Stock Compensation Plans and Stock Based Compensation (Tables)

12 Months Ended

Jan. 03, 2015

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 2014, 2013 and 2012 were as follows:

	2014		2013		2012
	(In thousands)
Stock options	$	11,870	$	13,100	$	8,752
Restricted stock	65,894		49,019		34,838
ESPP	6,028		4,166		3,971
Total stock-based compensation expense	$	83,792	$	66,285	$	47,561
Income tax benefit	$	20,544	$	16,236	$	12,453

Stock based compensation expense and allocation by cost

Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2014, 2013 and 2012 as follows:

	2014		2013		2012
	(In thousands)
Cost of product and maintenance	$	2,244	$	1,596	$	1,317
Cost of services	3,280		2,321		1,889
Marketing and sales	20,580		15,642		10,193
Research and development	43,173		32,999		21,516
General and administrative	14,515		13,727		12,646
Total stock-based compensation expense	$	83,792	$	66,285	$	47,561

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 2014, 2013 and 2012 were as follows:

	2014			2013			2012
Dividend yield	None			None			None
Expected volatility	29.2		%	40.0		%	46.4		%
Risk-free interest rate	1.59		%	0.86		%	0.79		%
Expected term (in years)	4.8			4.7			4.6
Weighted-average fair value of options granted	$	3.89		$	4.93		$	4.57

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 2014 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 28, 2013	17,475		$	10.06
Acquired options	20		0.32
Granted	1,312		13.90
Exercised	(4,202	)	10.98
Canceled and forfeited	(729	)	18.09
Options outstanding as of January 3, 2015	13,876		$	9.71	3.3	$	126,892
Options vested as of January 3, 2015	11,425		$	9.28	2.8	$	109,501
Options vested as of, and expected to vest after, January 3, 2015	13,870		$	9.71	3.3	$	126,866

Intrinsic value of and cash received from options exercised

The total intrinsic value of and cash received from options exercised during fiscal 2014, 2013 and 2012 was:

	2014		2013		2012
	(In thousands)
Intrinsic value of options exercised	$	24,032	$	15,114	$	11,493
Cash received from options exercised	46,123		27,569		19,119

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

Stock-based compensation expense related to performance-based restricted stock grants for fiscal 2014, 2013 and 2012 was as follows:

	2014		2013		2012
	(In thousands)
Stock-based compensation expense related to performance-based grants	$	5,227	$	4,340	$	3,230

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 2014, 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 28, 2013	10,113		$	13.11
Granted	5,840		16.90
Vested	(4,719	)	12.34
Forfeited	(783	)	13.94
Unvested shares as of January 3, 2015	10,451		$	15.51	1.1	$	196,801
Unvested shares expected to vest after January 3, 2015	9,846		$	15.47	1.1	$	185,398

Total fair value of restricted stock awards that vested

The total fair value realized by employees upon vesting of restricted stock during fiscal 2014, 2013 and 2012 was:

	2014		2013		2012
	(In thousands)
Fair value of restricted stock realized upon vesting	$	75,283	$	58,091	$	48,249

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 2014, 2013 and 2012 were as follows:

	2014			2013			2012
Dividend yield	None			None			None
Expected volatility	24.2		%	25.7		%	31.4		%
Risk-free interest rate	0.06		%	0.09		%	0.12		%
Expected term (in years)	0.5			0.5			0.5
Weighted-average fair value of options granted	$	3.39		$	3.21		$	2.78

Shares of common stock issued under Employee Stock Purchase Plan

Shares of common stock issued under the ESPP for fiscal 2014, 2013 and 2012 were as follows:

	2014		2013		2012
	(In thousands, except per share amounts)
Cadence shares purchased under the ESPP	1,689		1,382		1,548
Cash received for the purchase of shares under the ESPP	$	20,017	$	15,088	$	13,568
Weighted-average purchase price per share	$	11.85	$	10.91	$	8.77

Summary of common stock reserved for future issuance

As of January 3, 2015, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:

	Shares
	(In thousands)
Employee equity incentive plans*	24,340
2015 Warrants	46,382
Employee stock purchase plans	8,180
Directors stock option plans*	2,240
Total	81,142

_____________

* 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.