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Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company maintains an equity incentive plan, the 2014 Omnibus Incentive Plan, as amended and restated effective as of October 27, 2022 (the 2014 Omnibus Plan), to govern awards granted to V2X employees and directors, including nonqualified stock options (NQOs), restricted stock units (RSUs), total shareholder return (TSR) awards, performance share units (PSUs) and other awards. We account for NQOs, stock-settled RSUs and PSUs as equity-based compensation awards. TSR awards, described below, are accounted for as liability-based compensation awards. Liability-based awards are revalued at the end of each reporting period to reflect changes in fair value. Stock-based compensation expense and the associated tax benefits impacting our Condensed Consolidated Statements of (Loss) Income were as follows:
|  | Three Months Ended |  |
(In thousands) |  | March 31, 2023 |  | April 1, 2022 |  |  |  |
Compensation costs for equity-based awards |  | $ | 12,066 |  |  | $ | 3,100 |  |  |  |  |
Compensation costs for liability-based awards |  | 806 |  |  | (542) |  |  |  |  |
Total compensation costs, pre-tax |  | $ | 12,872 |  |  | $ | 2,558 |  |  |  |  |
Future tax benefit |  | $ | 2,971 |  |  | $ | 555 |  |  |  |  |
Compensation costs for equity-based awards for the three months ended March 31, 2023, included $5.6 million related to RSUs issued in connection with the Merger. As of March 31, 2023, total unrecognized compensation costs related to equity-based awards and liability-based awards were $34.4 million and $1.7 million, respectively, which are expected to be recognized ratably over a weighted average period of 1.85 years and 1.59 years, respectively. Total unrecognized compensation costs included $15.6 million of expense related to RSUs granted in connection with the Merger. The following table provides a summary of the activities for NQOs, RSUs and PSUs for the three months ended March 31, 2023:
|  | NQOs |  | RSUs |  | PSUs
(In thousands, except per share data) |  | Shares |  | Weighted Average Exercise Price Per Share |  | Shares |  | Weighted Average Grant Date Fair Value Per Share |  | Shares |  | Weighted Average Grant Date Fair Value Per Share
Outstanding at January 1, 2023 |  | 42 |  |  | $ | 22.86 |  |  | 1,628 |  |  | $ | 35.47 |  |  | — |  |  | $ | — |
Granted |  | — |  |  | $ | — |  |  | 278 |  |  | $ | 39.39 |  |  | 254 |  |  | $ | 35.86 |
Exercised |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Vested |  | — |  |  | $ | — |  |  | (839) |  |  | $ | 41.86 |  |  | — |  |  | $ | — |
Forfeited or expired |  | — |  |  | $ | — |  |  | (6) |  |  | $ | 40.59 |  |  | — |  |  | $ | — |
Outstanding at March 31, 2023 |  | 42 |  |  | $ | 22.86 |  |  | 1,061 |  |  | $ | 36.41 |  |  | 254 |  |  | $ | 35.86 |
Restricted Stock Units On July 5, 2022, pursuant to the terms of the Merger Agreement, the Company issued an additional 1,346,089 RSUs, with a grant date fair value of $33.92 per share, to certain employees of Vertex. The RSUs have been or will be settled in shares of the Company's common stock, with 517,918 RSUs vesting on the six-month anniversary following the grant date and a quarter of the remaining 828,171 RSUs vesting or having vested on each of four six-month anniversary dates following the grant date. The fair value of each RSU grant to employees and directors was determined based on the closing price of V2X common stock on the date of grant. Stock compensation expense will be recognized ratably over the vesting period of the awards. RSUs awarded to employees, excluding the RSU awards awarded under the Merger Agreement, discussed above, vest in one-third increments on each of the three anniversary dates following the grant date subject to continued employment. Director RSUs are granted on the date of an annual meeting of shareholders and vest on the business day immediately prior to the next annual meeting or the one-year anniversary of the grant date, if earlier. The fair value of each RSU grant was determined based on the closing price of V2X common stock on the date of grant. Stock compensation expense will be recognized ratably over the requisite service period of the RSU awards. As of March 31, 2023, there was $27.8 million of unrecognized RSU related compensation expense. Total Shareholder Return Awards TSR awards are performance-based cash awards that are subject to a three-year performance period. Any payments earned are made in cash following completion of the performance period according to the achievement of specified performance goals. As a result of the Merger and pursuant to the terms of the TSR awards, performance achievement fair value was measured at July 4, 2022 at $4.6 million and the aggregate future award payouts were fixed at that value. There were no cash-based TSR awards granted in the first quarter of 2023. As of March 31, 2023, there was $1.7 million of unrecognized TSR related compensation expense. Performance Share Units During the first quarter of 2023, the Company granted two types of performance-based awards with market conditions. The first award will vest and the stock will be issued at the end of a three-year period based on the attainment of certain total shareholder return performance measures relative to Aerospace and Defense companies in the S&P 1500 Index and the employee's continued service through the vest date. The number of shares ultimately awarded, if any, can range up to 200% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. The second award will vest and stock will be issued at the end of a three-year period based on achievement of certain stock price targets, shareholder return performance measures relative to certain Aerospace and Defense companies in the S&P 1500 Index and the employee's continued service through the vest date. The numbers of shares ultimately awarded, if any, can range up to the specified target awards. As of March 31, 2023, there was $6.5 million of unrecognized PSU related compensation expense.

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