary in advance of our separation from IBM so that we and IBM retain the assets of, and the liabilities associated with, our respective businesses.

The Separation and Distribution Agreement generally provides that the assets comprising our business consist of those exclusively related to our current business and operations (except for intellectual property assets, which are allocated as further described below under Intellectual Property Agreements or otherwise allocated to the business through a process of dividing shared assets).

The liabilities assumed in connection with the Spin-off generally consist of those related to the assets comprising our business or to the past and future operations of our business, including our locations used in our current operations.

The Separation and Distribution Agreement also provides for the settlement or extinguishment of certain liabilities and other obligations between us and IBM.

Reorganization Transactions

The Separation and Distribution Agreement describes certain actions related to our separation from IBM that occurred prior to the Distribution such as the formation of our subsidiaries and certain other internal restructuring actions taken by us and IBM, including the contribution by IBM to us of the assets and liabilities that comprise our business.

Intercompany Arrangements

All agreements, arrangements, commitments and understandings, including most intercompany accounts payable or accounts receivable, between us, on the one hand, and IBM, on the other hand, terminated and/or were repaid effective as of the Distribution Date or shortly thereafter, except specified agreements and arrangements that are intended to survive the Distribution.

Credit Support

We agreed to use reasonable best efforts to arrange, on or prior to the Distribution, for the replacement of all guarantees, covenants, indemnities, surety bonds, letters of credit or similar assurances of credit support, other than certain specified credit support instruments, currently provided by or through IBM or any of its subsidiaries for the benefit of us or any of our subsidiaries.

Representations and Warranties

In general, neither we nor IBM made any representations or warranties regarding any assets or liabilities transferred or assumed, any consents or approvals required in connection with these transfers or assumptions, the value or freedom from any lien or other security interest of any assets transferred, the absence of any defenses relating to any claim of either party or the legal sufficiency of any conveyance documents.

Except as expressly set forth in the Separation and Distribution Agreement, all assets have been transferred on an “as-is,” “where-is” basis.

Further Assurances

The parties will use reasonable best efforts to effect any transfers contemplated by the Separation and Distribution Agreement that have not been consummated prior to the Distribution.

In addition, the parties will use reasonable best efforts to effect any transfer or re-transfer of any asset or liability that was improperly transferred or retained.

The Distribution

The Separation and Distribution Agreement governs IBM’s and our respective rights and obligations regarding the proposed Distribution.

On or prior to the Distribution Date, IBM delivered 80.1% of the issued and outstanding shares of our common stock to the distribution agent.

Following the Distribution, the distribution agent electronically delivered the shares of our common stock to IBM stockholders based on the distribution ratio.

The IBM board of

directors, in its sole and absolute discretion, determined the Record Date, the Distribution Date and the terms of the Spin-off, including the amount of the shares of our common stock it retained.

In addition, IBM, at any time until the Distribution, could have decided to abandon the Distribution or modify or change the terms of the Distribution.

The Separation and Distribution Agreement also provided that several conditions must have been satisfied or, to the extent permitted by law, waived by IBM, in its sole and absolute discretion, before the Distribution could occur.

Exchange of Information

We and IBM agreed to provide each other with information reasonably necessary to comply with reporting, disclosure, filing or other requirements of any national securities exchange or governmental authority, for use in judicial, regulatory, administrative and other proceedings and to satisfy audit, accounting, litigation and other similar requests.

We and IBM also agreed to use reasonable best efforts to retain such information in accordance with our respective record retention policies applicable to our own information or such longer period as required by law.

Each party also agreed to use its reasonable best efforts to assist the other with its financial reporting and audit obligations.

The IBM board of directors, in its sole and absolute discretion, could have terminated the Separation and Distribution Agreement at any time prior to the Distribution.

Release of Claims

We and IBM each agreed to release the other and its affiliates, successors and assigns, and all persons that prior to the Distribution had been the other’s stockholders, directors, officers, members, agents and employees, and their respective heirs, executors, administrators, successors and assigns, from any and all liabilities that such party is taking on in connection with the Spin-off, whether at law or in equity (including any right of contribution), whether arising under any contract, by operation of law or otherwise, existing or arising from any acts or events occurring, or failing to occur, or alleged to have occurred, or to have failed to occur, or any conditions existing or alleged to have existed on or before the Distribution, including in connection with the Spin-off and all other activities to implement the Spin-off.

