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Equity Compensation Plans
 3 Months Ended
Aug. 31, 2016
Equity Compensation Plans

5. EQUITY COMPENSATION PLANS

Qualified and non-qualified options to purchase shares of common stock may be granted to directors, officers and employees of the

Company under the terms of the Company’s stock option plans. These options are granted at an exercise price of not less than the fair market value of the stock on the date of grant. Options vest ratably over three and five year periods and the contractual terms are generally five or ten years. A summary of stock option activity during the three months ended August 31, 2016 follows:

 

     Shares      Weighted-
Average
Exercise Price		  

Options outstanding at June 1, 2016

      2,081,000       $ 36.71   

Granted

      0         0   

Exercised

      (136,000 )       28.93   

Forfeited

      (3,000 )       39.14   
  

 

 

     

Options outstanding at August 31, 2016

      1,942,000         37.25   

During the three month periods ended August 31, 2016 and 2015 the Company recorded $1,516,000 and $1,297,000, respectively, of compensation expense related to its share-based awards.

The weighted-average fair value per share of stock options granted during fiscal 2016, estimated on the date of grant using the Black-Scholes option pricing model was $13.11. No options have yet been granted in fiscal 2017. The fair value of stock options granted was estimated using the following weighted-average assumptions.

 

     FY2016  

Risk-free interest rate

      1.2 % 

Expected dividend yield

      0 % 

Expected stock price volatility

      33.3 % 

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.