Exhibit 10.1
Henry Schein, Inc.
Incentive Plan
and
Plan Summary
Amended and Restated as of January 1, 2024
| 1. | Introduction |
As a member of the management team, you have direct impact to the profitability of Henry Schein. To align your interest with that of the Company, you have been nominated to participate in the Henry Schein Incentive Plan (formerly the Performance Incentive Plan), as may be amended from time to time, (“HSIP,” or the “Plan”), the incentive-based cash compensation program for the management team of Henry Schein, Inc. (the “Company”). This program was initially approved by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors (the “Board”) on February 26, 2014, and was initially effective beginning January 1, 2014. This program is renamed the Henry Schein Incentive Plan and is amended and restated effective as of January 1, 2024. This document serves as both the Plan and the Plan Summary.
Plan participants include the Company’s management team of directors and vice presidents, among others, who have been designated by the Company to participate in the Plan (the “Participant”). The Plan has been designed to align all Participants in a concerted effort to drive our business toward achieving common objectives that benefit the Company as a whole, the management team and each Participant. The Plan is specifically designed to:
| • | Foster achievement of specific corporate, business unit, individual performance goals and/or strategic goals on an annual basis (“Goals”); |
| • | Provide each Participant with an annual cash bonus opportunity based on the achievement of the Goals (“HSIP Award”); and |
| • | Recognize and reward Participants for individual and group team achievements. |
The Goals will be set forth in writing each year, and you will receive documentation regarding your annual Goals each year you are a Participant. Annual Goals may be modified from time to time, and any modification will also be set forth in writing. Any mid-year changes must be approved by the CEO, the appropriate EMC or by the Compensation Committee before the commencement of the fourth quarter. The Compensation Committee must be notified of any material changes. For purposes of the Plan, performance and achievement of Goals will be measured each calendar year or any other period specified by the Compensation Committee.
The HSIP Award, in conjunction with a Participant’s base compensation, is intended to provide Participants with competitive total annual cash compensation for comparable positions at companies in our industry and at other similarly sized organizations.
The Chief Executive Officer of the Company (the “CEO”) (solely with respect to Participants other than executive officers) or the Compensation Committee has the sole authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the HSIP and to construe and interpret the terms and provisions of the HSIP and any HSIP Award and make all other determinations and take any other action necessary or appropriate for the administration of the Plan, including, without limitation, correcting any defect, supplying any omission or reconciling any inconsistency in the Plan and any HSIP Award in the manner and to the extent deemed necessary to carry the Plan into effect.
Any decision, interpretation or other action made or taken by or at the direction of the CEO (solely with respect to Participants other than executive officers) or the Compensation Committee will be final, binding and conclusive on Henry Schein and all Participants and their respective heirs, executors, administrators, successors and assigns. The CEO is authorized to act on behalf of the Compensation Committee under the Plan or to exercise any discretion that the Compensation Committee has under the Plan, provided that such act or exercise of discretion by the CEO may not apply to Participants who are executive officers.
The Compensation Committee may, in its sole discretion, delegate any of its responsibilities under the HSIP (including administrative tasks) to the extent permitted by applicable law. The Compensation Committee may rely on information, and consider recommendations, provided by the Company’s Board of Directors or members of Company management.
| 2. | Eligibility |
The CEO annually determines eligibility for participation in the Plan, except that the Compensation Committee makes this determination with respect to executive officers. Participation is intended to be ongoing. However, changes in assignments may result in a Participants being ineligible to participate in the Plan. Participation in one year does not imply or guarantee participation in another year. Team Schein Members will be notified at the beginning of each year regarding their eligibility to participate in the Plan and will be notified during the year if that status changes.
HSIP awards for newly hired or promoted TSMs will be pro-rated. However, no new entry will be included after September of each performance year.
| 3. | HSIP Awards and Individual Performance Goals |
HSIP Awards are based on one or more of the following goals:
| a) | Company Financial Performance Goals |
| • | The Company’s annual profitability, specifically measured against earnings per share (“EPS”), net income or other predetermined profitability Goals. |
| b) | Functional Area Financial Performance Goals |
| • | The Participant’s business unit or functional area’s level of achievement in financial and other performance Goals. |
| c) | Individual Performance Goals (“MBO Performance Goals”) |
| • | The Participant’s achievement of his or her individual MBO Performance Goals. |
| d) | Strategic Scorecard Goals |
| • | The Participant’s achievement of goals related to the Company’s strategic plan. |
The Company Financial Performance Goals are set annually by the Compensation Committee. Each Participant’s Functional Area Financial Performance Goals, MBO Performance Goals and/or Strategic Scorecard Goals (“Other Goals”) will be determined at the start of each year by their Manager and then reviewed, as applicable, by the Manager’s Executive Management Committee (EMC) Member, CEO or the Compensation Committee or the Compensation Committee in its sole discretion (solely with respect
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to Participants who are executive officers), as applicable. There will be an ongoing review of these Goals. Any changes during the year must be approved by the Manager, the Manager’s EMC Member, Vice President – Global Human Resources and Financial Operations and, if appropriate, by the CEO or the Compensation Committee (solely with respect to Participants who are executive officers). Each Participant and his or her Manager are encouraged to have performance evaluations during the year to monitor progress and, if necessary, to modify Goals (with the approval of the CEO and/or the Compensation Committee, if appropriate) for the balance of the year.
The HSIP Award payouts corresponding to levels of achievement of Company Financial Performance Goals are determined by the Compensation Committee in its sole discretion on an annual basis. The HSIP Award payouts for meeting or exceeding the Other Goals are determined on an annual basis by the Participant’s Manager and then reviewed, as applicable, by the Manager’s EMC Member, CEO or the Compensation Committee in its sole discretion (solely with respect to Participants who are executive officers).
Weighting of Goals for each Participant will be determined by the Participant’s Manager and, if appropriate, approved by the CEO and/or the Compensation Committee in its sole discretion (solely with respect to Participants who are executive officers).
| 4. | Company Financial Performance Goals |
The Company Financial Performance Goals are determined by the Compensation Committee in its sole discretion with input from the Executive Management team. Each year, the Compensation Committee may, as it decides in its sole discretion, make adjustments to the Goals.
In determining whether the Company Financial Performance Goals have been achieved or exceeded, the Compensation Committee, in its sole discretion, will take into account the quality of earnings and/or circumstances of achievement.
| 5. | Functional Area Financial Performance Goals |
For Participants managing a Group, Division or Subsidiary: Functional Area Financial Goals are based on the financial performance of the Group, Division or Subsidiary measured against annual financial budgets, in the following areas:
| • | Group/Divisional/Subsidiary sales Goals. |
| • | Group/Divisional/Subsidiary gross profit Goals. |
| • | Group/Divisional/Subsidiary pre-tax income after “service and capital charge.” Goals. |
| • | Group/Divisional/Subsidiary net income Goals. |
For all other Participants: Goals are based on expense performance relative to the budget.
In determining whether Functional Area Financial Goals have been achieved or exceeded, the CEO, the appropriate EMC, or the Compensation Committee in its sole discretion (solely with respect to Participants who are executive officers) will take into account the quality of earnings and/or circumstances of achievement.
| 6. | MBO Performance Goals |
Specific, measurable MBO Performance Goals will be approved for each Participant by the CEO, the appropriate EMC, or by the Compensation Committee in its sole discretion (solely with respect to Participants who are executive officers). These MBO Performance Goals should drive toward and support enterprise-wide initiatives, such as: Profitability; Process Excellence; Customer Satisfaction; Strategic Planning; and Organizational Development. To drive performance and to focus management energy, it is recommended that the number of MBOs be limited to three to nine critical objectives. For example,
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| • | Profitability - e.g., reduce expenses as a percent of sales; increase gross profit percentage and gross profit dollars; increase business unit sales; reduce inventory. |
| • | Process Excellence - e.g., implement a new policy; reduce errors to customers; reduce DSOs; increase inventory turns. |
| • | Customer Satisfaction - e.g., increase frequency of salesperson to customer contacts; implement project to develop computer screens to aid in positive customer interactions; support internal customer by completing all recruits within a reasonable predetermined time period; develop customer feedback program, such as surveys and focus groups. |
| • | Strategic Planning - e.g., develop strategic plan based on individual responsibilities; benchmark Participant’s unit against similar companies’ functions. |
| • | Organizational Development - e.g. personal business development; succession planning; diversity Goals; staff development; recruitment goals. |
MBO Performance Goals should be specific, measurable, attainable, realistic and time-bound. In order to obtain an award of over 100% of the original MBO target amount, performance must have substantially exceeded the original parameters and expectations of the MBO Performance Goal in a measurable way. In summary, awards earned in excess of 100% should only be considered when significant benefits are realized when compared to the original MBO Performance Goal.
In determining whether MBO Performance Goals have been achieved or exceeded, the CEO, the appropriate EMC, or the Compensation Committee in its sole discretion (solely with respect to Participants who are executive officers) will take into account the quality of earnings and/or circumstances of achievement.
| 7. | Strategic Scorecard Goals |
Specific, measurable Strategic Scorecard Goals will be approved for each Participant by the CEO, the appropriate EMC, or by the Compensation Committee in its sole discretion (solely with respect to Participants who are executive officers). These Strategic Scorecard Goals should drive toward and support achievement of the financial goals and performance objectives set forth in the Company’s then current strategic plan.
In determining whether Strategic Scorecard Goals have been achieved or exceeded, the CEO, the appropriate EMC, or the Compensation Committee in its sole discretion (solely with respect to Participants who are executive officers) will take into account the quality of earnings and/or circumstances of achievement.
| 8. | HSIP Awards |
During the first fiscal quarter of each year, individual performance for the previous year is evaluated relative to Goals. HSIP Awards are determined for each performance category, as applicable. A Participant’s total HSIP Award will equal the sum of the awards earned in each category for the previous year’s performance.
Notwithstanding anything herein to the contrary, the Compensation Committee or the CEO (solely with respect to Participants other than executive officers) may, at any time, provide that all or a portion of an HSIP Award is payable: (i) upon the attainment of any goal (including the Goals), as determined by the
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Compensation Committee or the CEO, as applicable; or (ii) regardless of whether the applicable Goals are attained, subject to the Compensation Committee’s or the CEO’s (solely with respect to Participants other than executive officers) sole discretion as to the quality of earnings and the circumstances of their achievement.
Any action by the Compensation Committee (or its delegate) hereunder will be made pursuant to resolutions documenting such action.
In order to receive any HSIP Award, Participants must be actively employed on the payment date of the year the HSIP Award is to be paid out. A prorated HSIP Award may be available, at the discretion of the Compensation Committee or the CEO (solely with respect to Participants other than executive officers), if a Participant in the Plan dies, becomes permanently disabled, retires at the normal Social Security retirement age during the Plan year, or in other special circumstances.
HSIP Awards, less applicable withholdings, will be made by the end of the first fiscal quarter of each year.
To the extent applicable, unless payments are deferred as may be permitted by the Company, payments under the Plan are intended to be short-term deferrals within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the guidance issued thereunder (collectively, “Section 409A”) that are exempt from the applicable requirements of Section 409A and the Plan will be limited, construed and interpreted in accordance with such intent.
Notwithstanding anything to the contrary, the Company does not guarantee, and nothing in the Plan or otherwise is intended to provide a guarantee of, any particular tax treatment with respect to payments or benefits under the Plan or otherwise, and the Company will not be responsible for their compliance with or exemption from Section 409A.
| 9. | Forfeiture Conditions and Recoupment |
| a) | Recoupment/Clawback Policies |
Notwithstanding anything herein to the contrary, a Participant’s HSIP Award granted under the Plan is subject to the Company’s (i) Incentive Compensation Recoupment Policy, (ii) the Company’s Dodd-Frank Clawback Policy and (iii) any other clawback and/or recoupment policy approved by the Company’s Board of Directors or the Compensation Committee (or other committee of the Board) from time to time, to the extent each is applicable to the Participant and/or any other Company recoupment policies or procedures that may be required under applicable law or otherwise adopted by the Company or incorporated into any other part of an HSIP Award (collectively, the “Clawback Policies”). The Participant’s receipt of an HSIP Award shall constitute the Participant’s acknowledgement that the Participant is subject to the Clawback Policies (as applicable) and that such Participant’s HSIP Award may be subject to recoupment to the extent provided in such Clawback Policies. Nothing herein shall be construed as limiting any right of the Company to impose additional restrictions or other conditions with respect to an HSIP Award.
| b) | Cause and Material Restatements of Financial Statements |
Notwithstanding anything herein to the contrary, the Company or the Compensation Committee may take recoupment actions with respect to each HSIP Award granted and/or paid under the Plan or may take actions to forfeit and cancel an HSIP Award, in each case, in the event the applicable Participant (i) engages in conduct that could reasonably be expected to constitute “Cause” (as defined herein) (regardless of whether the Participant’s employment has terminated), as determined by the Company in its sole discretion, at any time on or after the grant date and prior to the applicable Payment Date (as defined below) and/or (ii) the Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the securities laws (a “Restatement”) that
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relates to the vesting schedule of the HSIP Award, the Compensation Committee shall have the right, in its sole discretion, to cause the immediate forfeiture of the HSIP Award during the Applicable Period (as defined below). With respect to clause (ii) herein, it is intended that the Company’s right to recoup cash payments made under the HSIP Award shall be interpreted in a manner consistent with the Company’s Dodd-Frank Clawback Policy, except that all references to executive officers (or words of like import) shall be disregarded.
For the purposes of the Plan, “Cause” means (i) if the Participant shall have committed fraud or any felony in connection with the Participant’s duties as an employee of the Company or any of its affiliates, or willful misconduct or any act of disloyalty, fraud or breach of trust or confidentiality as to the Company or any of its affiliates, or willful misconduct or any act of disloyalty, dishonesty, fraud or breach of trust or confidentiality as to the Company or any of its affiliates or the commission of any other act which causes or may be reasonably expected to cause economic or reputational injury to the Company or any of its affiliates, (ii) the Participant’s termination of employment with the Company or any of its affiliates is or would be deemed to be for Cause under any employment agreement between the Company or any of its affiliates and the Participant, or is expressly provided for under an HSIP Award, and/or (iii) any breach by the Participant of any agreement with the Company or any of its affiliates.
For the purposes of the Plan, “Applicable Period” means the three completed fiscal years of the Company immediately preceding the earlier of (i) the date the Board, a committee of the Board, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes (or reasonably should have concluded) that the Company was required to prepare an accounting restatement or (ii) the date a court, regulator, or other legally authorized entity directs the Company to prepare an accounting restatement, in each case, regardless of if or when the accounting restatement is actually filed. In such case, the Participant shall have no further rights or interests with respect to such HSIP Award.
| c) | Competitive Activity |
Notwithstanding anything herein to the contrary, each HSIP Award granted under the Plan is conditioned on the applicable Participant not engaging in any Competitive Activity (as defined below) from the effective date of the grant of the HSIP Award through the first anniversary of the applicable payment date of such HSIP Award (such applicable payment date, the “Payment Date”). If, on or after the effective date of grant of the HSIP Award but prior to the Payment Date, a Participant engages in a Competitive Activity, 100% of all HSIP Awards issued and payable to such Participant under the Plan shall be immediately forfeited in its entirety, and such Participant shall have no further rights or interests with respect to such HSIP Awards.
For purposes of the Plan, the Participant will be deemed to engage in a “Competitive Activity” if, either directly or indirectly, without the express prior written consent of the Company, the Participant (i) takes other employment with, render services to, or otherwise engages in any business activities with, companies or other entities that are competitors of the Company or any of its affiliates, (ii) solicits or induces, or in any manner attempts to solicit or induce, any person employed by or otherwise providing services to the Company or any of its affiliates, to terminate such person’s employment or service relationship, as the case may be, with the Company or any of its affiliates, (iii) diverts, or attempts to divert, any person or entity from doing business with the Company or any of its affiliates or induces, or attempts to induce, any such person or entity from ceasing to be a customer or other business partner of the Company or any of its affiliates, (iv) violates any agreement between the Participant and the Company or any of its affiliates relating to the non-disclosure of proprietary or confidential information of the Company or any of its affiliates, and/or (v) conducts himself or herself in a manner adversely affecting the Company or any of its affiliates, including, without limitation, making false, misleading or negative statements, either orally or in writing, about the Company or any of its affiliates. The determination as to whether a
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Participant has engaged in a Competitive Activity shall be made (A) if the Participant is an executive officer of the Company, by the Committee in its sole discretion or (B) if the Participant is not an executive officer of the Company, by the Company in its sole discretion.
FOR CALIFORNIA PARTICIPANTS ONLY. With respect to any Participant who resides, or provides services, in California (a “California Participant”), the above definition of “Competitive Activity” does not apply and, for the purposes of the Plan, a California Participant will be deemed to engage in a “Competitive Activity” if, either directly or indirectly, without the express prior written consent of the Company, a California Participant (i) prior to a termination of employment with the Company, takes other employment with, renders services to, or otherwise engages in any business activities with, companies or other entities that are competitors of the Company or any of its affiliates, (ii) prior to a termination employment with the Company, solicits or induces, or in any manner attempts to solicit or induce, any person employed by or otherwise providing services to the Company or any of its affiliates, to terminate such person’s employment or service relationship, as the case may be, with the Company or any of its affiliates, (iii) prior to a termination of employment with the Company, diverts, or attempts to divert, any person or entity from doing business with the Company or any of its affiliates or induces, or attempts to induce, any such person or entity from ceasing to be a customer or other business partner of the Company or any of its affiliates, (iv) violates any agreement between a California Participant and the Company or any of its affiliates relating to the non-disclosure of proprietary or confidential information of the Company or any of its affiliates, and/or (v) makes false, misleading or negative statements, either orally or in writing, about the Company or any of its affiliates; provided however, with respect to subsections (iv) and (v), following a termination of employment, a California Participant will not be limited from engaging in a lawful profession, trade, or business that is competitive with the Company or any of its affiliates or restrained from any activity that would be a violation of California Business and Professions Code § 16600. Any determination as to whether a California Participant has engaged in a Competitive Activity shall be made (A) if the Participant is an executive officer of the Company, by the Committee in its sole discretion or (B) if the Participant is not an executive officer of the Company, by the Company in its sole discretion.
With respect to any California Participant, notwithstanding the date of payment, no HSIP Award shall be earned by any California Participant prior to the first anniversary date of the Payment Date and satisfaction of the conditions of the applicable HSIP Award.
| d) | Method of Recoupment |
In the event that (i) the Participant engages in conduct that could reasonably be expected to constitute “Cause” on or after the Payment Date, but on or prior to the first anniversary of such Payment Date, (ii) the Participant engages in a Competitive Activity on or after the Payment Date but on or prior to the first anniversary of such Payment Date, or (iii) the Company makes a determination it is required to prepare a Restatement that relates to the performance period incorporated into each such HSIP Award, in each case, the Company will have the right to recoup from the Participant, and such Participant will repay to the Company, within thirty (30) days following demand by the Company, an amount in cash equal to 100% of the HSIP Awards paid to the Participant on the Payment Date pursuant to the Plan with respect to clauses (i) and (ii), and in an amount equal to a percentage designated by the Company of the HSIP Awards paid to the Participant on the Payment Date pursuant to the Plan with respect to clause (iii). The Company also has the right to set off (or cause to be set off) any amounts otherwise due to a Participant from the Company in satisfaction of such repayment obligation, provided that any such amounts are exempt from, or set off in a manner intended to comply with, the requirements of Section 409A.
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Participants receiving HSIP Awards hereby acknowledge and agree that the forfeiture and recoupment conditions set forth in this section 9, in view of the nature of the business in which the Company and its affiliates are engaged, are reasonable in scope and necessary in order to protect the legitimate business interests of the Company and its affiliates, and that any violation thereof would result in irreparable harm to the Company and its affiliates. Each Participant hereby acknowledge and agree that (i) it is a material inducement and condition to the Company’s issuance of the HSIP Award that such Participant agrees to be bound by such forfeiture and recoupment conditions and, further, that the amounts required to be forfeited or repaid to the Company pursuant to this Section 9 are reasonable, and (ii) nothing in the Plan is intended to preclude the Company (or any affiliate thereof) from seeking any remedies available at law, in equity, under contract to the Company or otherwise, and the Company (or any affiliate thereof) shall have the right to seek any such remedy with respect to the HSIP Award or otherwise.
| 10. | Miscellaneous |
All expenses of the Plan will be borne by the Company.
This Plan is not intended to, nor does it constitute, a contract or guarantee of continued employment. Nothing in the Plan or in any notice of an HSIP Award will affect the right of the Company or any of its affiliates to terminate the employment or service of any Participant or to increase or decrease the compensation payable to the Participant from the rate in effect at the commencement of a year or to otherwise modify the terms of such Participant’s employment.
Except to the extent required by applicable law, no HSIP Award or payment thereof nor any right or benefit under the Plan will be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, garnishment, execution or levy of any kind or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, charge, garnish, execute upon or levy upon the same will be void and will not be recognized or given effect by the Company.
No person will have any claim or right to participate in the Plan or to receive any HSIP Award for any particular year.
Participants will have 30 days from the date of payment of their HSIP Award to dispute calculations. After this period is over, all amounts are final, subject to the forfeiture and recoupment provisions set forth herein. Disputes should be submitted to the Participant’s manager for review and then submitted with any necessary documentation to the Participant’s HR Business Partner.
The Company reserves the right to amend, suspend or terminate the Plan at any time without notice.
The Plan has not been adopted by stockholders.
No member of the Compensation Committee and no other director or TSM of the Company or its affiliates to whom any duty or power relating to the administration or interpretation of the Plan has been delegated will be liable for any action, omission, or determination relating to the Plan, and the Company will indemnify and hold harmless each member of the Compensation Committee and each other director or TSM of the Company or its affiliates to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees, which fees shall be paid as incurred) or liability (including any sum paid in settlement of a claim with the approval of the Compensation Committee) arising out of or in connection with any action, omission or determination relating to the Plan, unless, in each case, such action, omission or determination was taken or made by such member, director or TSM in bad faith and without reasonable belief that it was in the best interests of the Company. The foregoing provisions of this paragraph are in addition to and shall not be deemed to limit or modify, any exculpatory rights or rights to indemnification or the advancement of expenses that any such persons may now or hereafter have, whether under the Company’s Amended and Restated Certificate of Incorporation (as amended), the Company’s Amended and Restated Bylaws (as amended), the Delaware General Corporation Law or otherwise.
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In the event that any one or more of the provisions contained in the Plan will, for any reason, be held to be invalid, illegal or unenforceable, in any respect, such invalidity, illegality or unenforceability will not affect any other provision of the Plan and the Plan will be construed as if such invalid, illegal or unenforceable provisions had never been contained therein.
The Company will have the right to make any provisions that it deems necessary or appropriate to satisfy any obligations it may have under law to withhold federal, state or local income or other taxes incurred by reason of payments pursuant to the Plan.
The Plan and any amendments thereto will be construed, administered, and governed in all respects in accordance with the laws of the State of New York (regardless of the law that might otherwise govern under applicable principles of conflict of laws).
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Exhibit 10.2
FORM OF RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO THE
HENRY SCHEIN, INC. 2020 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF MAY 21, 2020)
THIS AGREEMENT (the “Agreement”) is made as of [Grant Date] (the “Grant Date”), by and between Henry Schein, Inc. (the “Company”) and [Participant Name] (the “Participant”). Additional country-specific and state-specific terms and conditions that govern the grant made hereunder are attached hereto on Annex 1, which terms and conditions are incorporated by reference herein and made a part of the Agreement.
