STOCKHOLDERS' EQUITY AND STOCK OPTIONS

12 Months Ended

Jan. 31, 2012

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

7. STOCKHOLDERS’ EQUITY AND STOCK OPTIONS

The Company has three main share-based payment plans: The Non-Employee Directors Option Plan (the “Directors Plan”) and two Restricted Stock Plans (the “2006 Equity Plan” and the “2009 Equity Plan”). Both the 2006 and 2009 Equity Plans have the identical structure. The below table summarizes the main provisions of each of these plans:

	Nature and terms
Nonemployee 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.
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.

The Non-employee Directors’ Option Plan (the “Directors’ Plan”) provides for an automatic one-time grant of options to purchase 5,000 shares of common stock to each nonemployee director elected or appointed to the Board of Directors. Under the Directors’ Plan, 60,000 shares of common stock have been authorized for issuance. 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 each of such dates.

The following table represents our stock options granted, exercised and forfeited during the year ended January 31, 2012.

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 year ended January 31, 2012		6,000	$	8.27		6.00 years	$	0
Outstanding at January 31, 2012		18,200	$	7.31		3.38 years	$	10,230
Exercisable at January 31, 2012		18,200	$	7.31		3.38 years	$	10,230
Reserved for future issuance:
Directors’ Plan		31,300

There were no exercises or forfeitures during the year ended January 31, 2012.

The fair value of the options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions for the year ended January 31, 2012: expected volatility of 87%; risk-free interest rate of 3.6%; expected dividend yield of 0.0%; and expected life of six years. All stock-based option awards were fully vested at January 31, 2012 and 2011.

The 2006 Equity Plan and the 2009 Equity Plan

On June 21, 2006, the stockholders of the Company approved a restricted stock plan (the “2006 Equity 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 Plan”). Under these 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 voting rights until fully vested and issued, and the underlying shares are not considered to be issued and outstanding until vested.

All grants under the 2006 plan have either been vested and issued or expired. There are no remaining unvested or ungranted shares available under the 2006 plan as of January 31, 2012.

Under the 2009 Equity Plan, the Company has granted up to a maximum of 227,593 restricted stock awards as of January 31, 2012. All of these restricted stock awards are nonvested at January 31, 2012 (172,573 shares at “baseline”), and have a weighted average grant date fair value of $8.07. Under the 2006 Equity Plan, there are zero shares outstanding as of January 31, 2012. 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 January 31, 2012, unrecognized stock-based compensation expense related to restricted stock awards totaled $680,873, all under the 2009 Equity Plan, before income taxes, based on the maximum performance award level, less what has been charged to expense on a cumulative basis through January 31, 2012, which was set at baseline. Such unrecognized stock-based compensation expense related to restricted stock awards totaled $240,709 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 $543,542 and $676,304 for the years ended January 31, 2012 and 2011, respectively, of which $4,465 and $50,123 result from the 2006 Equity Plan and $516,797 and $626,181 result from the 2009 Equity Plan for the years ended January 31, 2012 and 2011, 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 $197,030 and $243,469 for the years ended January 31, 2012 and 2011, respectively.

Total Restricted Shares	Outstanding unvested grants at maximum at beginning of FY12		Granted during FY12		Becoming Vested during FY12		Forfeited during FY12		Outstanding unvested grants at maximum at end of FY12
Restricted stock grants- employees		137,123		8,014		——		15,601		129,536
Restricted stock grants- directors		63,184		4,686		——		4,686		63,184
Matching award program		3,058		3,000		2,558		——		3,500
Bonus in stock - employees		19,479		22,801		16,479		——		25,801
Retainer in stock - directors		——		5,572		——		——		5,572
Total restricted stock plan		222,844		44,073		19,037		20,287		227,593

Shares under 2009 Equity Plan	Outstanding unvested grants at maximum at beginning of FY12		Granted during FY12		Becoming Vested during FY12		Forfeited during FY12		Outstanding unvested grants at maximum at end of FY12
Restricted stock grants- employees		137,123		8,014		——		15,601		129,536
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		——		5,572		——		——		5,572
Total restricted stock plan		203,807		44,073		——		20,287		227,593

Shares under 2006 Equity Plan	Outstanding unvested grants at maximum at beginning of FY12		Granted during FY12		Becoming Vested during FY12		Forfeited during FY12		Outstanding unvested grants at maximum at end of FY12
Restricted stock grants- employees		——		——		——		——		——
Restricted stock grants- directors		——		——		——		——		——
Matching award program		2,558		——		2,558		——		——
Bonus in stock - employees		16,479		——		16,479		——		——
Retainer in stock - directors		——		——		——		——		——
Total restricted stock plan		19,037		——		19,037		——		——

Weighted average grant
date fair value

Shares under 2009 Equity Plan	Outstanding unvested grants at maximum at beginning of FY12		Granted during FY12		Becoming Vested during FY12		Forfeited during FY12		Outstanding unvested grants at maximum at end of FY12
Restricted stock grants- employees	$	8.00	$	8.00	$	——	$	——	$	8.00
Restricted stock grants- directors	$	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	$	——	$	8.49	$	——	$	——	$	8.49

Shares under 2006 Equity Plan	Outstanding unvested grants at maximum at beginning of FY12		Granted during FY12		Becoming Vested during FY12		Forfeited during FY12		Outstanding unvested grants at maximum at end of FY12
Restricted stock grants- employees	$	——	$	——	$	——	$	——	$	——
Restricted stock grants- directors	$	——			$	——	$	——	$	——
Matching award program	$	10.56	$	——	$	10.56	$	——	$	——
Bonus in stock - employees	$	5.63	$	——	$	5.63	$	——	$	——
Retainer in stock - directors	$	——	$	——	$	——	$	——	$	——

Overall weighted average per share - all plans	Outstanding unvested grants at maximum at beginning of FY12		Granted during FY12		Becoming Vested during FY12		Forfeited during FY12		Outstanding unvested grants at maximum at end of FY12
Restricted stock grants- employees	$	8.00	$	——	$	——	$	——	$	8.00
Restricted stock grants- directors	$	8.00	$	——	$	——	$	——	$	8.00
Matching award program	$	10.31	$	7.99	$	——	$	——	$	8.14
Bonus in stock - employees	$	6.20	$	8.39	$	5.63	$	——	$	8.50
Retainer in stock - directors	$	——	$	——	$	——	$	——	$	——
Total restricted stock plan	$	7.87	$	8.26	$	6.29	$	——	$	8.07

Restricted Stock Plan 2009 Equity Plan	Shares authorized 2009 plan		Re-allocated by BOD			Shares authorized under 2009 Plan as re- allocated by BOD		Outstanding unvested grants at maximum at end of FY12		Shares remaining available for future issuance
Restricted stock grants- employees		132,000		——			132,000		129,536		2,464
Restricted stock grants- directors		44,000		20,000			64,000		63,184		816
Matching award program		33,000		(20,000	)		13,000		3,500		9,500
Bonus in stock - employees		33,000		——			33,000		25,801		7,199
Retainer in stock - directors		11,000		——			11,000		5,572		5,428
Total restricted stock plan		253,000		——			253,000		227,593		25,407