The Company has stock-based compensation plans under which employees and non-employee directors are granted stock-based awards such as stock options, RSUs, and PSUs.

During fiscal years 2023, 2022 and 2021, the primary share-based awards and their general terms and conditions are as follows:

•Stock options, which entitle the holder to purchase a specified number of shares of common stock at an exercise price equal to the closing market price of common stock on the date of grant; typically vest over 4 years; and typically expire 5 or 10 years from date of grant.

•RSUs, which represent an unsecured promise to grant at no cost a set number of shares of common stock upon the completion of the vesting schedule, and principally vest over 4 years. With respect to RSUs, recipients are not entitled to cash dividends and have no voting rights on the stock during the vesting period.

•PSUs, which entitle the holder to receive at no cost, a specified number of shares of common stock within a range of shares from zero to a specified maximum and typically vest over 3 years. Payout of this award is contingent upon achievement of certain performance and market conditions.

As of December 30, 2023, approximately 4.1 million shares were authorized for future grants under the Company’s share-based compensation plans. The Company settles employee share-based compensation awards with newly issued shares. The following table provides stock-based compensation by the financial statement line item in which it is reflected:


	Fiscal Year
	2023		2022		2021
	(in thousands)
Cost of revenue	$	15,052	$	14,853	$	13,087
Selling, general and administrative	56,996		58,764		58,387
Stock-based compensation, before income taxes	72,048		73,617		71,474
Provision for income taxes	(10,907)		(10,969)		(10,299)
Stock-based compensation, net of income taxes	$	61,141	$	62,648	$	61,175

The following table summarizes stock option activity under the Company’s stock-based compensation plans:


	Number of shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)			(in years)	(in thousands)
Options outstanding as of December 31, 2022	882	$	204.41
Options granted	130	$	194.27
Options exercised	(195)	$	130.91
Options canceled	(28)	$	259.63
Options outstanding as of December 30, 2023	789	$	218.97	6.5	$	28,935
Options exercisable as of December 30, 2023	408	$	205.50	4.8	$	20,521
Options expected to vest as of December 30, 2023	381	$	233.37	8.3	$	8,414

The fair value of stock options granted was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:


	Fiscal Year
	2023		2022		2021
Expected life (in years)	6.0		6.0		6.0
Expected volatility	36	%	33	%	32	%
Risk-free interest rate	3.8	%	2.7	%	1.0	%
Expected dividend yield	0	%	0	%	0	%

The weighted-average grant date fair value of stock options granted was $80.98, $90.05 and $108.61 for fiscal years 2023, 2022 and 2021, respectively.

As of December 30, 2023, the unrecognized compensation cost related to unvested stock options expected to vest was $18.5 million. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.4 years.

The total intrinsic value of options exercised during fiscal years 2023, 2022 and 2021 was $18.2 million, $33.2 million and $94.4 million, respectively, with intrinsic value defined as the difference between the market price on the date of exercise and the exercise price.


	Restricted Stock Units	Weighted Average Grant Date Fair Value
	(in thousands)
December 31, 2022	364	$	226.43
Granted	265	$	194.84
Vested	(134)	$	212.34
Canceled	(26)	$	231.70
December 30, 2023	469	$	212.30

As of December 30, 2023, the unrecognized compensation cost related to shares of unvested RSUs expected to vest was $65.8 million, which is expected to be recognized over an estimated weighted-average amortization period of 2.8 years. The total fair value of RSU grants that vested during fiscal years 2023, 2022 and 2021 was $28.4 million, $24.8 million and $22.8 million, respectively.

The Company issues PSUs to certain corporate officers. The number of shares of common stock issued for each PSU is adjusted based on a performance condition linked to the Company’s financial performance. Certain awards are further adjusted based on a market condition, which is calculated based on the Company’s stock performance relative to a peer group over the three-year vesting period. The fair value of the market condition is reflected in the fair value of the award at grant date.

The Company utilizes a Monte Carlo simulation valuation model to value these awards. Information pertaining to the Company’s PSUs and the related estimated weighted-average assumptions used to calculate their fair value were as follows:


	Fiscal Year
	2023			2022			2021
	(shares in thousands)
PSUs granted	146			134			64
Weighted average grant date fair value	$	204.40		$	210.42		$	407.76
Key assumptions:
Expected volatility	37		%	39		%	37		%
Risk-free interest rate	4.2		%	2.6		%	0.2		%
Expected dividend yield	0		%	0		%	0		%
Total shareholder return of 20-trading day average stock price on grant date	(9.8)		%	(32.7)		%	39.9		%

The maximum number of common shares to be issued upon vesting of PSUs is 0.3 million. For fiscal years 2023, 2022 and 2021, the Company recognized stock-based compensation related to PSUs of $28.1 million, $31.2 million and $31.8 million, respectively. The total fair value of PSUs that vested during fiscal years 2023, 2022 and 2021 was $34.4 million, $31.0 million and $26.0 million, respectively.