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EQUITY COMPENSATION PLANS
 6 Months Ended
Nov. 30, 2012
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 six months ended November 30, 2012 follows:

 

     Shares     Weighted-
Average
Exercise Price		  

Options outstanding at June 1, 2012

      1,543,000      $ 22.34   

Granted

      306,000        43.00   

Exercised

      (235,000 )      14.43   

Forfeited

      (16,000 )      27.69   
  

 

 

    

Options outstanding at November 30, 2012

      1,598,000        27.51   

During the three and six month periods ended November 30, 2012 and 2011, the Company recorded $724,000 and $472,000 and $1,406,000 and $1,072,000 of compensation expense related to its share-based awards.

The weighted-average fair value of stock options granted during FY-13 and FY-12, estimated on the date of grant using the Black-Scholes option pricing model was $13.81 and $10.42 respectively, per option. The fair value of stock options granted was estimated using the following weighted-average assumptions.

 

     FY-13     FY-12  

Risk-free interest rate

      1.2 %      1.2 % 

Expected dividend yield

      0 %      0 % 

Expected stock price volatility

      39.2 %      36.4 % 

Expected option life

      4.0 years        4.0 years   

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.