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SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS
 12 Months Ended
Sep. 28, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS
Common Stock and 401(k) Retirement Income Plans
The Company has a 401(k) retirement plan (the “Plan”) for eligible U.S. employees. The Plan allows for employee contributions and matching Company contributions from 4% to 6% based upon terms and conditions of the 401(k) Plan.
The following table reflects the Company’s contributions to the Plan during fiscal 2019 and 2018:
 
 
Fiscal
(in thousands)
 
2019
 
2018
Cash
 
$
1,648

 
$
1,610


Share Repurchase Program
On August 15, 2017, the Company's Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 1, 2020. On July 10, 2018, the Company's Board of Directors increased the share repurchase authorization under the Program to $200 million. On January 31, 2019, the Board of Directors further increased the share repurchase authorization under the Program to $300 million. The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and is funded using the Company's available cash, cash equivalents and short-term investments. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by
management. The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.
During the fiscal year ended September 28, 2019, the Company repurchased a total of 4.7 million shares of common stock at a cost of $100.5 million. The share repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company’s Consolidated Balance Sheet. The Company records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid-in capital. If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings. As of September 28, 2019, our remaining share repurchase authorization under the Program was approximately $97.1 million.
Dividends
On August 7, 2019, May 20, 2019, February 28, 2019 and December 12, 2018, the Board of Directors declared a quarterly dividend $0.12 per share of common stock. During the fiscal year ended September 28, 2019, the Company declared dividends of $0.48 per share of common stock. The declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company's stockholders.
Accumulated Other Comprehensive Income
The following table reflects accumulated other comprehensive income / (loss) reflected on the Consolidated Balance Sheets as of September 28, 2019 and September 29, 2018: 
 
 
As of
(in thousands)
 
September 28, 2019
 
September 29, 2018
Loss from foreign currency translation adjustments
 
$
(7,745
)
 
$
(1,211
)
Unrecognized actuarial loss on pension plan, net of tax
 
(1,598
)
 
(1,620
)
Unrealized loss on hedging
 
(597
)
 
(1,071
)
Accumulated other comprehensive loss
 
$
(9,940
)
 
$
(3,902
)

Equity-Based Compensation
The Company has stockholder-approved equity-based employee compensation plans (the “Employee Plans”) and director compensation plans (the “Director Plans”) (collectively, the “Equity Plans”). As of September 28, 2019, 4.0 million shares of common stock are available for grant to the Company's employees and directors under the 2017 Equity Plan, including previously registered shares that have been carried forward for issuance under the 2009 Equity Plan.
•
Relative TSR Performance Share Units ("Relative TSR PSUs") entitle the employee to receive common shares of the Company on the award vesting date if market performance objectives which measure relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90-calendar day average price of the Company's stock as compared to specific peer companies that comprise the GICS (45301020) Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the Relative TSR PSUs are reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether the market condition is ultimately satisfied. Compensation expense is reversed if the award is forfeited prior to the vesting date.
•
In general, stock options and Time-based Restricted Share Units ("Time-based RSUs") awarded to employees vest annually over a three-year period provided the employee remains employed by the Company. The Company follows the non-substantive vesting method for stock options and recognizes compensation expense immediately for awards granted to retirement-eligible employees, or over the period from the grant date to the date retirement eligibility is achieved.
•
Special/Growth Performance Share Units (“Special/Growth PSUs”) entitle the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if revenue growth targets set by the Management Development and Compensation Committee (“MDCC”) of the Board of Directors on the date of grant are met. If revenue growth targets are not met, the Special/Growth PSUs do not vest. Certain Special/Growth PSUs vest based on achievement of strategic goals over a certain time period or periods set by the MDCC. If the strategic goals are not achieved, the Special/Growth PSUs do not vest.
•
In general, Performance-based Restricted Stock entitles the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if return on invested capital and revenue growth targets set by the Management Development and Compensation Committee (“MDCC”) of the Board of Directors on the date of grant are met. If return on invested capital and revenue growth targets are not met, Performance-based Restricted Stock does not vest. Certain PSUs vest based on achievement of strategic goals over a certain time period or periods set by the MDCC. If the strategic goals are not achieved, the PSUs do not vest.
Equity-based compensation expense recognized in the Consolidated Statements of Operations for fiscal 2019, 2018, and 2017 was based upon awards ultimately expected to vest. Following the early adoption in the first quarter of fiscal 2018 of ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, forfeitures have been accounted for when they occur.
The following table reflects total equity-based compensation expense, which includes Relative TSR PSUs, Time-based RSUs, Special/Growth PSUs, Performance-based Restricted Stock and common stock, included in the Consolidated Statements of Operations for fiscal 2019, 2018, and 2017: 
 
