Shareholders' Equity

12 Months Ended

Jan. 31, 2014

Shareholders' Equity

(13) Shareholders’ Equity

We have three stock award plans: the 2006 and 2010 Incentive Stock Plans; and the 2012 Outside Directors Plans (for non-employee directors). A total of 500,000 shares may be granted under each of the 2006 and 2010 Incentive Stock Plans and 50,000 shares may be granted under the 2012 Outside Directors Plan. As of January 31, 2014, we had 296,396 shares available for future grants under all stock award plans.

The 2006 and 2010 Incentive Stock Plans and the 2012 Outside Directors Plan (for non-employee directors only) authorize the award of both incentive stock options and non-qualified stock options to purchase common stock to officers, other associates and directors of the Company. The exercise price per share of incentive stock options may not be less than the market price of our common stock on the date the option is granted. The term of each option is determined by the Board of Directors and generally will not exceed ten years from the date of grant. In general, each option award vests at twenty percent per year over five years.

The 2006 and 2010 Incentive Stock Plans and the 2012 Outside Directors Plan (for non-employee directors only) also authorize the granting of stock appreciation rights, restricted stock, dividend equivalent rights, stock awards, and other stock-based awards to officers, other associates, directors, and consultants of the Company.

We also have one stock grant plan, the 2012 Stock Grant Plan for Outside Directors, which authorizes the granting of shares of stock to outside directors. We issue annual grants of shares of common stock valued at $10,000 per outside director from this plan. As of January 31, 2014, we have 20,180 shares remaining under the 2012 Stock Grant Plan for Outside Directors.

On December 4, 2009, we entered into a stock transfer agreement with the Marmaduke Family Limited Partnership (the “Partnership”). Under the stock transfer agreement, for a period of three years following the death of Mr. John H. Marmaduke, the Company’s Chief Executive Officer, the Partnership may tender for purchase to the Company, and, if so tendered, the Company will be required to purchase, the number of shares of the Company’s common stock belonging to the Partnership that equal an aggregate fair market value of $5.0 million. During this three year period, the Partnership may elect to tender portions of such shares in various lots and parcels, at any time and from time to time, and any tender shall not exhaust or limit the Partnership’s right to tender an additional amount of such shares, subject to the limitations set within the stock transfer agreement. Under the stock transfer agreement, the Company is not obligated to purchase, and the Partnership does not have the right to tender, any amount of such shares with an aggregate fair market value in excess of $5.0 million. In the event that Mr. Marmaduke resigns as an officer or director of the Company prior to his death, the Partnership’s right to tender the shares to the Company shall terminate. The stock transfer agreement shall terminate on the earlier of February 9, 2019, or four years after the death of Mr. Marmaduke. The Company is currently the beneficiary of a $10 million key-man life insurance policy on Mr. Marmaduke, a portion of the proceeds of which would be used to complete any purchases of shares resulting from the stock transfer agreement.

We did not pay any dividend during the fiscal year ending January 31, 2014.  An annual dividend of $0.02 per share and a special dividend of $0.35 per share were paid during the fiscal year ending January 31, 2013.  Under the Merger Agreement described under the heading “Merger Agreement” in Item 1 of this Annual Report on Form 10-K, the Company is not permitted to pay dividends without Parent’s consent..