Allison Transmission Holdings ALSN Deferred Compensation Arrangement With Individual Compensation Expense

The Company maintains a non-qualified deferred compensation plan (“Deferred Compensation Plan”) for a select group of management. Under the terms of the plan, the Company has utilized a rabbi trust to accumulate assets to fund its promise to pay benefits under the Deferred Compensation Plan. The rabbi trust is an irrevocable trust, which restricts any use of funds (operational or otherwise) by the Company other than to pay benefits under the Deferred Compensation Plan, and prevents immediate taxation of contributed amounts. Funds are accumulated through both employee deferrals and a Company match. Funds can be invested by the employee into a diversified group of investment options, which have been selected by the Company’s investment committee, that are all categorized as Level 1 in the fair value hierarchy. The Company match resulted in $1 million of expense recorded to the Consolidated Statements of Comprehensive Income for each of the years ended December 31, 2025, 2024 and 2023. The fair value of the rabbi trust plan assets and deferred compensation obligation was $24 million and $20 million as of December 31, 2025 and 2024, respectively.