EMPLOYEE STOCK PLANS (Tables)

9 Months Ended

Jul. 01, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Net Share-Based Compensation Expense

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

	Three Months Ended						Nine Months Ended
(In thousands)	July 1, 2016			July 3, 2015			July 1, 2016			July 3, 2015
Cost of revenues - Product	$	1,033		$	1,263		$	3,141		$	3,578
Cost of revenues - Service	1,114			1,066			3,063			3,004
Research and development	1,723			1,717			5,046			5,109
Selling, general and administrative	8,346			7,310			24,771			24,903
Total share-based compensation expense	$	12,216		$	11,356		$	36,021		$	36,594
Income tax benefit for share-based compensation	$	(3,701	)	$	(3,455	)	$	(10,958	)	$	(11,371	)

Fair Value of Employee Stock Option Plans With Weighted Average Assumptions

The fair value of 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 1, 2016			July 3, 2015			July 1, 2016			July 3, 2015
Employee Stock Option Plans
Expected term (in years)	4.13			4.13			4.13			4.15
Risk-free interest rate	1.2		%	1.3		%	1.1		%	1.3		%
Expected volatility	20.5		%	21.6		%	20.1		%	22.1		%
Expected dividend	—		%	—		%	—		%	—		%
Weighted average fair value at grant date	$	15.29		$	17.16		$	13.71		$	18.52

Fair Value of Employee Stock Purchase Plan 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 1, 2016			July 3, 2015			July 1, 2016			July 3, 2015
Employee Stock Purchase Plan
Expected term (in years)	0.50			0.50			0.50			0.50
Risk-free interest rate	0.4		%	0.1		%	0.3		%	0.1		%
Expected volatility	18.3		%	17.2		%	17.6		%	12.7		%
Expected dividend	—		%	—		%	—		%	—		%
Weighted average fair value at grant date	$	16.60		$	17.56		$	16.09		$	15.87

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 October 2, 2015	6,661
Granted	(2,327	)
Cancelled or expired	277
Balance at July 1, 2016	4,611

Activity Under Employee Stock Plans

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

	Options Outstanding
(In thousands, except per share amounts)	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Term (in years)	Aggregate Intrinsic Value (1)
Balance at October 2, 2015	2,537		$	72.58
Granted	828		75.97
Cancelled or expired	(23	)	85.95
Exercised	(377	)	52.02
Balance at July 1, 2016	2,965		$	76.03	4.6	$	26,060
Exercisable at July 1, 2016	1,664		$	72.13	3.4	$	20,556

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value of options, which is computed based on the difference between the exercise price and VMS’s closing common stock price of $82.60 as of July 1, 2016, the last trading date of the third quarter of fiscal year 2016, and which would have been received by the option holders had all option holders exercised and sold their options 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 October 2, 2015	950		$	84.11
Granted	485		77.89
Vested	(389	)	80.98
Cancelled or expired	(75	)	81.86
Balance at April 1, 2016	971		$	82.36