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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2022
Stock-Based Compensation |
Stock-Based Compensation | 16. Stock-Based Compensation The Company has two active stock plans, the 2009 Stock Incentive Plan (the “2009 Plan”) and the 2009 Employee Stock Purchase Plan (the “2009 ESPP”) that have been amended and approved by shareholders from time to time.
| ● | The 2009 Plan allows for grants of stock options, stock appreciation rights, performance shares, performance stock units, restricted stock units (RSUs), restricted stock awards (RSAs), performance-based stock units (PSUs) and other awards (collectively, “awards”). All awards deduct one share from the 2009 Plan shares available for issuance for each share granted. Awards granted under the 2009 Plan contain vesting provisions mostly ranging from three to four years. To the extent awards granted under the 2009 Plan terminate, expire, or lapse for any reason, or are settled in cash, shares subject to such awards will again be available for grant.
| ● | The 2009 ESPP allows eligible employees to purchase a limited number of shares of the Company’s common stock at no less than 85% of the fair market value of a share of common stock at prescribed purchase intervals during an offering period. Each offering period is comprised of a series of one or more successive and/or overlapping purchase intervals and has a maximum term of 27 months.
2009 Plan The Company granted to its employees 0.5 million, 0.6 million and 0.7 million shares of full value awards from the 2009 Plan during fiscal 2022, 2021 and 2020, respectively. Full value awards include RSUs, MSUs awards and PSUs. MSUs provide the rights to acquire a number of shares of common stock for no cash consideration based upon achievement of specified levels of market conditions. The requisite measurement period for these MSUs is also the vesting period, which is generally three years. MSUs granted in 2020 measured the relative performance of the total stockholders’ return of the Company against that of a selected benchmarked group of companies. The Company granted no MSUs in fiscal 2022 and 2021 and 82,000 MSUs in fiscal 2020. PSUs provide for the rights to acquire a number of shares of common stock for no cash consideration based upon the achievement of specified revenue or profitability objectives during the year. The requisite performance period of these PSUs is approximately three years from the date of grant. The Company granted 52,078 and 116,809 PSUs in fiscal 2022 and 2021, respectively, and no PSUs in fiscal 2020. 2009 ESPP The rights to purchase common stock granted under the 2009 ESPP are intended to be treated as either (i) purchase rights granted under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Internal Revenue Code (the “423(b) Plan”), or (ii) purchase rights granted under an employee stock purchase plan that is not subject to the terms and conditions of Section 423(b) of the Internal Revenue Code (the “Non-423(b) Plan”). The Company will retain the discretion to grant purchase rights under either the 423(b) Plan or the Non-423(b) Plan. During fiscal 2022, 2021 and 2020, the Company issued 109,000, 146,000 and 177,000 shares, respectively, under the 2009 ESPP to its employees. The weighted-average fair value for purchase rights granted in fiscal 2022 under the 2009 ESPP was $37.70 per share. ​ 16. Stock-Based Compensation (Continued) Accounting for Stock-Based Compensation Stock-based compensation costs are based on the fair values on the date of grant for awards under the 2009 Plan, and on the date of enrollment for grants under the 2009 ESPP. The fair values of stock awards (such as RSUs, PSUs and RSAs) are estimated based on their intrinsic values. The fair values of MSUs are estimated using a Monte Carlo simulation. The fair values of stock options and grants under the 2009 ESPP are estimated using the Black-Scholes option-pricing model. The fair values of all such stock-based grants are generally amortized on a straight-line basis over the vesting period of the grants. The Company estimates potential forfeitures of stock grants and adjusts compensation cost recorded accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock-based compensation expense to be recognized in future periods. The following table presents details of stock-based compensation costs recognized in the Consolidated Statements of Income (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended
​ | ​ | December 31, | ​ | January 1, | ​ | January 2,
​ |  | 2022 |  | 2022 |  | 2021
Cost of revenues | ​ | $ | 1,152 | ​ | $ | 964 | ​ | $ | 970
Research and development | ​ |  | 32,860 | ​ |  | 24,986 | ​ |  | 23,359
Selling, general and administrative | ​ |  | 26,498 | ​ |  | 30,892 | ​ |  | 25,125
​ | ​ |  | 60,510 | ​ |  | 56,842 | ​ |  | 49,454
Income tax benefit | ​ |  | (5,980) | ​ |  | (954) | ​ |  | (3,694)
Share-based compensation – continuing operations | ​ | ​ | 54,530 | ​ | ​ | 55,888 | ​ | ​ | 45,760
Share-based compensation – discontinued operations, net | ​ | ​ | — | ​ | ​ | (2,007) | ​ | ​ | 10,715
Total | ​ | $ | 54,530 | ​ | $ | 53,881 | ​ | $ | 56,475
