Employee Stock Plans (Tables)

12 Months Ended

Sep. 26, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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 Plans
	Fiscal Years									Fiscal Years
	2014			2013			2012			2014			2013			2012

Expected term (in years)		4.13			4.76			4.64			0.50			0.50			0.50
Risk-free interest rate		1.2	%		0.6	%		0.8	%		0.1	%		0.1	%		0.1	%
Expected volatility		24.6	%		32.2	%		36.9	%		12.8	%		16.5	%		19.3	%
Expected dividend		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Weighted average fair value at grant date	$	18.24		$	19.73		$	18.75		$	14.20		$	12.95		$	12.17

Net Share-Based Compensation Expense

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

	Fiscal Years
(In thousands)	2014			2013			2012
Cost of revenues - Product	$	3,323		$	4,088		$	4,419
Cost of revenues - Service		4,658			3,460			1,472
Research and development		6,194			5,993			6,378
Selling, general and administrative		25,461			29,096			35,606
Total share-based compensation expense		39,636			42,637			47,875
Taxes on earnings		(12,062	)		(12,989	)		(15,406	)
Net share-based compensation expense	$	27,574		$	29,648		$	32,469

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 incentive awards:

	Fiscal Years
(In thousands)	2014		2013		2012
Stock options	$	9,489	$	10,577	$	12,169
Restricted stock units and restricted stock awards⁽¹⁾		26,576		28,229		32,527
Employee stock purchase plan		3,571		3,831		3,179
Total share-based compensation expense	$	39,636	$	42,637	$	47,875

—	Restricted stock units and restricted stock awards include performance units and deferred stock units.

Summary of Share-Based Awards Available for Grant

A summary of share-based awards available for grant is as follows:

(In thousands)	Shares Available for Grant
Balance at September 30, 2011		8,424
Authorized		6,000
Granted		(2,680	)
Cancelled or expired		124
Balance at September 28, 2012		11,868
Granted		(2,045	)
Cancelled or expired		102
Balance at September 27, 2013		9,925
Granted		(1,934	)
Cancelled or expired		177
Balance at September 26, 2014		8,168

Activity Under Employee Stock Plans

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

	Options Outstanding
(In thousands, except per share amounts)	Number of Shares			Weighted Average Exercise Price
Balance at September 30, 2011		6,917		$	45.90
Granted		743			58.50
Canceled, expired or forfeited		(30	)		55.73
Exercised		(1,171	)		40.18
Balance at September 28, 2012		6,459			48.34
Granted		613			68.93
Canceled, expired or forfeited		(20	)		60.81
Exercised		(2,567	)		44.97
Balance at September 27, 2013 (3,655 options exercisable at a weighted average exercise price of $50.18)		4,485			53.02
Granted		625			83.50
Canceled, expired or forfeited		(46	)		72.35
Exercised		(1,721	)		49.01
Balance at September 26, 2014		3,343		$	60.53

Options Outstanding And Exercisable

The following table summarizes information related to stock options outstanding and exercisable under the Company’s employee stock plans at September 26, 2014:

	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)
$37.06 – $39.85		129		1.01	$	37.94	$	5,537		129		1.01	$	37.94	$	5,537
$45.22 – $52.07		880		1.74		50.30		26,907		880		1.74		50.30		26,907
$52.61 – $72.26		1,722		3.10		59.28		37,237		1,477		2.83		57.95		33,901
$74.28 – $84.23		612		6.41		83.49		91		-		-		-		-
Total		3,343		3.27	$	60.53	$	69,772		2,486		2.35	$	54.21	$	66,345

—

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 $80.90 as of September 26, 2014, the last trading date of fiscal year 2014, 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)	Number of Shares			Weighted Average Grant-Date Fair Value
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
Granted		516			70.37
Vested		(396	)		55.67
Cancelled or expired		(30	)		61.82
Balance at September 27, 2013		1,035			64.36
Granted		470			82.51
Vested		(335	)		63.70
Cancelled or expired		(44	)		70.69
Balance at September 26, 2014		1,126		$	72.08