These releases are subject to exceptions set forth in the Separation and Distribution Agreement.

Indemnification

We and IBM each agreed to indemnify the other and each of the other’s current and former directors, officers and employees, and each of the heirs, executors, successors and assigns of any of them, against certain liabilities incurred in connection with the Spin-off and our and IBM’s respective businesses.

The amount of either IBM’s or our indemnification obligations will be reduced by any net insurance proceeds the party being indemnified receives.

The Separation and Distribution Agreement also specifies procedures regarding claims subject to indemnification.

Transition Services Agreement

We entered into a Transition Services Agreement pursuant to which IBM will provide us with certain specified services for a limited time to ensure an orderly transition following the Distribution.

The services IBM will provide predominantly consist of information technology services, among others.

The services are generally intended to be provided for a period no longer than two years following the Distribution.

Each party may terminate the agreement in its entirety in the event of a material breach of the agreement by the other party that is not cured within a specified time period.

We may also terminate the services on an individual basis upon prior written notice to IBM, provided that a partial termination of a service will require mutual agreement between us and IBM.

The Transition Services Agreement provides for customary indemnification and limits on liability.

Given the short-term nature of the Transition Services Agreement, we are in the process of increasing our internal capabilities to eliminate reliance on IBM for the transition

services it will provide us following the Spin-off.

During the year ended December 31, 2021, we paid IBM $60 million in fees pursuant to the Transition Services Agreement.

Tax Matters Agreement

We entered into a Tax Matters Agreement with IBM that governs the respective rights, responsibilities and obligations of IBM and us after the Distribution with respect to all tax matters (including tax liabilities, tax attributes, tax returns and tax contests).

The Tax Matters Agreement generally provides that we are responsible and will indemnify IBM for all taxes, including income taxes, sales taxes, value-added and payroll taxes, relating to our business for all periods following the Distribution;

IBM is responsible and will indemnify us for all taxes relating to our business for all periods preceding the Distribution, except as otherwise provided in the Tax Matters Agreement.

In addition, the Tax Matters Agreement addresses the allocation of liability for taxes that were incurred as a result of restructuring activities undertaken to effectuate the Spin-off.

In addition, the Tax Matters Agreement provides that we are required to indemnify IBM for any taxes (and reasonable expenses) resulting from the failure of the Spin-off and related internal transactions to qualify for their intended tax treatment under U.S.

federal, state and local income tax law, as well as foreign tax law, where such taxes result from (i) breaches of covenants and representations we made and agreed to in connection with the Spin-off, (ii) the application of certain provisions of U.S.

federal income tax law to these transactions or (iii) any other action or omission (other than actions expressly required or permitted by the Separation and Distribution Agreement, the Tax Matters Agreement or other ancillary agreements) we take after the Distribution that gives rise to these taxes.

IBM has the exclusive right to control the conduct of any audit or contest relating to these taxes, but we have the right to review and comment on IBM’s conduct of any such audit or contest, to the extent that we could be liable for taxes under the Tax Matters Agreement as a result of such audit or contest.

The Tax Matters Agreement imposes certain restrictions on us and our subsidiaries (including restrictions on share issuances, redemptions or repurchases, mergers or other business combinations, sales of assets and similar transactions) that are designed to address compliance with Section 355 and related provisions of the Code, as well as state, local and foreign tax law, and are intended to preserve the tax-free nature of the Spin-off and related transactions.

Under the Tax Matters Agreement, these restrictions apply for two years following the Distribution, unless IBM obtains a private letter ruling from the IRS or we obtain an opinion of counsel, in each case acceptable to IBM in its discretion, that the restricted action would not impact the non-recognition treatment of the Spin-off or other transaction, or unless IBM otherwise gives its consent for us to take a restricted action in its discretion.

Even if such a private letter ruling or opinion is obtained, or IBM does otherwise consent to our taking an otherwise restricted action, we will remain liable to indemnify IBM in the event such restricted action gives rise to an otherwise indemnifiable liability.

These restrictions may limit our ability to pursue strategic transactions or engage in new businesses or other transactions that may maximize the value of our business, and might discourage or delay a strategic transaction that our stockholders may consider favorable.

Employee Matters Agreement

We entered into an Employee Matters Agreement with IBM that addresses employment and employee compensation and benefits matters.

