XML 58 R12.htm IDEA: XBRL DOCUMENT v3.2.0.727
Note 5 - Stockholders' Equity
 12 Months Ended
May. 31, 2015
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
5. Stockholders’ Equity
 
Holders of Common Stock are entitled to one vote per share.
 
Convertible Preferred Stock
 
The Company has authorized two million shares of preferred stock, and as of May 31, 2015 has no outstanding preferred stock.
 
Common Stock and Stock Option Plans
 
At May 31, 2015, the Company had 881,143
common shares reserved for future issuance under Landec equity incentive plans.
 
On October 10, 2013, following stockholder approval at the Annual Meeting of Stockholders of the
Company, the 2013 Stock Incentive Plan (the “Plan”) became effective and replaced the Company’s 2009 Stock Incentive Plan. Employees (including officers), consultants and directors of the Company and its subsidiaries and affiliates are eligible to participate in the Plan.
 
The Plan provides for the grant of stock options (both nonstatutory and incentive stock options), stock grants,
stock units and stock appreciation rights. Awards under the Plan will be evidenced by an agreement with the Plan
participants and 2.0 million shares of the Company’s Common Stock (“Shares”) were initially available for award under
the Plan. Under the Plan, no recipient may receive awards during any fiscal year that exceeds the following amounts: (i) stock options covering in excess of 500,000 Shares; (ii) stock grants and stock units covering in excess of 250,000 Shares in the aggregate; or (iii) stock appreciation rights covering more than 500,000 Shares. In addition, awards to non-employee directors are discretionary. However, a non-employee director may not be granted awards in excess of 30,000 Shares in the aggregate during any fiscal year. The exercise price of the options is the fair market value of the Company’s Common Stock on the date the options are granted.
 
On October 15, 2009, following stockholder approval at the Annual Meeting of Stockholders of the Company, the 2009 Stock Incentive Plan (the “2009 Plan”) became effective and replaced the Company’s 2005 Stock Incentive Plan. Employees (including officers), consultants and directors of the Company and its subsidiaries and affiliates were eligible to participate in the 2009 Plan. The 2009 Plan provided for the grant of stock options (both
nonstatutory and incentive stock options), stock grants, stock units and stock appreciation rights. Under the 2009 Plan, 1.9
million Shares were initially available for awards and as of May 31, 2015, 865,834 options to purchase shares and restricted stock units (RSUs) were outstanding.
 
On October 14, 2005, following stockholder approval at the Annual Meeting of Stockholders of the Company, the 2005 Stock Incentive Plan (“2005 Plan”) became effective. The 2005 Plan replaced the Company’s four then existing equity plans and no shares remain available for grant under those plans. Employees (including officers), consultants and directors of the Company and its subsidiaries and affiliates were eligible to participate in the 2005 Plan. The 2005 Plan provided for the grant of stock options (both nonstatutory and incentive stock options), stock grants, stock units and stock
appreciation rights. Under the 2005 Plan, 861,038 Shares were initially available for awards, and as of May 31, 2015,
168,550 options to purchase shares were outstanding. The exercise price of the options was the fair market value of the Company’s Common Stock on the date the options were granted.
 
The 1995 Directors’ Stock Option Plan (the “Directors Plan”) provided that each person who became a non- employee director of the Company, who had not received a previous grant, be granted a nonstatutory stock option to purchase 20,000 shares of Common Stock on the date on which the optionee first became a non-employee director of the Company. Thereafter, on the date of each annual meeting of the stockholders each non-employee director was granted an additional option to purchase 10,000 shares of Common Stock if, on such date, he or she had served on the Company’s Board of Directors for at least six months prior to the date of such annual meeting. The exercise price of the options was the fair market value of the Company’s Common Stock on the date the options were granted. Options granted under this plan were exercisable and vested upon grant. Under the Directors Plan, 800,000 Shares were initially available for awards, and as of May 31, 2015, 10,000 options to purchase shares were outstanding. No shares remain available for grant under the Directors’ Plan.
 
Activity under all Landec equity incentive plans is as follows:
 
Stock-Based Compensation Activity
 
 
 
Restricted Stock Outstanding
 
 
Stock Options Outstanding
 
 
 
