Accounting for Stock-Based Compensation

6 Months Ended

Nov. 30, 2012

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Note 3 — Accounting for Stock-Based Compensation

Stock Options

In July 2012, as part of our annual long-term stock incentive compensation, we granted 958,180 stock options to eligible employees at an exercise price of $12.90 and fair value of $4.6 million. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Six Months Ended
	November 30,
	2012		2011
Risk-free interest rate	0.6	%	1.5	%
Expected volatility of common stock	51	%	46	%
Dividend yield	2.3	%	1.0	%
Expected option term in years	5.4		5.7

The total intrinsic value of stock options exercised during the six-month periods ended November 30, 2012 and 2011 was $ 0.1 million and $3.3 million, respectively.  Expense charged to operations for stock options was $0.9 million and $1.1 million during the second quarters of fiscal years 2013 and 2012, respectively, and $1.6 million and $2.2 million during the six months ended November 30, 2012 and 2011, respectively.

Restricted Stock

In July 2012, as part of our annual long-term stock incentive compensation, we granted 53,280 shares of performance-based restricted stock and 65,780 restricted shares to eligible employees.  The grant date fair value per share was $12.90.  We also granted 45,000 restricted shares to members of the Board of Directors with a grant date fair value per share of $11.56.  Expense charged to operations for restricted stock was $0.9 million and $2.4 million during the second quarters of fiscal years 2012 and 2011, respectively, and $3.1 million and $3.9 million during the six months ended November 30, 2012 and 2011, respectively.  The expense charged to operations for restricted stock for the second quarter of fiscal 2013 is lower than prior quarters due to the cancellation of awards related to a key executive’s departure from the company.