Exhibit 10.39

 

LANDEC CORPORATION

 

NONQUALIFIED DEFERRED COMPENSATION PLAN

 

Section 1. Purpose of Plan and Participation in the Plan.

 

The purpose of this Plan is to provide specified benefits to non-employee
members of the Board of Directors (the “Board”) of Landec Corporation, a
Delaware corporation (“Landec” or “Company”), and those executives identified by
management and approved by the Board who contribute materially to the continued
growth, development and future business of Landec success and its subsidiaries,
Apio, Inc. (“Apio”) and Lifecore Biomedical, Inc. (“Lifecore”), that participate
in this Plan (collectively, “Eligible Participants”). This Plan shall be
unfunded for tax purposes and for purposes of Title I of ERISA. This Plan is
intended to comply with all applicable law, including Code Section 409A, and
shall be operated and interpreted in accordance with this intention.

 

All Eligible Participants are eligible to defer Base Pay, Bonus and cash Board
fees under the Plan. In addition, the Compensation Committee of the Board (the
“Compensation Committee”), may provide that Company contributions may be made to
the Plan for the benefit of a Participant under the terms and conditions as may
be specified by the Compensation Committee, in any manner the Compensation
Committee deems appropriate; provided, however, that any such contribution shall
comply with Section 409A of the Code.

 

Section 2. Definitions.

 

2.1 Base Pay means the annual base salary rate of cash compensation for
employees on the U.S. payroll of Landec, excluding Bonuses, incentive
compensation, commissions, overtime pay, severance payments, shift differential,
payments under the Landec Disability Plan or any other additional compensation.

 

2.2 Base Pay Deferral Account means the sub-account of the Deferral Account that
includes (i) the sum of amounts credited to Participant’s Base Pay Deferral
Account under Section 4, plus (ii) amounts credited (net of amounts debited) in
accordance with all the applicable crediting provisions of this Plan that relate
to the Participant’s Base Pay Deferral Account, less (iii) all distributions
made to the Participant or his or her Beneficiary pursuant to this Plan that
relate to the Participant’s Base Pay Deferral Account.

 

2.3 Beneficiary means the person or persons designated by a Participant pursuant
to Section 8, in accordance with the Plan and accepted by the Committee, to
receive any amounts payable under the Plan in the event of the Participant’s
death.

 

2.4 Bonus shall have the same meaning as an "award" as set forth in the
Company’s short-term and long-term bonus plans which provides an annual bonus
compensation opportunity to Eligible Employees as defined by the Compensation
Committee from time to time. Bonus does not include any sales incentive
compensation or commission or any other bonus plan not mentioned herein.

 

 
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2.5 Bonus Deferral Account means the sub-account of the Deferral Account that
includes (i) the sum of amounts credited to Participant’s Bonus Deferral Account
under Section 4, plus (ii) amounts credited (net of amounts debited) in
accordance with all the applicable crediting provisions of this Plan that relate
to the Participant’s Bonus Deferral Account, less (iii) all distributions made
to the Participant or his or her Beneficiary pursuant to this Plan that relate
to the Participant’s Bonus Deferral Account.

 

2.6 Change in Control means the occurrence 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.

 

Notwithstanding the foregoing, a transaction or series of related transactions
shall not constitute a Change in Control unless it or they also constitute a
change in the ownership or effective control of a corporation, or a change in
the ownership of a substantial portion of the assets of a corporation within the
meaning of Section 409A of the Code and the guidance promulgated thereunder.

 

2.7 Code means the Internal Revenue Code of 1986, as amended from time to time.

 

2.8 Committee means the Chief Executive Officer and Chief Financial Officer of
Landec or other persons designated by the Chief Executive Officer and/or Chief
Financial Officer.

 

2.9 Deferral Account means the account balance of a Participant in the Plan
created from Deferred Amounts, any Company contributions, and the Earnings
thereon prior to a payout to the Participant.

