UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

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Definitive Proxy Statement

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Soliciting Material Pursuant To §240.14a-12

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LANDEC CORPORATION

(Name of Registrant as Specified in Its Charter)

(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ONOCTOBER 19, 201714, 2020


TO THE STOCKHOLDERS OF LANDEC CORPORATION:


NOTICE IS HEREBY GIVEN that the 2020 Annual Meeting of Stockholders (the "Annual Meeting") of Landec Corporation, a Delaware Corporation (the “Company”“Company”), will be held on Thursday,Wednesday, October 19, 2017,14, 2020, at 12:0030 p.m. local time, at Lifecore Biomedical, 3515 Lyman Blvd, Chaska, MN 55318(Pacific Time). The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/LNDC2020, where you will be able to listen to the meeting live, submit questions, and vote online for the following purposes:

1.To elect the following seven directors of which all but Mr. Schechter shall serve for a term expiring at the Annual Meeting of Stockholders held in the second year following the year of their election (and Mr. Schechter shall serve for a term expiring at the Annual Meeting of Stockholders held in the first year following the year of his election) and until their successors are duly elected and qualified:

1.

To elect five directors to serve for a term expiring at the Annual Meeting of Stockholders held in the second year following the year of their election and until their successors are duly elected and qualified;

2.

To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending May 27, 2018;

3.

To approve an amendment to the 2013 Stock Incentive Plan that increases the number of shares of Common Stock available for issuance by 1,000,000 shares.

4.

To approve a non-binding advisory proposal on executive compensation;

Katrina L. HoudeNelson ObusAndrew PowellCatherine A. Sohn
Jeffrey Edwards

5.

Patrick Walsh (1)

To provide an advisory vote to determine whether a non-binding advisory vote on executive compensation should occur every one, two or three years, and

Joshua E. Schechter (1)

6.

To transact such other business as may properly come before the meeting or any postponement or adjournment(s) thereof.

(1)In the event that the Bylaws Amendment Proposal (defined below) is not approved by the Company stockholders, any votes to elect Messrs. Walsh and Schechter will be disregarded.

2.To approve the amendment to the Company’s Amended and Restated Bylaws to increase the maximum size of the Company’s Board of Directors to 12 directors (the “Bylaws Amendment Proposal”);

3.To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending May 30, 2021;

4.To approve a non-binding advisory proposal on the executive compensation of the Company’s named executive officers, as described in the Proxy Statement accompanying this notice; and

5.To transact such other business as may properly come before the Annual Meeting or any postponement(s) or adjournment(s) thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.

Only stockholders of record of our common stock at the closeclose of business on August 21, 2017,17, 2020, are entitled to notice of and to vote at the meetingAnnual Meeting and any postponement(s) or adjournment(s) thereof.

All stockholders are cordiallycordially invited to attend the meeting in person.via live webcast. However, to assure your representation at the meeting, you are urged to mark, sign, date, and return the enclosed proxy card as promptly as possible in the postage-prepaid envelope enclosed for that purpose or vote your shares by telephone or via the Internet.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Geoffrey P. Leonard

GEOFFREY P. LEONARD

Secretary

Menlo Park, California

August 23, 2017

BY ORDER OF THE BOARD OF DIRECTORS
/s/ Brian McLaughlin
BRIAN MCLAUGHLIN
Secretary
Santa Maria, California
August 31, 2020
IMPORTANT


WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE OR VOTE YOUR SHARES BY TELEPHONE OR VIA THE INTERNET. IF A QUORUM IS NOT REACHED, THE COMPANY MAY HAVE THE ADDED EXPENSE OF RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE VIRTUAL ANNUAL MEETING AND SO DESIRE, YOU MAY WITHDRAWREVOKE YOUR PROXY AND VOTE IN PERSON. THANKVIA THE VIRTUAL MEETING WEBSITE. IF YOU FOR ACTING PROMPTLY.

HOLD YOUR SHARES THROUGH AN ACCOUNT WITH A BROKERAGE FIRM, BANK, OR OTHER NOMINEE, PLEASE FOLLOW THE INSTRUCTIONS YOU RECEIVE FROM YOUR ACCOUNT MANAGER TO VOTE YOUR SHARES.



LANDEC CORPORATION

PROXY STATEMENT FOR 2020 ANNUAL MEETING OF STOCKHOLDERS

Table of Contents

Page
INFORMATION CONCERNING SOLICITATION AND VOTING1
GENERAL INFORMATION ABOUT THE ANNUAL MEETING2
PROPOSAL NO. 1 - ELECTION OF DIRECTORS5
PROPOSAL NO. 2 - AMENDMENT TO BYLAWS TO INCREASE THE MAXIMUM SIZE OF THE COMPANY'S BOARD OF DIRECTORS TO 12 DIRECTORS11
PROPOSAL NO. 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM12
PROPOSAL NO. 4 - NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION13
AUDIT COMMITTEE REPORT14
CORPORATE GOVERNANCE15
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT22
COMPENSATION DISCUSSION AND ANALYSIS25
COMPENSATION COMMITTEE REPORT37
EXECUTIVE COMPENSATION AND RELATED INFORMATION38
RELATED PARTY TRANSACTIONS46
DELINQUENT SECTION 16(A) REPORTS47
INCORPORATION BY REFERENCE47
OTHER MATTERS47




landeca0111.jpg

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON OCTOBER 19, 2017

14, 2020

_________________

INFORMATION CONCERNING SOLICITATION AND VOTING


General

The enclosed proxy is solicited on behalf of the Board of Directors (the "Board of Directors" or the "Board") of Landec Corporation, a Delaware corporation (“Landec,” the “Company”, “we” or the “Company”“us”), for use at the annual meeting2020 Annual Meeting of stockholdersStockholders (the “Annual Meeting”“Annual Meeting”) to be held virtually on Thursday,Wednesday, October 19, 2017,14, 2020, at 12:0030 p.m. (Pacific Time), local time, or at any postponementpostponement(s) or adjournmentadjournment(s) thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/LNDC2020, where you will be held at Lifecore Biomedical, 3515 Lyman Blvd, Chaska, MN 55318. able to listen to the meeting live, submit questions, and vote online.
The telephone number at that location is (952) 368-4300.

The Company’sCompany’s principal executive offices are located at 3603 Haven Avenue, Menlo Park,2811 Airpark Drive, Santa Maria, California 94025.93455. The Company’s telephone number at that location is (650) 306-1650.

Solicitation

These proxy solicitation materials are to be mailed on or about September 21, 201710, 2020 to all stockholders entitled to vote at the meeting.Annual Meeting. The costs of soliciting these proxies will be borne by the Company. These costs will include the expenses of preparing and mailing proxy materials for the Annual Meeting and the reimbursement of brokerage firms and others for their expenses incurred in forwarding solicitation material regarding the Annual Meeting to beneficial owners of the Company’s common stock, par value $0.001 per share (the “Common Stock”“Common Stock”). The Company may conduct further solicitation personally, telephonically or by facsimile through its officers, directors and regular employees, none of whom will receive additional compensation for assisting with the solicitation.

Important Notice Regarding the Availability of Proxy Materials for the

Stockholder Meeting to Be Held on October 14, 2020.
19, 2017
.

This Proxy Statement and the Company’s Annual Report to Stockholders are available at

http://landec.com/proxy



You may also find a copy of this Proxy Statement and our Annual Report (with exhibits) on the SECSecurities and Exchange Commission's website at http://www.sec.gov. We will, upon written request and without charge, send you additional copies of our Annual Report (without exhibits) and this Proxy Statement. To request additional copies, please send your request by mail to GregoryS. Skinner,Brian McLaughlin, Chief Financial Officer, Landec Corporation, 3603 Haven Avenue, Menlo Park,2811 Airpark Drive, Santa Maria, CA 9402593455 (telephone number: (650) 306-1650). Exhibits to the Annual Report may be obtained upon written request to Mr. SkinnerMcLaughlin and payment of the Company’s reasonable expenses in furnishing such exhibits.

1

Voting Procedure

You may vote by mail.

To vote by mail, please sign your proxy card and return it

GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Purpose of the Annual Meeting
At the Annual Meeting, stockholders will act upon the proposals described in this Proxy Statement.
Record Date; Quorum
Only holders of record of our Common Stock at the enclosed, prepaid and addressed envelope. If you mark your voting instructionsclose of business on the proxy card, your sharesAugust 17, 2020 will be voted as you instruct.

You may vote in person at the Annual Meeting.

We will pass out written ballots to anyone who wantsentitled to vote at the Annual Meeting. HoldingAt the close of business on August 17, 2020, we had 29,241,889 shares of Common Stock outstanding and entitled to vote.

The holders of a majority of the shares of our Common Stock entitled to vote at the Annual Meeting must be present at the Annual Meeting in “streetorder to hold the Annual Meeting and conduct business. This presence is called a quorum. Your shares are counted as present at the Annual Meeting if you are present and vote online at the Annual Meeting or if you have properly submitted a proxy.
Voting Rights; Required Vote
We do not have cumulative voting rights for the election of directors. You may vote all shares owned by you as of August 17, 2020, including (i) shares held directly in your name as the stockholder of record and (ii) shares held for you as the beneficial owner in “street name” meansthrough a broker, bank, trustee, or other nominee.
Stockholder of Record: Shares Registered in Your Name. If your shares were registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., then you are considered the stockholder of stock arerecord with respect to those shares. As a stockholder of record, you may vote at the Annual Meeting or vote by telephone, by Internet, or by filling out and returning the proxy card.
Beneficial Owner: Shares Registered in the Name of a Broker or Nominee. If your shares were held in an account by your stockbroker,with a brokerage firm, bank, or other nominee, then you are the beneficial owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee on how to vote the shares held in your account, and your nominee has enclosed or provided voting instructions for you to use in directing it on how to vote your shares. However, the stock certificates andorganization that holds your shares is considered the stockholder of record ownershipfor purposes of voting at the Annual Meeting. Because you are not in your name. If your shares are held in “street name” andthe stockholder of record, you wish to attend the Annual Meeting, you must notify your broker, bank or other nominee and obtain proper documentation tomay not vote your shares at the Annual Meeting.

You may vote by telephone or electronically.

You may submitMeeting unless you request and obtain a valid proxy from the organization that holds your proxy by followingshares giving you the Vote by Phone instructions accompanyingright to vote the proxy card. Also, you may vote online by following the Vote by Internet instructions accompanying the proxy card.

You may change your mind after you have returned your proxy card.

If you change your mind after you return your proxy card or submit your proxy by telephone or Internet, you may revoke your proxy at any time before the polls closeshares at the Annual Meeting. You may do this by:

●

signing and returning another proxy card with a later date, or

●

voting in person at the Annual Meeting.

Voting

Holders of Common Stock are entitled to one vote per share.

Votes cast in person or by proxy at the Annual Meeting will be tabulated by the Inspector of Elections. The Inspector of Elections will also determine whether or not a quorum is present. A majority of the shares entitled to vote, represented either in person or by proxy, will constitute a quorum for the transaction of business. The Inspector of Elections will treat abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum.

If a broker indicates on the enclosed proxy or its substitute that it has not received votingvoting instructions with respect to shares held in “street name”street name with such broker and either (i) does not have discretionary authority as to certain shares to vote on a particular matter or (ii) has discretionary voting authority but nevertheless refrained from voting on the matter (“broker non-votes”non-votes”), those shares will be counted for purposes of determining the presence of a quorum, but will not be considered as voting with respect to that matter.

Proposal No. 1 –- Election of directors:Directors: Each director is elected by a majority of the votes cast with respect to such director. Any votes “withheld” for a particular director are effectively votes against that director. In addition, in the event that the Bylaws Amendment Proposal (Proposal No. 2) is not approved, stockholders who vote to nominate all of the proposed nominees will be deemed to vote for each of the nominees other than Messrs. Walsh and Schechter and all votes for Messrs. Walsh and Schechter will be disregarded. Shares present and not voted, whether by broker non-vote, abstention or otherwise, will have no effect on this vote.

Proposal No. 2 – Ratification- Amendment to the Company’s Amended and Restated Bylaws to Increase the Maximum Size of independent registered public accounting firm:the Company’s Board of Directors to 12 Directors: ThisPursuant to the terms of the Company’s Amended and Restated Bylaws, this proposal must be approved by the affirmative vote of at least a majority of the shares present and voted on the proposal. Shares present and not voted, whether by broker non-vote, abstention or otherwise, will have no effect on this vote.

Proposal No. 3 – Approvalvoting power of amendment to increase the number of shares in the 2013 Stock Incentive Plan. This proposal must be approved by shares representing a majorityall of the then-outstanding shares present andof the voting stock of the Company entitled to vote on the proposal. Shares present andvote. Accordingly, any shares not voted, whether by broker non-vote, abstention or otherwise, will have the same effect as a vote against this proposal.


Proposal No. 3 - Ratification of Appointment of Independent Registered Public Accounting Firm: 4 — Advisory (non-binding)This proposal must be approved by a majority of the shares present and voted on the proposal. Abstentions will have the same effect as a vote against this proposal. Broker non-votes are unlikely to result from, and would not have any effect on, the outcome of the vote on executive compensation: this proposal.


2

Proposal No. 4 - Advisory (Non-binding) Vote on Executive Compensation: This advisory proposal will be approved if a majority of the shares present and voted on the proposal are voted in favor of the resolution. Shares present and not voted, whether by broker non-vote, abstention or otherwise, will have no effect on this advisory vote.

Proposal

 No. 5 — Advisory (non-binding) vote on frequency of votes on executive compensation: This advisory vote provides a choice among three frequency periods for future advisory votes on executive compensation (so-called, “say-on-pay” votes). The frequency period that receives the most votes (every one, two or three years) will be deemed to be the recommendation of the stockholders. As a result, any shares that are present and not voted, whether by broker non-vote, abstention or otherwise, will have no effect on the outcome of this advisory vote.

Any proxy which is returned using the form of proxy enclosed and which is not marked as to a particular item will bebe voted FOR the election of all of the director nominees proposed by the Board of Directors; FOR the amendment to the Company’s Amended and Restated Bylaws to increase the maximum size of the Company’s Board of Directors to 12 directors; FOR the ratification of the appointment of Ernst & Young LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending May 27, 2018; 30, 2021; FOR the approval of the amendment to increase the number of shares in the Company’s 2013 Stock Incentive Plan, FOR the advisory vote on executive compensation; FOR holding the advisory vote on executive compensation every year; and as the proxy holders deem advisable on other matters that may come before the meeting or any adjournment(s) thereof, as the case may be, with respect to the item not marked. Broker non-votes will not be considered as voting with respect to any of these matters.

Record Date and Sha

re Ownership

Only stockholders

Voting Instructions; Voting of Proxies

If you are a stockholder of record, you may:
•vote via the virtual meeting website - any stockholder can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/LNDC2020, where stockholders may vote and submit questions during the meeting. The Annual Meeting starts at 12:30 p.m. (Pacific Time) on Wednesday, October 14, 2020. Please have your 16-Digit Control Number to join the Annual Meeting. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com;
•vote via telephone or Internet - in order to do so, please follow the instructions shown on your proxy card; or
•vote by mail - complete, sign, and date the proxy card enclosed herewith and return it before the Annual Meeting in the envelope provided.
Votes submitted by telephone or Internet must be received by 11:59 pm Eastern Time on October 13, 2020. Submitting your proxy, whether via the Internet, by telephone, or by mail, will not affect your right to vote should you decide to attend the virtual Annual Meeting. If you are not the stockholder of record, please refer to the voting instructions provided by your nominee to direct your nominee on how to vote your shares. You may either vote “FOR” all of the nominees to the board of directors, or you may withhold your vote from all nominees or any nominee you specify. For Proposals 2, 3 and 4, you may vote “FOR” or “AGAINST” or “ABSTAIN” from voting. Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure that your vote is counted.
All proxies will be voted in accordance with the instructions specified on the proxy card. If you sign a physical proxy card and return it without instructions as to how your shares should be voted on a particular proposal at the closeAnnual Meeting, your shares will be voted in accordance with the recommendations of businessour Board of Directors stated above.
If you receive more than one proxy card, this is because your shares are registered in more than one name or are registered in different accounts. To make certain all of your shares are voted, please follow the instructions included on August 21, 2017,each proxy card and vote each proxy card by telephone or the Internet. If voting by mail, please complete, sign, and return each proxy card to ensure that all of your shares are entitledvoted.

Revocability of Proxies

A stockholder who has given a proxy may revoke it at any time before it is exercised at the Annual Meeting by:
•delivering to our Corporate Secretary (by any means) a written notice stating that the proxy is revoked;
•signing and delivering a proxy bearing a later date;
•voting again by telephone or Internet; or
•attending and voting at the Annual Meeting (although attendance at the Annual Meeting will not, by itself, revoke a proxy).
Please note, however, that if your shares are held of record by a broker, bank, or other nominee and you wish to voterevoke a proxy, you must contact that firm to revoke any prior voting instructions.

3

Voting Results
Voting results will be tabulated and certified by the inspector of elections appointed for the Annual Meeting. The preliminary voting results will be announced at the Annual Meeting. AsThe final results will be tallied by the inspector of August 21, 2017, 27,506,712 shareselections and filed with the Securities and Exchange Commission (the “SEC”) in a current report on Form 8-K within four business days of the Company’s Common Stock were issued and outstanding.

Annual Meeting.

Deadline for Receipt of Stockholder Proposals for the Company’sCompany’s Annual Meeting of Stockholders in 2018

2021

If any stockholder desires to present a stockholder proposal at the Company’s 2018Company’s 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”), such proposal must be received by the Secretary of the Company no later than May 15, 2018,12, 2021, in order that they may be considered for inclusion in the proxy statement and form of proxy relating to that meeting.

meeting (provided, however, if the date of the 2021 Annual Meeting is more than 30 days from the anniversary date of the 2020 Annual Meeting, the deadline for inclusion of proposals in our proxy statement shall instead be not later than the close of business on the later of (i) one hundred twenty (120) calendar days in advance of such annual meeting and (ii) ten (10) calendar days following the date on which public announcement of the date of the meeting is first made). Such proposals will also need to comply with SEC regulations under Rule 14a-8 of the Exchange Act of 1934, as amended, regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Each such notice must be made by a stockholder of record and must also contain the information specified in our bylaws for director nominations and other stockholder proposals.

Householding of Proxy Materials

Some companies, brokers, banks, and other nominee record holders participate in a practice commonly known as “householding,” where a single copy of our Proxy Statement and Annual Report is sent to one address for the benefit of two or more stockholders sharing that address. Householding is permitted under rules adopted by the SEC as a means of satisfying the delivery requirements for proxy statements and annual reports, potentially resulting in extra convenience for stockholders and cost savings for companies. We will promptly deliver a separate copy of either document to you if you contact our Chief Financial Officer at the address listed above or call us at (650) 306-1650. If you are receiving multiple copies of our Proxy Statement and Annual Report at your household and wish to receive only one, please notify your bank, broker, or other nominee record holder, or contact our Chief Financial Officer at the address listed above.


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PROPOSAL NO. 1


ELECTION OF DIRECTORS

Nominees

The Company’sCompany’s Bylaws currently provide for no fewer than six (6) and no more than ten (10) directors, and thedirectors. The Company’s Certificate of Incorporation provides for the classification of the Board of Directors into two classes serving staggered terms. Each Class 1 and Class 2 director is elected for a two-year term, with the Class 1 directors elected in even numbered calendar years (e.g., 2020) and the Class 2 directors elected in odd numbered calendar years (e.g., 2017)2021). The Board of Directors has currently fixed the number of directors at ten (10) directors.
Fredrick Frank, a Class 1 director, has decided to retire from the Board of Directors after 21 years of service, and has elected not to stand for re-election to the Board of Directors at the Annual Meeting. In addition, pursuant to the Bylaws Amendment Proposal (Proposal No. 2), the Board of Directors is recommending that the Company’s stockholders increase the maximum size of the Board from ten (10) to twelve (12) directors. If the Bylaws Amendment Proposal is approved by the Company’s stockholders, pursuant to the terms of the Company’s Certificate of Incorporation, the Board of Directors would consist of six (6) Class 1 directors elected in even numbered years (e.g., 2018). Accordingly, atand six (6) Class 2 directors, of which six (6) Class 1 directors and one (1) Class 2 director are currently standing for nomination. If the Annual Meeting,Bylaws Amendment Proposal is not approved by the Company’s stockholders, the Board will continue to consist of five (5) Class 1 directors and five (5) Class 2 directors, willand five (5) Class 1 directors would be elected.

Thestanding for nomination.

Based on the recommendation of our Nominating and Corporate Governance Committee, our Board of Directors has nominated a total of seven (7) directors listed below, of which:
the persons named below(i)Katrina L. Houde, Nelson Obus, Andrew Powell, and Catherine A. Sohn have been re-nominated to serve as Class 1 directors,
(ii)Jeffrey Edwards has been nominated to serve as a Class 1 director to replace Mr. Frank, and
(iii)if the Bylaws Amendment Proposal is approved, Patrick Walsh has been nominated to serve as an additional Class 1 director and Joshua E. Schechterhas been nominated to serve as a Class 2 directorsdirector,
in each case, to serve until the 2019expiration of their respective terms and until their successors are duly elected and qualified, and in the case of Mr. Schechter, subject to the terms of that certain Cooperation and Support Agreement, dated August, 21, 2020 (“Cooperation Agreement”), entered into between the Company, Legion Partners Asset Management, LLC (“Legion Partners”) and certain related investors party thereto (see “Corporate Governance—Cooperation Agreement with Legion Partners” for more information). In the event that the Bylaws Amendment Proposal is not approved, stockholders who vote to nominate all of the proposed nominees will be deemed to vote for each of the nominees other than Messrs. Walsh and Schechter and the votes for Messrs. Walsh and Schechter will be disregarded.
The persons nominated to serve as Class 1 directors, if elected, shall serve until the Company’s 2022 Annual Meeting at whichof Stockholders (the "2022 Annual Meeting") and until their successors will beare duly elected and qualified. Unless otherwise instructed,Mr. Schechter, if elected, shall serve until the proxy holders will vote2021 Annual Meeting and until his successor is duly elected and qualified (subject to the proxies received by them forterms of the Company’s five (5) nominees named below.Cooperation Agreement). In the event that any nominee of the Company is unable or declines to serve as a director at the time of the Annual Meeting, the proxies to be voted in favor of such nominee will instead be voted for any nominee who shall be designated by the present Board of Directors to fill thesuch vacancy. In the event that additional persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them in such a manner as will assure the election of as many of the nominees listed below as possible, and, in such event, the specific nominees to be voted for will be determined by the proxy holders. AssumingAs of the date of this Proxy Statement, the Board of Directors is not aware of any nominee who is unable or will decline to serve as a quorumdirector. In addition, the Board of Directors has determined that each of the director nominees is present,“independent” for purposes of the NASDAQ Stock Market, LLC (“NASDAQ”) rules.

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Class 1 Directors
Name of DirectorAgePrincipal OccupationDirector Since
Katrina L. Houde62Director2019
Nelson Obus73Director2018
Andrew Powell62Director, Chairman of the Board2018
Catherine A. Sohn, Pharm.D.67Director2012
Jeffrey Edwards60Director-
Patrick Walsh (1)59Director-
(1) In the event that the Bylaws Amendment Proposal is not approved by the Company stockholders, any votes to elect Mr. Walsh will be disregarded.
Except as set forth below, each of the Class 1 directors has been engaged in the principal occupation set forth next to his or her name above during the past five (5) nomineesyears. There is no family relationship between any director and any executive officer of the Company.
Katrina L. Houde has served as a member of the Board of Directors sinceAugust 5, 2019. Ms. Houde is currently serving as an independent advisor to select food companies. Ms. Houde has served on the Board of Directors at SunOpta, Inc. (NASDAQ:STKL) since January 2000, where she also served as Chair of the Compensation Committee and as a member of the Audit Committee until November 2016. Ms. Houde served as Interim CEO for SunOpta, Inc. on two occasions, from October 2016 until March 2017 and again from January to February of 2019, and was instrumental in leading a major operational turnaround. Before and between her roles as Interim CEO of SunOpta, Inc., Ms. Houde had various consulting engagements in the food industry. Prior to becoming a food industry consultant, Ms. Houde was President of Cuddy Food Products, a division of Cuddy International Corp., from January 1999 to March 2000 and was Chief Operating Officer of Cuddy International Corp. from January 1996 to January 1999. She is a member of the board of directors of a number of private and charitable organizations. Ms. Houde holds an Honours Bachelor of Commerce degree from the University of Windsor.
Ms. Houde’s extensive experience in the food industry assists the Board of Directors and management in developing the strategic direction of the Company's wholly - owned natural food subsidiary, Curation Foods, Inc. (“Curation Foods”).
Nelson Obus has served as a member of the Board of Directors since October 2018. Mr. Obus is Managing Member of Wynnefield Capital Management, LLC and a General Partner at Wynnefield Capital, Inc. and his prior associations include positions with Schaffer Capital Management and Lazard Freres. Mr. Obus presently serves on the Board of Directors of Williams Industrial Services Group, Inc. (OTCMKTS:WLMS) (formerly Global Power Equipment Group Inc.), where he also serves as a member of the Compensation and Nominating and Corporate Governance Committees. Mr. Obus is also a director receivingof MK Acquisition LLC and previously served on the Board of Directors of Layne Christensen Company, Breeze-Eastern Corporation and Underground Solutions Inc. Mr. Obus holds a Bachelor of Arts degree from New York University and a Master of Arts in political science from Brandeis University.
Mr. Obus’ extensive financial experience with technology and small- to middle-market companies provides the Board of Directors with valuable insights of an experienced investment manager.
Andrew Powell has served as a member of the Board of Directors since October 2018. Mr. Powell is currently an independent advisor to small and mid-size companies and research institutions in the life sciences sector. He serves on the Board of Directors of Aclaris Therapeutics, Inc. (NASDAQ:ACRS), a dermatologist-led biopharmaceutical company, since 2017, where he is a member of the Audit and the Nominating and Governance Committees. He has served on the Board of Directors of Synthorx, Inc., a biotechnology company, from December 2018 until January 2020, when that company was acquired by Sanofi-Aventis. He served as Senior Vice President, General Counsel, and Corporate Secretary of Medivation, Inc. from May 2015 until November 2016, when the company was acquired by Pfizer, Inc. Mr. Powell served as Executive Vice President, General Counsel, and Corporate Secretary of InterMune, Inc. from September 2013 to March 2015, when the company was acquired by Roche, Inc. From 2005 to 2013, he served as an executive in various development stage and commercially focused biotechnology companies, including ImClone Systems, Inc., prior to its acquisition by Lilly, Inc. Earlier in his career, Mr. Powell held positions of increasing responsibility for nearly 15 years at leastthe multi-national healthcare and medical solutions company Baxter International, Inc., where he was instrumental in a majorityseries of votes casttransactions that established Baxter throughout Eastern Europe, Asia and Latin America. Mr. Powell holds a Bachelor of Arts degree from the University of North Carolina at Chapel Hill and a Juris Doctorate from Stanford Law School.
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Mr. Powell has unique expertise in the areas of commercialization strategy, expansion (both domestic and international), governance, compliance, licensing and mergers and acquisitions. He provides the Board of Directors with essential skills to define and implement the Company’s growth strategies, and his experience in the life sciences industry will be a direct benefit to Landec’s wholly-owned biomedical subsidiary, Lifecore Biomedical, Inc. (“Lifecore”).
Catherine A. Sohn, Pharm.D. has served as a member of the Board of Directors since November 2012. Dr. Sohn is an experienced public company director, former global biopharmaceutical executive, Adjunct Professor and a Certified Licensing Professional. In addition to serving on our Board of Directors, Dr. Sohn is an independent director on the Boards of Directors of three NASDAQ listed life science companies: Jazz Pharmaceuticals plc (NASDAQ:JAZZ) and Axcella Health (NASDAQ:AXLA), where she serves as a member of the Compensation and Nominating and Corporate Governance Committees for each, and Rubius Therapeutics (NASDAQ:RUBY), where she serves as a member of the Audit and Compensation Committees. From January 2014 to May 2017, Dr. Sohn served as an independent director on the board of directors of Neuralstem, Inc. (now Seneca Biopharma, Inc. (NASDAQ:SNCA)), where she served as the Chair of the Governance and Nominating Committee and as a member of the Compensation Committee. From 1998 to 2010, Dr. Sohn served as Senior Vice President for Worldwide Business Development and Strategic Alliances for GlaxoSmithKline's $6 billion Consumer Healthcare division where she served on the Global Executive Committee and led numerous U.S., global, European and Japanese M&A and licensing transactions and integrations. From 1994 to 1998, she served as Vice President, Worldwide Strategic Product Development at SmithKline Beecham for the Cardiovascular, Pulmonary, and Metabolic Therapeutic Areas with responsibility for product strategy, valuation, and strategic commercial leadership. From 1982 to 1986, Dr. Sohn served in the anti-infective medical affairs department and from 1986 to 1993 as Director in US Marketing at SmithKline & French. Dr. Sohn received a Doctor of Pharmacy from the University of California San Francisco (“UCSF”), received a Certificate of Professional Development from The Wharton School at the University of Pennsylvania, and is a Board Leadership Fellow of the National Association of Corporate Directors. Dr. Sohn currently serves as Chairman of the Board of Directors of BioEclipse Therapeutics, Inc. an emerging private clinical stage biotechnology company, and as an Adjunct Professor at UCSF.
Dr. Sohn’s extensive global leadership and operational experience in health-related sectors, including in public and private company governance, committee leadership, and transaction experience, provides the Board of Directors with significant expertise in executive leadership across pharmaceuticals and consumer products, licensing/partnering, M&A, strategy and new product development and commercial launch, which have direct benefits to both Lifecore and the Company.
Jeffrey L. Edwards is a nominee to the Board of Directors. Mr. Edwards is a member of the Board of Directors of FibroGen, Inc. (NASDAQ:FGEN), a publicly traded biopharmaceutical company, and currently serves as a chairman of its Audit Committee. Mr. Edwards serves on the Board of Directors of Bio-Rad Laboratories, Inc. (NYSE:BIO), a publicly traded life sciences research and clinical diagnostic products company, and is a member of its Audit Committee and Compliance Committee and Chairman of its Compensation Committee. Mr. Edwards also serves on the Board of Directors, Audit Committee and Compensation Committee of Clearside Biomedical Inc. (NASDAQ:CLSD), a publicly traded, clinical stage pharmaceutical company. In 2015 Mr. Edwards retired from Allergan Inc., which he joined in 1993 and where he served as Executive Vice President, Finance and Business Development, and Chief Financial Officer from September 2005 to August 2014. From 2003 to 2005, Mr. Edwards served as Allergan’s Corporate Vice President, Corporate Development, and previously served as Senior Vice President, Treasury, Tax, and Investor Relations. Prior to joining Allergan, Mr. Edwards was with Banque Paribas and Security Pacific National Bank, where he held various senior-level positions in the credit and business development functions. Additionally, Mr. Edwards serves on the Board of Directors of BioTheryX, Inc., a privately owned, clinical-stage biotechnology company. Mr. Edwards received a Bachelor of Arts. in Sociology from Muhlenberg College and completed the Advanced Management Program at the Harvard Business School.
If Mr. Edwards is elected, we believe that his extensive experience in leadership positions and expertise in the biopharmaceutical and life sciences industries, including his deep financial, capital allocation, and business development experience, would provide the Board of Directors with valuable insights and perspectives with respect to its Lifecore business and the Company’s operations overall.
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Patrick D. Walsh is a nominee to the Board of Directors. He is founder of Diligence Team, LLC, a consulting practice serving clients in the healthcare industry. Mr. Walsh has served as Chairman of the Board of Directors of ANI Pharmaceuticals, Inc. (NASDAQ:ANIP), a publicly traded specialty pharmaceutical company, since June 2018, and is a former member of its Audit and Compensation Committees. He has also served as a Director for Avid Bioservices, Inc. (NASDAQ:CDMO) since October 2017, and is Chairman of its Compensation Committee and a member of its Nominating Committee. Mr. Walsh currently serves as an Operating Partner at Ampersand Capital, a private-equity healthcare investment firm, and has served on the boards of directors of pharmaceutical companies as chairman, non-executive chairman and company director, as well as an executive advisor to private equity and venture capital firms. He also currently serves on the Board of Directors of Industria Chimica Emiliana, S.p.A. (“I.C.E.”), a privately - held specialty API supplier to the pharmaceutical industry based in Milan, Italy.
If Mr. Walsh is elected, we believe that his extensive experience in leadership positions and expertise in the biopharmaceutical and life sciences industries, including his deep operational, manufacturing, commercial, capital allocation, growth and business development experience, would provide the Board of Directors with valuable insights and perspectives with respect to the Company’s Lifecore business and the Company’s operations overall.
Fredrick Frank will retire as a Class 1 director at the time of the Annual Meeting and will not stand for reelection at the Annual MeetingMeeting.

Class 2 Directors

Nominee for Class 2 Director

Name of Director
AgePositionDirector Since
Joshua E. Schechter (1)47Director-
(1) In the event that the Bylaws Amendment Proposal is not approved by the Company stockholders, any votes to elect Mr. Schechter will be elected.disregarded

.

Set forth below is the description of the background of Mr. Schechter, the Class 2 Directnominee, and his principal occupations for at least the past five years and his public-company directorships as of the record date as well as those held during the past five years. There are no family relationships between Mr. Schechter and any director or executive officer.
orsJoshua E. Schechter

Name of Director

Age

Principal Occupation

Director Since

Albert D. Bolles, Ph.D

60

Retired Executive Vice President and Chief Technical and Operations Officer, ConAgra Foods, Inc.

