Aveanna Healthcare Holdings, Inc. Stock Compensation Disclosure

12. SHARE-BASED COMPENSATION

Stock Incentive Plans

On July 2, 2021, the Company's Board of Directors adopted the Company's 2021 Stock Incentive Plan (the “2021 Omnibus Incentive Plan”). The 2021 Omnibus Incentive Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock or Cash Based Awards and Dividend Equivalents, as defined in the plan, to enhance the Company's ability to attract, retain, and motivate persons who make important contributions to the Company. The Company has only granted Restricted Stock Units under the 2021 Omnibus Incentive Plan.

On April 19, 2021, the Company’s Board of Directors adopted the Company’s Amended and Restated 2017 Stock Incentive Plan (the “Amended 2017 Plan”). The Amended 2017 Plan (i) provides for the issuance of shares of common stock, as opposed to the Class B common stock previously issuable under the plan, to align with the Company’s Amended and Restated Certificate of Incorporation and (ii) modified the vesting terms of the existing issued performance-vesting options to vest upon the achievement of volume weighted average price (“VWAP”) per share hurdles for any ninety consecutive days commencing on or after the nine-month anniversary of the IPO. On June 17, 2021, the Company established the VWAP per share hurdles for the performance-vesting options. Since adoption of the 2021 Omnibus Incentive Plan, no further awards have been granted under the Amended 2017 Plan.

Amended 2017 Plan

Outstanding awards granted under the Amended 2017 Plan included time-vesting options, performance-vesting options, and restricted stock awards. Most awards granted to Participants consisted of 50% time-vesting options and 50% performance-vesting options. Time-vesting options vest 20% per year over a period of five years, and the only condition to vesting is the passage of time. The related compensation expense is recognized ratably over the required service period. The Company has also awarded accelerator-vesting options under the Amended 2017 Plan, which are subject to the time-based vesting schedule of 20% per year over a period of five years and provide additional value to holders, should the Company meet specified return levels to its stockholders.

Time-Vesting, Accelerator-Vesting, & Performance-Vesting Options

To determine the fair value of time-vesting and accelerator-vesting options under the Amended 2017 Plan, the Company utilized a Black-Scholes model. No time-vesting, accelerator-vesting, or performance-vesting options were awarded during the fiscal years ended January 3, 2026 and December 28, 2024 under the Amended 2017 Plan. The Company calculated the fair value of the outstanding performance-vesting options using the Monte Carlo option-pricing model.

Director Restricted Stock Units - Amended 2017 Plan - Temporary Equity

In accordance with the Amended 2017 Plan, an aggregate of no more than 307,500 shares of common stock are reserved for settlement of deferred restricted stock units (“Pre-IPO Deferred RSUs”). Pre-IPO Deferred RSUs fully vest on the grant date and convert to common shares upon the earlier of (1) the sale of the Company or (2) termination of service. There were no awards granted during the fiscal years ended January 3, 2026 and December 28, 2024.

The Pre-IPO Deferred RSUs contain a put right, which would require the Company, at the option of the award recipient, to repurchase all the Pre-IPO Deferred RSUs in event of the recipient’s termination at fair market value. The existence of this put right prevented the recipient from bearing the risks and rewards of ownership during the six month period following the vesting date as the put right requires the Company to purchase all shares the Participant received at fair market value on the repurchase date. Based on the nature of the Pre-IPO Deferred RSUs, management determined the awards, upon grant, had characteristics of a liability and initially recorded the awards at fair value upon issuance and re-measured at fair value at each reporting date.

After an award has been outstanding for six months and a day, the award recipient is subject to the risk and rewards of ownership, and the award was reclassified to temporary equity. As the put right is exercisable only when the recipient terminates his or her service, which is outside the control of the Company, the Company has classified the awards outstanding subsequent to the initial six-month period as temporary equity.

As the Pre-IPO Deferred RSUs are contingently redeemable, the Company does not subsequently adjust the redemption value once classified as temporary equity as it is not deemed probable that the Participant will terminate their service. As of January 3, 2026, there were 71,750 Pre-IPO Deferred RSUs outstanding, and at December 28, 2024, there were 143,500 Pre-IPO Deferred RSUs outstanding. All Pre-IPO Deferred RSUs were fully vested prior to the beginning of the fiscal year ended December 28, 2024.

