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.

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, 2019, the Company had no shares of preferred stock issued or outstanding.

On January 30, 2019, the Board of Directors approved a stock repurchase program, pursuant to which the Company is authorized to repurchase up to $2.0 billion of its common stock from time to time prior to January 30, 2021, on the open market or in privately negotiated transactions as permitted by securities laws and other legal requirements. This authorized stock repurchase program replaced in its entirety the January 31, 2018, stock repurchase program. During the fiscal year ended September 27, 2019, the Company paid approximately $657.6 million (including commissions) in connection with the repurchase of 8.9 million shares of its common stock (paying an average price of $74.26 per share) under the January 30, 2019, stock repurchase plan and the January 31, 2018, stock repurchase plan. As of September 27, 2019, $1,626.4 million remained available under the January 30, 2019, stock repurchase plan.

On November 12, 2019, the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $0.44 per share. This dividend is payable on December 24, 2019, to the Company’s stockholders of record as of the close of business on December 3, 2019. Future dividends are subject to declaration by the Board of Directors. The dividends charged to retained earnings in fiscal 2019 and 2018 were as follows (in millions except per share amounts):



	Fiscal Years Ended
	September 27, 2019				September 28, 2018
	Per Share		Total		Per Share		Total
First quarter	$	0.38	$	67.1	$	0.32	$	58.8
Second quarter	0.38		66.0		0.32		58.5
Third quarter	0.38		65.7		0.32		57.8
Fourth quarter	0.44		75.1		0.38		68.1
	$	1.58	$	273.9	$	1.34	$	243.2

As of September 27, 2019, a total of 85.3 million shares are authorized for grant under the Company’s share-based compensation plans, with 1.3 million options outstanding. The number of common shares reserved for future awards to employees and directors under these plans was 12.4 million at September 27, 2019. The Company currently grants new equity awards to employees under the 2015 Long-Term Incentive Plan and to non-employee directors under the 2008 Director Long-Term Incentive Plan.

2015 Long-Term Incentive Plan. Under this plan, officers, employees, and certain consultants may be granted stock options, restricted stock awards and units, performance stock awards and units and other share-based awards. The plan has been approved by the stockholders. Under the plan, up to 19.4 million shares have been authorized for grant. A total of 11.7 million shares are available for new grants as of September 27, 2019. The maximum contractual term of options under the plan is seven years from the date of grant. Options granted under the plan at the determination of the compensation committee generally vest ratably over four years. Restricted stock awards and units granted under the plan at the determination of the compensation committee generally vest over four or more years. With respect to restricted stock awards, dividends are accumulated and paid when the underlying shares vest. If the underlying shares are forfeited for any reason, the rights to the dividends with respect to such shares are also forfeited. No dividends or dividend equivalents are paid or accrued with respect to restricted stock unit awards or other awards until the shares underlying such awards become vested and are issued to the award holder. Performance stock awards and units are contingently granted depending on the achievement of certain predetermined performance goals and generally vest over two 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 of 1.5 million shares have been authorized for grant. A total of 0.6 million shares are available for new grants as of September 27, 2019. The maximum contractual term of options granted under the plan is ten years from the date of grant. Options granted under the plan are generally exercisable over four years. Restricted stock awards and units granted under the plan generally vest over one or more years. With respect to restricted stock awards, dividends are accumulated and paid when the underlying shares vest. If the underlying shares are forfeited for any reason, the rights to the dividends with respect to such shares are also forfeited.

Employee Stock Purchase Plans. 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 (six months). The plans provide for purchases by employees of up to an aggregate of 9.7 million shares. Shares of common stock purchased under these plans in the fiscal years ended September 27, 2019, September 28, 2018, and September 29, 2017, were 0.3 million, 0.2 million, and 0.2 million, respectively. At September 27, 2019, there are 0.2 million shares available for purchase. The Company recognized compensation expense of $5.8 million, $5.2 million and $4.5 million for the fiscal years ended September 27, 2019, September 28, 2018, and September 29, 2017, respectively, related to the employee stock purchase plan. The unrecognized compensation expense on the employee stock purchase plan at September 27, 2019, was $1.9 million. The weighted average period over which the cost is expected to be recognized is approximately four months.



	Shares (in millions)		Weighted average exercise price		Weighted average remaining contractual life (in years)	Aggregate intrinsic value (in millions)
Balance outstanding at September 28, 2018	1.9		$	57.12
Granted	—		$	82.64
Exercised	(0.6	)	$	37.31
Canceled/forfeited	—		$	82.46
Balance outstanding at September 27, 2019	1.3		$	65.38	2.6	$	19.5

Exercisable at September 27, 2019	1.0		$	63.46	2.2	$	17.5

The weighted-average grant date fair value per share of employee stock options granted during the fiscal years ended September 27, 2019, September 28, 2018, and September 29, 2017, was $21.74, $68.32, and $23.25, respectively. The increase in the weighted-average grant date fair value per share of employee stock options granted during fiscal 2018 was due to replacement awards granted as a result of the Avnera acquisition completed during the period. The total grant date fair value of the options vested during the fiscal years ended September 27, 2019, September 28, 2018, and September 29, 2017, was $23.7 million, $22.6 million and $19.3 million, respectively.



	Shares (In millions)		Weighted average grant date fair value
Non-vested awards outstanding at September 28, 2018	2.7		$	92.37
Granted (1)	1.5		$	78.41
Vested	(0.8	)	$	85.95
Canceled/forfeited	(0.5	)	$	91.24
Non-vested awards outstanding at September 27, 2019	2.9		$	87.22
(1) includes performance shares granted and earned assuming maximum performance under the underlying performance metrics

The weighted average grant date fair value per share for awards granted during the fiscal years ended September 27, 2019, September 28, 2018, and September 29, 2017, was $78.41, $108.86, and $72.84, respectively. The total grant date fair value of the awards vested during the fiscal years ended September 27, 2019, September 28, 2018, and September 29, 2017, was $74.9 million, $81.1 million and $57.9 million, respectively.



	Fiscal Years Ended
	September 27, 2019		September 28, 2018		September 29, 2017
Cost of goods sold	$	13.0	$	14.4	$	13.6
Research and development	41.6		42.6		35.3
Selling, general and administrative	25.5		50.8		39.6
Total share-based compensation expense	$	80.1	$	107.8	$	88.5

Share-based compensation tax benefit	$	1.6	$	25.6	$	25.1
Capitalized share-based compensation expense at period end	$	4.7	$	2.9	$	4.0

The Company issued performance share units during fiscal 2019, fiscal 2018, and fiscal 2017 that contained market-based conditions. The fair value of these performance share units was estimated on the date of the grant using a Monte Carlo simulation with the following weighted average assumptions:



	Fiscal Year Ended
	September 27, 2019		September 28, 2018		September 29, 2017
Volatility of common stock	32.65	%	35.54	%	39.60	%
Average volatility of peer companies	37.07	%	36.78	%	39.78	%
Average correlation coefficient of peer companies	0.47		0.47		0.42
Risk-free interest rate	2.98	%	1.74	%	0.68	%
Dividend yield	1.84	%	1.15	%	1.44	%

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 dividend yield was calculated based on the annualized dividend and the stock price on the date of grant.

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.