2014

Deborah Carosella

60

Retired Chief Executive Officer, Madhava Natural Sweetners

2017

Tonia Pankopf

49

Managing Partner, Pareto Advisors, LLC

2012

Robert Tobin

79

Retired Chief Executive Officer, Ahold, USA

2004

Molly A. Hemmeter

50

President and Chief Executive Officer of the Company

2015

is a nominee to the Board of Directors. He is a private investor and public company director. Mr. Schechter has served as a member of the Board of Directors of Bed Bath & Beyond (NASDAQ:BBBY) since May 2019 and is Chairman of its Audit Committee. He has also served as a director of Viad Corp (NYSE:VVI), an S&P SmallCap 600 international experiential services company, since April 2015, and as Chairman of the Board of Directors of Support.com, Inc. (NASDAQ:SPRT), a leading provider of cloud-based software and services, since June 2016. From April 2018 to January 2020 he served as Chairman of the Board of Directors of SunWorks, Inc. (NASDAQ:SUNW), a premier provider of high-performance solar power solutions. From 2001 to June 2013, Mr. Schechter served as Managing Director of Steel Partners Ltd., a privately - owned hedge fund sponsor, and from 2008 to June 2013, served as Co-President of Steel Partners Japan Asset Management, LP, a private company offering investment services. Mr. Schechter earned an Masters of Public Administration in Professional Accounting and a Bachelor of Business Administration from The University of Texas at Austin.


If Mr. Schechter is elected, we believe that his experience in corporate governance matters, capital markets, acquisitions, and other transactions in a variety of industries, together with his managerial and public company board experience, would provide valuable insight to the Board of Directors.
Existing Class 2 Directors
 
Name of Director
AgePrincipal OccupationDirector Since
Albert D. Bolles, Ph.D.62President and CEO of the Company, Director2014
Deborah Carosella63Director2017
Tonia Pankopf52Director2012
Craig A. Barbarosh53Director2019
Charles Macaluso76Director2019
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Except as set forth below, each of the Class 2 directors has been engaged in the principal occupation set forth next to his or her name above during the past five years. There is no family relationship between any director and any executive officer of the Company.

Alb

ertAlbert D. Bolles, Ph.D,Ph.D. is President and Chief Executive Officer (“CEO”) of the Company and has served as a directormember of the Board of Directors since May 2014. Dr. Bolles also currently serves on the Board of Directors of SunOpta, Inc (NASDAQ:STKL), where he is a member of its Corporate Governance Committee, and serves as a director of Arcadia Biosciences, Inc. (NASDAQ:RKDA), where he is a member of its Nominating and Corporate Governance Committee. Prior to becoming the Company’s President and CEO on May 23, 2019, Dr. Bolles was Chairman of OnFood,the Company's ad hoc Food Innovation Committee and a start-up company.member of the Company's Compensation and Nominating and Corporate Governance Committees. From April 2014 until August 2015, Dr. Bolles served as the Executive Vice President, and Chief Technical andTechnology & Operations Officer of ConAgra Foods, Inc. (“ConAgra”(now Conagra Brands, Inc. (NYSE:CAG)) until his retirement in August 2015.("ConAgra"), a leading consumer products food company with net sales exceeding $16 billion. Prior to this role, Dr. Bolles led ConAgra’s Research, Quality & Innovation and Supply Chain organizations. He joined ConAgra in 2006 aswas Executive Vice President, Research, Quality & Innovation. Under his leadership,and Innovation for ConAgra, championing the development and execution of multiple new and improved products, realizing incremental growth for ConAgra Research, Quality & Innovation team broughtand facilitating a multi-year pipeline to market highly successful products that have led to substantial business growth.sustain and advance growth further. Prior to joining ConAgra in 2006, Dr. Bolles led worldwideserved as Vice President, Worldwide R&D for the Beverages and Foods division of PepsiCo, Inc. (NASDAQ:PEP), responsible for global R&D leadership for beverages (Pepsi, Gatorade, and Tropicana) and Quaker Foods including product, process, package and sensory R&D, Nutrition, Quality, and Scientific & Regulatory Affairs. His prior employment was with Gerber Foods for over 8 years with his last role being its R&D Director, overseeing infant and toddler global research and development for PepsiCo Beverages and Foods.development. Dr. Bolles serves on several professional advisory boards, including the Grocery Manufacturers Association (GMA) Scientific Regulatory Committee, and is currently the chairman of the Trout Council/Food Science program which is an endowed scholarship fund at Michigan State University in the Department of Food Science and Human Nutrition. He has a Ph.D. and master's degreeMasters of Science in food scienceFood Science, and a bachelor's degreeBachelor of Science in microbiology,Microbiology, all from Michigan State University. He holds several patents and has won numerous awards for his contributions to the world of food science.

Dr. Bolles isBolles’ service as a preeminent leader in food science and his extensive knowledge of the Company and its operations provides the Board of Directors with valuable areas of expertise in new product development, innovation, quality,, and supply chain in the packaged consumer food business.

Ms.

Deborah Carosella has served as s directora member of the Board of Directors since MarchMarch 2017. Ms. Carosella has over 30 years’years of experience in the consumer products goods industry, with both large corporations and smaller, entrepreneurial, high-growth companies. Ms. Carosella has extensive experience in the natural and organic foods industry, and particular expertise in branding,general operating management, customer and consumer strategy, strategic marketing, brand development and new product development and innovation. Most recently she served as a strategic consultant for various natural and organic food companies and as an advisor to select private equity firms. Previously, Ms. Carosella was CEO of Madhava Natural Sweeteners ("Madhava"), a Boulder, Colorado-based natural and organic sweetener company.company until December 2016. Prior to her tenure at Madhava, MsMs. Carosella was Senior Vice President of Innovation and a member of the Executive Leadership Team at Whitewave/Dean Foods. She joined Whitewave/Dean Foods from ConAgra Foods, Inc. (now Conagra FoodsBrands, Inc. (NYSE:CAG)) where she held various roles, including Vice President, General Manager, and Vice President, Strategic Marketing and Innovation, and Executive Vice President, New Platforms while serving on the Executive Leadership Team with business unitsegment specific and enterprise wideenterprise-wide responsibilities. MsMs. Carosella began her career in the advertising, branding, positioning, innovation and innovationadvertising agency business, serving as Presidentpresident of her own agency after working for several years with large, multi-national agencies.


Ms. Carosella’s holds a Bachelor of Journalism from the University of Missouri.

Ms. Carosella’s experience in consumer products and specifically in the areas of brandinggeneral operating management, customer and consumer strategy, strategic marketing, brand development and new product development and innovation provides the Board of Directors and management with expertise that will be invaluable as the Company develops its new natural products business strategies.

growth strategies for Curation Foods.

Tonia Pankopf has served as a directormember of the Board of Directors since November 2012. Ms. Pankopf currently serves on the Board of Directors of 180 Degree Capital Corp (NASDAQ:TURN) and previously served on the Board of Directors of Oxford Square Capital Corporation (NASDAQ:OXSQ) (formerly TICC Capital Corporation), for which she served as Chair of the Compensation Committee and as a member of each of the Audit Committee, Nominating and Corporate Governance Committee, and Valuation Committee. Ms. Pankopf has been managing partner of Pareto Advisors, LLC since 2005. Previously, she was a senior analystShe brings 25 years of investment experience in researching and valuing equity and debt securities and managing directorcapital market transactions for domestic and international public and private companies. She has held Vice President and Senior Equity Analyst positions at Palladio Capital Management from January 2004 through April 2005. From 2001 to 2003,Goldman, Sachs & Co., Merrill Lynch & Co. and was an investment banker at Deutsche Morgan Grenfell. Further, Ms. Pankopf served asPankopf's has been an analyst and portfolio manager with P.A.W. Capital Partners LP.and a senior equity analyst and managing director with Palladio Capital Management. Ms. Pankopf was a senior analyst and vice president at Goldman, Sachs & Co. from 1999 to 2001 and at Merrill Lynch & Co. from 1998 to 1999. From November 2003 until July 2017, she was a member of the board of directors of TICC Capital Corp, a business development company, having served on its Audit, Valuation, Nominating and Corporate Governance Committees and chairing its Compensation Committee. Ms. Pankopfhas also served on the Board of the University System of Maryland Foundation, from 2006 to 2012. Ms. Pankopfand is a Governance Fellow and member of the NACD and is an NACD Board Leadership Fellow in recognitionNational Association of her ongoing involvement in director professionalism and engagement with the director community.Corporate Directors. Ms. Pankopf received a Bachelor of Arts degree summa cum laude from the University of Maryland and an M.S.a Master of Science degree from the London School of Economics.

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Ms. Pankopf’s extensive financial experience with technology and middle-market companies provides the Board of Directors with valuable insights of an experienced investment manager and strategic financial advisor as well as knowledge of corporate governance issues.

Robert Tobin

Craig Barbarosh, has served as a director since December 2004. Mr. Tobin retired from his position as Chief Executive Officermember of Ahold USA, a food retailer, in 2001. Mr. Tobin has over 40 years of industry experience in the food retail and food service sectors, having served as Chairman and CEO of Stop and Shop Supermarkets. An industry leader, Mr. Tobin serves on the advisory boards of the College of Agriculture and Life Sciences and the Undergraduate Business Program at Cornell University where he received his B.S. in Agricultural Economics.

Mr. Tobin’s experience as the chief executive officer of food retailers and his knowledge of the food retail and food service sectors provide the Board of Directors with significant expertise with respect to issues facing the Company’s food business. In addition, Mr. Tobin’s service on advisory boards provides the Board of Directors with knowledge of the scientific issues that face Apio, Inc. (“Apio”).

Molly A. Hemmeter has been the Company’s President and Chief Executive Officer since October 15, 2015. Prior to that she served as the Chief Operating Officer of the Company from January 2014 to October 2015, prior to which she served as Chief Commercial Officer of the Company from December 2010 to January 2014 and Vice President, Business Development and Global Marketing of the Company from June 2009 to December 2010. From July 2006 until joining the Company in June 2009, Ms. Hemmeter was Vice President of Global Marketing and New Business Development for the Performance Materials division of Ashland, Inc., a global specialty chemicals company. Prior to joining Ashland, Inc., Ms. Hemmeter was Vice President of Strategy and Marketing for Siterra Corporation and Chief Marketing Officer for CriticalArc Technologies in the San Francisco Bay Area, both of which were privately held software startup companies that were eventually acquired by larger entities, and she previously held various positions at Bausch & Lomb and Eli Lilly and Company. Ms. Hemmeter received a B.E.S. and M.Eng. from the University of Louisville and an M.B.A. from Harvard University.

Ms. Hemmeter’s significant knowledge and understanding of the Company and its businesses, together with her extensive experience in operations, business development and marketing, has enabled Ms. Hemmeter to lead several of Landec’s significant growth initiatives. Ms. Hemmeter was an integral part of the teams that completed the acquisition of Lifecore in 2010, the financing of Windset Holdings 2010 Ltd. (“Windset”) in 2011, the acquisition of GreenLine Holding Company in 2012 and the acquisition of O Olive Oil, Inc. (“O Olive”) in 2017. More recently, Ms. Hemmeter was instrumental in creating and developing Apio’s line of salad kit products, the fastest growing products in Landec’s long history.


Nominees for Class 1 Directors

Name of Director

Age

Principal Occupation

Director Since

Gary T. Steele

68

Retired Chief Executive Officer of the Company

1991

Frederick Frank 

85

Chairman, Evolution Life Sciences Partners

1999

Steven Goldby

77

Partner, Venrock and Chairman of the Board of Directors of the Company

2008

Catherine A. Sohn, Pharma.D. 

64

Retired Senior Executive, Glaxo Smith Kline plc

2012

Except as set forth below, each of the Class 1 directors has been engaged in the principal occupation set forth next to his or her name above during the past five years. There2019. Mr. Barbarosh is no family relationship between any director and executive officer of the Company.

Gary T. Steele served as President and Chief Executive Officer of the Company until his retirement in October 2015. Mr. Steele has beenalso a director of Nextgen Healthcare, Inc. (NASDAQ:NXGN) since September 1991 and was2009, where he is currently the Vice Chairman of the Board of Directors, from January 1996 until his retirement. Mr. Steele has over 30 years of experience in the biotechnology, instrumentation and material science fields. From 1985 to 1991, Mr. Steele was President and Chief Executive Officer of Molecular Devices Corporation, a bioanalytical instrumentation company. From 1981 to 1985, Mr. Steele was Vice President, Product Development and Business Development at Genentech, Inc., a biomedical company focusing on pharmaceutical drug development. Mr. Steele has also worked with McKinsey & Company and Shell Oil Company. Mr. Steele received a B.S. from Georgia Institute of Technology and an M.B.A. from Stanford University.

Mr. Steele’s significant knowledge and understandingChairman of the CompanyCompensation Committee and its businesses together with his extensive experience in buildinga member of the Nominating and growing technology companies provideGovernance Committee. He is also a director of Sabra Health Care REIT, Inc. (NASDAQ:SBRA), where he is the Chair of the Audit Committee and a member of the Compensation Committee. Mr. Barbarosh previously served on the Board of Directors with significant insight intoof Aratana Therapeutics, Inc., where he was a member of the Company’s businessesCompensation Committee and operations.

Frederick Frank hasChair of the Strategic Review Committee, BioPharmX, Inc. (now Timber Pharmaceuticals, Inc. (NYSE:TMBR)), where he was the Chair of the Nominating and Governance Committee and a member of the Audit and Compensation Committees, and Bazaarvoice, Inc. (NASDAQ:BV), where he was a member of the Compensation Committee. Mr. Barbarosh also served as the independent board observer for Payless Holdings, LLC and is the independent director for Hytera America, Inc. Mr. Barbarosh has been a partner at the international law firm of Katten Muchin Rosenman LLP (“Katten”) since December 1999. Mr. Frank is ChairmanJune 2012 and was previously a partner of the Boardinternational law firm of Evolution Life Sciences Partners. Prior to joining Evolution Life Science Partners,Pillsbury Winthrop Shaw Pittman LLP (“Pillsbury”). Mr. Frank was ChairmanBarbarosh is a nationally recognized restructuring expert who, during the nearly three decades of his legal career, has represented lenders, indenture trustees and bondholders and other investors and their agents in some of the largest corporate restructuring cases in the country. He served in several leadership positions while a partner at Pillsbury, including serving on the firm’s Managing Board, of Burrill Securities. Prior to joining Burrill Securities, Mr. Frank was Vice Chairmanas the Chair of Peter J. Solomon Company (“Solomon”). Before joining Solomon, Mr. Frank was Vice Chairman of Lehman Brothers, Inc. (“Lehman”) and Barclays Capital. Before joining Lehmanthe firm’s Board’s Strategy Committee, as a co-leader of the firm’s national Insolvency & Restructuring practice and as the Managing Partner in October 1969,of the firm’s Orange County office. At Katten, Mr. Frank was co-director of research, as well as Vice President and Director of Smith Barney & Co. Incorporated. During his over 50 years on Wall Street, Mr. Frank has been involved in numerous financings and merger and acquisition transactions. He servedBarbarosh completed a seven-year term on the Advisory Board of PDL BioPharma, and was a director for the Institute for Systems Biology and Pharmaceutical Product Development, Inc. Mr. Frank is Chairman of the National Genetics Foundation and he serves on the Advisory Boards for Yale School of Organization and Management and the Massachusetts Institute of Technology Center of Biomedical Innovation and was formerly an Advisory Member of the Johns Hopkins Bloomberg School of Public Health, and the Harvard School of Public Health. He is a graduate of Yale University, received an M.B.A. from Stanford University and is a Chartered Financial Analyst.

Mr. Frank has over 50 years of capital markets experience and has been involved in numerous financings, commercial transactions and mergers and acquisitions. As such, Mr. Frank provides thefirm’s Board of Directors with extensive experience and knowledge with respect to transactions and financings inincluding a four-year term on the public company context and corporate governance experience based on his experience as a director of public and non-public companies.

Steven Goldby has served as a director since December 2008 and Chairmanfirm’s twelve-person Executive Committee, which oversees the business operations of the Board of Directors in a non-executive capacity since October 2015.firm. Over the past 13 years, Mr. GoldbyBarbarosh has been a Partner at Venrock, a venture capital firm, since 2007. Mr. Goldby was Chairmanreceived certificates from Harvard Business School for completing executive education courses on Private Equity and Chief Executive Officer of Symyx Technologies, Inc. (“Symyx”) from 1998 to 2007; he became the Executive Chairman in 2008,Venture Capital, Financial Analysis for Business Evaluation and Chairman in 2009. Before joining Symyx, Mr. Goldby served as Chief Executive Officer for more than ten years at MDL Information Systems, Inc., the enterprise software company that pioneered scientific information management. Earlier, Mr. Goldby held various management positions at ALZA Corporation, including President of Alza Pharmaceuticals. Mr. Goldby received a B.S. degree in chemistryEffective Corporate Boards, from the University of North CarolinaPennsylvania Wharton School program on Corporate Valuation, and from the Carnegie Mellon University program in Cybersecurity Oversight. Mr. Barbarosh is also a frequent speaker and author on restructuring and governance issues and has published several articles addressing business, governance, and legal topics. Mr. Barbarosh received a Juris Doctorate from the University of the Pacific, McGeorge School of Law in 1992, with distinction, and a law degreeBachelor of Arts in Business Economics from Georgetownthe University Law Center.of California at Santa Barbara in 1989.

Mr. Goldby’sBarbarosh’s extensive background serving in various leadership roles and experience with biotechnology companiesas a practicing attorney specializing in the area of financial and operational restructuring and related transactions provides theour Board of Directors with significant understanding of the technology issues facing the Company.and management team valuable guidance on transactions, securities offerings, compliance, governance, executive compensation, shareholder relationships, leadership coaching and development.
Charles Macaluso


Catherine A. Sohn, Pharm. D. has served as a member of ourthe Board of Directors since October 2019. He is a principal of Dorchester Capital Advisors, LLC, a management consulting and corporate advisory service firm focusing on operational assessment, strategic planning and workouts. Mr. Macaluso currently serves on the Board of Directors of Darling Ingredients Inc. (NYSE:DAR), a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, where he serves as independent lead director of the board and as Chairman of directors since November 2012.  Dr. Sohn is the founderNominating and Corporate Governance Committee. He also serves on the Board of Sohn Health Strategies, where since 2010 she has consulted for pharmaceutical, biotechnology, medical device and consumer healthcare companiesDirectors of Pilgrim’s Pride Corporation, a company primarily engaged in the areasproduction, processing, marketing and distribution of business strategy, business developmentfresh, frozen and strategic product development.  She has beenvalue-added chicken products to retailers, distributors and foodservice operators, where he also serves on the Audit Committee. Additionally, Mr. Macaluso serves on the Board of Directors of Williams Industrial Services Group Inc. (OTCMKTS:WLMS) (formerly Global Power Equipment Group, Inc.), a company engaged in a broad range of construction, maintenance and support services to customers in energy, power and industrial end markets, where he also serves as Chairman of the Board and as member of its Audit, Compensation and Nominating and Corporate Governance Committees. Previously, Mr. Macaluso also served on the Boards of Directors of GEO Specialty Chemicals, The Elder-Beerman Stores Corp. and Global Crossing Limited. He is also a member of the board of director of Jazz Pharmaceuticals plc, an international biopharmaceutical company, since July 2012.  From 1982 to 2010, she was with GlaxoSmithKline plc, an international pharmaceutical company, where she served most recently as Senior Vice President, Worldwide Business Development and Strategic Alliances in the $8 billion GSK Consumer Healthcare division.   Previously she was Vice President, Worldwide Strategic Product Development at SmithKline Beecham Pharmaceuticals plc.  Before that, she held a series of positions in U.S. Product Marketing, Pharmaceutical Business Development and Medical Affairs, at SmithKline Beecham and its predecessor company, SmithKline & French.  Dr. Sohn currently holds the position of Adjunct Professor at the University of California, San Francisco.  She received a Pharm.D. from the University of California, San Francisco.  She also received a Certificate of Professional Development from the Wharton School at the University of Pennsylvania.  Dr. Sohn was named Woman of the Year by the Healthcare Businesswomen's Association in 2003 and the UCSF Distinguished Alumnus in 2000. She is a Certified Licensing Professional and a National Association of Corporate Directors.

Mr. Macaluso’s extensive executive and financial expertise, ample public company experience and distinguished career focused on operational assessment, strategic planning, crisis management and turnaround advisory services are an asset to the Board of Directors.
Board Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE SEVEN NAMED DIRECTOR NOMINEES.

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PROPOSAL NO. 2

Amendment to Bylaws to Increase the Maximum Size of the Company’s Board of Directors (NACD) Board Leadership Fellow.

With over 30 years of experience in health-related sectors, Dr. Sohnto 12 Directors

The Company’s Amended and Restated Bylaws (as amended, the “Bylaws”) currently provides that the Board of Directors of the Company shall consist of a minimum of six (6) and a maximum of ten (10) directors. Pursuant to the terms of the Bylaws, any amendment to the Bylaws changing the authorized number of directors (except to fix the authorized number of directors within the range) may only be adopted by the affirmative vote of at least a majority of the voting power of all of the then-outstanding shares of the voting stock of the Company entitled to vote.
The Board of Directors hereby requests that the Company’s stockholders increase the maximum number of authorized directors from ten (10) directors to twelve (12) directors. Specifically, the Board of Directors hereby requests that the Company’s stockholders approve the following amendment to the Bylaws (the “Bylaws Amendment Proposal”):

“The first sentence of Section 3.2 of the By-Laws of Landec Corporation shall be amended and restated to read in its entirety as follows:
‘The authorized number of directors shall be no fewer than six (6) and no more than twelve (12).’”
The Bylaws Amendment Proposal will not affect the Board of Director’s ability to fix the number of directors within the authorized range, nor will it affect the requirement that the Company obtain an affirmative vote of at least a majority of the voting power of all of the then-outstanding shares of the voting stock of the Company entitled to vote to change the authorized number of directors (except to fix the authorized number of directors within the range).
The Board of Directors believes that increasing the maximum size of the Board of Directors to 12 directors is in the best interests of the Company and its stockholders. The Board of Directors believes that the Bylaws Amendment Proposal will allow for more diverse perspectives on the Board of Directors and will enhance its overall collective effectiveness. This increase will allow all 12 individuals nominated by the Board of Directors to serve as directors on the Board of Directors.
As noted in Proposal No. 1., if the Bylaws Amendment Proposal is approved, the Board of Directors has nominated Patrick Walsh to serve as an additional Class 1 director and Joshua E. Schechterto serve as an additional Class 2 director, in each case, to serve until the expiration of their respective terms and until their successors are duly elected and qualified.

Board Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE AMENDMENT TO THE BYLAWS TO INCREASE THE MAXIMUM SIZE OF THE COMPANY’S BOARD OF DIRECTORS TO 12 DIRECTORS.
11

PROPOSAL NO. 3

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors (the “Audit Committee”) has appointed the firm of Ernst & Young LLP as the Company’s independent registered public accounting firm to audit the financial statements of the Company for the fiscal year ending May 30, 2021, and recommends that the stockholders vote for ratification of this appointment. In the event the stockholders do not ratify such appointment, the Audit Committee may reconsider its selection. Ernst & Young LLP has audited the Company’s financial statements since the fiscal year ending May 25, 2008. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting with the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.
Fees Paid to Independent Registered Public Accounting Firm
The following table presents the aggregate fees billed to the Company for professional services rendered by Ernst & Young LLP for the fiscal years ended May 31, 2020 and May 26, 2019.

Fee Category
Fiscal Year
2020
Fiscal Year
2019
Audit Fees$2,586,000 $1,973,000 
Audit-Related Fees— — 
Tax Fees— — 
All Other Fees— — 
Total$2,586,000 $1,973,000 

Audit Fees were for professional services rendered for the integrated audit of the Company’s annual financial statements and internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, for the review of the Company’s interim financial statements included in the Company’s Quarterly Reports on Form 10-Q, and for assistance with and review of documents filed by the Company with the SEC and investigations relating to potential environmental and Foreign Corrupt Practices Act compliance matters associated with regulatory permitting at the Company's guacamole manufacturing plant in Mexico.
Audit Committee Pre-Approval Policies
The Audit Committee pre-approves all audit and permissible non-audit services provided by the Company’s independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Company’s independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with such pre-approval, and the fees for the services performed to date. The Audit Committee, or its designee, may also pre-approve particular services on a case-by-case basis. 
Required Vote
The ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm requires the affirmative vote of the holders of a majority of the shares of the Company’s Common Stock present at the Annual Meeting or by proxy and voted on this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING MAY 30, 2021.

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PROPOSAL NO. 4

NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Compensation Discussion and Analysis within Executive Compensation and Related Information of this Proxy Statement describes the Company’s executive compensation program and the compensation decisions that the Board of Directors and the Compensation Committee of the Board of Directors (the "Compensation Committee) made in fiscal year 2020 with respect to the compensation of our named executive officers. The Board of Directors is asking stockholders to cast a non-binding, advisory vote FOR the following resolution:

“RESOLVED, that the fiscal 2020 compensation paid to Landec Corporation's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in Landec Corporation's proxy statement for the 2020 annual meeting of stockholders, is hereby APPROVED on an advisory basis.”

We urge stockholders to read the Compensation Discussion and Analysis within Executive Compensation and Related Information of this Proxy Statement, as well as the Summary Compensation Table and related compensation tables directly following the Compensation Discussion and Analysis, which provide detailed information on the Company’s compensation policies and practices.

As we describe in the Compensation Discussion and Analysis, our executive compensation program is designed to attract, reward and retain talented officers and embodies a pay-for-performance philosophy that supports the Company’s business strategy and aligns the interests of our executives with our stockholders. Specifically, executive compensation is allocated among base salaries and short- and long-term incentive compensation. The base salaries are fixed in order to provide the executives with a stable cash income, which allows them to focus on the Company’s strategies and objectives as a whole, while the short- and long-term incentive compensation are designed to both reward the named executive officers based on the Company’s overall performance and align the named executive officers’ interests with those of our stockholders. Our annual cash incentive award program is intended to encourage our named executive officers to focus on specific short-term goals important to our success. Our executive officers’ annual cash incentive awards are determined based on objective performance criteria. The Company’s current practice with respect to long-term incentive compensation is to grant our named executive officers primarily stock options, but occasionally restricted stock units as well. This mixture is designed to provide a balance between the goals of increasing the price of our Common Stock and aligning the interests of our executive officers with those of our stockholders (as stock options only have value if our stock price increases after the option is granted) and encouraging retention of our executive officers. Because grants are generally subject to vesting schedules, they help ensure that executives always have significant expertisevalue tied to long-term stock price performance.

For these reasons, the Board of Directors is asking stockholders to support this proposal. Although the vote we are asking you to cast is non-binding, the Compensation Committee and the Board of Directors value the views of our stockholders and will consider the outcome of the vote when determining future compensation arrangements for our named executive officers.

At our 2017 Annual Meeting of Stockholders, the Company’s stockholders recommended, on an advisory basis, that the stockholder vote on the compensation of our named executive officers occur every year. In light of the foregoing recommendation, the Company has determined to hold a “say-on-pay” advisory vote every year. Accordingly, our next advisory say-on-pay vote (following the non-binding advisory vote at this Annual Meeting) is expected to occur at our 2021 annual meeting of stockholders.

At the 2019 Annual Meeting of Stockholders, 98% of votes cast expressed support for our compensation policies and practices, and we believe our program continues to be effective.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.

13

AUDIT COMMITTEE REPORT

Composition
The Audit Committee consists of the four directors whose names appear below and operates under a written charter adopted by the Board of Directors. Each member of the Audit Committee meets the independence and financial experience requirements of NASDAQ and the SEC currently in business development, strategic marketingeffect. In addition, the Board of Directors has determined that each of Ms. Pankopf and new product development within healthcare,Ms. Houde is an audit committee financial expert, as defined by the rules and regulations of the SEC.
Responsibilities
The responsibilities of the Audit Committee include appointing an independent registered public accounting firm and assisting the Board of Director’s oversight of the preparation of the Company’s financial statements. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report thereon. Management is responsible for the Company’s internal controls and financial reporting process. The Audit Committee’s responsibility is to oversee these processes and the Company’s internal controls. The Audit Committee members are not acting as professional accountants or auditors, and their functions are not to duplicate or to certify the activities of management and the independent registered public accounting firm.
Review with Management and Independent Auditors
The Audit Committee held four meetings during fiscal year 2020. The Audit Committee met and held discussions with management and representatives of the Company’s independent registered public accounting firm, Ernst & Young LLP. Management represented to the Audit Committee that the Company’s consolidated financial statements for the fiscal year ended May 31, 2020 were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements for the fiscal year ended May 31, 2020 with management and the Company’s independent registered public accounting firm.
The Audit Committee met with the Company’s independent registered public accounting firm, with and without management present, to discuss the overall scope and plans for their audit, the results of their examination, their evaluation of the Company’s internal controls and the overall quality of the Company’s financial reporting. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards (“SAS”) No. 114, The Auditor’s Communication with Those Charged with Governance, as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T, which supersedes SAS No. 61, as amended, including the judgment of the independent registered public accounting firm as to the quality of the Company’s accounting principles.
The Audit Committee has received the written disclosures and the letter from Ernst & Young LLP required by the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence, and has discussed with Ernst & Young LLP its independence.
Summary
Based upon the Audit Committee’s discussions with management and the Company’s independent registered public accounting firm, the Audit Committee’s review of the representations of management and the report of the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020, as filed with the SEC.
This report is submitted by the Audit Committee.
Tonia Pankopf (Chairperson)
Katrina L Houde
Charles Macaluso
Catherine A. Sohn, Pharm.D.

The foregoing report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Company specifically incorporates it by reference into a direct benefit to Landedocument filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
14
c’s wholly-owned biomedical subsidiary, Lifecore Biomedical, Inc. (“Lifecore”).

CORPORATE GOVERNANCE

Board of Directors Meetings and Committees

The Board of Directors held a total of fivenine meetings during the fiscal year ended May 28, 2017.2020. Each director attended at least 75% of all Board and applicable committee meetings during fiscal year 2017.2020. The Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each of which operates under a written charter approved by the Board of Directors.Directors which was reviewed and updated as appropriate in fiscal year 2020. The charter for each of the committees is available on the Company’s website (http://landec.com)(www.landec.com). The Board of Directors also has aan ad hoc Food Innovation Committee and an ad hoc Special Committee. It is our policy to encourage the members of the Board of Directors to attend the Company’s annual meeting of stockholders. All directors onmembers of the Board of Directors at the time attended our 20162019 Annual Meeting of Stockholders.

The Audit Committee currently consists of Ms. Pankopf (Chairperson), Mr. GoldbyDr. Sohn, Ms. Houde, and Mr. Tobin.Macaluso. In thethe determination of the Board of Directors, each of Ms. Pankopf, Mr. Goldby,Dr. Sohn, Ms. Houde and Mr. TobinMacaluso meets the independence requirements of the SecuritiesSEC and Exchange Commission (the “NASDAQ, including the heightened independence requirements for audit committee membership pursuant to SEC”) requirements. The Board of Directors has also determined that each of Ms. Pankopf and The Nasdaq Stock Market, LLC (“NASDAQ”).Ms. Houde is an “audit committee financial expert” within the meaning of applicable SEC rules. The Audit Committee assists the Board of Directors in its oversight of Company affairs relating to the quality and integrity of the Company’s financial statements, the qualifications and independence of the Company’s independent registered public accounting firm, the performance of the Company’s internal audit function and independent registered public accounting firm, and the Company’s compliance with legal and regulatory requirements. The Audit Committee is responsible for appointing, compensating, retaining and overseeing the Company’s independent registered public accounting firm, approving the services performed by the independent registered public accounting firm and reviewing and evaluating the Company’s accounting principles and its system of internal accounting controls. Rules adopted by the SEC require us to disclose whether theThe Audit Committee includes at least one member who is an “audit committee financial expert,” as that phrase is defined in SEC rulesalso responsible for administering our Related Party Transaction Policy, and regulations. The Board of Directors has determined that Ms. Pankopfreviewing and Mr. Goldby are “audit committee financial experts” within the meaning of applicable SEC rules.approving all such related party transactions. The Audit Committee held four meetings during fiscal year 2017.2020. Please see the section entitled “Audit Committee Report” for further matters related to the Audit Committee. The Board has adopted a written charter for the Audit Committee. The Audit Committee reviews the charter annually for changes, as appropriate.

changes.

The Compensation Committee currently consists of Dr. Sohn (Chairperson)Ms. Carosella (Chairperson), Mr. FrankBarbarosh, Mr. Obus, and Dr. Bolles.Sohn. In the determination of the Board of Directors, each of Dr. Sohn,Ms. Carosella, Mr. Frank,Barbarosh, Mr. Obus, and Dr. BollesSohn meets the current independence requirements of the SEC and NASDAQ. The function of the Compensation Committee is to review and set the compensation of the Company’s Chief Executive OfficerCEO and certain of the Company’s most highly compensated officers, including salary, bonuses and other cash incentive awards, and other forms of compensation, and to administer the Company’s stock plans and approve stock equity awards, and to oversee the career development of senior management.awards. The Compensation Committee held fiveeight meetings during fiscal year 2017.

2020. The Board has adopted a written charter for the Compensation Committee. The Compensation Committee reviews the charter annually for changes.

