Accounting for Stock-Based Compensation

3 Months Ended

Aug. 31, 2018

Accounting for Stock-Based Compensation

Note 4 — Accounting for Stock-Based Compensation

Restricted Stock

In the three-month period ended August 31, 2018, as part of our annual long-term stock incentive compensation, we granted 43,680 shares of performance-based restricted stock and 38,760 shares of time-based restricted stock to eligible employees. The grant date fair value per share for these shares was $48.09 (the closing price on the grant date). In June 2018, we also granted 29,128 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $45.32.

Expense charged to operations for restricted stock during the three-month periods ended August 31, 2018 and 2017 was $2.8 million and $1.4 million, respectively.

Stock Options

In July 2018, as part of our annual long-term stock incentive compensation, we granted 290,340 stock options to eligible employees at an exercise price of $48.09 and weighted average fair value of $13.67. 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	2.7	%
Expected volatility of common stock	30.8	%
Dividend yield	0.6	%
Expected option term in years	4.5

The total intrinsic value of stock options exercised during the three-month periods ended August 31, 2018 and 2017 was $10.7 million and $5.0 million, respectively. Expense charged to operations for stock options during the three-month periods ended August 31, 2018 and 2017 was $1.2 million and $1.1 million, respectively.