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Stock Plans
 6 Months Ended
Jul. 05, 2020
Share-based Payment Arrangement [Abstract]  
Stock Plans Stock Plans
The Company’s 2019 Incentive Plan (the “2019 Plan”) authorizes the issuance of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash awards as part of the Company’s compensation programs. The 2019 Plan was approved by the Company’s Board on January 24, 2019 and by the Company’s shareholders on April 23, 2019. The 2019 Plan replaced the Company’s 2009 Incentive Plan (the “2009 Plan”), under which the Company’s common stock was made available for stock option grants, restricted stock awards, performance restricted stock units, performance units and stock awards as part of the Company’s compensation programs. Upon shareholder approval of the 2019 Plan, 6.25 million shares of the Company’s common stock, as well as shares of the Company’s common stock previously granted under the 2009 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price subject to a contractual repurchase right, became available for grant under the 2019 Plan. Awards granted under the 2009 Plan prior to its expiration remain outstanding. As part of the Company’s compensation programs, the Company also offers shares of its common stock under its Employee Stock Purchase Plan.
The following table summarizes total pre-tax compensation expense recognized related to the Company’s stock option grants, restricted stock awards, performance restricted stock units, performance units and stock awards, included in the
Company’s condensed consolidated statements of operations for the three and six months ended July 5, 2020 and June 30, 2019:
 Three Months EndedSix Months Ended
 July 5,
2020		June 30,
2019		July 5,
2020		June 30,
2019
 (In thousands)
Cost of revenue$253  $377  $507  $711  
Research and development expenses316  333  588  624  
Selling, general and administrative expenses9,034  5,993  11,558  11,466  
Total stock-based compensation expense$9,603  $6,703  $12,653  $12,801  
The total income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation was $3.3 million and $5.5 million for the three and six months ended July 5, 2020, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation was $3.0 million and $7.2 million for the three and six months ended June 30, 2019, respectively. Stock-based compensation costs capitalized as part of inventory were $0.5 million as of each of July 5, 2020 and June 30, 2019, respectively.
Stock Options: The fair value of each option grant is estimated using the Black-Scholes option pricing model. The Company’s weighted-average assumptions used in the Black-Scholes option pricing model were as follows:
 Three and Six Months Ended
 July 5,
2020		June 30,
2019
Risk-free interest rate0.9 %1.9 %
Expected dividend yield0.3 %0.3 %
Expected term5 years5 years
Expected stock volatility23.8 %22.8 %
The following table summarizes stock option activity for the six months ended July 5, 2020:
Number
of
Shares		Weighted-
Average Exercise
Price		Weighted-Average
Remaining
Contractual 
Term		Total
Intrinsic
Value
 (In thousands) (In years)(In millions)
Outstanding at December 29, 20191,535  $60.42  
Granted266  86.87  
Exercised(196) 51.35  
Forfeited(65) 87.41  
Outstanding at July 5, 20201,540  $65.00  3.6$50.7  
Exercisable at July 5, 20201,123  $56.75  2.7$46.2  
The weighted-average per-share grant-date fair value of options granted during the six months ended July 5, 2020 was $18.98. The weighted-average per-share grant-date fair value of options granted during the three and six months ended June 30, 2019 was $21.95 and $22.64, respectively. The total intrinsic value of options exercised during the three and six months ended July 5, 2020 was $7.8 million and $8.7 million, respectively. The total intrinsic value of options exercised during the three and six months ended June 30, 2019 was $7.9 million and $16.7 million, respectively. Cash received from option exercises for the six months ended July 5, 2020 and June 30, 2019 was $10.1 million and $16.6 million, respectively.
The total compensation expense recognized related to the Company’s outstanding options was $0.8 million and $1.9 million for the three and six months ended July 5, 2020, respectively, and $1.3 million and $2.7 million for the three and six months ended June 30, 2019, respectively.
There was $6.5 million of total unrecognized compensation cost related to nonvested stock options granted as of July 5, 2020. This cost is expected to be recognized over a weighted-average period of 2.2 years.
Restricted Stock Awards: The following table summarizes restricted stock award activity for the six months ended July 5, 2020:
Number of
Shares		Weighted-
Average
Grant-
Date Fair
Value
 (In thousands) 
Nonvested at December 29, 2019345  $78.69  
Granted181  84.13  
Vested(181) 71.80  
Forfeited(28) 84.80  
Nonvested at July 5, 2020317  $85.20  
The fair value of restricted stock awards vested during the three and six months ended July 5, 2020 was $1.4 million and $13.0 million, respectively. The fair value of restricted stock awards vested during the three and six months ended June 30, 2019 was $2.0 million and $11.3 million, respectively. The total compensation expense recognized related to the Company’s outstanding restricted stock awards was $2.7 million and $5.2 million for the three and six months ended July 5, 2020, respectively, and $2.8 million and $5.5 million for the three and six months ended June 30, 2019, respectively.
As of July 5, 2020, there was $21.2 million of total unrecognized compensation cost related to nonvested restricted stock awards. This cost is expected to be recognized over a weighted-average period of 1.9 years.
Performance Restricted Stock Units: As part of the Company's executive compensation program, the Company granted 89,986 performance restricted stock units during the six months ended July 5, 2020 that will vest based on performance of the Company. The weighted-average per-share grant date fair value of performance restricted stock units granted during the six months ended July 5, 2020 was $76.76. During the six months ended July 5, 2020, 29,943 performance restricted stock units were forfeited. The total compensation expense recognized related to performance restricted stock units was $2.0 million and $2.6 million for the three and six months ended July 5, 2020, respectively, and $0.7 million and $1.5 million for the three and six months ended June 30, 2019, respectively. As of July 5, 2020, there were 121,759 performance restricted stock units outstanding.
Performance Units: No performance units were granted during the six months ended July 5, 2020. During the six months ended July 5, 2020, 1,948 performance units were forfeited. The total compensation expense recognized related to performance units was $3.3 million and $2.3 million for the three and six months ended July 5, 2020, respectively, and $1.2 million and $2.4 million for the three and six months ended June 30, 2019, respectively. As of July 5, 2020, there were 31,207 performance units outstanding and subject to forfeiture, with a corresponding liability of $5.6 million recorded in accrued expenses and other current liabilities.
Stock Awards: The Company’s stock award program provides an annual equity award to non-employee directors. During the six months ended July 5, 2020, the Company awarded 8,333 shares to non-employee directors. The weighted-average per-share grant-date fair value of the stock awards granted during the six months ended July 5, 2020 was $91.75. The total compensation expense recognized related to the stock awards was $0.8 million and $0.7 million for the six months ended July 5, 2020 and June 30, 2019, respectively.
Employee Stock Purchase Plan: During the six months ended July 5, 2020, the Company issued 27,619 shares of common stock under the Company's Employee Stock Purchase Plan at a weighted-average price of $92.72 per share. During the six months ended June 30, 2019, the Company issued 18,562 shares of common stock under the Company's Employee Stock Purchase Plan at a weighted-average price of $74.62 per share. At July 5, 2020, an aggregate of 0.8 million shares of the Company’s common stock remained available for sale to employees out of the 5.0 million shares authorized by shareholders for issuance under this plan.