 

 
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2.10 Deferred Amount means the amount the Participant elects to have deferred
from Base Pay and/or a Bonus, pursuant to Section 3, or cash Board fees the
Participant elects to have deferred or Company contributions.

 

2.11 Disability means the Participant is, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, either (i) unable to engage in any substantial gainful activity or
(ii) receiving benefits under the Landec Disability Plan for a period of not
less than three months.

 

2.12 Earnings means the deemed return on investment (or charge on investment
loss) allocated to a Participant’s Deferral Account, based on the return of the
Investment Options.

 

2.13 Eligibility Pay Threshold means the amount defined in Section 401(a)(17) of
the Code, as adjusted by the Secretary of the Treasury under Section 415(d) of
the Code, in effect on January 1st of the calendar year for which amounts are to
be deferred.

 

2.14 Eligible Employee means an employee on the U.S. payroll of Landec’s
Consolidated Group who has a Base Pay rate plus Bonus during the year in which
the election is made as specified in Section 3 equal to or in excess of the
Eligibility Pay Threshold and who Landec notifies is eligible to participate in
the Plan.

 

2.15 Employer means Landec or any of its affiliates as determined under Treasury
Regulation § 1.409A-1(h)(3).

 

2.16 ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

2.17 Investment Options means one or more of the investment funds selected by
the Committee from time to time in accordance with Section 5.2.

 

2.18 Landec means Landec Corporation, a Delaware corporation.

 

2.19 Landec’s Consolidated Group means Landec, Apio and Lifecore.

 

2.20 Participant means any individual who has a Deferral Account under the Plan
or who is receiving or entitled to receive benefits under the Plan.

 

2.21 Payout Commencement Date means the date upon which a payment to a
Participant of an amount credited to his or her Deferral Account first
commences.

 

2.22 Performance Based Compensation means, as defined in Section 409A,
compensation the amount of which, or entitlement to which, is contingent on the
satisfaction of pre-established organizational or individual performance
criteria relating to a performance period of at least 12 consecutive months.
Organizational or individual performance criteria are considered pre-established
if established in writing by not later than 90 days after the commencement of
the period of service to which the criteria relates, provided that the outcome
is substantially uncertain at the time the criteria are established. At the time
of the deferral election, in order for the election to be in compliance with
Code Section 409A, (i) the Participant must perform services continuously for
the period beginning on the later of the first day of the performance period or
the date the performance criteria are established, and ending on the date of
election with respect to the performance based compensation and (ii) the
election must not be made after the amount of the performance based compensation
becomes reasonably ascertainable. There may be a performance based company
contribution whereby participants may earn an employer paid performance based
contribution every three (3) years based on attainment of corporate performance
metrics to be established prior to each 3-year performance period.

 

 
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2.23 Plan means the Landec Corporation Nonqualified Deferred Compensation Plan.

 

2.24 Retirement means the Participant has reached age sixty-five (65) or has,
from the date of hire, ten (10) or more years of service with the Company.

 

2.25 Separation from Service means a separation from service within the meaning
of Treasury Regulation § 1.409A-1(h). A Participant shall not be deemed to have
separated from service if the Participant continues to provide services to an
Employer at an annual rate that is fifty percent or more of the services
rendered, on average, during the immediately preceding three full years of
service with the Employer (or if employed by or providing services to the
Employer less than three years, such lesser period); provided, however, that a
separation from service will be deemed to have occurred if a Participant’s
service with an Employer is reduced to an annual rate that is less than twenty
percent of the services rendered, on average, during the immediately preceding
three full years of service with the Employer (or if employed by or providing
services to the Employer less than three years, such lesser period).

 

2.27 Tax or (Taxes) means any federal, state, local, or any other governmental
income tax, employment tax, payroll tax, excise tax, or any other tax or
assessment owing with respect to amounts deferred, any Earnings thereon, or any
payments made to Participants or Beneficiaries under the Plan.

 

Section 3. Timing and Amounts of Deferred Compensation.