The Employee Matters Agreement addresses the allocation and treatment of assets and liabilities relating to employees and compensation and benefit plans and programs in which our employees participated prior to the Spin-off.

Except as specifically provided in the Employee Matters Agreement, we are generally responsible for all employment and employee compensation and benefits-related liabilities relating to our employees, former employees and other service providers.

In particular, we assumed certain assets and liabilities with respect to our current employees under certain of IBM’s non-U.S.

defined benefit pension plans (with assets and liabilities allocated based on formulas specified in the Employee Matters Agreement for each pension plan).

Generally, except as may be provided in a transition services agreement, each of our employees ceased active participation in IBM compensation and benefit plans as of the Spin-off.

The Employee Matters Agreement also provides that we establish certain compensation and benefit plans for the benefit of our employees following the Spin-off, including a 401(k) savings plan, which accepts

direct rollovers of account balances from the IBM 401(k) savings plan for any of our employees who elect to do so.

Generally, following the Spin-off, we assume and are responsible for any annual bonus payments, including with respect to the year in which the Spin-off occurs, and any other cash-based incentive or retention awards to our current and former employees.

IBM long-term incentive compensation awards, including restricted share units, performance share units, stock options and restricted stock, held by Kyndryl employees are treated as described in “Compensation Discussion and Analysis—Elements of Compensation and Compensation Decisions⸺Long-Term Equity Incentives⸺Treatment of Outstanding IBM Equity Awards in connection with the Spin-off”.

The Employee Matters Agreement incorporates the indemnification provisions contained in the Separation and Distribution Agreement and described above.

In addition, the Employee Matters Agreement provides that we indemnify IBM for certain employee-related liabilities associated with the failure to establish benefit plans or in connection with joint-employer liability claims by our employees.

Agreements Governing Intellectual Property

Allocation of Intellectual Property

The agreements we entered into with IBM governing intellectual property provide for (i) us to own certain specified patents and patent applications, trademarks, domain names, copyrights in proprietary software and documentation, database rights and certain other intellectual property rights solely developed by or exclusively related to our business and (ii) IBM to retain any of its other intellectual property rights related to our business.

Intellectual property rights were generally allocated to us if those rights were solely developed by our business (including with respect to software, database rights and certain other technologies) or are exclusively related to our business.

Any intellectual property and technologies that are not allocated to us will be retained by IBM.

Intellectual Property Agreement

We entered into an Intellectual Property Agreement with IBM, pursuant to which IBM granted us perpetual and irrevocable, non-exclusive, royalty-free licenses to certain proprietary software and documentation, databases, trade secrets and certain other intellectual property rights (excluding patents and trademarks) that are used in our business but are being retained by IBM.

The foregoing licenses exclude IBM’s commercial software, which is subject to IBM’s standard commercial terms if we choose to use it in our business.

Additionally, we granted to IBM perpetual and irrevocable, non-exclusive, royalty-free licenses to certain proprietary software and documentation, databases, trade secrets and certain other intellectual property rights (excluding patents and trademarks) that were allocated to us (other than certain restricted software and research assets, to which IBM was granted limited or no rights).

The field of use for the licenses granted to us is generally our business as conducted immediately prior to the Spin-off, with natural extensions and evolutions.

The field of use for the licenses granted to IBM is generally all businesses, operations, products and services.

The licenses are generally transferable with any sale or transfer of an entity or line of business that utilizes the relevant intellectual property, and the transferred license is limited to the business, products and services as conducted by the transferred entity or line of business as of the date of the transfer, with natural extensions and evolutions.

In addition, pursuant to the Intellectual Property Agreement, we are permitted to continue using certain of IBM’s trademarks, trade names and service marks with respect to the “IBM” brands in connection with certain limited transitional uses.

The permitted transitional uses generally do not exceed one to two years.

The Intellectual Property Agreement also provides that we will use commercially reasonable efforts to cease using such IBM trademarks as soon as reasonably practicable.

Other Intellectual Property Arrangements

We entered into a patent cross-license agreement with IBM, pursuant to which we granted to IBM, and IBM granted to us, a non-exclusive, worldwide, fully paid-up license to our respective patent portfolios as of the Spin-off.

The license will continue until the expiration of the last to expire of the licensed patents, unless earlier terminated (as described below).

