Stock Compensation Plans and Stock Based Compensation (Tables)

12 Months Ended

Dec. 29, 2018

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 ESPP during fiscal 2018, 2017 and 2016 were as follows:

	2018		2017		2016
	(In thousands)
Stock options	$	5,581	$	5,417	$	5,649
Restricted stock	153,348		117,797		96,989
ESPP	8,786		6,809		6,579
Total stock-based compensation expense	$	167,715	$	130,023	$	109,217
Income tax benefit	$	32,830	$	36,664	$	30,980

Stock based compensation expense and allocation by cost

Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2018, 2017 and 2016 as follows:

	2018		2017		2016
	(In thousands)
Cost of product and maintenance	$	2,631	$	2,218	$	1,995
Cost of services	3,714		3,232		2,911
Marketing and sales	34,665		26,838		22,700
Research and development	104,353		77,222		64,061
General and administrative	22,352		20,513		17,550
Total stock-based compensation expense	$	167,715	$	130,023	$	109,217

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 2018, 2017 and 2016 were as follows:

	2018			2017			2016
Dividend yield	None			None			None
Expected volatility	24.3		%	21.2		%	31.5		%
Risk-free interest rate	2.54		%	2.01		%	1.21		%
Expected term (in years)	4.8			4.8			4.8
Weighted-average fair value of options granted	$	10.24		$	6.86		$	5.84

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 2018 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 30, 2017	5,783		$	16.56
Granted	736		39.57
Exercised	(993	)	11.84
Canceled and forfeited	(112	)	18.83
Options outstanding as of December 29, 2018	5,414		$	20.51	3.6	$	120,215
Options vested as of December 29, 2018	4,029		$	16.68	3.0	$	104,852

Intrinsic value of and cash received from options exercised

The total intrinsic value of and cash received from options exercised during fiscal 2018, 2017 and 2016 was:

	2018		2017		2016
	(In thousands)
Intrinsic value of options exercised	$	31,109	$	45,643	$	44,835
Cash received from options exercised	11,748		22,255		30,984

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

Stock-based compensation expense related to performance-based restricted stock grants for fiscal 2018, 2017 and 2016 was as follows:

	2018		2017		2016
	(In thousands)
Stock-based compensation expense related to performance-based grants	$	12,868	$	8,224	$	9,195

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 2018 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 30, 2017	11,968		$	27.11
Granted	3,940		42.88
Vested	(5,457	)	28.49
Forfeited	(749	)	28.15
Unvested shares as of December 29, 2018	9,702		$	32.67	1.1	$	420,464

Total fair value of restricted stock awards that vested

The total fair value realized by employees upon vesting of restricted stock during fiscal 2018, 2017 and 2016 was:

	2018		2017		2016
	(In thousands)
Fair value of restricted stock realized upon vesting	$	232,099	$	174,548	$	113,114

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 2018, 2017 and 2016 were as follows:

	2018			2017			2016
Dividend yield	None			None			None
Expected volatility	21.1		%	20.4		%	24.4		%
Risk-free interest rate	2.05		%	0.92		%	0.43		%
Expected term (in years)	0.5			0.5			0.5
Weighted-average fair value of options granted	$	9.24		$	6.64		$	4.85

Shares of common stock issued under Employee Stock Purchase Plan

Shares of common stock issued under the ESPP for fiscal 2018, 2017 and 2016 were as follows:

	2018		2017		2016
	(In thousands, except per share amounts)
Cadence shares purchased under the ESPP	892		1,270		1,471
Cash received for the purchase of shares under the ESPP	$	29,160	$	26,709	$	24,450
Weighted-average purchase price per share	$	32.69	$	21.04	$	16.62

Summary of common stock reserved for future issuance

As of December 29, 2018, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:

	Shares
	(In thousands)
Employee equity incentive plans*	16,819
Employee stock purchase plans	7,027
Directors stock plans*	1,138
Total	24,984

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*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.