Accounting for Stock-Based Compensation

3 Months Ended

Aug. 31, 2016

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Note 4 — Accounting for Stock-Based Compensation

Restricted Stock

In the three month period ended August 31, 2016, as part of our annual long-term stock incentive compensation, we granted 212,583 shares of performance-based restricted stock and 34,100 shares of time-based restricted stock to eligible employees.  The average grant date fair value per share for these shares was $24.00.  In June 2016, we also granted 50,000 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $24.39.

Expense charged to operations for restricted stock during the three month periods ended August 31, 2016 and 2015 was $1.3 million and $1.2 million, respectively.

Stock Options

In July 2016, as part of our annual long-term stock incentive compensation, we granted 678,000 stock options to eligible employees at an exercise price of $24.00 and weighted average fair value of $6.50.  The fair value of stock options was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate	1.0	%
Expected volatility of common stock	36.8	%
Dividend yield	1.3	%
Expected option term in years	4.0

The total intrinsic value of stock options exercised during the three month periods ended August 31, 2016 and 2015 was $0.3 million and $0.8 million, respectively.   Expense charged to operations for stock options during the three month periods ended August 31, 2016 and 2015 was $1.2 million and $0.8 million, respectively.