Share-Based Compensation Plans

3 Months Ended

May 31, 2014

Note 14 – Share-Based Compensation Plans

We have share-based awards outstanding under two expired and three active share-based compensation plans. During the fiscal quarter ended May 31, 2014, the Company had the following share-based compensation activity:

· We granted options to purchase 231,500 shares of common stock at an exercise price of $64.19 per share to certain of our officers and employees. The fair values of the options were estimated using the Black-Scholes option pricing model to estimate fair values ranging from $25.03 to $26.05 for grants with terms of four and five years. The following assumptions were used for the grants: expected lives ranging from 4.05 to 4.35 years for grants with terms of four and five years; risk-free interest rates ranging from 1.28 to 1.40 percent; zero dividend yield; and expected volatilities ranging from 48.38 to 48.51 percent.

· We issued 2,628 restricted shares to non-employee Board members with a grant date fair value of $0.17 million, or $65.99 per share.

· Performance stock units and restricted stock awards with our former CEO covering 100,000 shares and 62,304 shares of common stock, respectively, vested and/or settled at a fair value of $67.10 per share. As payment for the related federal tax obligations arising from the settlement and vesting of these awards, 68,086 shares were withheld by the Company.

· Employees and directors exercised stock options to purchase 72,969 and 20,000 shares of common stock, respectively.

We recorded the following share-based compensation expense in SG&A for the periods covered below:

SHARE-BASED PAYMENT EXPENSE

(in thousands, except per share data)

	Three months ended May 31,
	2014			2013

Stock options	$	704		$	589
Directors stock compensation	247			137
Performance-based and other stock awards	418			2,693
Share-based payment expense	1,369			3,419
Less income tax benefits	(127		)	(723		)
Share-based payment expense, net of income tax benefits	$	1,243		$	2,696

Earnings per share impact of share-based payment expense:
Basic	$	0.04		$	0.08
Diluted	$	0.04		$	0.08

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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