charges. The provisions of FAS 151 are effective for our fiscal year beginning June 1, 2006. We have evaluated the provisions of FAS 151 and do not expect that the adoption will have a material impact on our consolidated financial position or results of operations.

On December 16, 2004, the FASB finalized SFAS No. 123R “Share Based Payment,” (“FAS 123R”) which, after the SEC amended the compliance dates on April 15, 2005, is effective for our fiscal year beginning June 1, 2006. The new standard will require us to record compensation expense for stock options using a fair value method. On March 29, 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”), which provides the Staff’s views regarding interactions between FAS 123R and certain SEC rules and regulations and provides interpretations of the valuation of share-based payments for public companies.

We plan to adopt the new requirements under FAS 123R and SAB 107 beginning in our first quarter of fiscal 2007 using the modified prospective transition method and the Black-Scholes fair value model. As a result of the adoption of FAS 123R, we will recognize additional compensation expense of approximately $0.36 per diluted share in fiscal 2007. The amount of expense that will be recognized is largely dependent on several variables, including the level of share-based payments that will be granted during the fiscal year in addition to the assumptions used in the valuation model. Accordingly, the actual effect per diluted share could differ from this estimate. The effect on our results of operations of expensing stock options for fiscal 2006, 2005 and 2004 using the Black-Scholes model is presented in the accompanying Notes to Consolidated Financial Statements (Note 1 — Significant Accounting Policies).

Under certain conditions, stock options granted by the Company are eligible for accelerated vesting upon the retirement of the employee. The FASB clarified in FAS 123R that the fair value of such stock options should be expensed based on the applicable accelerated vesting schedule, rather than ratably over the vesting period stated in the grant. Our pro forma disclosure currently reflects the expense of such options ratably over the stated vesting period, expensing all unvested shares upon actual retirement. The SEC clarified that companies should continue to follow the vesting method they have been using until adoption of FAS 123R, then apply the accelerated vesting schedule to all subsequent grants to those employees eligible for accelerated vesting upon retirement. Had we been accounting for such stock options using the accelerated vesting schedule for those employees eligible for accelerated vesting upon retirement, we would have recognized additional stock-based compensation expense in our pro forma disclosure of the effect of expensing stock options presented in the accompanying Notes to Consolidated Financial Statements (Note 1 — Significant Accounting Policies) of $0.01 per diluted share in fiscal 2006 and $0.05 per diluted share in fiscal 2005 and 2004. We usually grant the majority of stock options in a single grant in the first three months of each fiscal year. As a