Share-Based Compensation Plans

6 Months Ended

Aug. 31, 2014

Note 15 – Share-Based Compensation Plans

We have share-based awards outstanding under several share-based compensation plans. During the fiscal quarter and year-to-date periods ended August 31, 2014, the Company had the following share-based compensation activity:

· We granted options to purchase 9,000 and 240,500 shares of common stock, respectively, to certain of our officers and employees. The fair values of these options were estimated using the Black-Scholes option pricing model to estimate fair values ranging from $25.31 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 1.47 percent; zero dividend yield; and expected volatilities ranging from 46.60 to 50.53 percent.

· We issued 2,628 and 5,256 restricted shares, respectively, to non-employee Board members with total grant date fair values of $0.15 and $0.32 million, respectively, and average share prices of $58.18 and $62.09, respectively.

· During the fiscal quarter ended May 31, 2014, performance stock units and restricted stock awards held by 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 exercised stock options to purchase 26,450 and 99,419 shares of common stock, respectively.

· Employees purchased 13,848 shares of common stock for $0.69 million through our employee stock purchase plan.

· Directors exercised stock options to purchase -0- and 20,000 shares, 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 August 31,				Six months ended August 31,
	2014		2013		2014		2013

Stock options	$	910	$	613	$	1,614	$	1,202
Directors stock compensation	219		150		466		287
Performance-based and other stock awards	687		2,543		1,105		5,236
Employee stock purchase plan	167		158		167		158
Share-based payment expense	1,983		3,464		3,352		6,883
Less income tax benefits	(246)		(686)		(373)		(1,411		)
Share-based payment expense, net of income tax benefits	$	1,737	$	2,778	$	2,979	$	5,472

Earnings per share impact of share-based payment expense:
Basic	$	0.06	$	0.09	$	0.10	$	0.17
Diluted	$	0.06	$	0.09	$	0.10	$	0.17

- 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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