Employee Stock Plans (Tables)

12 Months Ended

Sep. 28, 2018

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

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

The fair value of options 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
	2018			2017			2016			2018			2017			2016
Expected term (in years)	3.83			3.99			4.13			0.50			0.50			0.50
Risk-free interest rate	2.3		%	1.7		%	1.1		%	1.6		%	0.7		%	0.3		%
Expected volatility	19.1		%	21.3		%	20.1		%	25.2		%	20.3		%	17.6		%
Expected dividend	—		%	—		%	—		%	—		%	—		%	—		%
Weighted average fair value at grant date	$	20.88		$	16.12		$	13.71		$	24.56		$	18.92		$	16.09

Fair Value of Employee Stock Option Plans with Weighted Average Assumptions



	Employee Stock Option Plans									Employee Stock Purchase Plans
	Fiscal Years									Fiscal Years
	2018			2017			2016			2018			2017			2016
Expected term (in years)	3.83			3.99			4.13			0.50			0.50			0.50
Risk-free interest rate	2.3		%	1.7		%	1.1		%	1.6		%	0.7		%	0.3		%
Expected volatility	19.1		%	21.3		%	20.1		%	25.2		%	20.3		%	17.6		%
Expected dividend	—		%	—		%	—		%	—		%	—		%	—		%
Weighted average fair value at grant date	$	20.88		$	16.12		$	13.71		$	24.56		$	18.92		$	16.09

Net Share-Based Compensation Expense

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



	Fiscal Years
(In millions)	2018			2017			2016
Cost of revenues - Product	$	3.1		$	3.0		$	3.3
Cost of revenues - Service	4.2			4.1			4.1
Research and development	4.8			5.1			5.3
Selling, general and administrative	34.3			27.0			29.5
Total share-based compensation expense	$	46.4		$	39.2		$	42.2
Income tax benefit for share-based compensation	$	(10.5	)	$	(11.5	)	$	(12.8	)

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 millions)	2018		2017		2016
Stock options ⁽¹⁾	$	10.3	$	9.2	$	9.9
Restricted stock units and restricted stock awards ⁽²⁾	31.9		26.2		28.7
Employee stock purchase plan	4.2		3.8		3.6
Total share-based compensation expense	$	46.4	$	39.2	$	42.2


⁽¹⁾	Stock options include performance options awards.


⁽²⁾	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 millions)	Shares Available for Grant
Balance at October 2, 2015	6.7
Granted	(2.4	)
Canceled or expired	0.3
Balance at September 30, 2016	4.6
Granted	(1.8	)
Canceled or expired	0.3
Adjustment due to Distribution	(0.6	)
Balance at September 29, 2017	2.5
Authorized ⁽¹⁾	6.0
Granted	(1.9	)
Canceled or expired	0.5
Balance at September 28, 2018	7.1


⁽¹⁾	On February 8, 2018, the Company's stockholders approved its Fifth Amended and Restated 2005 Omnibus Stock Plan ("2005 Plan") to increase the number of shares authorized for issuance by 6.0 million shares.

Activity Under Employee Stock Plans

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



	Options Outstanding
(In millions, except per share amounts)	Number of Shares		Weighted Average Exercise Price
Balance at September 29, 2017 (1.2 million options exercisable at a weighted average exercise price of $71.37)	2.3		$	74.08
Granted	0.7		111.54
Canceled, expired or forfeited	(0.1	)	84.90
Exercised	(0.6	)	71.02
Balance at September 28, 2018	2.3		$	85.82

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 28, 2018:



	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)
$51.23 - $67.12	0.6	3.6	$	65.72	$	28.4	0.5	3.5	$	65.43	$	23.7
$71.47 - $77.49	0.2	2.6	74.45		6.5		0.2	2.6	74.47		6.4
$80.40 - $99.26	0.8	4.6	82.38		24.8		0.5	4.2	82.20		16.2
$109.03 - $118.27	0.7	6.3	111.51		0.7		—	—	—		—
Total	2.3	4.7	$	85.82	$	60.4	1.2	3.7	$	74.14	$	46.3

⁽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 $111.93 as of September 28, 2018, the last trading date of fiscal year 2018, 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 29, 2017	0.9		$	75.37
Granted	0.3		111.84
Vested	(0.3	)	76.80
Canceled or expired	(0.1	)	87.23
Balance at September 28, 2018	0.8		$	89.17