IBM will also separately be licensed under any patents issuing from applications we file based on invention disclosures assigned to us in the Spin-off.

The field of our license to IBM’s patent portfolio generally covers information handling systems (subject to certain exclusions related to quantum systems, IBM’s System z servers, integrated circuits and semiconductor fabrication) and the performance of services, including services for information handling systems.

The field of IBM’s license to our patent portfolio generally covers information handling systems and the performance of services, including services for information handling systems.

Both licenses include certain rights to extend new licenses to divested entities or in connection with divested product or service lines, subject to certain limitations on the volume of licensed products and services under the new license and rights of the licensor party to terminate the new license if the counterparty asserts any patent infringement claim against the licensor, its subsidiaries or any of their customers or distributors.

In addition, such new license does not include the right to engage in further divestitures.

The licenses under the patent cross-license agreement are also transferable if a party is acquired and becomes a subsidiary of a third party, but the transferred license is limited to only licensed products and services of the acquired party immediately prior to the acquisition and may also be terminated by the non-acquired party if the acquirer or its affiliates asserts any claim of patent infringement against the non-acquired party, its subsidiaries or their respective customers or distributors.

If either party to the patent cross-license agreement is acquired by a third party such that it is no longer a separate legal entity, the license to that party will terminate as of the date of such acquisition.

In addition, we were granted licenses under certain of IBM’s patent cross-license agreements with third parties that have been identified as being relevant to the Business, and IBM will work together with us to extend us rights under these agreements to the extent permitted thereunder.

We also entered into a research master collaboration agreement with IBM, setting forth the general terms and conditions applicable to certain, to be determined, joint research projects between us and IBM’s Research Division.

Real Estate Matters Agreement

We entered into a Real Estate Matters Agreement with IBM that governs the allocation and transfer of real estate between IBM and Kyndryl and the colocation of IBM and Kyndryl following the Spin-off.

Real estate assets are predominantly allocated such that properties with greater than 50% occupancy by one company are allocated in full to such company and the non-majority company moves to another location, except that the non-majority company is not required to vacate earlier than the expiration date of any applicable lease or sublease entered into pursuant to the Real Estate Matters Agreement (the “Allocation Principles”).

Certain sites will need to be transferred from one company to the other to ensure conformity with the Allocation Principles.

Certain sites are occupied by both IBM and Kyndryl employees following the Spin-off pursuant to a lease, occupancy agreement or sublease.

IBM bears all costs relating to (i) the transfer of owned real property (e.g., transfer taxes and recording fees), (ii) the transfer of leased real property (e.g., the costs of obtaining consents) and (iii) except as stated otherwise in the applicable lease form, sublease form or split lease, any alterations or improvements reasonably required to separate IBM from Kyndryl employees with respect to all properties.

Other Arrangements

We also entered into commercial arrangements with IBM.

We entered into an IBM International Client Relationship Agreement with IBM that governs transactions by which we may order from IBM its branded programs, services and products and third-party products and services for use in our internal business and to service our customers.

We also entered into a Master Subcontracting Framework Agreement with IBM that governs relationships where either we or IBM can serve as the prime contractor or subcontractor with respect to a particular customer.

The Master Subcontracting Framework Agreement (i) sets forth the general principles by which we and IBM may establish subcontracting relationships, (ii) provides a template for developing the subcontract for each particular engagement and (iii) establishes standard terms and approaches to be applied in the ordinary course of subcontracting between us and IBM.

During the year ended December 31, 2021, we incurred costs of $3.9 billion pursuant to these commercial arrangements.

Stockholder Registration Rights Agreement

We entered into a Stockholder and Registration Rights Agreement with IBM pursuant to which we agreed that, upon the request of IBM, subject to certain limitations, we will use our reasonable best efforts to effect the registration under applicable federal or state securities laws of any shares of our common stock retained by IBM.

If we intend to file on our behalf or on behalf of any of our other security holders a registration statement in connection with a public offering of any of our securities in a manner that would permit the registration for offer and sale of our common stock held by IBM, IBM will have the right to include its shares of our common stock in that offering.

We are generally responsible for all registration expenses in connection with the performance of our obligations under the registration rights provisions in the agreement, and IBM will be responsible for its own internal fees and expenses, any applicable underwriting discounts or commissions and any stock transfer taxes.

