18. STOCK-BASED COMPENSATION PLANS

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On April 30, 2025, our stockholders approved a new Huntsman Corporation 2025 Stock Incentive Plan (the ‘‘2025 Stock Incentive Plan’’), which reserved 4.65 million shares for issuance. Each of the Huntsman Corporation 2016 Stock Incentive Plan and the Huntsman Corporation Stock Incentive Plan, as amended and restated (together, the “Prior Plans”), remain in effect for outstanding awards granted pursuant to the Prior Plans, but no further awards may be granted under the Prior Plans. Under the 2025 Stock Incentive Plan we may grant nonstatutory stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, cash awards and other stock-based awards to our employees, directors and consultants and to employees and consultants of our subsidiaries, provided that incentive stock options may be granted solely to employees. The terms of the grants under the 2025 Stock Incentive Plan and the Prior Plans are fixed at the grant date. As of June 30, 2025, we had approximately 4.6 million shares remaining under the 2025 Stock Incentive Plan available for grant. Option awards have a maximum contractual term of 10 years and generally must have an exercise price at least equal to the market price of our common stock on the date the option award is granted. Outstanding stock-based awards generally vest over a three-year period.

The compensation cost from continuing operations under the stock-based compensation plans for our Company and Huntsman International were as follows (dollars in millions):

The total income tax expense recognized in the condensed consolidated statements of operations for us and Huntsman International for stock-based compensation arrangements was approximately $1 million and nil for the six months ended June 30, 2025 and 2024, respectively.

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Stock Options

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The fair value of each stock option award was estimated on the date of grant using the Black-Scholes valuation model. Expected volatilities were based on the historical volatility of our common stock through the grant date. The expected term of options granted was estimated based on the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior. The risk-free rate for periods within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of grant. 

During each of the six months ended June 30, 2025 and 2024, no stock options were granted.

A summary of stock option activity under the stock-based compensation plans as of June 30, 2025 and changes during the six months then ended is presented below:

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As of  June 30, 2025, there was no unrecognized compensation cost related to nonvested stock option arrangements granted under the stock-based compensation plans. 

The total intrinsic value of stock options exercised during the six months ended June 30, 2025 and 2024 was approximately nil and $1 million, respectively. Cash received from stock options exercised during both of the six months ended June 30, 2025 and 2024 was approximately nil. The cash tax benefit from stock options exercised during both of the six months ended June 30, 2025 and 2024 was approximately nil.

Nonvested Shares

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Nonvested shares granted under the stock-based compensation plans consist of restricted stock and performance share unit awards, which are accounted for as equity awards, and phantom stock, which is accounted for as a liability award because it can be settled in either stock or cash. The fair value of each restricted stock and phantom stock award is estimated to be the closing stock price of Huntsman’s stock on the date of grant.

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For our performance share unit awards, the performance criteria are total stockholder return of our common stock relative to the total stockholder return of a specified industry peer group for the three-year performance periods. The fair value of each performance share unit award is estimated using a Monte Carlo simulation model that uses various assumptions, including an expected volatility rate and a risk-free interest rate. For the six months ended June 30, 2025 and 2024, the weighted-average expected volatility rate was 30.0% and 31.8%, respectively, and the weighted average risk-free interest rate was 4.30% and 4.39%, respectively. For the performance share unit awards granted during the six months ended June 30, 2025 and 2024, the number of shares earned varies based upon the Company achieving certain performance criteria over a three-year performance period.

A summary of the status of our nonvested shares as of June 30, 2025 and changes during the six months then ended is presented below:

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As of June 30, 2025, there was approximately $45 million of total unrecognized compensation cost related to nonvested share compensation arrangements granted under the stock-based compensation plans. That cost is expected to be recognized over a weighted-average period of approximately 2.0 years. The value of share awards that vested during the six months ended June 30, 2025 and 2024 was approximately $26 million and $24 million, respectively.

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