Company: DHR
Filing Date: 2025-03-26
Form Type: ARS
Source: 0000313616-25-000085
Chunk: 169

Company: DANAHER CORP /DE/
Filing Date: 2025-03-26
Form: ARS
Chunk 169
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 but may be shorter than the vesting period if the employee becomes retirement eligible before the end of the vesting period). The fair value for RSU awards was calculated using the closing price of the Company’s common stock on the date of grant, adjusted for the fact that RSUs do not accrue dividends. The fair value of the PSU awards was calculated using a Monte Carlo pricing model. The fair value of the options granted was calculated using a Black-Scholes Merton option pricing model (“Black-Scholes”). In connection with the Separation and in accordance with the employee matters agreement Danaher and Veralto have entered into, stock-based compensation awards have been converted into awards of the company that employs the employee post-separation. The Company has made certain adjustments to the exercise price and the number of shares underlying the stock-based compensation awards held by its employees, with the intention of preserving the intrinsic value of the awards immediately prior to the Separation. The adjustment to the Company’s stock-based compensation awards as a result of the Separation did not have a significant impact to the Company’s stock compensation expense. Veralto has responsibility for the awards that were converted into Veralto awards. The following summarizes the assumptions used in the Black-Scholes model to value options granted during the years ended December 31: 2024 2023 2022 Risk-free interest rate 4.1 – 4.5% 3.5 – 4.5% 1.8 – 4.0% Weighted average volatility 28.9 % 27.8 % 30.3 % Dividend yield 0.4 % 0.5 % 0.4 % Expected years until exercise 5.0 – 7.0 5.0 – 7.0 5.0 – 7.5 The Black-Scholes model incorporates assumptions to value stock-based awards. The risk-free rate of interest for periods within the contractual life of the option is based on a zero-coupon U.S. government instrument whose maturity period equals or approximates the option’s expected term. Expected volatility is based on implied volatility from traded options on the Company’s stock and historical volatility of the Company’s stock. The dividend yield is calculated by dividing the Company’s annual common stock dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date. To estimate the option exercise timing used in the valuation model (which impacts the risk- free interest rate and the expected