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STOCK-BASED COMPENSATION
 9 Months Ended
Dec. 27, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

Performance Share Units

On October 22, 2014, the Company issued a new type of equity award under its 2005 Long-Term Incentive Compensation Plan, Performance Share Units, with a target award level of 129,130 shares for 14 senior executives.
The value of these Performance Share Units is based upon the Company’s total shareholder return for the period from October 1, 2014 to their vesting date of September 30, 2017 relative to the total shareholder return of the companies comprising the Standard & Poor's Health Care Equipment Index (the "Index"). These awards are conditioned upon the employees’ continued employment with the Company through the vesting date. If an employee is no longer employed by the Company at the vesting date as a result of a Qualifying Retirement, then the continued employment requirement shall cease to apply and prorated shares awarded will be determined as of the vesting date.
Total shareholder return is equal to the appreciation of the share price during a performance period, plus any dividends paid on the applicable company’s common stock. Relative total shareholder return compares the company's total shareholder return to the Index.
The actual number of shares awarded under a Performance Share Unit may range from 0% to a maximum of 200% of the target award depending upon the Company’s relative total shareholder return. If the Company’s total shareholder return for the performance period is negative, then any share payout will be capped at 100% of the target award, regardless of the Company's performance relative to the Index.
Grant date fair values for the Performance Share Units were estimated using a Monte Carlo Simulation of the Company's and the Index's stock price correlation over three-year time horizons matching the Performance Share Units performance period with a risk free rate of 0.78%, volatility of 20% and 12 months of dividend history.
The estimated fair value, potential shares to be awarded, recognized compensation expense and future compensation expense to be recognized, including estimated forfeitures, for Performance Share Unit awards are as follows:

As of October 22, 2014
For Nine Months Ended December 27, 2014

PSU Performance Period
PSU Award Fair Value
Recognized Compensation Expense
Unrecognized Compensation Expense
Minimum Shares
Target Shares
Maximum Shares
(Per share)
(In thousands)
(In thousands)
Oct 1, 2014 - Sept 30, 2017
$
35.09

$
278

$
4,253

—

129,130
258,260


Stock-Based Compensation

Total stock-based compensation expense of $10.2 million and $9.7 million was recognized for the nine months ended December 27, 2014 and December 28, 2013, respectively. The related income tax benefit recognized was $3.3 million and $3.2 million for the nine months ended December 27, 2014 and December 28, 2013, respectively.

The weighted average fair value for our options granted was $7.89 and $10.17 per share for the nine months ended December 27, 2014 and December 28, 2013, respectively. The assumptions utilized for estimating the fair value of option grants during the periods presented are as follows:
 
 
Nine Months Ended
 
 
December 27,
2014
 
December 28,
2013
Stock Options Black-Scholes assumptions (weighted average):
 
 
 
 
Volatility
 
22.45
%
 
22.79
%
Expected life (years)
 
4.9

 
4.9

Risk-free interest rate
 
1.75
%
 
1.30
%
Dividend yield
 
—
%
 
—
%


As of December 27, 2014, there was $29.0 million of total unrecognized compensation cost related to non-vested equity based compensation, including stock options, restricted stock units, market stock units and performance share units. This cost is expected to be recognized over a weighted average period of 2.61 years.

During the nine months ended December 27, 2014 and December 28, 2013, there were 183,808 and 156,224 shares, respectively, purchased under the Employee Stock Purchase Plan at an average price of $25.92 and $32.77 per share, respectively.