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Equity Compensation Plans
 9 Months Ended
Feb. 28, 2017
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 nine months ended February 28, 2017 follows:

 

     Shares      Weighted-
Average
Exercise Price		  

Options outstanding June 1, 2016

      2,081,000      $ 36.71  

Granted

      618,000        54.19  

Exercised

      (542,000 )       29.04  

Forfeited

      (49,000 )       42.72  
  

 

 

     

Options outstanding February 28, 2017

      2,108,000        43.66  

During the three and nine month periods ended February 28/29, 2017 and 2016 the Company recorded $1,198,000 and $1,462,000 and $3,932,000 and $4,007,000, respectively, of compensation expense related to its share-based awards.

The weighted-average fair value per share of stock options granted during fiscal 2017 and fiscal 2016, estimated on the date of grant using the Black-Scholes option pricing model was $15.79 and $13.11, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions.

 

     FY2017     FY2016  

Risk-free interest rate

      1.2 %      1.2 % 

Expected dividend yield

      0.0 %      0.0 % 

Expected stock price volatility

      35.2 %      33.3 % 

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.