 
Fiscal
(in thousands)
 
2019
 
2018
 
2017
Cost of sales
 
$
632

 
$
515

 
$
463

Selling, general and administrative
 
10,503

 
8,548

 
9,015

Research and development
 
3,197

 
2,622

 
2,244

Total equity-based compensation expense
 
$
14,332

 
$
11,685

 
$
11,722


The following table reflects equity-based compensation expense, by type of award, for fiscal 2019, 2018, and 2017:  
 
 
Fiscal
(in thousands)
 
2019
 
2018
 
2017
Relative TSR PSUs
 
$
4,220

 
$
3,583

 
$
3,480

Time-based RSUs
 
8,603

 
7,027

 
7,492

Special/Growth PSUs
 
675

 
295

 
—

Common stock
 
834

 
780

 
750

Total equity-based compensation expense
 
$
14,332

 
$
11,685

 
$
11,722


Equity-Based Compensation: Relative TSR PSUs
The following table reflects Relative TSR PSUs activity for fiscal 2019, 2018, and 2017:
 
Number of shares (in thousands)
 
Unrecognized compensation expense (in thousands)
 
Average remaining service period (in years)
 
Weighted average grant date fair value per share
Relative TSR PSUs outstanding as of October 1, 2016
484

 
$
2,924

 
1.0
 
 
Granted
388

 
 
 
 
 
$
13.47

Forfeited or expired
(3
)
 
 
 
 
 
 
Vested
(196
)
 
 
 
 
 
 
Relative TSR PSUs outstanding as of September 30, 2017
673

 
$
6,204

 
1.4
 
 
Granted
180

 
 
 
 
 
$
29.60

Forfeited or expired
(146
)
 
 
 
 
 
 
Vested
(168
)
 
 
 
 
 
 
Relative TSR PSUs outstanding as of September 29, 2018
539

 
$
4,629

 
1.1
 
 
Granted
166

 
 
 
 
 
$
23.15

Forfeited or expired
(27
)
 
 
 
 
 
 
Vested
(117
)
 
 
 
 
 
 
Relative TSR PSUs outstanding as of September 28, 2019
561

 
$
4,136

 
0.9
 
 


The following table reflects the assumptions used to calculate compensation expense related to the Company’s Relative TSR PSUs issued during fiscal 2019, 2018, and 2017:
 
Fiscal
 
2019
 
2018
 
2017
Grant Price
$
20.87

 
$
19.65

 
$
12.51

Expected dividend yield(1)
2.30
%
 
0.12
%
 
N/A

Expected stock price volatility
34.20
%
 
31.71
%
 
30.39
%
Risk-free interest rate
2.92
%
 
1.68
%
 
0.96
%

(1) The expected dividend yield for fiscal 2018 includes the effect of 10,511 grants which were issued in the quarter ended September 29, 2018 with an assumed dividend yield of 1.91%

Equity-Based Compensation: Time-based RSUs
The following table reflects Time-based RSUs activity for fiscal 2019, 2018, and 2017:
 
Number of shares (in thousands)
 
Unrecognized compensation expense (in thousands)
 
Average remaining service period (in years)
 
Weighted average grant date fair value per share
Time-based RSUs outstanding as of October 1, 2016
1,015

 
$
6,440

 
1.5
 
 
Granted
715

 
 
 
 
 
$
13.32

Forfeited or expired
(50
)
 
 
 
 
 
 
Vested
(600
)
 
 
 
 
 
 
Time-based RSUs outstanding as of September 30, 2017
1,080

 
$
7,770

 
1.5
 
 
Granted
459

 
 
 
 
 
$
22.32

Forfeited or expired
(87
)
 
 
 
 
 
 
Vested
(542
)
 
 
 
 
 
