8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: September 13, 2006
(Date of earliest event reported)

LIFECORE BIOMEDICAL, INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 0-4136

Minnesota	41-0948334
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

3515 Lyman Boulevard, Chaska, Minnesota 55318
(Address of principal executive offices, including zip code)

(952) 368-4300
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Fiscal Year 2007 Bonus Plan

Stock Ownership Guidelines

Item 1.01 Entry into a Material Definitive Agreement.

Amendment to Lifecore Biomedical, Inc. 1996 Stock Plan

On September 13, 2006, the Board of Directors of Lifecore Biomedical, Inc. (the “Company”) amended Section 5(k) of the Lifecore Biomedical, Inc. 1996 Stock Plan (the “Stock Plan”). The purpose of the amendment was to revise the provisions of the Stock Plan to reduce the options granted to non-employee directors upon their re-election to the Board from options to purchase 10,000 shares of the Company’s common stock to options to purchase 7,500 shares of the Company’s common stock.

The Company will file the Stock Plan, as amended, as an exhibit to its Form 10-Q for the quarter ended September 30, 2006.

Adoption of the Lifecore Biomedical, Inc. Fiscal Year 2007 Bonus Plan

On September 13, 2006, the Company’s Board of Directors adopted the Lifecore Biomedical, Inc. Fiscal Year 2007 Bonus Plan, effective July 1, 2006 (the “Bonus Plan”). The Bonus Plan is a compensation plan that rewards the Company’s executive officers and certain members of management for the attainment of corporate and individual objectives. The Compensation Committee of the Board of Directors approves which individuals may participate in the Bonus Plan. The Company’s net income and net sales are used to determine annual rewards under the Bonus Plan. For each of the performance goals there is a threshold, plan and maximum performance level. Threshold is the minimum level of performance required to generate an award. Threshold is 80% of the net income goal and 90% of the net sales goal. Plan is 100% of each of the performance goals, and maximum is 115% of each of the performance goals. For all performance levels between these levels, awards will be interpolated. The Bonus Plan also permits discretionary awards based on the attainment of individual objectives. The range of bonuses participants are eligible to receive under the Bonus Plan are set forth on page 4 of the Bonus Plan, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 8.01 Other Events.

On September 13, 2006, the Company’s Board of Directors adopted Stock Ownership Guidelines applicable to the Company’s directors and executive officers. A copy of the Stock Ownership Guidelines is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

10.1	Lifecore Biomedical, Inc. Fiscal Year 2007 Bonus Plan, effective July 1, 2006.
99.1	Stock Ownership Guidelines of Lifecore Biomedical, Inc., as adopted on September 13, 2006.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LIFECORE BIOMEDICAL, INC.
By:	/s/ Dennis J. Allingham
	Dennis J. Allingham
	President and Chief Executive Officer

Date: September 19, 2006

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EXHIBIT INDEX

Exhibit
Number	Description
10.1	Lifecore Biomedical, Inc. Fiscal Year 2007 Bonus Plan, effective July 1, 2006.
99.1	Stock Ownership Guidelines of Lifecore Biomedical, Inc., as adopted on September 13, 2006.

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EX-10.1

EXHIBIT 10.1

Lifecore Biomedical

FY 2007 Bonus Plan

PLAN ADMINISTRATION

1.	Purpose of the Plan
	The purpose of the Lifecore Biomedical (the Company) FY 2007 Bonus Plan (the Plan) is to reward Executive Officers and selected members of the Management Team for the attainment of corporate and individual objectives.
2.	Definitions
	“Base Salary” means the plan participant’s salary in effect at the end of the plan year.
	“Committee” means the Compensation Committee of the Board.
	“Threshold” means the minimum level of performance required to generate an award. Threshold is 80% of the net income goal and 90% of the net sales goal.
	“Plan” means the level of performance that reflects 100% attainment of the performance measure approved by the Board. This level of performance triggers a target (or 100%) award.
	“Maximum” means the level of performance that results in the maximum award available under the plan being granted. Performance at maximum is 115% of the plan. Performance beyond maximum will not increase the award.
	“MBO” means Management By Objective. A discretionary award based on the attainment of individual objectives.
3.	Plan Administrator
	The Plan Administrator will be the Chairman of the Committee. The actions of the Plan Administrator are subject to the approval of the Committee, as appropriate.
4.	Plan Administration
	The Plan Administrator will administer the Plan under the general guidelines of this document. This will include all matters pertaining to the Plan and its interpretation, including the resolution of issues where the Plan is silent. Material matters are always subject to the approval of the Committee.
5.	Participation
	Participation will be restricted to Executive Officers and selected Management Team members of the Company as recommended by the Plan Administrator and approved by the Committee.