W I T N E S S E T H:
WHEREAS, the Company has adopted the Henry Schein, Inc. 2020 Stock Incentive Plan (as amended and restated effective as of May 21, 2020), as amended from time to time (the “Plan”) (a copy of which is on file with the Company’s Corporate Human Resources Department and is available for the Participant to review upon request at reasonable intervals as determined by the Company), which is administered by the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”);
WHEREAS, pursuant to Section 9(d) of the Plan, the Committee may grant Restricted Stock Units to Key Employees under the Plan;
WHEREAS, the shares of the Company’s common stock are traded on the Nasdaq Stock Market under the symbol “HSIC”; and
WHEREAS, the Participant is a Key Employee of the Company or a Subsidiary.
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
| 1. | Grant of Restricted Stock Units. |
Subject to the restrictions and other conditions set forth herein, in the Plan and Annex 1, the Committee has authorized this grant of [Shares Granted] Restricted Stock Units to the Participant on the Grant Date.
| 2. | Vesting and Payment. |
(a) Vesting Schedule. Except as set forth in Sections 2(c) and 2(d), the Restricted Stock Units shall vest on the fourth anniversary of the Grant Date (the “Scheduled Payment Date”); provided that the Participant has not had a Termination of Employment at any time prior to the Scheduled Payment Date.
(b) No Proportionate or Partial Vesting. Except as set forth in Section 2(c), there shall be no proportionate or partial vesting in the periods prior to the vesting date and all vesting shall occur only on the vesting date; provided that no Termination of Employment has occurred prior to such date.
(c) Retirement. The Restricted Stock Units shall vest on a pro-rated basis upon the Participant’s Retirement, unless otherwise provided expressly in a written agreement between the Participant and the Company (or a Subsidiary). For purposes of this Section 2(c), the Participant shall qualify for “Retirement” if (i) the Participant’s age (minimum 55) plus years of service with the Company and its Subsidiaries equal or exceed 70, (ii) the Participant has provided written notice of the Participant’s retirement to the Company at least 30 days prior to the date of such retirement, and (iii) no Termination of Employment has occurred prior to the date of such retirement. For purposes of determining the age and service requirement under Section 2(c)(i), the Participant’s age and years of service shall be determined by the Participant’s most recent birthday and employment anniversary, respectively. For purposes of this Section 2(c), vesting on a pro-rated basis shall be calculated by multiplying the number of Restricted Stock Units set forth under Section 1 by a fraction, the numerator of which is the number of days from the Grant Date to the date of the Participant’s Retirement, and the denominator of which is the number of days from the Grant Date to the Scheduled Payment Date.
(d) Change in Control Termination, Disability and Death. The Restricted Stock Units shall become fully vested on the earliest of (i) a Termination of Employment by the Company (or a Subsidiary) without Cause occurring within the 2-year period following a Change of Control, (ii) the Participant’s Disability and (iii) the Participant’s death; provided that no Termination of Employment has occurred prior to any such event, unless otherwise provided expressly in a written agreement between the Participant and the Company (or a Subsidiary). For purposes of this Agreement, “Cause” shall have the meaning set forth in Section
7(b) of the Plan, but shall also include any breach by the Participant of any agreement with the Company or any of its Subsidiaries. For purposes of this Agreement, a “Change of Control” shall mean a Change of Control as defined in the Plan. For purposes of this Agreement, “Disability” shall mean the approval of, and receiving benefits for, long term disability by the disability insurance carrier under the Company’s (or if applicable, Subsidiary’s) long term disability plan.
(e) Payment. The Participant shall be entitled to receive one share of Common Stock with respect to one vested Restricted Stock Unit. The Participant shall be paid one share of Common Stock with respect to each vested Restricted Stock Unit within thirty (30) days of the Scheduled Payment Date; except that, in the event of (i) Retirement, (ii) a Termination of Employment by the Company (or a Subsidiary) without Cause occurring within the 2-year period following a Change of Control, (iii) death or (iv) Disability, the Participant shall be paid within thirty (30) days of such Retirement, Termination of Employment, death or Disability, subject to Section 18 set forth in Annex 1 to the extent applicable, including with respect to a Participant who qualifies for Retirement at any time following the Grant Date.
| 3. | Forfeiture and Recoupment. |
(a) Forfeiture on Termination. Subject to Section 2 above, all unvested Restricted Stock Units will be forfeited on the Participant’s Termination of Employment.
(b) Forfeiture due to Cause Conduct. Notwithstanding anything herein or in the Plan to the contrary, in the event that the Participant engages in conduct that could reasonably be expected to constitute Cause, as defined in Section 2(d) above (regardless of whether the Participant had a Termination of Employment), as determined by the Company in its sole discretion, at any time on or after the Grant Date and prior to the applicable settlement date set forth in Section 2 above (such applicable settlement date, the “Payment Date”) the Committee shall have the right, in its sole discretion, to cause the immediate forfeiture of all the Restricted Stock Units (including any dividends credited thereupon) (whether or not vested) in their entirety, in which case the Participant shall have no further rights or interests with respect to such Restricted Stock Units (including any such dividends).
(c) Forfeiture Following Competitive Activity. Notwithstanding anything herein or in the Plan to the contrary, the grant of Restricted Stock Units (including any dividends credited thereupon) provided for under this Agreement is conditioned on the Participant not engaging in any Competitive Activity (as defined below) from the date that is twelve (12) months prior to the Payment Date through the first anniversary of such Payment Date. If, on or after the date that is twelve (12) months prior to the Payment Date but prior to the Payment Date, the Participant engages in a Competitive Activity, the Committee shall have the right, in its sole discretion, to cause the immediate forfeiture of all of the Restricted Stock Units (including any dividends credited thereupon) (whether or not vested) in their entirety, in which case the Participant shall have no further rights or interests with respect to such Restricted Stock Units (including any such dividends).
(d) Recoupment Following Cause Conduct or Competitive Activity After Payment Date. In the event that (i) the Participant engages in conduct described under Section 3(b) on or after the Payment Date, but on or prior to the first anniversary of such Payment Date or (ii) the Participant engages in a Competitive Activity on or after the Payment Date but on or prior to the first anniversary of such Payment Date, in each case, the Company shall have the right to recoup, in its sole discretion, from the Participant, and the Participant shall repay to the Company, within thirty (30) days following demand by the Company, a payment equal to the Fair Market Value of the aggregate shares of Common Stock payable in respect of such Restricted Stock Units (including any dividends credited thereupon) on the Payment Date (including any dividends or other distributions thereafter paid thereon); provided, that, the Company may require the Participant to satisfy such payment obligations hereunder either by forfeiting and returning to the Company such shares of Common Stock, Restricted Stock Units, dividends or any other shares of Common Stock, or making a cash payment or any combination of these methods, as determined by the Company in its sole discretion. The Company and its Subsidiaries, in their sole discretion, shall have the right to set off (or cause to be set off) any amounts otherwise due to the Participant from the Company (or the applicable Subsidiary) in satisfaction of such repayment obligation, provided that any such amounts are exempt from, or set off in a manner intended to comply with, the requirements of any applicable law (including, without limitation, Section 409A of the Code).
(e) Participant Acknowledgement of Reasonableness. The Participant hereby acknowledges and agrees that the forfeiture and recoupment conditions set forth in this Section 3, in view of the nature of the business in which the Company and its affiliates are engaged, are reasonable in scope and necessary in order to protect the legitimate business interests of the Company and its affiliates, and that any violation thereof would result in irreparable harm to the Company and its affiliates. The Participant also acknowledges and agrees that (i) it is a material inducement and condition to the Company’s issuance of the Restricted Stock Units (including any dividends credited thereupon) that such Participant agrees to be bound by such forfeiture and recoupment conditions and, further, that the amounts required to be forfeited or repaid to the Company pursuant to forfeiture and recoupment conditions set forth above are reasonable, and (ii) nothing in this Agreement or the Plan is intended to preclude the Company (or
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any affiliate thereof) from seeking any remedies available at law, in equity, under contract to the Company or otherwise, and the Company (or any affiliate thereof) shall have the right to seek any such remedy with respect to the Restricted Stock Units, any dividends credited thereupon, or otherwise.
(f) Definition of Competitive Activity. For purposes of this Agreement, the Participant will be deemed to engage in a “Competitive Activity” if, either directly or indirectly, without the express prior written consent of the Company, the Participant (i) takes other employment with, renders services to, or otherwise engages in any business activities with, companies or other entities that are competitors of the Company or any of its affiliates, (ii) solicits or induces, or in any manner attempts to solicit or induce, any person employed by or otherwise providing services to the Company or any of its affiliates, to terminate such person’s employment or service relationship, as the case may be, with the Company or any of its affiliates, (iii) diverts, or attempts to divert, any person or entity from doing business with the Company or any of its affiliates or induces, or attempts to induce, any such person or entity from ceasing to be a customer or other business partner of the Company or any of its affiliates, (iv) violates any agreement between the Participant and the Company or any of its affiliates relating to the non-disclosure of proprietary or confidential information of the Company or any of its affiliates, and/or (v) conducts himself or herself in a manner adversely affecting the Company or any of its affiliates, including, without limitation, making false, misleading or negative statements, either orally or in writing, about the Company or any of its affiliates. The determination as to whether the Participant has engaged in a Competitive Activity shall be made (A) if the Participant is an executive officer of the Company, by the Committee in its sole discretion or (B) if the Participant is not an executive officer of the Company, by the Company in its sole discretion.
(g) Protected Rights. Nothing in this Agreement shall be construed (i) to prohibit or is intended to restrict or impede the Participant from discussing the terms and conditions of the Participant’s employment with coworkers or exercising protected rights under Section 7 of the National Labor Relations Act or (ii) to prohibit the Participant from reporting possible violations of federal or state law or making other disclosures that are protected under whistleblower or other provisions of any applicable federal or state law or regulations; further, nothing herein prevents the Participant from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that a Participant has reason to believe is unlawful. In addition, the Participant is hereby advised as follows pursuant to the Defend Trade Secrets Act: An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (I) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (II) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (1) files any document containing the trade secret under seal; and (2) does not disclose the trade secret, except pursuant to court order.
(h) Clawback Policies. This Section 3(h) applies solely with respect to Participants who are members of the Company’s Executive Management Committee. Notwithstanding anything herein to the contrary, to the extent applicable to the Participant, by accepting the Restricted Stock Units granted under this Agreement, the Participant agrees and acknowledges that the Restricted Stock Units awarded under this Agreement (including the underlying shares) (whether or not vested) shall be subject to, and the Participant agrees to abide by, the terms and conditions of (i) the Company’s Incentive Compensation Recoupment Policy, (ii) the Company’s Dodd-Frank Clawback Policy and (iii) any other clawback and/or recoupment policy approved by the Board (or any committee thereof) from time to time, in each case, as amended from time to time and to the extent set forth in each applicable policy. To the extent that the Participant is subject to the terms and conditions of any of the foregoing Company clawback policies, the Participant shall have signed or shall sign each applicable clawback policy acknowledgement provided by the Company either in connection with the execution of this Agreement or prior to the Participant’s execution of this Agreement; provided, that the Participant’s failure to sign such acknowledgement shall have no impact on the applicability or enforceability of such Company clawback policy.
4. Dividend Equivalents. Cash dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to a Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of Common Stock and will be held uninvested and without interest and paid in cash if and when the Restricted Stock Unit vests. Stock dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to a Participant, provided that the Participant shall not be entitled to such dividend unless and until the Restricted Stock Unit vests.
5. Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any shares covered by any Restricted Stock Unit unless and until the Participant has become the holder of record of the shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares, except as otherwise specifically provided for in this Agreement or the Plan.
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6. Withholding. The Participant shall pay, or make arrangements to pay, in a manner satisfactory to the Company, an amount equal to the amount of all applicable foreign, federal, state, provincial and local taxes that the Company is required to withhold at any time. In the absence of such arrangements, the Company or one of its Subsidiaries shall have the right to withhold such taxes from the Participant’s normal pay or other amounts payable to the Participant. In addition, any statutorily required withholding obligation may be satisfied, in whole or in part, at the Participant’s election, in the form and manner prescribed by the Committee, by delivery of shares of Common Stock (including shares issuable under this Agreement).
7. Provisions of Plan Control. This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time. The Plan is incorporated herein by reference. Capitalized terms in this Agreement that are not otherwise defined shall have the same meaning as set forth in the Plan. Subject to Section 3, if and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any prior agreements between the Company and the Participant with respect to the subject matter hereof.
8. Amendment. To the extent applicable, the Board or the Committee may at any time and from time to time amend, in whole or in part, any or all of the provisions of this Agreement to comply with any applicable laws and stock exchange rules and regulations (including, without limitation, Section 409A of the Code and the regulations thereunder) and may also amend, suspend or terminate this Agreement subject to the terms of the Plan. Except as otherwise provided in the Plan, no modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced.
9. Notices. Any notice or communication given hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, or by regular United States mail or similar foreign mail or post, first class and prepaid, to the appropriate party at the address set forth below (or such other address as the party shall from time to time specify):
If to the Company, to:
Henry Schein, Inc.
135 Duryea Road
Melville, New York 11747
Attention: General Counsel
If to the Participant, to the address on file with the Company.
10. No Obligation to Continue Employment or Services. This Agreement is not an agreement of employment, consultancy or directorship. This Agreement does not guarantee that the Company or its Subsidiaries will employ or retain, or continue to employ or retain, the Participant during the entire, or any portion of the, term of this Agreement, including but not limited to any period during which any Restricted Stock Unit is outstanding, nor does it modify in any respect the Company or its Subsidiaries’ right to terminate or modify the Participant’s employment, service relationship or compensation.
11. Legend. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Common Stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of Common Stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section.
12. Securities Representations. The grant of the Restricted Stock Units and issuance of shares of Common Stock upon vesting of the Restricted Stock Units shall be subject to, and in compliance with, all applicable requirements of federal, state or foreign securities law. No shares of Common Stock may be issued hereunder if the issuance of such shares of Common Stock would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the shares of Common Stock may then be listed. As a condition to the settlement of the Restricted Stock Units, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation.
The shares of Common Stock are being issued to the Participant and this Agreement is being made by the Company in reliance upon the following express representations and warranties of the Participant. The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Act”) and in this connection the Company is relying in part on his or her representations set forth in this section.
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(b) If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, the shares of Common Stock must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such shares of Common Stock and the Company is under no obligation to register the shares of Common Stock (or to file a “re-offer prospectus”).
(c) If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, he or she understands that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock of the Company, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the shares of Common Stock may be made only in limited amounts in accordance with such terms and conditions.
13. Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission and processing by the Company (or any Subsidiary) of any personal data information related to Restricted Stock Units awarded under this Agreement, for legitimate business purposes (including, without limitation, the administration of the Plan) out of the Participant’s home country and including to countries with less data protection laws than the data protection laws provided by the Participant’s home country. This authorization/consent is freely given by the Participant.
14. Delivery Delay. The delivery of any certificate representing the Common Stock may be postponed by the Company for such period as may be required for it to comply with any applicable foreign, federal, state or provincial securities law, or any national securities exchange listing requirements and the Company is not obligated to issue or deliver any securities if, in the opinion of counsel for the Company, the issuance of such shares of Common Stock shall constitute a violation by the Participant or the Company of any provisions of any applicable foreign, federal, state or provincial law or of any regulations of any governmental authority or any national securities exchange. The Participant acknowledges and understands that the Company intends to meet its delivery obligations in Common Stock with respect to Restricted Stock Units, except as may be prohibited by law or described in this Agreement, the Plan or supplementary materials.
15. Miscellaneous.
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns.
(a) Governing Law. This Agreement shall be governed and construed in accordance with the laws of New York (regardless of the law that might otherwise govern under applicable New York principles of conflict of laws).
(b) Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract.
(c) Waiver. The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.
(d) Joint Venture/Partnership. This Agreement and the Plan do not create a joint venture or partnership between the Company and any Subsidiary.
(e) Notwithstanding any provisions in this Agreement, this grant of Restricted Stock Units shall be subject to any additional country-specific and state-specific terms and conditions set forth in Annex 1 to the Agreement for the Participant’s country or state to the extent applicable. Moreover, if the Participant relocates to one of the countries included in Annex 1, the additional country-specific terms and conditions for such country or the additional state-specific terms and conditions for such state, if any, will apply to the Participant to the extent that the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.
16. ACQUIRED RIGHTS. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT: (A) THE COMPANY MAY TERMINATE OR AMEND THE PLAN AT ANY TIME; (B) THE AWARD OF RESTRICTED STOCK UNITS MADE UNDER THIS AGREEMENT IS COMPLETELY INDEPENDENT OF ANY OTHER AWARD OR GRANT AND IS MADE AT THE SOLE DISCRETION OF THE COMPANY; AND (C) NO PAST GRANTS OR AWARDS (INCLUDING, WITHOUT LIMITATION, THE RESTRICTED STOCK UNITS AWARDED HEREUNDER) GIVE THE PARTICIPANT ANY RIGHT TO ANY GRANTS OR AWARDS IN THE FUTURE WHATSOEVER.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above.
| HENRY SCHEIN, INC. | ||||
|
|
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| Michael S. Ettinger | ||||
| Executive Vice President, Chief Operating Officer | ||||
| PARTICIPANT | ||||
| [Electronic Signature] |
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| [Participant Name] | ||||
[Acceptance Date]
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ANNEX 1
Additional Country Specific Terms and Conditions
for the Restricted Stock Unit Agreement
Capitalized terms, unless explicitly defined in this Annex 1, shall have the meanings given to them in the Agreement or in the Plan.
For purposes of this Annex 1, “Employer” means the entity (the Company or Subsidiary) that employs the Participant.
Terms and Conditions
This Annex 1 includes special terms and conditions applicable to the Participant if the Participant resides in one of the countries listed below. These terms and conditions are in addition to or, if so indicated, in place of, the terms and conditions set forth in the Agreement. If the Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which the Participant is currently residing and/or working, or if the Participant transfers employment and/or residency between countries after the Grant Date, the Company will, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to the Participant.
Notifications
This Annex 1 also includes country-specific information of which the Participant should be aware with respect to the Participant’s participation in the Plan. The information is based on the exchange control, foreign asset/account reporting and other laws in effect in the respective countries as of January 2024. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant does not rely on the information noted herein as the only source of information relating to the consequences of his/her participation in the Plan because the information may be out of date at the time that the Participant vests in the Restricted Stock Units or sells the shares of Common Stock acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participant’s particular situation, and the Company is not in a position to assure the Participant of any particular result. Accordingly, the Participant should seek appropriate professional advice as to how the relevant laws in the Participant’s country may apply to his/her individual situation.
The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying shares of Common Stock. The Participant should consult with his/her own personal tax, legal and financial advisors regarding his/her participation in the Plan before taking any action related to the Plan.
Finally, if the Participant is a citizen or resident (or is considered as such for local tax purposes) of a country other than the one in which the Participant is currently residing and/or working, or if the Participant transfers employment and/or residency after the Grant Date, the information contained herein may not be applicable to the Participant in the same manner.
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UNITED STATES
The second to last sentence of Section 2(d) of Agreement is hereby deleted in its entirety and replaced with the following:
“For the purposes of this Agreement, a “Change of Control” shall mean the occurrence of a Section 409A Change of Control (as defined in Section 17).”
As of the Grant Date, if the Participant either (i) qualifies for Retirement (as defined in Section 2(c) of the Agreement) or (ii) may become eligible to qualify for Retirement prior to the Scheduled Payment Date, Section 4 of the Agreement is hereby deleted in its entirety and replaced with the following:
“Dividend Equivalents.Cash dividends on Shares shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in Shares and will be held uninvested and without interest. The Participant’s right to receive any such cash dividends shall vest if and when the related Restricted Stock Unit vests, and such cash dividends shall be paid in cash to the Participant if and when the related Restricted Stock Unit is paid to the Participant. Stock dividends on Shares shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to the Participant. The Participant’s right to receive any such stock dividends shall vest if and when the related Restricted Stock Unit vests, and such stock dividends shall be paid in stock to the Participant if and when the related Restricted Stock Unit is paid to the Participant.”
The following shall be added to the Agreement as a new Section 17:
“Change of Control Defined. For purposes of this Agreement, a “Section 409A Change of Control” shall be deemed to have occurred upon:
(i) an acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of (A) 50% or more of the then outstanding Shares or (B) 33% or more of the total combined voting power of the then outstanding voting securities of HSI entitled to vote generally in the election of directors (the “Outstanding HSI Voting Securities”); excluding, however, the following: (w) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (x) any acquisition by the Company, (y) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or (z) any acquisition by any corporation pursuant to a reorganization, merger, consolidation or similar corporate transaction (in each case, a “Corporate Transaction”), if, pursuant to such Corporate Transaction, the conditions described in clauses (A), (B) and (C) of paragraph (iii) below are satisfied; or
(ii) within any 12-month period beginning on or after the date of the Agreement, the individuals who constitute the Board immediately before the beginning of such period (the Board as of the date hereof shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided that for purposes of this Subsection any individual who becomes a member of the Board subsequent to the date hereof whose election, or nomination for election by HSI’s stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who are also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or
(iii) the consummation of a Corporate Transaction or, if consummation of such Corporate Transaction is subject to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Corporate Transaction pursuant to which (A) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the outstanding Shares and Outstanding HSI Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction and the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors, in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the outstanding Shares and Outstanding HSI Voting Securities, as the case may be, (B) no Person (other than the Company, any
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employee benefit plan (or related trust) of the Company or the corporation resulting from such Corporate Transaction and any Person beneficially owning, immediately prior to such Corporate Transaction, directly or indirectly, 33% or more of the outstanding Shares or Outstanding HSI Voting Securities, as the case may be, will beneficially own, directly or indirectly, 33% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or
(iv) the sale or other disposition of all or substantially all of the assets of the Company; excluding, however, such sale or other disposition to a corporation with respect to which, following such sale or other disposition, (x) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors will be then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Common Stock and Outstanding HSI Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the outstanding Common Stock and Outstanding HSI Voting Securities, as the case may be, (y) no Person (other than the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 33% or more of the outstanding Common Stock or Outstanding HSI Voting Securities, as the case may be) will beneficially own, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (z) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of such corporation.
(v) No event set forth herein shall constitute a “Section 409A Change of Control” unless such event also qualifies as a “change in control event” for purposes of Treasury Regulation § 1.409A-3(i)(5). Accordingly, the definition of “Section 409A Change of Control” set forth herein shall be limited, construed and interpreted in accordance with Section 409A and the regulations issued thereunder.”
The following shall be added to the Agreement as a new Section 18:
“Section 409A. This Agreement is subject to Section 16(i) of the Plan, and any provisions in this Agreement providing for the payment of “nonqualified deferred compensation” (as defined in Section 409A of the Code and the Treasury regulations thereunder) to the Participant are intended to comply with, or be exempt from, the requirements of Section 409A of the Code, and this Agreement shall be interpreted in accordance therewith. Neither party individually or in combination may accelerate or defer the timing of the payment of any such nonqualified deferred compensation, except in compliance with Section 409A of the Code and this Agreement, and no amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A of the Code and this Agreement. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Participant as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. A Termination of Employment or Retirement shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A of the Code upon or following a Termination of Employment or Retirement, as applicable, unless such Termination of Employment or Retirement, as applicable, is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If the Participant is a “specified employee,” upon his or her “separation from service” (as defined under Section 409A of the Code under such definitions and procedures as established by the Company in accordance with Section 409A of the Code), any portion of a payment, settlement, or other distribution made upon such a “separation from service” that would cause the acceleration of, or an addition to, any taxes pursuant to Section 409A of the Code will not commence or be paid until a date that is six (6) months and one (1) day following the applicable “separation from service.” Any payments, settlements, or other distributions that are delayed pursuant to this Section 18 following the applicable “separation from service” shall be accumulated and paid to the Participant in a lump sum without interest on the first business day immediately following the required delay period. Any amounts payable hereunder that satisfy the short-term deferral exception in Treas. Reg. §1.409A-1(b)(4) shall not be subject to Section 409A of the Code. Whenever a payment under this Agreement may be paid within a specified period, the actual date of payment within the specified period shall be within the Company’s sole discretion.”