The Nominating and Corporate Governance Committee currently consists of Mr. Frank (Chairperson)Powell (Chairperson), Mr. Tobin,Frank, Mr. Obus, and Ms. Pankopf, and Dr. Bolles, each of whom, in the determination of the Board of Directors, meets the current independence requirements of the SEC and NASDAQ. The functions of the Nominating and Corporate Governance Committee are to recommend qualified candidates for appointment and election as executive officers and directors of the Company, and oversee the Company’s corporate governance policies.policies, and lead the annual self-evaluation of the Board of Directors. Mr. Powell assumed the role of Chairperson of the Nominating and Corporate Governance Committee in January 2020 on an interim basis. It is anticipated that another director will assume this role following the 2020 Annual Meeting. The Nominating and Corporate Governance Committee held twothree meetings during fiscal year 2017.


2020. The Board has adopted a written charter for the Nominating and Corporate Governance Committee. The Nominating and CorporCorporate Governance Committee reviews the charter annually for changes.

15
ate
The Nominating and Corporate Governance Committee will consider director nominees proposed by current directors, officers, employees, and stockholders. Any stockholder who wishes to recommend candidates for consideration by the Nominating and Corporate Governance Committee may do so by writing to the Secretary of the Company, Geoffrey P. Leonard of King & Spalding LLP, 101 Second Street, Suite 2300, San Francisco, CA 94105,Brian McLaughlin, and providing the candidate’s name, biographical data, and qualifications. The Company does not have a formal policy regarding the consideration of director candidates recommended by stockholders. The Company believes this is appropriate because the Nominating and Corporate Governance Committee evaluates any such nominees based on the same criteria as all other director nominees. In selecting candidates for the Board of Directors, the Nominating and Corporate Governance Committee strives for a variety of experienceexperiences and backgroundbackgrounds that addsadd depth and breadth to the overall character of the Board of Directors. The Nominating and Corporate Governance Committee evaluates potential candidates using standards and qualifications, such as the candidates’ business experience, independence, diversity, skills and expertise to collectively establish a number of areas of core competency of the Board of Directors, including business judgment, management and industry knowledge. Although the Nominating and Corporate Governance Committee does not have a formal policy on diversity, it believes that diversity is an important consideration in the composition of the Board of Directors, and it seeks to include Board members with diverse backgrounds and experiences. Further criteria include the candidates’ integrity and values, as well as the willingness to devote sufficient time to attend meetings and participate effectively on the Board of Directors and its committees.

The Food Innovation Committee currently consists of Dr. BollesMs. Carosella (Chairperson) and Ms. Carosella, each of whom,Houde, who in the determination of the Board of Directors, meetsboth meet the current independence requirements of the SEC and NASDAQ. The function of the Food InnovationInnovation Committee is to provide advice and make recommendations to the Board and to management with regard to food management, including new agricultural techniques, plant optimization strategies and new product development insights. The function of the Food Innovation Committee further entails making possible changes to current practices within the Company’s food business and making recommendations concerning new areas for the Company to pursue. As Chairman of theThe Food Innovation Committee Dr. Bolles spent approximately eight daysheld no formal meetings during fiscal year 20172020.
The Lifecore Innovation Committee was dissolved on siteOctober 16, 2019. Prior to its dissolution, the Lifecore Innovation Committee consisted of Dr. Sohn (Chairperson), Mr. Frank, and Mr. Powell, each of whom, in the determination of the Board of Directors, met the applicable independence requirements of the SEC and NASDAQ. The function of the Lifecore Innovation Committee was to provide advice and make recommendations to the Board of Directors and to management with regard to biomaterials management, including new biomaterial techniques, plant/equipment optimization strategies and new product development insights. The Lifecore Innovation Committee also looked at Apio or in teleconferences withmaking changes to current practices within the President of Apio and/or his executive team. Since joiningCompany’s biomaterials business and making recommendations concerning new areas for the Company to pursue. The Lifecore Innovation Committee held no meetings during fiscal year 2020.
The Special Committee, formed by the Board of Directors in March 2017,October 2019, currently consists of Mr. Barbarosh (Chairperson), Mr. Obus, Ms. Carosella has worked closelyPankopf and Mr. Powell, each of whom, in the determination of the Board of Directors, meets the current independence requirements of the SEC and NASDAQ. The function of the Special Committee is to oversee the previously disclosed internal investigation relating to potential environmental and Foreign Corrupt Practices Act compliance matters associated with regulatory permitting at the CEO and senior marketing executives on the innovation and strategic marketing strategies for Apio for the coming year.

Company’s guacamole manufacturing plant in Mexico. The Special Committee held 13 meetings during fiscal year 2020.

Corporate Governance

The Company provides information about its corporate governance policies, including the Company’sCompany’s Code of Ethics, Corporate Governance Guidelines, and charters for the Audit, Nominating and Corporate Governance, and Compensation Committees of the Board of Directors on the Corporate Governance page of its website. The website can be found at www.landec.com.

The Company’sCompany’s policies and practices reflect corporate governance initiatives that are compliant with the listing requirements of NASDAQ and the corporate governance requirements of the Sarbanes-Oxley Act of 2002, including:

A majority of the•All members of the Board of Directors, and all director nominees, are independent;

independent, other than Dr. Bolles;


•All members of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee and the Food Innovation Committee are independent;


•The independent members of the Board of Directors meet at each board meeting, and at least twice per year, in executive sessions without the presence of management.management or non-independent directors. The Board of Directors will designate a lead independent director or ahas designated Mr. Powell as non-executive Chairman of the Board, who, among other duties, is responsible for presiding over executive sessions of the independent directors and setting the agenda for each board meeting with the CEO and with input from the independent directors;

16


•The Company has an ethics hotline available to all employees, and the Audit Committee has procedures in place for the anonymous submission of employee complaints regarding accounting, internal controls, or auditingauditing matters; and


•The Company has adopted a Code of Ethics that applies to all of its directors, officers, and employees including(including the Company's its principal executive officer, principal financial officer, principal accounting officer, and all members of itsthe Company's finance department, including the principal financial officer and principal accounting officer, as well as the Board of Directors.department. Any substantive amendments to the Code of Ethics or grant of any waiver, including any implicit waiver, from a provision of the Code of Ethics to the Company’s principal executive officer, principal financial officer or principal accounting officer, will be disclosed either on the Company’s website or in a reportCurrent Report on Form 8-K.



Following a review of all relevant relationships and transactions between each director (including each director’sdirector’s family members) and the Company, the Board has determined that each member of the Board or nominee for election to the Board, other than Mr. Steele and Ms. Hemmeter,Dr. Bolles, is an independent director under applicable NASDAQ listing standards. Mr. Steele and Ms. Hemmeter doDr. Bolles does not meet the independence standards because Mr. Steele was an employee of the Company within the past three years and Ms. Hemmeterhe is currently an employee of the Company.


Leadership Structure of the Board of Directors

The Board of Directors believes that it is important to retain its flexibility to allocate the responsibilities of the positions of the Chairman of the Board (the “Chairman”“Chairman”) and Chief Executive OfficerCEO in the way that it believes is in the best interests of the Company. The Board of Directors does not have a formal policy with respect to whether the Chief Executive Officer should also serve as Chairman. Rather, the Board of Directors makes this decision based on its evaluation of current circumstances and the specific needs of the Company at any time it is considering either or both roles.

With the retirement of Mr. Steele as Chief Executive Officer and the election of Ms. Hemmeter as the Company’s new Chief Executive Officer in October 2015, the Board of Directors determined that the roles of Chairman and Chief Executive Officer should be separated and Mr. Goldby therefore assumed the role of non-executive Chairman in October 2015.

The Board of Directors believes that the appointment of Mr. GoldbyPowell as non-executive Chairman allows the Chief Executive Officer,CEO, who also possesses significant business and industry knowledge, to lead and speak on behalf of both the Company and the Board of Directors, while also providing for effective independent oversight by non-management directors through a non-executive Chairman.

At each Board of Directors meeting, the non-executive Chairman presides over an executive session of the non-management directors without the presence of management. The non-executive Chairman also may call additional meetings of the non-management directors as he deems necessary. If the Board did not have a non-executive Chairman, the lead independent director would serve as a liaison between the Chairman and the non-management directors; advise the Chairman of the informational needs of the Board of Directors and approve information sent to the Board of Directors; and would be available for consultation and communication if requested by major stockholders.

The Board of Directors also adheres to sound corporate governance practices, as reflected in the Company’sCompany’s corporate governance policies, which the Board of Directors believes has promoted, and continues to promote, the effective and independent exercise of leadership by the Board leadershipof Directors for the Company and its stockholders.

Stockholder Communications

Our Board of DirectorsDirectors welcomes communications from our stockholders. Stockholders and other interested parties may send communications to the Board of Directors, or the independent directors as a group, or to any director in particular, including the Chairman, c/o Gregory S. Skinner,by sending such communication to the Chief Financial Officer, Landec Corporation, 3603 Haven Avenue, Menlo Park,2811 Airpark Drive, Santa Maria, CA 94025.93455. Any correspondence addressed to the Board of Directors or to any one of our directors in care of Mr. Skinner will be promptly forwarded to the addressee. The independent directors review and approve the stockholder communication process periodically to ensure effective communication with stockholders.

Oversight of Risk Management

The Board of Directors’Directors’ role in the Company’s risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic and reputational risks. Our Audit Committee oversees management of financial risk exposures, including the integrity of our accounting and financial reporting processes and controls. As part of this responsibility, the Audit Committee meets periodically with the Company’s independent registered public accounting firm, our internal auditor and our financial and accounting personnel to discuss significant financial risk exposures and the steps management has taken to monitor, control and report such exposures. Additionally, the Audit Committee reviews significant findings prepared by the Company’s independent registered public accounting firm and our internal auditor, together with management’s response. Our Nominating and Corporate Governance Committee has responsibility for matters relating to corporate governance. As such, the charter for our Nominating and Corporate Governance Committee provides for the committee to periodically review and discuss our corporate governance guidelines and policies.


17


Our management also reviewed with our Compensation Committee and the Board of Directors the compensation policies and practicespractices of the Company that could have a material impact on the Company. Our management review considered whether any of these policies and practices may encourage inappropriate risk-taking, whether any policy or practice may give rise to risks that are reasonably likely to have a material adverse effect on the Company, and whether it would recommend any changes to the Company’s compensation policies and practices. Management also reviewed with the Board of Directors risk-mitigating controls such as the degree of committee and senior management oversight of each compensation program and the level and design of internal controls over such programs. Based on these reviews, the Board of Directors has determined that risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

The Board of Directors has adopted an executive compensation clawback policy, which provides for recoupment of executive incentive compensation in the eventevent of certain restatements of the financial results of the Company. Under the policy, in the event of a substantial restatement of the Company’s financial results due to material noncompliance with financial reporting requirements, if the Board of Directors determines in good faith that any portion of a current or former executive officer’s incentive compensation was paid as a result of such noncompliance, then the Company may recover the portion of such compensation that was based on the erroneous financial data.

The Board of Directors has also evaluated privacy protection, cybersecurity and information security in an effort to mitigate the risk of cyber-attacks and to protect the Company’sCompany’s information and that of its customers and suppliers. Based on this review, the Board of Directors has determined that such risks are not reasonably likely to have a material adverse effect on the Company.
Compensation Committee Interlocks and Insider Participation

The Committee is composed of Ms. Carosella (Chairperson), Mr. Barbarosh, Mr. Obus, and Dr. Sohn. Before his election as President and CEO, Dr. Bolles also served as a member of the Committee. During fiscal year 2020, none of the Company’s executive officers served on the board of directors of any entities whose directors or officers serve on the Committee. None of the Committee’s current members has at any time been an officer or employee of Landec. None of Landec’s executive officers currently serve, or in the past fiscal year have served, as members of the board of directors or compensation committee of any entity that has one or more of its executive officers serving on Landec’s Board of Directors or the Committee.

Cooperation Agreement with Legion Partners
On August 21, 2020, we entered into a Cooperation and Support Agreement with Legion Partners. Pursuant to the Cooperation Agreement, we agreed, among other things, to nominate Mr. Schechter to the Board of Directors at the Annual Meeting, and, if elected, to appoint Mr. Schechter to the Nominating and Corporate Governance Committee.
The Cooperation Agreement requires, at the Annual Meeting, Legion Partners to vote all of their beneficially owned shares of our common stock in favor of the election of directors nominated by the Board of Directors, against any proposals to remove such directors, against any nominees that have not been recommended by the Board of Directors, and in favor of the Bylaws Amendment. In addition, the Cooperation Agreement provides for certain “standstill” provisions that restrict Legion Partners, its affiliates and certain of its representatives from, among other things, engaging in any solicitation of proxies or written consents with respect to the voting securities of the Company or acquiring any securities of the Company that would result in Legion Partners having beneficial ownership of more than 15.0% of our common stock. The standstill provisions expire thirty days prior to the deadline for the submission of stockholder nominations for directors for the 2021 Annual Meeting. The Cooperation Agreement will also automatically terminate if the Company enters into a definitive agreement for a transaction that would constitute a Change of Control (as defined in the Cooperation Agreement).
If Legion Partners submit to us a notice of nomination or business proposal prior to the expiration of the standstill, Mr. Schechter will tender his resignation, which the Board of Directors may elect to accept.
Mr. Schechter is not affiliated with Legion Partners and, if elected, will serve on the Board of Directors as an independent director.
Compensation of Directors


The following table sets forth compensation information for the fiscal year ended May 28, 2017,2020 for each member of our Board of Directors who was not an executive officer during fiscal year 2017. The Chief Executive Officer, Molly A. Hemmeter, who serves on2020. Dr. Bolles, our Board of Directors,President and CEO, does not receive additionalany compensation for servinghis service on the Board of Directors. See “Summary
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NameFee Earned or
Paid in Cash (1)		Stock Awards (2)OtherTotal
Craig A Barbarosh (3)$59,542 $50,000 $— $109,542 
Deborah Carosella$79,792 $80,000 $— $159,792 
Frederick Frank$59,167 $80,000 $— $139,167 
Katrina L. Houde (3)$46,250 $67,000 $— $113,250 
Charles Macaluso (3)$35,000 $50,000 $— $85,000 
Nelson Obus$74,042 $80,000 $— $154,042 
Tonia Pankopf$85,917 $80,000 $— $165,917 
Andrew Powell$122,792 $80,000 $— $202,792 
Catherine A. Sohn, Pharm.D.$75,208 $80,000 $— $155,208 
Robert Tobin (4)$22,917 $— $— $22,917 
(1)Includes amounts (if any) deferred pursuant to the Company's Nonqualified Deferred Compensation Table”Plan, the terms of which are described under “Nonqualified Deferred Compensation Plan” below.
(2)The Company’s current compensation policy provides for disclosure relatedeach member of the Board of Directors to receive an annual restricted stock unit (“RSU”) award. On October 15, 2019, the annual RSU award was increased from $60,000 to $80,000 to better align with the market.
(3)Ms. Hemmeter.

Name

 

Fee Earned or Paid in Cash (1)

 

 

Stock Awards (2)

 

 

Other

 

 

Total

 

Albert D. Bolles, Ph.D.

 

$

69,167

 

 

$

—

 

 

$

—

 

 

$

69,167

 

Deborah Carosella (3)

 

$

8,333

  

$

—

  

$

—

  

$

8,333

 

Frederick Frank

 

$

57,500

 

 

$

—

 

 

$

—

 

 

$

57,500

 

Steven Goldby

 

$

75,000

 

 

$

—

 

 

$

—

 

 

$

75,000

 

Tonia Pankopf

 

$

65,000

 

 

$

—

 

 

$

—

 

 

$

65,000

 

Catherine A. Sohn, Pharma.D.

 

$

56,000

 

 

$

—

 

 

$

—

 

 

$

56,000

 

Gary T. Steele

 

$

40,000

 

 

$

—

 

 

$

—

 

 

$

40,000

 

Robert Tobin

 

$

55,000

 

 

$

—

 

 

$

—

 

 

$

55,000

 

Nicholas Tompkins (3)

 

$

16,667

 

 

$

—

 

 

$

—

 

 

$

16,667

 

(1)

Includes amounts (if any) deferred pursuant to the Company's Nonqualified Deferred Compensation Plan, the terms of which are described under “Nonqualified Deferred Compensation Plan” below.

(2)

The Company’s current compensation policy provides for each member of the Board to receive an annual restricted stock unit (“RSU”) award. These awards were granted in May 2016 for fiscal year 2017 and in June 2017 for fiscal year 2018 and therefore no RSUs were actually granted in fiscal year 2017. 

(3)

Ms. Carosella joined the Board on March 14, 2017. Mr. Tompkins retired from the Board at the end of his term as a Class 2 director on October 19, 2016.

At Houde was elected to the Board of Directors on August 5, 2019 while Mr. Barbarosh and Mr. Macaluso were elected to the Board of Directors on October 16, 2019. These directors' cash fees and RSU grants are pro-rated from their elections through May 28, 2017,31, 2020.

(4)Mr. Tobin retired on October 16, 2019.
As of May 31, 2020, the aggregate number of shares subject to outstanding restricted stock unit awards and optionRSU awards held by the members of the Board of Directors was: Dr. Bolles – 0Mr. Barbarosh - 5,501 shares; Ms. Carosella – 0- 2,200 shares; Mr. Frank – 10,000- 2,200 shares; Ms. Houde 7,334 shares; Mr. Goldby – 10,000Macaluso - 5,501; Mr. Obus - 2,200 shares; Ms. Pankopf – 6,667- 2,200 shares; Mr. Powell - 2,200 shares; and Dr. Sohn – 10,000 shares; Mr. Steele – 125,000 shares; and Mr. Tobin – 10,000- 2,200 shares.

The 2020 annual cash retainer fees paid to non-employee directors of the Company are detailed in the following table:

Annual Cash Retainer forAnnual Retainer Fees paid
Non-employee Director$50,000
Audit Committee$10,000
Food Innovation Committee$10,000
Lifecore Innovation Committee$10,000
Compensation Committee$7,500
Nominating and Corporate Governance Committee$5,000
Special Committee$1,000

For

In addition to the annual cash retainers paid to members of the committees as described above, for fiscal year 2017,2020, the Company paid annual retainers to each non-employee director received an annual retainer of $40,000 for servicethe chairs of the committee as a member of our Board of Directors.shown below. In addition, each director who served on the Audit Committee and the Food Innovation Committee received an annual retainer of $10,000, with the Chairperson of the Audit Committee and Food Innovation Committee receiving an annual retainer of $20,000. Each director who served on the Compensation Committee received an annual retainer of $7,500, with the Chairperson of the Compensation Committee receiving an annual retainer of $15,000. Each director who served on the Nominating and Corporate Governance Committee received an annual retainer of $5,000, with the Chairperson of the Nominating and Corporate Governance Committee receiving an annual retainer of $10,000. The ChairpersonChairman of the Board received ana separate annual retainer of $25,000. equal to the amount indicated in the table below:
Annual Cash Retainer forAnnual Retainer Fees paid
Chairman of the Board$55,000
Audit Committee Chair$20,000
Food Innovation Committee Chair$20,000
Lifecore Innovation Committee Chair$20,000
Compensation Committee Chair$15,000
Nominating and Corporate Governance Chair$10,000
Special Committee Chair$2,000
19

Consistent with the general industry trend toward fixed-value RSU awards, each non-employee director currently receives an annual RSU award each year with a fair market value of $60,000,$80,000, based on the fair market value of the Company’s Common Stock on the date of the grant, vesting on the first anniversary of the date of grant.

In addition to cash fees, each

Each director is reimbursed for reasonable out-of-pocket expenses incurred by a directorhe or she incurs to attend Board of Directors meetings, committee meetings or stockholder meetings in his or her capacity as a director.

Stock

Stock Ownership Requirement

The Board of Directors has determined that ownership of Landecthe Company’s Common Stock by officers and directors promotes a focus on long-term growth and aligns the interests of the Company’sCompany’s officers and directors with those of its stockholders. As a result, the Board of Directors has adopted stock ownership guidelines stating that the Company’s non-employee directors and its executive officers should maintain certain minimum ownership levels of Common Stock. Under these guidelines, each non-employee director of the Company is expected to maintain ownership of Common Stock having a value of at least three times the amount of the annual cash retainer paid to suchfor service as a non-employee director. For purposes of the guidelines, the value of a share of Common Stock, outstanding options, and/or unvested RSUs is measured as the greater of (i) the then current market price or (ii) the closing price of a share of Common Stock on the date when the stock was acquired, or the vesting date in the case of RSUs.

Newly-elected

Newly - elected directors have five yearsyears from the date they are elected to meet these guidelines. In the event a non-employee director’s cash retainer increases, he or she will have two years from the date of the increase to acquire any additional shares or RSUs needed to meet the guidelines. Until the required ownership level is reached, directors are required to retain 50% of net shares acquired upon any future vesting of RSUs and/or exercise of stock options, after deducting shares used to pay any applicable taxes and/orthe exercise price.

Required Vote

The election of each of the five (5) Class 2 director nominees requires the affirmative vote of the holders of a majority of the shares of the Company’s Common Stock present at the Annual Meeting in person or by proxy and voted with respect to such director. A “WITHHOLD” vote is effectively a vote against a director. This means that in order for a director to be elected, the number of shares voted “FOR” a director must exceed the number of votes cast against that director.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.


20

PROPOSAL

 NO. 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed the firm of Ernst & Young LLP as the Company’s independent registered public accounting firm to audit the financial statements

Executive Officers of the Company for the fiscal year ending May 27, 2018, and recommends that the stockholders vote for ratification of this appointment. In the event the stockholders do not ratify such appointment, the Audit Committee may reconsider its selection. Ernst & Young LLP has audited the Company’s financial statements since the fiscal year ending October 31, 1994. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting with the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.

Fees Paid to Independent Registered Public Accounting Firm

The following table presents the aggregate fees billed to the Company for professional services rendered by Ernst & Young LLP for the fiscal years ended May 28, 2017 and May 29, 2016.

Fee Category

Fiscal Year 2017

Fiscal Year 2016

Audit Fees

$

1,540,000

$

1,417,000

Audit-Related Fees  

—

—

Tax Fees

—

—

All Other Fees

—

—

Total

$

1,540,000

$

1,417,000

Audit Fees were for professional services rendered for the integrated audit of the Company’s annual financial statements and internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, for the review of the Company’s interim financial statements included in the Company’s Quarterly Reports on Form 10-Q, and for assistance with and review of documents filed by the Company with the SEC.

Audit Committee Pre-Approval Policies

The Audit Committee pre-approves all audit and permissible non-audit services provided by the Company’s independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Company’s independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with such pre-approval, and the fees for the services performed to date. The Audit Committee, or its designee, may also pre-approve particular services on a case-by-case basis.

Required Vote

The ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm requires the affirmative vote of the holders of a majority of the shares of the Company’s Common Stock present at the Annual Meeting in person or by proxy and voted on this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING MAY 27, 2018.


PROPOSAL NO. 3

APPROVAL OF AMENDMENT TO THE 2013 STOCK INCENTIVE PLAN

The Landec Corporation 2013 Stock Incentive Plan (the “Plan”) was approved by the Company’s stockholders on October 10, 2013 (the “Effective Date”). We are requesting that stockholders (1) approve an amendment to the Plan to increase the number of shares of common stock available for issuance by 1,000,000 shares from 2,000,000 to 3,000,000, and (2) re-approve the “performance goals” set forth in the Plan and used by the Company in granting awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) (as further described below).

If stockholders do not approve this Proposal No. 3, the Plan will continue in effect in accordance with its terms as originally approved by the Company’s stockholders.

Reasons for the Proposal

The Board of Directors and the Compensation Committee (the “Committee”) believe there is an insufficient number of shares of the Company’s common stock (individually, a “Share” and collectively, the “Shares”) remaining for grants under the Plan to achieve the Company’s compensation objectives over the coming years. The Board of Directors and the Committee believe that equity incentives are necessary to remain competitive in the marketplace and align the interests of our employees with our stockholders. If the amendment to increase the number of shares of common stock available for issuance by 1,000,000 shares from 2,000,000 to 3,000,000 (the “Amendment”) is not approved by stockholders, the Company’s ability to include equity compensation as part of our directors’ and employees’ total compensation package will be severely limited because there are only 155,239 Shares remaining available for grant under the Plan as of August 21, 2017.

As is the case with all publicly-held companies, compensation of more than $1 million paid by the Company in any year to our chief executive officer or to any of our other three most highly paid named executive officers (other than our chief financial officer) is not deductible by the Company unless it qualifies as exempt “performance-based” compensation meeting certain requirements under Section 162(m) of the Code, including the requirement that the material terms of the related performance goals be disclosed to and approved by the Company’s stockholders. The stockholders must re-approve the performance goals every five years; if the Company’s stockholders do not re-approve such performance goals, the Company will be denied a tax deduction with respect to such “performance-based” compensation. A description of the performance goals is set forth below under “Performance Goals” and the class of employees eligible to receive awards and the maximum amount of compensation that can be paid under the Plan is also described below.

General

The Plan contains the following compensation and corporate governance best practice provisions:

●

The Plan will be administered by the Committee or the Board of Directors, as further described below, and its authorized delegates. The Committee is composed entirely of independent directors who meet Nasdaq’s and the Company’s standards for independence and who meet the definition of “outside directors” for purposes of the performance-based compensation exemption under Section 162(m) of Code.

●

If approved by the Company’s stockholders, a total of 1,155,239 Shares, or approximately 4.2% of the Company’s total outstanding Shares as of August 21, 2017, will be available for issuance of awards under the Plan. The Shares available under the Plan, together with all outstanding awards granted under all of the Company’s prior equity award plans as of August 21, 2017, is equal to approximately 11.8% of the Company’s total outstanding Shares.

●

Participation by employees, directors, non-employee directors and consultants is at the discretion of the Committee. A non-employee director may not receive awards exceeding 30,000 Shares in any fiscal year. The Plan also places limits on the number of awards that other participants may receive in any fiscal year.

●

Stock options and stock appreciation rights must be granted with an exercise price of at least 100% of the fair market value of a Share on the date of grant.

●

Repricing of stock options and stock appreciation rights and cash buyouts of options and stock appreciation rights that are “underwater” cannot be done without prior stockholder approval.

●

The Committee may recover awards and payments under or gain in respect of awards to comply with Section 10D of the Securities Exchange Act of 1934.

●

The Plan has a seven-year life span and therefore expires on October 10, 2020.


The following is a summary of the principal features of the Plan. This summary, however, does not purport to be a complete description of all of the provisions of the Plan. A copy of the Plan, together with the Amendment, is attached as Appendix A to this Proxy Statement.

Share Reserve

Subject to adjustment as provided for below, the aggregate number of Shares that will be available for issuance of awards under the Plan is 3,000,000 Shares. For sake of clarity, the 3,000,000 share limit is reduced by the 1,844,761 Shares issued or issuable pursuant to any awards that were previously granted under the Plan as of August 21, 2017.

If awards under the Plan are forfeited or terminate before being exercised or becoming vested, then the Shares underlying those awards will again become available under the Plan. Shares that are used by a participant to pay withholding taxes or as payment for the exercise price of an award shall cease to be available under the Plan. Stock appreciation rights that are settled in Shares will be counted in full against the number of Shares available for issuance under the Plan, regardless of the number of Shares issued upon settlement of the stock appreciation rights. To the extent an award under the Plan is paid out in cash rather than Shares, such cash payment shall not result in a reduction of the number of Shares available for issuance under the Plan. Any dividend equivalents distributed as Share equivalents under the Plan will cease to be available under the Plan.

Under the Plan, no recipient may be awarded any of the following during any fiscal year: (i) stock options covering in excess of 500,000 Shares; (ii) stock grants and stock units covering in the aggregate in excess of 250,000 Shares; or (iii) stock appreciation rights covering in excess of 500,000 Shares. In addition, a non-employee director may not be granted awards covering in excess of 30,000 Shares in the aggregate during any fiscal year.

In the event of a subdivision of the outstanding Shares, a declaration of a dividend payable in Shares, a stock split or reverse stock split, a recapitalization, reorganization, merger, liquidation, spin-off, exchange of Shares or a similar occurrence, the Committee will, in its discretion, make appropriate adjustments to the number of Shares and kind of shares or securities issuable under the Plan (on both an aggregate and per-participant basis) and under each outstanding award. Appropriate adjustments will also be made to the exercise price of outstanding options and stock appreciation rights.

Administration

The Committee administers and interprets the Plan, provided that the Board of Directors shall administer and interpret the Plan with respect to all awards granted to non-employee directors. The Committee (or with respect to non-employee directors, the Board of Directors) shall have full authority and sole discretion to take any actions it deems necessary or advisable for the administration of the Plan, including the power and authority to: (i) select the individuals who are eligible to receive awards under the Plan; (ii) determining the type, number, vesting requirements and other features and conditions of such awards and amending such awards; (iii) correcting any defect, supplying any omission, or reconciling any inconsistency in the Plan or any award agreement; (iv) accelerating the vesting, or extending the post-termination exercise term, of awards at any time and under such terms and conditions as it deems appropriate; (v) interpreting the Plan; (vi) making all other decisions relating to the operation of the Plan; and (vii) adopting such plans or subplans as may be deemed necessary or appropriate to provide for the participation by employees of the Company and its subsidiaries and affiliates who reside outside the U.S. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons. The Committee may delegate (i) to one or more officers of the Company the power to grant awards to the extent permitted by Section 157(c) of the Delaware General Corporation Law; and (ii) to such employees or other persons as it determines such ministerial tasks as it deems appropriate.

Eligibility and Types of Awards Under the Plan

The Plan permits the Committee to grant stock options, stock appreciation rights, stock units and stock grants. Persons eligible to participate in the Plan include employees and consultants of the Company, any parent, subsidiary or affiliate of the Company, and non-employee directors of the Company.


Options

The Committee may grant nonstatutory stock options or incentive stock options (which may be entitled to favorable tax treatment) under the Plan. The number of Shares covered by each stock option granted to a participant will be determined by the Committee.

The stock option exercise price must be at least 100% of the fair market value of a Share on the date of grant (110% for incentive stock options granted to stockholders who own more than 10% of the total outstanding Shares of the Company, its parent or any of its subsidiaries). Each stock option award will be evidenced by a stock option agreement which will specify the date when all or any installment of the award is to become exercisable. The stock option agreement shall also specify the term of the option. A stock option agreement may provide for accelerated vesting in the event of the participant’s death, disability, or other events. Notwithstanding any other provision of the Plan, no option can be exercised after the expiration date provided in the applicable stock option agreement. Except in connection with certain corporate transactions, repricing of stock options, and cash buyouts of options by the Company at a time when the exercise price of the option exceeds the fair market value of the underlying shares are prohibited without stockholder approval. The exercise price of stock options must be paid at the time the Shares are purchased. Consistent with applicable laws, regulations and rules, payment of the exercise price of stock options may be made in cash (including by check, wire transfer or similar means) or, if specified in the stock option agreement, by cashless exercise, by surrendering or attesting to previously acquired Shares, or by any other legal consideration approved by the Committee.

Unless otherwise provided by the Committee, unvested stock options will generally expire upon termination of the participant’s service, and vested stock options will generally expire six months following the termination of the participant’s service. The term of a stock option shall not exceed seven years from the date of grant (five years for incentive stock options granted to stockholders who own more than 10% of the total outstanding Shares of the Company, its parent or any of its subsidiaries).

Stock Grants

The Committee may grant awards of Shares under the Plan. Participants may or may not be required to pay cash consideration to the Company at the time of grant of such Shares. The number of Shares associated with each stock grant will be determined by the Committee, and each grant may be subject to time and/or performance vesting conditions established by the Committee. Shares that are subject to such conditions are “restricted,” i.e. subject to forfeiture if the performance goals and/or other conditions are not satisfied. When the restricted stock award conditions are satisfied, then the participant is vested in the Shares and has complete ownership of the Shares. A stock grant agreement may provide for accelerated vesting in the event of the participant’s death, disability or other events.

A holder of a stock grant under the Plan will have the same voting, dividend and other rights as the Company’s other stockholders; provided, however, that the holder may be required to invest any cash dividends received in additional Shares, with any such additional Shares subject to the same conditions and restrictions as the stock grant with respect to which the dividends were paid.

Stock Units

The Committee may award stock units under the Plan. Participants are not required to pay any consideration to the Company at the time of grant of a stock unit. The number of Shares covered by each stock unit award will be determined by the Committee. A stock unit is a bookkeeping entry that represents a Share. A stock unit is similar to restricted stock in that the Committee may establish performance goals and/or other conditions that must be satisfied before the participant can receive any benefit from the stock unit. When the participant satisfies the conditions of the stock unit award, the Company will settle the vested stock units in cash or Shares or any combination of both. Settlement may occur or commence when the vesting conditions are satisfied or may be deferred, subject to applicable laws, to a later date. If stock units are settled in cash, the payment amount may be based on the average of the fair market value of a Share over a series of trading days or on other methods. A stock unit agreement may provide for accelerated vesting in the event of the participant’s death, disability or other events.

A holder of stock units will have no voting rights, but may have a right to dividend equivalents. A dividend equivalent right entitles the holder to be credited with an amount equal to the amount of cash dividends paid on a Share while the stock unit is outstanding. A dividend equivalent right may be settled in cash, Shares or a combination of both, and until settlement, will remain subject to the same conditions and restrictions as the stock units to which they attach.


Stock Appreciation Rights

The Committee may grant stock appreciation rights under the Plan. The number of Shares covered by each stock appreciation right will be determined by the Committee. Upon exercise of a stock appreciation right, the participant will receive payment from the Company in an amount equal to (a) the excess of the fair market value of a Share on the date of exercise over the exercise price multiplied by (b) the number of Shares with respect to which the stock appreciation right is exercised.