​ The Company recorded $7.8 million in selling, general and administrative expense during fiscal 2021 in connection with the modification of certain equity awards. The modifications were pursuant to employee terminations. There were no other significant modifications made to any stock grants during fiscal 2022, 2021 or 2020. The Company had approximately $121.5 million of total unrecognized compensation cost related to equity grants as of December 31, 2022 that is expected to be recognized over a weighted-average period of approximately 2.1 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented. 16. Stock-Based Compensation (Continued) Fair value assumptions and stock awards activity The fair values estimated from the Black-Scholes option-pricing model for ESPP shares granted were calculated using the following assumptions: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended |
​ | ​ | December 31, | ​ | January 1, | ​ | January 2, | ​
Employee Stock Purchase Plan |  | 2022 |  | 2022 |  | 2021 | ​
Expected volatility | ​ | 44 | % | 42 | % | 67 | %
Risk-free interest rate % | ​ | 3.18 | % | 0.05 | % | 0.15 | %
Expected term (in months) | ​ | 9 | ​ | 9 | ​ | 9 | ​
Dividend yield | ​ | — | ​ | — | ​ | — | ​
​ The fair values estimated from the Monte Carlo simulation for MSUs were calculated using the following assumptions: ​
​ | ​ | ​ | ​
​ | ​ | Year Ended |
​ | ​ | January 2, | ​
MSUs |  | 2021 |
Expected volatility |  | 36 | %
Risk-free interest rate % |  | 1.3 | %
Expected term (in years) |  | 2.9 | ​
Dividend yield |  | — | ​
​ A summary of stock-based compensation activity with respect to fiscal 2022 follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted- | ​ | Weighted-Average | ​ | Aggregate
​ | ​ | ​ | ​ | Average | ​ | Remaining | ​ | Intrinsic
​ | ​ | Shares | ​ | Exercise | ​ | Contractual Term | ​ | Value
Stock Options |  | (000s) |  | Price |  | (In Years) |  | (000s)
Outstanding at January 1, 2022 |  | 118 | ​ | $ | 38.80 |  | 4.12 | ​ | $ | 19,825
Outstanding at December 31, 2022 |  | 118 | ​ | $ | 38.80 |  | 3.12 | ​ | $ | 11,457
Vested at December 31, 2022 and expected to vest |  | 118 | ​ | $ | 38.80 |  | 3.12 | ​ | $ | 11,457
Exercisable at December 31, 2022 |  | 118 | ​ | $ | 38.80 |  | 3.12 | ​ | $ | 11,457
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ | Weighted- | ​ | Weighted-Average | ​ | Aggregate
​ | ​ | ​ | ​ | Average | ​ | Remaining | ​ | Intrinsic
​ | ​ | Shares | ​ | Grant Date | ​ | Vesting Term | ​ | Value
RSAs and RSUs |  | (000s) |  | Fair Value |  | (In Years) |  | (000s)
Outstanding at January 1, 2022 |  | 831 | ​ | $ | 117.25 | ​ | ​ | ​ | ​ | ​
Granted |  | 487 | ​ | $ | 144.40 | ​ | ​ | ​ | ​ | ​
Vested or issued |  | (378) | ​ | $ | 110.12 | ​ | ​ | ​ | ​ | ​
Cancelled or forfeited |  | (43) | ​ | $ | 134.92 | ​ | ​ | ​ | ​ | ​
Outstanding at December 31, 2022 |  | 897 | ​ | $ | 134.74 |  | 1.18 | ​ | $ | 121,668
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at December 31, 2022 and expected to vest |  | 825 | ​ | $ | 134.22 |  | 1.18 | ​ | $ | 111,979
​ 16. Stock-Based Compensation (Continued) ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted- |  | Weighted-Average | ​ | Aggregate
​ | ​ | ​ | ​ | Average | ​ | Remaining | ​ | Intrinsic
​ | ​ | Shares | ​ | Grant Date | ​ | Vesting Term | ​ | Value
PSUs and MSUs |  | (000s) |  | Fair Value |  | (In Years) |  | (000s)
Outstanding at January 1, 2022 |  | 246 |  | $ | 105.77 | ​ | ​ | ​ | ​ | ​
Granted |  | 52 | ​ | $ | 160.97 | ​ | ​ | ​ | ​ | ​
Vested or issued |  | — | ​ | $ | — | ​ | ​ | ​ | ​ | ​
Cancelled or forfeited |  | (73) | ​ | $ | 54.77 | ​ | ​ | ​ | ​ | ​
Outstanding at December 31, 2022 |  | 225 | ​ | $ | 134.93 |  | 1.27 | ​ | $ | 30,599
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at December 31, 2022 and expected to vest |  | 329 |  | $ | 138.15 |  | 1.27 | ​ | $ | 44,604
​ The following summarizes the Company’s weighted average fair value at the date of grant: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended
​ | ​ | December 31, | ​ | January 1, | ​ | January 2,
​ |  | 2022 |  | 2022 |  | 2021
Per grant of RSAs and RSUs | ​ | $ | 144.40 |  | $ | 135.28 |  | $ | 100.27
Per grant of PSUs and MSUs | ​ | $ | 160.97 |  | $ | 145.11 |  | $ | 98.58
​ The following summarizes the Company’s stock-based payment and stock option values (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended
​ | ​ | December 31, | ​ | January 1, | ​ | January 2,
​ |  | 2022 |  | 2022 |  | 2021
Intrinsic value of stock options exercised | ​ | $ | — | ​ | $ | 986 | ​ | $ | 558
Intrinsic value of RSUs that vested | ​ | $ | 57,621 | ​ | $ | 76,654 | ​ | $ | 48,534
Grant date fair value of RSUs that vested | ​ | $ | 41,610 | ​ | $ | 47,726 | ​ | $ | 37,477
Intrinsic value of PSUs and MSUs that vested | ​ | $ | — | ​ | $ | 5,231 | ​ | $ | 8,545
Grant date fair value of PSUs and MSUs that vested | ​ | $ | — | ​ | $ | 3,562 | ​ | $ | 6,302
​ As of December 31, 2022, the Company had reserved shares of common stock for future issuance as follows (in thousands): ​
​ | ​ | ​
2009 Plan |  | 2,520
2009 ESPP |  | 1,145
Total shares reserved |  | 3,665
​

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