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For California Participants only, the following shall be added to the Agreement as a new paragraph immediately following Section
3(d):
FOR CALIFORNIA PARTICIPANTS ONLY. With respect to any Participant who resides, or provides services, in California (a “California Participant”), Section 3(d) does not apply and, for purposes of this Agreement, a California Participant will be deemed to engage in a “Competitive Activity” if, either directly or indirectly, without the express prior written consent of the Company, the Participant (i) prior to a Termination of Employment, takes other employment with, renders services to, or otherwise engages in any business activities with, companies or other entities that are competitors of the Company or any of its affiliates, (ii) prior to a Termination of Employment, solicits or induces, or in any manner attempts to solicit or induce, any person employed by or otherwise providing services to the Company or any of its affiliates, to terminate such person’s employment or service relationship, as the case may be, with the Company or any of its affiliates, (iii) prior to a Termination of Employment, diverts, or attempts to divert, any person or entity from doing business with the Company or any of its affiliates or induces, or attempts to induce, any such person or entity from ceasing to be a customer or other business partner of the Company or any of its affiliates, (iv) violates any agreement between the Participant and the Company or any of its affiliates relating to the non-disclosure of proprietary or confidential information of the Company or any of its affiliates, and/or (v) makes false, misleading or negative statements, either orally or in writing, about the Company or any of its affiliates; provided however, with respect to subsections (iv) and (v), following a Termination of Employment, the Participant will not be limited from engaging in a lawful profession, trade, or business that is competitive with the Company or any of its affiliates or restrained from any activity that would be a violation of California Business and Professions Code § 16600. Any determination as to whether the Participant has failed to earn the Restricted Stock Units (and any payments made with respect thereto) or engaged in a Competitive Activity shall be made (A) if the Participant is an executive officer of the Company, by the Committee in its sole discretion or (B) if the Participant is not an executive officer of the Company, by the Company in its sole discretion.
With respect to any California Participant, notwithstanding the date of payment, and subject to Section 3, no Restricted Stock Unit (including any dividends credited thereupon and the underlying shares) shall be earned by any Participant prior to the first anniversary date of the Payment Date and satisfaction of the conditions under this Agreement.
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Exhibit 10.3
FORM OF RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO THE
HENRY SCHEIN, INC. 2020 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF MAY 21, 2020)
THIS AGREEMENT (the “Agreement”) is made as of [Grant Date] (the “Grant Date”), by and between Henry Schein, Inc. (the “Company”) and [Participant Name] (the “Participant”). Additional country-specific and state-specific terms and conditions that govern the grant made hereunder are attached hereto on Annex 1, which terms and conditions are incorporated by reference herein and made a part of the Agreement.
W I T N E S S E T H:
WHEREAS, the Company has adopted the Henry Schein, Inc. 2020 Stock Incentive Plan (as amended and restated effective as of May 21, 2020), as amended from time to time (the “Plan”) (a copy of which is on file with the Company’s Corporate Human Resources Department and is available for the Participant to review upon request at reasonable intervals as determined by the Company), which is administered by the Compensation Committee (the “Committee) of the Company’s Board of Directors (the “Board”);
WHEREAS, pursuant to Section 9(d) of the Plan, the Committee may grant Restricted Stock Units to Key Employees under the Plan;
WHEREAS, the shares of the Company’s common stock are traded on the Nasdaq Stock Market under the symbol “HSIC”; and
WHEREAS, the Participant is a Key Employee of the Company or a Subsidiary.
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
| 1. | Grant of Restricted Stock Units. |
Subject to the restrictions and other conditions set forth herein, in the Plan and Annex 1, the Committee has authorized this grant of [Shares Granted] Restricted Stock Units to the Participant on the Grant Date.
| 2. | Vesting and Payment. |
(a) Vesting Schedule. Except as otherwise provided in Sections 2(c), 2(d), 2(e) and 2(f), the Restricted Stock Units awarded under this Agreement shall not vest unless and until (1) the Committee determines and certifies that the target(s) and performance goal(s), a copy of which is on file with the Company’s Corporate Human Resources Department and is available for Participant to review upon reasonable request and at reasonable intervals as determined by the Company (collectively, the “Performance Goal(s)”), have been satisfied with respect to the three-year period beginning on or about January 1 of the year the grant was made and (2) the third anniversary of the Grant Date (the “Scheduled Payment Date”); provided, however, that if the satisfaction of the Performance Goal(s) exceed 100% of the targets, the Committee shall issue to the Participant such additional Shares in an amount that corresponds to the incremental percentage of the goal(s) achieved in excess of 100% of the targets up to a maximum of 200% of the targets, provided that any such additional Shares shall be subject to the terms and conditions of this Agreement. Except as set forth in Sections 2(c), 2(d), 2(e) and 2(f), if the targets and Performance Goal(s) are not satisfied in accordance with this Section 2(a), the Restricted Stock Unit awarded under this Agreement shall be forfeited. Notwithstanding anything herein or in the Plan to the contrary, but except as set forth in Sections 2(c), 2(d), 2(e) and 2(f), the Participant must be employed by the Company (or a Subsidiary) at the times the targets and Performance Goal(s) are satisfied and on the third anniversary of the date of grant. The Participant acknowledges and agrees that the Performance Goal(s) are confidential and agrees to execute the Company’s form confidentiality agreement prior to viewing Performance Goal(s), actual performance results and/or mandatory adjustments.
(b) No Proportionate or Partial Vesting. Except as set forth in Sections 2(c), 2(d) and 2(f), there shall be no proportionate or partial vesting in the periods prior to the vesting date and all vesting shall occur only on the vesting date; provided that no Termination of Employment has occurred prior to such date.
(c) Retirement. The Restricted Stock Units shall vest on a pro-rated basis, subject to actual achievement of the Performance Goal(s) during the applicable three-year period, upon the Participant’s Retirement, unless otherwise provided expressly in a written agreement between the Participant and the Company (or a Subsidiary). For purposes of this Section 2(c), the Participant shall qualify for “Retirement” if (i) the Participant’s age (minimum 55) plus years of service with the Company and its
Subsidiaries equal or exceed 70, (ii) the Participant has provided written notice of the Participant’s retirement to the Company at least 30 days prior to the date of such retirement, and (iii) no Termination of Employment has occurred prior to the date of such retirement. For purposes of determining the age and service requirement under Section 2(c)(i), the Participant’s age and years of service shall be determined by the Participant’s most recent birthday and employment anniversary, respectively.
(d) Disability. The Restricted Stock Units shall vest on a pro-rated basis, assuming target levels of the Performance Goals have been achieved, upon the Participant’s Disability, provided that no Termination of Employment has occurred prior to such date, unless otherwise provided expressly in a written agreement between the Participant and the Company (or a Subsidiary). For purposes of this Agreement, “Disability” shall mean the approval of, and receiving benefits for, long term disability by the disability insurance carrier under the Company’s (or if applicable, Subsidiary’s) long term disability plan.
(e) Change in Control Termination. The Restricted Stock Units shall vest in full, assuming target levels of the Performance Goals have been achieved, upon a Termination of Employment by the Company (or a Subsidiary) without Cause occurring within the 2-year period following a Change of Control; provided that no Termination of Employment has occurred prior to such date, unless otherwise provided expressly in a written agreement between the Participant and the Company (or a Subsidiary). For purposes of this Agreement, “Cause” shall have the meaning set forth in Section 7(b) of the Plan, but shall also include any breach by the Participant of any agreement with the Company or any of its Subsidiaries. For purposes of this Agreement, a “Change of Control” shall mean the occurrence of a Change of Control (as defined in the Plan).
(f) Death. The Restricted Stock Units shall vest on a pro-rated basis, assuming target levels of the Performance Goals have been achieved, upon the Participant’s death, provided that no Termination of Employment has occurred prior to such date, unless otherwise provided expressly in a written agreement between the Participant and the Company (or a Subsidiary).
(g) Calculation of Pro-rated Vesting. For purposes of Sections 2(c), 2(d) and 2(f), vesting on a pro-rated basis shall be calculated by multiplying the number of Restricted Stock Units set forth under Section 1 by a fraction, the numerator of which is the number of days from the Grant Date to the date of the Participant’s death, Disability or Retirement, as applicable, and the denominator of which is the number of days from the Grant Date to the Scheduled Payment Date.
(h) Timing of Payment. The Participant shall be entitled to receive one share of Common Stock with respect to one vested Restricted Stock Unit. The Participant shall be paid one share of Common Stock with respect to each vested Restricted Stock Unit within thirty (30) days of the Scheduled Payment Date; except that, in the event of (i) a Termination of Employment by the Company (or a Subsidiary) without Cause occurring within the 2-year period following a Change of Control, (ii) death or (iii) Disability, the Participant shall be paid within thirty (30) days of such employment termination, death or Disability, provided no Termination of Employment has occurred prior to such dates, subject to Section 18 set forth in Annex 1, to the extent applicable. In the event of Retirement, the Participant shall be paid one share of Common Stock with respect to each vested Restricted Stock Unit within thirty (30) days of the Scheduled Payment Date.
| 3. | Forfeiture and Recoupment. |
(a) Forfeiture on Termination. Subject to Section 2 above, all unvested Restricted Stock Units will be forfeited on the Participant’s Termination of Employment.
(b) Forfeiture due to Cause Conduct. Notwithstanding anything herein or in the Plan to the contrary, in the event that the Participant engages in conduct that could reasonably be expected to constitute Cause, as defined in Section 2(e) above (regardless of whether the Participant had a Termination of Employment), as determined by the Company in its sole discretion, at any time on or after the Grant Date and prior to the applicable settlement date set forth in Section 2 above (such applicable settlement date, the “Payment Date”), the Committee shall have the right, in its sole discretion, to cause the immediate forfeiture of all the Restricted Stock Units (including any dividends credited thereupon) (whether or not vested), in their entirety, in which case the Participant shall have no further rights or interests with respect to such Restricted Stock Units (including any such dividends).
(c) Forfeiture due to Material Restatement. Notwithstanding anything herein or in the Plan to the contrary, in the event that the Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the securities laws that relates to the vesting period under Section 2(a) above, the Committee shall have the right, in its sole discretion, to cause the immediate forfeiture of all the Restricted Stock Units (including any dividends credited thereupon) (whether or vested), in their entirety during the Applicable Period (as defined herein). The Applicable Period shall mean the three completed fiscal years of the Company immediately preceding the earlier of (i) the date the Board, a committee of the Board, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes (or reasonably should have concluded) that the Company was required to prepare an accounting restatement or (ii) the date a court,
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regulator, or other legally authorized entity directs the Company to prepare an accounting restatement, in each case, regardless of if or when the accounting restatement is actually filed. In such case, the Participant shall have no further rights or interests with respect to such Restricted Stock Units (including any such dividends).
(d) Forfeiture Following Competitive Activity. Notwithstanding anything herein or in the Plan to the contrary, the grant of Restricted Stock Units (including any dividends credited thereupon) provided for under this Agreement is conditioned on the Participant not engaging in any Competitive Activity (as defined below) from the date that is twelve (12) months prior to the Payment Date through the first anniversary of such Payment Date. If, on or after the date that is twelve (12) months prior to the Payment Date but prior to the Payment Date, the Participant engages in a Competitive Activity, the Committee shall have the right, in its sole discretion, to cause the immediate forfeiture of all of the Restricted Stock Units (including any dividends credited thereupon) (whether or not vested) in their entirety, in which case the Participant shall have no further rights or interests with respect to such Restricted Stock Units (including any such dividends).
(e) Recoupment Following Cause Conduct, Competitive Activity After Payment Date, or Material Restatement. In the event that (i) the Participant engages in conduct described under Section 3(b) on or after the Payment Date, but on or prior to the first anniversary of such Payment Date, (ii) the Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the securities laws that relates to the vesting period under Section 2(a) above, or (iii) the Participant engages in a Competitive Activity on or after the Payment Date but on or prior to the first anniversary of such Payment Date, in each case, the Company shall have the right to recoup, in its sole discretion, from the Participant, and the Participant shall repay to the Company, within thirty (30) days following demand by the Company, a payment equal to the Fair Market Value of the aggregate shares of Common Stock payable in respect of such Restricted Stock Units (including any dividends credited thereupon) on the Payment Date (including any dividends or other distributions thereafter paid thereon); provided, that, the Company may require the Participant to satisfy such payment obligations hereunder either by forfeiting and returning to the Company such shares of Common Stock, Restricted Stock Units, dividends or any other shares of Common Stock, or making a cash payment or any combination of these methods, as determined by the Company in its sole discretion. The Company and its Subsidiaries, in their sole discretion, shall have the right to set off (or cause to be set off) any amounts otherwise due to the Participant from the Company (or the applicable Subsidiary) in satisfaction of such repayment obligation, provided that any such amounts are exempt from, or set off in a manner intended to comply with, the requirements of any applicable law (including, without limitation, Section 409A of the Code). It is intended that the Company’s right to recoup Restricted Stock Units (including any dividends credited thereupon and the underlying shares) under this Section 3(e)(ii) relates to the Applicable Period and shall be interpreted in a manner consistent with the Company’s Dodd-Frank Clawback Policy, except that all references to executive officers (or words of like import) shall be disregarded.
(f) Participant Acknowledgement of Reasonableness. The Participant hereby acknowledges and agrees that the forfeiture and recoupment conditions set forth in this Section 3, in view of the nature of the business in which the Company and its affiliates are engaged, are reasonable in scope and necessary in order to protect the legitimate business interests of the Company and its affiliates, and that any violation thereof would result in irreparable harm to the Company and its affiliates. The Participant also acknowledges and agrees that (i) it is a material inducement and condition to the Company’s issuance of the Restricted Stock Units (including any dividends credited thereupon) that such Participant agrees to be bound by such forfeiture and recoupment conditions and, further, that the amounts required to be forfeited or repaid to the Company pursuant to forfeiture and recoupment conditions set forth above are reasonable, and (ii) nothing in this Agreement or the Plan is intended to preclude the Company (or any affiliate thereof) from seeking any remedies available at law, in equity, under contract to the Company or otherwise, and the Company (or any affiliate thereof) shall have the right to seek any such remedy with respect to the Restricted Stock Units, any dividends credited thereupon, or otherwise.
(g) Definition of Competitive Activity. For purposes of this Agreement, the Participant will be deemed to engage in a “Competitive Activity” if, either directly or indirectly, without the express prior written consent of the Company, the Participant (i) takes other employment with, renders services to, or otherwise engages in any business activities with, companies or other entities that are competitors of the Company or any of its affiliates, (ii) solicits or induces, or in any manner attempts to solicit or induce, any person employed by or otherwise providing services to the Company or any of its affiliates, to terminate such person’s employment or service relationship, as the case may be, with the Company or any of its affiliates, (iii) diverts, or attempts to divert, any person or entity from doing business with the Company or any of its affiliates or induces, or attempts to induce, any such person or entity from ceasing to be a customer or other business partner of the Company or any of its affiliates, (iv) violates any agreement between the Participant and the Company or any of its affiliates relating to the non-disclosure of proprietary or confidential information of the Company or any of its affiliates, and/or (v) conducts himself or herself in a manner adversely affecting the Company or any of its affiliates, including, without limitation, making false, misleading or negative statements, either orally or in writing, about the Company or any of its affiliates. The determination as to whether the Participant has engaged in a Competitive Activity shall be made (A) if the Participant is an executive officer of the Company, by the Committee in its sole discretion or (B) if the Participant is not an executive officer of the Company, by the Company in its sole discretion.
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(h) Protected Rights. Nothing in this Agreement shall be construed (i) to prohibit or is intended to restrict or impede the Participant from discussing the terms and conditions of the Participant’s employment with coworkers or exercising protected rights under Section 7 of the National Labor Relations Act or (ii) to prohibit the Participant from reporting possible violations of federal or state law or making other disclosures that are protected under whistleblower or other provisions of any applicable federal or state law or regulations; further, nothing herein prevents the Participant from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that a Participant has reason to believe is unlawful. In addition, the Participant is hereby advised as follows pursuant to the Defend Trade Secrets Act: An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (I) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (II) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (1) files any document containing the trade secret under seal; and (2) does not disclose the trade secret, except pursuant to court order.
(i) Clawback Policies. This Section 3(i) applies solely with respect to Participants who are members of the Company’s Executive Management Committee. Notwithstanding anything herein to the contrary, to the extent applicable to the Participant, by accepting the Restricted Stock Units granted under this Agreement, the Participant agrees and acknowledges that the Restricted Stock Units awarded under this Agreement (including the underlying shares) (whether or not vested) shall be subject to, and the Participant agrees to abide by, the terms and conditions of (i) the Company’s Incentive Compensation Recoupment Policy, (ii) the Company’s Dodd-Frank Clawback Policy and (iii) any other clawback and/or recoupment policy approved by the Board (or any committee thereof) from time to time, in each case, as amended from time to time and to the extent set forth in each applicable policy. To the extent that the Participant is subject to the terms and conditions of any of the foregoing Company clawback policies, the Participant shall have signed or shall sign each applicable clawback policy acknowledgement provided by the Company either in connection with the execution of this Agreement or prior to the Participant’s execution of this Agreement; provided, that the Participant’s failure to sign such acknowledgement shall have no impact on the applicability or enforceability of such Company clawback policy.
4. Dividend Equivalents. Cash dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to a Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of Common Stock and will be held uninvested and without interest and paid in cash if and when the Restricted Stock Unit vests. Stock dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to a Participant, provided that the Participant shall not be entitled to such dividend unless and until the Restricted Stock Unit vests.
5. Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any shares covered by any Restricted Stock Unit unless and until the Participant has become the holder of record of the shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares, except as otherwise specifically provided for in this Agreement or the Plan.
6. Withholding. The Participant shall pay, or make arrangements to pay, in a manner satisfactory to the Company, an amount equal to the amount of all applicable foreign, federal, state, provincial and local taxes that the Company is required to withhold at any time. In the absence of such arrangements, the Company or one of its Subsidiaries shall have the right to withhold such taxes from the Participant’s normal pay or other amounts payable to the Participant. In addition, any statutorily required withholding obligation may be satisfied, in whole or in part, at the Participant’s election, in the form and manner prescribed by the Committee, by delivery of shares of Common Stock (including shares issuable under this Agreement).
7. Provisions of Plan Control. This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time. The Plan is incorporated herein by reference. Capitalized terms in this Agreement that are not otherwise defined shall have the same meaning as set forth in the Plan. Subject to Section 3, if and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any prior agreements between the Company and the Participant with respect to the subject matter hereof.
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8. Amendment. To the extent applicable, the Board or the Committee may at any time and from time to time amend, in whole or in part, any or all of the provisions of this Agreement to comply with any applicable laws and stock exchange rules and regulations (including, without limitation, Section 409A of the Code and the regulations thereunder) and may also amend, suspend or terminate this Agreement subject to the terms of the Plan. Except as otherwise provided in the Plan, no modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced.
9. Notices. Any notice or communication given hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, or by regular United States mail or similar foreign mail or post, first class and prepaid, to the appropriate party at the address set forth below (or such other address as the party shall from time to time specify):
If to the Company, to:
Henry Schein, Inc.
135 Duryea Road
Melville, New York 11747
Attention: General Counsel
If to the Participant, to the address on file with the Company.
10. No Obligation to Continue Employment or Services. This Agreement is not an agreement of employment, consultancy or directorship. This Agreement does not guarantee that the Company or its Subsidiaries will employ or retain, or continue to employ or retain, the Participant during the entire, or any portion of the, term of this Agreement, including but not limited to any period during which any Restricted Stock Unit is outstanding, nor does it modify in any respect the Company or its Subsidiaries’ right to terminate or modify the Participant’s employment, service relationship or compensation.
11. Legend. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Common Stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of Common Stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section.
12. Securities Representations. The grant of the Restricted Stock Units and issuance of shares of Common Stock upon vesting of the Restricted Stock Units shall be subject to, and in compliance with, all applicable requirements of federal, state or foreign securities law. No shares of Common Stock may be issued hereunder if the issuance of such shares of Common Stock would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the shares of Common Stock may then be listed. As a condition to the settlement of the Restricted Stock Units, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation.
The shares of Common Stock are being issued to the Participant and this Agreement is being made by the Company in reliance upon the following express representations and warranties of the Participant. The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Act”) and in this connection the Company is relying in part on his or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, the shares of Common Stock must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such shares of Common Stock and the Company is under no obligation to register the shares of Common Stock (or to file a “re-offer prospectus”).
(c) If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, he or she understands that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock of the Company, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the shares of Common Stock may be made only in limited amounts in accordance with such terms and conditions.
13. Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission and processing by the Company (or any Subsidiary) of any personal data information related to Restricted Stock Units awarded under this Agreement, for legitimate business purposes (including, without limitation, the administration of the Plan) out of the Participant’s home country and including to countries with less data protection laws than the data protection laws provided by the Participant’s home country. This authorization/consent is freely given by the Participant.
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14. Delivery Delay. The delivery of any certificate representing the Common Stock may be postponed by the Company for such period as may be required for it to comply with any applicable foreign, federal, state or provincial securities law, or any national securities exchange listing requirements and the Company is not obligated to issue or deliver any securities if, in the opinion of counsel for the Company, the issuance of such shares of Common Stock shall constitute a violation by the Participant or the Company of any provisions of any applicable foreign, federal, state or provincial law or of any regulations of any governmental authority or any national securities exchange. The Participant acknowledges and understands that the Company intends to meet its delivery obligations in Common Stock with respect to Restricted Stock Units, except as may be prohibited by law or described in this Agreement, the Plan or supplementary materials.
| 15. | Miscellaneous. |
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns.
(a) Governing Law. This Agreement shall be governed and construed in accordance with the laws of New York (regardless of the law that might otherwise govern under applicable New York principles of conflict of laws).
(b) Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract.
(c) Waiver. The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.
(d) Joint Venture/Partnership. This Agreement and the Plan do not create a joint venture or partnership between the Company and any Subsidiary.
(e) Notwithstanding any provisions in this Agreement, this grant of Restricted Stock Units shall be subject to any additional country-specific and state-specific terms and conditions set forth in Annex 1 to the Agreement for the Participant’s country or state to the extent applicable. Moreover, if the Participant relocates to one of the countries included in Annex 1, the additional country-specific terms and conditions for such country or the additional state-specific terms and conditions for such state, if any, will apply to the Participant to the extent that the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.
16. ACQUIRED RIGHTS. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT: (A) THE COMPANY MAY TERMINATE OR AMEND THE PLAN AT ANY TIME; (B) THE AWARD OF RESTRICTED STOCK UNITS MADE UNDER THIS AGREEMENT IS COMPLETELY INDEPENDENT OF ANY OTHER AWARD OR GRANT AND IS MADE AT THE SOLE DISCRETION OF THE COMPANY; AND (C) NO PAST GRANTS OR AWARDS (INCLUDING, WITHOUT LIMITATION, THE RESTRICTED STOCK UNITS AWARDED HEREUNDER) GIVE THE PARTICIPANT ANY RIGHT TO ANY GRANTS OR AWARDS IN THE FUTURE WHATSOEVER.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above.
| HENRY SCHEIN, INC. | ||||
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| Michael S. Ettinger | ||||
| Executive Vice President, Chief Operating Officer | ||||
| PARTICIPANT | ||||
| [Electronic Signature] |
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| [Participant Name] | ||||
[Acceptance Date]
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ANNEX 1
Additional Country Specific Terms and Conditions
for the Restricted Stock Unit Agreement
Capitalized terms, unless explicitly defined in this Annex 1, shall have the meanings given to them in the Agreement or in the Plan.
