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Stock-based Compensation and Stockholders’ Equity | 12 Months Ended
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May 29, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation and Stockholders’ Equity | Stock-based Compensation and Stockholders’ Equity Common Stock and Stock Option Plans On October 16, 2019, following stockholder approval at the Annual Meeting of Stockholders of the Company, the 2019 Stock Incentive Plan (the “Plan”) became effective and replaced the Company’s 2013 Stock Incentive Plan (the “2013 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 in the aggregate; (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 the aggregate. In addition, awards to non-employee directors are discretionary. However, a non-employee director may not be granted awards in excess of an aggregate fair market value of $120,000 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, 2022, 1,700,911 options to purchase shares and restricted stock units (“RSUs”) were outstanding. On October 10, 2013, following stockholder approval at the Annual Meeting of Stockholders of the Company, the 2013 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 were eligible to participate in the 2013 Plan. The 2013 Plan provided for the grant of stock options (both nonstatutory and incentive stock options), stock grants, stock units and stock appreciation rights. Under the 2013 Plan, 2.0 million shares were initially available for awards and as of May 29, 2022, 541,374 options to purchase shares and RSUs were outstanding. At May 29, 2022, the Company had 3.7 million common shares reserved for future issuance under Landec stock incentive plans. Convertible Preferred Stock The Company has authorized 2.0 million shares of preferred stock, and as of May 29, 2022 has no outstanding preferred stock. Grant Date Fair Value The Company uses the Black-Scholes option pricing model to calculate the grant date fair value of stock option awards. The use of an option pricing model requires the Company to make estimates and assumptions, including the expected stock price volatility, expected life of option awards, risk-free interest rate, and expected dividend yield which have a significant impact on the fair value estimates. As of May 29, 2022, May 30, 2021 and May 31, 2020, the fair value of stock option grants was estimated using the following weighted average assumptions:
| Year Ended
| May 29, 2022 |  | May 30, 2021 |  | May 31, 2020
Weighted-average grant date fair value | $2.62 |  | $2.37 |  | $2.55
Assumptions: |  |  |  |  |
Expected life (in years) | 2.80 |  | 3.36 |  | 3.50
Risk-free interest rate | 0.45 | % |  | 0.23 | % |  | 1.01 | %
Volatility | 33 | % |  | 33 | % |  | 31 | %
Dividend yield | — | % |  | — | % |  | — | %
Stock-Based Compensation Activity A summary of the activity under the Company’s stock option plans as of May 29, 2022 and changes during the fiscal year then ended is presented below:
| Options Outstanding |  | Weighted-Average Exercise Price Per Share |  | Total Intrinsic Value of Options Exercised |  | Weighted-Average Remaining Contractual Term in Years |  | Aggregate Intrinsic Value
Options outstanding at May 26, 2019 | 2,000,096 |  |  | $ | 12.94 |  |  |  |  |  |  |
Options granted | 435,000 |  |  | $ | 10.42 |  |  |  |  |  |  |
Options exercised | (163,333) |  |  | $ | 11.16 |  |  | $ | 169,066 |  |  |  |  |
Options forfeited | (55,806) |  |  | $ | 13.08 |  |  |  |  |  |  |
Options expired | (499,599) |  |  | $ | 14.04 |  |  |  |  |  |  |
Options outstanding at May 31, 2020 | 1,716,358 |  |  | $ | 12.15 |  |  |  |  |  |  |
Options granted | 682,600 |  |  | $ | 9.66 |  |  |  |  |  |  |
Options exercised | — |  |  | $ | — |  |  | $ | — |  |  |  |  |
Options forfeited | (127,714) |  |  | $ | 9.93 |  |  |  |  |  |  |
Options expired | (437,227) |  |  | $ | 13.42 |  |  |  |  |  |  |
Options outstanding at May 30, 2021 | 1,834,017 |  |  | $ | 11.07 |  |  |  |  |  |  |
Options granted | 803,000 |  |  | $ | 11.79 |  |  |  |  |  |  |
Options exercised | (161,415) |  |  | $ | 9.69 |  |  | $ | 304,211 |  |  |  |  |
Options forfeited | (205,746) |  |  | $ | 10.96 |  |  |  |  |  |  |
Options expired | (322,170) |  |  | $ | 13.31 |  |  |  |  |  |  |
Options outstanding at May 29, 2022 | 1,947,686 |  |  | $ | 11.13 |  |  |  |  | 4.72 |  | $ | 310,682 |
Options exercisable at May 29, 2022 | 986,594 |  |  | $ | 10.96 |  |  |  |  | 3.73 |  | $ | 195,247 |
A summary of the Company’s restricted stock unit award activity as of May 29, 2022 and changes during the fiscal year then ended is presented below:
| Restricted Stock Units Outstanding |  | Weighted-Average Grant Date Fair Value Per Share
Restricted stock units/awards outstanding at May 26, 2019 | 428,427 |  |  | $ | 12.80 |
Granted | 296,527 |  |  | $ | 9.79 |
Vested | (124,045) |  |  | $ | 11.82 |
Forfeited | (131,361) |  |  | $ | 12.49 |
Restricted stock units/awards outstanding at May 31, 2020 | 469,548 |  |  | $ | 11.24 |
Granted | 188,225 |  |  | $ | 10.13 |
Vested | (146,197) |  |  | $ | 11.69 |
Forfeited | (31,180) |  |  | $ | 10.60 |
Restricted stock units/awards outstanding at May 30, 2021 | 480,396 |  |  | $ | 10.71 |
Granted | 105,858 |  |  | $ | 11.98 |
Vested | (228,568) |  |  | $ | 11.41 |
Forfeited | (63,087) |  |  | $ | 10.70 |
Restricted stock units/awards outstanding at May 29, 2022 | 294,599 |  |  | $ | 10.55 |
Stock-Based Compensation Expense The following table summarizes the stock-based compensation by statement of operations line item:
| Year Ended
(in thousands) | May 29, 2022 |  | May 30, 2021 |  | May 31, 2020
Continuing operations: |  |  |  |  |
Cost of sales | $ | 314 |  |  | $ | 348 |  |  | $ | 118 |
Research and development | 202 |  |  | 223 |  |  | 158 |
Selling, general and administrative | 2,126 |  |  | 2,734 |  |  | 2,099 |
Discontinued Operations | (34) |  |  | 55 |  |  | 44 |
Total stock-based compensation | $ | 2,608 |  |  | $ | 3,360 |  |  | $ | 2,419 |
As of May 29, 2022, there was $2.7 million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Landec stock incentive plans. Total expense is expected to be recognized over the weighted-average period of 1.90 years for stock options and 1.71 years for restricted stock unit 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 2022, 2021 and 2020, the Company did not purchase any shares on the open market.

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