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Stockholders' Equity | 12 Months Ended
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Oct. 01, 2021
Stockholders' Equity Note [Abstract] |
STOCKHOLDERS’ EQUITY | 10. STOCKHOLDERS’ EQUITY Common Stock At October 1, 2021, the Company is authorized to issue 525.0 million shares of common stock, par value $0.25 per share, of which 165.3 million shares are issued and 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. 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 October 1, 2021, the Company had no shares of preferred stock issued or outstanding. Stock Repurchase On January 26, 2021, 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 26, 2023, 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 30, 2019, stock repurchase program. The timing and amount of any shares of the Company’s common stock that are repurchased under the repurchase program are determined by the Company’s management based on its evaluation of market conditions and other factors. During the fiscal year ended October 1, 2021, the Company paid approximately $195.6 million (including commissions) in connection with the repurchase of 1.4 million shares of its common stock (paying an average price of $138.85 per share) under the January 30, 2019, stock repurchase plan. As of October 1, 2021, $2.0 billion remained available under the January 26, 2021, stock repurchase plan. During the fiscal year ended October 1, 2021, the Board of Directors approved the retirement of 68.5 million shares of treasury stock at an aggregated historical cost of $4,342.6 million. During the fiscal year ended October 2, 2020, the Company paid approximately $647.5 million (including commissions) in connection with the repurchase of 6.3 million shares of its common stock (paying an average price of $102.74 per share). 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). Dividends On November 4, 2021, the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $0.56 per share. This dividend is payable on December 14, 2021, to the Company’s stockholders of record as of the close of business on November 23, 2021. Future dividends are subject to declaration by the Board of Directors. The dividends charged to retained earnings in fiscal 2021 and 2020 were as follows (in millions except per share data):
| Fiscal Years Ended
| October 1, 2021 |  | October 2, 2020
| Per Share |  | Total |  | Per Share |  | Total
First quarter | $ | 0.50 |  |  | $ | 83.0 |  |  | $ | 0.44 |  |  | $ | 75.1 |
Second quarter | 0.50 |  |  | 82.6 |  |  | 0.44 |  |  | 74.9 |
Third quarter | 0.50 |  |  | 82.5 |  |  | 0.44 |  |  | 73.5 |
Fourth quarter | 0.56 |  |  | 92.5 |  |  | 0.50 |  |  | 83.5 |
| $ | 2.06 |  |  | $ | 340.6 |  |  | $ | 1.82 |  |  | $ | 307.0 |
Employee Stock Benefit Plans As of October 1, 2021, the Company has the following equity compensation plans under which its equity securities were authorized for issuance to its employees and/or directors: ◦the 2002 Employee Stock Purchase Plan ◦the Non-Qualified Employee Stock Purchase Plan ◦the 2005 Long-Term Incentive Plan ◦the 2008 Director Long-Term Incentive Plan ◦the 2015 Long-Term Incentive Plan Except for the Non-Qualified Employee Stock Purchase Plan, each of the foregoing equity compensation plans was approved by the Company’s stockholders. As of October 1, 2021, a total of 81.8 million shares are authorized for grant under the Company’s share-based compensation plans, with 0.2 million options outstanding. The number of common shares reserved for future awards to employees and directors under these plans was 16.3 million at October 1, 2021. 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 units, performance stock units, and other share-based awards. The plan has been approved by the stockholders. Under the plan, up to 24.5 million shares have been authorized for grant. A total of 14.0 million shares are available for new grants as of October 1, 2021. 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 units granted under the plan at the determination of the compensation committee generally vest over three or more years. No dividends or dividend equivalents are accumulated or paid with respect to restricted stock unit awards or other awards until the shares underlying such awards vest and are issued to the award holder. Performance stock units are contingently granted depending on the achievement of certain predetermined performance goals and generally vest over one or more years. 2008 Director Long-Term Incentive Plan. Under this plan, non-employee directors may be granted stock options, restricted stock units, 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 October 1, 2021. 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 units granted under the plan generally vest over one or more years. 