For purposes of this Annex 1, “Employer” means the entity (the Company or Subsidiary) that employs the Participant.
Terms and Conditions
This Annex 1 includes special terms and conditions applicable to the Participant if the Participant resides in one of the countries listed below. These terms and conditions are in addition to or, if so indicated, in place of, the terms and conditions set forth in the Agreement. If the Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which the Participant is currently residing and/or working, or if the Participant transfers employment and/or residency between countries after the Grant Date, the Company will, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to the Participant.
Notifications
This Annex 1 also includes country-specific information of which the Participant should be aware with respect to the Participant’s participation in the Plan. The information is based on the exchange control, foreign asset/account reporting and other laws in effect in the respective countries as of January 2024. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant does not rely on the information noted herein as the only source of information relating to the consequences of his/her participation in the Plan because the information may be out of date at the time that the Participant vests in the Restricted Stock Units or sells the shares of Common Stock acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participant’s particular situation, and the Company is not in a position to assure the Participant of any particular result. Accordingly, the Participant should seek appropriate professional advice as to how the relevant laws in the Participant’s country may apply to his/her individual situation.
The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying shares of Common Stock. The Participant should consult with his/her own personal tax, legal and financial advisors regarding his/her participation in the Plan before taking any action related to the Plan.
Finally, if the Participant is a citizen or resident (or is considered as such for local tax purposes) of a country other than the one in which the Participant is currently residing and/or working, or if the Participant transfers employment and/or residency after the Grant Date, the information contained herein may not be applicable to the Participant in the same manner.
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UNITED STATES
The last sentence of Section 2(e) of Agreement is hereby deleted in its entirety and replaced with the following:
“For the purposes of this Agreement, a “Change of Control” shall mean the occurrence of a Section 409A Change of Control (as defined in Section 17).”
As of the Grant Date, if the Participant either (i) qualifies for Retirement (as defined in Section 2(c) of the Agreement) or (ii) may become eligible to qualify for Retirement prior to the Scheduled Payment Date, Section 4 of the Agreement is hereby deleted in its entirety and replaced with the following:
“Dividend Equivalents.Cash dividends on Shares shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in Shares and will be held uninvested and without interest. The Participant’s right to receive any such cash dividends shall vest if and when the related Restricted Stock Unit vests, and such cash dividends shall be paid in cash to the Participant if and when the related Restricted Stock Unit is paid to the Participant. Stock dividends on Shares shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to the Participant. The Participant’s right to receive any such stock dividends shall vest if and when the related Restricted Stock Unit vests, and such stock dividends shall be paid in stock to the Participant if and when the related Restricted Stock Unit is paid to the Participant.”
The following shall be added to the Agreement as a new Section 17:
“Change of Control Defined. For purposes of this Agreement, a “Section 409A Change of Control” shall be deemed to have occurred upon:
(i) an acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of (A) 50% or more of the then outstanding Shares or (B) 33% or more of the total combined voting power of the then outstanding voting securities of HSI entitled to vote generally in the election of directors (the “Outstanding HSI Voting Securities”); excluding, however, the following: (w) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (x) any acquisition by the Company, (y) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or (z) any acquisition by any corporation pursuant to a reorganization, merger, consolidation or similar corporate transaction (in each case, a “Corporate Transaction”), if, pursuant to such Corporate Transaction, the conditions described in clauses (A), (B) and (C) of paragraph (iii) below are satisfied; or
(ii) within any 12-month period beginning on or after the date of the Agreement, the individuals who constitute the Board immediately before the beginning of such period (the Board as of the date hereof shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided that for purposes of this Subsection any individual who becomes a member of the Board subsequent to the date hereof whose election, or nomination for election by HSI’s stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who are also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or
(iii) the consummation of a Corporate Transaction or, if consummation of such Corporate Transaction is subject to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Corporate Transaction pursuant to which (A) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the outstanding Shares and Outstanding HSI Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction and the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors, in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the outstanding Shares and Outstanding HSI Voting Securities, as the case may be, (B) no Person (other than the Company, any
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employee benefit plan (or related trust) of the Company or the corporation resulting from such Corporate Transaction and any Person beneficially owning, immediately prior to such Corporate Transaction, directly or indirectly, 33% or more of the outstanding Shares or Outstanding HSI Voting Securities, as the case may be, will beneficially own, directly or indirectly, 33% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or
(iv) the sale or other disposition of all or substantially all of the assets of the Company; excluding, however, such sale or other disposition to a corporation with respect to which, following such sale or other disposition, (x) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors will be then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Common Stock and Outstanding HSI Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the outstanding Common Stock and Outstanding HSI Voting Securities, as the case may be, (y) no Person (other than the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 33% or more of the outstanding Common Stock or Outstanding HSI Voting Securities, as the case may be) will beneficially own, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (z) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of such corporation.
(v) No event set forth herein shall constitute a “Section 409A Change of Control” unless such event also qualifies as a “change in control event” for purposes of Treasury Regulation § 1.409A-3(i)(5). Accordingly, the definition of “Section 409A Change of Control” set forth herein shall be limited, construed and interpreted in accordance with Section 409A and the regulations issued thereunder.”
The following shall be added to the Agreement as a new Section 18:
“Section 409A. This Agreement is subject to Section 16(i) of the Plan, and any provisions in this Agreement providing for the payment of “nonqualified deferred compensation” (as defined in Section 409A of the Code and the Treasury regulations thereunder) to the Participant are intended to comply with, or be exempt from, the requirements of Section 409A of the Code, and this Agreement shall be interpreted in accordance therewith. Neither party individually or in combination may accelerate or defer the timing of the payment of any such nonqualified deferred compensation, except in compliance with Section 409A of the Code and this Agreement, and no amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A of the Code and this Agreement. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Participant as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. A Termination of Employment or Retirement shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A of the Code upon or following a Termination of Employment or Retirement, as applicable, unless such Termination of Employment or Retirement, as applicable, is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If the Participant is a “specified employee,” upon his or her “separation from service” (as defined under Section 409A of the Code under such definitions and procedures as established by the Company in accordance with Section 409A of the Code), any portion of a payment, settlement, or other distribution made upon such a “separation from service” that would cause the acceleration of, or an addition to, any taxes pursuant to Section 409A of the Code will not commence or be paid until a date that is six (6) months and one (1) day following the applicable “separation from service.” Any payments, settlements, or other distributions that are delayed pursuant to this Section 18 following the applicable “separation from service” shall be accumulated and paid to the Participant in a lump sum without interest on the first business day immediately following the required delay period. Any amounts payable hereunder that satisfy the short-term deferral exception in Treas. Reg. §1.409A-1(b)(4) shall not be subject to Section 409A of the Code. Whenever a payment under this Agreement may be paid within a specified period, the actual date of payment within the specified period shall be within the Company’s sole discretion.”
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For California Participants only, the following shall be added to the Agreement as a new paragraph immediately following Section 3(g):
FOR CALIFORNIA PARTICIPANTS ONLY. With respect to any Participant who resides, or provides services, in California (a “California Participant”), Section 3(g) does not apply and, for purposes of this Agreement, a California Participant will be deemed to engage in a “Competitive Activity” if, either directly or indirectly, without the express prior written consent of the Company, the Participant (i) prior to a Termination of Employment, takes other employment with, renders services to, or otherwise engages in any business activities with, companies or other entities that are competitors of the Company or any of its affiliates, (ii) prior to a Termination of Employment, solicits or induces, or in any manner attempts to solicit or induce, any person employed by or otherwise providing services to the Company or any of its affiliates, to terminate such person’s employment or service relationship, as the case may be, with the Company or any of its affiliates, (iii) prior to a Termination of Employment, diverts, or attempts to divert, any person or entity from doing business with the Company or any of its affiliates or induces, or attempts to induce, any such person or entity from ceasing to be a customer or other business partner of the Company or any of its affiliates, (iv) violates any agreement between the Participant and the Company or any of its affiliates relating to the non-disclosure of proprietary or confidential information of the Company or any of its affiliates, and/or (v) makes false, misleading or negative statements, either orally or in writing, about the Company or any of its affiliates; provided however, with respect to subsections (iv) and (v), following a Termination of Employment, the Participant will not be limited from engaging in a lawful profession, trade, or business that is competitive with the Company or any of its affiliates or restrained from any activity that would be a violation of California Business and Professions Code § 16600. Any determination as to whether the Participant has failed to earn the Restricted Stock Units (and any payments made with respect thereto) or engaged in a Competitive Activity shall be made (A) if the Participant is an executive officer of the Company, by the Committee in its sole discretion or (B) if the Participant is not an executive officer of the Company, by the Company in its sole discretion.
With respect to any California Participant, notwithstanding the date of payment, and subject to Section 3, no Restricted Stock Unit (including any dividends credited thereupon and the underlying shares) shall be earned by any Participant prior to the first anniversary date of the Payment Date and satisfaction of the conditions under this Agreement.
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Exhibit 10.4
FORM OF RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO THE
HENRY SCHEIN, INC. 2023 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF May 23, 2023)
THIS AGREEMENT (the “Agreement”) made as of [Grant Date] (the “Grant Date”), by and between Henry Schein, Inc. (the “Company”) and [Participant Name] (the “Participant”).
W I T N E S S E T H:
WHEREAS, the Company has adopted the Henry Schein, Inc. 2023 Non-Employee Director Stock Incentive Plan (as amended and restated effective as of May 23, 2023), a copy of which is on file with the Company’s Corporate Human Resources Department and is available for Participant to review upon request at reasonable intervals as determined by the Company (the “Plan”), which is administered by a Committee appointed by the Company’s Board of Directors (the “Committee”); and
WHEREAS, pursuant to Section 7 of the Plan, the Committee may grant Restricted Stock Units to non-employee directors under the Plan; and
WHEREAS, the Participant is a non-employee director of the Company.
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Grant of Restricted Stock Units. Subject to the restrictions and other conditions set forth herein and in the Plan, the Committee has authorized this grant of [Shares Granted] Restricted Stock Units to the Participant on the Grant Date.
| 2. | Vesting and Payment. |
(a) Except as set forth in Sections 2(c) and 2(d) below, the Restricted Stock Units shall vest on the twelve-month anniversary of the Grant Date (the “Scheduled Payment Date”); provided that the Participant has not had a Termination of Services any time prior to the Scheduled Payment Date.
(b) Except as may otherwise be provided by the Committee, in its sole and absolute discretion, there shall be no proportionate or partial vesting in the periods prior to the Scheduled Payment Date and, except as set forth in Sections 2(c) and 2(d) below, all vesting shall occur only on the Scheduled Payment Date; provided that no Termination of Services has occurred prior to the Scheduled Payment Date.
(c) The Restricted Stock Units will become fully vested on a Change of Control; provided that no Termination of Services has occurred prior to the Change of Control. For purposes of vesting, a “Change of Control” shall mean the occurrence of a Change of Control (as defined in the Plan) or a Section 409A Change of Control (as defined in Section 3(f)).
(d) The Restricted Stock Units will become fully vested on the date of the Participant’s Retirement. For purposes of this Agreement, “Retirement” shall refer to the Participant’s Termination of Services due to retirement in accordance with the terms and conditions of the Company’s Retirement Policy, approved by the Company’s Board of Directors on November 30, 2015.
(e) The Participant shall be entitled to receive one share of Common Stock with respect to one vested Restricted Stock Unit. The Participant shall be paid one share of Common Stock with respect to each vested Restricted Stock Unit within thirty (30) days of the Scheduled Payment Date; except that, in the event of (i) a Change of Control or (ii) Retirement, the Participant shall be paid within thirty (30) days of such Change of Control or Retirement; provided no Termination of Employment has occurred prior to such dates.
3. Deferred Payment. Notwithstanding Section 2(e) above, the Participant may elect to defer the payment date of his or her vested Restricted Stock Units beyond the Scheduled Payment Date (such elected deferred payment date, the “Deferred Payment Date”), provided, that:
(a) In order for a deferral election under this Section 3 to be effective, the Participant must make the election prior to the Grant Date.
(b) A deferral election made by the Participant pursuant to this Section 3 with respect to one or more of the Participant’s Restricted Stock Units shall, subject to Sections 3(c) and (e) below, defer the payment date of such Restricted Stock Units to the Deferred Payment Date elected by the Participant, which must be one of the following: (i) the third (3rd) anniversary of the Scheduled Payment Date; (ii) the fifth (5th) anniversary of the Scheduled Payment Date; (iii) the seventh (7th) anniversary of the Scheduled Payment Date; (iv) the tenth (10th) anniversary of the Scheduled Payment Date; or (v) the date of the Participant’s Termination of Services which occurs after the Scheduled Payment Date.
(c) The Participant shall also be permitted to further defer the payment date of his or her vested Restricted Stock Units beyond the Deferred Payment Date, provided that: (i) in order to be effective, the Participant must make such deferral election at least twelve (12) months prior to the Deferred Payment Date; (ii) a deferral election made by the Participant pursuant to this Section 3(c) shall defer the payment date of his or her vested Restricted Stock Units for a period of time (expressed in whole years) of not less than five (5) years and no more than ten (10) years beyond the Deferred Payment Date; and (iii) the Participant’s deferral election shall not become effective until twelve (12) months after the date on which it is made. The Participant shall be entitled to make more than one deferral election under this Section 3(c) with respect to his or her vested Restricted Stock Units, and any such new Deferred Payment Date election that becomes effective in accordance herewith shall supersede any previous Deferred Payment Date election made by the Participant with respect to such Restricted Stock Units on and after the twelve (12) month anniversary after the election is made.
(d) The Participant must make any deferral election permitted under this Section 3 in writing on the election form and in accordance with the procedures established by the Company. A deferral election is valid solely with respect to the Restricted Stock Units identified on the election form and must comply with the requirements of this Section 3 to be given effect. Subject to the requirements set forth in this Section 3, the Participant shall be entitled to make deferral elections with respect to all or only a portion of his or her Restricted Stock Units and any such deferral elections need not be the same for all of the Participant’s Restricted Stock Units.
(e) If the Participant elects in accordance with this Section 3 to defer the date of payment of any of his or her Restricted Stock Units beyond the Scheduled Payment Date, the payment date of such Restricted Stock Units, to the extent vested, shall occur within the thirty (30) day period following the earliest of the following to occur: (i) the Deferred Payment Date; (ii) the Participant’s Termination of Services (other than as a result of the Participant’s death, Disability or Retirement), but only if such Termination of Services qualifies as a “separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code and the Treasury regulations thereunder and, solely to the extent applicable, subject to the six (6) month delay described in Section 15(h) of the Plan with respect to “specified employees”; (iii) the Participant’s death; (iv) the Participant’s Disability; (v) the Scheduled Payment Date if the Participant has a Termination of Services due to Retirement; or (vi) a “Section 409A Change of Control” (as defined below).
(f) For purposes of Sections 2(c) and 3(e) only, a “Section 409A Change of Control” shall mean a Change in Control (as defined in the Plan); provided, that, no event shall constitute a “Section 409A Change of Control” for purposes of this Agreement unless such event also qualifies as a “change in control event” for purposes of Treasury Regulation § 1.409A-3(i)(5).
| 4. | Termination. |
Except as set forth in Section 2(d) above, all unvested Restricted Stock Units will be forfeited on the Participant’s Termination of Services.
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5. Dividend Equivalents. Cash dividends on Shares shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in Shares and will be held uninvested and without interest. The Participant’s right to receive any such cash dividends shall vest if and when the related Restricted Stock Unit vests, and such cash dividends shall be paid in cash to the Participant if and when the related Restricted Stock Unit is paid to the Participant. Stock dividends on Shares shall be credited to a dividend book entry account on behalf of the Participant with respect to each Restricted Stock Unit granted to the Participant. The Participant’s right to receive any such stock dividends shall vest if and when the related Restricted Stock Unit vests, and such stock dividends shall be paid in stock to the Participant if and when the related Restricted Stock Unit is paid to the Participant.
6. Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any shares covered by any Restricted Stock Unit unless and until the Participant has become the holder of record of the shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares, except as otherwise specifically provided for in this Agreement or the Plan.
7. Withholding.
To the extent applicable, the Participant shall pay, or make arrangements to pay, in a manner satisfactory to the Company, an amount equal to the amount of all applicable foreign, federal, state, provincial and local taxes that the Company is required to withhold at any time. In the absence of such arrangements, the Company or one of its Subsidiaries shall have the right to withhold such taxes from the Participant’s normal pay or other amounts payable to the Participant. In addition, any statutorily required withholding obligation may be satisfied, in whole or in part, at the Participant’s election, in the form and manner prescribed by the Committee, by delivery of shares of Common Stock (including shares issuable under this Agreement).
8. Provisions of Plan Control. This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time. The Plan is incorporated herein by reference. Capitalized terms in this Agreement that are not otherwise defined shall have the same meaning as set forth in the Plan. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any prior agreements between the Company and the Participant with respect to the subject matter hereof.
9. Amendment. To the extent applicable, the Board or the Committee may at any time and from time to time amend, in whole or in part, any or all of the provisions of this Agreement to comply with any applicable laws and stock exchange rules and regulations (including, without limitation, Section 409A of the Code and the regulations thereunder) and may also amend, suspend or terminate this Agreement subject to the terms of the Plan. Except as otherwise provided in the Plan, no modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced.
10. Notices. Any notice or communication given hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, or by regular United States mail, first class and prepaid, to the appropriate party at the address set forth below (or such other address as the party shall from time to time specify):
If to the Company, to:
Henry Schein, Inc.
135 Duryea Road
Melville, New York 11747
Attention: General Counsel
If to the Participant, to the address on file with the Company.
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11. No Obligation to Continue Directorship. This Agreement is not an agreement of directorship. This Agreement does not guarantee that the Company will retain, or continue to retain, the Participant during the entire, or any portion of the, term of this Agreement, including but not limited to any period during which any Restricted Stock Unit is outstanding, nor does it modify in any respect the Company’s right to terminate or modify the Participant’s services or compensation as a director.
12. Legend. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing Shares issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing Shares acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section.
13. Securities Representations. The grant of the Restricted Stock Units and issuance of Shares upon vesting of the Restricted Stock Units shall be subject to, and in compliance with, all applicable requirements of federal, state or foreign securities law. No Shares may be issued hereunder if the issuance of such Shares would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Shares may then be listed. As a condition to the settlement of the Restricted Stock Units, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation.
The Shares would be issued to the Participant and this Agreement is being made by the Company in reliance upon the following express representations and warranties of the Participant. The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Act”) and in this connection the Company is relying in part on his or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, the Shares must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such Shares and the Company is under no obligation to register the Shares (or to file a “re-offer prospectus”).
(c) If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, he or she understands that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock of the Company, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the Shares may be made only in limited amounts in accordance with such terms and conditions.
14. Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission and processing by the Company (or any subsidiary) of any personal data information related to the Restricted Stock Units awarded under this Agreement, for legitimate business purposes (including, without limitation, the administration of the Plan) out of the Participant’s home country and including to countries with less data protection laws than the data protection laws provided by the Participant’s home country. This authorization/consent is freely given by the Participant.
15. Section 409A. This Agreement is subject to Section 15(h) of the Plan, and any provisions in this Agreement providing for the payment of “nonqualified deferred compensation” (as defined in Section 409A of the Code and the Treasury regulations thereunder) to the Participant are intended to comply with the requirements of Section 409A of the Code, and this Agreement shall be interpreted in accordance therewith. Neither party individually or in combination may accelerate or defer the timing of the payment of any such nonqualified deferred compensation, except in compliance with Section 409A of the Code and this Agreement, and no amount shall be paid prior to the earliest date on which it is permitted to be paid under Section 409A of the Code and this Agreement. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Participant as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. Any amounts payable hereunder that satisfy the short-term deferral exception in
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Treas. Reg. §1.409A-1(b)(4) shall not be subject to Section 409A of the Code. Whenever a payment under this Agreement may be paid within a specified period, the actual date of payment within the specified period shall be within the Company’s sole discretion.
16. Miscellaneous. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns.
(a) This Agreement shall be governed and construed in accordance with the laws of New York (regardless of the law that might otherwise govern under applicable New York principles of conflict of laws).
(b) This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract.
(c) The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.
(d) This Agreement and the Plan do not create a joint venture or partnership between the Company and any Subsidiary.
