Stock Compensation Plans and Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

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 2016, 2015 and 2014 were as follows:

	2016		2015		2014
	(In thousands)
Stock options	$	5,649	$	7,903	$	11,870
Restricted stock	96,989		78,615		65,894
ESPP	6,579		5,823		6,028
Total stock-based compensation expense	$	109,217	$	92,341	$	83,792
Income tax benefit	$	30,980	$	24,294	$	20,544

Stock based compensation expense and allocation by cost

Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2016, 2015 and 2014 as follows:

	2016		2015		2014
	(In thousands)
Cost of product and maintenance	$	1,995	$	2,436	$	2,244
Cost of services	2,911		3,561		3,280
Marketing and sales	22,700		21,654		20,580
Research and development	64,061		49,755		43,173
General and administrative	17,550		14,935		14,515
Total stock-based compensation expense	$	109,217	$	92,341	$	83,792

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 2016, 2015 and 2014 were as follows:

	2016			2015			2014
Dividend yield	None			None			None
Expected volatility	31.5		%	26.8		%	29.2		%
Risk-free interest rate	1.21		%	1.61		%	1.59		%
Expected term (in years)	4.8			5.0			4.8
Weighted-average fair value of options granted	$	5.84		$	4.60		$	3.89

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 2016 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 January 2, 2016	8,977		$	11.35
Granted	1,325		20.05
Exercised	(3,148	)	9.84
Canceled and forfeited	(37	)	15.80
Options outstanding as of December 31, 2016	7,117		$	13.61	3.9	$	82,618
Options vested as of December 31, 2016	5,036		$	11.73	3.3	$	67,954

Intrinsic value of and cash received from options exercised

The total intrinsic value of and cash received from options exercised during fiscal 2016, 2015 and 2014 was:

	2016		2015		2014
	(In thousands)
Intrinsic value of options exercised	$	44,835	$	67,363	$	24,032
Cash received from options exercised	30,984		52,261		46,123

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

Stock-based compensation expense related to performance-based restricted stock grants for fiscal 2016, 2015 and 2014 was as follows:

	2016		2015		2014
	(In thousands)
Stock-based compensation expense related to performance-based grants	$	9,195	$	5,544	$	5,227

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 2016, 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 January 2, 2016	10,577		$	18.13
Granted	7,145		21.60
Vested	(4,939	)	17.45
Forfeited	(701	)	19.18
Unvested shares as of December 31, 2016	12,082		$	20.40	1.1	$	304,698

Total fair value of restricted stock awards that vested

The total fair value realized by employees upon vesting of restricted stock during fiscal 2016, 2015 and 2014 was:

	2016		2015		2014
	(In thousands)
Fair value of restricted stock realized upon vesting	$	113,114	$	99,564	$	75,283

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 2016, 2015 and 2014 were as follows:

	2016			2015			2014
Dividend yield	None			None			None
Expected volatility	24.4		%	22.9		%	24.2		%
Risk-free interest rate	0.43		%	0.13		%	0.06		%
Expected term (in years)	0.5			0.5			0.5
Weighted-average fair value of options granted	$	4.85		$	4.23		$	3.39

Shares of common stock issued under Employee Stock Purchase Plan

Shares of common stock issued under the ESPP for fiscal 2016, 2015 and 2014 were as follows:

	2016		2015		2014
	(In thousands, except per share amounts)
Cadence shares purchased under the ESPP	1,471		1,519		1,689
Cash received for the purchase of shares under the ESPP	$	24,450	$	22,449	$	20,017
Weighted-average purchase price per share	$	16.62	$	14.78	$	11.85

Summary of common stock reserved for future issuance

As of December 31, 2016, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:

	Shares
	(In thousands)
Employee equity incentive plans*	18,709
Employee stock purchase plans	5,189
Directors stock option plans*	1,484
Total	25,382

_____________

* 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.