	The Committee will have full discretion to pay a bonus and to adjust the payment in whatever manner the Committee deems appropriate to any individual who becomes an Executive Officer or Management Team member of the Company during the fiscal year.
	Participation in any one year does not guarantee participation in future years or participation at the same award level.
6.	Bonus Award
	Bonus payments under the Plan are specified under the attached Performance Parameters based upon performance versus the FY 2007 Operating Plan. Bonus payments shall be calculated on a pro rata basis using interpolation when performance is between parameters.
	The Committee reserves the right to make discretionary bonus payments, subject to approval by the Board of Directors, in the event the minimum performance level is not attained. The fund for these discretionary payments shall not exceed 10% of annual base salaries.
7.	Effective Date
	The effective date of the Plan is July 1, 2006
8.	Plan Year
	The Plan Year is the Company’s fiscal year.
9.	Termination of Employment
	A Participant who terminates their employment or whose employment is terminated by the Company forfeits all rights under the Plan.
	The Committee will have full discretion to pay or not pay a bonus and to adjust the payment in whatever manner the Committee deems appropriate.
10.	Death, Disability, Retirement
	In the event of death, disability, or retirement, a prorated award will be made based on the active time in the Plan and the level of performance attained. The Plan Administrator may use discretion in determining awards under these circumstances.
11.	Employment
	The Plan is not an employment contract, nor is there any intent to confer a right to employment to a Plan Participant.
	The Plan does not, in any way, restrict the Company’s right to terminate a Participant’s employment.

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12.	Amendment to the Plan
	The Committee may amend the Plan at any time. If such an amendment will materially impact the Participants, they will be notified as soon as practical.
13.	Termination of the Plan
	If the Plan is terminated, a pro rated award will be made based on the portion of the plan year completed and the level of performance attained.
14.	Transferability
	A Plan Participant may not sell, pledge, donate or otherwise assign their interest in awards under the Plan.
15.	Legal Requirements
	The Plan will be administered in accordance with all federal, state and local statutory requirements.

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Lifecore Biomedical
FY 2007 Bonus Plan
Performance Parameters

	Performance
	Parameter	Threshold			CEO			Officers			Mngrs
Net Income	$		80	%		10	%		5	%		2	%
	$		90	%		20	%		10	%		5	%
	$		100	%		30	%		20	%		10	%
	$		105	%		35	%		25	%		15	%
	$		110	%		40	%		30	%		20	%
	$		115	%		45	%		35	%		25	%
Net Sales	$		90	%		5	%		3	%		2	%
	$		95	%		10	%		7	%		4	%
	$		100	%		20	%		15	%		8	%
	$		105	%		25	%		19	%		10	%
	$		110	%		30	%		22	%		12	%
	$		115	%		35	%		25	%		15	%
MBO’s	Subjective					0-5	%		0-5	%		0-4	%

CEO	Dennis Allingham
Officers	Dave Noel, Larry Hiebert, Kip Thacker, Ben Beckham, Jim Hall
Mngrs	[names of non-executive officers have been omitted]

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EX-99.1

EXHIBIT 99.1

LIFECORE BIOMEDICAL, INC.

Stock Ownership Guidelines

The Board of Directors believes that ownership of common stock of Lifecore Biomedical, Inc. (the “Company”) by the Company’s directors and executive officers demonstrates a commitment to the long-term success of the Company. Accordingly, the Board has adopted these Stock Ownership Guidelines for members of its Board of Directors and executive officers which require such individuals to acquire and maintain a minimum level of ownership in the Company’s common stock.

§	Persons Covered. Members of the Company’s Board of Directors and its executive officers who are required to file reports under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are subject to these Guidelines.
§	Common Stock Covered. Shares that count toward satisfaction of these Guidelines include (i) all shares directly owned by a Board member or executive officer, and (ii) all shares “beneficially owned” (as that term is defined in Rule 13d-3 under the Exchange Act) by a Board member or executive officer, except for shares of common stock subject to options and unvested restricted stock.
§	Ownership Targets for Board Members. The ownership target for members of the Board is based on the value of the Company’s common stock, as shown in the following table:

Board Members 5 times annual retainer

§ Ownership Targets for Executive Officers. The ownership targets for executive officers are a multiple of base salary (not including bonuses, such as performance or signing bonuses), and vary by management level, as provided in the following table:

CEO	2 times base salary
Other Executive Officers	1 times base salary

§ Ownership Measurement for Existing Directors and Officers. For persons who were Board members or Section 16(a) officers on June 30, 2006, ownership levels will be measured as of the last day of each fiscal year commencing with June 30,

	2006, by using the average closing price of the common stock for the last ten trading days of that fiscal year, and, with respect to executive officers, by reference to the officer’s base salary as of the end of that fiscal year.
§	Ownership Measurement for New Directors and Officers. For persons who become Board members or Section 16(a) officers after June 30, 2006, ownership levels will be measured as of the last day of the fiscal year in which they become a covered person and of each fiscal year thereafter, by using the average closing price of the common stock for the last ten trading days of that fiscal year, and, with respect to executive officers, by reference to the officer’s base salary as of the end of that fiscal year (annualized in the case of the year in which such person becomes an executive officer).
§	Compliance Grace Period. Covered persons are expected to be in compliance with these Guidelines by the end of the fifth fiscal year with respect to which their ownership is measured.
§	Compliance Monitoring. The Compensation Committee will monitor compliance with these Guidelines and report to the Board annually on the level of such compliance. The Compensation Committee has the authority, in its sole discretion, to waive compliance with the Guidelines in the event of financial hardship (e.g., major medical expenses, purchase of a principal residence, dependent’s tuition costs) or other good cause. These Guidelines may be modified from time to time by the Board.

As adopted by the Company’s Board of Directors on September 13, 2006.

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