17. NO Acquired Rights. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT: (A) THE COMPANY MAY TERMINATE OR AMEND THE PLAN AT ANY TIME; (B) THE AWARD OF RESTRICTED STOCK UNITS MADE UNDER THIS AGREEMENT IS COMPLETELY INDEPENDENT OF ANY OTHER AWARD OR GRANT AND IS MADE AT THE SOLE DISCRETION OF THE COMPANY; AND (C) NO PAST GRANTS OR AWARDS (INCLUDING, WITHOUT LIMITATION, THE RESTRICTED STOCK UNITS AWARDED HEREUNDER) GIVE THE PARTICIPANT ANY RIGHT TO ANY GRANTS OR AWARDS IN THE FUTURE WHATSOEVER.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above.
| HENRY SCHEIN, INC. |
|
|
| Michael S. Ettinger |
| Executive Vice President, Chief Operating Officer |
| PARTICIPANT |
| [Electronic Signature] |
| [Participant Name] |
[Acceptance Date]
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EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Stanley M. Bergman, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Henry Schein, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 7, 2024 | /s/ Stanley M. Bergman | |||
| Stanley M. Bergman | ||||
| Chairman and Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Ronald N. South, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Henry Schein, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 7, 2024 | /s/ Ronald N. South | |||
| Ronald N. South | ||||
| Senior Vice President and | ||||
| Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of Henry Schein, Inc. (the “Company”) for the period ending March 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stanley M. Bergman, the Chairman and Chief Executive Officer of the Company, and I, Ronald N. South, Senior Vice President and Chief Financial Officer of the Company, do hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Stanley M. Bergman | ||||
| Dated: May 7, 2024 |
Stanley M. Bergman Chairman and Chief Executive Officer | |||
| Dated: May 7, 2024 |
/s/ Ronald N. South | |||
| Ronald N. South Senior Vice President and Chief Financial Officer | ||||
This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
|---|---|---|
| Current assets: | ||
| Accounts receivable, allowances for credit losses (in dollars) | $ 84 | $ 83 |
| Inventory, reserves | $ 188 | $ 192 |
| Stockholders' equity: | ||
| Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
| Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
| Preferred stock, shares outstanding (in shares) | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
| Common stock, shares authorized (in shares) | 480,000,000 | 480,000,000 |
| Common stock, shares outstanding (in shares) | 128,480,909 | 129,247,765 |
| Variable Interest Entity, Primary Beneficiary [Member] | Recourse [Member] | ||
| Stockholders' equity: | ||
| Liabilities of VIE | $ 300 | $ 210 |
| Asset Pledged as Collateral [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||
| Stockholders' equity: | ||
| Pledged assets | $ 497 | $ 284 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME [Abstract] | ||
| Net sales | $ 3,172 | $ 3,060 |
| Cost of sales | 2,160 | 2,094 |
| Gross profit | 1,012 | 966 |
| Operating expenses: | ||
| Selling, general and administrative | 791 | 717 |
| Depreciation and amortization | 61 | 44 |
| Restructuring costs | 10 | 30 |
| Operating income | 150 | 175 |
| Other income (expense): | ||
| Interest income | 5 | 3 |
| Interest expense | (30) | (14) |
| Other, net | 2 | (1) |
| Income before taxes, equity in earnings of affiliates and noncontrolling interests | 127 | 163 |
| Income taxes | (32) | (39) |
| Equity in earnings of affiliates, net of tax | 3 | 4 |
| Net income | 98 | 128 |
| Less: Net income attributable to noncontrolling interests | (5) | (7) |
| Net income attributable to Henry Schein, Inc. | $ 93 | $ 121 |
| Earnings per share attributable to Henry Schein, Inc.: | ||
| Basic (in dollars per share) | $ 0.72 | $ 0.92 |
| Diluted (in dollars per share) | $ 0.72 | $ 0.91 |
| Weighted-average common shares outstanding: | ||
| Basic (in shares) | 128,720,661 | 131,365,789 |
| Diluted (in shares) | 129,769,580 | 133,039,886 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
| Net income | $ 98 | $ 128 |
| Other comprehensive income, net of tax: | ||
| Foreign currency translation gain (loss) | (54) | 25 |
| Unrealized gain (loss) from foreign currency hedging activities | 11 | (3) |
| Other comprehensive income (loss), net of tax | (43) | 22 |
| Comprehensive income | 55 | 150 |
| Comprehensive income attributable to noncontrolling interests: | ||
| Net income | (5) | (7) |
| Foreign currency translation loss (gain) | 10 | (2) |
| Comprehensive loss (income) attributable to noncontrolling interests | 5 | (9) |
| Comprehensive income attributable to Henry Schein, Inc. | $ 60 | $ 141 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Millions |
Total |
Common Stock $.01 Par Value [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Noncontrolling Interests [Member] |
|---|---|---|---|---|---|---|
| Beginning Balance at Dec. 31, 2022 | $ 4,095 | $ 1 | $ 0 | $ 3,678 | $ (233) | $ 649 |
| Beginning Balance, shares (in shares) at Dec. 31, 2022 | 131,792,817 | |||||
| Net income (excluding amounts attributable to redeemable noncontrolling interests) | 124 | 121 | 3 | |||
| Foreign currency translation loss (excluding loss amounts attributable to redeemable noncontrolling interests) | 23 | 23 | ||||
| Unrealized gain from foreign currency hedging activities, net of tax | (3) | (3) | ||||
| Change in fair value of redeemable securities | 3 | 3 | ||||
| Initial noncontrolling interests and adjustments related to business acquisitions | 3 | 3 | ||||
| Repurchases and retirement of common stock - Value | (100) | (13) | (87) | |||
| Repurchases and retirement of common stock - Shares | (1,223,919) | |||||
| Stock-based compensation expense - Value | 10 | 10 | ||||
| Stock-based compensation expense - Shares | 1,016,300 | |||||
| Stock issued upon exercise of stock options - Value | 1 | 1 | ||||
| Stock issued upon exercise of stock options - Shares | 10,779 | |||||
| Shares withheld for payroll taxes - Value | (29) | (29) | ||||
| Shares withheld for payroll taxes - Shares | (399,194) | |||||
| Transfer of charges in excess of capital | 0 | 28 | (28) | |||
| Ending Balance at Apr. 01, 2023 | 4,127 | $ 1 | 0 | 3,684 | (213) | 655 |
| Ending Balance, shares (in shares) at Apr. 01, 2023 | 131,196,783 | |||||
| Beginning Balance at Dec. 30, 2023 | $ 4,289 | $ 1 | 0 | 3,860 | (206) | 634 |
| Beginning Balance, shares (in shares) at Dec. 30, 2023 | 129,247,765 | 129,247,765 | ||||
| Net income (excluding amounts attributable to redeemable noncontrolling interests) | $ 96 | 93 | 3 | |||
| Foreign currency translation loss (excluding loss amounts attributable to redeemable noncontrolling interests) | (44) | (44) | ||||
| Unrealized gain from foreign currency hedging activities, net of tax | 11 | 11 | ||||
| Change in fair value of redeemable securities | (42) | (42) | ||||
| Initial noncontrolling interests and adjustments related to business acquisitions | 1 | 1 | ||||
| Repurchases and retirement of common stock - Value | (75) | (10) | (65) | |||
| Repurchases and retirement of common stock - Shares | (998,728) | |||||
| Stock-based compensation expense - Value | 8 | 8 | ||||
| Stock-based compensation expense - Shares | 314,759 | |||||
| Stock issued upon exercise of stock options - Value | $ 1 | 1 | ||||
| Stock issued upon exercise of stock options - Shares | 21,570 | 20,939 | ||||
| Shares withheld for payroll taxes - Value | $ (8) | (8) | ||||
| Shares withheld for payroll taxes - Shares | (103,865) | |||||
| Settlement of stock-based compensation awards - Value | 0 | 0 | ||||
| Settlement of stock-based compensation awards - Shares | 39 | |||||
| Transfer of charges in excess of capital | 0 | 50 | (50) | |||
| Ending Balance at Mar. 30, 2024 | $ 4,237 | $ 1 | $ 0 | $ 3,838 | $ (239) | $ 637 |
| Ending Balance, shares (in shares) at Mar. 30, 2024 | 128,480,909 | 128,480,909 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
Dec. 30, 2023 |
|
| Net income attributable to redeemable noncontrolling interests | $ 2 | $ 4 | $ 6 |
| Foreign currency translation gain (loss) attributable to redeemable noncontrolling interests | (10) | 2 | $ 5 |
| Unrealized gain (loss) from foreign currency hedging activities, tax (benefit) | $ 4 | $ (1) | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Cash flows from operating activities: | ||
| Net income | $ 98 | $ 128 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 73 | 52 |
| Non-cash restructuring charges | 1 | 7 |
| Stock-based compensation expense | 8 | 10 |
| Provision for losses on trade and other accounts receivable | 5 | 1 |
| Provision for deferred income taxes | 2 | 2 |
| Equity in earnings of affiliates | (3) | (4) |
| Distributions from equity affiliates | 2 | 2 |
| Changes in unrecognized tax benefits | 2 | 1 |
| Other | (6) | (1) |
| Changes in operating assets and liabilities, net of acquisitions: | ||
| Accounts receivable | 190 | (20) |
| Inventories | 74 | 63 |
| Other current assets | 41 | 29 |
| Accounts payable and accrued expenses | (290) | (243) |
| Net cash provided by operating activities | 197 | 27 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (41) | (31) |
| Payments related to equity investments and business acquisitions, net of cash acquired | (20) | (1) |
| Proceeds from loan to affiliate | 1 | 2 |
| Capitalized software costs | (9) | (9) |
| Other | (3) | 0 |
| Net cash used in investing activities | (72) | (39) |
| Cash flows from financing activities: | ||
| Net change in credit lines | 0 | 132 |
| Proceeds from issuance of long-term debt | 90 | 31 |
| Principal payments for long-term debt | (60) | (1) |
| Proceeds from issuance of stock upon exercise of stock options | 1 | 1 |
| Payments for repurchases and retirement of common stock | (75) | (100) |
| Payments for taxes related to shares withheld for employee taxes | (7) | (30) |
| Distributions to noncontrolling shareholders | (6) | (4) |
| Acquisitions of noncontrolling interests in subsidiaries | (94) | (8) |
| Net cash provided by (used in) financing activities | (151) | 21 |
| Effect of exchange rate changes on cash and cash equivalents | 14 | 0 |
| Net change in cash and cash equivalents | (12) | 9 |
| Cash and cash equivalents, beginning of period | 171 | 117 |
| Cash and cash equivalents, end of period | $ 159 | $ 126 |
Basis of Presentation |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Basis of Presentation [Abstract] | |
| Basis of Presentation | Note 1 – Basis of Presentation Our condensed consolidated financial statements include the accounts of Henry controlled subsidiaries (“we”, “us” and “our”). consolidation. financial decisions are accounted for under the equity method. Our accompanying unaudited condensed consolidated financial statements accounting principles generally accepted in the United States with the instructions to Form 10-Q and Article 10 of Regulation S-X. information and footnote disclosures required by U.S. GAAP for complete The unaudited interim condensed consolidated financial statements should be consolidated financial statements and notes to the consolidated financial on Form 10-K for the year ended December 30, 2023 and with the information available filings with the Securities and Exchange Commission. reflect all adjustments considered necessary for a fair presentation of financial position for the interim periods presented. The preparation of financial statements in conformity with accounting principles States requires us to make estimates and assumptions that affect the reported amounts of disclosure of contingent assets and liabilities at the date of the financial revenues and expenses during the reporting period. operations for the three months ended March 30, 2024 are not necessarily for any other interim period or for the year ending December 28, 2024. Our condensed consolidated financial statements reflect estimates and other things, our goodwill, long-lived asset and definite-lived intangible investment valuation; assessment of the annual effective tax rate; valuation of tax contingencies; the allowance for doubtful accounts; hedging activity; compensation cost for certain share-based performance awards and cash bonus assumptions. We consolidate the results of operations and financial position of a trade accounts receivable securitization which we consider a VIE because we are its primary beneficiary, as we have the power to direct activities that most significantly affect its economic performance and have the obligation to absorb the benefits. debt. December 30, 2023, certain trade accounts receivable that can only be used $ 497 284 were $ 300 210 |
Significant Accounting Policies and Recently Issued Accounting Standards |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Significant Accounting Policies and Recently Issued Accounting Standards [Abstract] | |
| Significant Accounting Policies and Recently Issued Accounting Standards | Note 2 – Significant Accounting Policies and Recently Issued Accounting Significant Accounting Policies There have been no material changes in our significant accounting policies during 30, 2024, as compared to the significant accounting policies described in Item K for the year ended December 30, 2023. Recently Issued Accounting Standards In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic ,” which requires public business entities to disclose additional information in specified categories with effective tax rate to the statutory rate for federal, state and foreign income taxes. about individual reconciling items in the rate reconciliation to the extent specified threshold. information pertaining to taxes paid (net of refunds received) to be and further disaggregated for specific jurisdictions to the extent the The ASU also describes items that need to be disaggregated based on to the item’s fundamental or essential characteristics, such as the transaction or event that triggered the establishment of the reconciling item and the activity with which the reconciling eliminates the historic requirement that entities disclose information concerning reasonable possibility of significantly increasing or decreasing in the 12 ASU is effective for annual periods beginning after December 15, 2024. financial statements that have not yet been issued or made available prospective basis; however, retrospective application is permitted. ASU 2023 – 09 will have on our consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segments ,” which aims to improve financial reporting by requiring disclosure on an annual and interim basis for all public entities to enable investors to analyses. segments. operating decision maker uses to assess segment performance and Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. remove those disclosure requirements and do not change how a public aggregates those operating segments or applies the quantitative thresholds This ASU is effective for fiscal years beginning after December 15, 2023, and interim beginning after December 15, 2024. 2023 – 07 will have a material impact on our consolidated financial In March 2024, the FASB issued ASU 2024-01, “ Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, ” which clarifies how to determine whether a profit interest and similar awards should be accounted for as a share-based payment arrangement of other guidance. of paragraph 718-10-15-3 of Topic 718 to improve its clarity and operability. applies to all entities that issue profits interest awards as compensation for goods or services. financial statements or prospectively to profits interest awards granted If prospective application is elected, an entity must disclose the nature principle that resulted from the adoption of the ASU. December 15, 2024, including interim periods within those fiscal years. ASU 2024 – 01 will have a material impact on our consolidated financial |
Cyber Incident |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Cyber Incident [Abstract] | |
| Cyber Incident | Note 3 – Cyber Incident In October 2023 Henry Schein experienced a cyber incident that primarily American and European dental and medical distribution businesses. software, revenue cycle management and patient relationship management our manufacturing businesses were mostly unaffected. ecommerce platform and related applications, which has since been During the three months ended March 30, 2024, we continued noted above relating primarily to decreased sales to episodic customers (customers less continuous level of demand pre-incident). During the three months ended March 30, 2024, we incurred $ 5 incident, mostly consisting of professional fees. policy limitations. 60 following a $ 5 |
Net Sales from Contracts with Customers |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Net Sales from Contracts with Customers [Abstract] | |
| Net sales from Contracts with Customers | Note 4 – Net Sales from Contracts with Customers Net sales are recognized in accordance with policies disclosed in Item the year ended December 30, 2023. Disaggregation of Net Sales The following table disaggregates our net sales by reportable and operating segment Three Months Ended March 30, 2024 North America International Global Net sales: Health care distribution Dental $ 1,103 $ 811 $ 1,914 Medical 1,014 27 1,041 Total health care distribution 2,117 838 2,955 Technology 189 28 217 Total net sales $ 2,306 $ 866 $ 3,172 Three Months Ended April 1, 2023 North America International Global Net sales: Health care distribution Dental $ 1,144 $ 754 $ 1,898 Medical 951 20 971 Total health care distribution 2,095 774 2,869 Technology 166 25 191 Total net sales $ 2,261 $ 799 $ 3,060 Contract Liabilities At March 30, 2024, December 30, 2023, and December 31, 2022, the current were $ 84 8 89 9 86 8 the three months ended March 30, 2024, we recognized, in net sales, $ 36 deferred at December 30, 2023. 35 million of the amounts that were previously deferred at December 31, 2022. included in accrued expenses: other and the non-current contract liabilities our consolidated balance sheets. |
Segment Data |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Segment Data [Abstract] | |
| Segment Data | Note 5 Segment Data We conduct our business through two value-added services. dental businesses serve office-based dental practitioners, dental laboratories, schools, government institutions. medical technicians, dialysis centers, home health, federal and state governments group practices, and integrated delivery networks, among other providers dental and medical groups serve practitioners in 33 The health care distribution reportable segment aggregates our global dental segment distributes consumable products, dental specialty products (including products), pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, personal equipment (“PPE”) products, vitamins, and orthopedic implants. Our global technology and value-added services reportable segment provides added services to health care practitioners. systems for dental and medical practitioners. education, revenue cycle management and financial services on a non-recourse education services for practitioners, The following tables present information about our reportable and operating Three Months Ended March 30, April 1, 2024 2023 Net sales: Health care distribution (1) Dental $ 1,914 $ 1,898 Medical 1,041 971 Total health care distribution 2,955 2,869 Technology (2) 217 191 Total $ 3,172 $ 3,060 Consists of consumable products, dental specialty products (including implant, orthodontic and endodontic products), small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, PPE products, vitamins, and orthopedic implants. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, practice consultancy, education, revenue cycle management and financial services on a non-recourse basis, e-services, continuing education services for practitioners, practice technology, network and hardware services, and other services. Three Months Ended March 30, April 1, 2024 2023 Operating Income: Health care distribution $ 126 $ 145 Technology 24 30 Total $ 150 $ 175 |
Business Acquisitions |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Business Acquisitions [Abstract] | |
| Business Acquisitions | Note 6 Business Acquisitions Our acquisition strategy is focused on investments in companies that our geographic footprint (whether entering a new country, such as emerging markets, or building scale where we have already invested in businesses), and finally, those that enable us to access new products and technologies. 2024 Acquisitions During the quarter ended March 30, 2024, we made acquisitions within segment. 100 %. was $ 19 8 12 assets. 6 development of $ 4 1 1 Weighted average useful lives for these acquired intangible assets were 10 10 5 5 respectively. Goodwill is a result of the expected synergies and cross-selling opportunities that provide for us, as well as the expected growth potential. purposes. The impact of these acquisitions, individually and in the aggregate, was consolidated financial statements. 2023 Acquisitions Acquisition of Shield Healthcare On October 2, 2023 we acquired a 90 % voting equity interest in Shield Healthcare, Inc. (“Shield”), a supplier homecare medical products delivered directly to patients in their homes, for 366 million (including cash paid of $ 307 22 interests of $ 37 range of products, including items such as incontinence, urology, ostomy, enteral nutrition, advanced wound care and diabetes supplies. their homes. The accounting for the acquisition of Shield has not been completed finalizing valuation assessments of accounts receivable, inventory, accrued liabilities and income and non-income based taxes. value of intangible and tangible assets acquired and liabilities assumed. the information necessary to complete the analysis is obtained. recorded immaterial measurement period adjustments, related primarily The pro forma financial information has not been presented because the immaterial to our consolidated financial statements. Acquisition of S.I.N. Implant System On July 5, 2023, we acquired a 100 % voting equity interest in S.I.N. Implant System (“S.I.N.”) for consideration $ 329 procedures and is focused on advancing the development of value-priced dental the distribution of its products into the United States and other international The accounting for the acquisition of S.I.N. has not been completed finalizing valuation assessments of accounts receivable, inventory, accrued liabilities and income and non-income based taxes. value of intangible and tangible assets acquired and liabilities assumed. the information necessary to complete the analysis is obtained. possible but no later than one year from the acquisition date. recorded insignificant measurement period adjustments, related primarily The pro forma financial information has not been presented because the immaterial to our consolidated financial statements. Acquisition of Biotech Dental On April 5, 2023, we acquired a 57 % voting equity interest in Biotech Dental (“Biotech Dental”), which provider of dental implants, clear aligners, individualized prosthetics France. comprehensive, integrated suite of planning and diagnostic software medical devices to create a digital view of the patient, offering greater diagnostic experience. management software solutions will help customers streamline their the ultimate benefit of patients. The following table aggregates the final fair value, as of the date of acquisition, acquired in the Biotech Dental acquisition, including measurement period 2024: Preliminary Allocation as of July 1, 2023 Measurement Period Adjustments Allocation as of March 30, 2024 Acquisition consideration: Cash $ 216 $ - $ 216 Fair value of contributed equity share in a controlled subsidiary 25 - 25 Redeemable noncontrolling interests 182 - 182 Total consideration $ 423 $ - $ 423 Identifiable assets acquired and liabilities assumed: Current assets $ 78 $ (4) $ 74 Intangible assets 119 70 189 Other noncurrent assets 76 (7) 69 Current liabilities (50) (10) (60) Long-term debt (90) 17 (73) Deferred income taxes (38) (15) (53) Other noncurrent liabilities (16) (4) (20) Total identifiable 79 47 126 Goodwill 344 (47) 297 Total net assets acquired $ 423 $ - $ 423 Goodwill is a result of expected synergies that are expected to originate from the growth potential of Biotech Dental. ended March 30, 2024 we finalized our accounting for the acquisition adjustments related primarily to the completion of the intangibles valuation, deferred tax and certain other assets and liabilities. The following table summarizes the identifiable intangible assets acquired Dental: 2023 Weighted Average Lives (in years) Customer relationships and lists $ 47 9 Trademarks / Tradenames 18 7 Product development 124 10 Total $ 189 The pro forma financial information has not been presented because the was immaterial to our condensed consolidated financial statements. Other 2023 Acquisitions During the year ended December 30, 2023, in addition to those noted above, health care distribution and technology and value-added services segments. between 51 % to 100 %. 15 within the selling, general and administrative line in our condensed consolidated a change in the fair value of contingent consideration related to a 2023 During the three months ended March 30, 2024 we completed accounting the year ended December 30, 2023. condensed consolidated financial statements relating to changes in estimated assumed and contingent consideration assets and liabilities. The pro forma financial information for our 2023 acquisitions has not been acquisitions was immaterial to our condensed consolidated Acquisition Costs During the three months ended March 30, 2024 and April 1, 2023 we 2 7 acquisition costs, which are included in “selling, general and administrative” statements of income. |
Fair Value Measurements |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Fair Value Measurements [Abstract] | |
