Equity Compensation Plans

9 Months Ended

Feb. 28, 2019

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 nine months ended February 28, 2019 follows:

				Weighted-
				Average
	Shares			Exercise Price
Options outstanding June 1, 2018		2,497,124		$	42.63
Granted		526,750			62.92
Exercised		(418,598	)		30.76
Forfeited		(105,835	)		46.50
Options outstanding February 28, 2019		2,499,441			48.78

During the three and nine month periods ended February 28, 2019 and 2018, the Company recorded $1,306,000 and $1,026,000 and $4,137,000 and $3,692,000, respectively, of compensation expense related to its share-based awards.

The weighted-average fair value per share of stock options granted during fiscal years 2019 and fiscal 2018, estimated on the date of grant using the Black-Scholes option pricing model, was $14.91 and $14.44, 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.