2021 Omnibus Incentive Plan

Outstanding awards under the 2021 Omnibus Incentive Plan as of January 3, 2026 included restricted stock units which were granted to certain members of the Board of Directors and certain employees of the Company. These restricted stock units vest over time and upon vesting convert into shares of common stock on a one-for-one basis. The restricted stock units are granted annually as part of the Long-Term Incentive Plan to management and as part of board compensation to directors (“Director RSUs”). Director RSUs vest over a one-year period.

Long-Term Incentive Plan (“LTIP”)

In the first quarter of 2025, the Compensation Committee of the Board of Directors approved LTIP grants of restricted stock units (“RSUs”) and performance stock units (“PSUs”) under the 2021 Omnibus Incentive Plan.

The RSUs are subject to a three-year service-based cliff vesting schedule commencing on the date of grant. Compensation cost for the RSUs is measured based on the grant date fair value of each share and the number of shares granted and is recognized over the applicable vesting period on a straight-line basis. The PSUs granted contain performance criterion based on adjusted EBITDA targets for each of the three years that the award vests. Achievement of any annual target during the three years subsequent to the grant date results in a cumulative achievement event for the target year and any prior year award not previously achieved. Additionally, the PSUs are subject to a three-year service-based cliff vesting schedule commencing on the date of grant. For the PSUs that have service and performance conditions, compensation cost is initially measured based on the grant date fair value of each share. Cumulative compensation cost is subsequently adjusted at the end of each reporting period to reflect the current estimation of achieving the performance condition.

Further, during the fiscal year ended January 3, 2026, the Compensation Committee modified PSUs originally issued in February 2022. The previous performance criterion were replaced with an Adjusted EBITDA target for the fiscal year ending January 3, 2026. Effects of the modification are reflected in the table of share-based compensation expense, net of forfeitures, below. The Company recorded incremental compensation expense, net of forfeitures, of $1.6 million for the fiscal year ended January 3, 2026, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations.

Senior Management Retention Plan (“SMRP”)

In the second quarter of 2023, the Compensation Committee approved SMRP awards to certain members of management to be paid in the form of RSUs under the 2021 Omnibus Stock Incentive Plan. The awards were granted

based on a fixed dollar value for each member of senior management included in the plan. The number of RSUs to be paid as compensation was dependent on the share price of the Company's common stock upon completion of the SMRP awards' performance criteria. The SMRP awards required the Company to achieve both specified revenue and adjusted EBITDA targets during the performance period ending January 2, 2027. The performance condition related to the SMRP was achieved on March 29, 2025, resulting in the acceleration of the remaining compensation expense of the awards. Prior to vesting, the corresponding liability for the SMRP awards was recorded within other long-term liabilities. The liability balance for the SMRP awards as of December 28, 2024 was $7.1 million.

Employee Stock Purchase Plan

On April 28, 2021, the Company’s Board of Directors adopted the Aveanna Healthcare Holdings Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, shares of common stock may be purchased by eligible participants during defined purchase periods at 85% of the lesser of the closing price of the Company’s common stock on the first day or last day of each purchase period. The Company used a Black-Scholes option pricing model to value the common stock purchased as part of the Company's ESPP. The fair value estimated by the option pricing model is affected by the price of the common stock as well as subjective variables that include assumed interest rates, the expected dividend yield, and the expected share volatility over the term of the award. Expected share volatility is based on historical price data of peers. Fair value inputs for the purchase periods in 2025 included assumed risk free interest rate of 4.24% to 4.29%, expected volatility of 43% to 47%, and expected dividend yield of 0.00%. Fair value inputs for the purchase periods in 2024 included assumed risk-free interest rate of 5.24% to 5.37%, expected volatility of 48% to 49%, and expected dividend yield of 0.00%. Participants purchased a total of 1,966,186 shares of common stock at a weighted average price of $3.21 per share during the fiscal year ended January 3, 2026. Participants purchased a total of 1,751,909 shares of common stock at a weighted average price of $1.76 per share during the fiscal year ended December 28, 2024.

Share-based compensation is included in corporate expenses, branch and regional administrative expenses and cost of revenue, excluding depreciation and amortization in the accompanying consolidated statements of operations. The following table summarizes the Company’s share-based compensation expense by plan and award classification for the years ended January 3, 2026 and December 28, 2024 (amounts in thousands):

We recognized a tax benefit of $3.8 million related to share-based compensation expense for the year ended January 3, 2026 and no tax benefit related to share-based compensation for the year ended December 28, 2024, respectively.