V2X Inc

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During 2023, V2X’s human resources, finance and legal functions supported the work of the Compensation Committee, provided information, answered questions, and responded to requests from the Compensation Consultant.

OUR COMPENSATION CYCLE

The Compensation Committee reviews compensation in detail during the first quarter of each year. This review includes:

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Annual performance reviews for the prior year;

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Consideration of increases in base salary;

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Determination of AIP awards earned for the prior year and establishment of target awards for the current year; and

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Determination of long-term incentive target awards, including RSUs and PSUs for the current year.

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The award date for long-term incentive awards is determined by the Compensation Committee and is typically in March, following the February meeting of the Compensation Committee. Target PSU awards reflect a three-year performance period beginning on January 1 of the year in which the Compensation Committee approves the award as described below.

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COMPENSATION PROGRAM OBJECTIVES

COMPENSATION OBJECTIVES, PRINCIPLES AND APPROACHES

The V2X compensation program objectives, principles and approaches reflect the Company’s business needs and strategy, as detailed below:

PRIMARY COMPENSATION COMPONENTS

The primary compensation components for the NEOs are depicted below.

BASE SALARY —Base salary comprises the fixed component of total compensation. Salary is a competitive component of pay that is aligned with the NEO’s position, experience, and criticality of the required competencies. It is not an at-risk element of compensation.

ANNUAL AIP AWARDS —The Compensation Committee is responsible for the administration of the AIP awards, which were based on the achievement of certain corporate metrics and individual strategic achievements. All AIP awards for 2023 were granted under the 2014 Omnibus Plan.

LONG-TERM INCENTIVE AWARDS —The Compensation Committee is responsible for the administration of long-term incentive awards, which are comprised of RSU and PSU awards.

ANNUAL INCENTIVE PLAN AWARDS

The Compensation Committee identified the corporate metrics below that most closely predict the Company’s operating performance in 2023 for the AIP awards.

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TOTAL REVENUE: Total revenue reflects successful recognition of contracted revenue, recompetes and emphasizes growth through new revenue streams.

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NEW BUSINESS WINS: Winning new business is a critical focus for our Company, and includes any new business contract award notification, recompetes, contract extensions and add-on work to existing contracts, each occurring during the calendar year.

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ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“Adjusted EBITDA”): Adjusted EBITDA is an operating performance metric that is useful to management and investors in evaluating our operating performance and to provide a tool for evaluating our ongoing operations. This financial measure is defined as operating income, adjusted to exclude depreciation and amortization of intangible assets, and items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration and related costs.

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DAYS SALES OUTSTANDING (“DSO”): DSO is an important operating efficiency metric that measures the number of days it takes to turn accounts receivable into cash. DSO is calculated using a five-point average of the DSO for the fourth quarter of the prior year and each of the four quarters of the performance year. This financial measure excludes the net impact of the sale of certain accounts receivables through the Company’s Master Accounts Receivable Purchase Agreement (“MARPA Facility”).

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INDIVIDUAL STRATEGIC ACHIEVEMENTS: The use of individual goals balances the executive’s shared responsibility to achieve corporate goals with the desire to motivate the executive to achieve goals within the individual’s specific area of responsibility. The individual goals also reinforce the importance of certain key objectives within the individual’s specific area of responsibility and allow the Compensation Committee to differentiate compensation among these executives based on their individual performance. It also strengthens the executive’s accountability. Details on NEOs’ individual goals are discussed under “Individual Strategic Achievements for 2023” below.

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The table below sets forth each of the 2023 AIP metric and their respective performance percentage.

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The Compensation Committee did not assign a specific weighting to any of the individual goals within this metric, but reviewed each executive’s performance against his or her individual goals in the aggregate.

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For 2023, 90% of the awards were based on the achievement of the foregoing corporate metrics and 10% of the awards were based on the individual strategic achievements. These corporate metrics are also depicted in the pie chart below, and the table that follows illustrates minimum, target and maximum payments for each category of the performance metric: