STOCK COMPENSATION

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

The Company maintains the 2016 Omnibus Incentive Plan (the “Plan”) under which it may grant non-qualified stock options (“NQSOs”), incentive stock options, restricted stock, RSUs and stock appreciation rights, collectively referred to as “Awards.” Awards are granted at exercise prices that are equal to the closing stock price on the date of grant. The Company authorized grants under the Plan of 25 million shares of common stock, plus any unexercised portion of canceled or terminated stock options granted under the legacy DENTSPLY International Inc. 2010 and 2002 Equity Incentive Plans, as amended, and under the legacy Sirona Dental Systems, Inc. 2015 and 2006 Equity Incentive Plans, as amended. Each restricted stock and RSU issued is counted as a reduction of 3.09 shares of common stock available to be issued under the Plan. No key employee may be granted awards in excess of 1 million shares of common stock in any calendar year. The number of shares available for grant under the 2016 Plan at December 31, 2021 is 20 million.

The amounts of stock compensation expense recorded in the Company’s Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 were as follows:


	Year Ended December 31,
(in millions)	2021		2020		2019

Cost of products sold	$	3	$	1	$	2
Selling, general, and administrative expense	44		44		61
Research and development expense	2		1		2
Total stock based compensation expense	$	49	$	46	$	65

Related deferred income tax benefit	$	6	$	5	$	8

The Company uses the Black-Scholes option-pricing model to estimate the fair value of each option awarded. The average assumptions used to determine compensation cost for the Company’s NQSOs issued were as follows:


	Year Ended December 31,
	2021			2020			2019

Weighted average fair value per share	$	15.90		$	10.03		$	12.20
Expected dividend yield	0.68		%	0.84		%	0.71		%
Risk-free interest rate	0.79		%	0.77		%	2.36		%
Expected volatility	31.5		%	24.0		%	22.6		%
Expected life (years)	5.08			5.49			6.00

The total intrinsic value of options exercised for the years ended December 31, 2021, 2020 and 2019 was $16 million, $3 million and $37 million, respectively.

The total fair value of shares vested for the years ended December 31, 2021, 2020 and 2019 was $76 million, $54 million and $44 million, respectively.

The NQSO transactions for the year ended December 31, 2021 were as follows:


	Outstanding					Exercisable
(in millions, except per share amounts)	Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value

December 31, 2020	4.0	$	50.01	$	17	2.7	$	50.28	$	12
Granted	0.5	58.85

Exercised	(1.1)	46.81

Forfeited	(0.2)	53.03
December 31, 2021	3.2	$	52.44	$	15	2.2	$	52.05	$	11

There were 1.0 million NQSOs unvested at December 31, 2021. The remaining unamortized compensation cost related to NQSOs is $9 million, which will be expensed over the weighted average remaining vesting period of the options, or 1.8 years.

The weighted average remaining contractual term of all outstanding options is 5.6 years and the weighted average remaining contractual term of exercisable options is 4.2 years.

Information about NQSOs outstanding for the year ended December 31, 2021 were as follows:


			Outstanding				Exercisable
			Number Outstanding at December 31, 2021	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price		Number Exercisable at December 31, 2021	Weighted Average Exercise Price
Range of Exercise Prices
(in millions, except per share amounts and life)




30.01	-	40.00	0.1	1.4	$	37.29	0.1	$	37.29
40.01	-	50.00	1.4	5.9	47.31		0.8	46.73
50.01	-	60.00	1.4	6.0	56.32		0.9	55.05
60.01	-	70.00	0.3	4.3	62.37		0.4	62.24
			3.2				2.2

The unvested RSU transactions for the year ended December 31, 2021 were as follows:


	Unvested Restricted Stock Units
	Shares	Weighted Average Grant Date Fair Value

(in millions, except per share amounts)

Unvested at December 31, 2020	4.2	$	47.29
Granted	1.0	63.61

Vested	(1.5)	45.08
Forfeited	(0.6)	50.01
Unvested at December 31, 2021	3.1	$	53.52

The unamortized compensation cost related to RSUs is $42 million, which will be expensed over the remaining weighted average restricted period of the RSUs, or 2.0 years.