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Stock Based Compensation
 3 Months Ended
Apr. 30, 2012
Stock Based Compensation [Abstract]  
Stock Based Compensation

Note 8. Stock Based Compensation

Stock Incentive Plans

The Company’s two stock plans are the 2007 Employee Stock Incentive Plan (the “2007 Plan”) and the 1997 Employee Incentive Stock Plan (the “1997 Plan”). Under the 2007 Plan, the Company may grant an aggregate of 1,000,000 shares to its employees and non-employee directors in the form of stock options or awards. Restricted stock or stock units awarded under the 2007 Plan are expensed ratably over the vesting period of the awards. The Company determines the fair value of its restricted stock unit awards and related compensation expense as the difference between the market value of the awards on the date of grant less the exercise price of the awards granted. The Company granted 40,000 awards during the first quarter of 2012. As of April 30, 2012, there were approximately 91,200 shares available for future issuance under the 2007 Plan.

The 1997 Plan expired in 2007 and there were no unexercised options outstanding under the 1997 Plan at April 30, 2012. Stock options awarded to employees under the 1997 Plan had to be at exercise prices equal to the fair market value of the Company’s common stock on the date of grant. Stock options generally have a maximum term of 10 years and generally become exercisable ratably over a five-year period.

The shares of common stock issued upon exercise of a previously granted stock option are considered new issuances from shares reserved for issuance upon adoption of the various plans. While the Company does not have a formal written policy detailing such issuance, it requires that the option holders provide a written notice of exercise to the stock plan administrator and payment for the shares prior to issuance of the shares.

Restricted Stock and Stock Unit Awards

Accounting for the Plans

The following table presents a summary of restricted stock and stock unit awards at April 30, 2012 and 2011:

 

                         
                Unrecognized  
    Expense for 3 months ended     Compensation
Cost at		  
    4/30/2012     4/30/2011     4/30/2012  

2007 Plan

                        

40,000 Grants of Restricted Stock, issued 3/21/2012, vesting immediately

   $ 80,000     $ —       $ —    

68,960 Grants of Restricted Stock, issued 6/21/2011, vesting over 1 year

     50,000       —         17,000  

56,455 Grants of Restricted Stock, issued 6/8/2010, vesting over 1 year

     —         43,000       —    

382,500 Restricted Stock Units, issued 6/16/2009, vesting over 5 years

     56,000       67,000       470,000  

262,500 Restricted Stock Units, issued 6/19/2007, vesting over 5 years

     74,000       89,000       25,000  
   

 

 

    

 

 

    

 

 

  

Totals for the period

   $ 260,000     $ 199,000     $ 512,000  
   

 

 

    

 

 

    

 

 

  

Stockholders’ Rights

On October 15, 1996, the Board of Directors declared a dividend of one preferred stock purchase right (the “Rights”) for each outstanding share of the Company’s common stock. Each of the Rights entitles a stockholder to purchase for an exercise price of $50.00 ($20.70, as adjusted for stock splits and stock dividends), subject to adjustment, one one-hundredth of a share of Series A Junior Participating Cumulative Preferred Stock of the Company, or under certain circumstances, shares of common stock of the Company or a successor company with a market value equal to two times the exercise price. The Rights are not exercisable, and would only become exercisable for all other persons when any person has acquired or commences to acquire a beneficial interest of at least 20% of the Company’s outstanding common stock. The Rights have no voting privileges, and may be redeemed by the Board of Directors at a price of $.001 per Right at any time prior to the acquisition of a beneficial ownership of 20% of the outstanding common stock. There are 200,000 shares (483,153 shares as adjusted by stock splits and stock dividends) of Series A Junior Participating Cumulative Preferred Stock reserved for issuance upon exercise of the Rights. On July 31, 2007, the Company and Mellon Investor Services LLC entered into an amendment to the Rights Agreement governing the Rights. The amendment, among other things, extended the term of the Rights issued under the Rights Agreement to October 25, 2016, removed the dead-hand provisions from the Rights Agreement, and formally replaced the former Rights Agent, The Chase Manhattan Bank, with its successor-in-interest, Mellon Investor Services LLC.