 

Participants shall make elections to participate in the Plan, as follows:

 

3.1 Base Pay Deferrals.

 

(a) Timing of Base Pay Deferral. With respect to a deferral of Base Pay, an
election to defer Base Pay must be made before December 31, or such earlier date
established by the Committee, of the calendar year preceding the calendar year
with respect to which the services associated with such Base Pay are performed,
and in accordance with procedures established by the Committee. Base Pay
deferral elections shall be irrevocable on the December 31 of the calendar year
preceding the calendar year with respect to which such election pertains, or
such earlier date as Landec determines in its discretion. Notwithstanding the
foregoing, a new Eligible Participant may make an initial deferral election by
the date the Committee specifies after the individual receives enrollment
materials; provided, however, that such initial deferral election shall be made
no later than the 30th day after the individual becomes a Participant.

 

 
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(b) Amount of Base Pay Deferral. The percentage that will be deferred from Base
Pay for a Participant is determined as follows:

 

(i)  The Participant will elect an annual percentage to be deferred from Base
Pay. The maximum annual percentage of Base Pay that may be deferred each
calendar year is equal to fifty percent (50%) of the amount of Base Pay.

 

(ii) The percentage will be converted into an amount per pay period to be
deferred and adjusted as necessary.

 

3.2 Bonus Deferrals.

 

(a) Timing of Bonus Deferral. A Participant may elect to defer Bonuses that are
Performance Based Compensation; provided, however, such election shall not be
made later than six months prior to the end of the applicable performance period
and such election shall be irrevocable as Landec determines in its discretion as
reflected in the election form. Notwithstanding the foregoing, a new Eligible
Employee may make an initial bonus deferral election by the date the Committee
specifies after the individual receives enrollment materials; provided, however,
that such initial deferral election shall be made no later than the 30th day
after the individual becomes an Eligible Employee and the election may only
apply to compensation paid for services performed after the election.

 

(b) Amount of Bonus Deferral. The maximum amount of any Bonus a Participant may
defer in any calendar year is 100% of any short-term performance Bonus to which
he or she may become entitled. The Deferral Amount must be expressed in terms of
a whole percentage point. Once an election is made by an Eligible Employee to
defer any portion of a Bonus, the appropriate dollar amount will be withheld
from the Bonus when this amount would have otherwise been paid.

 

3.3 Cash Board Fee Deferrals.

 

(a) Timing of Cash Board Fee Deferral. Participants must make an election to
defer a cash Board fee no later than: (i) December 31, or such earlier date
established by the Committee, of the calendar year preceding the calendar year
with respect to which the services associated with such cash fees are performed,
and in accordance with procedures established by the Committee, or (ii) the 30th
day after the individual first becomes an Eligible Participant and the election
may only apply to compensation paid for services performed after the election.
Cash Board fee deferral elections shall be irrevocable on the December 31 of the
calendar year preceding the calendar year to which such election pertains, or
such earlier date as Landec determines in its discretion and as reflected in the
election form.

 

 
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(b) Amount of Deferral of Cash Board Fees. A Participant may defer any portion,
up to 100%, of any cash Board fee to which he or she may become entitled, so
long as the deferral amount is expressed in terms of a whole percentage point;
provided, however, if the percentage results in a fractional share, the amount
deferred shall be rounded up to the nearest whole number. Once an election is
made by a Participant to defer any portion of cash Board fee, the appropriate
amount will be withheld from the cash Board fee when the fee would have
otherwise have been distributed.

 

3.4 Company Contributions. Notwithstanding anything provided in this Section 3
or otherwise in the Plan to the contrary, the Committee, to the extent
authorized by the Compensation Committee, shall have the discretion to provide
that Company contributions may be made to the Plan for the benefit of a
Participant under the terms and conditions as may be specified by Landec, in any
manner Landec deems appropriate; provided, however, that any such contribution
shall comply with Section 409A of the Code. Additionally, performance based
Company contributions may be made to the Plan for the benefit of a Participant
and as further described under Section 2.22 above. All Company contributions may
be made subject to vesting conditions. In the event the Company contributions
are made subject to vesting conditions, any unvested Company contributions shall
become fully vested upon a Change in Control or upon the Participant’s
Separation from Service due to death, Disability or Retirement.

