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Note 5 - Stockholders' Equity
 12 Months Ended
May 29, 2016
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 29, 2016 has no outstanding preferred stock.
 
Common Stock and Stock Option Plans
 
At May 29, 2016, the Company had 2.7 million
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. As of May 29, 2016, 1,474,507 options to purchase shares and restricted stock units (RSUs) were outstanding.
 
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 29, 2016, 783,808 options to purchase shares and restricted stock units (RSUs) were outstanding.
 
Stock-Based Compensation Activity
 
Activity under all Landec equity incentive plans is as follows:
 
 
 
        
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 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  
Granted
     (443,175 )     177,675     $ 12.10       265,500     $ 12.04  
Awarded/Exercised
     —       (32,439 )   $ 13.28       (220,717 )   $ 6.44  
Forfeited
     28,000       (11,166 )   $ 14.36       (24,473 )   $ 14.38  
Plan shares expired
    —       —       —       (25,554 )   $ 9.86  
Balance at May 29, 2016
     465,968       526,841     $ 13.51       1,731,474     $ 11.90  
 
Upon vesting of certain RSUs and the exercise of certain options during fiscal years 2016, 2015 and 2014, 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 2016, 2015 and 2014 were 95,550, 112,443 and 47,573 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 2016, 2015 and 2014 were approximately zero, $343,000 and $1.3 million, 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 29, 2016
:
 
 
  
 
 
 
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 - $9.00       401,807       1.23     $ 5.86     $ 2,249,268       401,807     $ 5.86     $ 2,249,268  
$9.01 - $13.50       312,167       6.35     $ 11.86     $ 54,784       36,617     $ 10.56     $ 40,834  
$13.51 - $14.30       364,000       4.41     $ 14.13     $ —       308,722     $ 14.20     $ —  
$14.31 - $14.39       653,500       6.00     $ 14.39     $ —       216,687     $ 14.39     $ —  
$5.00 - $14.39       1,731,474       4.62     $ 11.90     $ 2,304,052       963,833     $ 10.63     $ 2,290,102  
 
At May 29, 2016 and May 31, 2015 options to purchase 963,833 and 849,464 shares of Landec’s Common Stock were vested, respectively, and 767,641 and 887,254 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 $11.46 on May 27, 2016, 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 29, 2016, was 418,474 shares. The aggregate intrinsic value of stock options exercised during the fiscal year 2016 was $1.1 million.
 
Option Awards
 
 
 
Outstanding Options
 
 
Weighted Average Exercise Price
 
 
Weighted Average Remaining Contract Term
(in years)
 
 
Aggregate Intrinsic Value
 
Vested
     963,833     $ 10.63       3.38     $ 2,290,102  
Expected to vest
     750,704     $ 13.51       6.17       13,517  
Total
     1,714,537     $ 11.89       4.60     $ 2,303,619  
 
As of May 29, 2016, there was $6.8 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 2.1 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 $10.0 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 2016, 2015 and 2014, the Company did not purchase any shares on the open market.