Employee Stock Compensation

6 Months Ended

Jul. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

8. Employee Stock Compensation

Shares of our common stock may currently be awarded under our 2012 stock incentive plan and a nonemployee director option plan. Upon the approval of the 2012 plan by stockholders of the Company in June 2012, the ability to make grants under the 2009 restricted stock plan was terminated. The 2012 plan has the structure and 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.

Equity Incentive Plans

On June 17, 2009, the stockholders of the Company authorized the issuance of 253,000 shares under a restricted stock plan (the “2009 Equity Incentive Plan”). Under the 2009 Equity Incentive Plan, eligible employees and directors were eligible to be 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 issued 104,989 fully vested shares as of July 31, 2012. The Company has granted up to a maximum of 35,989 restricted stock awards as of July 31, 2012. All of these restricted stock awards are nonvested at July 31, 2012 and have a weighted average grant date fair value of $8.36. 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.

On June 20, 2012, the stockholders of the Company authorized 310,000 shares under the Company’s 2012 Stock Incentive Plan the (“2012 Equity Incentive Plan”). Under the 2012 Incentive Plan, eligible employees and directors may be awarded restricted stock, restricted stock units, performance shares, performance units and other share-based awards. 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 2012 Equity Incentive Plan, the Company has granted 216,172 restricted stock awards as of July 31, 2012, assuming all maximum awards are achieved. All of these restricted stock awards are nonvested at July 31, 2012 (154,672 shares at “baseline”), and have a weighted average grant date fair value of $6.44. 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 July 31, 2012, unrecognized stock-based compensation expense related to restricted stock awards totaled $72,708 pursuant to the 2009 Equity Incentive Plan and $1,337,239 pursuant to the 2012 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 July 31, 2012, which was set at baseline. Such unrecognized stock-based compensation expense related to restricted stock awards totaled $72,708 for the 2009 Equity Incentive Plan and $941,179 for the 2012 Equity Incentive Plan 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.

The following table represents our stock options granted, exercised and forfeited during the six months ended July 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, 2012		18,200	$	7.31		3.38 years	$	10,230
Granted during the six months ended July 31, 2012		10,000	$	6.44		5.89 years	$	12,600
Outstanding at July 31, 2012		26,000	$	7.51		4.33 years	$	20,050
Exercisable at July 31, 2012		26,000	$	7.51		4.33 years	$	20,050
Reserved for future issuance:
Directors’ Plan		21,300

There were no exercises or forfeitures during the six-months ended July 31, 2012.

Stock-Based Compensation

The Company recognized total stock-based compensation costs of $176,878 and $367,882 for the six-months ended July 31, 2012 and 2011, respectively, of which $0 and $4,029 result from the 2006 Equity Plan, $100,129 and $330,397 result from the 2009 Equity Incentive Plan, $52,119 and $0 result from the 2012 Equity Incentive Plan and $24,630 and $33,456, from the Directors Option Plan, for the six-months ended July 31, 2012 and 2011, respectively. These amounts are reflected in selling, general and administrative expenses. The total income tax benefit recognized for stock-based compensation arrangements was $64,560 and $134,277 for the six-months ended July 31, 2012 and 2011, respectively.

Shares under 2009 Plan	Outstanding unvested grants at maximum at beginning of FY13		Granted during FY13 through July 31, 2012		Becoming Vested during FY13 through July 31, 2012		Forfeited during FY13 through July 31, 2012		Outstanding unvested grants at maximum at July 31, 2013
Restricted stock grants - employees		129,536		—		79,313		50,223		—
Restricted stock grants - directors		63,184		—		45,232		17,952		—
Matching award program		3,500		—		—		—		3,500
Bonus in stock - employees		25,801		—		—		—		25,801
Retainer in stock - directors		5,572		1,116		—		—		6,688
Total restricted stock plan		227,593		1,116		124,545		68,175		35,989
Weighted average grant date fair value	$	8.07	$	10.45	$	8.00	$	8.00	$	8.36

Shares under 2012 Plan	Outstanding unvested grants at maximum at beginning of FY13		Granted during FY13 through July 31, 2012		Becoming Vested during FY13 through July 31, 2012		Forfeited during FY13 through July 31, 2012		Outstanding unvested grants at maximum at July 31, 2013
Restricted stock grants - employees		—		164,500		—		—		164,500
Restricted stock grants - directors		—		49,500		—		—		49,500
Matching award program		—		—		—		—		—
Bonus in stock – employees		—		—		—		—		—
Retainer in stock – directors		—		2,172		—		—		2,172
Weighted average grant date fair value		—	$	6.44		—		—	$	6.44