 

Section 4. Crediting of Deferral Accounts.

 

Amounts deferred pursuant to Section 3 shall be credited to a Deferral Account
in the name of the Participant. Deferred Amounts arising from deferrals of Base
Pay shall be credited to a Participant’s Base Pay Deferral Account at least
quarterly. Deferrals resulting from amounts credited to a Participant’s Bonus
Deferral Account from the deferral of Bonuses shall be credited to a Bonus
Deferral Account as soon as practicable after such Bonus would otherwise have
been paid. Deferrals resulting from amounts credited to a Participant’s Deferral
Account from the deferral of cash Board fees shall be credited to a
Participant’s cash Board fees Deferral Account, as appropriate, as soon as
practicable after such fees would otherwise have been paid. The Participant’s
rights in the Deferral Account shall be no greater than the rights of any other
unsecured general creditor of Landec. Deferred Amounts and Earnings thereon
credited hereunder shall for all purposes be part of the general funds of
Landec. Any payout to a Participant of amounts credited to a Participant’s
Deferral Account is not due, nor are such amounts ascertainable, until the
Payout Commencement Date.

 

Section 5. Earnings on the Deferral Account.

 

5.1 Crediting in General. Amounts in a Participant’s Deferral Account will be
credited at least quarterly with Earnings until such amounts are paid out to the
Participant under this Plan as set forth in Section 6. All Earnings attributable
to the Deferral Account shall be added to the liability of and retained therein
by Landec. Any such addition to the liability shall be appropriately reflected
on the books and records of Landec’s Consolidated Group and identified as an
addition to the total sum owed the Participant.

 

 
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5.2 Investment Options. The Committee shall from time to time select the
Investment Options available for investment designation by the Participants with
respect to Deferral Accounts. The Committee shall notify Participants of the
type of Investment Options selected from time to time. At the time of deferral,
each Participant shall designate, pursuant to procedures established by the
Committee, the Investment Options for which the Participant’s Deferral Account
will be to be invested in for purposes of determining the Earnings to be
credited to that Deferral Account. In making the designation pursuant to this
Section 5.2, the Participant may specify that all or any percentage of his or
her Deferral Account be deemed to be invested, in whole percentage increments,
in one or more of the Investment Options provided under the Plan as communicated
from time to time by the Committee. Effective as of the end of any business day,
a Participant may change the designation made under this Section 5.2 pursuant to
procedures established by the Committee. If a Participant fails to elect an
Investment Option under this Section 5.2, the Committee will recommend a default
investment option.

 

5.3 Investment Directions. Although the Participant may designate the Investment
Options, the Committee shall not be bound to invest such amount in any specific
fund which is selected as an Investment Option and shall have no liability to
Participants for failure to so invest. The Committee shall select from time to
time, in its sole discretion, commercially available Investment Options of the
investment types determined from time to time by the Committee. The Committee
may from time to time select alternate Investment Options in addition to or in
replacement of Investment Options previously selected. If the Committee selects
alternate Investment options to replace an Investment Option previously selected
by the Participant, the Participant shall be notified to change their investment
designation to a different Investment Option and if the Participant fails to
timely make such change, the Participant’s investment designation to a replaced
Investment Option shall be substituted with an investment designation to an
equivalent alternate Investment Option. The balance in a Participant’s Deferral
Account shall increase or decrease in connection with the performance of the
Investment Option funds selected by the Participant.

 

Section 6. Payout Commencement Dates

 

6.1 Commencement and Form of Payout. The form and commencement of benefit shall
be made in accordance with the Participant’s election at the time of deferral
and this Section 6.1.

 

(a) Distribution upon a Specified Payment Year.

