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Equity Compensation Plans
 6 Months Ended
Nov. 30, 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 November 30, 2013 follows:

 

     Shares     Weighted-
Average
Exercise Price		  

Options outstanding at June 1, 2013

      2,091,000      $ 19.21   

Granted

      512,000        36.44   

Exercised

      (513,000 )      13.39   

Forfeited

      (80,000 )      21.25   
  

 

 

    

Options outstanding at November 30, 2013

      2,010,000        25.00   

During the three and six month periods ended November 30, 2013 and 2012, the Company recorded $906,000 and $724,000 and $1,695,000 and $1,406,000 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 $9.87 and $9.20 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.