Accounting for Stock-Based Compensation

9 Months Ended

Feb. 28, 2014

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Note 3 — Accounting for Stock-Based Compensation

Stock Options

In the first nine months of fiscal 2014, as part of our annual long-term stock incentive compensation, we granted 1,027,515 stock options to eligible employees at an average exercise price of $25.43 and weighted average fair value of $10.24.  The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Nine Months Ended
	February 28, 2014
Risk-free interest rate	1.4	%
Expected volatility of common stock	49.1	%
Dividend yield	1.2	%
Expected option term in years	5.2

The total intrinsic value of stock options exercised during the nine-month periods ended February 28, 2014 and 2013 was $3.8 million and $0.3, respectively.   Expense charged to operations for stock options was $1.0 and $1.0 million during the three months ended February 28, 2014 and 2013, respectively, and $2.6 and $2.6 million during the nine months ended February 28, 2014 and 2013, respectively.

Restricted Stock

In the first nine months of fiscal 2014, as part of our annual long-term stock incentive compensation, we granted 60,808 shares of performance-based restricted stock and 60,808 shares of time-based restricted stock to eligible employees.  The grant date fair value per share was $25.43.  In June 2013, we also granted 45,000 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $20.68.  Expense charged to operations for restricted stock was $1.2 and $2.3 million during the three months ended February 28, 2014 and 2013, respectively, and $3.7 and $5.4 million during the nine months ended February 28, 2014 and 2013, respectively.