STOCK-BASED COMPENSATION

3 Months Ended

Apr. 30, 2013

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

NOTE 4 – STOCK-BASED COMPENSATION

The Company grants equity awards to its senior executives and non-employee directors.  Historically, this has consisted of stock option awards.  In December 2010, the Company's board of directors approved a change in practice to begin awarding non-employee directors restricted stock units ("RSUs").

Restricted Stock Units:

On June 6, 2012, the Company awarded an aggregate of 15,465 RSUs to its five non-employee directors.  Each RSU entitles the grantee to receive, from the Company, one common share at the vesting date in accordance with the terms of the award agreement.  The awards granted on the date of the 2012 Annual Meeting of Shareholders on June 6, 2012 are scheduled to vest at the 2013 Annual Meeting of Shareholders.  The award agreements provide for accelerated vesting in certain instances such as a "change in control" or death, and for pro-rata vesting in the event of a non-cause departure from the board of directors prior to the one year anniversary of the award. The weighted average grant fair value per unit for awards granted on June 6, 2012 was $9.70 (which is the average of the high and low price of the Company's common shares on the NYSE that day).  As of April 30, 2013 there was a total of $12,501 of unrecognized compensation expense related to the non-vested RSU awards.

The following table summarizes RSU transactions for the three-months ended April 30, 2013:

	Units
Non-vested at February 1, 2013	15,465
Granted	-
Vested	-
Forfeited	-
Non-vested at April 30, 2013	15,465

Stock options:

On March 11, 2013, the Company granted 136,875 stock options to its senior executives, with one third exercisable one year from the grant date and the remaining two thirds vesting in equal amounts on the second and third anniversaries of the grant date. On June 6, 2012, April 2, 2012, and February 27, 2012, the Company granted 3,300, 54,625, and 97,299, stock options, respectively, to its senior executives, with one-third exercisable one year from the grant date and the remaining two-thirds vesting two and three years from grant date, respectively.   Under certain circumstances in the event of a "change of control", certain unvested options may become immediately exercisable.  Typically, the duration of options is for up to ten years from the date of grant, subject to early termination conditions.  The fair value of options granted is amortized into compensation expense on a straight-line basis over the respective vesting period, net of estimated forfeitures. The fair value of the options is estimated as of the grant date using the Black-Scholes option valuation model.  The per share fair value weighted-average at the date of grant for stock options granted March 11, 2013 was $3.14. The per share fair value weighted-averages at the date of grant for stock options granted in the months of June 2012, April 2012, and February 2012, were $2.91, $3.18, and $2.96, respectively. As of April 30, 2013, there was $702,833 of total unrecognized compensation expense related to non-vested stock option awards.

The application of this valuation model relies on the following assumptions that are judgmental and sensitive in the determination of the compensation expense:

	Three Months Ended
	April 30,
	2013			2012
Expected term (years)		5.0			5.0
Risk-free interest rate		0.77% - 1.68	%		0.88% - 2.11	%
Expected volatility		43% - 45	%		43% - 45	%
Dividend yield		2.18% - 2.93	%		2.18% - 2.88	%

Historical information was the principal basis for the selection of the expected term and dividend yield. The expected volatility is based on a weighted-average combination of historical and implied volatilities over a time period that approximates the expected term of the option. The risk-free interest rate was selected based upon the U.S. Treasury Bill rates in effect at the time of grant for the expected term of the option.

The following table summarizes stock option transactions for the three-month period ended April 30, 2013:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Shares			Exercise Price		Life (years)		Intrinsic Value
Options:
Outstanding at February 1, 2013		1,303,192		$	10.3077		4.83
Granted		136,875			10.2000
Forfeited		(32,700	)		11.5690
Exercised		(11,201	)		11.0001
Outstanding at April 30, 2013		1,396,166		$	10.2620		5.06	$	4,381,169
Exercisable at April 30, 2013		1,131,964		$	10.2382		4.11	$	3,579,270

The aggregate intrinsic value of options exercised during the three-month period ended April 30, 2013 was $26,434.  The intrinsic value of stock options is the amount by which the market price of the stock on a given date, such as at the end of the period or on the day of exercise, exceeded the market price of stock on the date of grant.

In connection with the Separation Agreement between the Company and its former Chief Financial Officer, the Company agreed to accelerate the vesting date and extend the exercise date of certain stock options.  This was considered a stock option modification resulting in additional stock compensation expense of approximately $250,000 recorded in the fiscal year ended January 31, 2013.