Stock Compensation Plans and Stock Based Compensation (Tables)

12 Months Ended

Dec. 29, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock based compensation expense and allocation by share based payment award

Stock-based compensation expense and the related income tax benefit recognized in connection with stock options, restricted stock and the Employee Stock Purchase Plan, or ESPP, during fiscal 2012, 2011 and 2010 were as follows:

	2012		2011		2010
	(In thousands)
Stock options	$	8,752	$	8,685	$	7,924
Restricted stock	34,838		30,815		31,725
ESPP	3,971		4,088		3,811
Total stock-based compensation expense	$	47,561	$	43,588	$	43,460
Income tax benefit	$	12,453	$	1,406	$	1,370

Stock based compensation expense and allocation by cost

Stock-based compensation expense is reflected throughout Cadence's costs and expenses during fiscal 2012, 2011 and 2010 as follows:

	2012		2011		2010
	(In thousands)
Cost of product	$	99	$	111	$	117
Cost of services	1,889		2,105		2,225
Cost of maintenance	1,218		1,357		1,435
Marketing and sales	10,193		10,356		9,765
Research and development	21,516		18,561		18,324
General and administrative	12,646		11,098		11,594
Total stock-based compensation expense	$	47,561	$	43,588	$	43,460

Fair value of options granted and the weighted-average assumptions

The weighted-average grant date fair value of options granted and the weighted-average assumptions used in the model for fiscal 2012, 2011 and 2010 were as follows:

	2012			2011			2010
Dividend yield	None			None			None
Expected volatility	46.4		%	44.9		%	45.9		%
Risk-free interest rate	0.79		%	2.18		%	2.45		%
Expected term (in years)	4.6			4.7			4.6
Weighted-average fair value of options granted	$	4.57		$	3.93		$	2.51

Summary of changes in stock options outstanding under equity incentive plans

A summary of the changes in stock options outstanding under Cadence's equity incentive plans during fiscal 2012 is presented below:

			Weighted- Average		Weighted- Average Remaining Contractual Terms	Aggregate Intrinsic
	Shares		Exercise Price		(Years)	Value
	(In thousands)					(In thousands)
Options outstanding as of December 31, 2011	22,996		$	11.01
Granted	1,700		$	11.63
Exercised	(2,457	)	$	7.78
Canceled and forfeited	(2,961	)	$	16.03
Options outstanding as of December 29, 2012	19,278		$	10.71	3.4	$	71,574
Options vested as of December 29, 2012	15,696		$	11.00	2.9	$	57,307
Options vested as of, and expected to vest after, December 29, 2012	19,222		$	10.71	3.3	$	71,386

Intrinsic value of and cash received from options exercised

The total intrinsic value of and cash received from options exercised during fiscal 2012, 2011 and 2010 was:

	2012		2011		2010
	(In thousands)
Intrinsic value of options exercised	$	11,493	$	7,255	$	1,435
Cash received from options exercised	$	19,119	$	6,478	$	868

Stock-based compensation expense related to performance-based restricted stock grants

Stock-based compensation expense related to performance-based restricted stock grants for fiscal 2012, 2011 and 2010 was as follows:

	2012		2011		2010
	(In thousands)
Stock-based compensation expense related to performance-based grants	$	3,230	$	2,174	$	2,541

Summary of the changes in restricted stock outstanding under Cadence's equity incentive plans

A summary of the changes in restricted stock outstanding under Cadence's equity incentive plans during fiscal 2012 is presented below:

			Weighted- Average Grant Date		Weighted- Average Remaining Vesting Terms	Aggregate Intrinsic
	Shares		Fair Value		(Years)	Value
	(In thousands)					(In thousands)
Unvested shares as of December 31, 2011	7,827		$	8.39
Granted	6,078		$	11.33
Vested	(4,033	)	$	8.02
Forfeited	(428	)	$	9.07
Unvested shares as of December 29, 2012	9,444		$	10.40	1.2	$	126,928
Unvested shares expected to vest after December 29, 2012	8,869		$	10.38	1.2	$	119,206

Total fair value of restricted stock awards that vested

The total fair value realized by employees upon vesting of restricted stock during fiscal 2012, 2011 and 2010 was:

	2012		2011		2010
	(In thousands)
Fair value of restricted stock realized upon vesting	$	48,249	$	43,756	$	28,866

Weighted-average grant date fair value of purchase rights granted under ESPP and weighted average assumptions used in model

The weighted-average grant date fair value of purchase rights granted under the ESPP and the weighted-average assumptions used in the model for fiscal 2012, 2011 and 2010 were as follows:

	2012			2011			2010
Dividend yield	None			None			None
Expected volatility	31.4		%	38.4		%	39.1		%
Risk-free interest rate	0.12		%	0.17		%	0.19		%
Expected term (in years)	0.5			0.5			0.5
Weighted-average fair value of options granted	$	2.78		$	2.48		$	1.72

Shares of common stock issued under Employee Stock Purchase Plan

Shares of common stock issued under the ESPP for fiscal 2012, 2011 and 2010 were as follows:

	2012		2011		2010
	(In thousands, except per share amounts)
Cadence shares purchased under the ESPP	1,548		2,029		2,568
Cash received for the purchase of shares under the ESPP	$	13,568	$	13,236	$	12,765
Weighted-average purchase price per share	$	8.77	$	6.52	$	4.97

Summary of common stock reserved for future issuance

As of December 29, 2012, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:

	Shares
	(In thousands)
Employee equity incentive plans*	39,505
2015 Warrants (Note 3)	46,382
2011 and 2013 Notes Warrants (Note 3)	6,830
Employee stock purchase plans	3,752
Directors stock option plans*	2,681
2023 Notes conversion (Note 3)	11
Total	99,161

* Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units.