| Fair Value Measurements | Note 7 – Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or transaction between market participants at the measurement date. (1) market participant assumptions developed based on market data obtained inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the in active markets for identical assets or liabilities (Level 1) and the lowest priority The three levels of the fair value hierarchy are described as follows: • measurement date. • either directly or indirectly. quoted prices for identical or similar assets or liabilities in markets prices that are observable for the asset or liability; and inputs that are observable market data by correlation or other means. • The following section describes the fair values of our financial instruments measure their fair values. Investments and notes receivable There are no quoted market prices available for investments in unconsolidated Certain of our notes receivable contain variable interest rates. estimate of fair value based on the interest rates in the applicable fair value is based on Level 3 inputs within the fair value hierarchy. Debt The fair value of our debt (including bank credit lines, current maturities based on Level 3 inputs within the fair value hierarchy, and as of March 30, 2024 and December 30, 2023 was estimated at $ 2,377 2,351 value of our debt include market conditions, such as interest rates and credit Derivative contracts Derivative contracts are valued using quoted market prices and instruments primarily include foreign currency forward agreements, forecasted foreign currency forward contracts, interest rate swaps and total return swaps. The fair values for the majority of our foreign currency derivative contracts rate to a published forward price of the underlying market rates, which transactions that are classified within Level 2 of the fair value hierarchy. The fair value of the interest rate swap, which is classified within Level 2 by comparing our contract rate to a forward market rate as of the The fair value of total return swaps is determined by valuing the underlying using market-on-close pricing by industry providers as of the valuation fair value hierarchy. Redeemable noncontrolling interests The values for redeemable noncontrolling interests are based on recent earnings that are classified within Level 3 of the fair value hierarchy. Assets measured on a non-recurring basis at fair value include intangibles. classified as Level 3 within the fair value hierarchy. The following table presents our assets and liabilities that are measured and basis classified under the appropriate level of the fair value hierarchy as of 2023: March 30, 2024 Level 1 Level 2 Level 3 Total Assets: Derivative contracts designated as hedges $ - $ 1 $ - $ 1 Derivative contracts undesignated - 2 - 2 Total return - 1 - 1 Total assets $ - $ 4 $ - $ 4 Liabilities: Derivative contracts designated as hedges $ - $ 1 $ - $ 1 Derivative contracts undesignated - 1 - 1 Total liabilities $ - $ 2 $ - $ 2 Redeemable noncontrolling interests $ - $ - $ 798 $ 798 December 30, 2023 Level 1 Level 2 Level 3 Total Assets: Derivative contracts designated as hedges $ - $ 1 $ - $ 1 Derivative contracts undesignated - 1 - 1 Total return - 4 - 4 Total assets $ - $ 6 $ - $ 6 Liabilities: Derivative contracts designated as hedges $ - $ 18 $ - $ 18 Derivative contracts undesignated - 2 - 2 Total liabilities $ - $ 20 $ - $ 20 Redeemable noncontrolling interests $ - $ - $ 864 $ 864 |
Debt |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Debt [Abstract] | |
| Debt | Note 8 – Debt Bank Credit Lines Bank credit lines consisted of the following: March 30, December 30, 2024 2023 Revolving credit agreement $ 50 $ 200 Other short-term bank credit lines 214 64 Total $ 264 $ 264 Revolving Credit Agreement On August 20, 2021 , we entered a $ 1.0 which was subsequently amended and restated on July 11, 2023 July 11, 2028 update the interest rate provisions to reflect the current market approach rate on this revolving credit facility is based on Term Secured Overnight Financing Rate (“Term SOFR”) plus a spread based on our leverage ratio at the end of each financial reporting rate on this revolving credit agreement was 5.32 % plus 1.10 % for a combined rate of 6.42 %. Agreement requires, among other things, that we maintain certain maximum Revolving Credit Agreement contains customary representations, warranties customary negative covenants, subject to negotiated exceptions, on changes (including mergers), dispositions and certain restrictive agreements. 30, 2023, we had $ 50 200 During the three months ended March 30, 2024, the average outstanding balance Agreement was approximately $ 100 10 million and $ 10 Agreement. Other Short-Term Bank Credit As of March 30, 2024 and December 30, 2023, we had various other short-term various currencies, with a maximum borrowing capacity of $ 383 368 March 30, 2024 and December 30, 2023, $ 214 64 three months ended March 30, 2024, the average outstanding balances under credit lines was approximately $ 96 short-term bank credit lines had weighted average interest rates of 6.08 % and 6.02 %, respectively. Long-term debt Long-term debt consisted of the following: March 30, December 30, 2024 2023 Private placement facilities $ 1,024 $ 1,074 Term loan 736 741 U.S. trade accounts receivable securitization 300 210 Various in varying installments through 2030 at interest rates from 0.00 % to 9.42 % at March 30, 2024 and from 0.00 % to 9.42 % at December 30, 2023 46 54 Finance lease obligations 7 8 Total 2,113 2,087 Less current maturities (103) (150) Total long-term debt $ 2,010 $ 1,937 Private Placement Facilities Our private placement facilities include four 1.5 are available on an uncommitted basis at fixed rate economic time to time through October 20, 2026 . fixed rate based on an agreed upon spread over applicable treasury notes possible issuance will be selected by us and can range from five 15 years 12 years ). working capital and capital expenditures, to refinance existing indebtedness, The agreements provide, among other things, that we maintain restrictions relating to subsidiary indebtedness, liens, affiliate transactions, disposal ownership. applicable due dates. The components of our private placement facility borrowings, which 3.66 %, as of March 30, 2024 are presented in the following table: Amount of Date of Borrowing Borrowing Borrowing Outstanding Rate Due Date December 24, 2012 $ 50 3.00 % December 24, 2024 June 16, 2017 100 3.42 June 16, 2027 September 15, 2017 100 3.52 September 15, 2029 January 2, 2018 100 3.32 January 2, 2028 September 2, 2020 100 2.35 September 2, 2030 June 2, 2021 100 2.48 June 2, 2031 June 2, 2021 100 2.58 June 2, 2033 May 4, 2023 75 4.79 May 4, 2028 May 4, 2023 75 4.84 May 4, 2030 May 4, 2023 75 4.96 May 4, 2033 May 4, 2023 150 4.94 May 4, 2033 Less: Deferred debt issuance costs (1) Total $ 1,024 Term Loan On July 11, 2023, we entered into a three-year 750 Agreement”). ratio at the end of each financial reporting quarter. We are required to make quarterly payments of $ 5 payments of $ 9 of March 30, 2024, the borrowings outstanding under this term loan were 736 interest rate under the Term Credit Agreement was 5.32 % plus 1.47 % for a combined rate of 6.79 %. December 30, 2023, the borrowings outstanding under this term loan were 741 the interest rate under the Term Credit Agreement was 5.36 % plus 1.35 % for a combined rate of 6.71 %. we have a hedge in place that ultimately creates an effective fixed rate of 5.91 % and 5.79 % at March 30, 2024 and December 30, 2023, respectively. certain maximum leverage ratios. warranties and affirmative covenants as well as customary negative covenants, subject liens, indebtedness, significant corporate changes (including mergers), dispositions agreements. U.S. Trade Accounts Receivable Securitization We have a facility agreement based on our U.S. trade accounts receivable that is structured as an asset-backed securitization program with pricing committed for up to three years . $ 450 two December 15, 2025 . As of March 30, 2024 and December 30, 2023, the borrowings outstanding $ 300 210 was based on the asset-backed commercial paper rate of 5.47 % plus 0.75 %, for a combined rate of 6.22 %. December 30, 2023, the interest rate on borrowings under this facility was paper rate of 5.67 % plus 0.75 %, for a combined rate of 6.42 %. If our accounts receivable collection pattern changes due to customers our ability to borrow under this facility may be reduced. We are required to pay a commitment fee of 30 35 |
Income Taxes |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Income Taxes [Abstract] | |
| Income Taxes | Note 9 – Income Taxes For the three months ended March 30, 2024 our effective tax rate was 25.6 %, compared to 23.8 % for the prior year period. foreign income taxes and interest expense. The Organization of Economic Co-Operation and Development (OECD) issued guidance on Pillar Two Model Rules in December 2021, which provides for a global minimum tax rate on the earnings of large multinational businesses on a country-by-country basis. global tax rate is 15% for various jurisdictions pursuant to the Pillar Two framework. from these developments may result in changes to long-standing tax principles, effective tax rate going forward or result in higher cash tax liabilities. Pillar Two Rules to our financial statements was immaterial. Pillar Two, The total amount of unrecognized tax benefits, which are included in consolidated balance sheets, as of March 30, 2024 and December 30, 2023, was 113 115 respectively, of which $ 106 107 It is possible that the amount of unrecognized tax benefits will material impact on our condensed consolidated statements of income. All tax returns audited by the IRS are officially closed through 2019. IRS include years 2020 and forward. examination. The amount of tax interest expense included as a component of the provision 1 1 million for the three months ended March 30, 2024 and April 1, 2023, interest is included in “other liabilities,” and was $ 17 16 30, 2023. consolidated financial statements. |
Plan of Restructuring |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Plan of Restructuring [Abstract] | |
| Plan of Restructuring | Note 10 – Plan of Restructuring On August 1, 2022, we committed to a restructuring plan focused on plan, streamlining operations and other initiatives to increase efficiency. completion and we have extended this initiative through the end of 2024. make a determination of an estimate of the amount or range of amounts these activities, both with respect to each major type of cost associated estimate of the amount or range of amounts that will result in future During the three months ended March 30, 2024 and April 1, 2023, we 10 and $ 30 employee-related costs, accelerated amortization of right-of-use costs. Restructuring costs recorded for the three months ended March 30, 2024 following: Three Months Ended March 30, 2024 Health Care Distribution Technology Value-Added Services Total Severance and employee-related costs $ 6 $ 1 $ 7 Accelerated depreciation and amortization 1 - 1 Exit and other related costs 2 - 2 Total restructuring $ 9 $ 1 $ 10 Three Months Ended April 1, 2023 Health Care Distribution Technology Value-Added Services Total Severance and employee-related costs $ 17 $ 3 $ 20 Accelerated depreciation and amortization 7 - 7 Exit and other related costs 1 1 2 Loss on disposal of a business 1 - 1 Total restructuring $ 26 $ 4 $ 30 The following table summarizes, restructuring initiatives restructuring costs as of March 30, 2024, which primarily relates included in accrued expenses: other within our condensed consolidated leased facilities are recorded within our current and non-current operating consolidated balance sheets. Technology Health Care Value-Added Distribution Services Total Balance, December 30, 2023 $ 22 $ 1 $ 23 Restructuring costs 9 1 10 Non-cash accelerated depreciation and amortization (1) - (1) Cash payments and other adjustments (11) (1) (12) Balance, March 30, 2024 $ 19 $ 1 $ 20 |
Legal Proceedings |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Legal Proceedings [Abstract] | |
| Legal Proceedings | Note 11 – Legal Proceedings Henry Schein, Inc. has been named as a defendant in multiple opioid hundred and seventy-five ( 175 ); one or more of Henry Schein, Inc.’s subsidiaries is also named as a defendant in a number of those cases). in a false advertising campaign to expand the market for such drugs and in the supply chain (including Henry Schein, Inc. and its subsidiaries) reaped otherwise failing to monitor appropriately and restrict the improper distribution consist of some that have been consolidated within the MultiDistrict Litigation Prescription Opiate Litigation (MDL No. 2804; Case No. 17-md-2804) remain pending in state courts and are proceeding independently and outside following cases are set for trial: the action filed by DCH Health Care Authority, et al. in Alabama state court, which is currently set for a jury trial on July 8, 2024; the action filed by Mobile state court, which has been set for a jury trial on August 12, 2024; Center, Inc. (and 25 other hospitals located throughout the State of Florida) in Florida state court, scheduled for a jury trial in September 2025. 12.3 sales of opioids represented less than four-tenths of 1 percent. business. In August 2022, Henry Schein received a Grand Jury Subpoena from the United Western District of Virginia, Federal Food, Drug & Cosmetic Act by Butler Animal Health Supply, LLC (“Butler”), a former subsidiary of Henry Schein. October 2022, Henry Schein received a second Grand Jury Subpoena the Western District of Virginia. received from Butler or Covetrus, Inc. (“Covetrus”). subsidiary of Covetrus in 2019 and is no longer owned by Henry Schein. investigation. On January 18, 2024, a putative class action was filed against the Company Eastern District of New York (“EDNY”), Case No. 24-cv-387 (the “Cruz-Bermudez Action”), based on the October 2023 cyber incident described in On January 26, 2024, a second putative class action was filed against the Company based on the cyber incident, also “Depperschmidt Action”). prejudice. plaintiffs’ counsel from the Depperschmidt Action and an additional new plaintiff. Plaintiffs in the Cruz-Bermudez Action seek to represent a class of all individuals information and personal health information was compromised by been harmed by alleged actions and/or omissions by the Company Company made deceptive public statements regarding privacy and data protection. claims seeking monetary damages, injunctive relief, costs and attorneys’ 22, 2024, plaintiffs voluntarily withdrew two of their five causes of action. Company’s motion to dismiss the remaining claims. vigorously against this action. Henry Schein, Inc. and its affiliate, North American Rescue, LLC (“NAR”), have qui tam lawsuit brought under the federal False Claims Act (“FCA”), in Russ and Murphy ex rel. United States v. North American Rescue, LLC et al. ; Case No. 21-cv-04238, filed in the United States District for the Eastern District of Pennsylvania. Chris Murphy) who worked for one of NAR’s competitors. as a defendant. “CAT”). amended complaint in November 2023. R, Relators requested and obtained leave to file their Second Amended FCA claims are based on allegations that NAR and Henry Schein made false connection with, and sold and submitted false claims for payment to the federal products that Relators contend violated certain “Buy American” Agreements Act of 1979) and/or were not properly sterilized as noted misbranded. blankets, eye, ear, nose and throat kits, and trauma dressing. supervised NAR’s alleged misconduct for a period of time. proved at trial, statutory civil penalties, reasonable expenses, attorneys’ interest. From time to time, we may become a party to other legal proceedings, liability claims, employment matters, commercial disputes, governmental in some cases involve our entering into settlement arrangements or consent of the ordinary course of our business. in our opinion none of these other pending matters are currently consolidated financial position, liquidity or results of operations. As of March 30, 2024, we had accrued our best estimate of potential losses result in liability and for which we were able to reasonably estimate a expenses, was not material to our financial position, results of operations determining estimated losses considers currently available factors, including probable recoveries from third parties. |
Stock-Based Compensation |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Stock-Based Compensation [Abstract] | |
| Stock-Based Compensation | Note 12 – Stock-Based Compensation Stock-based awards are provided to certain employees under our 2020 Stock Incentive directors under our 2023 Non-Employee Director Stock Incentive Plan Employee Director Stock Incentive Plan) (together, the “Plans”). Committee of the Board of Directors (the “Compensation Committee”). employees have been granted solely in the form of time-based and performance-based (“RSUs”) with the exception of our 2021 plan year in which non-qualified performance-based RSUs and in 2022, when we granted time-based and qualified stock options. in the form of time-based and performance-based RSUs. solely in the form of time-based RSUs. RSUs are stock-based awards granted to recipients with specified vesting provisions. stock is delivered on or following satisfaction of vesting conditions. 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. 12 -month cliff vesting. For these RSUs, we recognize the cost as compensation expense on a straight-line For all RSUs, we estimate the fair value based on our closing stock performance-based RSUs, the number of shares that ultimately vest and our performance as measured against specified targets over a specified period, as Committee. performance-based RSUs based on our closing stock price at time of grant. Each of the Plans provide for certain adjustments to the performance the Plans. performance measurement adjustments relate to significant events, including, divestitures, new business ventures, certain capital transactions (including share budgeted average outstanding shares (other than those resulting from capital 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), 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 in projected earnings generated by COVID-19 test kits (solely with respect the 2022 and 2023 plan years) and impairment charges (solely with respect to performance-based the 2023 and 2024 plan years), and unforeseen events or circumstances Over the performance period, the number of RSUs that will ultimately vest compensation expense is adjusted upward or downward based upon our targets. expense is based on our actual performance metrics as defined under Stock options are awards that allow the recipient to purchase shares of our price set at the time of grant. date of grant. service, subject to the terms and conditions of the 2020 Stock Incentive Plan, three years grant date and have a contractual term of ten years term acceleration upon certain events. vesting method. During the three months ended March 30, 2024, we did no t grant any stock options. Our condensed consolidated statements of income reflect pre-tax share-based compensation 8 and $ 10 Total unrecognized compensation cost related to unvested awards as of March 30, 2024 was $ 120 expected to be recognized over a weighted-average period of approximately 2.7 Our condensed consolidated statements of cash flows present our reconciling adjustment between net income and net cash provided by operating There were no cash benefits associated with tax deductions in excess of months ended March 30, 2024 and April 1, 2023. We have not declared cash dividends on our stock in the past and we do not anticipate declaring cash dividends in the foreseeable future. our stock, historical volatility of our stock and other factors. Treasury yield curve in effect at the time of grant that most closely aligns to the expected life of options. six - year expected life of the options was determined using the simplified permitted under Staff Accounting Bulletin Topic 14. The following table summarizes the stock option activity for the three Stock Options Weighted Average Weighted Average Aggregate Exercise Remaining Contractual Shares Price Life (in years) Outstanding at beginning of period 1,078,459 $ 71.46 Granted - Exercised (21,570) 62.71 Forfeited (897) 82.62 Outstanding at end of period 1,055,992 $ 71.63 7.3 $ 8 Options exercisable at end of period 908,836 $ 69.49 Weighted Average Weighted Average Aggregate Number of Exercise Remaining Contractual Intrinsic Options Price Life (in years) Value Expected to vest 147,110 $ 84.84 8.0 $ - The following tables summarize the activity of our unvested RSUs for Time-Based Restricted Stock Units Performance-Based Restricted Stock Units Weighted Weighted Average Intrinsic Average Intrinsic Grant Date Fair Value Grant Date Fair Value Shares/Units Value Per Share Per Share Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,655,393 $ 70.34 208,742 $ 78.02 Granted 432,350 76.56 450,333 76.81 Vested (307,839) 62.51 (6,432) 63.01 Forfeited (6,021) 81.48 (6,431) 83.07 Outstanding at end of period 1,773,883 $ 73.19 $ 75.52 646,212 $ 75.68 $ 75.52 |
Redeemable Noncontrolling Interests |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Redeemable Noncontrolling Interests [Abstract] | |
| Redeemable Noncontrolling Interests | Note 13 – Redeemable Noncontrolling Interests Some minority stockholders in certain of our subsidiaries have the right, their ownership interest in those entities at fair value. applicable for noncontrolling interests where we are or may be required outstanding interest in a consolidated subsidiary from the noncontrolling option contained in contractual agreements. interests for the three months ended March 30, 2024 and the year ended December following table: March 30, December 30, 2024 2023 Balance, beginning of period $ 864 $ 576 Decrease in redeemable noncontrolling interests due to acquisitions of noncontrolling interests in subsidiaries (94) (19) Increase in redeemable noncontrolling interests due to business acquisitions - 326 Net income attributable to redeemable noncontrolling interests 2 6 Distributions declared, net of capital contributions (6) (19) Effect of foreign currency translation gain (loss) attributable to redeemable noncontrolling interests (10) 5 Change in fair value of redeemable securities 42 (11) Balance, end of period $ 798 $ 864 |
Comprehensive Income |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Comprehensive Income [Abstract] | |
| Comprehensive Income | Note 14 – Comprehensive Income Comprehensive income includes certain gains and losses that, under U.S. are recorded directly to stockholders’ equity. The following table summarizes our Accumulated other comprehensive loss, net of March 30, December 30, 2024 2023 Attributable to redeemable noncontrolling interests: Foreign currency translation adjustment $ (42) $ (32) Attributable to noncontrolling interests: Foreign currency translation adjustment $ (1) $ (1) Attributable to Henry Schein, Inc.: Foreign currency translation adjustment $ (232) $ (188) Unrealized loss from hedging activities (2) (13) Pension adjustment loss (5) (5) Accumulated other comprehensive loss $ (239) $ (206) Total Accumulated $ (282) $ (239) The following table summarizes the components of comprehensive income, net Three Months Ended March 30, April 1, 2024 2023 Net income $ 98 $ 128 Foreign currency translation gain (loss) (54) 25 Tax effect - - Foreign currency translation gain (loss) (54) 25 Unrealized gain (loss) from hedging activities 15 (4) Tax effect (4) 1 Unrealized gain (loss) from hedging activities 11 (3) Comprehensive income $ 55 $ 150 Our financial statements are denominated in U.S. Dollars. compared to the U.S. Dollar may have a significant impact on our translation gain (loss) during the three months ended March 30, 2024 primarily due to changes in foreign currency exchange rates of the Euro, Dollar, Swiss Franc and Canadian Dollar. The hedging gain (loss) during the three months ended March 30, 2024, and investment hedge. The following table summarizes our total comprehensive income, net of Three Months Ended March 30, April 1, 2024 2023 Comprehensive income attributable to Henry Schein, Inc. $ 60 $ 141 Comprehensive income attributable to noncontrolling interests 3 3 Comprehensive income (loss) attributable to Redeemable noncontrolling interests (8) 6 Comprehensive income $ 55 $ 150 |
Earnings Per Share |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Earnings Per Share [Abstract] | |
| Earnings Per Share | Note 15 Earnings Per Share Basic earnings per share is computed by dividing net income attributable average number of common shares outstanding for the period. to basic earnings per share, except that it reflects the effect of common shares issuable exercise of stock options using the treasury stock method in periods A reconciliation of shares used in calculating earnings per basic and diluted Three Months Ended March 30, April 1, 2024 2023 Basic 128,720,661 131,365,789 Effect of dilutive securities: Stock options and restricted stock units 1,048,919 1,674,097 Diluted 129,769,580 133,039,886 The number of antidilutive securities that were excluded from the calculation shares outstanding are as follows: Three Months Ended March 30, April 1, 2024 2023 Stock options 419,139 422,190 Restricted stock units 245,667 18,305 Total anti-dilutive 664,806 440,495 |
Supplemental Cash Flow Information |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Supplemental Cash Flow information [Abstract] | |
| Supplemental Cash Flow Information | Note 16 – Supplemental Cash Flow Information Cash paid for interest and income taxes was: Three Months Ended March 30, April 1, 2024 2023 Interest $ 26 $ 13 Income taxes 21 21 For the three months ended March 30, 2024 and April 1, 2023, we had $ 15 (4) unrealized gains (losses) related to hedging activities, respectively. |
Related Party Transactions |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 17 – Related Party Transactions In connection with the formation of Henry Schein One, LLC, our joint venture formed on July 1, 2018, we entered into a ten-year Internet Brands approximately $ 31 months ended March 30, 2024 and April 1, 2023, we recorded $ 8 8 connection with costs related to this royalty agreement. Schein One, LLC had a net payable balance to Internet Brands of $ 3 1 comprised of amounts related to results of operations and the royalty agreement. are recorded within accrued expenses: other within our condensed consolidated We have interests in entities that we account for under the equity accounting method. business, during the three months ended March 30, 2024 and April 1, 2023, 12 and $ 8 purchased $ 3 2 we had an aggregate $ 31 32 6 $ 5 Certain of our facilities related to our acquisitions are leased from employees leases are classified as operating leases and have a remaining lease term one month 17 years. $ 5 22 6.7 % and 8.2 % of the total current and non-current operating lease liabilities, respectively. represented 6.3 % and 7.4 % of the total current and non-current operating lease liabilities, respectively. |
Basis of Presentation (Policy) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Basis of Presentation [Abstract] | |
| Principles of Consolidation | Our condensed consolidated financial statements include the accounts of Henry controlled subsidiaries (“we”, “us” and “our”). consolidation. financial decisions are accounted for under the equity method. |
