Equity Compensation Plans

6 Months Ended

Nov. 30, 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 10 years. A summary of stock option activity during the six months ended November 30, 2018 follows:


	Shares			Weighted- Average Exercise Price
Options outstanding June 1, 2018		2,497,124		$	42.63
Granted		525,750			62.93
Exercised		(340,023	)		29.49
Forfeited		(91,620	)		45.87

Options outstanding November 30, 2018		2,591,231			48.40

During the three and six month periods ended November 30, 2018 and 2017, the Company recorded $1,400,000 and $1,264,000 and $2,831,000 and $2,666,000, 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 and fiscal 2019, estimated on the date of grant using the Black-Scholes option pricing model, was $14.47 and $14.91, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions.


	FY 2019			FY 2018
Risk-free interest rate		2.6	%		1.6	%
Expected dividend yield		0.0	%		0.0	%
Expected stock price volatility		27.0	%		27.2	%
Expected option life		3.5 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.