 
Time-based RSUs outstanding as of September 29, 2018
910

 
$
9,038

 
1.4
 
 
Granted
521

 
 
 
 
 
$
20.95

Forfeited or expired
(42
)
 
 
 
 
 
 
Vested
(442
)
 
 
 
 
 
 
Time-based RSUs outstanding as of September 28, 2019
947

 
$
10,555

 
1.4
 
 


Equity-Based Compensation: Special/Growth PSUs
The following table reflects Special/Growth PSUs activity for fiscal 2019, 2018, and 2017:
 
Number of shares (in thousands)
 
Unrecognized compensation expense (in thousands)
 
Average remaining service period (in years)
 
Weighted average grant date fair value per share
Special/Growth PSUs outstanding as of September 30, 2017
—

 
 
 
 
 
 
Granted
60

 
 
 
 
 
$
22.57

Forfeited or expired
(14
)
 
 
 
 
 
 
Vested
—

 
 
 
 
 
 
Special/Growth PSUs outstanding as of September 29, 2018
46

 
$
702

 
2.1
 
 
Granted
$
55

 
 
 
 
 
$
21.07

Forfeited or expired
$
(4
)
 
 
 
 
 
 
Vested
$
—

 
 
 
 
 
 
Special/Growth PSUs outstanding as of September 28, 2019
$
97

 
$
1,128

 
1.6
 
 

The following table reflects employee stock option activity for fiscal 2019, 2018, and 2017:
 
Number of shares (in thousands)
 
Weighted average exercise price
 
Average remaining contractual life (in years)
 
Aggregate intrinsic value (in thousands)
Options outstanding as of October 1, 2016
90

 
$
8.41

 
 
 
 
Exercised
(61
)
 
$
8.31

 
 
 
$
531

Forfeited or expired
(13
)
 
$
8.50

 
 
 
 
Options outstanding as of September 30, 2017
16

 
$
8.73

 
 
 
 
Exercised
(6
)
 
$
8.74

 
 
 
$
73

Forfeited or expired
(8
)
 
$
8.74

 
 
 
 
Options outstanding as of September 29, 2018
2

 
$
8.64

 
 
 
 
Exercised
(2
)
 
$
8.64

 
 
 
$
24

Forfeited or expired
—

 
$
—

 
 
 
 
Options outstanding as of September 28, 2019
—

 
$
—

 
—

 
$
—

Options vested and expected to vest as of September 28, 2019
—

 
$
—

 
—

 
$
—

Options exercisable as of September 28, 2019
—

 
$
—

 
—

 
 
In the money exercisable options as of September 28, 2019
—

 
 
 
 
 
$
—


Intrinsic value of stock options exercised is determined by calculating the difference between the market value of the Company's stock price at the time an option is exercised and the exercise price, multiplied by the number of shares.
As of September 28, 2019, there were no unvested employee stock options.
Equity-Based Compensation: Non-Employee Directors
The 2017 Equity Plan provides for the grant of common shares to each non-employee director upon initial election to the board and on the first business day of each calendar quarter while serving on the board. The grant to a non-employee director upon initial election to the board is that number of common shares closest in value to, without exceeding, $120,000.  The quarterly grant to a non-employee director upon the first business day of each calendar quarter is that number of common shares closest in value to, without exceeding, $37,000.
The following table reflects shares of common stock issued to non-employee directors and the corresponding fair value for fiscal 2019, 2018, and 2017:
 
Fiscal
(in thousands)
2019
 
2018
 
2017
Number of common shares issued
37

 
33

 
45

Fair value based upon market price at time of issue
$
834

 
$
780

 
$
750


Pension Plan
The following table reflects the Company's defined benefits pension obligations, mainly in Switzerland and Taiwan, as of September 28, 2019 and September 29, 2018:
 
 
As of
(in thousands)
September 28, 2019
 
September 29, 2018
Switzerland pension obligation
$
1,962

 
$
1,980

Taiwan pension obligation
1,191

 
1,256


Other Plans
Some of the Company's other foreign subsidiaries have retirement plans that are integrated with and supplement the benefits provided by laws of the various countries. These other plans are not required to report nor do they determine the actuarial present value of accumulated benefits or net assets available for plan benefits as they are defined contribution plans.