Note 3 - Stock-based Compensation

6 Months Ended

Nov. 27, 2016

Notes to Financial Statements

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

3. Stock - Based Compensation

The Company

’s stock - based awards include stock option grants and restricted stock unit awards (“RSUs”). The Company records compensation expense for stock - based awards issued to employees and directors in exchange for services provided based on the estimated fair value of the awards on their grant dates and is recognized over the required service periods, generally the vesting period.

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

	Three Months Ended				Six Months Ended
	November 27, 2016		November 29, 2015		November 27, 2016		November 29, 2015
Options	$	307	$	360	$	599	$	690
RSUs		659		540		1,174		1,007
Total stock-based compensation	$	966	$	900	$	1,773	$	1,697

The following table summarizes the stock - based compensation by income statement line item (in thousands):

	Three Months Ended				Six Months Ended
	November 27, 2016		November 29, 2015		November 27, 2016		November 29, 2015
Cost of sales	$	124	$	100	$	237	$	198
Research and development		23		23		46		45
Selling, general and administrative		819		777		1,490		1,454
Total stock-based compensation	$	966	$	900	$	1,773	$	1,697

The estimated fair value for stock options, which determines the Company

’s calculation of stock - based compensation expense, is based on the Black - Scholes option pricing model. RSUs are valued at the closing market price of the Company’s common stock on the date of grant. The Company uses the straight - line single option method to calculate and recognize the fair value of stock - based compensation arrangements.

As of

November

27,

2016,

there was

$6.5

million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Landec incentive stock plans. Total expense is expected to be recognized over the weighted - average period of

1.8

years for stock options and

1.7

years for restricted stock unit awards.