Stockholders' Equity

12 Months Ended

Sep. 27, 2013

Stockholders' Equity Note [Abstract]

STOCKHOLDERS’ EQUITY

STOCKHOLDERS’ EQUITY

COMMON STOCK

At September 27, 2013, the Company is authorized to issue 525.0 million shares of common stock, par value $0.25 per share, of which 207.5 million shares are issued and 187.9 million shares outstanding.

Holders of the Company’s common stock are entitled to dividends in the event declared by the Company’s Board of Directors out of funds legally available for such purpose. Dividends may not be paid on common stock unless all accrued dividends on preferred stock, if any, have been paid or declared and set aside. In the event of the Company’s liquidation, dissolution or winding up, the holders of common stock will be entitled to share pro rata in the assets remaining after payment to creditors and after payment of the liquidation preference plus any unpaid dividends to holders of any outstanding preferred stock.

Each holder of the Company’s common stock is entitled to one vote for each such share outstanding in the holder’s name. No holder of common stock is entitled to cumulate votes in voting for directors. The Company’s restated certificate of incorporation as amended to date, ("the Certificate of Incorporation") provides that, unless otherwise determined by the Company’s Board of Directors, no holder of stock has any preemptive right to purchase or subscribe for any stock of any class which the Company may issue or sell.

During the fiscal year ended September 27, 2013, the Company paid approximately $184.9 million (including commissions) in connection with the repurchase of 8.1 million shares of its common stock (paying an average price of $22.75 per share). Of this amount, $164.5 million of stock was repurchased under the November 8, 2012 program (which approved up to $200.0 million in repurchases) and $20.4 million was repurchased under the current $250.0 million share repurchase plan which was initiated on July 16, 2013 by the Board of Directors. This plan is valid through July 16, 2015 and allows for the repurchase of the Company's common stock on the open market or in privately negotiated transactions, in compliance with applicable securities laws and other legal requirements. As of September 27, 2013, $229.6 million remained available under the available share repurchase plan.

During the fiscal year ended September 28, 2012, the Company paid approximately $12.4 million (including commissions) in connection with the repurchase of 0.8 million shares of its common stock (paying an average price of $16.54 per share). This stock repurchase program expired on August 3, 2012.

PREFERRED STOCK

The Company’s Certificate of Incorporation has authorized and permits the Company to issue up to 25.0 million shares of preferred stock without par value in one or more series and with rights and preferences that may be fixed or designated by the Company’s Board of Directors without any further action by the Company’s stockholders. The designation, powers, preferences, rights and qualifications, limitations and restrictions of the preferred stock of each series will be fixed by the certificate of designation relating to such series, which will specify the terms of the preferred stock. At September 27, 2013, the Company had no shares of preferred stock issued or outstanding.

EMPLOYEE STOCK BENEFIT PLANS

As of September 27, 2013, the Company has the following equity compensation plans under which its equity securities were authorized for issuance to its employees and/or directors:

• the 1999 Employee Long-Term Incentive Plan

• the Directors’ 2001 Stock Option Plan

• the Non-Qualified Employee Stock Purchase Plan

• the 2002 Employee Stock Purchase Plan

• the 2005 Long-Term Incentive Plan

• the 2008 Director Long-Term Incentive Plan

• AATI 1998 Amended Stock Plan

• AATI 2005 Equity Incentive Plan

Except for the 1999 Employee Long-Term Incentive Plan and the Non-Qualified Employee Stock Purchase Plan, each of the foregoing equity compensation plans was approved by the Company’s stockholders.

As of September 27, 2013, a total of 90.9 million shares are authorized for grant under the Company's share-based compensation plans, with 10.7 million options outstanding. The number of common shares reserved for future awards to employees and directors under these plans was 19.6 million at September 27, 2013. The Company grants equity awards under the 2005 Long-Term Incentive Plan to employees and the 2008 Director Long-Term Incentive Plan for non-employee directors.

2005 Long-Term Incentive Plan. Under this plan, officers, employees, non-employee directors and certain consultants may be granted stock options, restricted stock awards, restricted stock units, performance awards and other share-based awards. The plan has been approved by the stockholders. Under the plan, up to 55.9 million shares have been authorized for grant. A total of 18.8 million shares are available for new grants as of September 27, 2013. The maximum contractual term of the awards is seven years from the date of grant. Options granted under the plan are exercisable at the determination of the compensation committee and generally vest ratably over four years. Restricted stock awards and units granted under the plan at the determination of the compensation committee and generally vest over four or more years. Performance awards are contingently granted depending on the achievement of certain predetermined performance goals and generally vest over three or more years.

2008 Director Long-Term Incentive Plan. Under this plan, non-employee directors may be granted stock options, restricted stock awards and other share-based awards. The plan has been approved by the stockholders. Under the plan a total of1.5 million shares have been authorized for option grants. A total of 0.8 million shares are available for new grants as of September 27, 2013. The maximum contractual term of the director awards is ten years from the date of grant. Options granted under the plan are generally exercisable over four years. Restricted stock awards granted under the plan are exercisable at the determination of the compensation committee and generally vest over three or more years.

