Integer Holdings CorpITGR
Integer Holdings Corp Stock Compensation Disclosure
STOCK-BASED COMPENSATION
Stock-based Compensation Plans
The Company maintains certain stock-based compensation plans that were approved by the Company’s stockholders and are administered by the Board of Directors (the “Board”) or the Compensation and Organization Committee of the Board (the “Compensation Committee”). The stock-based compensation plans provide for the granting of stock options, restricted stock awards, RSUs, performance awards, stock appreciation rights and stock bonuses to employees, non-employee directors, consultants, and service providers.
As of December 31, 2025, the Company’s outstanding stock-based compensation plans and agreements include the 2021 Omnibus Incentive Plan (the “2021 Plan”), 2016 Stock Incentive Plan (the “2016 Plan”), 2011 Stock Incentive Plan (the “2011 Plan”), the 2009 Stock Incentive Plan (the “2009 Plan”). The 2021 Plan replaced the 2016 Plan and the Company ceased granting any new awards under the 2016 Plan. The number of shares initially reserved for issuance under the 2021 Plan was (i) 1,450,000 plus (ii) the total number of shares of common stock available for issuance under the 2016 Plan, plus (iii) any shares of common stock that are subject to awards forfeited, cancelled, expired, terminated or otherwise lapsed or settled in cash, in whole or in part, without the delivery of shares under the 2016 Plan. The 2011 Plan and 2009 Plan have expired and no awards are available for issuance under these expired plans. As of December 31, 2025, there were 772,585 shares available for future grants under the 2021 Plan.
(11.) STOCK-BASED COMPENSATION (Continued)
Stock-based Compensation Expense
The classification of stock-based compensation expense in the accompanying Consolidated Statements of Operations was as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| RSUs and PRSUs | $ | 23,224 | $ | 24,515 | $ | 23,108 | |||||||||||
| Discontinued operations | — | 252 | 175 | ||||||||||||||
| Total stock-based compensation expense | $ | 23,224 | $ | 24,767 | $ | 23,283 | |||||||||||
| Cost of sales | $ | 4,230 | $ | 3,881 | $ | 3,694 | |||||||||||
| SG&A | 17,856 | 19,415 | 18,189 | ||||||||||||||
| RD&E | 1,160 | 1,153 | 1,152 | ||||||||||||||
| Restructuring and other charges | (22) | 66 | 73 | ||||||||||||||
| Discontinued operations | — | 252 | 175 | ||||||||||||||
| Total stock-based compensation expense | $ | 23,224 | $ | 24,767 | $ | 23,283 | |||||||||||
| Income tax benefit recognized for stock-based compensation arrangements | $ | 7,429 | $ | 5,096 | $ | 3,667 | |||||||||||
Stock Options
There were no stock options granted during 2025, 2024 or 2023. The following table summarizes stock option activity during the year ended December 31, 2025:
| Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 130,083 | $ | 39.63 | ||||||||||||||||||||
| Exercised | (109,854) | 40.02 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 20,229 | $ | 37.48 | 1.2 | $ | 0.8 | |||||||||||||||||
| Vested and exercisable at December 31, 2025 | 20,229 | $ | 37.48 | 1.2 | $ | 0.8 | |||||||||||||||||
Intrinsic value is calculated for in-the-money options (exercise price less than market price) as the difference between the market price of $78.43, which was the closing price of the Company’s common stock as of December 31, 2025, and the weighted average exercise price of the underlying stock options, multiplied by the number of options outstanding and/or exercisable. Shares are distributed from the Company’s authorized but unissued reserve upon the exercise of stock options. As of December 31, 2025, there was no unrecognized compensation cost related to stock options.
The following table provides certain information relating to the exercise of stock options during 2025, 2024 and 2023 (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||
| Intrinsic value | $ | 9,183 | $ | 2,007 | $ | 3,670 | |||||||||||
| Cash received | 3,644 | 742 | 2,303 | ||||||||||||||
| Actual tax benefit for the tax deductions from the exercise of options | 2,204 | 482 | 881 | ||||||||||||||
(11.) STOCK-BASED COMPENSATION (Continued)
Restricted Stock Units
The following table summarizes RSU activity during the year ended December 31, 2025:
| Time-Vested Activity | Weighted Average Grant Date Fair Value | ||||||||||
| Nonvested at December 31, 2024 | 313,404 | $ | 88.36 | ||||||||
| Granted | 155,508 | 128.71 | |||||||||
| Vested | (148,496) | 89.59 | |||||||||
| Forfeited | (24,032) | 108.63 | |||||||||
| Nonvested at December 31, 2025 | 296,384 | $ | 107.27 | ||||||||
As of December 31, 2025, there was $16.0 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of approximately 1.8 years. The fair value of RSU shares that vested during 2025, 2024 and 2023 was $19.6 million, $17.3 million and $9.1 million, respectively. The weighted average grant date fair value of RSUs granted during 2025, 2024 and 2023 was $128.71, $81.39 and $79.03, respectively.
Performance Restricted Stock Units
The following table summarizes PRSU activity during the year ended December 31, 2025:
| Performance- Vested Activity | Weighted Average Grant Date Fair Value | ||||||||||
| Nonvested at December 31, 2024 | 237,898 | $ | 88.95 | ||||||||
| Granted | 65,974 | 149.99 | |||||||||
Performance adjustment(a) | 76,520 | 83.36 | |||||||||
| Vested | (153,040) | 83.36 | |||||||||
| Forfeited | (11,967) | 96.31 | |||||||||
| Nonvested at December 31, 2025 | 215,385 | $ | 109.23 | ||||||||
__________
(a)Represents additional PRSUs earned related to above-target achievement of performance conditions, the achievement of which was based upon predefined performance targets established by the Compensation Committee at the initial grant date.
For the Company’s PRSUs, in addition to service conditions, the ultimate number of shares earned depends on the achievement of financial or market-based performance conditions. The financial performance condition is based on the Company’s sales. The market conditions are based on the Company’s achievement of a relative total shareholder return (“TSR”) performance requirement, on a percentile basis, compared to a defined group of peer companies over three year performance periods.
At December 31, 2025, there was $9.4 million of total unrecognized compensation cost related to unvested PRSUs, which is expected to be recognized over a weighted-average period of approximately 1.7 years. The fair value of PRSU shares vested during 2025 and 2024 was $21.9 million and $19.8 million, respectively. The weighted average grant date fair value of PRSUs granted during 2025, 2024 and 2023 was $149.99, $110.54 and $74.32, respectively.
(11.) STOCK-BASED COMPENSATION (Continued)
The grant-date fair values of the market-based portion of the PRSUs granted during 2025, 2024 and 2023 were determined using the Monte Carlo valuation model on the date of grant. The weighted average fair value and assumptions used to value the TSR portion of the PRSUs granted are as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted average fair value | $ | 162.62 | $ | 117.96 | $ | 74.29 | |||||||||||
| Risk-free interest rate | 4.29 | % | 4.13 | % | 3.79 | % | |||||||||||
| Expected volatility | 33 | % | 34 | % | 46 | % | |||||||||||
| Expected life (in years) | 3.0 | 3.0 | 3.0 | ||||||||||||||
| Expected dividend yield | — | % | — | % | — | % | |||||||||||
The valuation of the TSR portion of the PRSUs granted during 2025, 2024 and 2023 also reflects a weighted average illiquidity discount of 8.78%, 8.00% and 11.23%, respectively, related to the period that recipients are restricted from selling, transferring, pledging or assigning the underlying shares, in the event of vesting.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.