Employee Stock Compensation

9 Months Ended

Oct. 31, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

8.  Employee Stock Compensation

The Company’s Director’s Plan permits the grant of share options and shares to its Directors for up to 60,000 shares of common stock as stock compensation.  All stock options under this Plan are granted at the fair market value of the common stock at the grant date.  This date is fixed only once a year upon a Board member’s re-election to the Board at the Annual Shareholders’ meeting. Director’s stock options vest ratably over a six-month period and generally expire six years from the grant date.

There are two general equity plans, the 2006 and 2009 equity plans, and a nonemployee director option plan. Each of the 2006 and 2009 plans has the identical structure and each plan includes all of the components described below:

	Nature and terms
Restricted Stock Plan - employees	Long-term incentive compensation-three-year plan.  Employees are granted potential share awards at the beginning of the three-year cycle at baseline and maximum amounts.  The level of award and final vesting is based on the Board of Director’s opinion as to the performance of the Company and management in the entire three year cycle.  All vesting is three-year “cliff” vesting - there is no partial vesting. The valuation is based on the stock price at the grant date and amortized to expense over the three-year period.
Restricted Stock Plan – Directors	Long-term incentive compensation-three-year plan.  Directors are granted potential share awards at the beginning of the three-year cycle at baseline and maximum amounts.  The level of award and final vesting is based on the Board of Director’s opinion as to the performance of the Company and management in the entire three-year cycle.  All vesting is three-year “cliff” vesting-there is no partial vesting. The valuation is based on the stock price at the grant date and amortized to expense over the three-year period.
Matching award program	All participating employees are eligible to receive one share of restricted stock awarded for each two shares of Lakeland stock purchased on the open market.  Such restricted shares are subject to three-year time vesting. The valuation is based on the stock price at the grant date and amortized to expense over the three-year period.
Bonus in stock program - employees	All participating employees are eligible to elect to receive any cash bonus in shares of restricted stock.  Such restricted shares are subject to two-year time vesting. The valuation is based on the stock price at the grant date and amortized to expense over the two-year period. Since the employee is giving up cash for unvested shares, the amount of shares awarded is 133% of the cash amount based on the grant date stock price.
Director fee in stock program	All directors are eligible to elect to receive any director fees in shares of restricted stock.  Such restricted shares are subject to two- year time vesting. The valuation is based on the stock price at the grant date and amortized to expense over the two-year period.  Since the director is giving up cash for unvested shares, the amount of shares awarded is 133% of the cash amount based on the grant date stock price.
Non-employee director stock option plan	The plan provides for an automatic one-time grant of options to purchase 5,000 shares of common stock to each nonemployee director newly elected or appointed. Options are granted at not less than fair market value, become exercisable commencing six months from the date of grant and expire six years from the date of grant. In addition, all nonemployee directors re-elected to the Company’s Board of Directors at any annual meeting of the stockholders will automatically be granted additional options to purchase 1,000 shares of common stock on that date.

The following table represents our stock options granted, exercised and forfeited during the nine months ended October 31, 2011.

Stock Options	Number of  Shares		Weighted Average  Exercise Price per  Share		Weighted Average  Remaining  Contractual Term	Aggregate  Intrinsic  Value
Outstanding at January 31, 2011		12,200	$	9.02	3.61 years	$	17,030
Granted during the nine-months ended October 31, 2011		5,000	$	8.28	6.00 years	$	0
Outstanding at October 31, 2011		17,200	$	7.26	3.58 years	$	8,000
Exercisable at October 31, 2011		17,200	$	7.26	3.58 years	$	8,000

There were no exercises or forfeitures during the nine-months ended October 31, 2011.

Restricted Stock Plan and Performance Equity Plan

On June 21, 2006, the stockholders of the Company approved a restricted stock plan (the “2006 Equity Incentive Plan”).  A total of 253,000 shares of restricted stock were authorized under this plan. On June 17, 2009, the stockholders of the Company authorized 253,000 shares under a new restricted stock plan (the “2009 Equity Incentive Plan”). Under the restricted stock plans, eligible employees and directors are awarded performance-based restricted shares of the Company common stock. The amount recorded as expense for the performance-based grants of restricted stock are based upon an estimate made at the end of each reporting period as to the most probable outcome of this plan at the end of the three-year performance period. (e.g., baseline, maximum or zero). In addition to the grants with vesting based solely on performance, certain awards pursuant to the plan have a time-based vesting requirement, under which awards vest from two to three years after grant issuance, subject to continuous employment and certain other conditions.  Restricted stock has no voting rights until fully vested and issued, and the underlying shares are not considered to be issued and outstanding until vested.

Under the 2009 Equity Incentive Plan, the Company has granted up to a maximum of 241,744 restricted stock awards as of October 31, 2011. All of these restricted stock awards are nonvested at October 31, 2011 (182,675 shares at “baseline”), and have a weighted average grant date fair value of $7.45. Under the 2006 Equity Incentive Plan, there are also outstanding as of October 31, 2011, unvested grants of 338 shares under the stock purchase match program. The Company recognizes expense related to performance-based awards over the requisite service period using the straight-line attribution method based on the outcome that is probable.

