EMPLOYEE STOCK PLANS (Tables)

12 Months Ended

Sep. 28, 2012

Fair Value Of Employee Stock Option Plans With Weighted Average Assumptions

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

	Employee Stock Plans									Employee Stock Purchase Plan
	Fiscal Years									Fiscal Years
	2012			2011			2010			2012			2011			2010(1)
Expected term (in years)		4.64			4.75			4.72			0.50			0.50			—
Risk-free interest rate		0.8	%		2.0	%		2.0	%		0.1	%		0.1	%		—
Expected volatility		36.9	%		35.5	%		37.3	%		19.3	%		14.0	%		—
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		—
Weighted average fair value at grant date	$	18.75		$	23.26		$	18.17		$	12.17		$	12.61			—

(1) No purchases were made under an employee stock purchase plan in fiscal year 2010.

Share-Based Compensation Expense

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

	Fiscal Years
(In thousands, except per share amounts)	2012			2011			2010
Cost of revenues—Product	$	4,419		$	3,917		$	3,680
Cost of revenues—Service contracts and other		1,472			1,977			2,475
Research and development		6,378			5,467			4,931
Selling, general and administrative		35,606			30,657			28,727
Taxes on earnings		(15,406	)		(14,063	)		(14,373	)
Net decrease in net earnings	$	32,469		$	27,955		$	25,440
Increase (decrease) on:
Cash flows from operating activities	$	(8,929	)	$	(22,570	)	$	(15,072	)
Cash flows from financing activities	$	8,929		$	22,570		$	15,072

Activity Under Employee Stock Plans

Activity under the Company’s employee stock plans is presented below:

	Shares Available for Grant			Options Outstanding
(In thousands, except per share amounts)				Number of Shares			Weighted Average Exercise Price
Balance at October 2, 2009 (10,140 options exercisable at a weighted average exercise price of $40.18)		5,352			11,853		$	40.59
Authorized		5,500			0			0.00
Granted(1)		(2,661	)		1,113			52.59
Canceled, expired or forfeited(2)		216			(141	)		51.13
Exercised		0			(2,651	)		31.85
Balance at October 1, 2010 (8,449 options exercisable at a weighted average exercise price of $43.16)		8,407			10,174			44.03
Granted(1)		(108	)		48			69.67
Canceled, expired or forfeited(2)		125			(46	)		48.64
Exercised		0			(3,259	)		40.38
Balance at September 30, 2011 (6,188 options exercisable at a weighted average exercise price of $45.42)		8,424			6,917			45.90
Authorized		6,000			0			0.00
Granted(1)		(2,680	)		743			58.50
Canceled, expired or forfeited(2)		124			(30	)		55.73
Exercised		0			(1,171	)		40.18
Balance at September 28, 2012		11,868			6,459		$	48.34

(1) The difference between the number of shares granted listed in the column headed “Shares Available for Grant” and the number of shares granted listed in the column headed “Options Outstanding—Number of Shares” represents the awards of deferred stock units, restricted stock units, shares of restricted common stock and performance units. Awards other than stock options set forth in the table were counted against the shares available for grant limit of the Third Amended 2005 Plan as 2.5 shares for every one share awarded before February 9, 2012 and were counted against the shares available for grant limit as 2.6 shares for every one awarded on or after February 9, 2012. In addition, the shares available for grant limit was further adjusted to reflect a maximum payout of 1.5 shares that could be issued for each performance unit granted.

(2) The difference between the number of cancelled or expired shares listed in the column headed “Shares Available for Grant” and the number of cancelled or expired shares listed in the column headed “Options Outstanding—Number of Shares” represents the cancellation of shares of restricted common stock and restricted stock units due to employee terminations.

Options Outstanding And Exercisable

The following table summarizes information related to options outstanding and exercisable under the Company’s employee stock plans at September 28, 2012:

	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 thousands, except years and per-share amounts)
$21.50 – $29.19		115		0.2	$	24.60	$	4,105		115		0.2	$	24.60	$	4,105
$32.10 – $39.85		1,584		2.4		37.27		36,517		1,584		2.4		37.27		36,517
$40.21 – $52.07		2,316		3.6		50.11		23,647		2,315		3.6		50.11		23,638
$52.08 – $72.19		2,444		4.4		54.94		13,871		1,526		3.6		53.74		10,607
Total		6,459		3.5	$	48.34	$	78,140		5,540		3.2	$	46.91	$	74,867

(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 $60.32 as of September 28, 2012, the last trading date of fiscal year 2012, 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 thousands, except per share amounts)	Shares			Weighted Average Grant-Date Fair Value
Balance at October 2, 2009		1,172		$	42.89
Granted		619			52.72
Vested		(438	)		44.53
Cancelled or expired		(20	)		43.27
Balance at October 1, 2010		1,333		$	46.91
Granted		24			68.67
Vested		(590	)		47.27
Cancelled or expired		(32	)		46.59
Balance at September 30, 2011		735		$	47.36
Granted		716			59.06
Vested		(469	)		44.68
Cancelled or expired		(37	)		53.94
Balance at September 28, 2012		945		$	57.30