Equity Compensation Plans

3 Months Ended

Aug. 31, 2018

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 our 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, 2018 follows:


	Shares			Weighted- Average Exercise Price
Options outstanding June 1, 2018		2,497,124		$	42.63
Granted		—			—
Exercised		(253,076	)		28.60
Forfeited		(8,210	)		44.51

Options outstanding August 31, 2018		2,235,838			44.21

During the three month period ended August 31, 2018 and 2017, the Company recorded $1,431,000 and $1,401,000, respectively, of compensation expense related to its share-based awards

The weighted-average fair value per share of stock options granted during fiscal year 2018, estimated on the date of grant using the Black-Scholes option pricing model, was $14.47. The fair value of stock options granted was estimated using the following weighted-average assumptions.


		FY 2018
Risk-free interest rate		1.6%
Expected dividend yield		0.0%
Expected stock price volatility		27.2%
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.