The exercise price of a stock appreciation right may not be less than 100% of the fair market value of a Share on the date of grant. The stock appreciation right agreement will specify the date when all or any installment of the award is to become exercisable. A stock appreciation right agreement may provide for accelerated vesting in the event of the participant’s death, disability or other events. Except in connection with certain corporate transactions, repricing of stock appreciation rights and cash buyouts of stock appreciation rights by the Company at a time when the exercise price of the stock appreciation right exceeds the fair market value of the underlying shares are prohibited without stockholder approval. Stock appreciation rights may be paid in cash or Shares or any combination of both, as determined by the Committee, in its sole discretion.

Unless otherwise provided by the Committee, unvested stock appreciation rights will generally expire upon termination of the participant’s service, and vested stock appreciation rights will generally expire six months following termination of the participant’s service. The terms of a stock appreciation right shall not exceed seven years from the date of grant.

Transfer of Awards

Unless otherwise provided in the applicable award agreement, and then only to the extent permitted by applicable law, awards under the Plan may not be transferred by the holder thereof, other than by will or by the laws of descent and distribution.

Performance Goals

Awards under the Plan may be made subject to performance conditions in addition to time-based vesting conditions. Such performance conditions may be established and administered in accordance with the requirements of Section 162(m) of the Code for awards intended to qualify as “performance-based compensation” thereunder. Performance conditions under the Plan shall utilize one or more objective measurable performance goals as determined by the Committee based upon one or more factors (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a parent, Company, affiliate, subsidiary, divisional, line of business, unit, project or geographical basis or in combinations thereof), including, but not limited to: (i) operating income; (ii) earnings before interest, taxes, depreciation and amortization; (iii) earnings; (iv) cash flow; (v) market share; (vi) sales or revenue; (vii) expenses; (viii) cost of goods sold; (ix) profit/loss or profit margin; (x) working capital; (xi) return on equity or assets; (xii) earnings per share; (xiii) economic value added; (xiv)  price/earnings ratio; (xv) debt or debt-to-equity; (xvi) accounts receivable; (xvii) writeoffs; (xviii) cash; (xix) assets; (xx) liquidity; (xxi) operations; (xxii) intellectual property (e.g., patents); (xxiii) product development; (xxiv) regulatory activity; (xxv) manufacturing, production or inventory; (xxvi) mergers and acquisitions or divestitures; and/or (xxvii) financings. To the extent consistent with the requirements of Section 162(m), the Committee may provide that the performance goals applicable to an award will be adjusted in an objectively determinable manner to reflect events (such as acquisitions and dispositions) that affect the performance goals during the applicable performance period. Awards to participants who are not subject to the limitations of Section 162(m) may be determined without regard to performance goals and may involve the Committee’s discretion. The Committee has the authority to award and/or pay compensation that is not exempt from the limits on deductibility under Section 162(m) of the Code.

Acceleration of Awards upon a Merger or Sale of Assets

In the event of a change in control of the Company or a covered transaction (each as defined in the Plan), the Committee may, with respect to some or all outstanding awards or a portion thereof, provide for the assumption, substitution or continuation of awards, accelerated vesting, or cancellation with or without consideration, in all cases without participant consent. Unless the Committee determines otherwise, each outstanding award will automatically terminate or be forfeited upon consummation of a change in control or a covered transaction, unless it is assumed or substituted.

Restrictions

The Committee may cancel, rescind, withhold or otherwise limit or restrict any award at any time if the participant is not in compliance with the terms of the award agreement or the Plan, or the participant breaches any other agreement with the Company with respect to non-competition, nonsolicitation or confidentiality. In addition, the Committee may recover awards and payments under or gain in respect of awards to the extent required to comply with any Company policy or Section 10D of the Securities Exchange Act of 1934 or any other applicable law or regulation.


Amendment and Termination

The Board of Directors may amend the Plan at any time and for any reason, provided that any such amendment will be subject to stockholder approval to the extent such approval is required by applicable laws, regulations or rules. The Board of Directors may terminate the Plan at any time and for any reason. Unless earlier terminated by the Board of Directors, the Plan will expire by its terms on October 10, 2020, the seventh anniversary of the Effective Date. The termination or amendment of the Plan may not impair in any material respect any award previously made under the Plan.

Federal Income Tax Consequences

The following is a brief summary of the U.S. federal income tax consequences applicable to awards granted under the Plan based on federal income tax laws in effect on the date of this Proxy Statement. This summary is not intended to be exhaustive and does not address all matters which may be relevant to a particular participant based on his or her specific circumstances. The summary expressly does not discuss the income tax laws of any state, municipality, or non-U.S. taxing jurisdiction, or the gift, estate, excise (including the rules applicable to deferred compensation under Section 409A of the Code), or other tax laws other than federal income tax law. The following is not intended or written to be used, and cannot be used, for the purposes of avoiding taxpayer penalties. Because individual circumstances may vary, the Company advises all participants to consult their own tax advisor concerning the tax implications of awards granted under the Plan.

A recipient of a stock option or stock appreciation right generally will not have taxable income upon the grant of the stock option or stock appreciation right. For nonstatutory stock options and stock appreciation rights, in general, the participant will recognize ordinary income upon exercise in an amount equal to the difference between the fair market value of the Shares on the date of exercise and the exercise price. Any gain or loss recognized upon any later disposition of the Shares generally will be a capital gain or loss.

In general, a participant realizes no ordinary taxable income upon the exercise of an incentive stock option. However, the exercise of an incentive stock option may result in an alternative minimum tax liability to the participant. With some exceptions, a disposition of Shares purchased under an incentive stock option within two years from the date of grant or within one year after exercise produces ordinary income to the participant equal to the value of the shares at the time of exercise less the exercise price. Any additional gain recognized in the disposition is treated as a capital gain. If the participant does not dispose of the Shares until after the expiration of these one and two-year holding periods, any gain or loss recognized upon a subsequent sale is treated as a long-term capital gain or loss.

For awards of restricted stock, unless the participant properly elects to be taxed at the time of receipt of the restricted stock, the participant will not have taxable income upon the receipt of the award, but upon vesting will recognize ordinary income equal to the fair market value of the Shares at the time of vesting less the amount (if any) paid for such Shares.

A participant is not deemed to receive any taxable income at the time an award of stock units is granted. When vested stock units (and dividend equivalents, if any) are settled and distributed, the participant will recognize ordinary income equal to the amount of cash and/or the fair market value of Shares received less the amount (if any) paid for such stock units.

If the participant is an employee or former employee, the amount a participant recognizes as ordinary income in connection with any award is subject to withholding taxes (not applicable to incentive stock options) and the Company is generally allowed a tax deduction equal to the amount of ordinary income recognized by the participant. Section 162(m) of the Code contains special rules regarding the federal income tax deductibility of compensation paid to the Company’s chief executive officer and to each of the Company’s other three most highly compensated executive officers, other than the chief financial officer. The general rule is that annual compensation paid to any of these specified executives will be deductible only to the extent that it does not exceed $1,000,000. However, the Company can preserve the deductibility of certain compensation in excess of $1,000,000 if such compensation qualifies as “performance-based compensation” by complying with certain conditions imposed by the Section 162(m) rules. The Committee may structure awards to qualify as performance-based compensation, but will continue to have authority to provide compensation that is not exempt from the limits on deductibility under Section 162(m) of the Code.


A participant who defers the payout of an award or the delivery of proceeds payable upon an award exercise will recognize ordinary income at the time of payout in the same amounts as described above. If the participant receives Shares, any additional gain or loss recognized upon later disposition of the Shares is capital gain or loss. Any deferrals made under the Plan, including awards granted under the Plan that are considered to be deferred compensation, must satisfy the requirements of Section 409A of the Code to avoid adverse tax consequences to participating employees. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20 percent federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation. In addition, certain states (such as California), have laws similar to Section 409A and as a result, failure to comply with such similar laws may result in additional state income, penalty and interest charges.

Under the Code, the vesting or accelerated exercisability of options or the vesting and payments of other awards in connection with a change of control of a corporation may be required to be valued and taken into account in determining whether participants have received compensatory payments, contingent on the change in control, in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of awards, may be subject to an additional 20% federal tax and may be non-deductible to the corporation.

Plan Benefits

Benefits, if any, payable under the Plan for 2017 and future years are dependent on the actions of the Committee and are therefore not determinable at this time. Our executive officers are eligible to receive awards under the Plan and, accordingly, our executive officers have an interest in this Proposal. In 2017, the following grants were made under the Plan to the persons and groups listed below:

Name and Principal Position

 

Awards (Shares)

Fair Value of

Award ($)

Molly A. Hemmeter

 

247,406

1,558,959

President and Chief Executive Officer

   
    

Gregory S. Skinner

 

17,825

245,999

Chief Financial Officer and Vice President

   

of Finance and Administration

   
    

Ronald L. Midyett

 

14,290

197,202

Vice President, Chief Operating Officer and

   

President of Apio, Inc

   

 

   

Larry D. Hiebert

 

13,450

185,610

President of Lifecore Biomedical, Inc.

   

and Vice President of Landec

   

 

   

Steven P. Bitler

 

—

—

Vice President of Corporate Technology

   
    

All Executive Officers, as a group

 

292,972

2,187,770

All Non-employee Directors, as a group

 

—

—

All Non-Executive Officer Employees, as a group

 

127,550

665,043

Required Vote

The amendment to the Plan to increase the number of shares available for issuance by 1,000,000 shares from 2,000,000 to 3,000,000 and to re-approve the plan’s performance goals for purposes of Code Section 162(m) must be approved by Shares representing a majority of the Shares present and entitled to vote on the proposal. Shares present and not voted, whether by broker non-vote, abstention or otherwise, will have the same effect as a vote against this proposal.


THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL NO. 3 TO APPROVE THE AMENDMENT TO THEPLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE BY 1,000,000 SHARES FROM 2,000,000 TO 3,000,000 AND TO RE-APPROVE THE PLAN’S PERFORMANCE GOALS FOR PURPOSES OF CODE SECTION 162(m).

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes information with respect to options and other equity awards under Landec’s equity compensation plans as of May 28, 2017:

Plan Category

 

Number of

Securities to

be Issued Upon

Exercise

of Outstanding

Options,

Warrants and

Rights (1)

 

 

Weighted

Average

Exercise Price

of Outstanding

Options,

Warrants

and Rights (2)

 

 

Number of

Securities

Available for

Future

Issuance Under

Equity

Compensation

Plans

(Excluding

Securities

Reflected in

Column (a))

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans approved by stockholders

 

 

2,080,897

 

 

$

13.20

 

 

 

155,239

(3)

(1)

Consists of stock options and restricted stock units outstanding under Landec’s equity compensation plans, as no stock warrants or other rights were outstanding as of May 28, 2017.

(2)

The weighted average exercise price does not take restricted stock units into account as restricted stock units have no purchase price.

(3)

Represents shares remaining for issuance pursuant to the 2013 Stock Incentive Plan.

The 2013 Stock Incentive Plan

The 2013 Stock Incentive Plan (the “2013 Plan”), which was approved by stockholders, authorizes the grant of equity awards, including stock options, restricted stock and restricted stock units to employees, including officers and directors, outside consultants and non-employee directors of the Company. 2,000,000 shares are authorized to be issued under this plan. The exercise price of stock options to be granted under the 2013 Plan will be the fair market value of the Company’s Common Stock on the date the options are granted. Options to be granted under the 2013 Plan will generally be exercisable upon vesting and will generally vest ratably over three years.

The 2009 Stock Incentive Plan

The 2009 Stock Incentive Plan (the “2009 Plan”), which was approved by stockholders and has been terminated, authorized the grant of equity awards, including stock options, restricted stock and restricted stock units to employees, including officers and directors, outside consultants and non-employee directors of the Company. 1,900,000 shares were authorized to be issued under this plan. The exercise price of stock options granted under the 2009 Plan was the fair market value of the Company’s Common Stock on the date the options were granted. Options granted under the 2009 Plan were exercisable upon vesting and generally vested ratably over three years. No further awards will be made pursuant to the 2009 Plan.


PROPOSAL NO. 4

NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Compensation Discussion and Analysis beginning on page 27 of this Proxy Statement describes the Company’s executive compensation program and the compensation decisions that the Compensation Committee and Board of Directors made in fiscal year 2017 with respect to the compensation of our named executive officers. The Board of Directors is asking stockholders to cast a non-binding, advisory vote FOR the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED on an advisory basis.”

We urge stockholders to read the Compensation Discussion and Analysis beginning on page 27 of this Proxy Statement, as well as the Summary Compensation Table and related compensation tables, appearing on pages 39 through 42, which provide detailed information on the Company’s compensation policies and practices.

As we describe in the Compensation Discussion and Analysis, our executive compensation program is designed to attract, reward and retain talented officers and embodies a pay-for-performance philosophy that supports Landec’s business strategy and aligns the interests of our executives with our stockholders. Specifically, executive compensation is allocated among base salaries and short- and long-term incentive compensation. The base salaries are fixed in order to provide the executives with a stable cash income, which allows them to focus on the Company’s strategies and objectives as a whole, while the short- and long-term incentive compensation are designed to both reward the named executive officers based on the Company’s overall performance and align the named executive officers’ interests with those of our stockholders. Our annual cash incentive award program is intended to encourage our named executive officers to focus on specific short-term goals important to our success. Our executive officers’ cash incentive awards are determined based on objective performance criteria. The Company’s current practice is to grant our named executive officers both stock options and restricted stock units. This mixture is designed to provide a balance between the goals of increasing the price of our Common Stock and aligning the interests of our executive officers with those of our stockholders (as stock options only have value if our stock price increases after the option is granted) and encouraging retention of our executive officers. Because grants are generally subject to vesting schedules, they help ensure that executives always have significant value tied to long-term stock price performance.

For these reasons, the Board of Directors is asking stockholders to support this proposal. Although the vote we are asking you to cast is non-binding, the Compensation Committee and the Board of Directors value the views of our stockholders and will consider the outcome of the vote when determining future compensation arrangements for our named executive officers.

At the 2016 annual meeting of stockholders, 98.4% of votes cast expressed support for our compensation policies and practices, and we believe our program continues to be effective.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.


PROPOSAL NO. 5.

NON-BINDING ADVISORY VOTE ON FREQUENCY OF EXECUTIVE

COMPENSATION ADVISORY VOTES

In Proposal 4, we are asking stockholders to cast an advisory vote for the compensation disclosed in this proxy statement that the Company paid in 2017 to our named executive officers. This advisory vote is referred to as a “say-on-pay” vote. In this Proposal 5, the Board of Directors is asking stockholders to cast a non-binding, advisory vote on how frequently we should have say-on-pay votes in the future. Stockholders will be able to mark the enclosed proxy card or voting instruction form on whether to hold say-on-pay votes every one, two or three years. Alternatively, you may indicate that you are abstaining from voting.

“RESOLVED, that the stockholders of the Company recommend, in a non-binding vote, whether an advisory vote to approve the compensation of the Company’s named executive officers should occur every one, two or three years.”

After considering this item, the Board of Directors has determined that a vote every year on executive compensation is appropriate. By providing an advisory vote on executive compensation on an annual basis, our stockholders will be able to provide us with timely and direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Therefore, the Board of Directors recommends that you vote to hold say-on-pay votes every year.

This vote, like the say-on-pay vote itself, is not binding on the Board of Directors. However, the Board of Directors values stockholders’ input and will consider the outcome of this vote when determining the frequency of future say-on-pay votes.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” CONDUCTING FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION EVERY YEAR.


AUDIT COMMITTEE REPORT

The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Composition

The Audit Committee of the Board of Directors consists of the three directors whose names appear below and operates under a written charter adopted by the Board of Directors. Each member of the Audit Committee meets the independence and financial experience requirements of NASDAQ and the SEC currently in effect. In addition, the Board of Directors has determined that Mr. Goldby and Ms. Pankopf are audit committee financial experts, as defined by the rules and regulations of the SEC.

Responsibilities

The responsibilities of the Audit Committee include appointing an independent registered public accounting firm and assisting the Board of Director’s oversight of the preparation of the Company’s financial statements. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report thereon. Management is responsible for the Company’s internal controls and financial reporting process. The Audit Committee’s responsibility is to oversee these processes and the Company’s internal controls. The Audit Committee members are not acting as professional accountants or auditors, and their functions are not to duplicate or to certify the activities of management and the independent registered public accounting firm.

Review with Management and Independent Auditors

The Audit Committee held four meetings during fiscal year 2017. The Audit Committee met and held discussions with management and representatives of the Company’s independent registered public accounting firm, Ernst & Young LLP. Management represented to the Audit Committee that the Company’s consolidated financial statements for the fiscal year ended May 28, 2017 were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements for the fiscal year ended May 28, 2017 with management and the Company’s independent registered public accounting firm.

The Audit Committee met with the Company’s independent registered public accounting firm, with and without management present, to discuss the overall scope and plans for their audit, the results of their examination, their evaluation of the Company’s internal controls and the overall quality of the Company’s financial reporting. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards (“SAS”) No. 114, The Auditor’s Communication with Those Charged with Governance, as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T, which supersedes SAS No. 61, as amended, including the judgment of the independent registered public accounting firm as to the quality of the Company’s accounting principles.

The Audit Committee has received the written disclosures and the letter from Ernst & Young LLP required by the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence, and has discussed with Ernst & Young LLP its independence.

Summary

Based upon the Audit Committee’s discussions with management and the Company’s independent registered public accounting firm, the Audit Committee’s review of the representations of management and the report of the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10- K for the fiscal year ended May 28, 2017, as filed with the SEC.

This report is submitted by the Audit Committee.

Tonia Pankopf (Chairperson)

Steven Goldby

Robert Tobin


EXECUTIVE OFFICERS OF THE COMPANY

The following sets forth certain information with regard to each named executive officer and each executive officer of the Company for fiscal year 2017.2020. Ages are as of August 21, 2017.17, 2020.

Albert D. Bolles, Ph.D.

Molly A. Hemmeter (age 50)(age 62) has beenserved as the Company’s President and CEO since May 23, 2019. Prior to becoming President and CEO, Dr. Bolles was a member of the Board of Directors, Chairman of the ad hoc Food Innovation Committee and a member of the Company’s Compensation Committee and Nominating and Corporate Governance Committee. Prior to his retirement in 2015 from ConAgra, Dr. Bolles most recently served as Executive Vice President, Chief Technology & Operations Officer. Prior to this role, Dr. Bolles was Executive Vice President, Research, Quality and Innovation for ConAgra, championing the development and execution of multiple new and improved products, realizing incremental growth for ConAgra and a facilitating a multi-year pipeline to sustain and advance growth further. Prior to joining ConAgra in 2006, Dr. Bolles served as Vice President, Worldwide R&D for the Beverages and Foods division of PepsiCo, Inc., responsible for global R&D leadership for beverages (Pepsi, Gatorade, and Tropicana) and Quaker Foods including product, process, package and sensory R&D, Nutrition, Quality, and Scientific & Regulatory Affairs. His prior employment was with Gerber Foods for over 8 years with his last role being its R&D Director, overseeing infant and toddler global research and development. Dr. Bolles currently serves on the Board of Directors at SunOpta, Inc. and Arcadia Biosciences, Inc.

Brian F. McLaughlin (age 66) has been the Chief Financial Officer and Secretary of the Company since October 15,March 19, 2020. Prior to that he was Chief Financial Officer of Curation Foods (formerly Apio, Inc.), a natural foods company, since August 2015. Mr. McLaughlin was Chief Financial Officer for Organicgirl from 2010 until August 2015. Prior to that she served as thehe was Chief OperatingFinancial Officer of the Companyfor EuroFresh Farms from January 2014 to October 2015, prior to which she2008 until 2009, and Chief Financial Officer for Driscoll’s, Inc. from 2006 until 2007. From 1996 until 2006, Mr. McLaughlin served as Chief CommercialFinancial Officer of the Company from December 2010 to January 2014 and Vice President, Business Development and Global Marketing of the Company from June 2009 to December 2010. From July 2006 until joining the Company in June 2009, Ms. Hemmeter was Vice President of Global Marketing and New Business Development for the Performance Materials division of Ashland,Fresh Express, Inc., a global specialty chemicals company. Prior to joining Ashland, Inc., Ms. Hemmeter was Vice President of Strategy and Marketing for Siterra Corporation and Chief Marketing Officer for CriticalArc Technologies in the San Francisco Bay Area, both of which were privately held software startup companies that were eventually acquired by larger entities, and she previously held various positions at Bausch & Lomb and Eli Lilly and Company.

Gregory S. Skinner (age 56) has beenFresh Express as Chief Financial Officer, Mr. McLaughlin spent 19 years in commercial banking, the majority of which was spent in corporate middle market and real estate development debt restructurings.

Dawn Kimball (age 59) has been the Chief People Officer and a Senior Vice President of Finance of the Company since November 1999October 14, 2019. Ms. Kimball has over 20 years of human resources experience and prior to joining the Company was the Vice President of Administration since November 2000. From May 1996 to October 1999, Mr. Skinner servedEnterprise Learning Solutions and Talent Management for Charles Schwab & Company, a financial services company, from December 2011 until March 2017. Ms. Kimball also has business line experience as Controller of the Company. From 1994 to 1996, Mr. Skinner was Controller of DNA Plant Technology and from 1988 to 1994 he was with Litton Electron Devices. Prior to joining Litton Electron Devices, Mr. Skinner was with Litton Industries, Inc. and Arthur Andersen & Company.

Ronald L. Midyett (age 51) has been Chief Operating Officer since October 2015. He has served asVice President of Apio since January 2008 and asFood & Food Development at Williams-Sonoma, Inc. Earlier in her career she implemented the human resources function for multiple start-up organizations.

James G. Hall (age 57) has been a Vice President of the Company since February 2008. Mr. Midyett joined Apio in May 2005 as Chief Operating Officer. Prior to joining Apio, Mr. Midyett was Senior Vice President of Operations for Dole Fresh Vegetables. Mr. Midyett has over 30 years of technology and operations experience in the produce industry. Mr. Midyett was a member of the board of directors of the United Fresh Fruit and Vegetable Association from 2009 to 2015, served as chairman from April 2013 through April 2014, and is currently a member of its executive committee. Mr. Midyett is currently a director of Windset Holdings 2010 Ltd., a privately held Canadian corporation.

Larry D. Hiebert (age 61) has been President of Lifecore and a Vice President of the Company since June 2013.2017. At Lifecore, Mr. HiebertHall served as Lifecore’s Vice President and General Manager from July 20062013 to June 2013. Prior to that he was Lifecore’s2017; Vice President of Operations from March 20042006 to June 2006 and2013; Director of Manufacturing Operations and Engineering from 2001 to 2006; and the Manager of Engineering and Operations from March 19971999 to March 2004,2001. From 1995 until joining Lifecore in 1999, Mr. Hall was Manager of Pre-Clinical and Clinical supply for Protein Design Labs, a biotechnology company focusing on humanizing monoclonal antibodies. Prior to joining Protein Design Labs in 1995, Mr. Hall held various Manufacturing and Materials Managementengineering positions within Lifecore from October 1983 to March 1997.beginning in 1989. Mr. HiebertHall has over 3029 years of operational experience in the biomaterials industry.pharmaceutical and combination product manufacturing and development experience.

Mr. Hiebert retired as President of Lifecore and

Timothy P. Burgess (age 57) has been a Vice President of the Company onand Senior Vice President of Supply Chain with Curation Foods since May 28, 2017. He was replaced by Mr. James Hall who had been serving as the Vice President and General Manager of Lifecore.

Steven P. Bitler, Ph.D. (age 59) has been Vice President, Corporate Technology of the Company since March 2002. From 1988 until March 2002, Dr. Bitler held various positions with the Company related to the Company’s polymer product development and thermal switch products.2019. Prior to joining Curation Foods, Mr. Burgess was Vice President Global Manufacturing from February 2018 until March 2019 at Trident Seafood, the Company, Dr. Bitler developed new high strength polymeric materials at SRI International.largest privately held seafood company in the United States. From March 2006 to February 2018 Mr. Burgess served as Vice President of Supply Chain APAC for Mead Johnson Nutrition, a pediatric nutrition company based in Singapore. Earlier in his career Mr. Burgess was plant manager for Dannon and Basic Vegetable Products.


21


COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


The following table sets forth the beneficial ownership of the Company’sCompany’s Common Stock as of August 21, 201717, 2020 as to (i) each person who is known by the Company to beneficially own more than five percent of any class of the Company’s voting stock, (ii) each of the Company’s directors, (iii) each of the executive officers named in the Summary Compensation Table of this proxy statement (the “Named“Named Executive Officers”Officers”), and (iv) all directors and executive officers as a group. The business address of each director and executive officer named below is c/o Landec Corporation, 3603 Haven2811 Airpark Drive, Santa Maria, CA 93455.
The number of shares of common stock beneficially owned by each person or entity is determined in accordance with the applicable rules of the Securities and Exchange Commission and includes voting or investment power with respect to shares of our common stock. Unless otherwise indicated, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares of common stock, except to the extent authority is shared by spouses under community property laws.
Shares Beneficially Owned
NameTotal Number of Shares Beneficially OwnedPercentage of Common Stock Beneficially Owned (1)
Holders of more than 5% of our Common Stock
Legion Partners Asset Management, LLC2,866,340 (2)9.80%
Wynnefield Capital, Inc.2,682,400 (3)9.17%
Russell Investments Group, Ltd.2,591,554 (4)8.86%
Dimensional Fund Advisors LP2,431,533 (5)8.32%
Blackrock, Inc.2,011,711 (6)6.88%
The Vanguard Group1,619,102 (7)5.54%
Non-Employee Directors and Nominees:
Craig A. Barbarosh5,501 (8)*
Deborah Carosella21,226 (9)*
Jeffrey Edwards— *
Frederick Frank68,224 (10)*
Katrina L. Houde7,334 (11)*
Charles Macaluso5,501 (12)*
Nelson Obus2,911,415 (13)9.96%
Tonia Pankopf44,237 (14)*
Andrew Powell12,115 (15)*
Joshua E. Schechter— *
Catherine A. Sohn, Pharm.D.38,707 (16)*
Patrick Walsh— *
Named Executives
Albert D. Bolles, Ph.D.97,702 (17)*
Brian F. McLaughlin104,511 (18)*
James G. Hall146,338 (19)*
Timothy P. Burgess5,100 *
Dawn Kimball9,975 (20)*
All current directors, director nominees and executive officers as a group (17 persons)3,477,886 (21)11.89%
* Less than 1%
22

(1)As of August 17, 2020, 29,241,889 shares of Common Stock were issued and outstanding. Percentages are calculated with respect to a holder of options exercisable within 60 days after August 17, 2020 as if such holder had exercised his options. Options held by other holders are not included in the percentage calculation with respect to any other holder.
(2)Information is based on a Schedule 13D/A filed by Legion Partners, L.P. I, Legion Partners, L.P. II, Legion Partners, LLC, Legion Partners Asset Management, LLC, Legion Partners Holdings, LLC, Christopher S. Kiper and Raymond White (the “Legion Investors”) on June 22, 2020, and is as of June 18, 2020. According to the Schedule 13D/A, (i) Legion Partners, L.P. I, has shared voting and shared dispositive power over 2,736,667 shares of the Company’s common stock; (ii) Legion Partners, L.P. II, has shared voting and shared dispositive power over 129,473 shares of the Company’s common stock; and (iii) each of Legion Partners, LLC, Legion Partners Asset Management, LLC, Legion Partners Holdings, LLC, Christopher S. Kiper and Raymond White has shared voting and shared dispositive power over 2,866,340 shares of the Company’s common stock. The address for each of the Legion Investors is 12121 Wilshire Blvd, Suite 1240, Los Angeles, CA 90025.
(3)This information is based on a Schedule 13D/A filed by Wynnefield Partners Small Cap Value, L.P. I (“Wynnefield Partners I”), Wynnefield Partners Small Cap Value, L.P. (“Wynnefield Partners”), Wynnefield Small Cap Value Offshore Fund, Ltd. (“Wynnefield Offshore”), Wynnefield Capital, Inc. Profit Sharing Plan (“Wynnefield Plan”), Wynnefield Capital Management, LLC (“WCM”), Wynnefield Capital, Inc. (“WCI”) and Nelson Obus and Joshua H. Landes (collectively, the “Wynnnefield Investors”) on May 24, 2018, and is as of May 22, 2018. According to the Schedule 13D/A, (i) Wynnefield Partners I has sole voting and sole dispositive power over 1,242,270 shares of the Company’s common stock; (ii) Wynnefield Partners has sole voting and sole dispositive power over 782,410 shares of the Company’s common stock; (iii) Wynnefield Offshore has sole voting and sole dispositive power over 567,519 shares of the Company’s common stock; (iv) Wynnefield Plan has sole voting and sole dispositive power over 90,201 shares of the Company’s common stock; (v) WCM has sole voting and sole dispositive power over 2,024,680 shares of the Company’s common stock; (vi) WCI has sole voting and sole dispositive power over 567,519 shares of the Company’s common stock; and (vii) each of Nelson Obus and Joshua H. Landes has shared voting and shared dispositive power over 2,592,199 shares of the Company’s common stock. The address for each of the Wynnefield Investors is 450 Seventh Avenue, Menlo Park, CA 94025.Suite 509, New York, New York 10123.

 

 

Shares Beneficially Owned (1)

 

Name

 

Number of Shares

of Common Stock

 

 

Percent of Total (2)

 

 

 

 

 

 

 

 

 

 

5% Stockholders

 

 

 

 

 

 

 

 

NWQ Investment Management Company, LLC

2049 Century Park East, 16th Floor

Los Angeles, CA 90067

 

 

3,726,173

(3)

 

 

13.55

%

 

 

 

 

 

 

 

 

 

Franklin Resources, Inc

55 Challenger Road, Suite 501 

Ridgefield Park, NJ 07660

 

 

2,847,300

(4)

 

 

10.35

%

 

 

 

 

 

 

 

 

 

Wynnefield Capital, Inc

450 Seventh Ave, #509

New York, NY 10123

 

 

2,682,400

(5)

 

 

9.75

%

 

 

 

 

 

 

 

 

 

Dimensional Fund Advisors, L.P.

 

 

2,297,667

(6)

 

 

8.35

%

6300 Bee Cave Road, Building One

 

 

 

 

 

 

 

 

Austin, TX 78746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock, Inc

55 E. 52nd Street

 

 

1,839,207

(7)

 

 

6.69

%

New York, NY 10055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Officers and Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Molly A. Hemmeter

President and Chief Executive Officer

 

 

359,651

(8)

 

 

1.29

%

 

 

 

 

 

 

 

 

 

Gregory S. Skinner

Chief Financial Officer and Vice President of Finance and Administration

 

 

303,710

(9)

 

 

1.10

%

 

 

 

 

 

 

 

 

 

Ronald L. Midyett

Chief Operating Officer and Vice President

 

 

137,802

(10)

 

 

*

 

 

 

 

 

 

 

 

 

 

Larry D. Hiebert

President of Lifecore Biomedical, Inc. and Vice President of Landec

 

 

—

(11)

 

 

*

 

 

 

 

 

 

 

 

 

 

Steven P. Bitler

Vice President of Corporate Technology

 

 

86,332

(12)

 

 

*

 

(4)This information is based on a Schedule 13G filed by Russell Investments Group, Ltd. (“Russell Investments”) on February 12, 2020, and is as of December 31, 2019. According to the Schedule 13G, Russell Investments has sole voting and shared dispositive power over 2,591,554 shares of the Company’s common stock. The address for Russell Investments is 1301 Second Ave., Suite 1800, Seattle, WA 98101.
(5)This information is based on a Schedule 13G/A filed by Dimensional Fund Advisors LP (“Dimensional Fund”) on February 12, 2020, and is as of December 31, 2019. According to the Schedule 13G/A, Dimensional Fund has sole voting power over 2,343,604 shares of the Company’s common stock, and sole dispositive power over 2,431,533 shares of the Company’s common stock. The address for Dimensional Fund is Building One, 6300 Bee Cave Road, Austin, Texas, 78746.
(6)This information is based on a Schedule 13G/A filed by Blackrock, Inc. (“Blackrock”) on February 5, 2020, and is as of December 31, 2019. According to the Schedule 13G/A, Blackrock has sole dispositive power over 2,011,711 shares of the Company’s common stock, and sole voting power over 1,945,346 shares of the Company’s common stock. The address for Blackrock is 55 East 52nd Street, New York, NY 10055.
(7)This information is based on a Schedule 13G/A filed by The Vanguard Group (“Vanguard”) on February 12, 2020, and is as of December 31, 2019. According to the Schedule 13G/A, Vanguard has sole voting power over 23,949 shares of the Company’s common stock, shared voting power over 26,800 shares of the Company’s common stock, sole dispositive power over 1,569,853 shares of the Company’s common stock, and shared dispositive power over 49,249 shares of the Company’s common stock. The address for Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.
(8)This number includes 5,501 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.
(9)This number includes 2,200 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.
(10)This number includes 2,200 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.
(11)This number includes 7,334 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.
(12)This number includes 5,501 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.
(13)This number includes 2,911,415 shares reported on Form 13F filed by Wynnefield Capital, Inc. showing such beneficial owner's holdings as of June 30, 20. Mr. Obus is a General Partner of Wynnefield Capital, Inc. This number also includes shares subject to outstanding 2,200 RSUs vesting within 60 days after August 17, 2020.
(14)This number includes 2,200 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.

