Eve Holding, Inc. Stock Compensation Disclosure

Note 12– Share-Based Compensation

2022 Stock Incentive Plan

In May 2022 (the “Effective Date”), the shareholders of the Company approved the 2022 Stock Incentive Plan (“the Plan”). The Plan will expire on the tenth anniversary of the Effective Date. The number of common stock shares reserved under the Plan automatically increases on January 1st of each calendar year (each, an “Evergreen Date”) prior to the tenth anniversary of the Effective Date, in amount equal to the lesser of (i) 3% of the total number of shares of common stock outstanding on the December 31 immediately preceding the applicable Evergreen Date and (ii) a number of shares of Eve common stock determined by the plan administrator, unless such increase is deemed unnecessary by the plan administrator. As of December 31, 2025, the maximum number of shares of common stock reserved for issuance under the Plan is 12.3 million shares. 

The awards that have been granted under the Plan consists of RSUs for the Company’s common stock. The awards contain service, performance, and/or market conditions that generally vest over 1-5 years. The RSU’s are settled by the Company with its own common stock upon achievement of the vesting conditions. There is neither repurchase obligations nor restrictions for the grantees to access the shares. The Company is allowed to net settle the award for statutory tax withholding purposes, but in no case exceeding the maximum statutory tax rates in the employees’ relevant tax jurisdictions. Therefore, the RSU’s are classified as equity. 

The following table summarizes the RSU activity for service-based awards for the year ended December 31, 2025:

The weighted-average grant date fair value of service-based awards granted during the years 2025, 2024 and 2023 was $3.96, $5.38 and $7.71, respectively.

The following table summarizes the RSU activity for awards with market conditions for the year ended December 31, 2025:

For awards that are tied to market conditions, the grant date fair value was determined based on a Monte Carlo simulation model, which takes into account certain assumptions. The weighted-average assumptions used to value the awards are expected volatility of  50.8%, a risk-free rate of 4.2% and an expected term of 2.6 years for awards with market conditions granted during the year ended December 31, 2024. The expected volatility is based on the average implied volatility of publicly traded peer companies in a similar industry with extensive trading history. The final award is determined by the market value of the Company upon vesting and may equal 0% to 200% of the initial award depending on achievement of the market condition. The weighted-average grant date fair value of awards with market conditions during the year 2024 was $2.75.

Share-based compensation plan expense and tax benefits were as follows:

During 2023, the service period for four directors was modified from three years to one. The incremental compensation expense related to this modification was $0.3 million. Additionally, one other award was modified for one employee. The modification affected the awards eligibility as the employee transitioned from employee to director. There was no incremental share-based compensation expense associated with this modification.

As of December 31, 2025, the Company had $13.9 million of total unrecognized compensation expense associated with nonvested awards issued under the Plan. The cost is expected to be recognized over a weighted-average period of 1.9 years.