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Stock Compensation Plans and Stock Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2022
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 2022, 2021 and 2020 were as follows:
202220212020
(In thousands)
Stock options$14,597 $9,051 $8,062 
Restricted stock224,887 181,946 173,193 
ESPP30,955 19,093 16,013 
Total stock-based compensation expense$270,439 $210,090 $197,268 
Income tax benefit$40,612 $33,958 $31,857 
Stock based compensation expense and allocation by cost
Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2022, 2021 and 2020 as follows:
202220212020
(In thousands)
Cost of product and maintenance$3,818 $3,375 $2,922 
Cost of services4,851 4,161 3,720 
Marketing and sales54,771 43,264 42,096 
Research and development158,937 131,247 124,999 
General and administrative48,062 28,043 23,531 
Total stock-based compensation expense$270,439 $210,090 $197,268 
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 2022, 2021 and 2020 were as follows:
202220212020
Dividend yieldNoneNoneNone
Expected volatility36.0 %31.7 %25.1 %
Risk-free interest rate2.14 %1.02 %1.36 %
Expected term (in years)4.84.84.8
Weighted average fair value of options granted$49.16 $46.10 $19.38 
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 2022 is presented below:
Weighted
Average
Weighted
Average
Remaining
Contractual
Terms



Aggregate
Intrinsic
SharesExercise Price(Years)Value
(In thousands)(In thousands)
Options outstanding as of January 1, 20223,419 $62.69 
Granted251 143.00 
Exercised(755)21.21 
Forfeited— — 
Options outstanding as of December 31, 20222,915 $80.35 3.4$240,736 
Options vested as of December 31, 20222,167 $60.08 2.8$219,610 
Intrinsic value of and cash received from options exercised
The total intrinsic value of and cash received from options exercised during fiscal 2022, 2021 and 2020 was:
202220212020
(In thousands)
Intrinsic value of options exercised$105,242 $129,403 $109,193 
Cash received from options exercised16,014 23,844 26,474 
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 2022, 2021 and 2020 was as follows:
202220212020
(In thousands)
Stock-based compensation expense related to performance-based restricted stock$17,753 $16,225 $14,859 
Stock-based compensation expense related to market-based performance stock awards25,259 6,453 8,335 
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 2022 is presented below:
Weighted
Average Grant Date


Aggregate
Intrinsic
SharesFair ValueValue
(In thousands)(In thousands)
Unvested shares as of January 1, 20224,931 $89.91 
Granted3,885 107.17 
Vested(2,164)89.61 
Forfeited(281)122.20 
Unvested shares as of December 31, 20226,371 $99.03 $730,178 
Total fair value of restricted stock awards that vested
The total fair value realized by employees upon vesting of restricted stock during fiscal 2022, 2021 and 2020 was:
202220212020
(In thousands)
Fair value of restricted stock realized upon vesting$346,003 $365,298 $358,261 
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 2022, 2021 and 2020 were as follows:
202220212020
Dividend yieldNoneNoneNone
Expected volatility37.2 %31.5 %32.6 %
Risk-free interest rate1.71 %0.07 %0.80 %
Expected term (in years)0.50.50.5
Weighted average fair value of options granted$43.41 $33.77 $23.08 
Shares of common stock issued under Employee Stock Purchase Plan
Shares of common stock issued under the ESPP for fiscal 2022, 2021 and 2020 were as follows:
202220212020
(In thousands, except per share amounts)
Cadence shares purchased under the ESPP703 624 785 
Cash received for the purchase of shares under the ESPP$89,314 $63,932 $48,328 
Weighted average purchase price per share$127.12 $102.41 $61.55 
Summary of common stock reserved for future issuance
As of December 31, 2022, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:
Shares
(In thousands)
Employee equity incentive plans*16,651 
Employee stock purchase plans3,927 
Directors stock plans*498 
    Total21,076 
_____________
*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.