Note I – Stock-Based Compensation

Service-Based Restricted Common Shares

During the current year quarter, we granted an aggregate of 102,705 service-based restricted common shares under our stock-based compensation plans, which generally cliff vest three years from the grant date. The weighted average grant date fair value of these restricted common shares, based on the weighted average closing price of the underlying common shares on the grant date, was $55.91 per share, or $5,743 in total, and will be recognized on a straight-line basis over the vesting period, net of any forfeitures.

Performance Shares

Performance shares awarded under our stock-based compensation plans are earned based on the level of achievement with respect to a set of measurement criteria for corporate and business unit targets. The awards granted in fiscal 2027 generally cover three-year performance periods ending May 31, 2027, 2028, and 2029.

These performance share awards will be paid, to the extent earned, in common shares in the fiscal quarter following the end of the applicable performance period. The fair values of our performance shares are determined by the closing market prices of the underlying common shares at the respective grant dates of the performance shares and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued. The ultimate pre-tax stock-based compensation expense to be recognized over the performance period will vary based on our periodic assessment of the probability of the targets being achieved. During the current year quarter, we granted performance share awards covering an aggregate of 198,050 common shares (at target levels), with a weighted average grant date fair value of $54.29 per share. The aggregate grant-date fair value at target for these performance shares is $10,752, which will be recognized over the performance period and adjusted based on our periodic assessment of the probability of achieving the performance targets.