EMPLOYEE STOCK PLANS (Tables)

3 Months Ended

Dec. 28, 2018

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

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



	Three Months Ended
(In millions)	December 28, 2018			December 29, 2017
Cost of revenues - Product	$	0.7		$	0.7
Cost of revenues - Service	1.1			1.0
Research and development	1.1			1.2
Selling, general and administrative	7.6			7.8
Total share-based compensation expense	$	10.5		$	10.7
Income tax benefit for share-based compensation	$	(2.3	)	$	(2.1	)

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
	December 28, 2018			December 29, 2017
Employee Stock Option Plans
Expected term (in years)	3.77			3.82
Risk-free interest rate	2.9		%	1.9		%
Expected volatility	22.2		%	18.7		%
Expected dividend	—		%	—		%
Weighted average fair value at grant date	$	25.87		$	19.45

Option Component of ESPP Shares 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
	December 28, 2018			December 29, 2017
Employee Stock Purchase Plan
Expected term (in years)	0.50			0.50
Risk-free interest rate	2.5		%	1.2		%
Expected volatility	18.6		%	17.9		%
Expected dividend	—		%	—		%
Weighted average fair value at grant date	$	22.82		$	20.97

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		Weighted Average Remaining Term (in years)	Aggregate Intrinsic Value⁽¹⁾
Balance at September 28, 2018	2.3		$	85.82
Granted	0.2		118.44
Cancelled or expired ⁽²⁾	—		98.38
Exercised	(0.2	)	69.96
Balance at December 28, 2018	2.3		$	89.95	4.8	$	51.8
Exercisable at December 28, 2018	1.1		$	75.10	3.7	$	42.3

⁽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 $111.99 as of December 28, 2018, the last trading date of the first quarter of fiscal year 2019, 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.


⁽²⁾	The cancelled and expired shares were not material for disclosure.

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 28, 2018	0.8		$	89.17
Granted	0.1		117.44
Vested	(0.1	)	74.77
Cancelled or expired	(0.1	)	79.74
Balance at December 28, 2018	0.7		$	94.66