Employee Stock Plans (Tables)

12 Months Ended

Oct. 02, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions

The fair value of stock options, performance-based options and cash-settled stock appreciation rights granted under the 2005 Plan and the option component of the shares purchased under the Employee Stock Purchase Plan (which is described further below) were estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions:

	Employee Stock Option Plans						Employee Stock Purchase Plans
	Fiscal Years						Fiscal Years
	2020		2019		2018		2020		2019		2018
Expected term (in years)	3.74		3.76		3.83		0.50		0.50		0.50
Risk-free interest rate	1.5	%	2.4	%	2.3	%	0.9	%	2.5	%	1.6	%
Expected volatility	24.8	%	23.6	%	19.1	%	35.2	%	22.8	%	25.2	%
Expected dividend	—	%	—	%	—	%	—	%	—	%	—	%
Weighted average fair value at grant date	$29.55		$27.20		$20.88		$29.44		$26.76		$24.56

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

Fair Value of Employee Stock Option Plans with Weighted Average Assumptions

The fair value of stock options, performance-based options and cash-settled stock appreciation rights granted under the 2005 Plan and the option component of the shares purchased under the Employee Stock Purchase Plan (which is described further below) were estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions:

	Employee Stock Option Plans						Employee Stock Purchase Plans
	Fiscal Years						Fiscal Years
	2020		2019		2018		2020		2019		2018
Expected term (in years)	3.74		3.76		3.83		0.50		0.50		0.50
Risk-free interest rate	1.5	%	2.4	%	2.3	%	0.9	%	2.5	%	1.6	%
Expected volatility	24.8	%	23.6	%	19.1	%	35.2	%	22.8	%	25.2	%
Expected dividend	—	%	—	%	—	%	—	%	—	%	—	%
Weighted average fair value at grant date	$29.55		$27.20		$20.88		$29.44		$26.76		$24.56

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

Net Share-Based Compensation Expense

The table below summarizes the effect of recording share-based compensation expense:

	Fiscal Years
(In millions)	2020		2019		2018
Cost of revenues - Product	$	3.8	$	2.9	$	3.1
Cost of revenues - Service	5.6		4.5		4.2
Research and development	6.1		4.7		4.8
Selling, general and administrative	28.4		35.8		34.3
Total share-based compensation expense	$	43.9	$	47.9	$	46.4
Income tax benefit for share-based compensation	$	(7.7)	$	(9.2)	$	(10.5)

Summary the Effect of Recording Pre-Tax Share-Based Compensation Expense for Equity Incentive Awards

The table below summarizes the effect of recording pre-tax share-based compensation expense for equity awards: 

	Fiscal Years
(In millions)	2020		2019		2018
Restricted stock units (1)	$	26.1	$	21.1	$	21.6
Performance units and performance options	2.1		13.6		12.1
Stock options	8.9		8.6		8.5
Employee stock purchase plan	5.9		4.5		4.2
Cash-settled stock appreciation rights	0.9		0.1		—
Total share-based compensation expense	$	43.9	$	47.9	$	46.4

(1)Restricted stock units include restricted units granted to directors.

Activity Under Employee Stock Plans

Activity under the Company’s employee stock plans related to stock options and performance-based options is presented below: 

	Options Outstanding
(In millions, except per share amounts)	Number of Shares	Weighted Average Exercise Price
Balance at September 27, 2019 (1.2 million options exercisable at a weighted average exercise price of $80.98)	2.2	$	97.66
Granted	0.4	139.86
Canceled, expired or forfeited	—	119.05
Exercised	(0.7)	84.08
Balance at October 2, 2020	1.9	$	110.79

Options Outstanding And Exercisable

The following table summarizes information related to stock options outstanding and exercisable under the Company’s employee stock plans at October 2, 2020:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Shares	Weighted Average Remaining Contractual Term (in years)	Weighted Average Exercise Price		Aggregate Intrinsic Value (1)		Number of Shares	Weighted Average Remaining Contractual Term (in years)	Weighted Average Exercise Price		Aggregate Intrinsic Value (1)
(In millions, except years and per share amounts)
$67.12 - $81.97	0.5	2.4	$	77.92	$	49.7	0.5	2.4	$	77.92	$	49.7
$99.26 - $110.36	0.4	4.6	108.56		21.2		0.1	5.0	107.79		3.7
$112.82 - $118.76	0.4	4.7	115.64		23.8		0.2	4.3	113.47		10.7
$129.97 - $146.91	0.6	5.9	137.26		21.1		0.1	5.4	131.77		4.3
Total	1.9	4.4	$	110.79	$	115.8	0.9	3.3	$	93.83	$	68.4

(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 $171.93 as of October 2, 2020, the last trading date 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, 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	0.4	146.03
Vested	(0.3)	99.00
Canceled or expired	(0.1)	124.71
Balance at October 2, 2020	0.7	$	133.82