23

 

 

Shares Beneficially Owned (1)

 

Name

 

Number of Shares

of Common Stock

 

 

Percent of Total (2) 

 

Albert D. Bolles, Ph.D., Director

 

 

12,976

 

 

 

*

 

 

        

Deborah Carosella, Director

  

0

   

*

 
         

Frederick Frank, Director

 

 

56,892

(13)

 

 

*

 

 

        

Steven Goldby, Director

 

 

49,373

(14)

 

 

*

 

 

        

Tonia Pankopf, Director

 

 

27,551

(15)

 

 

*

 

 

        

Catherine A. Sohn, Pharma.D., Director

 

 

29,805

(16)

 

 

*

 

 

        

Gary T. Steele, Director

 

 

179,782

(17)

 

 

*

 

 

        

Robert Tobin, Director 

 

 

54,459 

(18)

 

 

*

 

 

        

All directors and executive officers as a group (13 persons)

 

 

1,298,293

(19)

 

 

4.62

%

 

        

* Less than 1%

        

(1)

Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of capital stock.

(2)

As of August 21, 2017, 27,506,712 shares of Common Stock were issued and outstanding. Percentages are calculated with respect to a holder of options exercisable within 60 days after August 21, 2017 as if such holder had exercised his options. Options held by other holders are not included in the percentage calculation with respect to any other holder.

(3)

This information is based on a Form 13F filed by NWQ Investment Management Company, LLC with the SEC showing such beneficial owner’s holdings as of June 30, 2017.

(4)

This information is based on a Form 13F filed by Franklin Resources, Inc. with the SEC showing such beneficial owner’s holdings as of June 30, 2017.

(5)

This information is based on a Form 13F filed by Wynnefield Capital, Inc with the SEC showing such beneficial owner’s holdings as of June 30, 2017.

(6)

This information is based on a Form 13F filed by Dimensional Fund Advisors LP with the SEC showing such beneficial owner’s holdings as of June 30, 2017.

(7)

This information is based on a Form 13F filed by nine institutions with the SEC: BlackRock Institutional Trust Company, N.A.; BlackRock Advisors, BlackRock Advisors, LLC; BlackRock Investment Management, LLC; BlackRock (Netherlands) B.V.; Blackrock Financial Management, Inc, BlackRock Asset Management Canada Limited, Blackrock Asset Management Schweiz AG; Blackrock Asset Management Ireland Limited under the parent company BlackRock, Inc showing such beneficial owners’ holdings as of June 30, 2017.

(8)

This number includes 321,233 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(9)

This number includes 65,000 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.


(10)

This number includes 53,333 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(11)

Mr. Hiebert retired as President of Lifecore and a Vice President of the Company on May 28, 2017 as such he has zero shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(12)

This number includes 16,666 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(13)

This number includes 10,000 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(14)

This number includes 10,000 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(15)

This number includes 6,667 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(16)

This number includes 10,000 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(17)

This number includes 91,666 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(18)

This number includes 10,000 shares subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(19)

This number includes an aggregate of 594,565 shares held by officers and directors that are subject to outstanding stock options exercisable within 60 days after August 21, 2017.

(15)This number includes 2,200 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.
(16)This number includes 2,200 shares subject to outstanding RSUs vesting within 60 days after August 17, 2020.
(17)This number includes 71,550 shares subject to outstanding stock options exercisable within 60 days after August 17, 2020.
(18)This number includes 89,979 shares subject to outstanding stock options exercisable within 60 days after August 17, 2020.
(19)This number includes 117,187 shares subject to outstanding stock options exercisable within 60 days after August 17, 2020.
(20)This number includes 9,975 shares subject to outstanding stock options exercisable within 60 days after August 17, 2020.
(21)This number includes an aggregate of 3,477,886 shares held by executive officers, directors and director nominees that are subject to outstanding stock options exercisable within 60 days after August 17, 2020.



24

EXECUTIVE


COMPENSATION DISCUSSION AND RELATED INFORMATION

ANALYSIS


Compensation Discussion and Analysis

The following Compensation DiscussionDiscussion and Analysis (“CD&A”) describes the philosophy, objectives and structure of our 2017fiscal 2020 executive compensation program. This CD&A is intended to be read in conjunction with the tables whichthat immediately follow this section, which provide further historical compensation information.

The following executive officers constituted our Named Executive Officers (“NEOs”) throughout the past fiscal year:

Molly Hemmeter

Albert D. Bolles, Ph.D.President and Chief Executive Officer

CEO

Gregory S. Skinner

Brian McLaughlin (1)

Vice President of Finance and Administration, and Chief Financial Officer

Ronald L. Midyett

Gregory S. Skinner (1)

Former Executive Vice President of Finance and Administration, and Chief OperatingFinancial Officer
James G. HallVice President of the Company and President of Apio

Lifecore

Larry D. Hiebert

Timothy Burgess

Vice President of the Company and Senior Vice President of Lifecore

Supply Chain of Curation Foods

Steven P. Bitler

Dawn Kimball

Senior Vice President of Corporate Technology

Human Resources, Chief People Officer

(1)Mr. Skinner separated from the Company on January 8, 2020. On January 8, 2020, Mr. McLaughlin, who had previously served as the CFO of Curation Foods, became Interim CFO of the Company, and on March 19, 2020 became the CFO of the Company.

CD&A Reference Guide

Executive Summary

Section I

Executive SummarySection I
Compensation Philosophy and Objectives

Section II

Establishing Executive Compensation

Section III

Compensation Competitive Analysis

Section IV

Elements of Compensation

Section V

Additional Compensation Practices and Policies

Section VI



I.  Executive Summary
Strategy

I.

Executive Summary

We made good progress toward our long-term strategic vision this past year as we continued

The Company’s strategy is to deliver on our mission to create innovative products that support people’s individual health and wellness goals. Undermaximize the leadership of Molly Hemmeter, who became Landec’s President and CEO in October 2015, the strategic directionvalue of our Apiobusiness portfolio by improving operating margins at Curation Foods, and investing in growth to drive momentum at Lifecore businesses has become morewhile driving profitable growth across the organization with consumer insights driven innovation. Each of our business segments are in different life stages and are have clear strategic priorities.
Lifecore
Lifecore is the Company’s FDA Approved CDMO business, which is focused and has better positioned Landec for long-term growth.

Landec had many noteworthy accomplishments in fiscal year 2017 compared to fiscal year 2016:

1)     Lifecore delivered a record yearon driving profitable growth with revenues increasing 18% to $59.4 million and operating income increasing 13% to $15.9 million. The shift in Lifecore’s business model from a premium supplier of hyaluronic acid (HA) to a fully integrated contractproduct development and manufacturing of sterile injectable products. Lifecore seeks to expand its presence in the CDMO marketplace by partnering with biopharmaceutical and biotechnology companies to bring their unique therapies to market. Lifecore’s goal of continuing success will be to execute on its three strategic priorities:

1) Managing Business Development Pipeline: Accelerate product development activities for small and large biopharmaceutical and biotechnology companies in various stages of the product lifecycle, spanning from the clinical development stage to commercialization, which aligns with the business’ overall product development strategy.
2) Maximizing Capacity: Meet customer demand by maximizing capacity in the syringe and vial multi-purpose filler production line to significantly increase the number of products produced.
25

3) Advancing Product Commercialization: Continue to seek out opportunities to advance customers’ late-stage product development activities by supporting their clinical programs and commercial process scale-up activities.
Curation Foods
Curation Foods, the Company’s natural food business, is focused on transforming its business to improve operational performance. The Company launched its shareholder value creation program, Project SWIFT, which aims to strengthen Curation Foods by simplifying the business, optimizing its operational network and rightsizing the organization. The Company believes that the decisive actions of Project SWIFT will help improve the Company’s operating cost structure, enhance profitability, and strengthen its balance sheet with an overall aim to deliver long-term value to stockholders. Curation Foods intends to continue to deliver high levels of product quality and safety, while successfully executing on its customer, grower, and partner commitments. Project SWIFT will continue to be implemented throughout fiscal 2021, with three strategic priorities designed to improve Curation Foods’ overall financial performance and profitability:
1) Network & Operational Optimization: Streamline the organization (CDMO) for difficult-to-handle biomaterials is delivering results.

2)     Apio’s strategy to focus on innovationmaximize efficiency and shiftproductivity by continuous improvement in plant operations with lean manufacturing practices. This included the consolidation and centralization of various offices of Curation Foods into its product mix to higher margin products resultedInnovation Center headquarters in a 260 basis point increase in gross margin. Despite a 4% decline in revenues, Apio’s gross profitSanta Maria, California in fiscal 2017 increased $10.5 million, or 23%,2020.

2) Focus on Strategic Assets:Simplify the business by divesting non-core assets. In fiscal 2020 the Company initiated the strategic sale process of the Company’s Ontario, California salad dressing manufacturing facility, which was duehad yet to become operational and a reduction in lower margin product sales coupled with positive operating efficiencies, including more favorable produce sourcing.

3)     Apio added considerable new distribution late in fiscal year 2017, specifically: (1) Walmart expanded the distributionreview of our Sweet Kale Salad from 1,400 stores to 3,800 stores; (2) Kroger became Eat Smart’s newest salad customer, ordering four varieties of Eat Smart® salads that started shipping to 2,000 stores in July 2017; and (3) Fresh Market started up as a new customer and began shipping eight varieties of Eat Smart salads to approximately 177 stores.

4)     Finally, we added O Olive Oil, Inc. to our portfolio in March 2017. O Olive is Landec’s first step in our stated strategy of moving into natural product segments beyond produce that offer consumers convenient, delicious, and healthystrategic options for everyday eating.of its legacy core vegetable bag and tray business. In June 2020 the Company began exploring opportunities for the planned divestiture of its underutilized Hanover manufacturing facility.

3) Organizational Redesign: Redesigning the organization so that it is the appropriate size for the Company’s future direction. In fiscal 2020, the Company focused on redesigning strategic initiatives, developed and elevated internal talent and reduced overall headcount to improve efficiencies.
Our compensation program has been structured by the Compensation Committee (the “Committee”) of the Board of Directors to reward and incentivize executives to create long-term, sustainable stockholder value growth through a focus on corporate, business unit, and individual achievement. The performance metrics used, and the goals beingtargets set, are reflective ofreflect our updated business strategy. Highlights of our fiscal year 20172020 compensation program include:
•

●     IntroductionSimplified the long-term incentive (LTI) compensation mix

The Committee re-structured the equity compensation component of the long-term incentive plan to primarily include stock options, in order to align with stockholder value creation without the complexity of setting goals during the multi-year transformation period. The Company views options as performance-based long-term cashbecause they do not deliver value to the holder without an increase in the stock price.
•Continued use of a short-term incentive (STI) compensation program
Our short-term incentive program (LTIP)

This new LTIP delivers valueis designed to participants uponfocus our executives on the achievement of ROIC goals for fiscal year 2019. Weannual short-term objectives which we believe thatwill drive the return on invested capital (ROIC) demonstrates effective usedelivery of capital and is an important driver of our long-term growth.

●     New long-term incentive (LTI) compensation mix going forward

Withenhanced stockholder value over the addition of the cash LTIP, the Committee has structured the LTI as 50% cash-based LTIP, 30% restricted stock units (RSUs) and 20% stock options.

●     New short-term incentive (STI) compensation metric added

For 20% of the annual cash incentive award plan, the Committee added “all or nothing” strategic goals for each executive which may be based on corporate, Apio orlong term. At Lifecore, achievements, depending on the responsibility of the executive. The other 80%100% of the annual cash incentive award plan will still bewas based on achieving established targets for revenuesrevenue and operating income for each business unitthe business. Lifecore met its revenue and consolidatedoperating income targets and did earn a bonus in fiscal year 2020. At Curation Foods and for employees tied to Landec results.Corporate (including the CEO and CFO), the fiscal year 2020 annual cash incentive award was based on the Company achieving a minimum Adjusted EBITDA level of $39.9 million, and the available bonus pool was capped at 150% of the established target bonus levels for all plan participants. Although significant progress was made to transform Curation Foods, as the Adjusted EBITDA targets were not met, no bonuses were paid out to the respective executives consistent with our intent to align executive compensation with stockholders’ interests.

•

●     Revised peer group for fiscal year 2017

2020

We made changes in fiscal year 2019 to our peer group this year to better reflect our business practices.

●     the evolution and transformation of Landec’s two businesses. In fiscal year 2020, we further refined the peer group to better align according to size and market capitalization.

•Continued strong stockholderstockholder support for our pay program

Once

At the 2019 Annual Meeting of Stockholders, once again, we have received very strong support (over 98%) for our say-on-pay proposal. Our Committee is proud ofbelieves this achievement and believes it is reflective of thereflects stockholders’ support for our pay-for-performance philosophy and practice.


26


Components of Our Compensation Program

The Committee oversees our executive compensation program, which includes several compensation elements that have each been tailored to reward specific aspects of overall Landec and business line performance that the Board believes are central to delivering long-term stockholder value.

Base Salary

Base salaries are set to be competitive to the marketplace. Base salaries are not automatically adjusted annually but instead are adjusted when the Committee judges that a change is warranted due to changes in an executive officer’s responsibilities, demonstrated performance or relevant market data.

Short-Term

Incentives

20%Short-Term
Incentives

Funding of the fiscal year 2020 annual cash incentive awardpool for Landec corporate executives and Curation employees was dependent upon the Company exceeding $39.9 million of consolidated Adjusted EBITDA for the fiscal year. The maximum payout, is 150% of their target bonus for all plan is based on achieving certain strategic goals for each executive which may be based on corporate, Apio orparticipants.The Lifecore achievements, depending on the responsibility of the executive.

80% of the annual cash incentive award plan is based on achieving established targets for Lifecore revenues and operating income for each business unit and consolidated Landec results.income.

Long-Term

Incentives

Long-Term
Incentives

Long-term equity awards incentivizeprovide an incentive to executives to deliverincrease long-term stockholder value, while also providing a retention vehicle for our executives.

The LTI mix is currently 50% cash LTIP, 30% RSUs and 20% While restricted stock options.

2017 Target Total Compensation

To promote our pay-for-performance philosophy, and align the interests of management and stockholders, our 2017 executive compensation program focused extensively on variable compensation components. For example, our CEO’s target pay forunits were awarded to certain Named Executive Officers during fiscal year 2017 consists2020, the Committee re-structured the equity component of over 81% variable, or “at risk”the long-term incentive pay. This includes short-term cash incentives, as well as long-term incentives delivered asplan to primarily include stock options, RSUs,because it views the inherent requirement to increase stock price in order to realize value as performance based and our new performance-based cash LTIP vehicle.

aligned with Landec’s transformation plan.


Compensation Governance Practices

Our pay-for-performance philosophy and compensation governance practices provide an appropriate framework for our executives to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. Some of our practices include:

Best Practices We Employ

Long-term focus.The majority of our executive compensation is tied to long-term performance.

Equity Ownership GuidelinesGuidelines.. We have robust equity ownership guidelines of 5x salary for our CEO and 3x salary for other executive officers.

Equity Holding Requirements. We have implemented holding requirements for executives wherein each executive must retain at least 50% of equity granted until minimum share ownership requirements are achieved.

Clawback Policy. We have implemented a strong recoupment, or "clawback",“clawback” policy, to recover incentive compensation in the event of certain restatements of the financial results of the Company.

No Excessive Perquisites. Benefits.Other than participation in benefit plans offered to all of our employees, we We offer nolimited perquisites and other perquisitesbenefits to our executive officers.

No Section 280G Gross-upsGross-ups. . None of our executive officers are entitled to an excise tax gross-up of the payments received in connection with a Section 280G gross-up.change in control.

Director Independence.The Committee is made up entirely of independent directors.

Independent Compensation Consultant.The Committee retains an independent compensation consultant to advise on our executive compensation programs and practices.

Risk Assessment.We conduct an annual risk assessment of theour compensation program.


27


Say on Pay Voting Results


At the 2016 annual meeting2019 Annual Meeting of stockholders,Stockholders, our say-on-pay proposal received strong support, garnering support from 98.4%over 98% of sharesvotes cast. This is consistent with the voting results of 20152018, 2017 and 2014,2016, which had support levels of 97.4%98%, 96% and 97.9%98%, respectively. The CompanyCommittee is pleased with these results and believes thatthey reflect stockholders have confirmedsupport for our past executive compensation philosophy, policies and programs. The Committee took these results into account by continuing to emphasize our pay-for-performance philosophy which utilizes performance measures that provide incentives to deliver value to our stockholders.

II.

Compensation Philosophy and Objectives

Landec

II.  Compensation Philosophy and Objectives
’s
Landec’s compensation program is intended to meet three principal objectives:

1)

attract, retain and reward officers and other key employees;

2)

motivate these individuals to achieve the Company’s short-term and long-term strategic goals; and

3)

align the interests of our executives with those of our stockholders.

1)attract, retain and reward officers and other key employees;
2)motivate these individuals to achieve the Company’s short-term and long-term strategic goals; and
3)align the interests of our executives with those of our stockholders.
The compensation program is designed to balance an executive’sexecutive’s achievements in managing the day-to-day business and addressing shorter-term challenges facing the Company and its subsidiaries, such as the effects of weather-related disruptions and competitive pressures, with incentives to achieve our long-term vision to be the leadergoal of increasing profitability in our food and biomaterials businesses by creating innovative products that support people’s individual health and wellness goals.

The above policies guide the Committee in assessing the proper allocation among base salary, short term incentive compensation and long-term compensation, current cash compensation and short-term bonusincentive compensation. Other considerations include Landec’s business objectives, its fiduciary and corporate responsibilities (including internal equity considerations and affordability), competitive practices and trends and regulatory requirements.

III.

Establishing Executive Compensation

Landec

III.  Establishing Executive Compensation
’sLandec’s executive compensation program is overseen and administered by the Committee, which is comprised entirely of independent directors as determined in accordance with applicable NASDAQ SEC and Internal Revenue CodeSEC rules. The Committee operates under a written charter adopted by our Board of Directors. A copy of the Committee’s charter is available at www.landec.com.

In determining the particular elements of compensation that are used to implement Landec’sLandec’s overall compensation policies, the Committee takes into consideration a number of objective factors related to Landec’s performance, such as Landec’s earnings per share, profitability, revenue growth and business-unit-specific operational and financial performance, as well as the competitive practices among its peer group. The Committee evaluates the Company’s financial and strategic performance in the context of determining compensation as well as the individual performance of each Named Executive Officer.


The Committee meets regularly to review overall executive compensation. The Committee also meets with Landec’sLandec’s President and Chief Executive Officer, Ms. Hemmeter,CEO and other executives to obtain recommendations with respect to Company compensation programs, practices and packages for executives and other employees. The Chief Executive OfficerCEO makes recommendations to the Committee on the base salary, bonusannual cash incentive targets and equity compensation for the executive team and other employees, but not for herself.herself or himself. The Committee, however, has the ultimate responsibility for determining executive compensation, which is recommended to the Board of Directors for its final approval.

compensation.

Role of the Compensation Consultant

In March 2017,

For fiscal year 2020, the Committee retained Radford Consulting, an Aon Hewitt company,Frederic W. Cook & Co (“FW Cook”) to provide consulting services to the Committee, including advice on the compensation philosophy, incentive plan design,designs, executive compensation analysis, and CD&A disclosure, amongamong other compensation topics. RadfordFW Cook provides no services to the Company other than consulting services provided to the Committee.

The Committee has conducted a specific review of its relationship with Radford,FW Cook and determined that Radford’sFW Cook’s work for the Committee does not raise any conflicts of interest. Radford’sFW Cook’s work has conformed to the independence factors and guidance provided by the Dodd-Frank Act, the SEC and NASDAQ.
28

IV.

Compensation Competitive Analysis

IV.  Compensation Competitive Analysis

Our Committee uses peer group information to provide context for its compensation decision-making for our executive officers. The Committee monitors the peer group to assess its appropriateness as a source of competitive compensation data and reassesses the relevance of the peer group as needed. In an effort to more accurately reflect the significant portion ofthat both Curation Foods and Lifecore play a role in the Company’s business attributable to Apio’s operations,performance, the peer group washas been adjusted and simplified over the years, with peers in 2014,both the life sciences and agriculture/food industries to allowreflect the Company’s labor market and similar investments for comparisonsstockholders.
Fiscal Year 2020 Peers
To assist in determining compensation for fiscal year 2020, FW Cook helped the Committee to confirm the companies similar to Landec with respect to sector, market capitalization and revenue to provide a broad perspective on how these peers address the volatility and unpredictability of financial results as well as to assess competitive pay levels and practices.
•Sector: Healthcare, consumer staples, contract development and manufacturing organizations, and excluding companies within the chemical industry.
•Revenue: Revenue between $100 million and $1.4 billion, viewed as reasonable and the size from which Landec (at $590 million in annual revenues) may recruit executives.
•Market Capitalization: Range between $250 million and $4.40 billion in the food and life sciences industries. Similarly,prior fiscal year, which is approximately 0.9x to 15x Landec’s 2020 market capitalization, which was viewed as understated during the transformation.

Using these criteria, the Committee revised the Company’s peer group again for fiscal year 2017, with Amplify Snack Brands being added, while Inventure Foods and Snyder’s Lance being removed.

Our fiscal year 2017 peer group consisted ofdetermined that the following companies:

12 companies comprised the Company's 2020 peer group:

Albany Molecular Research

Anika Therapeutics, Inc.John BB. Sanfilippo & Son,

Inc.

Amplify Snack Brands

Calavo Growers, Inc.

Lancaster Colony

Corporation

Anika Therapeutics

Cal-Maine Foods, Inc.

Limoneira

Company

Calavo Growers

National Beverage

CryoLife, Inc.		Seneca Foods Corporation

Cal-Maine Foods

Omega Protein

Farmer Bros. Co.		SunOpta, Inc.

CryoLife,

Seneca

Farmer Bros.

SunOpta

J&J Snack Foods

Corp.

Surmodics,

Inc.

One peer (Cal-Maine Foods, Inc.) was reinstated from the fiscal year 2018 peer group.We removed the following three peers that were used in the fiscal year 2019 peer group because they were either viewed as too large or had been acquired: The Simply Good Foods Company, Lantheus Holdings, Inc., and Medpace Holdings, Inc.
Peer group data is gathered with respect to base salary, bonus targets and all equity and non-equity awards (including stock options, performance shares, restricted stock and long-term, and cash-based awards).

The Committee does not benchmark compensation to a particular level, but rather uses competitive market data as one reference point among several when determining appropriate pay levels. On an overall basis, Landec’s goal is to target total compensation for Named Executive Officers at a level that is competitive with the 50th percentile within the selected peer group for the Named Executive Officers, but other important considerations include each executive'sexecutive’s particular experience, unique and critical skills, scope of responsibilities, proven performance, succession management and retention considerations, and the need to recruit new executives. The Committee analyzes base pay, target cash compensation and target total direct compensation within this broader context.

V.  Elements of Compensation

V.

Elements of Compensation

As outlined above, there are three major elements that comprise Landec’sLandec’s compensation program: (i) base salary; (ii) annual cash incentive opportunities; and (iii) long-term incentives, in the form of stock options and/orand RSU awards, as well as long-term,and performance-based cash awards.RSUs (although no performance based RSUs were issued in fiscal year 2020).

29

Base Salaries

The base salaries of executive officers are set at levels intended to be competitive with those companies in ourour peer group with which we compete for executive talent. In determining base salary, the Committee also considers factors such as:

●

job performance

●

skill set

●

prior experience

●

the executive’s time in his or her position with Landec

●

internal consistency regarding pay levels for similar positions or skill levels within the Company

●

external pressures to attract and retain talent, and

●

market conditions generally.

•job performance
•skill set
•prior experience
•the executive’s time in his or her position with Landec
•internal consistency regarding pay levels for similar positions or skill levels within the Company
•external pressures to attract and retain talent and
•market conditions generally.
Base salaries are not adjusted annually but are generally adjusted when the Committee judges that a change is warranted by a change in an executive officer’s responsibilities, demonstrated performance or relevant market data.


In fiscal years 20172020 and 2016, our NEO2019, annual base salaries for our named executive officers were as follows:

Name

FY 2017

FY 2016

% Change

Molly A. Hemmeter

475,000

426,000

11.5%

Gregory S. Skinner

380,000

380,000

0.0%

Ronald L. Midyett

340,000

340,000

0.0%

Larry D. Hiebert

300,000

300,000

0.0%

Steven P. Bitler

275,000

273,461

0.6%

NameFY 2020FY 2019% Change
Albert D. Bolles, Ph. D.$620,000 $620,000 — %
Brian F. McLaughlin (1)$350,000 $285,000 23 %
Gregory S. Skinner$418,000 $380,000 10 %
James G. Hall$350,000 $293,600 19 %
Timothy P. Burgess (2)$325,000 $— N/A
Dawn Kimball (2)$300,000 $— N/A
(1) Mr. McLaughlin became interim CFO in January 2020 and was named permanent CFO in March 2020. The amount shown is his salary upon being named permanent CFO, effective March 19, 2020.
(2) Mr. Burgess and Ms. Hemmeter has only beenKimball became Named Executive Officers in her role since October 2015. When Ms. Hemmeter was promoted to President and CEO, her compensation was initially positioned at approximately the 25th percentile, in light of the fact that she was new to the President and CEO role. Having demonstrated a proven track record of success in her new role, the Committee is making adjustments to more closely align her compensation with the median of the competitive market.

fiscal year 2020.

Annual Cash Incentive Award Plan

Landec maintains an annual cash incentive award plan (the “Cash(the “Cash Incentive Award Plan”Plan”) for senior executives to encourage and reward achievement of Landec’s business goals and to assist Landec in attracting and retaining executives by offering an opportunity to earn a competitive level of compensation. This plan is consistent with our overall pay-for-performance philosophy and our goal of attracting and retaining top level executive officers in the industry.

In keeping with our pay for performance philosophy, a portion of our executive’sexecutives’ annual compensation is “at risk” compensation. This has resulted in most of our NEOsNamed Executive Officers not receiving any annual cash incentive award or only a portion of their targeted award in a majority of recent years. This was also the case in fiscal year 2017, where despite a strong year in terms of overall achievements, Apio did not achieve its revenue and operating income targets due to a variety of factors, such as certain customers deciding to change to a multi-sourcing strategy resulting in the loss of some business at Apio and the Company’s long-term strategic decision to discontinue certain low-margin Apio business, which resulted in Apio not achieving its minimum targets for the payment of that portion of the annual cash incentive award in fiscal year 2017.


Award targets are set as a percentage of base salary. Incentive awardaward targets and ranges are typically set early in each fiscal year, together with specific criteria for corporate, business unit and sometimes, individual objectives. The overall corporate and business unit objectives are intended to be challenging but achievable. Such objectives are based on actual performance compared to predetermined financial performance targets, which are weighted depending upon whether the employee is a member of a business unit or the corporate staff. Incentive award targets and criteria for executive officers are subject to approval by the Committee.

30

Fiscal Year 20172020 Cash Incentive Award Plan

At the beginning of fiscal year 2017, the Committee approved the 2017

The Cash Incentive Award Plan for the fiscal year which2020 included financial objectives for each business unitthe consolidated corporation and atfor Lifecore. The plan which applied to Landec corporate employees and the corporate level on a consolidated basis. The financial objectives wereCuration Foods employees was originally based on the achievement of revenue and operating income goals; however, during fiscal year 2020 the Compensation Committee decided to amend the plan to instead be based on Landec achieving a minimum level of consolidated Adjusted EBITDA goal. The plan for Lifecore employees was based on Lifecore’s internally-developed business unit financial plan for the fiscal year.

The 2017 Cash Incentive Award Plan2020 Landec corporate and Curation Foods plan was based on Landec exceeding a minimum consolidated Adjusted EBITDA level of $39.9 million and the 2020 Lifecore plan was based on established targets for revenues and operating income for eachthe business unit and consolidated Landec results.

unit. For fiscal year 2017,2020, the CEO’s target cash incentive award was 100% of her base salary for Mr. Bolles, and the other Named Executive Officers’ target incentive awards ranged from 40%50% to 60%80% of their base salary.


Performance Goals
In fiscal year 2017,2020, performance measures were broken into two buckets:

Strategic goals:categories:

“All or nothing” strategic goals (20% weighting)

Corporate Financial goals: target revenueAdjusted EBITDA above a minimum threshold. We define Adjusted EBITDA as earnings before the fair market value change of the Company’s investment in Windset, interest expense, income tax expense, depreciation and amortization, certain restructuring and other non-recurring charges, and before impairment of goodwill and intangibles charges.
Lifecore: Target Lifecore revenues and operating income (80% weighting)budget. The revenue goal was $85.5 million and the operating income goal was $21.2 million.

For Ms. Hemmeter and Mr. Skinner, each award target wasLifecore executives, financial goals are based on consolidated a matrix of revenues and controllable income goals for the Lifecore business. The Landec performance;corporate (“Corporate”) and Curation Foods bonus formula was as follows:

1. Upon achievement of $39.9 million Adjusted EBITDA, the bonus pool begins to fund and 95% of next $1.0 million of Adjusted EBITDA funds into the Curation Foods and Corporate combined pool accrual.
2. Out of any Adjusted EBITDA in excess of $40.9 million, 50% of such excess is contributed to the Curation Foods and Corporate employee bonus pool.
3. Curation Foods and Corporate employee bonus pool is capped at 150% of target bonus cost.
4. Curation Foods and Corporate bonus pool that is funded may be spent/allocated between all participants using discretion; and the ability to use discretion to allocate to individuals extends to both Curation Foods and Corporate (up to 150% of target).
5. The total target cost of the Curation Foods and the Corporate bonus pool is $2.6 million (with the maximum being $3.9 million, or 150% of target).

The Lifecore bonus matrix was as follows, expressed as a percent of target bonus (linear interpolation applied between points shown, and $s are in millions):
Revenue
$68.4$77.0$85.5$94.1$102.6$111.2
% Goal80%90%100%110%120%130%
Operating Income$27.6130%200%158%175%193%210%228%
$25.5120%194%135%150%165%180%195%
$23.3110%189%113%125%138%150%163%
$21.2100%85%90%100%110%120%130%
$19.190%45%68%75%83%90%98%
$17.080%10%45%50%55%60%65%
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Fiscal Year 2020 Earned Incentives
Fiscal year 2020 actual Adjusted EBITDA performance for Landec was $22.0 million. Because this was below the $39.9 million minimum Adjusted EBITDA required under the fiscal year 2020 cash incentive plan for Landec Corporate and Curation Foods executives, no cash incentive awards were paid to Curation Foods or Landec Corporate employees for fiscal year 2020.
Mr. Midyett,Hall participated in the award targetsLifecore cash incentive plan. Lifecore’s fiscal year 2020 revenue was based on Apio’s annual financial results; for Mr. Hiebert, the award target was based on Lifecore’s annual financial results$85.8 million and for Dr. Bitler, the award target was based on several specific financial goals related to the success and advancement of the Company’s BreatheWay® technology and overall Landec results. No bonuses are payable if revenue orits fiscal year 2020 operating income was less than 80%$19.3 million. This combined payout using the Lifecore bonus matrix was 78% of target, which is the target amounts; bonuses can exceed the target bonus for each NEO based on the business unit and/or consolidated Landec results exceeding the targeted amounts.

amount of fiscal year 2020 cash incentive paid to Mr. Hall.

Based on the metrics and actual performance described above, the Named Executive Officers’Officers’ target incentive awards and actual amounts earned for fiscal year 20172020 were as follows:
NameTarget as % of Base SalaryTarget ($)Actual Earned 2020 Incentive Award ($)
Albert D. Bolles, PhD100%$620,000 $— 
Brian F. McLaughlin (1)60%$210,000 $— 
Gregory S. Skinner60%$250,800 $— 
James G. Hall (2)80%$280,000 $218,400 
Timothy P. Burgess50%$162,500 $— 
Dawn Kimball50%$150,000 $— 

Name

 

Target as %

of Base

Salary

  

Target ($)

  

Actual Earned

2017 Incentive

Award ($)

 

Molly A. Hemmeter

  100% $475,000  $331,088 

Gregory S. Skinner

  60% $228,000  $158,922 

Ronald L. Midyett

  50% $170,000  $34,000 

Larry D. Hiebert

  50% $150,000  $157,525 

Steven P. Bitler

  40% $110,000  $49,336 

(1)With Mr. McLaughlin’s promotion to CFO of the Company effective March 19, 2020 his target bonus increased from 50% to 60% of base salary.
(2)For fiscal year 2020, Mr. Hall is the only executive who earned a cash incentive. The Compensation Committee in its discretion determined that, in addition to the earned cash incentive, Mr. Hall would receive a bonus equal to 12% of target bonus in form of RSUs specifically, 3,574 RSUs that fully vest on the first anniversary of the grant date. In deciding to award the RSUs the Committee discussed that Lifecore’s operating income was hurt by the COVID-19 pandemic slowdown during Q4, thus resulting in a depressed payout under Lifecore's bonus plan, and decided in its discretion to award RSUs to continue to incentivize Mr. Hall.

Long-Term Incentive Compensation

Landec provides long-term incentive compensation through equity-based and cash-based awards intended to align the interests of officers with those of the stockholders by creating an incentive for officers to maximize long-term stockholder value. At the same time, our long-term awards are designed to encourage officers to remain employed with Landec despite a competitive labor market in our industry.


Award Types

Awards to eligible employees, including Named Executive Officers, are generally made on an annual basis. Equity-based awards typically takehistorically have taken the form of stock options and RSUs. The RSUs typically vest on the third anniversary of the grant date. Stock option awards provide that one-third vests on the first anniversary of the grant date and are generthen 1/36thally granted with a three-year vesting schedule. For fiscal year 2017, we also introduced performance-based cash awards to be paid under the LTIP. per month thereafter.

