6. Stock-Based Compensation Plans

The Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan (the "2004 Plan") provides that, in addition to other types of awards, non-qualified and incentive stock options to purchase Common Stock may be granted to employees and non-employee directors at market prices at date of grant. In addition, non-qualified and incentive stock options remain outstanding under our 1993 Stock Option Plan.

Options become exercisable in installments beginning one year after the date of grant and expire ten years after the date of grant. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. Options with graded vesting are valued as single awards and the compensation cost recognized using a straight-line attribution method over the shorter of the vesting period or required service period adjusted for estimated forfeitures. The following table sets forth the information about the weighted-average grant date fair value of options granted during the six-month periods ended November 30, 2011 and November 30, 2010.


		Six months ended November 30,
		2011				2010
Weighted average grant date fair value	$		19.72		$		17.61
Weighted average assumptions used:
Expected volatility			.411				.420
Expected term of the option in years			10				10
Risk-free interest rate			2.97	%			3.33	%
Expected dividend yield			.56	%			.86	%

Expected volatility is based on an analysis of historical volatility of our common stock. Expected term of option is the period of time that options granted are expected to be outstanding and is derived by analyzing the historical option exercise experience of our optionees. Risk-free interest rate is determined using the implied yield currently available for zero coupon U.S. treasury issues with a remaining term equal to the expected term of the options. Expected dividend yield is based on the approved annual dividend rate in effect and the market price of our common stock at the time of grant.

A summary of option transactions for the six-month period ended November 30, 2011, follows:


	Shares Under Option			Weighted-Average Option Price

Outstanding at May 31, 2011		1,972,441		$	39.58
Granted		16,000			38.40
Exercised		(6,853	)		23.10
Canceled		(49,144	)		39.31

Outstanding at November 30, 2011		1,932,444		$	39.63

Exercisable at November 30, 2011		1,030,584		$	41.39

The following table summarizes information about stock options outstanding as of November 30, 2011.


	Range of Exercise Prices
	$16.04 - $27.39		$33.57 - $48.60		$50.63 - $70.18

Options outstanding
Shares outstanding		559,878		820,006		552,560
Weighted-average remaining term in years		4.26		7.25		4.47
Weighted-average exercise price	$	22.00	$	39.70	$	57.41
Options exercisable
Shares exercisable		356,058		230,926		443,600
Weighted-average remaining term in years		2.85		4.19		4.29
Weighted-average exercise price	$	20.51	$	42.55	$	57.54

Outstanding options expire on various dates to October 12, 2021. As of November 30, 2011, there were 652,612 shares available for future awards under the 2004 Plan.

As of November 30, 2011, the aggregate intrinsic value (the difference in the closing market price of our common stock of $25.33 and the exercise price to be paid by the optionee) of stock options outstanding was $1.9 million. The aggregate intrinsic value of exercisable stock options at that date was $1.8 million. The total intrinsic value for options exercised (the difference in the market price of our common stock on the exercise date and the price paid by the optionee to exercise the option) was less than $0.1 million and $0.2 million for the three-month periods ended November 30, 2011 and November 30, 2010, respectively, and $0.1 million and $0.3 million for the six-month periods ended November 30, 2011 and November 30, 2010, respectively.

We have provided additional stock-based compensation to employees and directors under stock appreciation rights contracts, deferred compensation agreements, restricted stock payments and a former stock awards program. At November 30, 2011, outstanding stock appreciation rights totaled 133,315 shares, deferred compensation agreements to be settled in cash totaled 101,790 shares, deferred compensation agreements to be settled in common stock totaled 2,303 shares, unvested restricted stock payments totaled 8,834 shares and stock awards totaled 2,323 shares. Other credits include $3.0 million at November 30, 2011 and $6.8 million at May 31, 2011 representing accrued stock-based compensation which is accounted for as liabilities and expected to be settled in cash. Common stock totaling 2.6 million shares at November 30, 2011 and 2.6 million shares at May 31, 2011 have been reserved for the settlement of stock-based compensation.

Total stock-based compensation included in selling, general and administrative expense (credit) was $(1.3) million and $2.5 million in the three-month periods ended November 30, 2011 and November 30, 2010, respectively, and $(1.2) million and $2.3 million in the six-month periods ended November 30, 2011 and November 30, 2010, respectively. The impact of changes in our company's stock price on stock-based awards accounted for as liabilities reduced stock-based compensation $2.7 million in the three-month period ended November 30, 2011 and increased stock-based compensation $1.5 million in the three-month period ended November 30, 2010. The impact of changes in our company's stock price on stock-based awards accounted for as liabilities reduced stock-based compensation $3.8 million in the six-month period ended November 30, 2011 and increased stock-based compensation $0.1 million in the six-month period ended November 30, 2010.

Total tax expense or benefit recognized in our statements of operations for stock-based compensation was an expense of less than $0.1 million and a benefit of $0.7 million in the three-month periods ended November 30, 2011 and November 30, 2010, respectively, and an expense of less than $0.1 million and a benefit of $0.4 million in the six-month periods ended November 30, 2011 and November 30, 2010, respectively. No cash tax benefit was realized for stock-based compensation in the three-month and six-month periods ended November 30, 2011 and November 30, 2010.

As of November 30, 2011, $9.4 million of total unrecognized compensation cost related to stock options, restricted stock payments and stock awards is expected to be recognized in future periods. We currently expect to recognize in the years succeeding November 30, 2011 approximately $3.4 million of this stock-based compensation expense in 2012, $2.7 million in 2013, $2.0 million in 2014, $1.1 million in 2015 and $0.2 million in 2016.