As of October 31, 2011, unrecognized stock-based compensation expense related to restricted stock awards totaled $830,855, consisting of $212 remaining under the 2006 Equity Incentive Plan and $830,643 under the 2009 Equity Incentive Plan, before income taxes, based on the maximum performance award level, less what has been charged to expense on a cumulative basis through October 31, 2011, which was set at baseline. Such unrecognized stock-based compensation expense related to restricted stock awards totaled $358,095 at the baseline performance level. The cost of these nonvested awards is expected to be recognized over a weighted-average period of three years. The Board has estimated its current performance level to be at the baseline level, and expenses have been recorded accordingly. The performance based awards are not considered stock equivalents for earnings per share (“EPS”) calculation purposes.

Stock-Based Compensation

The Company recognized total stock-based compensation costs of $499,493 and $591,751 for the nine months ended October 31, 2011 and 2010, respectively, of which $4,253 and $43,257 result from the 2006 Equity Incentive Plan and $476,692 and $548,494 result from the 2009 Equity Incentive Plan for the nine months ended October 31, 2011 and 2010, respectively, and $18,548 and $0, respectively, from the Director Option Plan. These amounts are reflected in selling, general and administrative expenses.  The total income tax benefit recognized for stock-based compensation arrangements was $179,817 and $213,031 for the nine months ended October 31, 2011 and 2010, respectively

Total Restricted Shares	Outstanding  unvested  grants at  maximum at  beginning of  FY12		Granted  during  FY12  through  October 31,  2011		Becoming  Vested  during FY12  through  October 31,  2011			Forfeited  during FY12  through  October 31,  2011			Outstanding  unvested  grants at  maximum at  October 31,  2011
Restricted stock grants - employees		137,123		8,014		-			-			145,137
Restricted stock grants - directors		63,184		4,686		-			(4,686	)		63,184
Matching award program		3,058		3,000		(2,220	)		-			3,838
Bonus in stock - employees		19,479		22,801		(16,479	)		-			25,801
Retainer in stock - directors		-		4,122		-			-			4,122
Total restricted stock plan		222,844		42,623		(18,699	)		(4,686	)		242,082
Shares under 2009 plan	Outstanding  unvested  grants at  maximum at  beginning of  FY12		Granted  during  FY12  through  October 31,  2011		Becoming  Vested  during FY12  through  October 31,  2011			Forfeited  during FY12  through  October 31,  2011			Outstanding  unvested  grants at  maximum at  October 31,  2011
Restricted stock grants - employees		137,123		8,014		-			-			145,137
Restricted stock grants - directors		63,184		4,686		-			(4,686	)		63,184
Matching award program		500		3,000		-			-			3,500
Bonus in stock - employees		3,000		22,801		-			-			25,801
Retainer in stock - directors		-		4,122		-			-			4,122
Total restricted stock plan		203,807		42,623		-			(4,686	)		241,744
Shares under 2006 Plan	Outstanding  unvested  grants at  maximum at  beginning of  FY12		Granted  during  FY12  through  October 31,  2011		Becoming  Vested  during FY12  through  October 31,  2011			Forfeited  during FY12  through  October 31,  2011			Outstanding  unvested  grants at  maximum at  October 31,  2011
Restricted stock grants - employees		-		-		-			-			-
Restricted stock grants - directors		-		-		-			-			-
Matching award program		2,558		-		(2,220	)		-			338
Bonus in stock - employees		16,479		-		(16,479	)		-			-
Retainer in stock - directors		-		-		-			-			-
Total restricted stock plan		19,037		-		(18,699	)		-			338

Weighted average grant date fair value
Shares under 2009 Equity Incentive Plan	Outstanding  unvested  grants at  maximum at  beginning of  FY12		Granted  during  FY12  through  October 31,  2011		Becoming  Vested  during FY12  through  October 31,  2011		Forfeited  during FY12  through  October 31,  2011		Outstanding  unvested  grants at  maximum at  October 31,  2011
Restricted stock grants - employees	$	8.00	$	8.00	$	-	$	-	$	8.00
Restricted stock grants - directors	$	8.00	$	8.00	$	-	$	8.00	$	8.00
Matching award program	$	9.03	$	7.99	$	-	$	-	$	8.14
Bonus in stock - employees	$	9.31	$	8.39	$	-	$	-	$	8.50
Retainer in stock - directors	$	-	$	8.17	$	-	$	-	$	8.17
Shares under 2006 Equity Incentive Plan	Outstanding  unvested  grants at  maximum at  beginning of  FY12		Granted  during  FY12  through  October 31,  2011		Becoming  Vested  during FY12  through  October 31,  2011		Forfeited  during FY12  through  October 31,  2011		Outstanding  unvested  grants at  maximum at  October 31,  2011
Restricted stock grants - employees	$	-	$	-	$	-	$	-	$	-
Restricted stock grants - directors	$	-	$	-	$	-	$	-	$	-
Matching award program	$	10.56	$	-	$	10.95	$	-	$	7.98
Bonus in stock - employees	$	5.63	$	-	$	5.63	$	-	$	-
Retainer in stock - directors	$	-	$	-	$	-	$	-	$	-
Overall weighted average per share - all plans
Restricted stock grants - employees	$	8.00							$	8.00
Restricted stock grants - directors	$	8.00							$	8.00
Matching award program	$	10.31							$	8.14
Bonus in stock - employees	$	6.20							$	8.50
Retainer in stock - directors	$	-							$	8.17
Total restricted stock plan