| 5. | Equity Compensation Plans |
Qualified and non-qualified options to purchase shares of common stock may be granted to directors, officers and employees of the Company under the terms of the Company’s stock option plans. These options are granted at an exercise price of not less than the fair market value of the stock on the date of grant. Remaining shares available for grant under stock option plans were 818,000, 1,108,000 and 397,000 at May 31, 2013, 2012 and 2011, respectively. Options vest ratably over three and five year periods and the contractual terms are generally five or ten years.
| (In thousands except for share price) | Shares | Weighted-Average Exercise Price |
Weighted-Average Fair Value |
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|
Outstanding at May 31, 2010 (729 exercisable) |
1,998 | 14.14 | 4.72 | |||||||||
|
Granted |
293 | 28.50 | 8.66 | |||||||||
|
Exercised |
(627 | ) | 9.83 | 3.98 | ||||||||
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Forfeited |
(90 | ) | 18.22 | 5.84 | ||||||||
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Outstanding at May 31, 2011 (509 exercisable) |
1,574 | 17.77 | 5.71 | |||||||||
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Granted |
316 | 34.59 | 10.41 | |||||||||
|
Exercised |
(320 | ) | 12.44 | 4.39 | ||||||||
|
Forfeited |
(27 | ) | 16.62 | 5.39 | ||||||||
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Outstanding at May 31, 2012 (575 exercisable) |
1,543 | 22.34 | 6.95 | |||||||||
|
Granted |
306 | 43.00 | 13.81 | |||||||||
|
Exercised |
(438 | ) | 15.91 | 5.14 | ||||||||
|
Forfeited |
(16 | ) | 29.50 | 9.11 | ||||||||
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|
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Outstanding at May 31, 2013 (499 exercisable) |
1,395 | 28.82 | 9.00 | |||||||||
The following is a summary of stock options outstanding at May 31, 2013:
| Options Outstanding | Options Exercisable | |||||||||||||||||||
|
Range of Exercise price |
Number | Average Remaining Contractual Life |
Weighted-Average Exercise Price |
Number | Weighted Average Exercise Price |
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|
$ 6.75 - $ 19.17 |
225,912 | 1.97 | $ | 15.03 | 164,192 | $ | 13.85 | |||||||||||||
|
19.18 - 19.94 |
287,066 | 1.62 | 19.55 | 155,071 | 19.55 | |||||||||||||||
|
19.95 - 34.37 |
295,017 | 3.44 | 28.10 | 124,981 | 27.25 | |||||||||||||||
|
34.38 - 42.39 |
283,250 | 3.75 | 34.76 | 55,048 | 35.01 | |||||||||||||||
|
42.40 - 43.00 |
303,500 | 4.99 | 43.00 | 0 | 0 | |||||||||||||||
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| 1,394,745 | 3.23 | 28.82 | 499,292 | 21.31 | ||||||||||||||||
The weighted-average exercise price of shares that were exercisable at May 31, 2013 and 2012 was $21.31 and $16.59, respectively. The weighted-average grant-date fair value of options granted in 2013, 2012, and 2011 was $13.81, $10.41 and $8.66, respectively.
The aggregate intrinsic value of options outstanding and options exercisable was $35,778,000 and $16,557,000, respectively, at May 31, 2013, $25,617,000 and $12,855,000 respectively, at May 31, 2012 and $42,607,000 and $16,040,000 respectively, at May 31, 2011. The aggregate intrinsic value of options exercised during the year was $12,519,000 in 2013, $8,226,000 in 2012 and $15,262,000 in 2011. Remaining compensation cost to be expensed in future periods for non-vested options was $4,096,000 at May 31, 2013, with a weighted average expense recognition period of 3.2 years.
The following table summarizes warrant activity with non-employees that were expensed at fair value upon grant. All warrants were exercisable for common stock of the Company and expired in 2012.
| (In thousands except for share price) | Shares | Weighted-Average Exercise Price |
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|
Outstanding warrants at May 31, 2010 |
29 | 8.48 | ||||||
|
Warrants exercised during the year |
(20 | ) | 8.30 | |||||
|
Warrants forfeited during the year |
(2 | ) | 8.18 | |||||
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|
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Outstanding warrants at May 31, 2011 |
7 | 9.02 | ||||||
|
Warrants exercised during the year |
(2 | ) | 9.02 | |||||
|
Warrants forfeited during the year |
(5 | ) | 9.02 | |||||
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Outstanding warrants at May 31, 2012 |
0 | 0 | ||||||
Common stock totaling 43,539 of the 225,000 originally authorized shares are reserved for issuance under the terms of the 2002 Employee Stock Purchase Plan. An additional 250,000 shares are also reserved for issuance under the terms of the 2011 Employee Stock Purchase Plan. The plan gives eligible employees the option to purchase common stock at a 5% discount to the lower of the market value of the stock at the beginning or end of each participation period. Total individual purchases in any year are limited to 10% of compensation. Shares purchased by employees were 14,925, 14,144 and 18,252 in 2013, 2012 and 2011, respectively.