8.	*Employee Stock Compensation*

The Company has three main share-based payment plans: The Nonemployee Directors Option Plan (the “Directors Plan”) and two Restricted Stock Plans (the “2009 Equity Plan” and the “2012 Equity Plan”). Both the 2009 and 2012 Equity Plans have an 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. Such plan expired at December 31, 2012, as to any new awards. Existing options will expire based on individual award dates.
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. The Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of the Company all elected to take 30% of their cash compensation in restricted stock pursuant to this program, commencing in October 2012 and ended in June 2013.
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 following table represents our stock options granted, exercised and forfeited during the three-months ended April 30, 2014.

Stock Options	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 31, 2014		24,000	$	7.47		2.95 years	$	—
Granted during the three-months ended April 30, 2014		—		—
Outstanding at April 30, 2014		24,000	$	7.47		2.70 years	$	4,600
Exercisable at April 30, 2014		24,000	$	7.47		2.70 years	$	4,600
Reserved for future issuance:		—
Directors’ Plan (expired on December 31, 2012)

There were no exercises or forfeitures during the three-months ended April 30, 2014.

Restricted Stock Plan and Performance Equity Plan

On June 17, 2009, the stockholders of the Company approved the 2009 Equity Plan. A total of 253,000 shares of restricted stock were authorized under this plan. On June 20, 2012, the stockholders of the Company authorized 310,000 shares under the 2012 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, and the underlying shares are not considered to be issued and outstanding until vested.

Under the 2009 Equity Incentive Plan, the Company has issued 180,859 fully vested shares as of April 30, 2014. The Company has granted up to a maximum of 2,000 restricted stock awards remaining unvested as of April 30, 2014 and have a weighted average grant date fair value of $7.85. 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.

Under the 2012 Equity Plan, the Company has granted 273,227 restricted stock awards as of April 30, 2014, assuming all maximum awards are achieved. All of these restricted stock awards are nonvested at April 30, 2014 (215,727 shares at “baseline”), and have a weighted average grant date fair value of $6.00. 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 April 30, 2014, unrecognized stock-based compensation expense related to restricted stock awards totaled $1,811 pursuant to the 2009 Equity Incentive Plan and $1,330,093 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 April 30, 2014, which was set to zero. Such unrecognized stock-based compensation expense related to restricted stock awards totaled $1,811 for the 2009 Equity Incentive Plan and $959,793 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 zero, 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 $24,364 and $74,831 for the three-months ended April 30, 2014 and 2013, respectively, of which $18,896 and $0 result from the 2009 Equity Plan and $5,468 and $74,831 result from the 2012 Equity Plan for the years April 30, 2014 and 2013, respectively, and $0 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 $8,771 and $26,939 for the years ended April 30, 2014 and 2013, respectively.

Shares under 2012 Equity Plan	Outstanding unvested grants at maximum^(a) at beginning of FY15		Granted during FY15 through April 30, 2014		Vested during FY15 through April 30, 2014		Forfeited during FY15 through April 30, 2014		Outstanding unvested grants at maximum^(a) at April 30, 2014
Restricted stock grants – employees		150,500		—		—		—		150,500
Restricted stock grants – directors		49,500		—		—		—		49,500
Matching award program		3,000		—		—		—		3,000
Bonus in stock - employees		55,189		—		—		—		55,189
Retainer in stock - directors		14,101		937		—		—		15,038
Total restricted stock plan		272,290		937		—		—		273,227

Weighted average grant date fair value

Shares under 2009 Equity Plan	Outstanding unvested grants at maximum^(a) at beginning of FY15		Granted during FY15 through April 30, 2014		Vested during FY15 through April 30, 2014		Forfeited during FY15 through April 30, 2014		Outstanding unvested grants at maximum^(a) at April 30, 2014
Restricted stock grants -employees		—		—		—		—		—
Restricted stock grants - directors		—		—		—		—		—
Matching award program		3,000		—		1,000		—		2,000
Bonus in stock - employees		—		—		—		—		—
Retainer in stock - directors		1,116		—		1,116		—		—
Total restricted stock plan		4,116		—		2,116		—		2,000

Weighted average grant date fair value

^(a)

The Board has estimated the current performance level at zero and expenses have been recorded accordingly.