CALAVO GROWERS FORM S-8



 



EXHIBIT 4.2




2001 STOCK PURCHASE PLAN FOR OFFICERS AND EMPLOYEES

OF

CALAVO GROWERS, INC.



	1.	  	PURPOSE OF THE PLAN.



     Pursuant to this 2001 Stock Purchase Plan for Officers and Employees (the
“Plan”) of Calavo Growers, Inc., a California corporation (the “Company”),
officers and employees of the Company and its subsidiaries are eligible to
receive awards (“Stock Purchase Awards”) that entitle them to purchase shares
of the common stock of the Company, par value $0.001 per share (“Common
Stock”). The purpose of the Plan is to align the interests of the Company’s
officers and employees more closely with those of the Company’s shareholders by
providing stock ownership opportunities to selected officers and employees.
The Company believes that providing its officers and employees with stock
ownership in the Company will enhance the long-term growth of the Company and
enable it to attract and retain qualified officers and employees.



	2.	  	ELIGIBILITY TO RECEIVE STOCK PURCHASE AWARDS.



     The Administrator (as defined below) may, from time to time, make Stock
Purchase Awards to some or all of the officers and employees of the Company and
its subsidiaries. Each Stock Purchase Award will entitle its recipient to
purchase shares of Common Stock on the terms and conditions that are described
in the Plan, in a Stock Purchase Award notice delivered by the Company and in a
stock purchase agreement (the “Stock Purchase Agreement”) between the Company
and the officer or employee. No Stock Purchase Awards shall be made under the
Plan to any person who is not an officer or employee of the Company or a
subsidiary on the date of the Stock Purchase Award. The term “subsidiary” as
used in the Plan means a subsidiary corporation of the Company as defined in
Section 424(f) or any other applicable provision of the Internal Revenue Code
of 1986, as amended (the “Code”). Unless otherwise expressly indicated,
references in the Plan to officers and employees of the Company include
officers and employees of the Company’s subsidiaries.



	3.	  	STOCK SUBJECT TO THE PLAN; MAXIMUM NUMBER OF GRANTS.



     Subject to the adjustment provisions of Section 5.14 of the Plan, the
total number of shares of Common Stock which may be offered under, or issued
under Stock Purchase Awards granted pursuant to, the Plan shall not exceed Two
Million (2,000,000) shares of Common Stock. The shares covered by the portion
of any Stock Purchase Award under the Plan that expires, terminates or is
cancelled unexercised shall become available again for grants under the Plan.
If shares of Common Stock sold under the Plan are repurchased or otherwise
reacquired by the Company, the number of shares so repurchased or reacquired
shall again be available under the Plan.


 







 



	4.	  	ADMINISTRATION.



     4.1 The Plan shall be administered by the Board of Directors of the
Company (the “Board”) or by a committee (the “Committee”) to which
administration of the Plan, or of part of the Plan, is delegated by the Board
(in either case, the “Administrator”). The Board shall appoint and remove
members of the Committee in its discretion in accordance with applicable laws.
If necessary in order to comply with Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or Section 162(m) of the Code,
the Committee shall, in the Board’s discretion, be comprised solely of
“non-employee directors” within the meaning of Rule 16b-3 under the Exchange
Act or “outside directors” within the meaning of Section 162(m) of the Code.
The foregoing notwithstanding, the Administrator may delegate non-discretionary
administrative duties to such employees of the Company as it deems proper, and
the Board, in its discretion, may at any time and from time to time exercise
any and all rights and duties of the Administrator under the Plan.


     4.2 Subject to the other provisions of the Plan, the Administrator shall
have the authority, in its discretion: (i) to grant Stock Purchase Awards; (ii)
to determine the fair market value of the Common Stock subject to Stock
Purchase Awards; (iii) to determine the purchase price of Common Stock subject
to Stock Purchase Awards; (iv) to determine the persons to whom, and the time
or times at which, Stock Purchase Awards shall be granted and the number of
shares subject to each Stock Purchase Award; (v) to construe and interpret the
terms and conditions of the Plan, of any Stock Purchase Agreement and all Stock
Purchase Awards granted under the Plan; (vi) to prescribe, amend and rescind
rules and regulations relating to the Plan; (vii) to determine all other terms
and conditions of each Stock Purchase Award granted under the Plan (which need
not be identical); (viii) with the consent of the Stock Purchase Award holder,
to rescind any Stock Purchase Award and to amend the terms of any Stock
Purchase Award or Stock Purchase Agreement; (ix) to authorize any person to
execute on behalf of the Company any instrument evidencing the grant of a
Stock Purchase Award; and (x) to make all other determinations deemed necessary
or advisable for the administration of the Plan, any Stock Purchase Award or
Stock Purchase Agreement. The Administrator may delegate non-discretionary
administrative duties to such employees of the Company as it deems proper.


