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Equity Compensation Plans
 3 Months Ended
Aug. 31, 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 three months ended August 31, 2014 follows:

 

     Shares      Weighted-
Average
Exercise Price		  

Options outstanding at June 1, 2014

      1,869,000       $ 25.69   

Granted

      0         0   

Exercised

      191,000         14.85   

Forfeited

      27,000         33.95   
  

 

 

     

Options outstanding at August 31, 2014

      1,651,000         26.82   

During the three month periods ended August 31, 2014 and 2013, the Company recorded $907,000 and $789,000 and of compensation expense related to its share-based awards.

The weighted-average fair value of stock options granted during fiscal 2014, estimated on the date of grant using the Black-Scholes option pricing model was $9.87, per option. No options were granted in the first quarter of fiscal 2015. The fair value of stock options granted in fiscal 2014 was estimated using the following weighted-average assumptions.

 

     FY2014

Risk-free interest rate

    0.8%

Expected dividend yield

    0%

Expected stock price volatility

    33.1%

Expected option life

    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.