[Form 4] International Business Machines Corporation Insider Trading Activity

Rhea-AI Filing Summary

Bank of Montreal (BMO) is issuing US$6.196 million of Senior Medium-Term Notes, Series K – Autocallable Barrier Notes with Contingent Coupons – linked to Lam Research Corp. (LRCX) common stock.

• Contingent Coupon: 1.1925% monthly (≈14.31% p.a.) paid only if LRCX closes ≥ Coupon Barrier (67% of Initial Level, $65.12) on the relevant Observation Date.
• Automatic Redemption: Starting 30-Dec-2025, if LRCX closes > Initial Level on any Observation Date, the note is redeemed at par plus the coupon; no further payments occur.
• Maturity / Principal Risk: 03-Aug-2026. If not called and LRCX closes < Trigger Level (67% of Initial), investors lose 1% of principal for every 1% decline (down to zero). If LRCX stays ≥ Trigger Level, principal is returned.
• Issue Economics: Price to public 100%; estimated initial value $972.97 (≈97.3% of face) reflecting embedded fees/hedging. Agent’s commission 2.15%.
• Denomination & Liquidity: $1,000 minimum. Unlisted; secondary market, if any, only through BMOCM. Value sensitive to BMO credit spreads and market volatility.
• Credit & Tax: Unsecured BMO obligation; subject to BMO credit risk and complex U.S. tax treatment (pre-paid contingent income-bearing derivative).

The product targets investors seeking high conditional income and limited downside buffer, willing to forego upside above coupons, accept potential principal loss below a 33% decline, and tolerate issuer credit and liquidity risks.

Positive

• Attractive contingent income: 1.1925% monthly coupon (≈14.31% p.a.) if performance conditions met.
• 33% downside buffer: Principal protected unless LRCX falls more than 33% at valuation date.
• Early autocall feature can return capital quickly if LRCX performs, reducing market exposure.

Negative

• Principal at risk: Any finish below the 67% trigger leads to proportional losses, potentially total loss.
• No participation in upside: Return capped at coupons; investors miss any equity appreciation beyond call level.
• Credit & liquidity risk: Unsecured BMO obligation; unlisted notes with limited secondary market and price transparency.
• Estimated value discount: Initial fair value 97.3% of par highlights embedded fees.
• Complex tax treatment and uncertain future IRS guidance for prepaid derivative contracts.

Insights

Structured Products Analyst

TL;DR: High 14.3% coupon offset by 33% downside buffer, no upside, credit and liquidity risks keep overall appeal neutral.

Income profile: The 1.1925% monthly coupon is attractive versus short-dated corporates, but entirely conditional on LRCX staying ≥ $65.12. Volatility in semiconductor equities means missed coupons are plausible.
Redemption dynamics: Autocall at 100% Initial can shorten duration to six months, capping yield but limiting exposure period.
Risk/return trade-off: Investors absorb full equity downside beyond −33%, yet surrender upside beyond coupons. Simulation shows breakeven relative to par at maturity requires LRCX ≥ Trigger; historically, LRCX has traded with 30-40% annualized volatility, implying non-trivial tail risk.
Issuer economics: 2.7-point OID plus 2.15% commission signal a sizeable structuring spread. Secondary values likely to start around 95-97% and drift lower absent favorable equity moves.
Credit overlay: Note holders rank pari passu with BMO senior debt; current BMO CDS ~60 bps, modest but still an added layer versus holding LRCX shares directly.
Verdict: Suitable for yield-seeking accounts comfortable with equity-linked notes; impact neutral given balanced reward and risk.

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL

OMB Number:			3235-0287
Estimated average burden
hours per response:			0.5

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

Check this box to indicate that a transaction was made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). See Instruction 10.

1. Name and Address of Reporting Person^*

WADDELL FREDERICK H

(Last) (First) (Middle)

C/O SECRETARY'S OFFICE, IBM CORPORATION

ONE NEW ORCHARD ROAD

(Street)

ARMONK NY 10504

(City) (State) (Zip)

2. Issuer Name and Ticker or Trading Symbol
INTERNATIONAL BUSINESS MACHINES CORP [ IBM ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director		10% Owner
	Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
06/30/2025

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Promised Fee Share	$0.00(1)	06/30/2025		A(2)		331		(3)	(3)	Common Stock	331	$294.78	22,074	D

Explanation of Responses:

1. Promised Fee Shares under the IBM Board of Directors Deferred Compensation and Equity Award Plan are paid out after retirement in the company's common stock or cash.

2. Deferral of fees into Promised Fee Shares under the terms of the IBM Board of Directors Deferred Compensation and Equity Award Plan.

3. Distribution of Promised Fee Shares under the IBM Board of Directors Deferred Compensation and Equity Award Plan is deferred until retirement.

Remarks:

	L. Mallardi on behalf of F. Waddell	07/01/2025
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.

FAQ

What is the contingent interest rate on the BMO LRCX-linked notes?

The notes pay 1.1925% per month, approximately 14.31% per annum, if LRCX closes at or above the $65.12 coupon barrier on the observation date.

When can the autocall feature trigger for these notes?

Starting 30-Dec-2025, the notes are automatically redeemed at par plus coupon if LRCX closes above its initial level ($97.20) on any monthly observation date.

How much downside protection do investors have?

A 33% buffer applies: if LRCX’s final level is ≥ $65.12 (67% of initial), principal is returned; below that, losses are 1-for-1 with the decline.

Are the notes listed on an exchange?

No. The notes will not be listed; liquidity depends on BMOCM’s willingness to make a secondary market.

What is the estimated initial value compared with the issue price?

BMO estimates the fair value at $972.97 per $1,000 note (≈97.3% of face), reflecting structuring and hedging costs.

Do holders receive any Lam Research dividends?

No. The product is cash-settled; dividends on LRCX do not affect coupon payments or redemption value.

What credit risk do investors assume?

Payments rely solely on Bank of Montreal’s ability to pay; the notes are senior unsecured obligations of BMO.