     4.3 All questions of interpretation, implementation and application of the
Plan or any Stock Purchase Award or Stock Purchase Agreement shall be
determined by the Administrator, which determination shall be final and binding
on all persons.



	5.	  	TERMS AND CONDITIONS OF STOCK PURCHASE AWARDS.



     5.1 Selection of Stock Purchase Award Recipients. The Administrator shall
determine the officers and employees who shall receive Stock Purchase Awards
and the date of each Stock Purchase Award. Promptly after selecting an officer
or employee to receive a Stock Purchase Award, the Administrator shall notify
the officer or employee of the principal terms of


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the award. No Stock Purchase Awards may be made more than ten (10) years
after the effective date of the Plan.


     5.2 Number of Shares Covered by Each Stock Purchase Award. The
Administrator shall determine the number of shares of Common Stock to be
covered by each Stock Purchase Award. However, subject to the adjustment
provisions of Section 5.14 of the Plan, no officer or employee shall be granted
Stock Purchase Awards during any twelve-month period covering more than One Hundred
Thousand (100,000) shares of Common Stock.


     5.3 Amount of the Purchase Price. The purchase price of each share of
Common Stock that is subject to a Stock Purchase Award shall be determined by
the Administrator. However, the purchase price shall not be less than the fair
market value of the Common Stock (determined as set forth below in Section
5.16) on the date of the Stock Purchase Award.


     5.4 Method of Paying the Purchase Price. With respect to each Stock
Purchase Award, the Administrator shall determine whether the purchase price of
the shares of Common Stock covered by the award is payable (i) by cash or check
and/or (ii) by the officer’s or employee’s full recourse promissory note for
all or part of the purchase price on such terms and bearing such interest rate
as determined by the Administrator (but in no event less than the minimum
interest rate specified under the Code at which no additional interest or
original issue discount would be imputed), which promissory note may be either
secured or unsecured in such manner as the Administrator shall approve
(including, without limitation, by a security interest in the shares of Common
Stock acquired upon exercise of the Stock Purchase Award).


     5.5 Manner of Stock Purchase Award Exercise. An officer or employee who
desires to purchase shares of Common Stock pursuant to a Stock Purchase Award
must, within thirty (30) days after the date of the Stock Purchase Award or
within such longer period as the Administrator permits in its discretion,
exercise the Stock Purchase Award by giving written notice to the Company at
its principal executive office, to the attention of the Company’s Chief
Financial Officer or other officer of the Company designated by the
Administrator. The notice must specify the number of shares to be purchased by
the officer or employee. If the Administrator elected to provide the officer
or employee with the right to pay part or all of the purchase price with a full
recourse promissory note, the notice must also specify the portion of the
purchase price (if any) that the officer or employee desires to pay with a
promissory note. The notice shall contain any other information required by
the Administrator. Failure to deliver a timely notice to the Company shall
constitute the officer’s or employee’s irrevocable election to purchase none of
the shares of Common Stock that are the subject of the Stock Purchase Award.


     5.6 Delivery of the Purchase Price and Execution of a Stock Purchase
Agreement. Within sixty (60) days after the date of the Stock Purchase Award
(or such longer period as the