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 11.6 million shares. Shares of common stock purchased under these plans in the fiscal years ended October 1, 2021, October 2, 2020, and September 27, 2019, were 0.2 million, 0.3 million, and 0.3 million, respectively. At October 1, 2021, there are 1.6 million shares available for purchase. The Company recognized compensation expense of $8.7 million, $6.6 million, and $5.8 million for the fiscal years ended October 1, 2021, October 2, 2020, and September 27, 2019, respectively, related to the employee stock purchase plan. The unrecognized compensation expense on the employee stock purchase plan at October 1, 2021, was $3.1 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 October 2, 2020 | 0.4 |  |  | $ | 70.28 |  |  |  |  |
Granted | — |  |  | $ | 143.87 |  |  |  |  |
Exercised | (0.2) |  |  | $ | 66.35 |  |  |  |  |
Canceled/forfeited | — |  |  | $ | 31.88 |  |  |  |  |
Balance outstanding at October 1, 2021 | 0.2 |  |  | $ | 74.68 |  |  | 1.8 |  | $ | 16.7 |
Exercisable at October 1, 2021 | 0.2 |  |  | $ | 74.12 |  |  | 1.7 |  | $ | 16.2 |
The weighted-average grant date fair value per share of employee stock options granted during the fiscal years ended October 1, 2021, October 2, 2020, and September 27, 2019, was $39.63, $24.49, and $21.74, respectively. Restricted and Performance Awards and Units The following table represents a summary of the Company’s restricted and performance awards and units:
| Shares (in millions) |  | Weighted average grant date fair value
Non-vested awards outstanding at October 2, 2020 | 2.9 |  |  | $ | 94.77 |
Granted (1) | 1.5 |  |  | $ | 148.96 |
Vested | (1.1) |  |  | $ | 102.94 |
Canceled/forfeited | (0.6) |  |  | $ | 105.34 |
Non-vested awards outstanding at October 1, 2021 | 2.7 |  |  | $ | 118.90 |
(1) includes performance stock awards granted and earned assuming target performance under the underlying performance metrics
The weighted-average grant date fair value per share for awards granted during the fiscal years ended October 1, 2021, October 2, 2020, and September 27, 2019, was $148.96, $99.68, and $78.41, respectively. The following table summarizes the total intrinsic value for stock options exercised and awards vested (in millions):
| Fiscal Years Ended
| October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
Awards | $ | 167.4 |  |  | $ | 100.9 |  |  | $ | 67.7 |
Options | $ | 18.6 |  |  | $ | 44.2 |  |  | $ | 26.4 |
Valuation and Expense Information The following table summarizes pre-tax share-based compensation expense by financial statement line and related tax benefit (in millions):
| Fiscal Years Ended
| October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
Cost of goods sold | $ | 28.9 |  |  | $ | 23.2 |  |  | $ | 13.0 |
Research and development | 85.7 |  |  | 68.7 |  |  | 41.6 |
Selling, general and administrative | 77.3 |  |  | 64.7 |  |  | 25.5 |
Total share-based compensation expense | $ | 191.9 |  |  | $ | 156.6 |  |  | $ | 80.1 |
Share-based compensation tax benefit | $ | 13.5 |  |  | $ | 10.3 |  |  | $ | 1.6 |
Capitalized share-based compensation expense at period end | $ | 9.8 |  |  | $ | 10.6 |  |  | $ | 4.7 |
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 October 1, 2021:
| Unrecognized compensation cost for unvested awards (in millions) |  | Weighted average remaining recognition period (in years)
Awards | $ | 202.0 |  |  | 2.9
Options | $ | 0.1 |  |  | 1.3
The fair value of the restricted stock units is equal to the closing market price of the Company’s common stock on the date of grant. The Company issued performance stock unit awards during fiscal 2021, fiscal 2020, and fiscal 2019 that contained market-based conditions. The fair value of these performance stock unit awards was estimated on the date of the grant using a Monte Carlo simulation with the following weighted average assumptions:
| Fiscal Year Ended
| October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
Volatility of common stock | 43.20 | % |  | 32.22 | % |  | 32.65 | %
Average volatility of peer companies | 45.96 | % |  | 33.96 | % |  | 37.07 | %
Average correlation coefficient of peer companies | 0.65 |  |  | 0.61 |  |  | 0.47
Risk-free interest rate | 0.25 | % |  | 1.62 | % |  | 2.98 | %
Dividend yield | 1.39 | % |  | 1.78 | % |  | 1.84 | %
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:
| Fiscal Years Ended
| October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
Expected volatility | 39.65 | % |  | 34.26 | % |  | 34.47 | %
Risk-free interest rate | 0.13 | % |  | 1.65 | % |  | 2.76 | %
Dividend yield | 1.39 | % |  | 1.78 | % |  | 1.84 | %
Expected option life (in years) | 4.0 |  | 4.0 |  | 4.0
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.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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