Stock-Based Compensation Plans

The Company's equity incentive plans are broad-based, long-term retention programs that cover employees, consultants and non-employee directors of the Company. These plans are intended to attract and retain talented employees, consultants and non-employee directors and to provide such persons with a proprietary interest in the Company.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to stock awards granted under the Company's equity incentive plans and rights to acquire stock granted under the Company's employee stock purchase plan (ESPP):



(In thousands)	April 1, 2017			April 2, 2016			March 28, 2015
Stock-based compensation included in:
Cost of revenues	$	8,014		$	7,977		$	8,101
Research and development	66,822			59,692			50,185
Selling, general and administrative	48,022			44,315			40,994
Restructuring charges	—			—			579
Stock-based compensation effect on income before taxes	122,858			111,984			99,859
Income tax effect	(37,752		)	(34,119		)	(29,268		)
Net stock-based compensation effect on net income	$	85,106		$	77,865		$	70,591

The Company adjusts stock-based compensation on a quarterly basis for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization was recognized in the period the forfeiture estimate was changed, and was not material for all periods presented.

During fiscal 2017, 2016 and 2015, there were no options granted and therefore the Company's stock-based compensation expense related to options, and the number of options outstanding as of April 1, 2017, were not material.

As of April 1, 2017 and April 2, 2016, the ending inventory balances included $2.2 million and $2.0 million of capitalized stock-based compensation, respectively. During fiscal 2017, 2016 and 2015, the tax benefit realized for the tax deduction from restricted stock units (RSUs) and other awards totaled $53.3 million, $56.3 million and $55.0 million, respectively. The tax deduction includes amounts credited to income tax expense in fiscal 2017, and additional paid-in capital in fiscal 2016 and 2015.

The fair values of ESPP were estimated as of the grant date using the Black-Scholes option pricing model. The Company's expected stock price volatility assumption is estimated using implied volatility of the Company's traded options. The expected life of options granted is based on the historical exercise activity as well as the expected disposition of all options outstanding. The expected life of options granted also considers the actual contractual term.

The weighted-average fair value per share of stock purchase rights granted under the ESPP during fiscal 2017, 2016 and 2015 were $13.00, $11.12 and $9.17, respectively. These fair values per share were estimated at the date of grant using the following weighted-average assumptions:



	Employee Stock Purchase Plan
	2017		2016		2015
Expected life of options (years)	1.3		1.3		1.3
Expected stock price volatility	0.24		0.26		0.25
Risk-free interest rate	0.7	%	0.5	%	0.3	%
Dividend yield	2.4	%	2.7	%	2.9	%

The estimated fair values of RSU awards were calculated based on the market price of Xilinx common stock on the date of grant, reduced by the present value of dividends expected to be paid on Xilinx common stock prior to vesting. The per share weighted-average fair value of RSUs granted during fiscal 2017, 2016 and 2015 were $44.38, $41.19 and $43.11, respectively. The weighted average fair value of RSUs granted in fiscal 2017, 2016 and 2015 were calculated based on estimates at the date of grant using the following weighted-average assumptions:



	2017		2016		2015
Risk-free interest rate	0.9	%	1.3	%	0.8	%
Dividend yield	2.8	%	2.8	%	2.5	%

As of April 1, 2017, total unrecognized stock-based compensation costs related to ESPP was $20.7 million. The total unrecognized stock-based compensation cost for ESPP is expected to be recognized over a weighted-average period of 1.1 years.

Equity Incentive Plans

As of April 1, 2017, 12.5 million shares are available for future grants under the 2007 Equity Incentive Plan (2007 Equity Plan). The contractual term for stock awards granted under the 2007 Equity Plan is seven years from the grant date. Stock awards granted to existing and newly hired employees generally vest over a four-year period from the date of grant.

A summary of shares available for grant under the 2007 Equity Plan is as follows:



(Shares in thousands)	Shares Available for Grant
March 29, 2014	15,037
Additional shares reserved	3,000
Stock options cancelled	6
RSUs granted	(3,201	)
RSUs cancelled	531
March 28, 2015	15,373
Stock options cancelled	10
RSUs granted	(3,088	)
RSUs cancelled	651
April 2, 2016	12,946
Additional shares reserved	2,500
Stock options cancelled	1
RSUs granted	(3,398	)
RSUs cancelled	410
April 1, 2017	12,459

The types of awards allowed under the 2007 Equity Plan include incentive stock options, non-qualified stock options, RSUs, restricted stock and stock appreciation rights. To date, the Company has issued a mix of non-qualified stock options and RSUs under the 2007 Equity Plan.

The total pre-tax intrinsic value of options exercised during fiscal 2017 and 2016 was $28.0 million and $42.6 million, respectively. This intrinsic value represents the difference between the exercise price and the fair market value of the Company's common stock on the date of exercise.

Since the Company adopted the policy of retiring all repurchased shares of its common stock, new shares are issued upon employees' exercise of their stock options.

RSU Awards

A summary of the Company's RSU activity and related information is as follows:



	RSUs Outstanding
(Shares and intrinsic value in thousands)	Number of Shares		Weighted-Average Grant-Date Fair Value Per Share	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value ⁽¹⁾
March 29, 2014	6,901		$35.08
Granted	3,201		$43.11
Vested ⁽²⁾	(2,698	)	$33.82
Cancelled	(531	)	$32.91
March 28, 2015	6,873		$39.07
Granted	3,088		$41.19
Vested ⁽²⁾	(2,691	)	$37.23
Cancelled	(651	)	$39.77
April 2, 2016	6,619		$40.74
Granted	3,398		$44.38
Vested ⁽²⁾	(2,619	)	$39.49
Cancelled	(410	)	$41.63
April 1, 2017	6,988		$42.93	2.38	$	404,667

Expected to vest as of April 1, 2017	5,676		$42.95	2.39	$	328,590


(1)	Aggregate intrinsic value for RSUs represents the closing price per share of Xilinx's stock on April 1, 2017 of $57.89, multiplied by the number of RSUs outstanding or expected to vest as of April 1, 2017.


(2)	The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements.

RSUs with a fair value of $103.4 million were vested during fiscal 2017. As of April 1, 2017, total unrecognized stock-based compensation costs related to non-vested RSUs was $198.5 million. The total unrecognized stock-based compensation cost for RSUs is expected to be recognized over a weighted-average period of 2.6 years.

Employee Stock Purchase Plan

Under the Company's ESPP, qualified employees can obtain a 24-month purchase right to purchase the Company's common stock at the end of each six-month exercise period. Participation is limited to 15% of the employee's annual earnings up to a maximum of $21 thousand in a calendar year. Approximately 83% of all eligible employees participate in the ESPP. The purchase price of the stock is 85% of the lower of the fair market value at the beginning of the 24-month offering period or at the end of each six-month exercise period. Employees purchased 1.2 million shares for $39.5 million in fiscal 2017, 1.1 million shares for $37.6 million in fiscal 2016, and 1.2 million shares for $39.0 million in fiscal 2015. The next scheduled purchase under the ESPP is in the second quarter of fiscal 2018. As of April 1, 2017, 8.2 million shares were available for future issuance.