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Administrator permits in its discretion), each officer or employee who has
elected to purchase some or all of the shares of Common Stock that are the
subject of a Stock Purchase Award shall deliver to the Company (i) a promissory
note for the portion of the purchase price that the officer or employee has
elected to pay on a deferred basis pursuant to the terms and conditions of the
Stock Purchase Award, (ii) cash or a check for the balance of the purchase
price, (iii) an executed Stock Purchase Agreement, and (iv) any financing
statements and other documents requested by the Administrator in order to
evidence and secure the officer’s or employee’s purchase of the shares of
Common Stock. The Administrator shall determine the form of the promissory
note and the Stock Purchase Agreement, which may contain such terms and
conditions not inconsistent with the Plan as may be determined by the
Administrator. The Stock Purchase Agreement may evidence the officer’s or
employee’s pledge of shares of Common Stock to secure payment of the promissory
note or, if determined by the Administrator, the security agreement may be
contained in the promissory note or in a separate document approved by the
Administrator. In the event of a conflict between the terms or conditions of a
promissory note, Stock Purchase Agreement or other document and the terms and
conditions of the Plan, the terms and conditions of the Plan shall govern.
Failure by an officer or employee to deliver the purchase price, Stock Purchase
Agreement and/or other required documents on a timely basis shall constitute
the officer’s or employee’s irrevocable election to purchase none of the shares
of Common Stock that are the subject of the Stock Purchase Award.


     5.7 Non-Transferability of Stock Purchase Awards. No Stock Purchase Award
granted under the Plan may be assigned or otherwise transferred by an officer
or employee, either voluntarily or by operation of law, except by will or by
the laws of descent and distribution and, during the life of the officer or
employee, a Stock Purchase Award shall be exercisable only by him or her.


     5.8 Withholding Taxes. At the time of the purchase of shares of Common
Stock pursuant to a Stock Purchase Award and as a condition thereto, or at such
other time as the amount of such obligation becomes determinable, the officer
or employee shall remit to the Company by cash or check any and all applicable
federal and state withholding and employment taxes in an amount determined by
the Administrator.


     5.9 Shareholder Rights. The date that the Company receives the purchase
price and the executed Stock Purchase Agreement and other documents described
above in Section 5.6 will be considered as the date the officer or employee
acquired the shares of Common Stock as to which the Stock Purchase Award was
exercised. The officer or employee shall have all of the rights of a
shareholder with respect to such shares, including, without limitation, voting
rights and the right to any dividends that may be declared and paid by the
Company on shares of Common Stock, with respect to such acquired shares,
notwithstanding his or her delivery of a promissory note to the Company with
respect to all or a portion of the purchase price of such shares. However,
until payment in full of any such promissory note, the shares of Common Stock
that are purchased by the officer or employee shall remain subject to all of
the Company’s rights and remedies upon the exercise of its security interest in
the shares if the officer or employee is in default under the promissory note.
Furthermore, any certificate or other


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document that the Company issues to the officer or employee to evidence
his or her ownership of the shares of Common Stock shall refer to the Company’s
security interest until the full amount of the promissory note has been paid.


     5.10 Restrictions on the Transfer of the Shares. Until the officer or
employee has paid all principal and accrued interest on any promissory note
that the officer or employee delivered to the Company pursuant to Section 5.6
above in connection with the purchase of shares of Common Stock, the officer or
employee shall not be entitled to sell, pledge or otherwise transfer any of
such shares, and any such attempted sale, pledge or other transfer shall be
void. Furthermore, (i) the sale, pledge or other transfer of such shares shall
at all times be subject to the restrictions on transfer that are contained in
Article VI of the Company’s Bylaws, and (ii) the Administrator shall have
discretion to place rights of first refusal in favor of the Company in some or
all Stock Purchase Agreements.



     5.11 Termination of Employment. If an officer or employee terminates his
or her employment with the Company (including its subsidiaries) for any reason
or for no stated reason, or if the Company terminates such officer’s or
employee’s employment with or without cause, any promissory note that the
officer or employee delivered to the Company pursuant to Section 5.6 above in
connection with the purchase of shares of Common Stock shall remain payable in
accordance with its terms and conditions. If the employment of the officer or employee
terminates (by reason of death or for any other reason) after receipt of a
Stock Purchase Award but prior to the date that he or she has exercised the
Stock Purchase Award pursuant to Section 5.5 above or delivered the purchase
price pursuant to Section 5.6 above, the Stock Purchase Award shall terminate
effective as of the date of the termination of the officer’s or employee’s
employment unless the Administrator elects in its discretion to permit the
former officer or employee (or his or her heirs) to exercise the Stock Purchase
Award and pay for the shares of Common Stock as described above in Sections 5.5
and 5.6.