| Use of Estimates | The preparation of financial statements in conformity with accounting principles States requires us to make estimates and assumptions that affect the reported amounts of disclosure of contingent assets and liabilities at the date of the financial revenues and expenses during the reporting period. operations for the three months ended March 30, 2024 are not necessarily for any other interim period or for the year ending December 28, 2024. |
| Consolidated Variable Interest Entity | We consolidate the results of operations and financial position of a trade accounts receivable securitization which we consider a VIE because we are its primary beneficiary, as we have the power to direct activities that most significantly affect its economic performance and have the obligation to absorb the benefits. debt. December 30, 2023, certain trade accounts receivable that can only be used $ 497 284 were $ 300 210 |
Significant Accounting Policies and Recently Issued Accounting Standards (Policy) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Significant Accounting Policies and Recently Issued Accounting Standards [Abstract] | |
| Accounting Standard Adopted and Recently Issued Accounting Standards | Recently Issued Accounting Standards In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic ,” which requires public business entities to disclose additional information in specified categories with effective tax rate to the statutory rate for federal, state and foreign income taxes. about individual reconciling items in the rate reconciliation to the extent specified threshold. information pertaining to taxes paid (net of refunds received) to be and further disaggregated for specific jurisdictions to the extent the The ASU also describes items that need to be disaggregated based on to the item’s fundamental or essential characteristics, such as the transaction or event that triggered the establishment of the reconciling item and the activity with which the reconciling eliminates the historic requirement that entities disclose information concerning reasonable possibility of significantly increasing or decreasing in the 12 ASU is effective for annual periods beginning after December 15, 2024. financial statements that have not yet been issued or made available prospective basis; however, retrospective application is permitted. ASU 2023 – 09 will have on our consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segments ,” which aims to improve financial reporting by requiring disclosure on an annual and interim basis for all public entities to enable investors to analyses. segments. operating decision maker uses to assess segment performance and Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. remove those disclosure requirements and do not change how a public aggregates those operating segments or applies the quantitative thresholds This ASU is effective for fiscal years beginning after December 15, 2023, and interim beginning after December 15, 2024. 2023 – 07 will have a material impact on our consolidated financial In March 2024, the FASB issued ASU 2024-01, “ Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, ” which clarifies how to determine whether a profit interest and similar awards should be accounted for as a share-based payment arrangement of other guidance. of paragraph 718-10-15-3 of Topic 718 to improve its clarity and operability. applies to all entities that issue profits interest awards as compensation for goods or services. financial statements or prospectively to profits interest awards granted If prospective application is elected, an entity must disclose the nature principle that resulted from the adoption of the ASU. December 15, 2024, including interim periods within those fiscal years. ASU 2024 – 01 will have a material impact on our consolidated financial |
Net Sales from Contracts with Customers (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Net Sales from Contracts with Customers [Abstract] | |
| Disaggregation of Revenue | Three Months Ended March 30, 2024 North America International Global Net sales: Health care distribution Dental $ 1,103 $ 811 $ 1,914 Medical 1,014 27 1,041 Total health care distribution 2,117 838 2,955 Technology 189 28 217 Total net sales $ 2,306 $ 866 $ 3,172 Three Months Ended April 1, 2023 North America International Global Net sales: Health care distribution Dental $ 1,144 $ 754 $ 1,898 Medical 951 20 971 Total health care distribution 2,095 774 2,869 Technology 166 25 191 Total net sales $ 2,261 $ 799 $ 3,060 |
Segment Data (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Segment Data [Abstract] | |
| Business segment information | Three Months Ended March 30, April 1, 2024 2023 Net sales: Health care distribution (1) Dental $ 1,914 $ 1,898 Medical 1,041 971 Total health care distribution 2,955 2,869 Technology (2) 217 191 Total $ 3,172 $ 3,060 Consists of consumable products, dental specialty products (including implant, orthodontic and endodontic products), small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, PPE products, vitamins, and orthopedic implants. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, practice consultancy, education, revenue cycle management and financial services on a non-recourse basis, e-services, continuing education services for practitioners, practice technology, network and hardware services, and other services. Three Months Ended March 30, April 1, 2024 2023 Operating Income: Health care distribution $ 126 $ 145 Technology 24 30 Total $ 150 $ 175 |
Business Acquisitions (Tables) - Biotech Dental [Member] |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Business Acquisition [Line Items] | |
| Summary of Estimated Fair Value of Consideration Paid and Net Assets Acquired | Preliminary Allocation as of July 1, 2023 Measurement Period Adjustments Allocation as of March 30, 2024 Acquisition consideration: Cash $ 216 $ - $ 216 Fair value of contributed equity share in a controlled subsidiary 25 - 25 Redeemable noncontrolling interests 182 - 182 Total consideration $ 423 $ - $ 423 Identifiable assets acquired and liabilities assumed: Current assets $ 78 $ (4) $ 74 Intangible assets 119 70 189 Other noncurrent assets 76 (7) 69 Current liabilities (50) (10) (60) Long-term debt (90) 17 (73) Deferred income taxes (38) (15) (53) Other noncurrent liabilities (16) (4) (20) Total identifiable 79 47 126 Goodwill 344 (47) 297 Total net assets acquired $ 423 $ - $ 423 |
| Summary of Identifiable Intangible Assets Acquired and Estimated Useful Lives | 2023 Weighted Average Lives (in years) Customer relationships and lists $ 47 9 Trademarks / Tradenames 18 7 Product development 124 10 Total $ 189 |
Fair Value Measurements (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Fair Value Measurements [Abstract] | |
| Assets and Liabilities Measured and Recognized on a Recurring Basis | March 30, 2024 Level 1 Level 2 Level 3 Total Assets: Derivative contracts designated as hedges $ - $ 1 $ - $ 1 Derivative contracts undesignated - 2 - 2 Total return - 1 - 1 Total assets $ - $ 4 $ - $ 4 Liabilities: Derivative contracts designated as hedges $ - $ 1 $ - $ 1 Derivative contracts undesignated - 1 - 1 Total liabilities $ - $ 2 $ - $ 2 Redeemable noncontrolling interests $ - $ - $ 798 $ 798 December 30, 2023 Level 1 Level 2 Level 3 Total Assets: Derivative contracts designated as hedges $ - $ 1 $ - $ 1 Derivative contracts undesignated - 1 - 1 Total return - 4 - 4 Total assets $ - $ 6 $ - $ 6 Liabilities: Derivative contracts designated as hedges $ - $ 18 $ - $ 18 Derivative contracts undesignated - 2 - 2 Total liabilities $ - $ 20 $ - $ 20 Redeemable noncontrolling interests $ - $ - $ 864 $ 864 |
Debt (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Debt [Abstract] | |
| Schedule of Bank Credit Lines | March 30, December 30, 2024 2023 Revolving credit agreement $ 50 $ 200 Other short-term bank credit lines 214 64 Total $ 264 $ 264 |
| Schedule of Long-Term Debt | March 30, December 30, 2024 2023 Private placement facilities $ 1,024 $ 1,074 Term loan 736 741 U.S. trade accounts receivable securitization 300 210 Various in varying installments through 2030 at interest rates from 0.00 % to 9.42 % at March 30, 2024 and from 0.00 % to 9.42 % at December 30, 2023 46 54 Finance lease obligations 7 8 Total 2,113 2,087 Less current maturities (103) (150) Total long-term debt $ 2,010 $ 1,937 |
| Schedule of Private Placement Facility Borrowings | Amount of Date of Borrowing Borrowing Borrowing Outstanding Rate Due Date December 24, 2012 $ 50 3.00 % December 24, 2024 June 16, 2017 100 3.42 June 16, 2027 September 15, 2017 100 3.52 September 15, 2029 January 2, 2018 100 3.32 January 2, 2028 September 2, 2020 100 2.35 September 2, 2030 June 2, 2021 100 2.48 June 2, 2031 June 2, 2021 100 2.58 June 2, 2033 May 4, 2023 75 4.79 May 4, 2028 May 4, 2023 75 4.84 May 4, 2030 May 4, 2023 75 4.96 May 4, 2033 May 4, 2023 150 4.94 May 4, 2033 Less: Deferred debt issuance costs (1) Total $ 1,024 |
Plan of Restructuring and Integration Costs (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Plan of Restructuring [Abstract] | |
| Schedule of Restructuring Costs and Integration Costs | Three Months Ended March 30, 2024 Health Care Distribution Technology Value-Added Services Total Severance and employee-related costs $ 6 $ 1 $ 7 Accelerated depreciation and amortization 1 - 1 Exit and other related costs 2 - 2 Total restructuring $ 9 $ 1 $ 10 Three Months Ended April 1, 2023 Health Care Distribution Technology Value-Added Services Total Severance and employee-related costs $ 17 $ 3 $ 20 Accelerated depreciation and amortization 7 - 7 Exit and other related costs 1 1 2 Loss on disposal of a business 1 - 1 Total restructuring $ 26 $ 4 $ 30 |
| Schedule of Restructuring Reserve by Segment | Technology Health Care Value-Added Distribution Services Total Balance, December 30, 2023 $ 22 $ 1 $ 23 Restructuring costs 9 1 10 Non-cash accelerated depreciation and amortization (1) - (1) Cash payments and other adjustments (11) (1) (12) Balance, March 30, 2024 $ 19 $ 1 $ 20 |
Stock-Based Compensation (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Stock-Based Compensation [Abstract] | |
| Summary of Stock Option Activity Under the Plans | Stock Options Weighted Average Weighted Average Aggregate Exercise Remaining Contractual Shares Price Life (in years) Outstanding at beginning of period 1,078,459 $ 71.46 Granted - Exercised (21,570) 62.71 Forfeited (897) 82.62 Outstanding at end of period 1,055,992 $ 71.63 7.3 $ 8 Options exercisable at end of period 908,836 $ 69.49 |
| Intrinsic Values | Weighted Average Weighted Average Aggregate Number of Exercise Remaining Contractual Intrinsic Options Price Life (in years) Value Expected to vest 147,110 $ 84.84 8.0 $ - |
| Status of Unvested RSUs | Time-Based Restricted Stock Units Performance-Based Restricted Stock Units Weighted Weighted Average Intrinsic Average Intrinsic Grant Date Fair Value Grant Date Fair Value Shares/Units Value Per Share Per Share Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,655,393 $ 70.34 208,742 $ 78.02 Granted 432,350 76.56 450,333 76.81 Vested (307,839) 62.51 (6,432) 63.01 Forfeited (6,021) 81.48 (6,431) 83.07 Outstanding at end of period 1,773,883 $ 73.19 $ 75.52 646,212 $ 75.68 $ 75.52 |
Redeemable Noncontrolling Interests (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Redeemable Noncontrolling Interests [Abstract] | |
| Components of the Change in Redeemable Noncontrolling Interests | March 30, December 30, 2024 2023 Balance, beginning of period $ 864 $ 576 Decrease in redeemable noncontrolling interests due to acquisitions of noncontrolling interests in subsidiaries (94) (19) Increase in redeemable noncontrolling interests due to business acquisitions - 326 Net income attributable to redeemable noncontrolling interests 2 6 Distributions declared, net of capital contributions (6) (19) Effect of foreign currency translation gain (loss) attributable to redeemable noncontrolling interests (10) 5 Change in fair value of redeemable securities 42 (11) Balance, end of period $ 798 $ 864 |
Comprehensive Income (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Comprehensive Income [Abstract] | |
| Accumulated Other Comprehensive Loss Net of Applicable Taxes | March 30, December 30, 2024 2023 Attributable to redeemable noncontrolling interests: Foreign currency translation adjustment $ (42) $ (32) Attributable to noncontrolling interests: Foreign currency translation adjustment $ (1) $ (1) Attributable to Henry Schein, Inc.: Foreign currency translation adjustment $ (232) $ (188) Unrealized loss from hedging activities (2) (13) Pension adjustment loss (5) (5) Accumulated other comprehensive loss $ (239) $ (206) Total Accumulated $ (282) $ (239) |
| Components of Comprehensive Income, Net of Applicable Taxes | Three Months Ended March 30, April 1, 2024 2023 Net income $ 98 $ 128 Foreign currency translation gain (loss) (54) 25 Tax effect - - Foreign currency translation gain (loss) (54) 25 Unrealized gain (loss) from hedging activities 15 (4) Tax effect (4) 1 Unrealized gain (loss) from hedging activities 11 (3) Comprehensive income $ 55 $ 150 |
| Total Comprehensive Income, Net of Applicable Taxes | Three Months Ended March 30, April 1, 2024 2023 Comprehensive income attributable to Henry Schein, Inc. $ 60 $ 141 Comprehensive income attributable to noncontrolling interests 3 3 Comprehensive income (loss) attributable to Redeemable noncontrolling interests (8) 6 Comprehensive income $ 55 $ 150 |
Earnings Per Share (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Earnings Per Share [Abstract] | |
| Reconciliation of Shares used in Calculating Earnings per Share Basic and Diluted | Three Months Ended March 30, April 1, 2024 2023 Basic 128,720,661 131,365,789 Effect of dilutive securities: Stock options and restricted stock units 1,048,919 1,674,097 Diluted 129,769,580 133,039,886 |
| Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Three Months Ended March 30, April 1, 2024 2023 Stock options 419,139 422,190 Restricted stock units 245,667 18,305 Total anti-dilutive 664,806 440,495 |
Supplemental Cash Flow Information (Tables) |
3 Months Ended |
|---|---|
Mar. 30, 2024 | |
| Supplemental Cash Flow information [Abstract] | |
| Cash paid for interest and income taxes | Three Months Ended March 30, April 1, 2024 2023 Interest $ 26 $ 13 Income taxes 21 21 |
Basis of Presentation - Narrative (Details) - Variable Interest Entity, Primary Beneficiary [Member] - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
|---|---|---|
| Asset Pledged as Collateral [Member] | ||
| Pledged assets | $ 497 | $ 284 |
| Recourse [Member] | ||
| Liabilities of VIE | $ 300 | $ 210 |
Cybersecurity Incident - Narrative (Details) - Cyber Incident [Member] $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 30, 2024
USD ($)
| |
| Unusual or Infrequent Item, or Both [Line Items] | |
| Expenses related to cybersecurity incident | $ 5 |
| Cybersecurity Insurance Policy [Member] | |
| Unusual or Infrequent Item, or Both [Line Items] | |
| Insurance policy limitations | 60 |
| Insurance retention | $ 5 |
Net Sales from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
Dec. 30, 2023 |
Dec. 31, 2022 |
|
| Net Sales from Contracts with Customers [Abstract] | ||||
| Contract with Customer, Liability, Current | $ 84 | $ 89 | $ 86 | |
| Contract with Customer, Liability, Noncurrent | 8 | $ 9 | $ 8 | |
| Contract with Customer, Liability, Revenue Recognized | $ 36 | $ 35 | ||
Net Sales from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Disaggregation of Revenue [Abstract] | ||
| Net sales | $ 3,172 | $ 3,060 |
| North America [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 2,306 | 2,261 |
| International [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 866 | 799 |
| Health Care Distribution [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 2,955 | 2,869 |
| Health Care Distribution [Member] | North America [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 2,117 | 2,095 |
| Health Care Distribution [Member] | International [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 838 | 774 |
| Health Care Distribution [Member] | Dental [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 1,914 | 1,898 |
| Health Care Distribution [Member] | Dental [Member] | North America [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 1,103 | 1,144 |
| Health Care Distribution [Member] | Dental [Member] | International [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 811 | 754 |
| Health Care Distribution [Member] | Medical [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 1,041 | 971 |
| Health Care Distribution [Member] | Medical [Member] | North America [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 1,014 | 951 |
| Health Care Distribution [Member] | Medical [Member] | International [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 27 | 20 |
| Technology and Value-Added Services [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 217 | 191 |
| Technology and Value-Added Services [Member] | North America [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | 189 | 166 |
| Technology and Value-Added Services [Member] | International [Member] | ||
| Disaggregation of Revenue [Abstract] | ||
| Net sales | $ 28 | $ 25 |
Segment Data (Details) $ in Millions |
3 Months Ended | |
|---|---|---|
|
Mar. 30, 2024
USD ($)
segments
countries
|
Apr. 01, 2023
USD ($)
|
|
| Segment Data [Abstract] | ||
| Number of reportable segments | segments | 2 | |
| Segment Reporting Information [Line Items] | ||
| Net sales | $ 3,172 | $ 3,060 |
| Operating income | 150 | 175 |
| Health Care Distribution [Member] | ||
| Segment Reporting Information [Line Items] | ||
| Net sales | 2,955 | 2,869 |
| Operating income | $ 126 | 145 |
| Number of countries served globally | countries | 33 | |
| Health Care Distribution [Member] | Dental [Member] | ||
| Segment Reporting Information [Line Items] | ||
| Net sales | $ 1,914 | 1,898 |
| Health Care Distribution [Member] | Medical [Member] | ||
| Segment Reporting Information [Line Items] | ||
| Net sales | 1,041 | 971 |
| Technology and Value-Added Services [Member] | ||
| Segment Reporting Information [Line Items] | ||
| Net sales | 217 | 191 |
| Operating income | $ 24 | $ 30 |
Business Acquisitions - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
|---|---|---|---|---|---|---|---|---|
Oct. 02, 2023 |
Jul. 05, 2023 |
Apr. 05, 2023 |
Mar. 30, 2024 |
Jul. 01, 2023 |
Mar. 30, 2024 |
Dec. 30, 2023 |
Apr. 01, 2023 |
|
| Business Acquisition [Line Items] | ||||||||
| Goodwill | $ 3,835 | $ 3,835 | $ 3,875 | |||||
| Acquisition costs | $ 2 | $ 2 | $ 7 | |||||
| Series Of Individually Immaterial Business Acquisitions [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Percentage of voting interest acquired | 100.00% | 100.00% | ||||||
| Consideration paid | $ 19 | |||||||
| Goodwill | 8 | $ 8 | ||||||
| Intangible assets | 12 | 12 | ||||||
| Change in fair value of contingent consideration | 15 | |||||||
| Series Of Individually Immaterial Business Acquisitions [Member] | Customer Relationships and Lists [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Intangible assets | $ 6 | 6 | ||||||
| Estimated useful lives (in years) | 10 years | |||||||
| Series Of Individually Immaterial Business Acquisitions [Member] | Product Development [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Intangible assets | $ 4 | 4 | ||||||
| Estimated useful lives (in years) | 10 years | |||||||
| Series Of Individually Immaterial Business Acquisitions [Member] | Trademarks And Trade Names [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Intangible assets | $ 1 | 1 | ||||||
| Estimated useful lives (in years) | 5 years | |||||||
| Series Of Individually Immaterial Business Acquisitions [Member] | Noncompete Agreements [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Intangible assets | $ 1 | 1 | ||||||
| Estimated useful lives (in years) | 5 years | |||||||
| Series Of Individually Immaterial Business Acquisitions [Member] | Minimum [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Percentage of voting interest acquired | 51.00% | |||||||
| Series Of Individually Immaterial Business Acquisitions [Member] | Maximum [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Percentage of voting interest acquired | 100.00% | |||||||
| Shield Healthcare, Inc. [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Percentage of voting interest acquired | 90.00% | |||||||
| Consideration paid | $ 307 | |||||||
| Total consideration | 366 | |||||||
| Deferred consideration | 22 | |||||||
| Redeemable noncontrolling interests | $ 37 | |||||||
| S.I.N. Implant System [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Percentage of voting interest acquired | 100.00% | |||||||
| Total consideration | $ 329 | |||||||
| Biotech Dental [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Percentage of voting interest acquired | 57.00% | |||||||
| Consideration paid | $ 216 | 216 | ||||||
| Goodwill | $ 297 | 344 | 297 | |||||
| Intangible assets | $ 189 | 119 | 189 | |||||
| Total consideration | 423 | 423 | ||||||
| Redeemable noncontrolling interests | $ 182 | $ 182 | ||||||
| Biotech Dental [Member] | Customer Relationships and Lists [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Estimated useful lives (in years) | 9 years | |||||||
| Biotech Dental [Member] | Product Development [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Estimated useful lives (in years) | 10 years | |||||||
| Biotech Dental [Member] | Trademarks And Trade Names [Member] | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Estimated useful lives (in years) | 7 years |
Business Acquisitions - Summary of Estimated Fair Value of Consideration Paid and Net Assets Acquired (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | |
|---|---|---|---|---|
Mar. 30, 2024 |
Jul. 01, 2023 |
Mar. 30, 2024 |
Dec. 30, 2023 |
|
| Identifiable assets acquired and liabilities assumed: | ||||
| Goodwill | $ 3,835 | $ 3,835 | $ 3,875 | |
| Biotech Dental [Member] | ||||
| Acquisition consideration: | ||||
| Cash | $ 216 | 216 | ||
| Fair value of contributed equity share in a controlled subsidiary | 25 | 25 | ||
| Redeemable noncontrolling interests | 182 | 182 | ||
| Total consideration | 423 | 423 | ||
| Identifiable assets acquired and liabilities assumed: | ||||
| Current assets | 74 | 78 | 74 | |
| Intangible assets | 189 | 119 | 189 | |
| Other noncurrent assets | 69 | 76 | 69 | |
| Current liabilities | (60) | (50) | (60) | |
| Long-term debt | (73) | (90) | (73) | |
| Deferred income taxes | (53) | (38) | (53) | |
| Other noncurrent liabilities | (20) | (16) | (20) | |
| Total identifiable net assets | 126 | 79 | 126 | |
| Goodwill | 297 | 344 | 297 | |
| Total net assets acquired | 423 | $ 423 | 423 | |
| Biotech Dental [Member] | Restatement Adjustment [Member] | ||||
| Identifiable assets acquired and liabilities assumed: | ||||
| Current assets | (4) | (4) | ||
| Intangible assets | 70 | 70 | ||
| Other noncurrent assets | (7) | (7) | ||
| Current liabilities | (10) | (10) | ||
| Long-term debt | 17 | 17 | ||
| Deferred income taxes | (15) | (15) | ||
| Other noncurrent liabilities | (4) | (4) | ||
| Total identifiable net assets | 47 | 47 | ||
| Goodwill | (47) | (47) | ||
| Total net assets acquired | 0 | 0 | ||
| Series Of Individually Immaterial Business Acquisitions [Member] | ||||
| Acquisition consideration: | ||||
| Cash | 19 | |||
| Identifiable assets acquired and liabilities assumed: | ||||
| Intangible assets | 12 | 12 | ||
| Goodwill | $ 8 | $ 8 |
Business Acquisitions - Summary of Identifiable Intangible Assets Acquired and Estimated Useful Lives (Details) - Biotech Dental [Member] $ in Millions |
Apr. 05, 2023
USD ($)
|
|---|---|
| Business Acquisition [Line Items] | |
| Identifiable intangible assets acquired | $ 189 |
| Customer Relationships and Lists [Member] | |
| Business Acquisition [Line Items] | |
| Identifiable intangible assets acquired | $ 47 |
| Estimated useful lives (in years) | 9 years |
| Trademarks/Tradenames [Member] | |
| Business Acquisition [Line Items] | |
| Identifiable intangible assets acquired | $ 18 |
| Estimated useful lives (in years) | 7 years |
| Product Development [Member] | |
| Business Acquisition [Line Items] | |
| Identifiable intangible assets acquired | $ 124 |
| Estimated useful lives (in years) | 10 years |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
|---|---|---|
| Estimate of Fair Value Measurement [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of debt (including bank credit lines) | $ 2,377 | $ 2,351 |
| Term Credit Agreement [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Debt face amount | $ 750 |
Fair Value Measurements - Assets and Liabilities Measured and Recognized on a Recurring Basis (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|---|
| Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
| Redeemable noncontrolling interests | $ 798 | $ 864 | $ 576 |
| Fair value, measurements, recurring [Member] | |||
| Assets [Abstract] | |||
| Total return swaps | 1 | 4 | |
| Total assets | 4 | 6 | |
| Liabilities [Abstract] | |||
| Total liabilities | 2 | 20 | |
| Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
| Redeemable noncontrolling interests | 798 | 864 | |
| Fair value, measurements, recurring [Member] | Derivative contracts designated as hedges [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 1 | 1 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | 1 | 18 | |
| Fair value, measurements, recurring [Member] | Derivative contracts undesignated [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 2 | 1 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | 1 | 2 | |
| Fair value, measurements, recurring [Member] | Level 1 [Member] | |||
| Assets [Abstract] | |||
| Total return swaps | 0 | 0 | |
| Total assets | 0 | 0 | |
| Liabilities [Abstract] | |||
| Total liabilities | 0 | 0 | |
| Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
| Redeemable noncontrolling interests | 0 | 0 | |
| Fair value, measurements, recurring [Member] | Level 1 [Member] | Derivative contracts designated as hedges [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 0 | 0 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | 0 | 0 | |
| Fair value, measurements, recurring [Member] | Level 1 [Member] | Derivative contracts undesignated [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 0 | 0 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | 0 | 0 | |
| Fair value, measurements, recurring [Member] | Level 2 [Member] | |||
| Assets [Abstract] | |||
| Total return swaps | 1 | 4 | |
| Total assets | 4 | 6 | |
| Liabilities [Abstract] | |||
| Total liabilities | 2 | 20 | |
| Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
| Redeemable noncontrolling interests | 0 | 0 | |
| Fair value, measurements, recurring [Member] | Level 2 [Member] | Derivative contracts designated as hedges [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 1 | 1 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | 1 | 18 | |