 

(i)      A Participant may elect to receive payment from his Deferral Account
upon a specified payment year to commence no sooner than three (3) years after
the calendar year to which the deferrals in the Deferral Account relate. If a
Participant's Deferral Account election provides for distributions based on the
occurrence of a specified payment year, in such year, the Deferral Account(s)
attributable to such election shall be distributed to the Participant in a lump
sum or in annual installments not to exceed a ten (10) year period as specified
on the Participant's Deferral Account election form.

 

 
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(ii)     After the time of the initial deferral, a Participant may subsequently
elect to delay the specified payment year to which his or her deferrals in a
Deferral Account relate. Such a subsequent deferral election shall be made in
the manner prescribed by the Committee; provided that any subsequent deferral
election must (i) be made at least 12 months prior to the originally scheduled
specified payment year, (ii) set a new specified payment year which is at least
five (5) years after the originally scheduled payment year; and (iii) not be
effective for at least twelve (12) months after the date on which the subsequent
deferral election is made.

 

(iii)    In the event the value of any Participant's Deferral Account for a
particular specified payment year is equal to or less than the Internal Revenue
Code Section 402(g) limit, the Deferral Account shall be distributed in cash in
a lump sum notwithstanding the Participant's election to have his or her
Deferral Account distributed in installments under the Plan. The Deferral
Account(s) shall be valued on the date a distribution is processed. All payments
and deliveries due under this Section 6.1(a) shall be made by January 31 of the
specified payment year, provided, however, that if the Participant’s Separation
from Service occurs prior to the specified payment year for any Deferral
Account, the Participant’s Deferral Account shall be paid to him in accordance
with Section 6.1(b) below.

 

(b) Distribution upon Separation from Service. If a Participant does not elect
to receive payment from his Deferral Account(s) upon a specified payment year or
in the event the Participant’s Separation from Service occurs before such
specified payment year, upon the Participant’s Separation from Service, the
Deferral Account(s) attributable to such Deferral Account election shall be
distributed to the Participant in a lump sum. A Participant, at the time of
deferral, may also elect to receive payment of his Deferral Account(s) in annual
installments not to exceed a ten (10) year period as specified on the
Participant's Deferral Account election form. In the event the value of any
Participant's Deferral Account as of his or her Separation from Service is equal
to or less than the Internal Revenue Code Section 402(g) limit, the Deferral
Account shall be distributed in cash in a lump sum notwithstanding the
Participant's election to have his or her Deferral Account distributed in
installments under the Plan. The Deferral Accounts shall be valued on the date a
distribution is processed. Additionally, in the event Separation from Service
occurs prior to Retirement, the Deferral Account shall be distributed in cash in
a lump sum notwithstanding the Participant's election to have his or her
Deferral Account distributed in installments under the Plan. All payments and
deliveries due under this Section shall be made or commence within 60 days
following the first day that is six months following the Participant’s
Separation from Service.

 

(c) Distribution upon Death. Upon the death of a Participant prior to the
payment of his or her Deferral Accounts, the balance of his or her Accounts
shall be paid to the Participant's Beneficiary in a lump sum as soon as
administratively practicable, but no more than sixty (60) days following the
date of the Participant's death; provided that, if such sixty-day period ends in
the taxable year following the year in which the Participant's death occurs, the
Beneficiary shall not have the right to designate the year of payment.

 

(d) Distribution upon Disability. Upon the Disability of a Participant prior to
the payment of his or her Deferral Accounts, the balance of his or her Deferral
Accounts shall be paid to the Participant in a lump sum with such payment to be
made as soon as administratively practicable, but no more than within sixty
(60) days following the date on which the Participant becomes Disabled; provided
that, if such sixty-day period ends in the taxable year following the year in
which the Participant becomes Disabled, the Participant shall not have the right
to designate the year of payment.

 

 
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(e) Distribution upon Change in Control. Upon a Change in Control of Landec, a
Participant shall be paid the balance of his or her Deferral Account in a lump
sum within sixty (60) days following the date on which the Change in Control
occurs; provided that, if such sixty-day period ends in the taxable year
following the year in which the Change in Control occurs, the Participant shall
not have the right to designate the year of payment.

