Owens Corning

14. STOCK COMPENSATION

Description of the Plan

On April 20, 2023, the Company’s stockholders approved the Owens Corning 2023 Stock Plan (the “2023 Stock Plan”), which authorizes grants of stock options, stock appreciation rights, stock awards (including restricted stock awards, restricted stock units and bonus stock awards), performance share awards and performance share units. At March 31, 2025, the number of shares remaining available under the 2023 Stock Plan for all stock awards was 2.6 million.

Prior to the 2023 Stock Plan, employees were eligible to receive stock awards under the Owens Corning 2019 Stock Plan.

Total Stock-Based Compensation Expense

Stock-based compensation expense included in both Marketing and administrative expenses and Net earnings/(loss) from discontinued operations attributable to Owens Corning, net of tax in the accompanying Consolidated Statements of Earnings is as follows:

Restricted Stock Units

The Company has granted restricted stock units (“RSUs”) under its stockholder-approved stock plans. Generally, all outstanding RSUs will fully settle in stock. Compensation expense for RSUs is measured based on the closing market price of the stock at date of grant and is recognized on a straight-line basis over the vesting period, which is typically three tofour years. The 2023 Stock Plan allows alternate vesting schedules for death, disability and retirement. The weighted-average grant date fair value of RSUs granted under the 2023 Stock Plan in 2025 was $180.34.

Masonite Equity Awards

On May 15, 2024, the Company converted outstanding Masonite stock-based incentive awards to Masonite employees at a 0.8 equity award exchange ratio. Masonite equity awards include outstanding and unvested awards of restricted stock units and performance stock units (“PRSUs”) under the Masonite International Corporation 2021 Omnibus Incentive Plan (“Masonite Stock Plan”) that were held by employees of Masonite, which were exchanged for time-vesting restricted stock units of Owens Corning RSUs in connection with the completion of the transactions contemplated by the Arrangement Agreement. The converted stock-based incentive awards include 0.2 million PRSUs and 0.3 million restricted stock units.

The equity award exchange ratio was determined by the consideration amount of $133 per share divided by the volume weighted average closing sale price of one share of Owens Corning common stock for the ten consecutive trading days ended March 15, 2024 of $174.03 per share, in accordance with the terms of the Arrangement Agreement.

In accordance with the Arrangement Agreement, the number of Masonite shares underlying the PRSUs was equal to (i)107.33% of target for PRSUs granted in February 2022, (ii)100% of target for PRSUs granted in August 2022 and (iii)122% of target for PRSUs granted in February 2023.

The fair value of the Owens Corning RSUs issued for Masonite outstanding equity awards was $85 million as of the date of acquisition, of which $35 million was related to pre-combination expense and was included in the purchase price. The remaining portion of $50 million relates to post-combination expense, of which $26 million was accelerated as of March 31, 2025. As of March 31, 2025, the future unrecognized expense related to the converted outstanding RSUs was approximately $10 million which will be recognized over the remaining service period of approximately 1.51 years. Please refer to Notes 8 and 11 of the Consolidated Financial Statements for further information. Future equity-based awards to Company employees who were former Masonite employees may be granted from the remaining available shares under the Masonite Stock Plan. At March 31, 2025, the number of shares remaining available under the Masonite Stock Plan was 0.6 million shares of Owens Corning common stock.

The following table summarizes the Company’s RSU activity:

As of March 31, 2025, there was $79 million of total unrecognized compensation cost related to RSUs. This total includes $10 million of unrecognized compensation related to converted Masonite equity awards. The remaining $69 million of unrecognized compensation cost is related to RSUs granted under both the Owens Corning Stock Plans and Masonite Stock Plan. That cost is expected to be recognized over a weighted-average period of 2.02 years. The total grant date fair value of shares vested during the three months ended March 31, 2025 and 2024 was $40 million and $23 million, respectively.

Performance Share Units

The Company has granted performance share units (“PSUs”) as a part of its long-term incentive plan. All outstanding PSUs will fully settle in stock. The amount of shares ultimately distributed from all PSUs is contingent on meeting internal company-based metrics or an external-based stock performance metric.

In the three months ended March 31, 2025, the Company granted both internal company-based and external-based metric PSUs.

Internal Company-based metrics

The internal Company-based metric PSUs are based on various Company metrics and typically vest after athree-year period. The amount of stock distributed will vary from 0% to 200% of PSUs awarded depending on each award’s design and performance versus the company-based metrics.

The initial fair value for all internal company-based metric PSUs assumes that the performance goals will be achieved and is based on the grant date stock price. This assumption is monitored quarterly and if it becomes probable that such goals will not be achieved or will be exceeded, compensation expense recognized will be adjusted and previous surplus compensation expense recognized will be reversed or additional expense will be recognized. The expected term represents the period from the grant date to the end of thethree-year performance period. Pro-rata vesting may be utilized in the case of death, disability or retirement and awards, if earned, will be paid at the end of thethree-year period.

The following table provides a summary of the grant date fair values of the internal Company-based metric PSUs:

External-based metrics

The external-based metric PSUs vest after athree-year period. Outstanding grants issued in or after 2023 are based on the Company’s total stockholder return relative to a peer group. The amount of stock distributed will vary from 0% to 200% of PSUs awarded depending on the relative stockholder return performance. The fair value of external-based metric PSUs has been estimated at the grant date using a Monte Carlo simulation that uses various assumptions.

The following table provides a summary of the assumptions for PSUs granted in 2025 and 2024:

The risk-free interest rate was based on zero-coupon United States Treasury STRIPS at the grant date. The expected term represents the period from the grant date to the end of thethree-year performance period.

PSU Summary

As of March 31, 2025, there was $35 million total unrecognized compensation cost related to PSUs. That cost is expected to be recognized over a weighted-average period of 2.24 years.

The following table summarizes the Company’s PSU activity:

Employee Stock Purchase Plan

The Owens Corning Employee Stock Purchase Plan (“ESPP”) is a tax-qualified plan under Section 423 of the Internal Revenue Code. The purchase price of shares purchased under the ESPP is equal to 85% of the lower of the fair market value of shares of Owens Corning common stock at the beginning or ending of the offering period, which is asix-month period ending on May 31 and November 30 of each year. On April 16, 2020, the Company’s stockholders approved the Amended and Restated Owens Corning Employee Stock Purchase Plan, which increased the number of shares available for issuance under the plan by 4.2 million shares. As of March 31, 2025,3.0 million shares remain available for purchase.

Included in total stock-based compensation expense is $3 million of expense related to the Company’s ESPP recognized during the three months ended March 31, 2025. During the three months ended March 31, 2024, the Company recognized expense of $2 million related to the Company’s ESPP. As of March 31, 2025, there was $2 million of total unrecognized compensation cost related to the ESPP.