2002 Employee Stock Purchase Plan. The Company maintains a domestic and an international employee stock purchase plan. Under these plans, eligible employees may purchase common stock through payroll deductions of up to 10% of their compensation. The price per share is the lower of 85% of the fair market value of the common stock at the beginning or end of each offering period (generally six months). The plans provide for purchases by employees of up to an aggregate of 10.6 million shares. Shares of common stock purchased under these plans in fiscal years ended September 27, 2013, September 28, 2012, and September 30, 2011 were 0.5 million, 0.5 million, and 0.5 million, respectively. At September 27, 2013, there are 2.0 million shares available for purchase. The Company recognized compensation expense of $3.9 million, $3.5 million and $2.5 million for the fiscal years ended September 27, 2013, September 28, 2012, and September 30, 2011, respectively. The unrecognized compensation expense on the employee stock purchase plan at September 27, 2013 was $1.4 million. The weighted average period over which the cost is expected to be recognized is approximately four months.

Stock Options

The following table represents a summary of the Company's stock options:

	Shares (in millions)		Weighted average exercise price		Weighted average remaining contractual life (in years)	Aggregate intrinsic value (in millions)
Balance outstanding at September 28, 2012	11.9		$	15.57
Granted	1.7		$	20.53
Exercised	(2.0	)	$	10.43
Canceled/forfeited	(0.9	)	$	22.55
Balance outstanding at September 27, 2013	10.7		$	16.76	4.1	$	88.0
Exercisable at September 27, 2013	5.6		$	13.41	3.3	$	64.4

The weighted-average grant date fair value per share of employee stock options granted during the fiscal years ended September 27, 2013, September 28, 2012, and September 30, 2011 was $9.31, $8.91, and $9.63, respectively. The total grant date fair value of the options vested during the fiscal years ending September 27, 2013, September 28, 2012 and September 30, 2011 was $33.5 million, $25.4 million and $22.1 million, respectively.

Restricted and Performance Awards and Units

The following table represents a summary of the Company's restricted and performance transactions:

	Shares (In millions)		Weighted average grant date fair value
Non-vested awards outstanding at September 28, 2012	5.9		$	19.79
Granted	2.9		$	20.19
Vested	(2.5	)	$	19.06
Canceled/forfeited	(0.6	)	$	20.31
Non-vested awards outstanding at September 27, 2013	5.7		$	20.31

The weighted average grant date fair value per share for awards granted during the fiscal years ended September 27, 2013, September 28, 2012, and September 30, 2011 was $20.19, $19.31, and $23.61, respectively. The total grant date fair value of the awards vested during the fiscal years ending September 27, 2013, September 28, 2012 and September 30, 2011 was $53.5 million, $53.8 million and $28.4 million, respectively.

The following table summarizes the total intrinsic value for stock options exercised and awards vested (in millions):

	Fiscal Years Ended
	September 27 2013		September 28 2012		September 30 2011
Options	$	26.2	$	54.5	$	90.1
Awards	$	53.5	$	53.8	$	53.6

Valuation and Expense Information under ASC 718

The following table summarizes pre-tax share-based compensation expense by financial statement line (in millions):

	Fiscal Years Ended
	September 27, 2013		September 28, 2012		September 30, 2011
Cost of goods sold	$	10.2	$	9.4	$	7.5
Research and development	28.2		28.0		18.1
Selling, general and administrative	33.3		34.8		32.7
Total share-based compensation expense	$	71.7	$	72.2	$	58.3

The Company had capitalized share-based compensation expense of $2.1 million, $2.0 million and $2.1 million in inventory at September 27, 2013, September 28, 2012 and September 30, 2011, respectively.

The following table summarizes total compensation costs related to unvested share based awards not yet recognized and the weighted average period over which it is expected to be recognized at September 27, 2013:

	Unrecognized compensation cost for unvested awards (in millions)		Weighted average remaining recognition period (in years)
Options	$	30.3	2.0
Awards	$	56.8	1.3

The fair value of each stock option is estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions. The fair value of the restricted awards and units are equal to the closing market price of the Company's common stock on the date of grant. The fair value of the performance awards and units are equal to the closing market price of the Company's common stock on the date of grant and updated for the achievement of the underlying performance metrics.

	Fiscal Years Ended
	September 27, 2013		September 28, 2012		September 30, 2011
Expected volatility	57.71	%	59.21	%	49.26	%
Risk free interest rate	1.29	%	0.52	%	0.63	%
Dividend yield	0.00		0.00		0.00
Expected option life (in years)	4.2		4.1		4.1

The Company used a historical volatility calculated by the mean reversion of the weekly-adjusted closing stock price over the expected life of the options. The risk-free interest rate assumption is based upon observed treasury bill interest rates appropriate for the expected life of the Company’s employee stock options.

The expected life of employee stock options represents a calculation based upon the historical exercise, cancellation and forfeiture experience for the Company across its demographic population. The Company believes that this historical data is the best estimate of the expected life of a new option and that generally all groups of the Company's employees exhibit similar behavior.