The agreement also contains customary indemnification and contribution provisions by us for the benefit of IBM and, in limited situations, by IBM for the benefit of us with respect to the information provided by IBM included in any registration statement, prospectus or related document.

If IBM transfers shares covered by the agreement, it will be able to transfer the benefits of the Stockholder’s and Registration Rights Agreement to transferees of 5% or more of the shares of our common stock outstanding immediately following the Distribution, provided that each transferee agrees to be bound by the terms of the Stockholder and Registration Rights Agreement.

In addition, IBM agreed to vote any shares of our common stock that it retains immediately after the Distribution in proportion to the votes cast by our other stockholders.

In connection with such agreement, IBM will grant us a proxy to vote its shares of our retained common stock in such proportion.

As a result, IBM will not be able to exert any control over us through the shares of our common stock it retains.

Any such proxy, however, will be automatically revoked as to a particular share upon any sale or transfer of such share from IBM to a person other than IBM, and neither the Stockholder and Registration Rights Agreement nor proxy will limit or prohibit any such sale or transfer.

Guarantee Agreements

In October 2021, IBM entered into guarantee agreements pursuant to which IBM initially guaranteed on a senior unsecured basis (i) $700 million aggregate principal amount of our 2.050% Senior Notes due 2026, (ii) $500 million aggregate principal amount of our 2.700% Senior Notes due 2028, (iii) $650 million aggregate principal amount of our 3.150% Senior Notes due 2031, (iv) $550 million aggregate principal amount of our 4.100% Senior Notes due 2041 and (v) $500 million in borrowings under our term loan credit agreement.

IBM was automatically and unconditionally released and discharged from all obligations under these guarantee agreements at the time the Spin-off was completed.

Other Related Person Transactions

From time to time, we may have employees who are related to our executive officers or directors.

The daughter of Mr.

Keinan (our Group President), was an IBM employee for a portion of 2021 and transferred to Kyndryl to hold a non-executive position until December 31, 2021, when she left Kyndryl.

She received compensation of $128,900 in 2021.

Her compensation and other terms of employment were determined on a basis consistent with our human resources policies and industry practices.

Director Independence

Under our Corporate Governance Guidelines and NYSE rules, a director is not independent unless our Board affirmatively determines that he or she does not have a direct or indirect material relationship with us or any of our subsidiaries.

Our Corporate Governance Guidelines define independence in accordance with the independence definition in the current NYSE corporate governance rules for listed companies.

Our Corporate Governance Guidelines require our Nominating and Governance Committee and our Board to review the independence of all directors at least annually.

In the event a director has a relationship with the Company that is relevant to his or her independence and is not addressed by the objective tests set forth in the NYSE independence definition, our Board will determine, considering all relevant facts and circumstances, whether such relationship is material.

Our Board has affirmatively determined that each of Messrs.

Hester, Caruso, Harris, Machuel, Merchant and Ungerleider and Mses.

Jackson, Kugel and Schreuder is independent under the guidelines for director independence set forth in the Corporate Governance Guidelines and under all applicable NYSE guidelines, including with respect to committee membership.

Our Board also has determined that each of Messrs.

Caruso, Machuel and Merchant is “independent” for purposes of Section 10A(m)(3) of the Exchange Act, and that each of Mses.

Kugel and Schreuder and Mr.

Ungerleider is “independent” for purposes of Section 10C(a)(3) of the Exchange Act.

In making its independence determinations, our Board considered and reviewed all information known to it (including information identified through annual directors’ questionnaires), including the various commercial transactions and relationships between IBM and/or us and our subsidiaries and the entities with which certain of our directors are or have been affiliated.

The Board determined that the transactions identified were not material and did not affect the independence of any of our non-employee directors under either the Company’s Governance Guidelines or the applicable NYSE rules.

The information called for by this Item 13 will be included in our Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed within 120 days after March 31, 2023, the last day of our fiscal year covered by this Form 10-K.

Such information is incorporated herein by reference.

Principal Accountant Fees and Services .

PricewaterhouseCoopers LLP (“PwC”) began serving as our independent registered public accounting firm in 2020.

In connection with the audit of the 2021 financial statements, we entered into an agreement with PwC which sets forth the terms by which PwC would perform audit services for the Company.

The following table presents fees for professional audit and other services rendered by PwC for the year ended December 31, 2021.