 

(f) Distribution upon Separation from Service with Cause. In the event of a
Participant’s Separation from Service as a result of an involuntary termination
with “cause”, the Participant forfeits all unvested balances of his or her
Company contributions account. For purposes of this Plan, “cause” shall have the
same meaning as in the Company’s 2009 Stock Incentive Plan or any successor
equity plan adopted by the Company and in effect at the time of the
Participant’s termination. The remaining balances in any Deferral Account(s)
held by the Participant will be paid in the form of a lump sum, pursuant to
Section 6.1(b) above.

 

Section 7. Hardship Provision for Unforeseeable Emergencies.

 

Neither the Participant nor his or her Beneficiary is eligible to withdraw
amounts credited to a Deferral Account prior to the time specified in Section 6.
However, such credited amounts may be subject to early withdrawal if (1) an
unforeseeable emergency occurs that is caused by a sudden and unexpected illness
or accident of the Participant, the Participant’s spouse, the Beneficiary or of
a dependent (as defined in Section 152 of the Code without regard to Section
152(b)(1), (b)(2) or (d)(1)(B)) of the Participant, loss of the Participant’s
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant’s control,
(2) such circumstances would result in severe financial hardship to the
individual if early withdrawal is not permitted, and (3) any other requirements
established under the Code and regulations promulgated thereunder, are
satisfied. A severe financial hardship exists only when all other reasonably
available financial resources have been exhausted, including but not limited to
(1) reimbursement or compensation by insurance or otherwise, (2) liquidation of
the Participant’s assets, to the extent that liquidation of such assets would
not itself cause severe financial hardship, or (3) cessation of deferrals under
the Plan. Examples of what are not considered to be unforeseeable emergencies
include the need to send a Participant’s child to college or the desire to
purchase a home.

 

The Committee shall have sole discretion to determine whether to approve any
withdrawal under this Section 7, which amount will be limited to the amount
necessary to meet the emergency. The Committee’s decision is final and binding
on all interested parties. A Participant who is then serving as a member of the
Committee shall not vote on whether or not he or she is eligible for such a
withdrawal under this Section 7.

 

 
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Section 8. Designation of Beneficiary.

 

The Participant shall, in accordance with procedures established by the
Committee, (1) designate a Beneficiary hereunder, and (2) shall have the right
thereafter to change such designation. No Beneficiary designation shall be
effective unless it is in writing or in the form and manner determined by
Landec, and provided to the appropriate person at Landec prior to the
Participant’s death. In the case of a Participant’s death, payment due under
this Plan shall be made to the designated Beneficiary or, in the absence of such
designation, by will or the laws of descent and distribution in the
Participant’s state of residence at the time of his or her death.

 

Section 9. Limitation on Assignments.

 

Except to comply with a domestic relations order defined under Treasury
Regulation § 1.409A-3(j)(4)(ii), benefits under this Plan are not subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishments by creditors of the Participant or the Participant’s
Beneficiary and any attempt to do so shall be void.

 

Section 10. Administration.

 

10.1 Administration by Committee. The Committee shall administer the Plan.
Notwithstanding any provision of the Plan to the contrary, no member of the
Committee shall be entitled to vote on any matter which would create a
significant risk that such member could be treated as being in constructive
receipt of some or all of his or her Deferral Account. The Committee shall have
the sole authority to interpret the Plan, to establish and revise rules and
regulations relating to the Plan and to make any other determinations that it
believes necessary or advisable for the administration of the Plan, provided
that, with respect to any provision hereof that requires the Committee to obtain
the authorization of the Compensation Committee or is otherwise dependent upon
action by the Compensation Committee, the Committee’s determination shall be
subject to the approval of the Compensation Committee. Decisions and
determinations by the Committee shall be final and binding upon all parties,
including shareholders, Participants, Beneficiaries and other employees. The
Committee may delegate its administrative responsibilities, as it deems
appropriate.

 

10.2 Claims and Appeals. The claims and appeals provisions for the Plan are set
forth in the summary to the Plan that is provided to Participants.

