SERVICE CORP INTERNATIONAL

PART II

11. Share-Based Compensation

Stock Benefit Plans

We maintain benefit plans whereby shares of our common stock may be issued pursuant to the exercise of stock options or restricted stock granted to officers and key associates. Our Amended and Restated Incentive Plan ("the 1996 Plan") reserved 44,000,000 shares of our common stock for outstanding and future awards of stock options, restricted stock, and other share-based awards to officers and key associates. In May 2017, our shareholders approved the amended 2016 Equity Incentive Plan ("the 2016 Plan"), which reserved 13,404,404 shares of common stock for outstanding and future awards of stock options, restricted stock, and other awards to officers and key associates.

Our benefit plans allow for options to be granted as either non-qualified or incentive stock options. The options historically have been granted annually, or upon hire, as approved by the Compensation Committee of the Board of Directors. The options are granted with an exercise price equal to the market price of our common stock on the date of the grant, as approved by the Compensation Committee of the Board of Directors. The options are generally exercisable at a rate of 331/3% each year unless alternative vesting methods are approved by the Compensation Committee of the Board of Directors. Outstanding options will expire, if not exercised or forfeited, within eight years from the date of grant. Restricted shares are generally expensed ratably over the period during which the restrictions lapse, which is typically 331/3% each year. At December 31, 2025 and 2024, 2,255,668 and 2,821,617 shares, respectively, were reserved for future option and restricted share grants under our stock benefit plans.

We utilize the Black-Scholes option valuation model for estimating the fair value of our stock options. This model allows the use of a range of assumptions related to volatility, risk-free interest rate, expected holding period, and dividend yield. The expected volatility utilized in the valuation model is based on the historical volatility of our stock price. The dividend yield and expected holding period are based on historical experience and management’s estimate of future events. The risk-free interest rate is derived from the U.S. Treasury yield curve based on the expected life of the option in effect at the time of grant. The fair values of our stock options are calculated using the following weighted average assumptions, based on the methods described above:

The following table summarizes certain information with respect to stock option and restricted share compensation included in our Consolidated Statement of Operations:

Stock Options

The following table sets forth stock option activity for the year ended December 31, 2025 (shares reported in whole numbers):

The aggregate intrinsic value for stock options outstanding and exercisable was $65.5 million and $62.7 million, respectively, at December 31, 2025.

FORM 10-K 73

PART II

Set forth below is certain information related to stock options outstanding and exercisable at December 31, 2025 (shares reported in whole numbers):

Other information pertaining to stock options was as follows (in thousands, except weighted-average grant date fair value):

As of December 31, 2025, the unrecognized compensation expense related to stock options of $7.2 million is expected to be recognized over a weighted average period of 1.7 years.

Restricted Shares

The fair value of our restricted share awards and units, as determined on the grant date, is being amortized and charged to income (with an offsetting credit to Capital in excess of par value) generally over the average period during which the restrictions lapse.

Restricted share award activity was as follows (share awards reported in whole numbers):

Other information pertaining to restricted share awards was as follows (in thousands, except weighted-average grant date fair value):

At December 31, 2025, unrecognized compensation expense of $7.7 million related to restricted share awards is expected to be recognized over a weighted average period of 1.8 years.

74 Service Corporation International

PART II

Restricted share units activity was as follows (share units reported in whole numbers):

Other information pertaining to restricted share units was as follows (in thousands, except weighted-average grant date fair value):

At December 31, 2025, the unrecognized compensation expense related to restricted share units of $4.5 million is expected to be recognized over a weighted average period of 1.8 years.

Performance Units

During 2025, 2024, and 2023, we granted 84,004,96,761 and 88,084 performance units, respectively. At December 31, 2025, there were 277,806 performance units outstanding. Total compensation expense for performance units was $6.4 million, $10.8 million, and $11.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. For the year ended December 31, 2025 and 2024, cash paid to settle performance units was $10.3 million and $15.9 million, respectively. The fair value of the liability for these awards is calculated using a Monte Carlo simulation. The weighted average key assumptions as of December 31, 2025 were as follows:

At December 31, 2025, the unrecognized compensation expense related to performance units of $6.6 million is expected to be recognized over a weighted average period of 1.4 years.