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Equity Compensation Plans
 3 Months Ended
Aug. 31, 2011
Equity Compensation Plans  
Equity Compensation Plans

5. EQUITY COMPENSATION PLANS

Options are generally granted under the employee and director stock option plan for 5 year periods and become exercisable in equal annual installments during that period. Certain non-qualified options are granted for 10 year periods. A summary of stock option activity during the three months ended August 31, 2011 follows:

 

     Shares     Weighted-Average
Exercise Price		  

Options outstanding at June 1, 2011

      1,574,000      $ 17.77   

Granted

      0        0   

Exercised

      (77,000 )      12.31   

Forfeited

      (3,000 )      22.53   
  

 

 

    

Options outstanding at August 31, 2011

      1,494,000        18.05   

During the three month periods ended August 31, 2011 and 2010, the Company recorded $600,000 and $675,000, respectively, of compensation expense related to its share-based awards.

The weighted-average fair value of stock options granted during FY 2011, estimated on the date of grant using the Black-Scholes option pricing model was $8.66 per option. As of August 31, 2011, no grants had been granted for the FY 2012 to date. The fair value of stock options granted in FY 2011 was estimated using the following weighted-average assumptions.

 

     2011  

Risk-free interest rate

      1.7 % 

Expected dividend yield

      0 % 

Expected stock price volatility

      38.8 % 

Expected option life

      4.0 years   

The Company has 6,750 outstanding warrants that are exercisable for common stock. The warrants have lives of 5 years and were expensed at fair value upon issuance.

The Company has an Employee Stock Purchase plan that provides for employee stock purchases at a 5% discount to market price. The discount is expensed as of the date of purchase.