For the year ended December 31, 2020, we did not pay any fees for professional services to PwC.

Prior to the Separation, IBM paid any audit, audit-related, tax or other fees related to Kyndryl’s business.

As a result, the amounts reported below are not necessarily representative of the fees we expect to pay PwC in future years.

All PwC services for 2020 and 2021 were approved in advance by our Audit Committee (or, prior to the Spin-off, by IBM’s audit committee).

(Dollars in millions)

Audit Fees (1)

Audit-Related Fees (2)

All Other Fees (4)

NA – Not applicable

Fees in 2021 include the audit of Kyndryl’s consolidated annual financial statements, the review of interim financial statements in Kyndryl’s quarterly reports on Form 10-Q filed subsequent to the Separation and the performance of audits in accordance with statutory requirements.

Fees in 2021 include the services provided related to process control reports delivered to the Company and its clients.

Tax fees were not applicable for the period presented.

The Company did not incur other fees for the period presented.

The Audit Committee considered whether providing the non-audit services included in this table was compatible with maintaining PwC’s independence and concluded that it was.

Pre-Approval of Services Provided by Independent Registered Public Accounting Firm

Consistent with its charter and applicable SEC rules, our Audit Committee approves all fees paid to, and all services performed by, our independent registered public accounting firm.

At the time of the Spin-off, the Audit Committee approved and, going forward, at the beginning of each year, the Audit Committee approves the proposed services, including the nature, type and scope of service contemplated and the related fees, to be rendered by PwC during the year.

In addition, pursuant to authority delegated by the Audit Committee, the Audit Committee chair may approve engagements that are outside the scope of the services and fees approved by the Audit Committee, which are later presented to the Committee.

For each category of proposed service, the independent registered public accounting firm is required to confirm that the provision of such services does not impair its independence.

The information called for by this Item 14 will be included in our Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed within 120 days after March 31, 2023, the last day of our fiscal year covered by this Form 10-K.

Such information is incorporated herein by reference.

Exhibits, Financial Statement Schedules:

3 unchanged sentences

The Amended and Restated Certificate of Incorporation of the registrant was filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on November 4, 2021 and is hereby incorporated by reference.

The Amended and Restated Bylaws of the registrant was filed as Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed on November 4, 2021 and is hereby incorporated by reference.

The Amended and Restated Bylaws of the registrant, effective January 25, 2023, was filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on January 27, 2023 and is hereby incorporated by reference.

The Indenture, dated as of October 15, 2021, between Kyndryl Holdings, Inc.

3 unchanged sentences

Guarantee Agreement, dated as of October 15, 2021, among International Business Machines Corporation, Kyndryl Holdings, Inc.

and the Bank of New York Mellon Trust Company, N.A., as trustee, in favor of the holders of the notes (filed herewith).

and the Bank of New York Mellon Trust Company, N.A., as trustee, in favor of the holders of the notes was filed as Exhibit 4.3 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 10, 2022 and is hereby incorporated by reference.

The Registration Rights Agreement, dated as of October 15, 2021, among Kyndryl Holdings, Inc.

7 unchanged sentences

and solely for the purposes of Section 13.19, Kyndryl Holdings, Inc., was filed as Exhibit 10.1 to the registrant’s current report on Form 8-K filed on November 1, 2021 and is hereby incorporated by reference.

First Amendment to Amended and Restated Receivables Purchase Agreement, dated as of January 26, 2022, among Kyndryl, Inc., Kyndryl Holdings, Inc.

The First Amendment to Amended and Restated Receivables Purchase Agreement, dated as of January 26, 2022, among Kyndryl, Inc., Kyndryl Holdings, Inc.

and Banco Santander S.A.

(filed herewith).

was filed as Exhibit 10.4 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 10, 2022 and is hereby incorporated by reference.

The Second Amendment to Amended and Restated Receivable Purchase Agreement, dated September 21, 2022, by and among Banco Santander S.A., Kyndryl, Inc.

and Kyndryl Holdings, Inc.

was filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2022 filed on February 9, 2023 and is hereby incorporated by reference.

The Third Amendment to Amended and Restated Receivable Purchase Agreement, dated as of December 21, 2022, by and among Banco Santander S.A., Kyndryl, Inc.

and Kyndryl Holdings, Inc.

was filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2022 filed on February 9, 2023 and is hereby incorporated by reference.

