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Stockholders' Equity
 9 Months Ended
Oct. 02, 2022
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Issuances of Common Stock
A summary of the status of stock option activity for the nine months ended October 2, 2022 is as follows:
(In millions, except price data)
SharesWeighted-Average
Exercise Price
Per Share
Outstanding at January 2, 20220.7 $62.71 
Granted0.2 100.45 
Stock options assumed in the Combinations1.2 96.10 
Exercised(0.1)41.39 
Outstanding at October 2, 20222.0 $86.17 
A summary of the status of RSU activity for the nine months ended October 2, 2022 is as follows:
(In millions, except price data)
SharesWeighted-Average
Grant Date
Fair Value
Non-vested January 2, 20220.6 $95.81 
Granted0.7 97.52 
Vested(0.2)85.18 
Forfeited(0.1)104.18 
Non-vested at October 2, 20221.0 $99.02 
Stock-Based Compensation
The expense related to the Company’s stock-based compensation plans included in the accompanying unaudited Consolidated Statements of Income was as follows:
Three Months EndedNine Months Ended
(In millions)October 2, 2022October 3, 2021October 2, 2022October 3, 2021
Cost of sales$0.8 $0.9 $2.0 $2.1 
Research and development1.3 1.4 3.8 3.3 
Sales, marketing and administrative7.2 4.7 20.5 13.3 
Acquisition and integration costs6.9 — 24.2 — 
Total stock-based compensation expense$16.2 $7.0 $50.5 $18.7 
The table above includes $3.0 million and $13.9 million of compensation expense related to liability-classified awards for the three and nine months ended October 2, 2022, respectively, which have been or are expected to be settled in cash. These awards represent the $7.14 per share cash settled portion of the replacement awards issued in connection with the Combinations. As of October 2, 2022, total unrecognized compensation expense was $105.8 million, which is expected to be recognized over a weighted-average period of approximately 2.6 years.
The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants, including grants related to options assumed in the Combinations presented separately:
Assumed on
Nine Months Ended
May 27, 2022 (1)October 2, 2022October 3, 2021
Risk-free interest rate2.28 %1.99 %0.48 %
Expected option life (in years)1.784.894.99
Volatility rate64 %58 %54 %
Dividend rate0 %0 %0 %
Weighted-average grant date fair value$40.57$50.86$106.55
(1) The replacement stock options granted to Ortho option holders on the closing date of the Combinations were issued consistent with the vesting conditions of the replaced award. The fair value on the closing date of the Combinations attributed to post-combination service, adjusted for estimated forfeitures, is recognized as expensed on a straight-line basis over the remaining vesting period. The fair value of the replacement stock options were valued utilizing the Black-Scholes option valuation model.
The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the nine months ended October 2, 2022 and October 3, 2021 was $97.52 and $200.05, respectively.