Equity Compensation Plans

9 Months Ended

Feb. 29, 2016

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 29, 2016 follows:


	Shares			Weighted- Average Exercise Price
Options outstanding at June 1, 2015		1,988,000		$	31.04
Granted		549,000			46.98
Exercised		(385,000	)		23.45
Forfeited		(19,000	)		36.62

Options outstanding at February 29, 2016		2,133,000			36.47

During the three and nine month periods ended February 29/28, 2016 and 2015 the Company recorded $1,462,000 and $1,228,000 and $4,007,000 and $3,187,000 of compensation expense related to its share-based awards.

The weighted-average fair value of stock options granted during fiscal 2016 and fiscal 2015, estimated on the date of grant using the Black-Scholes option pricing model was $13.11 and $11.91, respectively, per option. The fair value of stock options granted was estimated using the following weighted-average assumptions.


	FY2016	FY2015
Risk-free interest rate	1.2%	1.2%
Expected dividend yield	0%	0%
Expected stock price volatility	33.3%	36.2%
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.