8. Employee Stock Compensation

The Company has two main share-based payment plans: The Nonemployee Directors’ Option Plan (the “Directors’ Plan”) and a Restricted Stock Plan (the “2012 Equity Plan”). 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, maximum or zero amounts. The level of award and final vesting is based on the Board of Directors’ 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, which approximates the performance 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, maximum or zero amounts. The level of award and final vesting is based on the Board of Directors’ 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, which approximates the performance 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, which approximates the performance 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, which approximates the performance period.

The following table represents our stock options granted, exercised and forfeited during the three-months ended April 30, 2015.

Stock Options	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 31, 2015		17,000	$	7.11	1.83 years	$	54,580
Granted during the three-months ended April 30, 2015		—		—	—		—
Forfeited during the three-months ended April 30, 2015		(5,000)	$	6.21	—		—
Outstanding at April 30, 2015		12,000	$	7.48	2.26 years	$	24,070
Exercisable at April 30, 2015		12,000	$	7.48	2.26 years	$	24,070
Reserved for future issuance:
Directors’ Plan (expired on December 31, 2012)		0

All stock-based option awards were fully vested at April 30, 2015 and January 31, 2015. There were no new grants during the three months ended April 30, 2015, and this plan expired by its terms on December 31, 2012.

The 2009 Equity Plan and the 2012 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 a new restricted stock plan (the “2012 Equity Plan”). Under these restricted stock plans, eligible employees and directors are awarded performance-based restricted shares of the Company’s 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, all grants have been vested. There are no remaining unvested or ungranted shares available under the 2009 Restricted Stock Plan as of April 30, 2015.

Under the 2012 Equity Incentive Plan, the Company has issued 53,556 fully vested shares as of April 30, 2015. The Company has also granted 244,497 of shares of unvested restricted stock as of April 30, 2015, assuming all maximum awards are achieved, (188,497 shares at “baseline”), and have a weighted average grant date fair value of $6.49 per share. 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, 2015, unrecognized stock-based compensation expense related to restricted stock awards totaled $207,122 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 October 31, 2012, which was set to zero. The cost of these nonvested awards is expected to be recognized over a weighted-average period of three years. 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 $127,652 and $24,364 for the three-months ended April 30, 2015 and 2014, respectively, of which $0 and $18,896 result from the 2009 Equity Plan and $127,652 and $5,468 result from the 2012 Equity Plan for the periods ended April 30, 2015 and 2014, respectively, and $0 and $0, respectively, from the Director Option Plan. These amounts are reflected in operating expenses. The total income tax benefit recognized for stock-based compensation arrangements was $45,955 and $8,771 for the years ended April 30, 2015 and 2014, respectively.

Shares under 2012 Equity Plan	Outstanding Unvested Grants at Maximum at Beginning of FY16		Granted during FY16 through April 30, 2015		Becoming Vested during FY16 through April 30, 2015		Forfeited during FY16 through April 30, 2015		Outstanding Unvested Grants at Maximum at End of April 30, 2015
Restricted stock grants – employees		147,500		—		—		—		147,500
Restricted stock grants - directors		49,500		—		—		—		49,500
Matching award program		17,600		—		—		—		17,600
Bonus in stock - employees		36,172		—		18,316		—		17,856
Retainer in stock - directors		13,634		1,514		3,107		—		12,041
Total restricted stock plan		264,406		1,514		21,423		—		244,497

Weighted average grant date fair value	$	6.27	$	9.22	$	4.06		—	$	6.49