CABOT CORP Stock Compensation Disclosure

Note M. Share-Based Compensation

The Cabot Corporation 2025 Long-Term Incentive Plan (the “2025 Plan”) was adopted by the Company to provide stock-based compensation to eligible employees. The 2025 Plan was approved by Cabot’s stockholders on March 13, 2025, and authorizes the issuance of up to an additional 1,400,000 shares of common stock. The Company ceased granting awards under the Cabot Corporation Amended and Restated 2017 Long-Term Incentive Plan when the 2025 Plan was adopted by the Company’s stockholders, and the shares remaining available for future grants under the 2017 Plan as of the effective date of the 2025 Plan were transferred to the 2025 Plan’s share pool. The 2025 Plan is the only equity incentive plan under which the Company may grant equity awards to employees.

The terms of awards made under Cabot’s equity compensation plans are generally determined by the Compensation Committee of Cabot’s Board of Directors. The awards made in fiscal 2025, 2024 and 2023 consist of grants of stock options, time-based restricted stock units and performance-based restricted stock units. The options were issued with an exercise price equal to 100% of the market price of Cabot’s common stock on the date of grant, generally vest over a three-year period (30% on each of the first and second anniversaries of the date of grant and 40% on the third anniversary of the date of grant) and have a ten-year term. The restricted stock units generally vest three years from the date of the grant. The number of shares issuable, if any, when a performance-based restricted stock unit award vests will depend on the degree of achievement of the corporate performance metrics for each year within the three-year performance period of the award. Accordingly, future compensation costs associated with outstanding awards of performance-based restricted stock units may increase or decrease based on the probability of the Company achieving the performance metrics.

Share-based employee compensation expense was $22 million, $23 million and $18 million, after tax, for fiscal 2025, 2024 and 2023, respectively.

As of September 30, 2025, Cabot had $21 million and $3 million of total unrecognized compensation cost related to restricted stock units and options, respectively, granted under the Company’s equity incentive plans. These costs are expected to be recognized over a weighted-average period of approximately one year for restricted stock units and options.

Equity Incentive Plan Activity

Stock Options

As of September 30, 2025, the aggregate intrinsic value for all options outstanding and options exercisable was $23 million. The intrinsic value of options exercised during fiscal 2025, 2024 and 2023 was $6 million, $17 million and $2 million, respectively, and the Company received cash of $9 million, $20 million and $4 million, respectively, from these exercises. The Company recognized a tax benefit of $1 million in fiscal 2025, a tax benefit of $2 million in fiscal 2024 and immaterial tax benefits in fiscal 2023 from the exercise of stock options which were included in (Provision) benefit for income taxes within the Consolidated Statements of Operations.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of the options at the grant date. The weighted average grant date fair values of options granted during fiscal 2025, 2024 and 2023 was $44.96, $27.42, and $26.28 per option, respectively. The fair values on the grant date were calculated using the following weighted-average assumptions:

The expected stock price volatility assumption was determined using the historical volatility of the Company’s common stock over the expected life of the option. The expected term reflects the anticipated time period between the measurement date and the exercise date or post-vesting cancellation date.

Restricted Stock Units

The value of restricted stock unit awards is the closing stock price at the date of the grant. The weighted average grant date fair values of restricted stock unit awards granted during fiscal 2025, 2024 and 2023 was $110.67, $75.98 and $73.68, respectively. The intrinsic value of restricted stock units (meaning the fair value of the units on the date of vesting) that vested during fiscal 2025, 2024 and 2023 was $32 million, $37 million and $20 million, respectively.

Supplemental 401(k) Plan

Cabot’s Deferred Compensation and Supplemental Retirement Plan (“SERP 401(k)”) provides benefits to highly compensated employees when the retirement plan limits established under the Internal Revenue Code prevent them from receiving all of the Company matching and retirement contributions that would otherwise be provided under the qualified 401(k) plan. The SERP 401(k) is non-qualified and unfunded. Contributions under the SERP 401(k) are treated as if invested in Cabot common stock. The majority of the distributions made under the SERP 401(k) are required to be paid with shares of Cabot common stock. The remaining distributions, which relate to certain grandfathered accounts, will be paid in cash based on the market price of Cabot common stock at the time of distribution. The aggregate value of the accounts that will be paid out in stock, which is equivalent to approximately 110,000 and 117,000 shares of Cabot common stock as of September 30, 2025 and 2024, respectively, is reflected at historic cost in stockholders’ equity, and the aggregate value of the accounts that will be paid in cash, which was immaterial as of September 30, 2025 and 2024, was included in Other liabilities in the Consolidated Balance Sheets and marked-to-market quarterly.