Stock-based awards are provided to certain employees under our 2020 Stock Incentive
Plan and to non-employee
directors under our 2023 Non-Employee Director Stock Incentive Plan
(formerly known as the 2015 Non-
Employee Director Stock Incentive Plan) (together, the “Plans”).
The Plans are administered by the Compensation
Committee of the Board of Directors (the “Compensation Committee”).
Historically, equity-based awards to our
employees have been granted solely in the form of time-based and performance-based
restricted stock units
(“RSUs”) with the exception of our 2021 plan year in which non-qualified
stock options were issued in place of
performance-based RSUs and in 2022, when we granted time-based and
performance-based RSUs, as well as non-
qualified stock options.
For our 2023 plan year, we returned to granting our employees equity-based awards solely
in the form of time-based and performance-based RSUs.
Our non-employee directors receive equity-based awards
solely in the form of time-based RSUs.
RSUs are stock-based awards granted to recipients with specified vesting provisions.
In the case of RSUs, common
stock is delivered on or following satisfaction of vesting conditions.
We issue RSUs to employees that primarily
vest (i) solely based on the recipient’s continued service over time, primarily with
four
-year cliff vesting and/or (ii)
based on achieving specified performance measurements and the recipient’s continued service over time, primarily
with
three
-year cliff vesting.
RSUs granted to our non-employee directors primarily include
12
For these RSUs, we recognize the cost as compensation expense on a straight-line
basis.
For all RSUs, we estimate the fair value based on our closing stock
price on the grant date.
With respect to
performance-based RSUs, the number of shares that ultimately vest and
are received by the recipient is based upon
our performance as measured against specified targets over a specified period, as
determined by the Compensation
Committee.
Although there is no guarantee that performance targets will be achieved, we
estimate the fair value of
performance-based RSUs based on our closing stock price at time of grant.
Each of the Plans provide for certain adjustments to the performance
measurement in connection with awards under
the Plans.
With respect to the performance-based RSUs granted under our 2020 Stock Incentive Plan, such
performance measurement adjustments relate to significant events, including,
without limitation, acquisitions,
divestitures, new business ventures, certain capital transactions (including share
repurchases), differences in
budgeted average outstanding shares (other than those resulting from capital
transactions referred to above),
restructuring costs, if any, amortization expense recorded for acquisition-related intangible assets (solely with
respect to performance-based RSUs granted in the 2023 and 2024 plan years),
certain litigation settlements or
payments, if any, changes in accounting principles or in applicable laws or regulations, changes in income tax rates
in certain markets, foreign exchange fluctuations, the financial impact
either positive or negative, of the difference
in projected earnings generated by COVID-19 test kits (solely with respect
to performance-based RSUs granted in
the 2022 and 2023 plan years) and impairment charges (solely with respect to performance-based
RSUs granted in
the 2023 and 2024 plan years), and unforeseen events or circumstances
affecting us.
Over the performance period, the number of RSUs that will ultimately vest
and be issued and the related
compensation expense is adjusted upward or downward based upon our
estimation of achieving such performance
targets.
The ultimate number of shares delivered to recipients and the related compensation
cost recognized as an
expense is based on our actual performance metrics as defined under
the 2020 Stock Incentive Plan.
Stock options are awards that allow the recipient to purchase shares of our
common stock after vesting at a fixed
price set at the time of grant.
Stock options were granted at an exercise price equal to our
closing stock price on the
date of grant.
Stock options issued in 2021 and 2022 vest one-third per year based
on the recipient’s continued
service, subject to the terms and conditions of the 2020 Stock Incentive Plan,
are fully vested
three years
grant date and have a contractual term of
ten years
from the grant date, subject to earlier termination of term and
term acceleration upon certain events.
Compensation expense for stock options is recognized using
a graded
vesting method.
We estimate grant date fair value of stock options using the Black-Scholes valuation model.
During the three months ended March 30, 2024, we did
no
t grant any stock options.