Landec grants stock options because they can be an effective tool for meeting Landec’sLandec’s compensation goal of increasing long-term stockholder value. Employees are able to profit from stock options only if Landec’s stock price increases in value over the stock option’s exercise price. Landec grants RSUs because they provide a more predictable value to employees than stock options, and therefore are efficient tools in retaining and motivating employees, while also serving as an incentive to increase the value of Landec’s stock. RSUs also can be a morean efficient means of using equity plan share reserves because fewer RSUs are needed to provide a retention and incentive value as compared to awards of stock options. Finally, we have introduced
In fiscal year 2020, the Committee primarily granted stock options because they are a performance-based cash LTIPsimple way to provide an incentive vehicle directly linked to our strategic goal of focusing on ROIC. We have chosenensure that executives realize a cash-based plan to help manage our equity burn rate and avoid dilution. When earned, the cash received by an executivereward only in the LTIP must be placed in a deferred compensation account for a minimum of one year before it can be drawn.event that stockholders experience stock price appreciation.
32

LTI

Equity Grants in FiscalFiscal Year 2017

2020

In general, the number of long-term incentive awards granted to each executive officer isare determined based on a number of qualitative factors, considered holistically, including an analysis of competitive market data, the officer’sofficer’s degree of responsibility, general level of performance, ability to affect future Company performance, salary level and recent noteworthy achievements, as well as prior years’ awards.

During fiscal year 2017,2020, the Committee granted time-based equity awards to our executive officers, including our Named Executive Officers,officers in the form of stock options and RSUs. The RSUs will vest on the third anniversary of the grant date and the stock options will vest as follows:

Name

Stock Options (#)

RSUs (#)

Molly A. Hemmeter

150,000

97,406

Gregory S. Skinner

—

17,826

Ronald L. Midyett

—

14,290

Larry D. Hiebert

—

13,450

Steven P. Bitler

—

—

Additionally, one-third vests on the Committee set the following individual target amounts for the cash-based awards to be paid under the LTIP for our NEOs, based on achieving a specific ROIC target for fiscal year 2019:

Name

 

Target Amount

 

Molly A. Hemmeter

 $327,100 

Gregory S. Skinner

 $123,000 

Ronald L. Midyett

 $98,600 

Larry D. Hiebert (1)

 $92,800 

(1)

Mr. Hiebert will not receive any payment under the LTIP due to his retirement at the end of fiscal year 2017.


Each participant who continues as an employee will receive a payout that is a percentage of their individual target amount, based on a ratiofirst anniversary of the actual ROICgrant date and then 1/36th per month thereafter.


NameStock Options (#)RSUs (#)
Albert D. Bolles, Ph.D100,000 — 
Brian F. McLaughlin (1)60,000 — 
Gregory S. Skinner— — 
James G. Hall100,000 10,000
Timothy P. Burgess— 17,500
Dawn Kimball— 17,500
(1)Mr. McLaughlin’s received an award of 25,000 options on January 7, 2020 while serving as interim CFO and an award of 35,000 stock options upon being promoted to CFO permanently on April 1, 2020.

The award to Dr. Bolles, Mr. McLaughlin, Mr. Burgess, and Ms. Kimball had grant date fair values, as disclosed in the target ROIC.Summary Compensation Table, which were below the median compensation of our peer group to reflect their payout potential and the fact that Landec market capitalization is lower than the median peer group market capitalization. The payout scale will beaward to Mr. Hall had grant date fair value, as follows:disclosed in the Summary Compensation Table, which was slightly above the median of our peer group to reflect the importance of Lifecore to Landec’s future and his strong performance, particularly ensuring that the Lifecore business unit continued to remain and grow its profitability.

Actual ROIC as a % of Target

ROIC

% of Individual
Target Paid

130% and above

130%

115%

115%

100%

100%

90%

75%

80%

50%

less than 80%

0%

VI.

Additional Compensation Policies and Practices


VI.  Additional Compensation Policies and Practices
Clawback Policy

In May 2014, the Board of Directors adopted an executive compensation clawback policy, which provides for recoupment of executive incentive compensation in the event of certain restatements of the financial results of the Company. Under the policy, in the event of a substantial restatement of the Company’s financial results due to material noncompliance with financial reporting requirements, if the Board of Directors determines in good faith that any portion of a current or former executive officer’s incentive compensation was paid as a result of such noncompliance, then the Company may recover that portion of such compensation that was based on the erroneous financial data. In determining whether to seek recovery of compensation, the Board of Directors or the Committee may take into account any considerations it deems appropriate, including whether the assertion of a claim may violate applicable law or adversely impact the interests of the Company in any related proceeding or investigation, the extent to which the executive officer was responsible for the error that resulted in the restatement, and the cost and likely outcome of any potential litigation in connection with the Company’s attempts to recoup such compensation.
Transactions in Company Securities
Our insider trading policy prohibits our directors, officers, and employees from engaging in certain speculative or hedging transactions in our securities, such as puts, calls, collars, swaps, forward sale contracts, and other derivative securities transactions involving the Company’s equity securities, on an exchange or in any other organized market.
33

Executive Stock Ownership Requirements

To promote a focus on long-term growth and to align the interests of the Company’sCompany’s officers and directors with those of its stockholder, the Board of Directors has adopted stock ownership guidelines requiring certain minimum ownership levels of Common Stock, based on position:

Position

Requirement

Chief Executive Officer

Position

Requirement

CEO5x base salary

Other executive officers

3x base salary

Non-executive directors

3x annual retainer


For purposes of the guidelines, the value of a share of Common Stock, outstanding options, and/or unvested RSUs is measured as the greater of (i) the then current market price or (ii) the closing price of a share of Common Stock on the date when the stock was acquired, or the vesting date in the case of RSUs.acquired.

Newly-appointed

Newly appointed executive officers have five years from the date they are appointed or promoted to meet these guidelines. In the event of an increase in base salary, the executive officer will have two years from the date of the increase to acquire any additional shares or RSUs needed to meet the guidelines. Until the required ownership level is reached, executive officers are required to retain 50% of net shares acquired upon any future vesting of RSUs and/or exercise of stock options, after deducting shares used to pay any applicable taxes and/or exercise price.


Nonqualified Deferred Compensation Plan

On July 25, 2013, the Board approved the NonqualifiedNonqualified Deferred Compensation Plan (the “Deferral Plan”“Deferral Plan”) for non-employee directors and certain participating employees, including the Named Executive Officers. The Deferral Plan is administered by a committee consisting of the Chief Executive OfficerCEO and the Chief Financial Officer of the Company or persons designated by them. The Deferral Plan allows non-employee directors to defer up to 100% of the fees earned for their service as director and allows participating employees to defer up to 50% of their base salary and up to 100% of their annual cash bonus. In addition, any amounts earned by an executive under the LTIP must be placed in a Deferral Plan account for a minimum of one year. Any amounts deferred by a participating employee are invested on behalf of the participating employee, and any investment returns earned thereon are credited to the participating employee’s account. Investment options are determined by the committee that administers the Deferral Plan. Each participating employee may designate the investment option or options for his or her account and may change those investment options at any time.

A participating employee may elect to receive distributions from his or her account beginning in a specified payment year no sooner than three years afterafter the calendar year to which the deferred compensation relates, to be paid in a lump sum or in annual installments not to exceed ten years, according to the participating employee’s election. This election is made at the time when the participating employee makes an election to defer compensation. The participating employee may subsequently elect to delay the year in which deferred compensation is paid, provided that such election must be made at least 12 months before the year in which payment was previously scheduled to occur, must specify a new payment year that is at least five years after the year in which payment was to be made and will not take effect for 12 months. A participating employee will also receive distributions in accordance with his or her deferral elections, which may include a specified payment date, and upon the occurrencea separation from service, death, disability and/or a change in control of certain events specified in Deferral Plan, including termination of employment.Landec

.

The Company has the discretion, but not the obligation, to make contributions to the Deferral Plan for the benefit of the participating employees, subject to the terms and conditionsconditions of the Deferral Plan.

401(k) Plan and Other Generally Available Benefit Programs

Landec maintains a tax-qualified 401(k) plan which provides for broad-based employee participation. Under the 401(k) Plan, all Landec employees are eligible to receive matchingmatching contributions from Landec. The 401(k) Plan is a safe harbor plan (as defined in the Internal Revenue Code of 1986)Code) with a safe harbor match of 100% on the first 3% of deferrals and 50% on the next 2% of each participant’s pretax contributions; and the match is calculated and paid to participants’ accounts on a payroll-by-payroll basis, subject to applicable federal limits. The 401(k) Plan does not have an associated vesting schedule. Landec also makes an annual “reconciling match” by recalculating the regular matching contribution as if it were paid on an annualized, instead of on a payroll-by-payroll, basis. If the annualized matching contribution would have been higher, Landec makes a contribution to the participant’s account in an amount equal to the difference between the two amounts. Other than the 401(k) Plan, Landec does not provide defined benefit pension plans or defined contribution retirement plans to its executives or other employees.
34

Landec also offers a number of other benefits to the Named ExecutiveExecutive Officers pursuant to benefit programs that provide for broad-based employee participation. These benefit programs include medical, dental and vision insurance, long-term and short-term disability insurance, life and accidental death and dismemberment insurance, health and dependent care flexible spending accounts, wellness programs, educational assistance and certain other benefits.

The 401(k) Plan and other generally available benefit programs allow Landec to remain competitive with respect to employeeemployee talent, and Landec believes that the availability of the benefit programs generally enhances employee productivity and loyalty to Landec. The main objectives of Landec’s benefit programs are to give our employees access to quality healthcare, financial protection from unforeseen events, assistance in achieving retirement financial goals and enhanced health and productivity. These generally available benefits typically do not specifically factor into decisions regarding an individual executive’s total compensation or equity award package.


Employment Agreements

Chief Executive Officer

On October 15, 2015May 23, 2019, the Company entered into an executive employment agreement with Ms. Hemmeter (the “Hemmeter Agreement”)Dr. Bolles setting forth the terms of herhis employment. The Hemmeter Agreement expiresThis agreement was set to expire on December 31, 2018May 29, 2022 unless renewed or extended by both parties and providesprovided that Ms. HemmeterDr. Bolles shall be paid an annual base salary of $475,000 (which was increased to $525,000 effective at the beginning of fiscal year 2018) through the term of the Hemmeter Agreement,$620,000 and continue towould participate in the annual Cash Incentive Award Plan. Ms. HemmeterPlan and the LTI plan. Dr. Bolles is also eligible for grants of equity-based awards at such times and in such amounts as determined by the Committee. See the section entitled “Employment Contracts and Potential Payments upon Termination or Change in Control” for a further discussion of the terms of the Hemmeter Agreement.

In making decisions with respect to Ms. Hemmeter’sDr. Bolles’ salary, target bonus and equity compensation grant, the Committee relied on the peer group data described above and gave considerable weight to the CEO’s ability to drive performance necessary to achieve our transformational corporate objectives and to deliver value to our stockholders.
Dr. Bolles agreed, as part of the Bolles Agreement (defined below), not to solicit, induce, recruit, encourage or take away employees or consultants of the Company during his employment and for a period of two years following his termination.
Chief Executive Officer’s significant and direct influence over Landec’s overall performance.

Other Named Executive Officers

People Officer

On October 15, 2015,14, 2019, the Company entered into a newan executive employment agreement with Mr. SkinnerMs. Kimball (the “Skinner Agreement”“Kimball Agreement”) setting forth the terms of hisher employment. The SkinnerKimball Agreement expires on December 31, 20182021 unless renewed or extended by both parties, and provides that Mr. SkinnerMs. Kimball shall be paid an annual base salary of $380,000$300,000 through the term of the SkinnerKimball Agreement (unless modified by the Committee), and continue to participate in the annual Cash Incentive Award Plan. Mr. SkinnerPlan and LTI plan. Ms. Kimball is also eligible for grants of equity-based awards at such times and in such amounts as determined by the Committee. See
Ms. Kimball agreed, as part of the Kimball Agreement, not to solicit, induce, recruit, encourage or take away employees or consultants of the Company during her employment and for a period of two years following her termination.
Former Chief Financial Officer
On January 31, 2019, the Company entered into a new executive employment agreement with Mr. Skinner (the “Skinner Agreement”) setting forth the terms of his employment. The Skinner Agreement provided that Mr. Skinner would be paid an annual base salary of $418,000 through the term of the Skinner Agreement (unless modified by the Committee), and continue to participate in the annual Cash Incentive Award Plan and LTI plan. Mr. Skinner was also eligible for grants of equity-based awards at such times and in such amounts as determined by the Committee. Mr. Skinner separated from the Company effective January 8, 2020 and in connection with his separation received the following severance benefits which are described in the section entitled “Employment Contracts and Potential Payments upon Termination or Change in Control” forbelow.
For a further discussiondescription of the termspotential payments upon termination or a change in control based on the agreements that were in effect in for fiscal year 2020, see the section entitled “Employment Contracts and Potential Payments upon Termination or Change in Control” below. In addition for fiscal year 2021 we amended Dr. Bolles’ employment agreement and adopted a new severance plan as described below.
35

Fiscal Year 2021 Announcements
CEO - Amended and Restated Employment Agreement
On July 23, 2020, the Board approved entering into an amended and restated employment agreement with Albert D. Bolles, Ph.D., the Company’s President and CEO (the “Bolles Agreement”). The amended employment agreement supersedes and replaces Dr. Bolles’ prior employment agreement and revises the prior agreement in the following material respects. The term of the Skinner Agreement.

In making decisions with respectamended employment agreement begins on July 23, 2020 and ends on July 23, 2023, at which point the agreement will expire unless renewed or extended by the written consent of both parties.

Under the Bolles Agreement, in the event that Dr. Bolles’ employment is terminated by the Company without “cause” or by Dr. Bolles for “good reason”, in either case, on or within two years following a “change in control”, subject to the execution and non-revocation of a general release of claims in favor of the Company, Dr. Bolles will be eligible to receive the following payments and benefits: a cash payment equal to the sum of (i) Dr. Bolles’ then-current annual base salary, plus (ii) his target cash performance bonus for Named Executive Officers other than the CEO,year in which the Committee reviews peer group data astermination occurs, to be paid in substantially equal installments over the 18-month period following the termination date; a cash payment equal to Dr. Bolles’ pro-rated target cash performance bonus for the year in which the termination occurs; Company-subsidized COBRA premium payments for Dr. Bolles and his covered dependents for up to the maximum period permitted under COBRA; and full accelerated vesting of all outstanding Company equity awards, with performance-based awards vesting at target performance values (unless otherwise specified in the applicable award agreement). Dr. Bolles’ right to receive the severance payments and benefits described above is subject to his delivery and, takes into account the dateas applicable, non-revocation of the most recent adjustmenta general release of claims in our favor and his continued compliance with any applicable restrictive covenants. In addition, in the base pay of each Named Executive Officer.

Complianceevent that any payment under the Bolles Agreement, together with Internal Revenue Codeany other amounts paid to Dr. Bolles by us, would subject the executive to an excise tax under Section 162(m)

Section 162(m)4999 of the Internal Revenue Code, such payments will be reduced to the extent that such reduction would produce a better net after-tax result for him.


Executive Change in Control Severance Plan
On July 23, 2020, the Board of 1986, as amended, generally disallowsDirectors of the Company adopted the Landec Corporation Executive Change in Control Severance Plan (the “Severance Plan”). The Severance Plan provides for the payment of cash severance and other benefits to our executives, including Brian McLaughlin, James Hall, Timothy Burgess and Dawn Kimball in the event of a tax deductionqualifying termination of employment with us in connection with a change in control.
Under the Severance Plan, in the event of a termination of an executive’s employment by us without “cause” or by the executive for “good reason”, in either case, on or within two years following a “change in control”, the executive will be eligible to public companiesreceive the following payments and benefits: a cash payment equal to the sum of 1.0 times (or, for certain compensationMr. Burgess, 0.75 times) (i) the executive’s then-current annual base salary, plus (ii) the executive’s target cash performance bonus for the year in excesswhich the termination occurs, to be paid in a lump sum within 60 days following the executive’s termination; a cash payment equal to the executive’s pro-rated target cash performance bonus for the year in which the termination occurs; Company-subsidized COBRA premium payments for the executive and his or her covered dependents for up to 12 months; and full accelerated vesting of $1 million paidall outstanding Company equity awards, with performance-based awards vesting at target performance values (unless otherwise specified in the applicable award agreement).
The executive’s right to a company’s executive officers. Certain compensation, including qualified performance-based compensation, will not bereceive the severance payments and benefits described above is subject to the deduction limit if specified requirements are met. The Committee reviewsexecutive’s delivery and, as applicable, non-revocation of a general release of claims in our favor and the potential effect of Section 162(m) periodically and may seekexecutive’s continued compliance with any applicable restrictive covenants. In addition, in the event that any payment under the Severance Plan, together with any other amounts paid to structure the long-term incentive compensation grantedexecutive by us, would subject the executive to Named Executive Officers in a manner that is intended to avoid disallowance of deductionsan excise tax under Section 162(m). Nevertheless, there can be no assurance that compensation attributable to long-term incentive awards4999 of the Internal Revenue Code, such payments will be treated as qualified performance-based compensation under Section 162(m). In addition,reduced to the Committee reservesextent that such reduction would produce a better net after-tax result for the right to authorize compensation payments that may be in excess of the limit when the Committee believes such payments are appropriate and in the best interest of Landec and its stockholders, after taking into consideration changing business conditions and the performance of its employees.executive.

36

COMPENSATION COMMITTEE REPORT
The Compensation Committee Interlockshas reviewed and Insider Participation

The Committee is composed of Dr. Sohn (Chairperson), Dr. Bollesdiscussed with management the Compensation Discussion and Mr. Frank. DuringAnalysis for fiscal year 2017, none of the Company’s executive officers served2020. Based on the board of directors of any entities whose directors or officers serve onreview and discussions, the Committee. None ofCompensation Committee recommended to the Committee’s current or former members has at any time been an officer or employee of Landec. None of Landec’s executive officers currently serve, or in the past fiscal year have served, as members of the board of directors or compensation committee of any entity that has one or more of its executive officers serving on Landec’s Board of Directors, orand the Committee.


Board of Directors has approved, that the Compensation CommitteeDiscussion and Analysis be included in Landec’s Proxy Statement for its 2020 Annual Meeting of Stockholders and incorporated into our Annual Report

on Form 10-K for the fiscal year ended May 31, 2020.

This report is submitted by the Compensation Committee:
Deborah Carosella (Chairperson)
Craig Barbarosh
Nelson Obus
Catherine A. Sohn, Pharm.D.

The information contained in thisforegoing report shall not be deemed to be “soliciting“soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Landec specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.

37

EXECUTIVE COMPENSATION AND RELATED INFORMATION

Summary Compensation

The Committee has reviewed and discussed with management the Compensation Discussion and Analysisfollowing table shows compensation information for fiscal years 2020, 2019 and 2018 for the Named Executive Officers.

Summary Compensation Table
Name and Principal PositionYearSalary
($)		Stock
Awards
($) (1)		Option
Awards
($) (2)		Non-Equity
Incentive Plan
Compensation
($) (3)		All Other
Compensation
($) (4)		Total
($)
Albert D. Bolles, Ph.D.2020620,000—267,611—92,698980,308
President and CEO20194,769574,246348,451—77,5001,004,966
Brian F. McLaughlin2020303,426—146,821—46,686496,932
Vice President of Finance and Administration, Chief Financial Officer2019285,000105,917134,53926,12951,450603,035
Gregory S. Skinner (5)2020262,054———524,427786,481
Former Executive Vice President of Finance and Administration, Chief Financial Officer2019380,000231,22263,711159,05825,124859,115
2018380,00088,55059,774189,43624,074741,834
James G. Hall2020341,586105,600259,912218,40034,698960,196
President of Lifecore Biomedical and Vice President of Landec2019293,600310,96557,958148,20032,118842,841
2018285,000350,000232,245146,83832,0671,046,150
Timothy P. Burgess2020323,750190,225——63,878577,853
Senior Vice President of Supply Chain of Curation Foods and Vice President of Landec
Dawn Kimball2020203,295159,075——18,584380,955
Senior Vice President of Human Resources and Chief People Officer
(1)Amounts shown do not reflect compensation actually received by the Named Executive Officer. Instead, the amounts shown are the aggregate grant date fair value of RSUs granted during fiscal year 2017. Based on2020 computed for financial statement reporting purposes in accordance with ASC 718.
(2)Amounts shown do not reflect compensation actually received by the reviewNamed Executive Officer. Instead, the amounts shown are the aggregate grant date fair value of stock options granted during fiscal year 2020 computed for financial statement reporting purposes in accordance with ASC 718. The assumptions used to calculate the value of stock option awards are set forth under Note 1 and discussions,Note 6 of the Committee recommendedNotes to the Board of Directors, and the Board of Directors has approved, that the Compensation Discussion and Analysis beConsolidated Financial Statements included in Landec’s Proxy Statement for its 2017 Annual Meeting of Stockholders and incorporated into our Annual Report on Form 10-K for the fiscal year ended May 28, 2017.31, 2020.

This report is submitted by the Committee:

Catherine A. Sohn, Pharma. D. (Chairperson)

Al Bolles, Ph.D.

Fred Frank


Summary Compensation

The following table shows compensation information(3)Amounts consist of bonuses earned for meeting and/or exceeding financial performance targets in fiscal years 2017, 20162020, 2019 and 20152018 under the Company’s annual Cash Incentive Award Plans. The bonus earned by Mr. Skinner in fiscal year 2019 was deferred by him pursuant to the Deferral Plan. For fiscal year 2020, Mr. Hall is the only executive that received cash incentive compensation. The Compensation Committee determined on July 23, 2020 (subsequent to

38

fiscal year 2020) that, in addition to the earned cash incentive, Mr. Hall would receive a bonus of 12% of target bonus in the form of RSUs, specifically, 3,574 RSUs.
(4)Amounts consist of Company-paid life insurance and an employer 401(k) match for theall Named Executive Officers. The amount shown for Mr. Hall also includes Company-paid disability insurance for which Mr. Hall is the beneficiary. The amounts shown for Mr. McLaughlin include $26,000 and for Ms. Kimball of $4,985 for temporary housing allowance. Dr. Bolles had $51,590 and Mr. Burgess had $38,850 in relocation expense reimbursement. The amounts shown for Mr. Skinner also includes severance pay of $418,000 and COBRA health insurance benefits of $46,105 and earnings of $1,226 from the Deferral Plan in fiscal year 2020. In addition 2019 and 2018 have been updated to correctly reflect the added value of the Company’s executive benefit program (“Armada Care Plan”) for Messrs. McLaughlin, Skinner and Hall. In 2019 the amount for Mr. McLaughlin was $11,052, Mr. Skinner was $13,164 and Mr. Hall was $18,372 while in 2018 the amount for Mr. Skinner was $12,900 and Mr. Hall was $17,736.

Summary Compensation Table

Name and Principal Position

Year

 

Salary

($) (1)

 

 

Stock

Awards

($) (2)

 

 

Option

Awards

($) (3)

 

 

Non-Equity

Incentive Plan

Compensation

($) (4)

 

 

All Other

Compensation

($) (5)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Molly A. Hemmeter

2017

 

 

475,000

 

 

 

1,221,703

 

 

 

337,256

 

 

 

331,088

 

 

 

19,896

 

 

 

2,384,943

 

President and Chief Executive

2016

 

 

426,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17,320

 

 

 

443,320

 

Officer

2015

 

 

345,000

 

 

 

1,439,000

 

 

 

1,026,900

 

 

 

195,079

 

 

 

12,906

 

 

 

3,018,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gregory S. Skinner

2017

 

 

380,000

 

 

 

245,999

 

 

 

—

 

 

 

158,922

 

 

 

10,975

 

 

 

795,896

 

Chief Financial Officer and

2016

 

 

380,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

18,290

 

 

 

398,290

 

Vice President of Finance and

2015

 

 

325,000

 

 

 

215,850

 

 

 

154,035

 

 

 

155,832

 

 

 

12,114

 

 

 

862,831

 

Administration

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ronald L. Midyett

2017

 

 

340,000

 

 

 

197,202

 

 

 

—

 

 

 

34,000

 

 

 

26,014

 

 

 

597,216

 

Vice President, Chief Operating Officer and

2016

 

 

340,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

26,014

 

 

 

366,014

 

President of Apio, Inc

2015

 

 

340,000

 

 

 

143,900

 

 

 

102,690

 

 

 

192,246

 

 

 

27,652

 

 

 

806,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Larry D. Hiebert

2017

 

 

300,000

 

 

 

185,610

 

 

 

—

 

 

 

157,525

 

 

 

13,839

 

 

 

656,974

 

President of Lifecore Biomedical, Inc.

2016

 

 

300,000

 

 

 

56,800

 

 

 

40,393

 

 

 

199,119

 

 

 

12,895

 

 

 

609,207

 

and Vice President of Landec

2015

 

 

300,000

 

 

 

107,925

 

 

 

77,018

 

 

 

30,000

 

 

 

14,339

 

 

 

529,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven P. Bitler

2017

 

 

275,000

 

 

 

—

 

 

 

—

 

 

 

49,336

 

 

 

11,137

 

 

 

335,473

 

Vice President of Corporate

2016

 

 

273,461

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11,029

 

 

 

284,490

 

Technology

2015

 

 

243,750

 

 

 

71,950

 

 

 

51,300

 

 

 

 75,119

 

 

 

10,686

 

 

 

452,805

 

(1)

Includes amounts (if any) deferred at the election of the Named Executive Officer pursuant to the Deferral Plan.

(2)

Amounts shown do not reflect compensation actually received by the Named Executive Officer. Instead, the amounts shown are the aggregate grant date fair value of RSUs granted during fiscal year 2017 computed for financial statement reporting purposes in accordance with ASC 718. The assumptions used to calculate the value of the RSU awards are set forth under Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 28, 2017. In accordance with SEC rules, these amounts exclude estimates of forfeitures in the case of awards with service-based vesting conditions.

(3)

Amounts shown do not reflect compensation actually received by the Named Executive Officer. Instead, the amounts shown are the aggregate grant date fair value of stock options granted during fiscal year 2017 computed for financial statement reporting purposes in accordance with ASC 718. The assumptions used to calculate the value of stock option awards are set forth under Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 28, 2017. In accordance with SEC rules, these amounts exclude estimates of forfeitures in the case of awards with service-based vesting conditions.

(4)

Amounts consist of bonuses earned for meeting and/or exceeding financial performance targets in fiscal years 2017, 2016 and 2015 under the Company’s annual Cash Incentive Award Plans.

(5)

Amounts consist of Company-paid life insurance and an employer 401(k) match for all Named Executive Officers. The amount shown for Mr. Hiebert also include Company-paid disability insurance for which Mr. Hiebert, is the beneficiary. For Mr. Midyett, the amount shown includes an annual car allowance of $15,000. For Ms. Hemmeter, the amount includes a car allowance expense of $8,336.

(5)Mr. Skinner separated from the Company on January 6, 2020. In connection with the termination of his employment, Mr. Skinner received certain severance benefits, the details of which have been provided under the heading “Former Chief Financial Officer” below.


39


Grants of Plan-Based Awards

The following table shows all plan-based awards granted to the Named Executive Officers during fiscal year 2017.2020. The option awards and the unvested portion of the stock awards identified in the table below are also reported in the “Outstanding Equity Awards at Fiscal 20172020 Year-End” table on the following page.

Grants of Plan-Based Awards

 

 

 

 

Estimated Future Payouts Under

Non-Equity Incentive Plan

Awards (1)

 

 

All Other 

Stock 

Awards: 

Number

of Shares of

 

 

All Other

Option

Awards:

Number

of Securities

 

 

Exercise or 

Base Price of

 Option

 

 

Grant Date

Fair Value 

of Stock and 

Option

 

 

 

Grant

 

Threshold

 

 

Target

 

 

Maximum

 

 

Stock

 

 

Underlying

 

 

Awards

 

 

Awards

 

Name

 

Date

 

($)

 

 

($)

 

 

($)

 

 

or Units (#)

 

 

Options (#) 

 

 

($/share)

 

 

($) (2)

 

Molly A. Hemmeter 

 

 

 

 

 —

 

 

 

475,000 

 

 

 

 N/A

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

  

10/20/2016

              

47,406

 

 

 

—

 

 

 

—

 

 

 

654,203

 
  

07/21/2016

              

50,000

           

567,500

 
  

07/21/2016

               

 

 

 

150,000

 

 

 

11.35

 

 

 

337,256

 
                               

Gregory S. Skinner

 

 

 

 

—

 

 

 

228,000

 

 

 

N/A

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10/20/2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,826

 

 

 

—

 

 

 

—

 

 

 

245,999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

              

Ron Midyett

 

 

 

 

—

 

 

 

170,000

 

 

 

N/A

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 
  

10/20/2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,290

 

 

 

—

 

 

 

—

 

 

 

197,202

 
                               

Larry D. Hiebert

 

 

 

 

—

 

 

 

150,000

 

 

 

N/A

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10/20/2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,450

 

 

 

—

 

 

 

—

 

 

 

185,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steve P. Bitler

 

 

 

 

—

 

 

 

110,000

 

 

 

N/A

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 
                               

(1)

Amounts shown are estimated payouts for fiscal year 2017 to the Named Executive Officers under the 2017 Cash Incentive Award Plan. The target amount is based on a percentage of the individual’s fiscal year 2017 base salary. All executives received a cash incentive award for fiscal year 2017. For more information on these awards, including the amount actually paid, see “Compensation Discussion and Analysis-Annual Cash Incentive Award Plan.”

(2)

The value of a stock award or option award is based on the fair value as of the grant date of such award determined pursuant to ASC 718. Stock awards consist only of RSUs. The exercise price for all options granted to the Named Executive Officers is 100% of the fair market value of Landec Common Stock on the grant date. The option exercise price has not been deducted from the amounts indicated above. Regardless of the value placed on a stock option on the grant date, the actual value of the option will depend on the market value of Landec Common Stock at such date in the future when the option is exercised. The value of the option following this exercise does not include the option exercise price. All options vest at the rate of 1/36th per month and therefore all options are fully vested three years after the date of grant. RSUs typically vest on the third anniversary of the date of grant but the grants made on October 20, 2016 in connection with the LTIP have half of the RSUs cliff vesting on the first anniversary of the grant date and the other half vesting on the second anniversary of the grant date.

  Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards (1)		All Other
Stock
Awards:
Number
of Shares Stock or Units (#)		All Other
Option
Awards:
Number
of Securities Underlying Options (#)		Exercise or
Base Price of
Option Awards ($/share)		Grant Date
Fair Value
of Stock and
Option Awards ($) (2)
 GrantThresholdTargetMaximum
NameDate($)($)($)
Albert D. Bolles, Ph.D.— 620,000930,000— — — — 
5/27/2020— 100,000 11.20 267,611 
Brian F. McLaughlin— 210,000315,000— — — — 
4/1/2020— 35,000 9.77 81,843 
1/7/2020— 25,000 10.12 64,978 
Greg S. Skinner— 250,800376,200— — — — 
James G. Hall28,000 280,000638,400— — — — 
1/7/2020— 100,000 10.12 259,912 
8/5/201910,000 105,600 
Timothy P. Burgess— 162,500243,750— — — — 
7/25/201917,500 — — 190,225 
Dawn Kimball— 150,000225,000— — — — 
10/15/201917,500— — 159,075 
(1)Amounts shown are estimated payouts for fiscal year 2020 to the Named Executive Officers under the 2020 Cash Incentive Award Plan. The target amount is based on a percentage of the individual’s fiscal year 2020 base salary. With the exception of Mr. Hall, none of the Named Executive Officers received a cash incentive award for fiscal year 2020. For more information on these awards, including the amounts actually paid, see “Compensation Discussion and Analysis-Annual Cash Incentive Award Plan.” With respect to Mr. Hall, the “threshold” bonus was eligible to be earned based on the achievement of the minimum performance goals.
(2)The value of a stock award or option award is based on the fair value as of the grant date of such award determined pursuant to ASC 718. Stock awards consist only of RSUs. The assumptions used to calculate the value of stock option awards are set forth under Note 1 and Note 6 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2020. Regardless of the value placed on a stock option on the grant date, the actual value of the option will depend on the market value of the Common Stock at such date in the future when the option is exercised. Stock option awards provide that one-third vests on the first anniversary of the grant date and then 1/36th per month thereafter, therefore all options are fully vested three years after the date of grant, subject to continued employment. RSUs typically vest on the third anniversary of the date of grant, subject to continued employment.

40


Equity Awards


The following table shows all outstanding equity awards held by the Named Executive Officers at the end of fiscal year 2017.2020. The awards for fiscal year 20172020 identified in the table below are also reported in the “Grants of Plan-Based Awards” table on the previous page.table.