 

10.3 Books and Records. Books and records maintained for the purpose of the Plan
shall be maintained by the officers and employees of Landec at its expense and
subject to supervision and control of the Committee.

 

Section 11. Rabbi Trust.

 

A rabbi trust (the "Trust") may be established in connection with the Plan. In
such case, Landec will transfer the Participants' deferrals to the Trust. The
Trust will be irrevocable and will terminate on the earlier to occur of (i) all
funds having been distributed from the Trust, or (ii) the date all obligations
under the Plan have been satisfied. The Trust will provide that the assets of
the Trust will be distributed only to or for the benefit of the Participants or
their Beneficiaries unless the insolvency provisions of the Trust apply. Landec
will appoint an independent trustee for the Trust and will enter into a trust
agreement, in form and substance acceptable to the Committee, with the Trustee.
The Committee shall select the initial independent trustee.

 

 
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Section 12. Amendment and Termination of the Plan.

 

Landec, by action of the Committee, in its sole discretion may suspend or
terminate the Plan or revise or amend it in any respect whatsoever; provided,
however, that amounts already credited to Deferral Accounts will continue to be
owed to the Participants or Beneficiaries and will continue to accrue Earnings
and continue to be a liability of Landec. The Committee may, in its discretion,
terminate the Plan in accordance with Section 409A of the Code and the
regulations promulgated thereunder, for any reason including a Change in
Control. Participants or Beneficiaries will be given notice prior to the
discontinuance of the Plan or reduction of any benefits provided by the Plan.
Notwithstanding any other provision of the Plan, Landec may without Participant
or Beneficiary consent amend the Plan or change the Plan’s administrative rules
and procedures or modify the terms of a deferral election to comply with Section
409A of the Code.

 

Section 13. Tax Withholding.

 

Landec’s Consolidated Group may withhold Taxes from any cash payment made under
the Plan, any Bonus plan or arrangement, owing as a result of any deferral or
payment hereunder, as Landec deems appropriate in its sole discretion. If, with
respect to the pay period within which a deferral or payment is made under the
Plan, the Participant receives insufficient actual cash compensation to cover
such Taxes, then Landec’s Consolidated Group may withhold any remaining Taxes
owing from the deferred amount or Participant’s subsequent cash compensation
received, until such Tax obligation is satisfied, or otherwise make appropriate
arrangements with the Participant or Beneficiary for satisfaction of such
obligation.

 

Section 14. Applicable Law.

 

This Plan, and all rights under this Plan, shall be interpreted and construed in
accordance with ERISA, as applicable, and, to the extent not preempted, the law
of the State of California, unless otherwise stated in the Plan. This Plan is
intended to comply, and shall be interpreted as necessary to comply, with
Section 409A of the Code and the regulations promulgated thereunder. Any
provision of the Plan that is noncompliant with Code Section 409A is void or
deemed amended to comply with Code Section 409A. Landec does not guarantee or
warrant the tax consequences of any payment under this Plan and the Participants
shall in all cases be liable for any taxes due with respect to the Plan.

 

 
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Section 15. Notice.

 

Any written notice to Landec required by any of the provisions of this Plan
shall be addressed to the chief executive officer of Landec or his or her
delegate and shall become effective when it is received.

 

Section 16. No Employment Rights.

 

Nothing in the Plan, nor any action of Landec pursuant to the Plan, shall be
deemed to give any person any right to remain in the employ of Landec’s
Consolidated Group or affect the right of Landec to terminate a person’s
employment at any time and for any reason.

 

Section 17. Severability of Provisions.

 

If any particular provision of this Plan is found to be invalid or
unenforceable, such provision shall not affect any other provisions of the Plan,
but the Plan shall be construed in all respects as if such invalid provision had
been omitted.

 

Section 20. Execution.

 

IN WITNESS WHEREOF, Landec has caused this Plan to be duly adopted by the
undersigned this __th day of ______, 2013, effective as of August 1, 2013.

 

Landec Corporation

 

By:

 

 

 

 

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