Note 3 - Stock-based Compensation

9 Months Ended

Mar. 01, 2015

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

3.	Stock-Based Compensation

The Company records compensation expense for stock-based awards issued to employees and directors in exchange for services provided based on the estimated fair value of the awards on their grant dates and is recognized over the required service periods (generally the vesting period). For nonstatutory options, the cash flows resulting from the tax benefit due to tax deductions in excess of the compensation expense recognized for those options (excess tax benefit) are classified as financing activities within the statement of cash flows. The Company’s stock-based awards include stock option grants and restricted stock unit awards (“RSUs”).

The following table summarizes the stock-based compensation for options and RSUs (in thousands):

	Three Months Ended March 1 , 2015		Three Months Ended February 23 , 2014		Nine Months Ended March 1 , 2015		Nine Months Ended February 23 , 2014
Options	$	139,000	$	131,000	$	394,000	$	416,000
RSUs		252,000		222,000		745,000		576,000
Total stock-based compensation	$	391,000	$	353,000	$	1,139,000	$	992,000

The following table summarizes the stock-based compensation by income statement line item:

	Three Months Ended March 1 , 2015		Three Months Ended February 23 , 2014		Nine Months Ended March 1 , 2015		Nine Months Ended February 23 , 2014
Research and development	$	8,000	$	14,000	$	28,000	$	28,000
Sales, general and administrative		383,000		339,000		1,111,000		964,000
Total stock-based compensation	$	391,000	$	353,000	$	1,139,000	$	992,000

The estimated fair value for stock options, which determines the Company’s calculation of compensation expense, is based on the Black-Scholes option pricing model. RSUs are valued at the closing market price of the Company’s common stock on the date of grant. The Company uses the straight line single option method to calculate and recognize the fair value of stock-based compensation arrangements. In addition, the Company uses historical data to estimate pre-vesting forfeitures and records stock-based compensation expense only for those awards that are expected to vest and revises those estimates in subsequent periods if the actual forfeitures differ from the prior estimates.

As of March 1, 2015, there was $2.2 million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Landec incentive stock plans. Total expense is expected to be recognized over the weighted-average period of 1.8 years for stock options and 1.7 years for RSUs

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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