| Fair value, measurements, recurring [Member] | Level 2 [Member] | Derivative contracts undesignated [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 2 | 1 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | 1 | 2 | |
| Fair value, measurements, recurring [Member] | Level 3 [Member] | |||
| Assets [Abstract] | |||
| Total return swaps | 0 | 0 | |
| Total assets | 0 | 0 | |
| Liabilities [Abstract] | |||
| Total liabilities | 0 | 0 | |
| Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
| Redeemable noncontrolling interests | 798 | 864 | |
| Fair value, measurements, recurring [Member] | Level 3 [Member] | Derivative contracts designated as hedges [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 0 | 0 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | 0 | 0 | |
| Fair value, measurements, recurring [Member] | Level 3 [Member] | Derivative contracts undesignated [Member] | |||
| Assets [Abstract] | |||
| Derivative contracts - assets | 0 | 0 | |
| Liabilities [Abstract] | |||
| Derivative contracts - liabilities | $ 0 | $ 0 |
Debt - Revolving Credit Agreement Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Aug. 20, 2021 |
Mar. 30, 2024 |
Dec. 30, 2023 |
|
| Revolving Credit Agreement [Member] | |||
| Line of Credit Facility [Line Items] | |||
| Line of credit initiation date | Aug. 20, 2021 | Jul. 11, 2023 | |
| Credit facility borrowing capacity | $ 1,000 | ||
| Credit facility expiration date | Jul. 11, 2028 | ||
| Line of credit interest rate | 5.32% | ||
| Debt instrument, basis spread on variable rate | 1.10% | ||
| Line of credit combined interest rate | 6.42% | ||
| Borrowings | $ 50 | $ 200 | |
| Outstanding letters of credit provided to third parties | 10 | 10 | |
| Average amount outstanding | 100 | ||
| Other Short-Term Credit Lines [Member] | |||
| Line of Credit Facility [Line Items] | |||
| Credit facility borrowing capacity | 383 | $ 368 | |
| Average amount outstanding | $ 96 |
Debt - Other Short-Term Bank Credit Lines Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Dec. 30, 2023 |
|
| Line of Credit Facility [Line Items] | ||
| Bank credit lines | $ 264 | $ 264 |
| Other Short-Term Credit Lines [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Credit facility borrowing capacity | 383 | 368 |
| Bank credit lines | $ 214 | $ 64 |
| Weighted average interest rate on borrowings under credit lines at period end | 6.08% | 6.02% |
| Average amount outstanding | $ 96 |
Debt - Private Placement Facilities Narrative (Details) - Private Placement Facilities [Member] |
3 Months Ended |
|---|---|
|
Mar. 30, 2024
USD ($)
| |
| Debt Instrument [Line Items] | |
| Number of companies included in private placement facilities | 4 |
| Debt instrument maximum borrowing capacity | $ 1,500,000,000 |
| Debt instrument, maturity date | Oct. 20, 2026 |
| Average term of issuances under private placement facilities | 12 years |
| Weighted average interest rate at period end | 3.66% |
| Minimum [Member] | |
| Debt Instrument [Line Items] | |
| Term of issuances under private placement facilities | 5 years |
| Maximum [Member] | |
| Debt Instrument [Line Items] | |
| Term of issuances under private placement facilities | 15 years |
Debt - Term Loan Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 30, 2024 |
Dec. 30, 2023 |
|
| Term Credit Agreement [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Debt face amount | $ 750 | |
| Debt term (in years) | 3 years | |
| Long-term debt | $ 736 | $ 741 |
| Term Credit Agreement [Member] | Interest Rate Swap [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Derivative fixed interest rate | 5.91% | 5.79% |
| Term Credit Agreement [Member] | Secured Overnight Financing Rate Sofr Overnight Index Swap Rate [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Debt instrument, interest rate, stated percentage | 5.32% | 5.36% |
| Debt instrument, basis spread on variable rate | 1.47% | 1.35% |
| Debt instrument, interest rate at period end | 6.79% | 6.71% |
| September 2024 through June 2026 [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Quarterly payments | $ 9 | |
| September 2023 through June 2024 [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Quarterly payments | $ 5 |
Debt - U.S. Trade Accounts Receivable Securitization Narrative (Details) $ in Millions |
3 Months Ended | 12 Months Ended |
|---|---|---|
|
Mar. 30, 2024
USD ($)
number
|
Dec. 30, 2023
USD ($)
|
|
| U.S. Trade Accounts Receivable Securitization Expiring 2022 [Member] | Minimum [Member] | ||
| Debt Instrument [Line Items] | ||
| Commitment fee basis points depending upon program utilization | 0.0030 | |
| U.S. Trade Accounts Receivable Securitization Expiring 2022 [Member] | Maximum [Member] | ||
| Debt Instrument [Line Items] | ||
| Commitment fee basis points depending upon program utilization | 0.0035 | |
| U.S. Trade Accounts Receivable Securitization [Member] | ||
| Debt Instrument [Line Items] | ||
| Pricing commitment period | 3 years | |
| Debt Instrument, Maturity Date | Dec. 15, 2025 | |
| Debt instrument maximum borrowing capacity | $ 450 | |
| Long-term debt | $ 300 | $ 210 |
| Number of banks as agents for debt instrument | number | 2 | |
| U.S. Trade Accounts Receivable Securitization [Member] | Average Asset Backed Commercial Paper Rate [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt instrument, interest rate at period end | 5.47% | 5.67% |
| Debt instrument, basis spread on variable rate | 0.75% | 0.75% |
| Debt instrument, variable rate basis at period end | 6.22% | 6.42% |
Debt - Schedule of Bank Credit Lines (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
|---|---|---|
| Line of Credit Facility [Line Items] | ||
| Bank Credit lines | $ 264 | $ 264 |
| Revolving Credit Agreement [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Bank Credit lines | 50 | 200 |
| Other Short-Term Credit Lines [Member] | ||
| Line of Credit Facility [Line Items] | ||
| Bank Credit lines | $ 214 | $ 64 |
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
||
|---|---|---|---|---|
| Debt Instrument [Line Items] | ||||
| Finance lease obligations | $ 7 | $ 8 | ||
| Total | 2,113 | 2,087 | ||
| Less current maturities | (103) | (150) | ||
| Long-term debt | [1] | 2,010 | 1,937 | |
| Term Credit Agreement [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Long-term debt | 736 | 741 | ||
| Private Placement Facilities [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Long-term debt | 1,024 | 1,074 | ||
| U.S. Trade Accounts Receivable Securitization [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Long-term debt | 300 | 210 | ||
| Various Collateralized and Uncollateralized Loans Payable with Interest in Varying Installments Through 2023 at Interest Rates Ranging from 0.00% to 3.65% at April 1, 2023 and Ranging from 0.00% to 3.50% at December 31, 2022 [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Long-term debt | $ 46 | $ 54 | ||
| Various Collateralized and Uncollateralized Loans Payable with Interest in Varying Installments Through 2023 at Interest Rates Ranging from 0.00% to 3.65% at April 1, 2023 and Ranging from 0.00% to 3.50% at December 31, 2022 [Member] | Minimum [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Borrowing Rate | 0.00% | 0.00% | ||
| Various Collateralized and Uncollateralized Loans Payable with Interest in Varying Installments Through 2023 at Interest Rates Ranging from 0.00% to 3.65% at April 1, 2023 and Ranging from 0.00% to 3.50% at December 31, 2022 [Member] | Maximum [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Borrowing Rate | 9.42% | 9.42% | ||
| ||||
Debt - Schedule of Private Placement Facility Borrowings (Details) - Private Placement Facilities [Member] - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Dec. 30, 2023 |
|
| Debt Instrument [Line Items] | ||
| Less: Deferred debt issuance costs | $ (1) | |
| Total | $ 1,024 | $ 1,074 |
| Debt Instrument, Maturity Date | Oct. 20, 2026 | |
| Private Placement Facilities 1 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | Dec. 24, 2012 | |
| Long-term Debt, Gross | $ 50 | |
| Borrowing Rate | 3.00% | |
| Debt Instrument, Maturity Date | Dec. 24, 2024 | |
| Private Placement Facilities 2 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | Jun. 16, 2017 | |
| Long-term Debt, Gross | $ 100 | |
| Borrowing Rate | 3.42% | |
| Debt Instrument, Maturity Date | Jun. 16, 2027 | |
| Private Placement Facilities 3 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | Sep. 15, 2017 | |
| Long-term Debt, Gross | $ 100 | |
| Borrowing Rate | 3.52% | |
| Debt Instrument, Maturity Date | Sep. 15, 2029 | |
| Private Placement Facilities 4 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | Jan. 02, 2018 | |
| Long-term Debt, Gross | $ 100 | |
| Borrowing Rate | 3.32% | |
| Debt Instrument, Maturity Date | Jan. 02, 2028 | |
| Private Placement facilities 5 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | Sep. 02, 2020 | |
| Long-term Debt, Gross | $ 100 | |
| Borrowing Rate | 2.35% | |
| Debt Instrument, Maturity Date | Sep. 02, 2030 | |
| Private Placement Facilities 6 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | Jun. 02, 2021 | |
| Long-term Debt, Gross | $ 100 | |
| Borrowing Rate | 2.48% | |
| Debt Instrument, Maturity Date | Jun. 02, 2031 | |
| Private Placement Facilities 7 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | Jun. 02, 2021 | |
| Long-term Debt, Gross | $ 100 | |
| Borrowing Rate | 2.58% | |
| Debt Instrument, Maturity Date | Jun. 02, 2033 | |
| Private Placement Facilities 8 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | May 04, 2023 | |
| Long-term Debt, Gross | $ 75 | |
| Borrowing Rate | 4.79% | |
| Debt Instrument, Maturity Date | May 04, 2028 | |
| Private Placement Facilities 9 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | May 04, 2023 | |
| Long-term Debt, Gross | $ 75 | |
| Borrowing Rate | 4.84% | |
| Debt Instrument, Maturity Date | May 04, 2030 | |
| Private Placement Facilities 10 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | May 04, 2023 | |
| Long-term Debt, Gross | $ 75 | |
| Borrowing Rate | 4.96% | |
| Debt Instrument, Maturity Date | May 04, 2033 | |
| Private Placement Facilities 11 [Member] | ||
| Debt Instrument [Line Items] | ||
| Debt Instrument, Issuance Date | May 04, 2023 | |
| Long-term Debt, Gross | $ 150 | |
| Borrowing Rate | 4.94% | |
| Debt Instrument, Maturity Date | May 04, 2033 |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
Dec. 30, 2023 |
|
| Income Tax Examination [Line Items] | |||
| Effective tax rate | 25.60% | 23.80% | |
| Tax interest expense (credit) | $ 1 | $ 1 | |
| Other Liabilities [Member] | |||
| Income Tax Examination [Line Items] | |||
| Unrecognized tax benefits | 113 | $ 115 | |
| Unrecognized tax benefits that would affect the effective tax rate if recognized | 106 | 107 | |
| Total interest | $ 17 | $ 16 | |
Plan of Restructuring - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring costs | $ 10 | $ 30 |
Plan of Restructuring - Schedule of Restructuring Costs and Integration Costs (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | $ 10,000,000 | $ 30,000,000 |
| Severance and Employee-Related Costs [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 7,000,000 | 20,000,000 |
| Accelerated Depreciation and Amortization [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 1,000,000 | 7,000,000 |
| Exit and Other Related Costs [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 2,000,000 | 2,000,000 |
| Disposal of Business [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 1,000,000 | |
| Health Care Distribution [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 9,000,000 | 26,000,000 |
| Health Care Distribution [Member] | Severance and Employee-Related Costs [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 6,000,000 | 17,000,000 |
| Health Care Distribution [Member] | Accelerated Depreciation and Amortization [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 1,000,000 | 7,000,000 |
| Health Care Distribution [Member] | Exit and Other Related Costs [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 2,000,000 | 1,000,000 |
| Health Care Distribution [Member] | Disposal of Business [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 1,000,000 | |
| Technology and Value-Added Services [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 1,000,000 | 4,000,000 |
| Technology and Value-Added Services [Member] | Severance and Employee-Related Costs [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 1,000,000 | 3,000,000 |
| Technology and Value-Added Services [Member] | Accelerated Depreciation and Amortization [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | 0 | 0 |
| Technology and Value-Added Services [Member] | Exit and Other Related Costs [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | $ 0 | 1,000,000 |
| Technology and Value-Added Services [Member] | Disposal of Business [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Restructuring Costs | $ 0 | |
Plan of Restructuring - Schedule of Restructuring Reserve by Segment (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Restructuring Cost and Reserve [Line Items] | ||
| Balance, beginning | $ 23,000,000 | |
| Restructuring costs | 10,000,000 | $ 30,000,000 |
| Non-cash asset impairment and accelerated depreciation and amortization of right-of-use lease assets and other long-lived assets | (1,000,000) | |
| Cash payments and other adjustments | 12,000,000 | |
| Balance, ending | 20,000,000 | |
| Health Care Distribution [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Balance, beginning | 22,000,000 | |
| Restructuring costs | 9,000,000 | 26,000,000 |
| Non-cash asset impairment and accelerated depreciation and amortization of right-of-use lease assets and other long-lived assets | (1,000,000) | |
| Cash payments and other adjustments | 11,000,000 | |
| Balance, ending | 19,000,000 | |
| Technology and Value-Added Services [Member] | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Balance, beginning | 1,000,000 | |
| Restructuring costs | 1,000,000 | $ 4,000,000 |
| Non-cash asset impairment and accelerated depreciation and amortization of right-of-use lease assets and other long-lived assets | 0 | |
| Cash payments and other adjustments | 1,000,000 | |
| Balance, ending | $ 1,000,000 | |
Legal Proceedings - Narrative (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
|
Mar. 30, 2024
USD ($)
claims
|
Apr. 01, 2023
USD ($)
|
Dec. 30, 2023
USD ($)
|
|
| Loss Contingency, Information about Litigation Matters [Abstract] | |||
| Revenues | $ 3,172 | $ 3,060 | |
| Maximum [Member] | |||
| Loss Contingency, Information about Litigation Matters [Abstract] | |||
| Loss Contingency, Pending Claims, Number | claims | 175 | ||
| Actions Consolidated in the MultiDistrict Litigation [Member] | |||
| Loss Contingency, Information about Litigation Matters [Abstract] | |||
| Maximum sales of opioids in North America during the year, percentage | 0.40% | ||
| Actions Consolidated in the MultiDistrict Litigation [Member] | Continuing Operations [Member] | |||
| Loss Contingency, Information about Litigation Matters [Abstract] | |||
| Revenues | $ 12,300 | ||
| Other Hospitals Located throughout Florida [Member] | |||
| Loss Contingency, Information about Litigation Matters [Abstract] | |||
| Number of plaintiffs | 25 | ||
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Weighted-average period of recognition for unrecognized compensation costs on nonvested awards (in years) | 2 years 8 months 12 days | |
| Grants in period (in shares) | 0 | |
| Total unrecognized compensation cost related to non-vested awards | $ 120.0 | |
| Expected life of options (years) | 6 years | |
| Pre-tax share-based compensation (Credit) expense | $ 8.0 | $ 10.0 |
| Stock Options [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Number of years for full vesting (in years) | 3 years | |
| Percentage of stock options vest per year | 33.33% | |
| Expiration period (in years) | 10 years | |
| Time-Based Restricted Stock/Restricted Units [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Number of years for full vesting (in years) | 4 years | |
| Time-Based Restricted Stock/Restricted Units [Member] | 2015 Non-Employee Director Stock Incentive Plan [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Number of years for full vesting (in years) | 12 months | |
| Performance-Based Restricted Stock Units [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Number of years for full vesting (in years) | 3 years | |
Stock-Based Compensation - Summary of Stock Option Activity under the Plans (Details) $ / shares in Units, $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 30, 2024
USD ($)
$ / shares
shares
| |
| Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
| Outstanding at beginning of period (in shares) | shares | 1,078,459 |
| Exercised (in shares) | shares | (21,570) |
| Forfeited (in shares) | shares | (897) |
| Outstanding at end of period (in shares) | shares | 1,055,992 |
| Weighted Average Exercise Price Per Share [Abstract] | |
| Outstanding at beginning of period (in dollars per share) | $ / shares | $ 71.46 |
| Exercised (in dollars per share) | $ / shares | 62.71 |
| Forfeited (in dollars per share) | $ / shares | 82.62 |
| Outstanding at end of period (in dollars per share) | $ / shares | $ 71.63 |
| Outstanding at end of period, Weighted Average Remaining Contractual Life in Years | 7 years 3 months 18 days |
| Outstanding at end of period, Aggregate Intrinsic Value | $ | $ 8 |
| Options exercisable (in shares) | shares | 908,836 |
| Weighted average exercise price, options exercisable (in dollars per share) | $ / shares | $ 69.49 |
Stock-Based Compensation - Intrinsic Values (Details) $ / shares in Units, $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 30, 2024
USD ($)
$ / shares
shares
| |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Number of Options | shares | 147,110 |
| Weighted Average Exercise Price | $ / shares | $ 84.84 |
| Weighted Average Remaining Contractual Life (in years) | 8 years |
| Intrinsic Value Per Share | $ | $ 0 |
Stock-Based Compensation - Status of Unvested RSUs (Details) |
3 Months Ended |
|---|---|
|
Mar. 30, 2024
$ / shares
shares
| |
| Time-Based Restricted Stock/Restricted Units [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
| Beginning balance outstanding (in shares) | shares | 1,655,393 |
| Granted (in shares) | shares | 432,350 |
| Vested (in shares) | shares | (307,839) |
| Forfeited (in shares) | shares | (6,021) |
| Ending balance outstanding (in shares) | shares | 1,773,883 |
| Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
| Beginning balance outstanding (in dollars per share) | $ 70.34 |
| Granted (in dollars per share) | 76.56 |
| Vested (in dollars per share) | 62.51 |
| Forfeited (in dollars per share) | 81.48 |
| Ending balance outstanding (in dollars per share) | 73.19 |
| Aggregate intrinsic value | $ 75.52 |
| Performance-Based Restricted Stock Units [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
| Beginning balance outstanding (in shares) | shares | 208,742 |
| Granted (in shares) | shares | 450,333 |
| Vested (in shares) | shares | (6,432) |
| Forfeited (in shares) | shares | (6,431) |
| Ending balance outstanding (in shares) | shares | 646,212 |
| Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
| Beginning balance outstanding (in dollars per share) | $ 78.02 |
| Granted (in dollars per share) | 76.81 |
| Vested (in dollars per share) | 63.01 |
| Forfeited (in dollars per share) | 83.07 |
| Ending balance outstanding (in dollars per share) | 75.68 |
| Aggregate intrinsic value | $ 75.52 |
Redeemable Noncontrolling Interests - Components of the Change in Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
Dec. 30, 2023 |
|
| Components of the change in the redeemable noncontrolling interests [Abstract] | |||
| Balance, beginning of period | $ 864 | $ 576 | $ 576 |
| Decrease in redeemable noncontrolling interests due to acquisitions of noncontrolling interest in subsidiaries | (94) | (19) | |
| Increase in redeemable noncontrolling interests due to business acquisitions | 0 | 326 | |
| Net income attributable to redeemable noncontrolling interests | 2 | 4 | 6 |
| Dividends declared, net of capital contributions | (6) | (19) | |
| Effect of foreign currency translation gain (loss) attributable to redeemable noncontrolling interests | (10) | $ 2 | 5 |
| Change in fair value of redeemable securities | 42 | (11) | |
| Balance, end of period | $ 798 | $ 864 | |
Comprehensive Income - Accumulated Other Comprehensive Income and Comprehensive Income Components (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
Dec. 30, 2023 |
|
| Attributable to Redeemable noncontrolling interests: | |||
| Foreign currency translation adjustment | $ (42) | $ (32) | |
| Attributable to noncontrolling interests: | |||
| Foreign currency translation adjustment | (1) | (1) | |
| Attributable to Henry Schein, Inc.: | |||
| Foreign currency translation adjustment | (232) | (188) | |
| Unrealized loss from hedging activities | (2) | (13) | |
| Pension adjustment loss | (5) | (5) | |
| Accumulated other comprehensive loss | (239) | (206) | |
| Total Accumulated other comprehensive loss | (282) | $ (239) | |
| Components of Comprehensive Income | |||
| Net Income (loss) | 98 | $ 128 | |
| Foreign currency translation gain (loss) | (54) | 25 | |
| Tax effect | 0 | 0 | |
| Foreign currency translation gain (loss) | (54) | 25 | |
| Unrealized gain (loss) from foreign currency hedging activities | 15 | (4) | |
| Tax effect | (4) | 1 | |
| Unrealized gain (loss) from foreign currency hedging activities | 11 | (3) | |
| Comprehensive income | $ 55 | $ 150 | |
Comprehensive Income - Total Comprehensive Income, Net of Applicable Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Comprehensive Income Net Of Applicable Taxes [Abstract] | ||
| Comprehensive income attributable to Henry Schein, Inc. | $ 60 | $ 141 |
| Comprehensive income attributable to noncontrolling interests | 3 | 3 |
| Comprehensive income (loss) attributable to Redeemable noncontrolling interests | (8) | 6 |
| Comprehensive income | $ 55 | $ 150 |
Earnings Per Share - Reconciliation of Shares used in Calculating Earnings per Share Basic and Diluted (Details) - shares |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Weighted-average common shares outstanding: | ||
| Basic (in shares) | 128,720,661 | 131,365,789 |
| Effect of dilutive securities: | ||
| Stock options and restricted stock units | 1,048,919 | 1,674,097 |
| Diluted (in shares) | 129,769,580 | 133,039,886 |
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
| Anti-dilutive securities excluded from EPS computation | 664,806 | 440,495 |
| Stock Options [Member] | ||
| Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
| Anti-dilutive securities excluded from EPS computation | 419,139 | 422,190 |
| Restricted Stock Units [Member] | ||
| Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
| Anti-dilutive securities excluded from EPS computation | 245,667 | 18,305 |
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
| Supplemental Cash Flow Information [Abstract] | ||
| Interest | $ 26 | $ 13 |
| Income taxes | 21 | 21 |
| Non-cash net unrealized gains related to foreign currency hedging activities | $ 15 | $ (4) |
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
Dec. 30, 2023 |
|
| Related Party Transaction [Line Items] | |||
| Current operating lease liabilities | $ 75 | $ 80 | |
| Noncurrent operating lease liabilities | 266 | 310 | |
| Equity Method Investee [Member] | |||
| Related Party Transaction [Line Items] | |||
| Other liabilities | 6 | 5 | |
| Due from related party | 31 | 32 | |
| Revenues | 12 | $ 8 | |
| Purchases from related party | 3 | 2 | |
| Internet Brands Inc [Member] | |||
| Related Party Transaction [Line Items] | |||
| Other liabilities | $ 3 | $ 1 | |
| Internet Brands Inc [Member] | Royalty Agreements [Member] | |||
| Related Party Transaction [Line Items] | |||
| Period covered by agreement | 10 years | ||
| Related party agreement amount | $ 31 | ||
| Operating costs and expenses | 8 | $ 8 | |
| Employees and Minority Shareholders [Member] | |||
| Related Party Transaction [Line Items] | |||
| Current operating lease liabilities | 5 | ||
| Noncurrent operating lease liabilities | $ 22 | ||
| Employees and Minority Shareholders [Member] | Operating Lease Liabilities, Current [Member] | Related Party Concentration Risk[Member] | |||
| Related Party Transaction [Line Items] | |||
| Concentration risk percentage | 6.70% | 6.30% | |
| Employees and Minority Shareholders [Member] | Operating Lease Liabilities, Non-Current [Member] | Related Party Concentration Risk[Member] | |||
| Related Party Transaction [Line Items] | |||
| Concentration risk percentage | 8.20% | 7.40% | |
| Employees and Minority Shareholders [Member] | Minimum [Member] | |||
| Related Party Transaction [Line Items] | |||
| Remaining operating lease term | 1 month | ||
| Employees and Minority Shareholders [Member] | Maximum [Member] | |||
| Related Party Transaction [Line Items] | |||
| Remaining operating lease term | 17 years | ||
Insider Trading Arrangements |
3 Months Ended |
|---|---|
|
Mar. 30, 2024
shares
| |
| Insider Trading Arr [Line Items] | |
| Material Terms of Trading Arrangement | ITEM 5. Rule 10b5-1 Trading Arrangements During the three months ended March 30, 2024, (i) Michael S. Ettinger , the Company’s Executive Vice President and Chief Operating Officer , and (ii) Walter Siegel , the Company’s Senior Vice President and Chief Legal Officer , each adopted intended to satisfy the affirmative defense of Exchange Act Rule 10b5 -1(c), as well as the requirements of the Company’s insider trading policy. Each plan is subject to an initial “cooling off” period during which there may be no transactions between the adoption date and a date that is the later of 90 days Company’s filing of its next quarterly report on Form 10-Q or Annual Report on form 10-K. March 4, 2024 , Mr. Ettinger adopted the trading plan to sell a total of 12,240 a term through March 4, 2025 . March 7, 2024 , Mr. Siegel adopted the trading plan to sell 4,134 a limit order at a specified price, with a term through March 7, 2025 . |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
| Michael S. Ettinger [Member] | |
| Insider Trading Arr [Line Items] | |
| Name | Michael S. Ettinger |
| Title | Executive Vice President and Chief Operating Officer |
| Rule 10b5-1 Arrangement Adopted | true |
| Adoption Date | March 4, 2024 |
| Termination Date | March 4, 2025 |
| Aggregate Available | 12,240 |
| Walter Siegel [Member] | |
| Insider Trading Arr [Line Items] | |
| Name | Walter Siegel |
| Title | Senior Vice President and Chief Legal Officer |
| Rule 10b5-1 Arrangement Adopted | true |
| Adoption Date | March 7, 2024 |
| Termination Date | March 7, 2025 |
| Aggregate Available | 4,134 |