Stock-Based Compensation
 3 Months Ended
Apr. 01, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
STOCK-BASED COMPENSATION
An omnibus incentive plan governs all long-term incentive awards granted to Vectrus employees and directors, including nonqualified stock options (NQOs), restricted stock units (RSUs), total shareholder return (TSR) awards and other awards. We account for NQOs and stock-settled RSUs as equity-based compensation awards. TSR awards, described below, and cash-settled RSUs are accounted for as liability-based compensation awards.
Stock-based compensation expense and the associated tax benefits impacting our condensed consolidated statements of income were as follows:

 
Three Months Ended
 
 
April 1,
 
March 27,
(In thousands)
 
2016
 
2015
Compensation costs for equity-based awards
 
$
1,476

 
$
1,758

Compensation costs for liability-based awards
 
237

 
121

Total compensation costs, pre-tax
 
$
1,713

 
$
1,879

Future tax benefit
 
$
610

 
$
676


As of April 1, 2016, total unrecognized compensation costs related to equity-based awards and liability-based awards were $5.5 million and $2.3 million, respectively, which are expected to be recognized ratably over a weighted average period of 2.07 years and 2.39 years, respectively.
The following table provides a summary of the activities for NQOs and RSUs for the three months ended April 1, 2016:

 
NQOs
 
RSUs
(In thousands, except per share data)
 
Shares
 
Weighted Average Exercise Price Per Share
 
Shares
 
Weighted Average Grant Date Fair Value Per Share
Outstanding at January 1, 2016
 
486

 
$19.25
 
350

 
$22.47
Granted
 
87

 
$20.06
 
122

 
$20.06
Exercised
 
—

 
$0.00
 
—

 
—

Vested
 
—

 
—

 
(118
)
 
$19.37
Forfeited or expired
 
—

 
—

 
(1
)
 
$32.04
Outstanding at April 1, 2016
 
573

 
$19.37
 
353

 
$22.62

On March 4, 2016, we granted long-term incentive awards to employees consisting of 86,829 NQOs and 121,868 RSUs with respective weighted average grant date fair values per share of $7.06 and $20.06. The NQOs vest in one-third cumulative annual installments on the first, second and third anniversaries of the grant date and expire 10 years from the grant date. The option exercise price was $20.06, the closing price of Vectrus common shares on the grant date. The fair value of each NQO grant was estimated on the date of grant using the Black-Scholes option pricing model. For employee RSUs granted in 2014 and after, one-third of the award vests on each of the three anniversary dates following the grant date. Director RSUs are granted on the date of an annual meeting of shareholders and vest the business day immediately prior to the next annual meeting. The fair value of each RSU grant was determined based on the closing price of Vectrus common stock on the date of grant, which was $20.06 for the March 4, 2016 grants. Stock compensation expense will be recognized ratably over the vesting period of the awards.
The following assumptions were utilized in deriving the fair value for NQOs granted on March 4, 2016 under the Black-Scholes model:
Expected volatility

30.2
%
Expected life (in years)

7.0

Risk-free rate

1.69
%
Weighted-average grant date fair value per share

$7.06

Total Shareholder Return (TSR) Awards
TSR awards are granted subject to a three-year performance period, and any payments earned are made in cash following completion of the performance period according to the achievement of specified performance goals. During the three months ended April 1, 2016, we granted 2016 TSR awards with an aggregate target value of $1.5 million. The fair value of TSR awards is measured quarterly and based on the Company’s performance relative to the performance of the Aerospace and Defense Companies in the S&P 1500 Index. Depending on the Company’s performance during the three-year performance period, payments can range from 0% to 200% of the target value.