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Equity Compensation Plans
 9 Months Ended
Feb. 28, 2014
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, 2014 follows:

 

     Shares     Weighted-
Average
Exercise Price		  

Options outstanding at June 1, 2013

      2,091,000      $ 19.21   

Granted

      512,000        36.44   

Exercised

      (556,000 )      13.74   

Forfeited

      (81,000 )      21.35   
  

 

 

    

Options outstanding at February 28, 2014

      1,966,000        25.15   

During the three and nine month periods ended February 28, 2014 and 2013, the Company recorded $993,000 and $791,000 and $2,689,000 and $2,198,000 of compensation expense related to its share-based awards.

The weighted-average fair value of stock options granted during fiscal 2014 and fiscal 2013, 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.

 

     FY2014   FY2013

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 recorded in administrative expense as of the date of purchase.