Accounting for Stock-Based Compensation

3 Months Ended

Aug. 31, 2013

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Note 3 — Accounting for Stock-Based Compensation

Stock Options

In July 2013, as part of our annual long-term stock incentive compensation, we granted 1,026,515 stock options to eligible employees at an 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:

	Three Months Ended
	August 31, 2013
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 three-month periods ended August 31, 2013 and 2012 was $2.6 million and zero, respectively.   Expense charged to operations for stock options during the three-month periods ended August 31, 2013 and 2012 was $0.5 and $0.7 million, respectively.

Restricted Stock

In July 2013, 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 during the three-month periods ended August 31, 2013 and 2012 was $1.1 million and $2.2 million, respectively.