Note 14 - Share-Based Compensation

9 Months Ended

Feb. 28, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

14. SHARE-BASED COMPENSATION

The Company has granted nonvested restricted stock, stock options, and stock appreciation rights to key employees, directors and consultants under several stock award plans.  The Company granted stock awards with an aggregate fair value of approximately $0.1 and $0.7 million during the three months and nine months ended February 28, 2015 and $0.2 million and $0.7 million during the three months and nine months ended February 28, 2014, respectively.  As of February 28, 2015, a total of 39,023 shares were available for future grants.

Restricted stock units typically vest over a two year period (50% per year) and do not expire. Upon vesting, restricted stock units are settled in shares of IVD Holdings Inc.’s common stock. Stock option awards are granted with service-based vesting conditions, and performance-based or market-based vesting conditions.  The service-based vesting options contain tiered vesting terms over the service period. The performance-based and market-based options vest in tranches based upon either the achievement of the performance conditions, if they are considered probable, or if they are not considered probable, on the achievement of the market-based condition, which are measured over a three or four year period.  The stock appreciation rights vest only on the occurrence of a liquidity event.  These awards have a ten year term. 

During fiscal 2014 and in the first quarter of fiscal 2015, stock option awards were measured based upon the achievement of the market condition since the Company believed that the achievement of the performance conditions were not probable. Effective on September 2, 2014, the Company amended its 2011 Equity Incentive Plan to (1) modify the financial targets for all unvested performance-based option grants, and (2) specify that the unvested options will vest on each of August 19, 2015 and August 19, 2016 if the financial targets are achieved or exceeded for the immediately preceding fiscal years, or will vest on the later date if the financial targets are not achieved for fiscal 2015 but are achieved for the combined fiscal 2015 and 2016 periods. As a result of this plan amendment, the Company believes that the achievement of the performance conditions is now probable and therefore the stock-based compensation cost was remeasured as of September 2, 2014 for all unvested performance-based option grants.

The Company recognized expense of $0.3 million and $1.8 million in the three months and nine months ended February 28, 2015 and $0.4 million and $1.2 million in the three months and nine months ended February 28, 2014, respectively, before income tax benefits, for all of the Company’s stock plans.  As of February 28, 2015, there was $2.1 million of total unrecognized compensation cost related the Company’s stock plans that will be recognized over approximately 2.0 years. 

As of February 28, 2015 there was no expense or liability recognized related to the stock appreciation rights granted as management has determined that a liquidity event is not considered probable. The fair value of the liability relating to cash-settled stock appreciation rights was approximately $0.9 million as of February 28, 2015.