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Employee Stock Compensation | 9 Months Ended
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Oct. 31, 2014
Share-Based Arrangements With Employees and Nonemployees [Abstract] |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
9. | Employee Stock Compensation
The Company has three share-based payment plans: The Nonemployee Directors Option Plan (the “Directors Plan”) (expired in 2012) and two Restricted Stock Plans (the “2009 Equity Plan” and the “2012 Equity Plan”). Both the 2009 Equity Plan and the 2012 Equity Plan have identical structures. The below table summarizes the main provisions of each of these plans:
Nonemployee Directors 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, 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 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, 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.
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 nine-months ended October 31, 2014.
|  |  |  | Weighted |  | Weighted |  |  |
|  |  |  | Average |  | Average |  |  |
|  |  |  | Exercise |  | Remaining |  | Aggregate |
|  | Number of |  | Price per |  | Contractual |  | Intrinsic |
Stock Options |  | Shares |  | Share |  | Term |  | Value |
Outstanding at January 31, 2014 |  | 24,000 |  | $ | 7.47 |  | 2.95 years |  |  | —— |
Granted during the nine-months ended October 31, 2014 |  | —— |  |  | —— |  | —— |  |  | —— |
Forfeited during the nine-months ended October 31, 2014 |  | 2,000 |  | $ | 13.10 |  | —— |  |  | —— |
Outstanding at October 31, 2014 |  | 22,000 |  | $ | 6.96 |  | 2.43 years |  | $ | 53,960 |
Exercisable at October 31, 2014 |  | 22,000 |  | $ | 6.96 |  | 2.43 years |  | $ | 53,960 |
Reserved for future issuance: |  | —— |  |  |  |  |  |  |  |  |
Directors’ Plan (expired on December 31, 2012) |  |  |  |  |  |  |  |  |  |  |
There were no exercises during the nine-months ended October 31, 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 182,859 fully vested shares and there are zero shares remaining unvested as of October 31, 2014. 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 issued 8,622 fully vested shares as of October 31, 2014. The Company has granted 265,394 restricted stock awards as of October 31, 2014, at maximum performance level. All of these restricted stock awards are nonvested at October 31, 2014 (209,394 shares at “baseline”), and have a weighted average grant date fair value of $6.02. 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, 2014, unrecognized stock-based compensation expense related to restricted stock awards totaled $0 pursuant to the 2009 Equity Incentive Plan and $295,682 pursuant to the 2012 Equity Incentive Plan, before income taxes, based on the maximum performance award level, net of what has been charged to expense, which was set to maximum on a cumulative basis through October 31, 2014. The cost of these nonvested awards is expected to be recognized over a weighted-average period of three years. The Board has estimated the ultimate performance level at the expiration of the plan to be at maximum, and accordingly, the Company has taken a non-cash charge of $1.0 million reflecting the cumulative amortization of the value of the awarded shares based on grant date market value. This amount reflects the amortization of the total original value at grant date of the restricted shares in question for the period June 20, 2012 through October 31, 2014. Such amount will result in an after-tax charge on earnings per shares ($0.11) for both the three months and nine months ending October 31, 2014. 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 $1,073,187 and $179,002 for the nine-months ended October 31, 2014 and 2013, respectively, of which $20,707 and $13,881 result from the 2009 Equity Plan and $1,052,480 and $165,121 result from the 2012 Equity Plan for the periods ended October 31, 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 $386,347 and $64,441 for the years ended October 31, 2014 and 2013, respectively.
|  | Outstanding |  |  |  |  |  |  |  | Outstanding |
|  | unvested |  | Granted |  |  |  | Forfeited |  | unvested |
|  | grants at |  | during FY15 |  | Vested during |  | during FY15 |  | grants at |
|  | maximum at |  | through |  | FY15 through |  | through |  | maximum |
Shares under |  | beginning of |  | October 31, |  | October 31, |  | October 31, |  | at October |
2009 Equity Plan |  | FY15 |  | 2014 |  | 2014 |  | 2014 |  | 31, 2014 |
Restricted stock grants -employees |  |  | —— |  |  | —— |  |  | —— |  |  | —— |  |  | —— |
Restricted stock grants - directors |  |  | —— |  |  | —— |  |  | —— |  |  | —— |  |  | —— |
Matching award program |  |  | 3,000 |  |  | —— |  |  | 3,000 |  |  | —— |  |  | —— |
Bonus in stock - employees |  |  | —— |  |  | —— |  |  | —— |  |  | —— |  |  | —— |
Retainer in stock - directors |  |  | 1,116 |  |  | —— |  |  | 1,116 |  |  | —— |  |  | —— |
Total restricted stock plan |  |  | 4,116 |  |  | —— |  |  | 4,116 |  |  | —— |  |  | —— |
Weighted average grant date fair value |  | $ | 8.66 |  |  | —— |  | $ | 8.66 |  |  | —— |  |  | —— |
Shares under |  | Outstanding unvested grants at |  | Granted during FY15 through October |  | Vested during FY15 through October |  | Forfeited during FY15 through |  | Outstanding unvested grants at |
2012 Equity Plan |  | maximum at beginning of FY15 |  | 31, 2014 |  | 31, 2014 |  | October 31, 2014 |  | maximum at October 31, 2014 |
Restricted stock grants – employees |  |  | 150,500 |  |  | ----- |  |  | ----- |  |  | 3,000 |  |  | 147,500 |
Restricted stock grants – directors |  |  | 49,500 |  |  | ----- |  |  | ----- |  |  | ----- |  |  | 49,500 |
Matching award program |  |  | 3,000 |  |  | ----- |  |  | ----- |  |  | ----- |  |  | 3,000 |
Bonus in stock - employees |  |  | 55,189 |  |  | ----- |  |  | 4,331 |  |  | ----- |  |  | 50,858 |
Retainer in stock - directors |  |  | 14,101 |  |  | 4,726 |  |  | 4,291 |  |  | ----- |  |  | 14,536 |
Total restricted stock plan |  |  | 272,290 |  |  | 4,726 |  |  | 8,622 |  |  | 3,000 |  |  | 265,394 |
Weighted average grant date fair value |  | $ | 6.00 |  | $ | 8.16 |  | $ | 6.25 |  | $ | 6.44 |  | $ | 6.02 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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