Accounting for Stock-Based Compensation

3 Months Ended

Aug. 31, 2017

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, 2017, as part of our annual long-term stock incentive compensation, we granted 98,750 shares of performance-based restricted stock and 24,425 shares of time-based restricted stock to eligible employees.  The grant date fair value per share for these shares was $35.26 (the closing price on the grant date).  In June 2017, we also granted 55,000 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $34.95.

Expense charged to operations for restricted stock during the three-month periods ended August 31, 2017 and 2016 was $1.4 million and $1.3 million, respectively.

Stock Options

In July 2017, as part of our annual long-term stock incentive compensation, we granted 453,450 stock options to eligible employees at an exercise price of $35.26 and weighted average fair value of $9.27.  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	1.8	%
Expected volatility of common stock	31.7	%
Dividend yield	0.9	%
Expected option term in years	4.3

The total intrinsic value of stock options exercised during the three-month periods ended August 31, 2017 and 2016 was $5.0 million and $0.3 million, respectively.   Expense charged to operations for stock options during the three-month periods ended August 31, 2017 and 2016 was $1.1 million and $1.2 million, respectively.