ASHLAND INC. Stock Compensation Disclosure

NOTE O – STOCK INCENTIVE PLANS

Ashland has stock incentive plans under which key employees or directors are granted performance share awards or nonvested stock awards. Each program is typically a long-term incentive plan designed to link employee compensation with increased shareholder value or reward superior performance and encourage continued employment with Ashland. Ashland recognizes compensation expense for the grant date fair value of stock-based awards over the requisite service period and accounts for forfeitures when they occur across all stock-based awards.

Stock Appreciation Rights ("SARs")

SARs were granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and typically become exercisable over periods of one to three years. Unexercised SARs lapse ten years after the date of grant. Ashland estimated the fair value of SARs granted using the Black-Scholes option-pricing model. Ashland has not granted any SARs since August 2020.

The total intrinsic value of SARs exercised was less than $1 million in 2025, $6 million in 2024 and $6 million in 2023. The actual tax benefit realized from the exercised SARs was zero in 2025, $1 million in 2024 and $1 million in 2023. The total grant date fair value of SARs that vested during 2025, 2024 and 2023 was zero, zero and $1 million, respectively. As of September 30, 2025, there was zero unrecognized compensation costs related to SARs. As of September 30, 2025, the aggregate intrinsic value of outstanding and exercisable SARs was zero.

Nonvested stock awards

Nonvested stock awards are granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and generally vest over a one-to-three-year period. However, such shares or units are subject to forfeiture upon termination of service before the vesting period ends. Beginning in 2016, these awards were primarily granted as stock units that will convert to shares upon vesting, while the grants in prior years were generally made in nonvested shares. Only nonvested stock awards granted in the form of shares entitle employees or directors to vote the shares. Dividends on nonvested stock awards granted are in the form of additional units or shares of nonvested stock awards, which are subject to vesting and forfeiture provisions.

The total grant date fair value of nonvested stock awards that vested during 2025, 2024 and 2023 was $10 million, $9 million and $8 million, respectively. As of September 30, 2025, there was $5 million of total unrecognized compensation costs related to nonvested stock awards. That cost is expected to be recognized over a weighted-average period of 1.6 years.

Cash-settled nonvested stock awards

Certain nonvested stock awards are granted to employees and are settled in cash upon vesting. As of September 30, 2025, 43 thousand cash-settled nonvested stock awards were outstanding. The value of these cash-settled nonvested stock awards changes in connection with changes in the fair market value of the Ashland Common Stock. These awards generally vest over a period of three years. The expense recognized related to cash-settled nonvested stock awards was zero, $2 million, and zero during 2025, 2024 and 2023, respectively.

Performance awards

Ashland sponsors a long-term incentive plan that awards performance shares/units to certain key employees that are tied to Ashland’s overall financial performance relative to the financial performance of selected industry peer groups and/or internal targets. Awards are granted annually, with each award covering a three-year measurement period and vesting over a one to three year period. Nonvested performance shares/units do not entitle employees to vote the shares or to receive any dividends thereon.

Each awarded performance share is convertible to one share of Ashland Common Stock and recorded as a component of stockholders’ equity. For fiscal year 2025, performance measures used to determine the actual number of performance shares issuable upon vesting include 60:20:20 weighting of Ashland’s total shareholder return ("TSR") performance, return on net assets ("RONA"), and Ashland’s EPS as compared to internal targets. TSR relative to peers is considered a market condition while EPS and RONA are considered performance conditions in accordance with U.S. GAAP. Beginning in 2025, each award includes a dividend equivalent feature that accrue dividends and are reinvested from the date of grant until the applicable vesting date. If the award is forfeited the employee is not entitled to the accrued reinvested dividends on those awards.

For fiscal years 2024 and 2023, performance measures used to determine the actual number of performance shares issuable upon vesting includes 60:40 weighting of Ashland’s TSR performance and Ashland’s RONA performance as compared to internal targets. TSR relative to peers is considered a market condition while RONA is considered a performance condition in accordance with U.S. GAAP.

For these awards, the fair value of the performance unit awards is equal to the fair market value of Ashland’s Common Stock as of the end of each reporting period. Compensation cost is recognized over the requisite service period if it is probable that the performance condition will be satisfied.

As of September 30, 2025, there was $5 million of total unrecognized compensation costs related to nonvested performance share/unit awards. That cost is expected to be recognized over a weighted-average period of approximately 1.9 years.