The Transition Services Agreement, dated as of November 2, 2021, between International Business Machines Corporation and Kyndryl Holdings, Inc., was filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on November 4, 2021 and is hereby incorporated by reference.*

13 unchanged sentences

was filed as Exhibit 10.8 to the registrant’s Current Report on Form 8-K filed on November 4, 2021 and is hereby incorporated by reference.

The Kyndryl 2021 Long-Term Performance Plan was filed as Exhibit 10.9 to the registrant’s Current Report on Form 8-K filed on November 4, 2021 and is hereby incorporated by reference.†

The Amended and Restated Kyndryl 2021 Long-Term Performance Plan was filed as Exhibit 4.3 to the registrant’s Registration Statement on Form S-8 filed on July 29, 2022 and is hereby incorporated by reference.†

The Forms of LTPP equity award agreements for (i) stock options, restricted stock, restricted stock units, cash-settled restricted stock units and (ii) retention restricted stock unit awards was filed as Exhibit 10.10 to the registrant’s Current Report on Form 8-K filed on November 4, 2021 and is hereby incorporated by reference.†

5 unchanged sentences

The Offer Letter by and between International Business Machines Corporation and Elly Keinan, dated March 1, 2021, the LTPP performance share unit award agreement, dated April 1, 2021, and the related terms and conditions document, effective March 1, 2021, the Executive Sign-on Repayment Agreement and the noncompetition agreement, dated March 2, 2021, was filed as Exhibit 10.15 to the registrant’s Registration Statement on Form 10 filed on October 12, 2021 and is hereby incorporated by reference.†

The Offer Letter by and between International Business Machines Corporation and Maryjo Charbonnier, dated May 28, 2021, the LTPP performance share unit award agreement, dated August 2, 2021, and the related terms and conditions document, effective March 1, 2021, the LTPP retention restricted stock unit award agreement, dated August 2, 2021, and the related terms and conditions document, effective June 1, 2020, the Executive Sign-on Repayment Agreement and the noncompetition agreement, dated June 1, 2021, was filed as Exhibit 10.16 to the registrant’s

Registration Statement on Form 10 filed on October 12, 2021 and is hereby incorporated by reference.†

The LTPP performance share unit award agreement for Edward Sebold, dated May 3, 2021, and the related terms and conditions document, effective May 1, 2021, and the noncompetition agreement, dated April 25, 2012, was filed as Exhibit 10.17 to the registrant’s Registration Statement on Form 10 filed on October 12, 2021 and is hereby incorporated by reference.†

1 unchanged sentence

Executive Severance and Retirement Plan was filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on February 25, 2022 and is hereby incorporated by reference.†

The Amendment to the Kyndryl Executive Severance Plan and Executive Retirement Policy was filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on August 1, 2022 and is hereby incorporated by reference.

The Kyndryl Annual Incentive Plan for Executives was filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on February 25, 2022 and is hereby incorporated by reference.

Form of LTPP equity award agreement for directors (filed herewith).†

Form of Terms and Conditions for LTPP equity award agreement for directors (filed herewith).†

The Form of LTPP equity award agreement for directors was filed as Exhibit 10.25 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 10, 2022 and is hereby incorporated by reference.†

The Form of Terms and Conditions for LTPP equity award agreement for directors was filed as Exhibit 10.26 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 10, 2022 and is hereby incorporated by reference.†

The Form of LTPP equity award agreement for performance share units (Fiscal 2023) was filed as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed on November 4, 2022 and is hereby incorporated by reference.

Subsidiaries of the registrant (filed herewith).

5 unchanged sentences

Certification of principal financial officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Section 13(r) Disclosure.

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.

13 unchanged sentences

Kyndryl Holdings, Inc.

March 10, 2022

/s/ Martin J.

4 unchanged sentences

Director, Chairman and Chief Executive Officer

March 10, 2022

(Principal Executive Officer)

Chief Financial Officer

March 10, 2022

(Principal Financial Officer)

1 unchanged sentence

Vice President and Controller

March 10, 2022

Vineet Khurana

(Principal Accounting Officer)

March 10, 2022

Shirley Ann Jackson

March 10, 2022

Denis Machuel

March 10, 2022

Jana Schreuder

March 10, 2022

/s/ Evan Barth

1 unchanged sentence

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