G. STOCK OPTIONS AND RESTRICTED STOCK

The Company has one active stock-based compensation plan: the 2006 Incentive Compensation Plan (as amended and restated effective as of August 1, 2013, the “2006 Plan”). Under the terms of the 2006 Plan, up to 7,250,000 shares of common stock are available for the granting of awards; provided, however, that the maximum number of those shares that may be subject to the granting of awards other than stock options and stock appreciation rights cannot exceed 4,250,000 shares. The terms of the 2006 Plan provide for grants of stock options, stock appreciation rights, restricted stock, deferred stock, other stock-related awards and performance awards that may be settled in cash, stock or other property.

The 2006 Plan is administered by the Compensation Committee, all of the members of which are non-employee directors who qualify as independent under the listing standards of the Nasdaq Global Select Market. The Compensation Committee is authorized to make all determinations with respect to amounts and conditions covering awards. Options are not granted at a price less than fair value on the date of the grant. Options granted to employees and executives typically vest over three years and options granted to non-employee directors vest over two years. Generally, options expire ten years from the date of grant.

2006 Plan—Stock Option and Restricted Share Award Activity

Stock Option Activity

The following table summarizes stock option activity under the 2006 Plan for fiscal 2014:

	Number of Shares			Weighted-average exercise price per option		Weighted-average remaining contractual term	Aggregate intrinsic value
Stock Options
Outstanding options at beginning of year		2,721,569		$	4.95
Options granted		170,596		$	5.29
Options canceled		(118,139	)	$	4.32
Options exercised		(26,224	)	$	4.69

Outstanding options at end of year		2,747,802		$	4.97	7.9 years	$	457,575
Options exercisable at end of year		607,628		$	4.77	6.4 years	$	309,799
Vested and expected to vest at end of year		1,585,755		$	4.91	7.6 years	$	411,863

The intrinsic value of options exercised was immaterial for fiscal 2014. The intrinsic value of options exercised in fiscal 2013 was $23,700.

Restricted Share Activity

The following table summarizes activity for non-vested shares (“restricted shares”) under the 2006 Plan for fiscal 2014:

	Number of Shares			Weighted-average grant-date fair value ⁽¹⁾
Restricted Shares
Restricted shares outstanding at beginning of year		2,017,940		$	5.01
Restricted shares granted		115,166		$	5.31
Deferred shares granted ⁽²⁾		11,238		$	5.22
Restricted shares vested		(352,848	)	$	4.77
Restricted shares canceled		(94,968	)	$	5.00

Restricted and Deferred shares outstanding at end of year		1,696,528		$	5.09

(1)	The fair value of a restricted share is equal to the Company’s closing stock price on the date of grant.

(2)

During fiscal 2014, the Company granted 11,238 shares of deferred stock, with a fair value of approximately $58,643, to a director as compensation in lieu of cash and in accordance with his irrevocable election. The shares of deferred stock, which have no continued service requirement, will vest three years from the date of grant. The Company recognized compensation expense in full on the date of grant.

Approximately $6.4 million of the total unrecognized stock compensation cost of $9.7 million is related to restricted shares unvested at January 31, 2015. Approximately $4.7 million of the $6.4 million of unrecognized stock compensation is tied to performance-based awards, which were not deemed probable at January 31, 2015. The remaining $1.7 million of unrecognized stock compensation is tied to time-based awards and is expected to be recognized over a weighted-average period of 17.3 months.

Share Availability Under the 2006 Plan

At January 31, 2015, the Company has 1,122,627 shares available for future grant under the 2006 Plan. Of this amount, 1,015,286 shares remain available for awards other than options and stock appreciation rights.

1992 Plan—Stock Option Activity-

Grants still remain outstanding under the Company’s previous 1992 Stock Incentive Plan (as amended, the “1992 Plan”). As a result of the adoption of the 2006 Plan, however, no further grants can be made under the 1992 Plan. The following table summarizes stock option activity under the 1992 Plan for fiscal 2014:

	Number of Shares			Weighted-average exercise price per option		Weighted-average remaining contractual term	Aggregate intrinsic value ⁽¹⁾
Stock Options
Outstanding options at beginning of year		911,775		$	6.82
Options granted		—			—
Options canceled		(686,775	)	$	6.77
Options exercised ⁽¹⁾		(7,500	)	$	5.67

Outstanding options at end of year		217,500		$	7.01	0.3 years		—
Options exercisable at end of year		217,500		$	7.01	0.3 years		—
Vested and expected to vest at end of year		217,500		$	7.01	0.3 years		—

(1)	The majority of outstanding options were out-of-the-money at January 31, 2015; therefore, the intrinsic value was immaterial.

The total intrinsic value of options exercised was immaterial for fiscal 2014 and $182,900 for fiscal 2013.

Non-Employee Director Compensation Plan

In January 2010, the Company established a Non-Employee Director Stock Purchase Plan to provide a convenient method for its non-employee directors to acquire shares of the Company’s common stock at fair market value by voluntarily electing to receive shares of common stock in lieu of cash for service as a director. The substance of this plan is now encompassed within the Company’s Amended and Restated Non-Employee Director Compensation Plan.

Beginning in fiscal 2015, the non-employee directors are required to take 50% of their annual retainer, which is paid quarterly, in equity. Any shares of stock, deferred stock or stock options issued to a director as part of this 50% requirement will be issued from the Company’s 2006 Plan. Only discretionary elections of equity will be issued from the Non-Employee Director Compensation Plan.

The following shares of common stock, with the respective fair value, were issued to its non-employee directors as compensation for fiscal 2014, fiscal 2013 and fiscal 2012:

	Number of shares of common stock issued		Fair value of common stock issued
Fiscal 2014		40,910	$	213,749
Fiscal 2013		43,541	$	255,884
Fiscal 2012		31,707	$	123,976