Outstanding Equity Awards at Fiscal 2020 Year End
  Option AwardsStock Awards
 Grant DateNumber of
Securities
Underlying
Unexercised
Options		Number of
Securities
Underlying Unexercised Options Unexercisable		Option Exercise PriceOption
Expiration		Number of
Shares or
Units of
Stock That
Have Not
Vested		Market
Value of
Shares
Or Units
of Stock
That
Have Not
Vested		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not VestedEquity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested
NameExercisable(#) (1)($)Date(#) (2)($) (3)(#) (4)($) (3)
Albert D. Bolles, Ph.D.5/27/2020—100,00011.205/27/2027————
5/23/201953,460108,5409.355/23/202655,000586,850——
Brian F. McLaughlin4/1/2020—35,0009.774/1/2027————
1/7/2020—25,00010.121/7/2027————
1/30/201918,84611,99312.761/30/2026————
7/25/20186,8754,37514.357/25/2025————
10/19/201712,9162,08412.6510/19/20245,00053,350——
5/25/201615,000—11.365/25/2023————
10/15/201530,000—12.7810/15/2022————
Gregory S. Skinner7/25/201818,550—14.357/25/2025————
10/19/201721,000—12.6510/19/2024————
5/28/201545,000—14.395/28/2022————
6/7/201330,000—14.306/7/2020————
James G. Hall1/7/2020—100,00010.121/7/2027————
8/5/2019————10,000106,700——
7/25/201810,3126,56314.357/25/20255,62560,019——
7/25/2018——————9,04596,510
6/1/201772,9162,08414.006/1/202425,000266,750——
5/25/201615,000—11.365/25/2023————
5/28/201515,000—14.395/28/2022————
Timothy P. Burgess7/25/2019————17,500186,725——
Dawn Kimball10/15/2019————17,500186,725——
10/12/20187,8817,11912.9510/12/20255,00053,350——
2017 Year-End(1)

 

 

 

 

Option Awards

 

Stock Awards

 

 

 

 

 

Number of 

Securities 

Underlying 

Unexercised 

Options

 

 

Number of 

Securities 

Underlying 

Unexercised 

Options

Unexercisable

 

 

Option 

Exercise 

Price

 

Option 

Expiration

 

Number of 

Shares or 

Units of 

Stock That 

Have Not 

Vested

 

 

Market 

Value of

Shares

Or Units 

of Stock

That 

Have Not

 Vested

 

Name

 

Grant Date

 

Exercisable

 

 

(#) (1)

 

 

($)

 

Date

 

(#) (2)

 

 

($) (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Molly A. Hemmeter

 

10/20/2016

 

 

—

 

 

 

—

 

 

 

—

 

—

 

 

47,406

 

 

 

647,092

 

  

07/21/2016

  

41,666

   

108,334

   

11.35

 

07/21/2023

  

50,000

   

682,500

 
  

05/28/2015

  

199,500

   

100,500

   

14.39

 

05/28/2022

  

100,000

   

1,365,000

 

 

 

06/07/2013

 

 

30,000

 

 

 

—

 

 

 

14.30

 

06/07/2020

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gregory S. Skinner

 

10/20/2016

 

 

—

 

 

 

—

 

 

 

—

 

—

 

 

17,826

 

 

 

243,325

 

  

05/28/2015

  

30,000

   

15,000

   

14.39

 

05/28/2022

  

15,000

   

204,750

 

 

 

06/07/2013

 

 

30,000

 

 

 

—

 

 

 

14.30

 

06/07/2020

 

 

—

 

 

 

—

 

                        

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ronald L. Midyett

 

10/20/2016

 

 

—

 

 

 

—

 

 

 

—

 

—

 

 

14,290

 

 

 

195,059

 

  

05/28/2015

  

20,000

   

10,000

   

14.39

 

05/28/2002

  

10,000

   

136,500

 

 

 

06/07/2013

 

 

30,000

 

 

 

—

 

 

 

14.30

 

06/07/2020

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Larry D. Hiebert

 

10/20/2016

 

 

—

 

 

 

—

 

 

 

—

 

—

 

 

13,450

 

 

 

183,593

 

  

05/25/2016

  

5,000

   

10,000

   

11.36

 

05/23/2023

  

5,000

   

68,250

 

 

 

05/28/2015

 

 

15,000

 

 

 

7,500

 

 

 

14.39

 

05/28/2022

 

 

7,500

 

 

 

102,375

 

 

 

06/07/2013

 

 

18,000

 

 

 

—

 

 

 

14.30

 

06/07/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven P. Bitler

 

05/28/2015

 

 

10,000

 

 

 

5,000

 

 

 

14.39

 

05/28/2022

 

 

5,000

 

 

 

68,250

 

 

 

06/07/2013

 

 

5,000

 

 

 

—

 

 

 

14.30

 

06/07/2020

 

 

—

 

 

 

—

 

(1)

All options vest at the rate of 1/36 per month over a three-year period from date of grant, other than the option for 300,000 shares granted to Molly Hemmeter on May 28, 2015, which vests at the rate of 1/3 on first anniversary of the date of grant and then 1/36 monthly thereafter.

(2)

The RSUs typically vest on the third anniversary of the date of grant, except that the RSUs granted on October 20, 2016 in connection with the LTIP have half of the RSUs cliff vesting on the first anniversary of the grant date and the other half vesting on the second anniversary of the grant date.

(3)

Value is based on the closing price of the Company’s Common Stock of $13.65 on May 28, 2017 as reported on the Nasdaq Global Select Market.

Options granted prior to fiscal year 2020 vest at the rate of 1/36 per month over a three-year period from date of grant. Options granted in fiscal year 2020 vest one-third on the first anniversary of the grant date and then 1/36th per month thereafter.

41


(2)The RSUs typically vest on the third anniversary of the date of grant. Mr. Skinner separated from the Company in January 2020. In connection with his termination of employment with the Company, Mr. Skinner received certain severance benefits including the acceleration of vesting of certain RSUs previously granted, the details of which are provided under the heading “Former Chief Financial Officer” below.
(3)Value is based on the closing price of the Common Stock of $10.67 on May 29, 2020 (the last trading day of our fiscal year) as reported on the NASDAQ Global Select Market.
(4)RSUs will vest based on the achievement of an earnings per share goal for fiscal year 2021. The number of RSUs that are eligible to vest range from 50% - 150% of the target number of RSUs (reported in the table), based on the actual achievement of the earnings per share goal (ranging from 80% of the target goal to 150% of the target goal). If the Company achieves less than the minimum performance goal, then none of the RSUs will vest.

42

Option Exercises and Stock Vested


The following table shows all stock options exercised and the value realized upon exercise and the number of stock awards vested and the value realized upon vesting by the Named Executive Officers during fiscal year 2020.
2017.

Option Exercises and Stock VestedVested For Fiscal20172020

 

 

Option Awards

 

 

Stock Awards

 

Name

 

Number of

Shares

Acquired

on

Exercise

(#)

 

 

Value

Realized on

Exercise

($) (1)

 

 

Number of

shares

withheld to

cover

exercise

price and

taxes

(#) (2)

 

 

Number of

Shares

Acquired

on

Vesting (#)

 

 

Value

Realized

on Vesting

($)

 

 

Number of

shares

withheld to

cover taxes

(#) (2)

 

Molly A. Hemmeter

 

 

37,500

 

 

 

287,625

 

 

 

19,495

 

 

 

10,000

 

 

 

115,400

 

 

 

3,758

 

Gregory S. Skinner

 

 

75,000

 

 

 

681,572

 

 

 

36,160

 

 

 

10,000

 

 

 

115,400

 

 

 

3,758

 

Ronald L. Midyett

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,000

 

 

 

115,400

 

 

 

3,719

 

Larry D. Hiebert

 

��

2,500

 

 

 

16,925

 

 

 

1,135

 

 

 

6,000

 

 

 

69,240

 

 

 

1,962

 

Steven P. Bitler

 

 

45,000

 

 

 

336,700

 

 

 

16,872

 

 

 

1,667

 

 

 

19,237

 

 

 

—

 

(1)

The value realized equals the difference between the option exercise price and the fair market value of Landec Common Stock on the date of exercise, multiplied by the number of shares for which the option was exercised.

(2)

Indicates shares withheld at the election of the Named Executive Officer to cover the exercise price and/or the taxes owed on the exercise of the option or the vesting of the stock award.

 Option AwardsStock Awards
NameNumber of
Shares
Acquired
on
Exercise
(#)		Value
Realized on
Exercise
($) (1)		Number of
Shares
Acquired
on
Vesting (#)		Value
Realized
on Vesting
($)
Albert D. Bolles, Ph.D.— — 4,240 42,018 
Gregory S. Skinner (2)— — 13,183 146,595 
(1)The value realized equals the difference between the option exercise price and the fair market value of the Common Stock on the date of exercise, multiplied by the number of shares for which the option was exercised.
(2)Mr. Skinner separated from the Company in January 2020. In connection with his termination of employment with the Company, Mr. Skinner received certain severance benefits including the acceleration of vesting of certain RSUs previously granted, the details of which are provided under the heading “Former Chief Financial Officer” below.

Nonqualified Deferred Compensation


The following table showsshows all compensation deferred by the Named Executive Officers, and earnings on such deferred compensation, under the Deferral Plan during fiscal year 2017.2020.

Nonqualifed

NonqualifiedDeferred Compensation

Name

 

Executive

Contributions

in Fiscal

Year 2017

($) (1)

 

 

Registrant

Contributions

in Fiscal

Year 2017

($)

 

 

Aggregate

Earnings

in Fiscal

Year 2017

($) (2)

 

 

Aggregate

Withdrawals

in Fiscal

Year 2017 

($)

 

 

Aggregate

Balance at

End of

Fiscal Year 2017

($)

 

Molly A. Hemmeter

 

 

—

 

 

 

—

 

 

 

24,019

 

 

 

—

 

 

 

226,460

 

Gregory S. Skinner

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Ronald L. Midyett

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Larry D. Hiebert

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Steven P. Bitler

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

(1)

Contributions reported in this column are reported as compensation in the Salary column of the Summary Compensation Table.

(2)

Name
Executive
Contributions
in Fiscal
Year 2020
($) (1)
Registrant
Contributions
in Fiscal
Year 2020
($)
Aggregate
Earnings
in Fiscal
Year 2020
($) (2)
Aggregate
Withdrawals
in Fiscal
Year 2020
($)
Aggregate
Balance at
End of
Fiscal Year 2020
($)
Albert D. Bolles, Ph. D.— — — — — 
Brian F. McLaughlin— — — — — 
Gregory S. Skinner— — 1,226 — 160,284 
James G. Hall— — — — — 
Timothy P. Burgess— — — — — 
Dawn Kimball— — — — — 
(1)Contributions reported in this column are reported as compensation in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.
(2)Amounts reported in this column represent the aggregate earnings accrued and credited to a Named Executive Officer’s account during fiscal year 2017.


Employment Contracts and credited to a Named Executive Officer’s account during fiscal year 2020.

See the section entitled “Additional Compensation Policies and Practices - Nonqualified Deferred Compensation Plan” in the CD&A for a description of the Deferral Plan.
Potential Payments upon Termination or Change in Control

Employment Contracts

On October 15

The following describes the potential payments upon termination or change in control, based on the arrangements in effect for fiscal year 2020.
If Dr. Bolles is terminated without cause or if he terminates his employment for good reason (generally, any relocation of Dr. Bolles’ place of employment, reduction in salary, reduction in his target bonus amount or material reduction of his duties or authority), 2015, the Company entered into an executive employment agreement with Ms. Hemmeter, (the “Hemmeter Agreement”) setting forth the termsDr. Bolles will receive a severance payment equal to 100% of her employment. The Hemmeter Agreement expires on December 31, 2018 unless renewed or extended by both parties, and provides that Ms. Hemmeter shall be paid anhis annual base salary over a twelve month period,
43

a pro-rated portion of $475,000 (which was increasedany annual cash incentive award to $525,000 effective atwhich he is entitled and a one-year acceleration of his unvested stock options and other equity awards, and the beginning of fiscal year 2018) throughCompany will pay the term ofmonthly premiums for health insurance coverage for Dr. Bolles (and his spouse and eligible dependents) for the Hemmeter Agreement (unless modified bymaximum period permitted under COBRA or until such earlier time as Dr. Bolles receives substantially equivalent health insurance coverage in connection with new employment. In addition, the Compensation Committee), and continue to participate in the annual Cash Incentive Award Plan. Ms. Hemmeter is also eligible for grants of equity-based awards at such times and in such amounts as determined by the Compensation Committee.

The HemmeterBolles Agreement provides that upon Ms. Hemmeter’sif Dr. Bolles is terminated without cause or terminates his employment for good reason within two (2) years following a “change of control,” Dr. Bolles will receive a severance payment equal to 150% of his annual base salary over a twelve month period, a pro-rated portion of any annual cash incentive award to which he is entitled, full vesting of all of Dr. Bolles’ unvested stock options and other equity awards and the Company will pay the monthly premiums for health insurance coverage for Dr. Bolles (and his spouse and eligible dependents) for the maximum period permitted under COBRA or until such earlier time as Dr. Bolles receives substantially equivalent health insurance coverage in connection with new employment.

Upon Dr. Bolles death or disability, the Company shall pay Ms. Hemmeter or her estate her unpaid base salary and the pro rata portion of her annual cash incentive award through the date of termination.

Ms. Hemmeter agreed, as part of the Hemmeter Agreement, not to solicit, induce, recruit, encourage or take away employees or consultants of the Company for a period of two years following her termination. In addition, Ms. Hemmeter agreed not to solicit any licensor to or customer of the Company for a period of two years following her termination.

On October 15, 2015, the Company entered into a new executive employment agreement with Mr. Skinner (the “Skinner Agreement”) setting forth the terms of his employment. The Skinner Agreement expires on December 31, 2018 unless renewed or extended by both parties, and provides that Mr. Skinner shall be paid an annual base salary of $380,000 through the term of the Skinner Agreement (unless modified by the Compensation Committee), and continue to participate in the annual Cash Incentive Award Plan. Mr. Skinner is also eligible for grants of equity-based awards at such times and in such amounts as determined by the Compensation Committee.

The Skinner Agreement provides that upon Mr. Skinner’s death or disability, the Company shall pay Mr. SkinnerDr. Bolles or his estate his unpaid base salary and the pro rata portion of his annual cash incentive award through the date of termination. 

Mr. Skinner agreed, as part of the Skinner Agreement, not to solicit, induce, recruit, encourage or take away employees or consultants of the Companytermination (which, for a period of two years following his termination. In addition, Mr. Skinner agreed not to solicit any licensor to or customer of the Company for a period of two years following his termination.

Potential Payments upon Termination or Change in Control

fiscal year 2020 was $0).

If Ms. HemmeterKimball is terminated without cause or if she terminates her employment for good reason (generally, any relocation of Ms. Hemmeter’sKimball’s place of employment, reduction in salary, reduction in her target bonus amount or material reduction of her duties or authority), Ms. HemmeterKimball will receive a severance payment equal to 100% of her annual base salary over a twelve month period, a pro-rated portion of any annual cash incentive award to which she is entitled and a one-year acceleration of her unvested stock options and other equity awards, and the Company will pay the monthly premiums for health insurance coverage for Ms. HemmeterKimball (and her spouse and eligible dependents) for the maximum period permitted under COBRA or until such earlier time as Ms. HemmeterKimball receives substantially equivalent health insurance coverage in connection with new employment. In addition, the Hemmeter Agreement provides that if Ms.Hemmeter is terminated without cause
If Dr. Bolles’ or terminates her employment for good reason within two (2) years following a “change of control,” Ms. Hemmeter will receive a severance payment equal to 150% of her annual base salary over a twelve month period, a pro-rated portion of any annual cash incentive award to which she is entitled and the Company will pay the monthly premiums for health insurance coverage for Ms. Hemmeter (and her spouse and eligible dependents) for the maximum period permitted under COBRA or until such earlier time as Ms. Hemmeter receives substantially equivalent health insurance coverage in connection with new employment. In the event of a “change of control,” all of Ms. Hemmeter’s unvested stock options and other equity awards shall immediately vest and become exercisable.


If Mr. Skinner is terminated without cause or if he terminates his employment for good reason (generally, any relocation of Mr. Skinner’s place of employment, reduction in salary, reduction in his target bonus amount or material reduction of his duties or authority), Mr. Skinner will receive a severance payment equal to 100% of his annual base salary over a twelve month period, a pro-rated portion of any annual cash incentive award to which he is entitled and a one-year acceleration of his unvested stock options and other equity awards, and the Company will pay the monthly premiums for health insurance coverage for Mr. Skinner (and his spouse and eligible dependents) for the maximum period permitted under COBRA or until such earlier time as Mr. Skinner receives substantially equivalent health insurance coverage in connection with new employment. In addition, the Skinner Agreement provides that if Mr. Skinner is terminated without cause or terminates his employment for good reason within two (2) years following a “change of control,” Mr. Skinner will receive a severance payment equal to 150% of his annual base salary over a twelve month period and a pro-rated portion of any annual cash incentive award to which he is entitled and the Company will pay the monthly premiums for health insurance coverage for Mr. Skinner (and his spouse and eligible dependents) for the maximum period permitted under COBRA or until such earlier time as Mr. Skinner receives substantially equivalent health insurance coverage in connection with new employment. In the event of a “change of control,” all of Mr. Skinner’s unvested stock options and other equity awards shall immediately vest and become exercisable.

If Ms. Hemmeter’s or Mr. Skinner’sKimball’s employment with the Company had been terminated without cause or for good reason not in connection with a change of control of the Company on May 28, 2017,31, 2020, the last day of Landec’sthe 2020 fiscal year, 2017,Dr. Bolles and Ms. Hemmeter and Mr. SkinnerKimball would have received the following severance benefits under the HemmeterBolles Agreement and SkinnerKimball Agreement, respectively:

NameBase
Salary (1)		Bonus
Payment		Accelerated
Vesting of Options (2)		Accelerated
Vesting of RSUs (3)		Post-Termination
Health Insurance
Premiums (4)		Total
Albert D. Bolles, Ph. D.$620,000 $— $47,758 $396,057 $72,146 $1,135,960 
Dawn Kimball$300,000 $— $— $148,162 $48,448 $496,609 
(1)

Name

 

Base

Salary (1)

 

 

Bonus Payment

 

 

Accelerated

Vesting

of Options (2)

 

 

Accelerated

Vesting of 

RSUs (3)

 

 

Post-Termination

Health Insurance 

Premiums (4)

 

 

Total

 

Molly A. Hemmeter

 

$

475,000

 

 

$

331,088

 

 

$

249,168

 

 

$

1,688,547

 

 

$

23,472

 

 

$

2,767,275

 

Gregory S. Skinner

 

$

380,000

 

 

$

158,922

 

 

$

—

 

 

$

326,412

 

 

$

23,472

 

 

$

888,806

 

(1)

Reflects potential payments based on salaries as of May 28, 2017.

(2)

A portion of unvested options for Ms. Hemmeter and all unvested options for Mr. Skinner are out of the money (exercise price above stock price as of May 28, 2017) and therefore there is no value to the acceleration for those options.

(3)

Accelerating the vesting of the outstanding RSUs by one year would result in 123,703 and 23,913 of the currently outstanding RSUs vesting as of May 28, 2017 for each of Ms. Hemmeter and Mr. Skinner, respectively.

(4)

Represents the maximum amount of premiums that would have been paid under COBRA on behalf of Ms. Hemmeter and Mr. Skinner

Reflects potential payments based on 100% of salaries as of May 31, 2020.

(2)Reflects value of shares that are in the money (exercise price below stock price as of May 31, 2020). For stock options out of the money (exercise price above stock price as of May 31, 2020), there is no value to the acceleration for those options.
(3)Accelerating the vesting of the outstanding RSUs by one year would result in 37,119 and 13,886 of the currently outstanding RSUs vesting as of May 31, 2020 for each of Dr. Bolles and Ms. Kimball respectively. The value is based on the closing price of the Common Stock of $10.67 on May 29, 2020 (the last trading day of our fiscal year) as reported on the NASDAQ Global Select Market.
(4)Represents the maximum amount of premiums that would have been paid under COBRA.
If Dr. Bolles’ or Ms. Hemmeter’sKimball’s employment with the Company had been terminated due to his or Mr. Skinner’sher death or disability on May 31, 2020, the last day of the 2020 fiscal year, each would have received only the unpaid base salary at the time of termination since neither Dr. Bolles nor Ms. Kimball received an annual cash incentive award in fiscal year 2020.
44

If Dr. Bolles’ employment with the Company had been terminated without cause or for good reason in connection with a change of control of the Company on May 28, 2017,31, 2020, the last day of Landec’sthe 2020 fiscal year, 2017, Ms. Hemmeter and Mr. SkinnerDr. Bolles would have received the following severance benefits under the HemmeterBolles Agreement, and Skinner Agreement, respectively, set forth above, except that amounts received forabove:
NameBase
Salary (1)		Bonus
Payment		Accelerated
Vesting of Options (2)		Accelerated
Vesting of RSUs (3)		Post-Termination
Health Insurance
Premiums (4)		Total
Albert D. Bolles, Ph. D.$930,000 $— $213,840 $586,850 $72,146 $1,802,836 
(1)Reflects potential payments based on 150% of base salary as of May 31, 2020.
(2)Reflects value of shares that are in the money (exercise price below stock price as of May 31, 2020). For stock options out of the money (exercise price above stock price as of May 31, 2020), there is no value to the acceleration for those options.
(3)Accelerating the vesting of all outstanding RSUs would result in 55,000 of the currently outstanding RSUs vesting as of May 31, 2020 for Dr. Bolles. The value is based on the closing price of the Common Stock of $10.67 on May 29, 2020 (the last trading day of our fiscal year) as reported on the NASDAQ Global Select Market.
(4)Represents the maximum amount of premiums that would have been $712,500 and $570,00 for Ms. Hemmeter and paid under COBRA.
Former Chief Financial Officer
Mr. Skinner respectively,separated from the Company effective January 8, 2020 and in connection with his separation received the following severance benefits in accordance with his employment agreement:
NameBase Salary (1)Bonus PaymentAccelerated Vesting of Options (2)Accelerated Vesting of RSUs (3)Post-Termination Health Insurance Premiums (4)Total
Greg Skinner$418,000 $— $— $146,595 $46,105 $610,700 
(1) Reflects payments based on 100% of his salary as of January 8, 2020, per the terms of the Skinner Agreement.
(2) Stock options were out of the money (exercise price above stock price as of January 8, 2020, termination date), and therefore there is no value to the acceleration for those options.
(3) Accelerating the vesting of all outstanding RSUs resulted in the immediate vesting of 13,183 of the currently outstanding RSUs.
(4) Represents estimated premiums to be paid under COBRA and the amounts receivedArmada Care Plan.
CEO Pay Ratio

The following table sets forth the ratio of the total compensation of the Company’s CEO, Albert D. Bolles, to that of our median compensated employee for the accelerationfiscal year ended May 31, 2020.
CEO total annual compensation$980,308
Median Employee total annual compensation$57,009
Ratio of CEO to Median Employee total annual compensation17:1
To determine the CEO’s total annual compensation, we used the amount reported in the 2020 “Total” column of RSUs would have been $2,694,592our Summary Compensation Table included in this Proxy Statement. In determining the median compensated employee, we excluded our two employees in Canada from the total number of employees employed by the Company as of May 31, 2020. We used base salary and $448,075actual bonus as the consistently applied compensation metric to determine the median compensated employee. If this resulted in more than one individual at the median level, we assessed the grant date fair value of standard equity awards for Ms. Hemmeterthese individuals and Mr. Skinner, respectively. Thereforeselected the employee with the median award value. After identifying the median compensated employee, we calculated annual total compensation would have been $4,010,820 and $1,200,469 for Ms. Hemmeter and Mr. Skinner, respectively.

according to the methodology used to report the annual compensation of our Named Executive Officers in the Summary Compensation Table.

45

RELATED PARTY TRANSACTIONS

Policies and Procedures with Respect to Related Party Transactions


The Audit Committee, all of whose members are independent directors, reviews, and approves in advanceand/or ratifies all related party transactions (other than compensation transactions). InIn reviewing related party transactions, the Audit Committee takes into account factors it deems appropriate, such as whether the related party transaction is on terms no less favorable than terms generally available to an unrelated third party under the same or similar conditions and the extent of the related party’s interest in the transaction. To identify related party transactions, each year we require our executive officers and directors to complete a questionnaire identifying any transactions between the Company and the respective executive officer or director and their family members or affiliates. Additionally, under the Company’s Code of Ethics, directors, officers and all other employees and consultants are expected to avoid any relationship, influence or activity that would cause, or even appear to cause, a conflict of interest.

Certain Relationships and Related Transactions

Apio

Curation Foods sells products to and earns license fees from Windset HoldingsHolding 2010 Ltd., a Canadian corporation (“Windset”Windset”). ApioCuration Foods holds a 26.9% equity interest in Windset. During fiscal year 2017, Apio2020, Curation Foods recognized $514,000$0.6 million of revenues from Windset.

Additionally, unrelated to the revenue transactions above, Apio purchases produce from Windset for sale to third parties. During fiscal year 2017, Apio purchased $22,000 of produce from Windset.
46


DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

16(A) REPORTS


Section 16(a) of the Exchange Act requires the Company’sCompany’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and holders of more than ten percent of the Company’s Common Stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’sCompany’s knowledge, based solely upon review of the copies of such reports filed with the SEC and written representations that no other reports were required, during the fiscal year ended May 28, 201731, 2020 all Section 16(a) filing requirements applicable to the Company’s officers, directors and holders of more than ten percent of the Company’s Common Stock were satisfied.satisfied, except for (i) one late Form 4 for James Hall, filed on June 4, 2020, with respect to two transactions, (ii) one amendment on Form 4 for Steven Goldby, filed on May 30, 2019, with respect to one transaction, and (iii) one amendment on Form 4 for Molly Hemmeter, filed on May 29, 2019, with respect to one transaction.

INCORPORATION BY REFERENCE

Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended, or the Exchange Act, which might incorporate future filings made by us under those statutes, the preceding Compensation Committee Report and Audit Committee Report will not be incorporated by reference into any of those prior filings, nor will any such reports be incorporated by reference into any future filings made by us under those statutes. In addition, information on our website, other than this Proxy Statement, the Notice of Annual Meeting and form of proxy, is not part of the proxy soliciting material and is not incorporated herein by reference.

OTHER MATTERS


The Board of Directors knows of no other matters to be submitted to the stockholders at the annual meeting. If any other matters properly come before the meeting, then the persons named in the enclosed form of proxy will vote the shares they represent in such manner as the Board of Directors may recommend.


It is important that the proxies be returned promptly and that your shares be represented. Stockholders are urged to mark, date, execute and promptly return the accompanyingaccompanying proxy card in the enclosed envelope or vote their shares by telephone or via the Internet.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Geoffrey P. Leonard

GEOFFREY P. LEONARD

SECRETARY

Brian McLaughlin
BRIAN MCLAUGHLIN
Secretary

Menlo Park,

Santa Maria, California

August 23, 2017

31, 2020

47

Appendix A

FIRST AMENDMENT

to the

LANDEC CORPORATION

2013 STOCK INCENTIVE PLAN

WHEREAS, Landec Corporation (the “Corporation”) adopted the Landec Corporation 2013 Stock Incentive Plan (the “Plan”), effective October 10, 2013 (the “Effective Date”); and

WHEREAS, the Board of Directors has determined that it is in the best interests of the Corporation and its stockholders to amend the Plan to increase the number of shares of common stock available for issuance under the Plan by 1,000,000 shares from 2,000,000 to 3,000,000, subject to stockholder approval.

NOW THEREFORE, the Plan is hereby amended as follows:

1.     Section 5.1 of the Plan is hereby deleted in its entirety and replaced with the following:

“5.1     Basic Limitation. The stock issuable under the Plan shall be authorized but unissued Shares. The aggregate number of Shares reserved for Awards under the Plan shall not exceed 3,000,000 Shares, subject to adjustment pursuant to Section 10. For sake of clarity, all Shares issued and issuable pursuant to any Awards granted under the Plan on or after the Effective Date shall count against the 3,000,000 Share limit. The aggregate maximum number of Shares that may be issued in connection with ISOs shall be 3,000,000 Shares.”

2.     This Amendment shall become effective upon stockholder approval. Except as amended herein, the terms of the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the undersigned has executed this First Amendment to the Landec Corporation 2013 Stock Incentive Plan on August 23, 2017, to become effective upon stockholder approval of this Amendment.

LANDEC CORPORATION

By: /s/ Molly A. Hemmeter
Name: Molly A. Hemmeter
Title: President and Chief Executive Officer


APPENDIX A

LANDEC CORPORATION


2013 STOCK INCENTIVE PLAN

SECTION 1.

INTRODUCTION.

1.1

The Landec Corporation 2013 Stock Incentive Plan will be effective (the “Effective Date”) upon its approval by an affirmative vote of the holders of a majority of the Shares that are present in person or by proxy and entitled to vote at the 2013 Annual Meeting of Stockholders of the Company. The Plan shall supersede the Existing Equity Plan effective as of the Effective Date such that no further awards shall be made under the Existing Equity Plan on or after such date. However, this Plan shall not, in any way, affect awards under the Existing Equity Plan that are outstanding as of the Effective Date. If the Company’s stockholders do not approve this Plan, no Awards will be made under this Plan and the Existing Equity Plan will continue in effect in accordance with its terms.

1.2

The purpose of the Plan is to promote the long-term success of the Company and the creation of Stockholder value by offering Key Service Providers an opportunity to share in such long-term success by acquiring a proprietary interest in the Company.

1.3

The Plan seeks to achieve this purpose by providing for discretionary Awards in the form of Options (which may constitute Incentive Stock Options or Nonstatutory Stock Options), Stock Appreciation Rights, Stock Grants and Stock Units.

1.4

The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions), and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case as determined by the Committee. Capitalized terms shall have the meaning provided in Section 2 unless otherwise provided in this Plan or any related Stock Option Agreement, SAR Agreement, Stock Grant Agreement or Stock Unit Agreement.

SECTION 2.

DEFINITIONS.

2.1

“Affiliate” means any entity other than a Subsidiary if the Company and/or one or more Subsidiaries have a controlling interest in such entity. For purposes of the preceding sentence, except as the Committee may otherwise determine subject to the requirements of Treas. Reg. §1.409A-1(b)(5)(iii)(E)(1), the term “controlling interest” has the same meaning as provided in Treas. Reg. §1.414(c)-2(b)(2)(i), provided that the words “at least 50 percent” are used instead of the words “at least 80 percent” each place such words appear in Treas. Reg. §1.414(c)-2(b)(2)(i). The Company may at any time by amendment provide that different ownership thresholds (consistent with Section 409A of the Code) apply but any such change shall not be effective for twelve (12) months.

2.2

“Award” means any award of an Option, SAR, Stock Grant or Stock Unit under the Plan.

2.3

“Board” means the Board of Directors of the Company, as constituted from time to time.

2.4

“Cashless Exercise” means, to the extent that a Stock Option Agreement so provides and as permitted by applicable law, (i) a program approved by the Committee in which payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and any applicable tax withholding obligations relating to the Option or (ii) the withholding of that number of Shares otherwise deliverable upon exercise of the Option whose aggregate Fair Market Value is equal to the aggregate Exercise Price.

2.5

“Cause” means, except as may otherwise be provided in a Participant’s employment agreement or Award agreement to the extent such agreement is in effect at the relevant time, any of the following events: (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Company and shall be conclusive and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s Service at any time as provided in Section 12(a), and the term “Company” will be interpreted to include any Subsidiary, Parent, Affiliate, or any successor thereto, if appropriate.

landeccorporation_vsmvxprx3.jpg

2.6

“Change In Control” except as may otherwise be provided in a Participant’s employment agreement or Award agreement, means the first to occur of any of the following: (i) the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such transaction is owned by persons who were not stockholders of the Company immediately prior to such transaction; (ii) the sale, transfer or other disposition of all or substantially all of the Company’s assets; (iii) the direct or indirect sale or exchange in a single transaction or series of related transactions by the stockholders of the Company of more than 50% of the voting stock of the Company to an unrelated person or entity if more than 50% of the combined voting power of the surviving entity’s securities outstanding immediately after such transaction is owned by persons who were not stockholders of the Company immediately prior to such transaction; or (iv) a complete liquidation or dissolution of the Company.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions.

2.7

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder.

2.8

“Committee” means a committee described in Section 3.

2.9

“Common Stock” means the Company’s common stock, par value $0.001 per share.

2.10

“Company” means Landec Corporation, a Delaware corporation.

2.11

“Consultant” means an individual who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate, other than as an Employee or Director or Non-Employee Director.

2.12

“Covered Employees” means those persons who are subject to the limitations of Section 162(m) of the Code.

2.13

“Covered Transaction” means any of a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described herein (as determined by the Committee), the Covered Transaction will be deemed to have occurred upon consummation of the tender offer.

2.14

“Director” means a member of the Board who is also an Employee.

2.15

“Disability” means that the Participant is classified as disabled under a long-term disability policy of the Company or, if no such policy applies, the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

2.16

“Employee” means any individual who is a common law employee of the Company, a Parent, a Subsidiary or an Affiliate.

2.17

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.18

“Exercise Price” means, in the case of an Option, the amount for which a Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value in determining the amount payable upon exercise of such SAR.


2.19

“Existing Equity Plan” means the Company’s 2009 Stock Incentive Plan.

2.20

“Fair Market Value” means the market price of a Share as determined in good faith by the Committee. Such determination shall be conclusive and binding on all persons. The Fair Market Value shall be determined by the following: (i) if the Shares are admitted to trading on any established national stock exchange or market system, including without limitation the NASDAQ Global Market System, on the date in question, then the Fair Market Value shall be equal to the closing sales price for such Shares as quoted on such national exchange or system on such date; or (ii) if the Shares are admitted to quotation on NASDAQ or are regularly quoted by a recognized securities dealer but selling prices are not reported on the date in question, then the Fair Market Value shall be equal to the mean between the bid and asked prices of the Shares reported for such date.

