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Stock Compensation Plans and Stock Based Compensation (Tables) | 12 Months Ended
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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 |
_____________ *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.

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