V2X, Inc.VVX
V2X, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
The Company maintains an equity incentive plan, the 2014 Omnibus Incentive Plan, as amended and restated effective as of May 8, 2025 (the 2014 Omnibus Plan), to govern awards granted to V2X employees and directors, including nonqualified stock options (NQOs), restricted stock units (RSUs), performance share units (PSUs) and other awards. The Company accounts for NQOs, stock-settled RSUs and PSUs as equity-based compensation awards.
There were 4.4 million shares of the Company's common stock authorized for issuance under the 2014 Omnibus Plan. As of December 31, 2025, 1.3 million shares remained available for future awards.
Stock-based compensation expense and the associated tax benefits impacting our Consolidated Statements of Income (Loss) were as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Compensation costs for equity-based awards | $ | 11,924 | $ | 15,383 | $ | 31,456 | ||||||||||||||
Compensation costs for other awards | — | 586 | 1,387 | |||||||||||||||||
| Total compensation costs, pre-tax | $ | 11,924 | $ | 15,969 | $ | 32,843 | ||||||||||||||
| Future tax benefit | $ | 2,757 | $ | 3,710 | $ | 7,685 | ||||||||||||||
At December 31, 2025, total unrecognized compensation costs related to equity-based awards were $17.1 million, which are expected to be recognized ratably over a weighted average period of 1.66 years.
Non-Qualified Stock Options
NQOs vest in one-third increments on the first, second and third anniversaries of the grant date and expire 10 years from the date of grant.
A summary of the status of our NQOs as of December 31, 2025, 2024 and 2023 and changes during the years then ended is presented below:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | Shares | Weighted Average Exercise Price Per Share | Shares | Weighted Average Exercise Price Per Share | Shares | Weighted Average Exercise Price Per Share | ||||||||||||||||||||||||||||||||
| Outstanding at January 1, | 34 | $ | 22.43 | 40 | $ | 22.93 | 42 | $ | 22.86 | |||||||||||||||||||||||||||||
| Exercised | (24) | $ | 22.96 | (6) | $ | 25.90 | (2) | $ | 20.62 | |||||||||||||||||||||||||||||
| Outstanding and exercisable at December 31, | 10 | $ | 21.19 | 34 | $ | 22.43 | 40 | $ | 22.93 | |||||||||||||||||||||||||||||
All outstanding NQOs are exercisable. The following table summarizes information about NQOs outstanding and exercisable as of December 31, 2025:
| (In thousands, except per share data) | Options Outstanding and Exercisable | ||||||||||||||||||||||||||||
| Range of Exercise Prices Per Share | Number | Weighted Average Remaining Contractual Life (In Years) | Weighted Average Exercise Price Per Share | Aggregate Intrinsic Value | |||||||||||||||||||||||||
$20.06 - $21.98 | 10 | 0.76 | $ | 21.19 | $ | 345 | |||||||||||||||||||||||
| Total options and aggregate intrinsic value | 10 | 0.76 | $ | 21.19 | $ | 345 | |||||||||||||||||||||||
The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on our closing stock price of $54.55 per share on December 31, 2025, which would have been received by the option holders if all option holders had exercised their options as of that date. There were no exercisable options "out of the money" as of December 31, 2025. The aggregate intrinsic value of options exercised during the years ended December 31, 2025 was $0.8 million. The aggregate intrinsic value of options exercised during both of the years ending December 31, 2024 and 2023 was not material.
Restricted Stock Units
RSUs awarded to employees typically vest in one-third increments on each of the three anniversary dates following the grant date subject to continued employment as described in the RSU award agreement. RSUs issued to directors are typically granted annually and vest approximately one year after the grant date. 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. RSUs have no voting rights and, if an employee leaves the Company prior to vesting, whether through resignation or termination for cause, the RSUs are typically forfeited. If an employee retires or is terminated by the Company other than for cause, all or a pro rata portion of the RSUs may vest.
The table below provides a roll-forward of outstanding RSUs for the years ended December 31, 2025, 2024 and 2023.
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | ||||||||||||||||||||||||||||||||
| Outstanding at January 1, | 436 | $ | 43.11 | 800 | $ | 37.29 | 1,628 | $ | 35.47 | |||||||||||||||||||||||||||||
| Granted | 264 | $ | 49.28 | 317 | $ | 45.58 | 318 | $ | 40.50 | |||||||||||||||||||||||||||||
| Vested | (216) | $ | 42.18 | (549) | $ | 37.35 | (1,136) | $ | 43.07 | |||||||||||||||||||||||||||||
| Forfeited or canceled | (76) | $ | 46.54 | (132) | $ | 42.62 | (10) | $ | 42.81 | |||||||||||||||||||||||||||||
| Outstanding at December 31, | 408 | $ | 46.96 | 436 | $ | 43.11 | 800 | $ | 37.29 | |||||||||||||||||||||||||||||
The total grant date fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $9.1 million, $20.5 million and $40.0 million, respectively.
As of December 31, 2025, there was $10.3 million of unrecognized RSU related compensation expense.
Performance Share Units
During the year ended December 31, 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 assuming and based on i) the attainment of total shareholder return performance measures relative to certain Aerospace and Defense companies in the S&P 1500 Index and ii) the employee's continued service through the vesting 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 assuming and based on i) achievement of certain stock price targets, ii) shareholder return performance measures relative to certain Aerospace and Defense companies in the S&P 1500 Index and iii) the employee's continued service through the vesting date. The numbers of shares ultimately awarded, if any, can range up to the specified target awards.
During the year ended December 31, 2024, the Company granted performance-based awards that will vest and stock will be issued at the end of a three-year period assuming and based on i) the attainment of total shareholder return performance measures relative certain to Aerospace and Defense companies in the S&P 1500 Index and ii) the employee's continued service through the vesting 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.
During the year ended December 31, 2025, the Company granted performance-based awards that include two performance components, including total shareholder return performance and Adjusted Earnings Per Share performance. The performance-based awards will vest and the stock will be issued at the end of a three-year period assuming and based on i) the attainment of total shareholder return performance measures relative to certain Aerospace and Defense companies in the S&P 1500 Index, ii) Company performance against an annual adjusted EPS target established each year and iii) the employee's continued service through the vesting 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. A Monte Carlo valuation model was used to determine the fair value of the awards by simulating 50,000 potential TSR outcomes for the Company and a group of peer companies over the performance periods, and determined the amount of the payout that would occur in each simulation. The fair value is based on the average of the results.
The table below provides a roll-forward of outstanding PSUs for the years ended December 31, 2025, 2024 and 2023.
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | ||||||||||||||||||||||||||||||||
| Outstanding at January 1, | 258 | $ | 43.98 | 267 | $ | 43.45 | — | $ | — | |||||||||||||||||||||||||||||
| Granted | 139 | $ | 53.66 | 161 | $ | 45.44 | 279 | $ | 40.41 | |||||||||||||||||||||||||||||
| Forfeited or canceled | (29) | $ | 33.53 | (170) | $ | 36.27 | (12) | $ | 51.38 | |||||||||||||||||||||||||||||
| Outstanding at December 31, | 368 | $ | 48.48 | 258 | $ | 43.98 | 267 | $ | 43.45 | |||||||||||||||||||||||||||||
As of December 31, 2025, there was $6.8 million of unrecognized PSU related compensation expense.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.