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EQUITY COMPENSATION PLANS
 9 Months Ended
Feb. 28, 2013
EQUITY COMPENSATION PLANS

5. EQUITY COMPENSATION PLANS

Options are generally granted under the employee and director stock option plan for five-year periods and become exercisable in equal annual installments during that period. Certain non-qualified options are granted for ten-year periods. A summary of stock option activity during the nine months ended February 28, 2013 follows:

 

     Shares     Weighted-
Average
Exercise
Price		  

Options outstanding at June 1, 2012

      1,543,000      $ 22.34   

Granted

      306,000        43.00   

Exercised

      (302,000 )      15.39   

Forfeited

      (16,000 )      29.50   
  

 

 

    

Options outstanding at February 28, 2013

      1,531,000        27.77   

During the three and nine month periods ended February 28/29, 2013 and 2012, the Company recorded $791,000 and $685,000 and $2,197,000 and $1,757,000 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.