Stock Compensation Plans and Stock Based Compensation (Tables)

12 Months Ended

Dec. 28, 2019

Share-based Payment Arrangement [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 2019, 2018 and 2017 were as follows:

	2019		2018		2017
	(In thousands)
Stock options	$	6,806	$	5,581	$	5,417
Restricted stock	164,078		153,348		117,797
ESPP	10,663		8,786		6,809
Total stock-based compensation expense	$	181,547	$	167,715	$	130,023
Income tax benefit	$	30,118	$	32,830	$	36,664

Stock based compensation expense and allocation by cost

Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2019, 2018 and 2017 as follows:

	2019		2018		2017
	(In thousands)
Cost of product and maintenance	$	2,759	$	2,631	$	2,218
Cost of services	3,510		3,714		3,232
Marketing and sales	39,088		34,665		26,838
Research and development	114,656		104,353		77,222
General and administrative	21,534		22,352		20,513
Total stock-based compensation expense	$	181,547	$	167,715	$	130,023

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 2019, 2018 and 2017 were as follows:

	2019			2018			2017
Dividend yield	None			None			None
Expected volatility	24.4		%	24.3		%	21.2		%
Risk-free interest rate	2.47		%	2.54		%	2.01		%
Expected term (in years)	4.8			4.8			4.8
Weighted-average fair value of options granted	$	14.58		$	10.24		$	6.86

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 2019 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 29, 2018	5,414		$	20.51
Granted	595		56.57
Exercised	(1,076	)	13.52
Forfeited	—		—
Options outstanding as of December 28, 2019	4,933		$	26.38	3.4	$	216,599
Options vested as of December 28, 2019	3,772		$	21.00	2.8	$	185,923

Intrinsic value of and cash received from options exercised

The total intrinsic value of and cash received from options exercised during fiscal 2019, 2018 and 2017 was:

	2019		2018		2017
	(In thousands)
Intrinsic value of options exercised	$	51,625	$	31,109	$	45,643
Cash received from options exercised	14,553		11,748		22,255

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

Stock-based compensation expense related to performance-based and market-based performance restricted stock grants for fiscal 2019, 2018 and 2017 was as follows:

	2019		2018		2017
	(In thousands)
Stock-based compensation expense related to performance-based restricted stock	$	12,640	$	12,868	$	8,224
Stock-based compensation expense related to market-based performance stock awards	7,019		2,300		1,979

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 2019 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 29, 2018	9,702		$	32.67
Granted	4,028		53.11
Vested	(4,799	)	31.75
Forfeited	(538	)	39.66
Unvested shares as of December 28, 2019	8,393		$	42.55	1.1	$	589,937

Total fair value of restricted stock awards that vested

The total fair value realized by employees upon vesting of restricted stock during fiscal 2019, 2018 and 2017 was:

	2019		2018		2017
	(In thousands)
Fair value of restricted stock realized upon vesting	$	298,320	$	232,099	$	174,548

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 2019, 2018 and 2017 were as follows:

	2019			2018			2017
Dividend yield	None			None			None
Expected volatility	27.9		%	21.1		%	20.4		%
Risk-free interest rate	2.23		%	2.05		%	0.92		%
Expected term (in years)	0.5			0.5			0.5
Weighted-average fair value of options granted	$	14.37		$	9.24		$	6.64

Shares of common stock issued under Employee Stock Purchase Plan

Shares of common stock issued under the ESPP for fiscal 2019, 2018 and 2017 were as follows:

	2019		2018		2017
	(In thousands, except per share amounts)
Cadence shares purchased under the ESPP	988		892		1,270
Cash received for the purchase of shares under the ESPP	$	38,290	$	29,160	$	26,709
Weighted-average purchase price per share	$	38.74	$	32.69	$	21.04

Summary of common stock reserved for future issuance

As of December 28, 2019, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:

	Shares
	(In thousands)
Employee equity incentive plans*	15,898
Employee stock purchase plans	6,039
Directors stock plans*	905
Total	22,842

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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.