On May 29, 2008, the Company’s stockholders approved the 2008 Equity Incentive Plan and the 2008 Employee Stock Purchase Plan (“ESPP”). The 2008 Equity Incentive Plan and ESPP were previously adopted by the Company’s Board of Directors on April 8, 2008, subject to stockholder approval.

The 2008 Equity Incentive Plan allows for the award of stock options, stock awards (including stock units, stock grants and stock appreciation rights or other similar equity awards) and cash awards to officers, employees, consultants and non-employee members of the Board of Directors. The total number of shares reserved for issuance under the 2008 Equity Incentive Plan was 11,856,300 shares of common stock, subject to adjustment resulting from a stock split or the payment of a stock dividend or any other increase or decrease in the number of issued shares of the Company’s stock effected without receipt of consideration by the Company. As of January 3, 2020, 2,121,786 shares were available for grant under the 2008 Equity Incentive Plan.

The ESPP allows for officers and employees to purchase common stock through payroll deductions of up to 15% of a participant’s eligible compensation. Shares of common stock are purchased under the ESPP at 95% of the fair market value of the Company’s common stock on each purchase date. Subject to adjustment resulting from a stock split or the payment of a stock dividend or any other increase or decrease in the number of issued shares of the Company’s stock effected without receipt of consideration by the Company, the total number of shares reserved for issuance under the ESPP was 1,200,000 shares of common stock. As of January 3, 2020, 386,628 shares were available for grant. Weighted average purchase prices for shares sold under the ESPP plan in 2019, 2018 and 2017 were $60.32, $45.26 and $30.67, respectively.

The Company grants restricted stock units to employees and outside directors. These restricted stock unit grants are designed to attract and retain employees, and to better align employee interests with those of the Company’s stockholders. For a select group of employees, up to 40% of their annual bonus is settled with fully vested restricted stock unit awards. Under these fully vested restricted stock unit awards, the holder of each award has the right to receive one share of the Company’s common stock for each fully vested restricted stock unit four years from the date of grant. Each individual who received a fully vested restricted stock unit award is granted a matching number of unvested restricted stock unit awards. These unvested restricted stock unit awards cliff vest four years from the date of grant, at which time the holder of each award will have the right to receive one share of the Company’s common stock for each restricted stock unit award, provided the holder of each award has met certain employment conditions. In the case of retirement at 59 ½ years or older, all unvested restricted stock unit awards will continue to vest provided the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company.

All restricted stock units granted have dividend equivalent rights (“DER”), which entitle holders of restricted stock units to the same dividend value per share as holders of common stock. DER are subject to the same vesting and other terms and conditions as the corresponding unvested restricted stock units. DER are accumulated and paid when the underlying shares vest and are forfeited if the underlying shares are forfeited.

The value of these restricted stock unit awards is determined based on the market price of the Company’s common stock on the date of grant. The value of fully vested restricted stock unit awards issued is recorded as a reduction to accrued bonuses. The portion of bonus expense that the Company expects to settle with fully vested restricted stock unit awards is recorded as stock-based compensation during the period the bonus is earned. For 2019, 2018 and 2017, the Company recorded stock-based compensation expense associated with accrued bonus awards of $8,756,000, $8,443,000 and $8,331,000, respectively.

The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $8,127,000, $7,653,000 and $7,075,000 during 2019, 2018 and 2017, respectively. The total fair value of restricted stock unit awards vested during 2019, 2018, and 2017 was $25.6 million, $23.2 million and $21.3 million, respectively. The weighted-average grant date fair values of restricted stock unit awards granted during 2019, 2018 and 2017 were $57.08, $40.61 and $29.50, respectively.

The number of unvested restricted stock unit awards outstanding as of January 3, 2020 is as follows ⁽¹⁾:

	Number of awards outstanding			Weighted- average grant date fair value		Weighted- average remaining contractual term (years)		Aggregate intrinsic value (in thousands) ⁽²⁾
Balance as of December 28, 2018		1,034,539		$	27.76
Awards granted		302,635			57.08
Awards vested		(448,946	)		32.83
Awards forfeited		(1,933	)		46.64

Balance as of January 3, 2020		886,295		$	35.16		1.4	$	62,448

The Company currently grants stock options under the 2008 Equity Incentive Plan. Options are granted for terms of ten years and generally vest ratably over a four-year period from the grant date. The Company grants options at exercise prices equal to the fair value of the Company’s common stock on the date of grant. All stock options have dividend equivalent rights, which entitle holders of stock options to the same dividend value per share as holders of common stock. DER are subject to the same vesting terms as the corresponding stock options. DER are accumulated and paid in cash when the underlying stock options vest and are forfeited if the underlying stock options do not vest. During 2019, 2018 and 2017, the Company recorded stock-based compensation expense of $583,000, $897,000 and $749,000, respectively, associated with stock options.

	Number of shares outstanding			Weighted- average exercise price		Weighted- average remaining contractual term (years)		Aggregate intrinsic value (in thousands)
Balance as of December 28, 2018		778,000		$	20.80
Options granted		50,000			54.95
Options forfeited and expired		—			—
Options exercised		(165,851	)		9.41

Balance as of January 3, 2020		662,149		$	26.23		5.85	$	29,290

Exercisable at January 3, 2020		450,649		$	20.99		4.93	$	22,292

The total intrinsic value of options exercised during 2019, 2018 and 2017 was $9,651,000, $0 and $1,461,000, respectively. The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the fiscal year ended January 3, 2020, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on January 3, 2020. This amount changes based on the fair-value of the Company’s stock.

The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include expected stock price volatility over the term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends.

The Company used historical exercise and post-vesting forfeiture and expiration data to estimate the expected term of options granted. The historical volatility of the Company’s common stock over a period of time equal to the expected term of the options granted was used to estimate expected volatility. The risk-free interest rate used in the option-pricing model was based on United States Treasury zero coupon issues with remaining terms similar to the expected term on the options. The dividend yield assumption considers the expectation of continued declaration of dividends, offset by option holders’ dividend equivalent rights. All share-based payment awards are recognized on a straight-line basis over the requisite service periods of the awards.

The assumptions used to value option grants for 2019, 2018 and 2017 are as follows:

	Stock Option Plan
	Fiscal Years
	2019			2018			2017
Expected term (in years)		5.7			5.9			5.9
Risk-free interest rate		2.52	%		2.74	%		2.11	%
Volatility		23	%		23	%		24	%
Dividend yield		0	%		0	%		0	%

The weighted-average grant date fair value of options granted during 2019, 2018 and 2017 were $15.16, $10.59 and $8.09, respectively.

The amount of stock-based compensation expense and the related income tax benefit recognized in the Company’s consolidated statements of income for 2019, 2018 and 2017 is as follows:

	Fiscal Years
(In thousands)	2019		2018		2017
Compensation and related expenses:
Restricted stock units	$	16,320	$	15,561	$	14,809
Stock option grants		583		897		749
Sub-total		16,903		16,458		15,558

General and administrative expenses:
Restricted stock units		563		535		597
Sub-total		563		535		597
Total stock-based compensation expense	$	17,466	$	16,993	$	16,155

Income tax benefit	$	8,067	$	4,467	$	6,331

As of January 3, 2020, there was $9,338,000 of unrecognized compensation cost, expected to be recognized over a weighted average period of 2.5 years, related to unvested restricted stock unit awards and $1,107,000 of unrecognized compensation cost, expected to be recognized over a weighted average period of 2.4 years, related to unvested stock options.