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EMPLOYEE STOCK PLANS (Tables)

9 Months Ended

Jul. 03, 2020

Share-based Payment Arrangement [Abstract]

The table below summarizes the share-based compensation expense recognized for employee stock awards and employee stock purchase plan shares:


	Three Months Ended						Nine Months Ended
(In millions)	July 3, 2020		June 28, 2019		July 3, 2020		June 28, 2019
Cost of revenues - Product	$	1.0	$	0.7	$	2.7	$	2.2
Cost of revenues - Service	1.6		1.2		4.1		3.3
Research and development	1.8		1.3		4.4		3.5
Selling, general and administrative	0.2		9.0		19.5		26.2
Total share-based compensation expense	$	4.6	$	12.2	$	30.7	$	35.2
Income tax benefit for share-based compensation	$	(0.4)	$	(2.3)	$	(5.4)	$	(6.8)

Fair Value of Employee Stock Option Plans With Weighted Average Assumptions

The fair value of stock options and performance stock options granted was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions:


	Three Months Ended									Nine Months Ended
	July 3, 2020			June 28, 2019			July 3, 2020			June 28, 2019
Employee Stock Option Plans
Expected term (in years)	3.75			3.76			3.74			3.76
Risk-free interest rate	0.3		%	2.2		%	1.5		%	2.6		%
Expected volatility	31.2		%	23.9		%	24.8		%	23.1		%
Expected dividend	—		%	—		%	—		%	—		%
Weighted average fair value at grant date⁽¹⁾	$	27.93		$	28.52		$	29.55		$	27.85

⁽¹⁾Excludes the fair value of the market condition based on relative total shareholder return for the performance stock options granted during the period.

Option Component of ESPP Shares with Weighted Average Assumptions

The option component of employee stock purchase plan shares was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions:


	Three Months Ended									Nine Months Ended
	July 3, 2020			June 28, 2019			July 3, 2020			June 28, 2019
Employee Stock Purchase Plan
Expected term (in years)	0.50			0.50			0.50			0.50
Risk-free interest rate	0.1		%	2.5		%	0.9		%	2.5		%
Expected volatility	43.7		%	27.8		%	35.2		%	22.8		%
Expected dividend	—		%	—		%	—		%	—		%
Weighted average fair value at grant date	$	31.23		$	31.38		$	29.44		$	26.76

Activity Under Employee Stock Plans

The activity for stock options and performance stock options is summarized as follows:


	Options Outstanding
(In millions, except per share amounts)	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Term (in years)	Aggregate Intrinsic Value⁽¹⁾
Balance at September 27, 2019	2.2	$	97.66
Granted	0.4	89.65

Cancelled or expired	—	119.06
Exercised	(0.4)	63.62
Balance at July 3, 2020	2.2	$	107.96	4.5	$	40.8

Exercisable at July 3, 2020	1.1	$	90.58	3.4	$	34.9

⁽¹⁾The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of VMS common stock of $122.39 as of July 2, 2020, the last trading date of the third quarter of fiscal year 2020, and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date.

Activity for Restricted Stock, Restricted Stock Units, Deferred Stock Units and Performance Units

The activity for restricted stock units, deferred stock units and performance units is summarized as follows:


(In millions, except per share amounts)	Number of Shares	Weighted Average Grant-Date Fair Value
Balance at September 27, 2019	0.7	$	108.35
Granted	0.3	142.91

Vested	(0.3)	98.40
Cancelled or expired	(0.1)	123.00
Balance at July 3, 2020	0.6	$	130.35