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Stock Based Compensation
 6 Months Ended
Jul. 31, 2012
Stock Based Compensation [Abstract]  
Stock Based Compensation

Note 8. Stock Based Compensation

Stock Incentive Plans

The Company’s two stock plans are the 2011 Stock Incentive Plan (the “2011 Plan”) and the 2007 Stock Incentive Plan (the “2007 Plan”). Under the 2011 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. The 2007 Plan similarly allows for the issuance of up to 1,000,000 shares. As of July 31, 2012, only 448,750 and 13,075 shares remained available for issuance under the 2011 Plan and 2007 Plan, respectively. Restricted stock or stock units awarded under both Plans 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.

There were no unexercised options outstanding under the 2011 Plan or the 2007 Plan at July 31, 2012. Stock options awarded to employees under the both Plans have 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 July 31, 2012 and 2011:

 

                                                 
                                    Unamortized  
                                    Compensation  
Date of   Units   Terms of   Expense for 3 months ended     Expense for 6 months ended     Cost at  

Grants

   Granted   Vesting   7/31/2012     7/31/2011     7/31/2012     7/31/2011     7/31/2012  

2011 Stock Incentive Plan

  

6/19/2012

   31,250   1 year   $ 8,286     $ —       $ 8,286     $ —       $ 41,429  

6/19/2012

   520,000   5 year     28,000       —         28,000       —         804,000  

2007 Stock Incentive Plan

  

6/19/2012

   78,125   1 year     20,714       —         20,714       —         103,571  

3/21/2012

   40,000   Immediate     —         —         80,000       —         —    

6/21/2011

   68,960   1 year     17,000       33,000       67,000       33,000       —    

6/8/2010

   56,455   1 year     —         15,000       —         58,000       —    

6/16/2009

   382,500   5 year     56,000       58,000       113,000       125,000       414,000  

6/19/2007

   262,500   5 year     24,000       75,000       98,000       165,000       —    
           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
            $ 154,000     $ 181,000     $ 415,000     $ 381,000     $ 1,363,000  
           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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.