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Equity Compensation Plans
 3 Months Ended
Aug. 31, 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 three months ended August 31, 2013 follows:

 

     Shares     Weighted-
Average
Exercise Price		  

Options outstanding at June 1, 2013

      1,395,000      $ 28.82   

Granted

      319,000        14.65   

Exercised

      (182,000 )      5.98   

Forfeited

      (44,000 )      9.13   
  

 

 

    

Options outstanding at August 31, 2013

      1,488,000        10.62   

During the three month periods ended August 31, 2013 and 2012, the Company recorded $789,000 and $682,000 of compensation expense related to its share-based awards.

The weighted-average fair value of stock options granted during FY-14 and FY-13, estimated on the date of grant using the Black-Scholes option pricing model was $14.65 and $13.81 respectively, per option. The fair value of stock options granted was estimated using the following weighted-average assumptions.

 

     FY-14    FY-13

Risk-free interest rate

    0.8%    1.2%

Expected dividend yield

    0%    0%

Expected stock price volatility

    33.1%    39.2%

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.