Equity-Based Compensation

3 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Pursuant to the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (the "Incentive Plan"), the Company granted time-vesting restricted stock units, with the vesting of these restricted stock units being subject to continued employment through specified dates and the condition that the Company’s common stock be listed for trading on a national securities exchange or an approved foreign securities exchange by March 31, 2028 (the "Listing Condition"). On May 10, 2024 (the "Modification Date"), the time-vesting restricted stock units granted under the Incentive Plan that were outstanding

immediately prior to that date were amended to extend the period by which the Listing Condition must be satisfied for the vesting of such restricted stock units from March 31, 2028 to March 31, 2031 and to provide that the Listing Condition shall be deemed to be satisfied on March 31, 2031 regardless of whether the Company’s common stock has been listed by that date on a national securities exchange or foreign securities exchange and would vest earlier upon the occurrence of a "Change in Control" (as defined in the Incentive Plan) as a result of a merger, consolidation, share exchange or sale of all or substantially all of the assets of the Company. On the Modification Date, the amended Listing Condition was rendered nonsubstantive, and recipients of all such outstanding time-vesting restricted stock units had satisfied the continued service requirement, meaning the restricted stock units were fully earned for vesting. During the three months ended June 30, 2024, the Company recognized total equity-based compensation expense of $3,031, which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations. The modified time-vesting restricted stock units accounted for $2,877 of the total equity-based compensation to reflect the cumulative catch-up required on the Modification Date.

The following summarizes the Company's equity awards granted:


	Three Months Ended
	June 30,
(in thousands, except grant date fair value)	2024		2023
Restricted stock units
Number granted	768		—
Grant date fair value	$	3.50	$	—
Performance-based stock units
Number granted (at target performance level)	576		—
Grant date fair value	$	4.36	$	—

Restricted stock units granted under the Incentive Plan during the three months ended June 30, 2024 are earned ratably over a three-year period, and will vest, subject to continued employment, upon the earlier of March 31, 2031 or the occurrence of a liquidity event as defined under the terms of the restricted stock unit award agreement. Unrecognized compensation costs for restricted stock units is $2,534 as of June 30, 2024, and is expected to be recognized over a weighted average period of 2.75 years, representing the remaining service period related to the awards, subject to adjustments for actual forfeitures.

Under the terms of the performance-based stock units, the amount of shares to be issued (ranging from 0% to 200% of the number of shares to be issued at the target performance level) will be contingent upon the per share price achieved in a liquidity event (as defined under the terms of the performance-based stock unit award agreement), subject to continued employment through the date of a liquidity event. The contingent liquidity event is not probable as of June 30, 2024, and accordingly, no equity-based compensation expense has been recognized for the performance-based stock units granted during the period.