Stock Compensation Plans and Stock Based Compensation (Tables)

12 Months Ended

Jan. 02, 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 2015, 2014 and 2013 were as follows:

	2015		2014		2013
	(In thousands)
Stock options	$	7,903	$	11,870	$	13,100
Restricted stock	78,615		65,894		49,019
ESPP	5,823		6,028		4,166
Total stock-based compensation expense	$	92,341	$	83,792	$	66,285
Income tax benefit	$	24,294	$	20,544	$	16,236

Stock based compensation expense and allocation by cost

Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2015, 2014 and 2013 as follows:

	2015		2014		2013
	(In thousands)
Cost of product and maintenance	$	2,436	$	2,244	$	1,596
Cost of services	3,561		3,280		2,321
Marketing and sales	21,654		20,580		15,642
Research and development	49,755		43,173		32,999
General and administrative	14,935		14,515		13,727
Total stock-based compensation expense	$	92,341	$	83,792	$	66,285

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 2015, 2014 and 2013 were as follows:

	2015			2014			2013
Dividend yield	None			None			None
Expected volatility	26.8		%	29.2		%	40.0		%
Risk-free interest rate	1.61		%	1.59		%	0.86		%
Expected term (in years)	5.0			4.8			4.7
Weighted-average fair value of options granted	$	4.60		$	3.89		$	4.93

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 2015 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 3, 2015	13,876		$	9.71
Granted	1,305		17.25
Exercised	(5,948	)	8.79
Canceled and forfeited	(256	)	12.26
Options outstanding as of January 2, 2016	8,977		$	11.35	3.5	$	84,954
Options vested as of January 2, 2016	7,098		$	10.35	3.1	$	74,264
Options vested as of, and expected to vest after, January 2, 2016	8,976		$	11.35	3.5	$	84,947

Intrinsic value of and cash received from options exercised

The total intrinsic value of and cash received from options exercised during fiscal 2015, 2014 and 2013 was:

	2015		2014		2013
	(In thousands)
Intrinsic value of options exercised	$	67,363	$	24,032	$	15,114
Cash received from options exercised	52,261		46,123		27,569

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

Stock-based compensation expense related to performance-based restricted stock grants for fiscal 2015, 2014 and 2013 was as follows:

	2015		2014		2013
	(In thousands)
Stock-based compensation expense related to performance-based grants	$	5,544	$	5,227	$	4,340

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 2015, 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 3, 2015	10,451		$	15.51
Granted	5,849		19.62
Vested	(5,019	)	14.68
Forfeited	(704	)	16.34
Unvested shares as of January 2, 2016	10,577		$	18.13	1.1	$	220,103
Unvested shares expected to vest after January 2, 2016	10,000		$	18.08	1.1	$	208,091

Total fair value of restricted stock awards that vested

The total fair value realized by employees upon vesting of restricted stock during fiscal 2015, 2014 and 2013 was:

	2015		2014		2013
	(In thousands)
Fair value of restricted stock realized upon vesting	$	99,564	$	75,283	$	58,091

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 2015, 2014 and 2013 were as follows:

	2015			2014			2013
Dividend yield	None			None			None
Expected volatility	22.9		%	24.2		%	25.7		%
Risk-free interest rate	0.13		%	0.06		%	0.09		%
Expected term (in years)	0.5			0.5			0.5
Weighted-average fair value of options granted	$	4.23		$	3.39		$	3.21

Shares of common stock issued under Employee Stock Purchase Plan

Shares of common stock issued under the ESPP for fiscal 2015, 2014 and 2013 were as follows:

	2015		2014		2013
	(In thousands, except per share amounts)
Cadence shares purchased under the ESPP	1,519		1,689		1,382
Cash received for the purchase of shares under the ESPP	$	22,449	$	20,017	$	15,088
Weighted-average purchase price per share	$	14.78	$	11.85	$	10.91

Summary of common stock reserved for future issuance

As of January 2, 2016, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:

	Shares
	(In thousands)
Employee equity incentive plans*	21,523
Employee stock purchase plans	6,660
Directors stock option plans*	1,845
Total	30,028

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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.