RSUs and
Options
Available
for Grant
 
 
Number
of
Restricted
Shares
 
 
Weighted
Average Grant Date
Fair Value
 
 
Number of
Stock
Options
 
 
Weighted Average Exercise
Price
 
Balance at May 27, 2012
     449,643       348,166     $ 5.93       2,046,432     $ 6.50  
Granted
     (26,666 )     6,666     $ 9.01       20,000     $ 9.01  
Awarded/Exercised
     —       (231,086 )   $ 5.74       (671,563 )   $ 6.30  
Forfeited
     —       (28,416 )   $ 6.20       (44,977 )   $ 6.34  
Plan shares expired
    —       —       —       (10,000 )   $ 13.32  
Balance at May 26, 2013
     422,977       95,330     $ 6.52       1,339,892     $ 6.58  
Additional shares reserved
     2,000,000       —       —       —       —  
Granted
     (420,131 )     128,631     $ 14.30       291,500     $ 14.30  
Awarded/Exercised
     —       (62,499 )   $ 6.18       (398,080 )   $ 6.45  
Forfeited
     —       (12,162 )   $ 8.86       (12,452 )   $ 6.66  
Plan shares expired
    (2,846 )     —       —       (5,000 )   $ 13.32  
Balance at May 25, 2014
     2,000,000       149,300     $ 13.17       1,215,860     $ 8.45  
Granted
     (1,118,857 )     324,357     $ 13.97       794,500     $ 14.20  
Awarded/Exercised
     —       (79,219 )   $ 11.57       (205,419 )   $ 6.55  
Forfeited
     —       (1,667 )   $ 14.30       (2,223 )   $ 14.30  
Plan shares expired
    —       —       —       (66,000 )   $ 11.32  
Balance at May 31, 2015
     881,143       392,771     $ 14.15       1,736,718     $ 11.19  
 
Upon vesting of certain RSUs and the exercise of certain options during fiscal years 2015, 2014 and 2013, certain RSUs and exercised options were net share-settled to cover the required exercise price and withholding tax and
the remaining amounts were converted into an equivalent number of shares of Common Stock. The Company withheld shares with value equivalent to the exercise price for options and the employees' minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total
shares withheld for fiscal years 2015, 2014 and 2013 were 112,443, 47,573 and 145,159 RSUs and options, respectively,
which was based on the value of the option and/or RSUs on their exercise or vesting date as determined
by the Company's closing stock price. Total payments for the employees' tax obligations to the taxing authorities during fiscal years 2015, 2014 and 2013 were approximately $343,000, $1.3 million and $49,000, respectively. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise have been issued as a result of the vesting and did not represent an expense to the Company.
 
The following table summarizes information concerning stock options outstanding and exercisable at May 31, 2015
:
 
   
 Options Outstanding 
  
Options Exercisable
 
Range of
Exercise
Prices
    
Number of Shares
Outstanding
     
Weighted
Average
Remaining
Contractual
Life
(in years)
      
Weighted
Average
Exercise
Price
     
Aggregate
Intrinsic
Value
     
Number of
Shares
Exercisable
     
Weighted
Average
Exercise
Price
     
Aggregate
Intrinsic Value
 
$ 5.00 - $6.00
    317,750       2.10     $ 5.65     $ 2,746,675       317,750     $ 5.65     $ 2,746,675  
$ 6.01 - $9.00
    315,191       1.83     $ 6.46     $ 2,466,904       315,191     $ 6.46     $ 2,466,904  
$ 9.01 - $14.00
    140,000       6.14     $ 12.57     $ 240,900       30,732     $ 10.55     $ 115,027  
$14.01- $14.39
    963,777       6.39     $ 14.36     $ —       185,791     $ 14.30     $ —  
$ 5.00 - $14.39
     1,736,718       4.76     $ 11.19     $ 5,454,479       849,464     $ 8.02     $ 5,328,606  
 
At May 31, 2015 and May 25, 2014 options to purchase 849,464 and 984,610 shares of Landec’s Common Stock were vested, respectively, and 887,254 and 231,250 were unvested, respectively. No options have been
exercised prior to being vested. The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on the Company’s closing stock price of $14.29 on May 29, 2015, which would have been received by holders of stock options had all holders of stock options exercised their stock options that were in-the-money as of that date. The total number of in-the-money stock options exercisable as of May 31, 2015, was 663,673 shares. The aggregate intrinsic value of stock options exercised during the fiscal year 2015 was $1.5 million.
 
Option Awards
 
 
 
Outstanding Options
 
 
Weighted Average Exercise Price
 
 
Weighted Average Remaining Contract Term

(in years)
 
 
Aggregate Intrinsic Value
 
Vested
     849,464     $ 8.02       2.74     $ 5,328,606  
Expected to vest
     861,612     $ 14.22       6.69       123,261  
Total
     1,711,076     $ 11.14       4.73     $ 5,451,867  
 
As of May 31, 2015, there was $7.6 million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Company’s incentive stock plans. Total expense is expected to be recognized over the weighted-average period of 2.6 years for both stock options and restricted stock awards.
 
Stock Repurchase Plan
 
On July 14, 2010, the Board of Directors of the Company approved the establishment of a stock repurchase plan which allows for the repurchase of up to $10 million of the Company’s Common Stock. The Company may repurchase its common stock from time to time in open market purchases or in privately negotiated transactions. The timing and actual number of shares repurchased is at the discretion of management of the Company and will depend on a variety of factors, including stock price, corporate and regulatory requirements, market conditions, the relative attractiveness of other
capital deployment opportunities and other corporate priorities. The stock repurchase program does not obligate Landec to acquire any amount of its common stock and the program may be modified, suspended or terminated at any time at the
Company's discretion without prior notice. During fiscal years 2015, 2014 and 2013, the Company did not purchase any shares on the open market.