In each case, the applicable price shall be the price reported in The Wall Street Journal or such other source as the Committee deems reliable; provided, however, that if there is no such reported price for the Shares for the date in question, then the Fair Market Value shall be equal to the price reported on the last preceding date for which such price exists. If neither (i) or (ii) are applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate, consistent with the requirements of Section 409A or Section 422 of the Code, to the extent applicable.

2.21

“Fiscal Year” means the Company’s fiscal year.

2.22

“Grant” means any grant of an Award under the Plan.

2.23

“Incentive Stock Option” or “ISO” means a stock option intended to be an “incentive stock option” within the meaning of Section 422 of the Code.

2.24

“Key Service Provider” means an Employee, Director, Non-Employee Director or Consultant who has been selected by the Committee to receive an Award under the Plan.

2.25

“Non-Employee Director” means a member of the Board who is not an Employee.

2.26

“Nonstatutory Stock Option” or “NSO” means a stock option that is not an ISO.

2.27

“Option” means an ISO or NSO granted under the Plan entitling the Optionee to purchase Shares.

2.28

“Optionee” means an individual, estate that holds an Option.

2.29

“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

2.30

“Participant” means an individual or estate that holds an Award under the Plan.

2.31

“Performance Goals” means one or more objective measurable performance factors as determined by the Committee with respect to each Performance Period based upon one or more factors (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a Parent, Company, Affiliate, Subsidiary, divisional, line of business, unit, project or geographical basis or in combinations thereof), including, but not limited to: (i) operating income; (ii) earnings before interest, taxes, depreciation and amortization (“EBITDA”); (iii) earnings; (iv) cash flow; (v) market share; (vi) sales or revenue; (vii) expenses; (viii) cost of goods sold; (ix) profit/loss or profit margin; (x) working capital; (xi) return on equity or assets; (xii) earnings per share; (xiii) economic value added (“EVA”); (xiv) price/earnings ratio; (xv) debt or debt-to-equity; (xvi) accounts receivable; (xvii) writeoffs; (xviii) cash; (xix) assets; (xx) liquidity; (xxi) operations; (xxii) intellectual property (e.g., patents); (xxiii) product development; (xxiv) regulatory activity; (xxv) manufacturing, production or inventory; (xxvi) mergers and acquisitions or divestitures; and/or (xxvii) financings or refinancings. Awards issued to persons who are not Covered Employees may take into account other factors. To the extent consistent with the requirements for satisfying the performance-based compensation exception under Section 162(m) of the Code, the Committee may provide in the case of any Award intended to qualify for such exception that one or more of the Performance Goals applicable to such Award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the Performance Period that affect the applicable Performance Goals.

landeccorporation_vsmvxprx2.jpg

2.32

“Performance Period” means any period not exceeding 36 months as determined by the Committee, in its sole discretion. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

2.33

“Plan” means this Landec Corporation 2013 Stock Incentive Plan, as it may be amended from time to time.

2.34

“Re-Price” means that the Company has lowered or reduced the Exercise Price of outstanding Options and/or outstanding SARs for any Participant(s) in a manner described by Item 402(i)(1) of SEC Regulation S-K (or its successor provision).

2.35

“SAR Agreement” means the agreement described in Section 7 evidencing each Award of a Stock Appreciation Right.

2.36

“SEC” means the Securities and Exchange Commission.

2.37

“Section 16 Persons” means those officers, directors or other persons who are subject to Section 16 of the Exchange Act.

2.38

“Securities Act” means the Securities Act of 1933, as amended.

2.39

“Service” means service as an Employee, Director, Non-Employee Director or Consultant. A Participant’s Service does not terminate if he or she is an Employee and goes on a bona fide leave of absence that was approved by the Company in writing and the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. However, for purposes of determining whether an Option is entitled to continuing ISO status, an Employee’s Service will be treated as terminating 90 days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Committee determines which leaves count toward Service, and when Service terminates for all purposes under the Plan. Further, unless otherwise determined by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant provides service to the Company, a Parent, Subsidiary or Affiliate, or a transfer between entities (the Company or any Parent, Subsidiary, or Affiliate); except that, for purposes of Section 4(g)(i) only, a Participant’s Service shall be deemed to terminate if he or she is an Employee and thereafter becomes a Consultant but, for the avoidance of doubt, a Participant’s Service shall not be deemed to terminate if he or she is an Employee and thereafter remains or becomes a Non-Employee Director (even if the Participant is also a Consultant) (it being understood that any post-termination exercise period set forth in Section 4(g)(iii) or (iv) shall commence when the Participant ceases to provide Service in any capacity listed herein); provided, however, in all cases that there is no interruption or other termination of Service.


2.40

“Share” means one share of Common Stock.

2.41

“Stock Appreciation Right” or “SAR” means a stock appreciation right awarded under the Plan.

2.42

“Stock Grant” means Shares awarded under the Plan.

2.43

“Stock Grant Agreement” means the agreement described in Section 8 evidencing each Award of a Stock Grant.

2.44

“Stock Option Agreement” means the agreement described in Section 6 evidencing each Award of an Option.

2.45

“Stock Unit” means a bookkeeping entry representing the equivalent of one Share, as awarded under the Plan.

2.46

“Stock Unit Agreement” means the agreement described in Section 9 evidencing each Award of a Stock Unit.

2.47

“Subsidiary” means any corporation (other than the Company) or other entity in a chain of corporations or other entities in which each corporation or other entity has a controlling interest in another corporation or other entity in the chain, beginning with the Company and ending with such corporation or other entity. For purposes of the preceding sentence, except as the Committee may otherwise determine subject to the requirements of Treas. Reg. §1.409A-1(b)(5)(iii)(E)(1), the term “controlling interest” has the same meaning as provided in Treas. Reg. §1.414(c)-2(b)(2)(i), provided that the words “at least 50 percent” are used instead of the words “at least 80 percent” each place such words appear in Treas. Reg. §1.414(c)-2(b)(2)(i). The Company may at any time by amendment provide that different ownership thresholds (consistent with Section 409A of the Code) apply but any such change shall not be effective for twelve (12) months. A corporation or other entity that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.


2.48

“10-Percent Stockholder” means an individual who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

SECTION 3.

ADMINISTRATION.

3.1

Committee Composition. A Committee appointed by the Board shall administer the Plan. Unless the Board provides otherwise, the Company’s Compensation Committee shall be the Committee. If no Committee has been appointed, the entire Board shall constitute the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee.

(1)

The Committee shall have membership composition which enables it to make (i) awards to Section 16 Persons to qualify as exempt from liability under Section 16(b) of the Exchange Act and (ii) awards to Covered Employees to qualify as performance-based compensation as provided under Section 162(m) of the Code.

(2)

The Board may also appoint one or more separate committees of the Board, each composed of two or more directors of the Company who need not qualify under Rule 16b-3 or Section 162(m) of the Code, that may administer the Plan with respect to Key Service Providers who are not Section 16 Persons or Covered Employees, respectively, may grant Awards under the Plan to such Key Service Providers and may determine all terms of such Awards.

(3)

Notwithstanding the foregoing, the Board shall constitute the Committee and shall administer the Plan with respect to all Awards granted to Non-Employee Directors.

3.2

Authority of the Committee. Subject to the provisions of the Plan, the Committee shall have full authority and sole discretion to take any actions it deems necessary or advisable for the administration of the Plan. Such actions shall include, without limitation: (i) selecting Key Service Providers who are to receive Awards under the Plan; (ii) determining the type, number, vesting requirements and other features and conditions of such Awards and amending such Awards; (iii) correcting any defect, supplying any omission, or reconciling any inconsistency in the Plan or any Award agreement; (iv) accelerating the vesting, or extending the post-termination exercise term, of Awards at any time and under such terms and conditions as it deems appropriate; (v) interpreting the Plan; (vi) making all other decisions relating to the operation of the Plan; and (vii) adopting such plans or subplans as may be deemed necessary or appropriate to provide for the participation by employees of the Company and its Subsidiaries and Affiliates who reside outside the U.S., which plans and/or subplans shall be attached hereto as Appendices.


The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. In the case of any Award intended to be eligible for the performance-based compensation exception under Section 162(m) of the Code, the Committee will exercise its discretion consistent with qualifying the Award from that exception. The Committee’s determinations under the Plan shall be final and binding on all persons.

The Committee may delegate (i) to one or more officers of the Company the power to grant Awards to the extent permitted by Section 157(c) of the Delaware General Corporation Law; and (ii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate. In the event of any delegation described in the preceding sentence, the term “Committee” will include the person or persons so delegated to the extent of such delegation.

3.3

Indemnification. To the maximum extent permitted by applicable law, each member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Award agreement, and (ii) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.


SECTION 4.

GENERAL.

4.1

General Eligibility. Only Employees, Directors, Non-Employee Directors and Consultants shall be eligible to participate in the Plan. Eligibility shall be further limited, subject to such express exceptions, if any, as the Committee may establish, to those persons as to whom the use of a Form S-8 registration statement is permissible.

4.2

Incentive Stock Options. Only Key Service Providers who are Employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs. In addition, a Key Service Provider who is a 10-Percent Stockholder shall not be eligible for the grant of an ISO unless the requirements set forth in Section 422(c)(5) of the Code are satisfied.

4.3

Restrictions on Shares. Any Shares issued pursuant to an Award shall be subject to such rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine, in its sole discretion. Such restrictions shall apply in addition to any restrictions that may apply to holders of Shares generally and shall also comply to the extent necessary with applicable law. In no event shall the Company be required to issue fractional Shares under this Plan.

4.4

Beneficiaries. Unless stated otherwise in an Award agreement, a Participant may designate one or more beneficiaries with respect to an Award by timely filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death. If no beneficiary was designated or if no designated beneficiary survives the Participant, then after a Participant’s death any vested Award(s) shall be transferred or distributed to the Participant’s estate.

4.5

Performance Conditions. The Committee may, in its discretion, include performance conditions in an Award. If performance conditions are included in Awards to Covered Employees, then such Awards will be subject to the achievement of Performance Goals established by the Committee. Such Performance Goals shall be established and administered pursuant to the requirements of Section 162(m) of the Code. Before any Shares underlying an Award or any Award payments are released to a Covered Employee with respect to a Performance Period, the Committee shall certify in writing that the Performance Goals for such Performance Period have been satisfied. Awards with performance conditions that are granted to Key Service Providers who are not Covered Employees need not comply with the requirements of Section 162(m) of the Code.

4.6

No Rights as a Stockholder. A Participant, or a transferee of a Participant, shall have no rights as a Stockholder with respect to any Common Stock covered by an Award until such person has satisfied all of the terms and conditions to receive such Common Stock, has satisfied any applicable withholding or tax obligations relating to the Award and the Shares have been issued to such person (as evidenced by an appropriate entry on the books of the Company or a duly authorized transfer agent of the Company).

4.7

Termination of Service. Unless the applicable Award agreement or, with respect to Participants who reside in the U.S., the applicable employment agreement provides otherwise, the following rules shall govern the vesting, exercisability and term of outstanding Awards held by a Participant in the event of termination of such Participant’s Service (in all cases subject to the term of the Option and/or SAR as applicable): (i) upon termination of Service for any reason, all unvested portions of any outstanding Awards shall be immediately forfeited without consideration and the vested portions of any outstanding Stock Units shall be settled upon termination; (ii) if the Service of a Participant is terminated for Cause, then all unexercised Options and/or SARs, unvested portions of Stock Units and unvested portions of Stock Grants shall terminate and be forfeited immediately without consideration; (iii) if the Service of Participant is terminated for any reason other than for Cause, death, or Disability, then the vested portion of his or her then-outstanding Options and/or SARs may be exercised by such Participant or his or her personal representative within six months after the date of such termination; or (iv) if the Service of a Participant is terminated due to death or Disability, the vested portion of his or her then-outstanding Options and/or SARs may be exercised within six months after the date of termination of Service. In no event shall an Option or SAR be exercisable following the end of the term of such Option or SAR, as applicable.

4.8

Coordination with Other Plans. Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or its Subsidiaries or Affiliates. For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or its Subsidiaries or Affiliates may be settled in Shares if the Committee so determines, in which case the shares delivered will be treated as awarded under the Plan (and will reduce the number of shares thereafter available under the Plan in accordance with the rules set forth in Section 5). In any case where an award is made under another plan or program of the Company or its Subsidiaries or Affiliates and such award is intended to qualify for the performance-based compensation exception under Section 162(m), and such award is settled by the delivery of Shares or another Award under the Plan, the applicable Section 162(m) limitations under both the other plan or program and under the Plan will be applied to the Plan as necessary (as determined by the Committee) to preserve the availability of the Section 162(m) performance-based compensation exception with respect thereto.


SECTION 5.

SHARES SUBJECT TO PLAN AND SHARE LIMITS.

5.1

Basic Limitation. The stock issuable under the Plan shall be authorized but unissued Shares. The aggregate number of Shares reserved for Awards under the Plan shall not exceed 2,000,000 Shares, subject to adjustment pursuant to Section 10. The aggregate maximum number of Shares that may be issued in connection with ISOs shall be 2,000,000 Shares.

5.2

Additional Shares. If Awards are forfeited or are terminated for any reason before being exercised or becoming vested or if the Awards are settled in cash, then the Shares underlying such Awards shall again become available for Awards under the Plan. SARs to be settled in Shares shall be counted in full against the number of Shares available for issuance under the Plan, regardless of the number of Shares issued upon settlement of the SARs. Any shares withheld from an Award to satisfy the tax withholding obligations with respect to such Award or in payment of the Exercise Price of an Award requiring exercise shall not again be available for issuance under the Plan.

5.3

Dividend Equivalents. Any dividend equivalents distributed as Shares under the Plan shall be applied against the number of Shares available for Awards. Dividend equivalents distributed as cash shall have no impact on the number of Shares available for Awards.

5.4

Share Limits.

(a)

Limits on Options. No Key Service Provider shall receive Options to purchase Shares during any Fiscal Year covering in excess of 500,000 Shares.

(b)

Limits on SARs. No Key Service Provider shall receive Awards of SARs during any Fiscal Year covering in excess of 500,000 Shares.

(c)

Limits on Stock Grants and Stock Units. No Key Service Provider shall receive Stock Grants or Stock Units during any Fiscal Year covering, in the aggregate, in excess of 250,000 Shares.

(d)

Limits on Awards to Non-Employee Directors. Notwithstanding subsections (i), (ii) or (iii) above, no Non-Employee Directors shall receive Awards during any Fiscal Year covering, in the aggregate, in excess of 30,000 Shares.

(e)

The foregoing share limits will be construed in a manner consistent with Section 162(m) of the Code, including, without limitation, where applicable, the rules under Section 162(m) pertaining to permissible deferrals of exempt awards.

SECTION 6.

TERMS AND CONDITIONS OF OPTIONS.

6.1

Stock Option Agreement. Each Grant of an Option under the Plan shall be evidenced and governed exclusively by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Committee deems appropriate for inclusion in a Stock Option Agreement (including without limitation any performance conditions). The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. The Stock Option Agreement shall also specify whether the Option is an ISO or an NSO.

6.2

Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall be subject to adjustment of such number in accordance with Section 10.


6.3

Exercise Price. An Option’s Exercise Price shall be established by the Committee and set forth in a Stock Option Agreement. The Exercise Price of an Option shall not be less than 100% of the Fair Market Value (110% for ISO grants to 10-Percent Stockholders) on the date of Grant.

6.4

Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an Option shall in no event exceed seven years from the date of Grant (five years from the date of Grant for ISO grants to 10-Percent Stockholders). A Stock Option Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, or other events. Notwithstanding any other provision of the Plan, no Option can be exercised after the expiration date provided in the applicable Stock Option Agreement. Unless the Committee expressly provides otherwise, no Stock Option will be deemed to have been exercised until the Committee receives a notice of exercise (in form acceptable to the Committee) which may be an electronic notice, signed (including electronic signature in form acceptable to the Committee) by the appropriate person and accompanied by any payment required under the Award. A Stock Option exercised by any person other than the Participant will not be deemed to have been exercised until the Committee has received such evidence as it may require that the person exercising the Award has the right to do so.

6.5

Payment for Option Shares. The Exercise Price of Shares issued upon exercise of Options shall be payable in cash at the time when such Shares are purchased, except as follows and if so provided for in an applicable Stock Option Agreement:

(a)

Surrender of Stock. Payment for all or any part of the Exercise Price may be made with Shares which have already been owned by the Optionee; provided that the Committee may, in its sole discretion, require that Shares tendered for payment be previously held by the Optionee for a minimum duration (e.g., to avoid financial accounting charges to the Company’s earnings). Such Shares shall be valued at their Fair Market Value.

(b)

Cashless Exercise. Payment for all or a part of the Exercise Price may be made through Cashless Exercise.

(c)

Other Forms of Payment. Payment may be made in any other form that is consistent with applicable laws, regulations and rules and approved by the Committee.

In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Section 6(e). In the case of an NSO granted under the Plan, the Committee may, in its discretion at any time, accept payment in any form(s) described in this Section 6(e).

6.6

Modifications or Assumption of Options. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. Notwithstanding the preceding sentence or anything to the contrary, no modification of an Option shall, without the consent of the Optionee, impair his or her rights or obligations under such Option and, unless there is approval by the Company stockholders, the Committee may not Re-Price outstanding Options.

6.7

Assignment or Transfer of Options. Except as otherwise provided in the applicable Stock Option Agreement and then only to the extent permitted by applicable law, no Option shall be transferable by the Optionee other than by will or by the laws of descent and distribution. Except as otherwise provided in the applicable Stock Option Agreement, an Option may be exercised during the lifetime of the Optionee only or by the guardian or legal representative of the Optionee. No Option or interest therein may be assigned, pledged or hypothecated by the Optionee during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process.


SECTION 7.

TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

7.1

SAR Agreement. Each Award of a SAR under the Plan shall be evidenced by a SAR Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan (including without limitation any performance conditions). A SAR Agreement may provide for a maximum limit on the amount of any payout notwithstanding the Fair Market Value on the date of exercise of the SAR. The provisions of the various SAR Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction in the Participant’s compensation.

7.2

Number of Shares. Each SAR Agreement shall specify the number of Shares to which the SAR pertains and is subject to adjustment of such number in accordance with Section 10.

7.3

Exercise Price. Each SAR Agreement shall specify the Exercise Price. The Exercise Price of a SAR shall not be less than 100% of the Fair Market Value on the date of Grant.

7.4

Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR which shall not exceed seven years from the date of Grant. A SAR Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability, or other events and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service.

7.5

Exercise of SARs. If, on the date when a SAR expires, the Exercise Price under such SAR is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall automatically be deemed to be exercised as of such date with respect to such portion. Upon exercise of a SAR, the Participant (or any person having the right to exercise the SAR after Participant’s death) shall receive from the Company (i) Shares, (ii) cash or (iii) any combination of Shares and cash, as the Committee shall determine at the time of grant of the SAR, in its sole discretion. The amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price of the Shares.

7.6

Modification or Assumption of SARs. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (including stock appreciation rights granted by another issuer) in return for the grant of new SARs for the same or a different number of Shares and at the same or a different Exercise Price. Notwithstanding the preceding sentence or anything to the contrary, no modification of a SAR shall, without the consent of the Participant, impair his or her rights or obligations under such SAR and, unless there is approval by the Company stockholders, the Committee may not Re-Price outstanding SARs.

7.7

Assignment or Transfer of SARs. Except as otherwise provided in the applicable SAR Agreement and then only to the extent permitted by applicable law, no SAR shall be transferable by the Participant other than by will or by the laws of descent and distribution. Except as otherwise provided in the applicable SAR Agreement, a SAR may be exercised during the lifetime of the Participant only or by the guardian or legal representative of the Participant. No SAR or interest therein may be assigned, pledged or hypothecated by the Participant during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process.

SECTION 8.

TERMS AND CONDITIONS FOR STOCK GRANTS.

8.1

Time, Amount and Form of Awards. Awards under this Section 8 may be granted in the form of a Stock Grant.

8.2

Stock Grant Agreement. Each Stock Grant awarded under the Plan shall be evidenced and governed exclusively by a Stock Grant Agreement between the Participant and the Company. Each Stock Grant shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan that the Committee deems appropriate for inclusion in the applicable Stock Grant Agreement (including without limitation any performance conditions). The provisions of the Stock Grant Agreements entered into under the Plan need not be identical.

8.3

Payment for Stock Grants. Stock Grants may be issued with or without cash consideration under the Plan.


8.4

Vesting Conditions. Each Stock Grant may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Grant Agreement which may include Performance Goals pursuant to Section 4(e). A Stock Grant Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, or other events.

8.5

Assignment or Transfer of Stock Grants. Except as provided in the applicable Stock Grant Agreement and then only to the extent permitted by applicable law, a Stock Grant awarded under the Plan shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily, involuntarily or by operation of law. Any act in violation of this Section 8(e) shall be void. However, this Section 8(e) shall not preclude a Participant from designating a beneficiary who will receive any vested outstanding Stock Grant Awards in the event of the Participant’s death, nor shall it preclude a transfer of vested Stock Grant Awards by will or by the laws of descent and distribution. 

8.6

Voting and Dividend Rights. The holder of a Stock Grant awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Stock Grant Agreement, however, may require that the holder of such Stock Grant invest any cash dividends received in additional Shares subject to the Stock Grant. Such additional Shares subject to the Stock Grant shall be subject to the same conditions and restrictions as the Stock Grant with respect to which the dividends were paid. Such additional Shares subject to the Stock Grant shall not reduce the number of Shares available for issuance under Section 5.

8.7

Modification or Assumption of Stock Grants. Within the limitations of the Plan, the Committee may modify or assume outstanding Stock Grants or may accept the cancellation of outstanding Stock Grants (including stock granted by another issuer) in return for the grant of new Stock Grants for the same or a different number of Shares. Notwithstanding the preceding sentence or anything to the contrary, no modification of a Stock Grant shall, without the consent of the Participant, impair his or her rights or obligations under such Stock Grant.

SECTION 9.

TERMS AND CONDITIONS OF STOCK UNITS.

9.1

Stock Unit Agreement. Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the Participant and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan (including without limitation any performance conditions). The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical. Stock Units may be granted in consideration of a reduction in the Participant’s other compensation.

9.2

Number of Shares. Each Stock Unit Agreement shall specify the number of Shares to which the Stock Unit Grant pertains and is subject to adjustment of such number in accordance with Section 10.

9.3

Payment for Awards. To the extent that an Award is granted in the form of Stock Units, no cash consideration shall be required of the Award recipients.

9.4

Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Agreement which may include Performance Goals pursuant to Section 4(e). A Stock Unit Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, or other events.

9.5

Voting and Dividend Rights. The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Share while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of Shares, or in a combination of both. Prior to distribution, any dividend equivalents which are not paid shall be subject to the same conditions and restrictions as the Stock Units to which they attach. Any entitlement to dividend equivalents or similar entitlements shall be established and administered consistent either with exemption from, or compliance with, the requirements of Section 409A of the Code.

9.6

Form and Time of Settlement of Stock Units. Settlement of vested Stock Units may be made in the form of (a) cash, (b) Shares or (c) any combination of both, as determined by the Committee at the time of the grant of the Stock Units, in its sole discretion. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a series of trading days. Vested Stock Units may be settled in a lump sum or in installments. The distribution may occur or commence when the vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred, in accordance with applicable law, to any later date. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Section 10.


9.7

Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement.

9.8

Modification or Assumption of Stock Units. Within the limitations of the Plan, the Committee may modify or assume outstanding Stock Units or may accept the cancellation of outstanding Stock Units (including stock units granted by another issuer) in return for the grant of new Stock Units for the same or a different number of Shares. Notwithstanding the preceding sentence or anything to the contrary, no modification of a Stock Unit shall, without the consent of the Participant, impair his or her rights or obligations under such Stock Unit.

9.9

Assignment or Transfer of Stock Units. Except as provided in the applicable Stock Unit Agreement and then only to the extent permitted by applicable law, Stock Units shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily, involuntarily or by operation of law. Any act in violation of this Section 9(i) shall be void. However, this Section 9(i) shall not preclude a Participant from designating a beneficiary who will receive any outstanding vested Stock Units in the event of the Participant’s death, nor shall it preclude a transfer of vested Stock Units by will or by the laws of descent and distribution.

SECTION 10.

PROTECTION AGAINST DILUTION.

10.1

Basic Adjustments. In the event of a subdivision of the outstanding Shares, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Shares (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence that constitutes an equity restructuring within the meaning of FASB ASC 718, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of: (i) the number of Shares and the kind of shares or securities available for future Awards under Section 5; (ii) the limits on Awards specified in Section 5; (iii) the number of Shares and the kind of shares or securities covered by each outstanding Award; or (iv) the Exercise Price under each outstanding SAR or Option.

References in the Plan to Shares will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 10. Unless the Committee determines otherwise, any adjustments hereunder shall be done on terms and conditions consistent with Section 409A of the Code.

10.2

Certain Other Adjustments. The Committee may also make adjustments of the type described in Section 10(a) above to take into account distributions to stockholders other than those provided for in Section 10(a), including, without limitation, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares or any other event, if the Committee determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Awards made hereunder, having due regard for the qualification of ISOs under Section 422 of the Code, the requirements of Section 409A of the Code, and for the performance-based compensation rules of Section 162(m) of the Code, where applicable.

10.3

Participant Rights. Except as provided in this Section 10, a Participant shall have no rights by reason of any issue by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. If by reason of an adjustment pursuant to this Section 10 a Participant’s Award covers additional or different shares of stock or securities, then such additional or different shares and the Award in respect thereof shall be subject to all of the terms, conditions and restrictions which were applicable to the Award and the Shares subject to the Award prior to such adjustment.

10.4

Fractional Shares. Any adjustment of Shares pursuant to this Section 10 shall be rounded down to the nearest whole number of Shares. Under no circumstances shall the Company be required to authorize or issue fractional shares and no consideration shall be provided as a result of any fractional shares not being issued or authorized.


SECTION 11.

EFFECT OF A CHANGE IN CONTROL.

11.1

Change in Control. In the event of a Change in Control, the Committee may provide for the assumption or substitution of some or all outstanding Awards or any portion thereof by the surviving corporation or its parent, for the continuation of some or all outstanding Awards or any portion thereof by the Company (if the Company is a surviving corporation), for accelerated vesting of some or all outstanding Awards or any portion thereof or for a payment (a “cash-out”) with respect to some or all Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the excess, if any, of (i) the fair market value of one Share, as determined by the Committee, times the number of Shares subject to the Award or such portion, over (ii) the aggregate Exercise Price or purchase price, if any, under the Award or such portion, in all cases without the consent of the Participant. Except as the Committee may otherwise determine in any case, each Award will automatically terminate (and in the case of Stock Grants, will be automatically forfeited) upon consummation of a Change in Control, other than Awards assumed or substituted for as provided for herein.  

11.2

Acceleration. In the event that a Change in Control occurs with respect to the Company and there is no assumption, substitution or continuation of outstanding Options, SARs or Stock Units pursuant to Section 11(a), the Committee may determine, in its sole discretion, that all such outstanding Options, SARs and Stock Units shall fully vest and be fully exercisable immediately prior to such Change in Control. The Committee may determine, at the time of granting an Award or thereafter, that such Award shall become fully vested as to all Shares subject to such Award in the event that a Change in Control occurs with respect to the Company. To the extent acceleration pursuant to this Section 10(b) of an Award subject to Section 409A of the Code would cause the Award to fail to satisfy the requirements of Section 409A of the Code, the Award shall not be accelerated and the Committee in lieu thereof shall take such steps as are necessary to ensure that payment of the Award is made in a medium other than Shares and on terms that as nearly as possible, but taking into account adjustments required or permitted by this Section 10, replicate the prior terms of the Award.

11.3

Additional Limitations: Any Shares and any cash or other property delivered pursuant to Section 10(b) above with respect to an Award may, in the discretion of the Committee, contain such restrictions, if any, as the Committee deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Change in Control. In the case of Stock Grants that do not vest in connection with the Change in Control, the Committee may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock Grants in connection with the Change in Control be placed in escrow or otherwise made subject to such restrictions as the Committee deems appropriate to carry out the intent of the Plan.

11.4

Dissolution. To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.

11.5

Covered Transactions. In the event of a Covered Transaction that does not constitute a Change in Control, the Committee may take any of the actions contemplated by subsection (a) or (b) above and the provisions of subsection (c) shall also apply. Except as the Committee may otherwise determine in any case, each Award will automatically terminate (and in the case of Stock Grants, will be automatically forfeited) upon consummation of a Covered Transaction that does not constitute a Change in Control, other than Awards assumed as provided for herein.

SECTION 12.

LIMITATIONS ON RIGHTS.

12.1

Participant Rights. A Participant’s rights, if any, in respect of or in connection with any Award is derived solely from the discretionary decision of the Company to permit the individual to participate in the Plan and to benefit from a discretionary Award. By accepting an Award under the Plan, a Participant will be deemed to have agreed to the terms of the Award and the Plan, and expressly acknowledges that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Awards. Any Award granted hereunder is not intended to be compensation of a continuing or recurring nature, or part of a Participant’s normal or expected compensation, and in no way represents any portion of a Participant’s salary, compensation, or other remuneration for purposes of pension benefits, severance, redundancy, resignation or any other purpose. The existence of the Plan or the grant of any Award will not in any way affect the Company’s right to Award a person bonuses or other compensation in addition to Awards under the Plan.

Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an employee, consultant or director of the Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parents and Subsidiaries and Affiliates reserve the right to terminate the Service of any person at any time, and for any reason, subject to applicable laws, the Company’s Articles of Incorporation and Bylaws and a written employment agreement (if any), and such terminated person shall be deemed irrevocably to have waived any claim to damages or specific performance for breach of contract or dismissal, compensation for loss of office, tort or otherwise with respect to the Plan or any outstanding Award that is forfeited and/or is terminated by its terms or to any future Award. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of Service for any reason, even if the termination is in violation of an obligation of the Company or any Affiliate to the Participant.


12.2

Stockholders’ Rights. A Participant shall have no dividend rights, voting rights or other rights as a Stockholder with respect to any Shares covered by his or her Award prior to the issuance of such Shares (as evidenced by an appropriate entry on the books of the Company or a duly authorized transfer agent of the Company). No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date when such Shares are issued, except as expressly provided in Section 10.

12.3

Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue Shares or other securities under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of Shares or other securities pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Shares or other securities, to their registration, qualification or listing or to an exemption from registration, qualification or listing.

12.4

Section 409A. Awards under the Plan are intended either to be exempt from the rules of Section 409A of the Code or to satisfy those rules, and the Plan and such Awards shall be construed accordingly. Granted Awards may be modified at any time, in the Committee’s discretion, so as to increase the likelihood of exemption from or compliance with the rules of Section 409A of the Code, so long as such modification does not result in a reduction in value to the applicable Participant (unless the Participant consents in writing to such modification). Notwithstanding anything to the contrary in the Plan, neither the Company, any Subsidiary, nor the Board, nor any person acting on behalf of the Company, any Subsidiary, or the Board, shall be liable to any participant or to the estate or beneficiary of any participant or to any other holder of an option by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of an option to satisfy the requirements of Section 409A of the Code.

12.5

Additional Restrictions. The Committee may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award agreement and the Plan, or if the Participant breaches any agreement with the Company or its Subsidiaries or Affiliates with respect to non-competition, nonsolicitation or confidentiality. Without limiting the generality of the foregoing, the Committee may recover Awards made under the Plan and payments under or gain in respect of any Award to the extent required to comply with any Company policy or Section 10D of the Securities Exchange Act of 1934, as amended, or any stock exchange or similar rule adopted under said Section or any other applicable law or regulation.

SECTION 13.

WITHHOLDING TAXES.

13.1

General. A Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with his or her Award. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied.

13.2

Share Withholding. If a public market for the Company’s Shares exists, the Committee may permit a Participant to have the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired in satisfaction of all or a part of his or her withholding or income tax obligations (but not in excess of the minimum withholding required by law). Such Shares shall be valued based on the value of the actual trade or, if there is none, the Fair Market Value as of the previous day. Any payment of taxes by assigning Shares to the Company may be subject to restrictions, including, but not limited to, any restrictions required by rules of the SEC. The Committee may, in its discretion, also permit a Participant to satisfy withholding or income tax obligations related to an Award through Cashless Exercise or through a sale of Shares underlying the Award.


SECTION 14.

DURATION AND AMENDMENTS.

14.1

Term of the Plan. The Plan shall become effective upon its approval by Company stockholders. The Plan shall terminate on the seventh anniversary of the Effective Date and may be terminated on any earlier date pursuant to this Section 14, but previously granted Awards may continue beyond that date in accordance with their terms.

14.2

Right to Amend or Terminate the Plan. The Board may amend or terminate the Plan at any time and for any reason. Any such termination of the Plan, or any amendment thereof, shall not impair in any material respect any Award previously granted under the Plan. No Awards shall be granted under the Plan after the Plan’s termination. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent such approval is required by applicable laws, regulations or rules (including the Code and applicable stock exchange requirements).

14.3

Except as contemplated by Section 10 or 11 of the Plan, the Company may not, without obtaining stockholder approval, (a) amend the terms of outstanding Options or SARs to reduce the Exercise Price of such Options or SARs, (b) cancel outstanding Options or SARs in exchange for Options or SARs with an Exercise Price that is less than the Exercise Price of the original Options or SARs, or (c) cancel outstanding Options or SARs that have an Exercise Price greater than the Fair Market Value of a share on the date of such cancellation in exchange for cash or other consideration.

SECTION 15.

WAIVER of jury trial

By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim will be tried before a court and not before a jury. By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit disputes arising under the terms of the Plan or any Award made hereunder to binding arbitration or as limiting the ability of the Company to require any eligible individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.