     5.12 Securities Act Compliance. Shares of Common Stock shall not be
issued pursuant to the exercise of a Stock Purchase Award unless the
Administrator determines that the exercise of such Stock Purchase Award and the
issuance and delivery of such shares pursuant thereto will comply with all
relevant provisions of law, including, without limitation, the Securities Act
of 1933, as amended (the “Securities Act”), applicable state and foreign
securities laws and the requirements of any stock exchange or Nasdaq market
system upon which the Common Stock may be listed. The inability of the Company
to obtain from any applicable regulatory body a permit, order or approval
deemed by the Administrator to be necessary to the lawful issuance and sale of
any shares of Common Stock under the Plan shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite permit, order or approval shall not have been obtained. As a
condition to the exercise of any Stock Purchase Award, the Administrator may
require an officer or employee to satisfy


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any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be reasonably requested by the
Administrator.


     5.13 Non-Competition Agreement. As a further condition to the receipt of
Common Stock pursuant to the exercise of a Stock Purchase Award, an officer or
employee may be required not to render services for any organization, or to
engage directly or indirectly in any business, competitive with the Company at
any time during which a Stock Purchase Award is outstanding and for up to two
(2) years after the receipt of Common Stock pursuant to the exercise of a Stock
Purchase Award.


     5.14 Changes in Capital Structure. Subject to Section 5.15 below, if the
stock of the Company is changed by reason of a stock split, reverse stock
split, stock dividend, recapitalization, combination or reclassification,
appropriate adjustments shall be made by the Administrator, in its discretion,
in (i) the number and class of shares of stock subject to the Plan and each
Stock Purchase Award outstanding under the Plan and (ii) the purchase price of
each outstanding Stock Purchase Award; provided, however, that the Company
shall not be required to issue fractional shares as a result of any such
adjustments. Any adjustment, however, in an outstanding Stock Purchase Award
shall be made without change in the total purchase price applicable to the
Stock Purchase Award but with a corresponding adjustment in the price for each
share covered by the unexercised portion of the Stock Purchase Award.
Adjustments under this Section 5.14 shall be made by the Administrator, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. If an adjustment under this Section
5.14 would result in a fractional share interest under a Stock Purchase Award
or any installment, the Administrator’s decision as to inclusion or exclusion
of that fractional share interest shall be final, but no fractional shares of
stock shall be issued under the Plan on account of any such adjustment.


     5.15 Corporate Transactions. Except as otherwise provided in the
applicable Stock Purchase Agreement, in the event of a Corporate Transaction
(as defined below), the Administrator shall, as promptly as practicable before
the occurrence of the Corporate Transaction, notify each officer or employee
who holds an unexercised Stock Purchase Award or a Stock Purchase Award for
which the purchase price has not been delivered pursuant to Section 5.6 above.
Immediately prior to the consummation of such Corporate Transaction, all
unexercised Stock Purchase Awards shall terminate and all Stock Purchase Awards
for which the purchase price has not been delivered pursuant to Section 5.6
shall terminate, unless the Administrator determines, in its discretion, to
provide that all or certain of the outstanding Stock Purchase Awards shall be
assumed or an equivalent Stock Purchase Award substituted by an applicable
successor corporation or other entity or any affiliate of the successor
corporation or entity. A “Corporate Transaction” means (a) a liquidation or
dissolution of the Company; (b) a merger or consolidation of the Company with
or into another corporation or entity as a result of which the Company is not
the surviving corporation (other than a merger or consolidation with a
wholly-owned subsidiary of the Company); (c) a sale of all or substantially all
of the assets of the Company; or (d) a purchase or other acquisition of
beneficial ownership of more than fifty


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percent (50%) of the outstanding capital stock of the Company in a single
transaction or a series of related transactions by one person or more than one
person acting in concert (excluding, however, a purchase of stock by the
Company or by a Company-sponsored employee benefit plan). The occurrence of a
Corporate Transaction shall not relieve an officer or employee of the
obligation to make payments of principal and accrued interest on any promissory
note that has been delivered to the Company pursuant to Section 5.6 above.


     5.16 Determination of Value. For purposes of the Plan, the fair market
value of Common Stock (or of other stock or securities) of the Company shall be
determined as follows:


          5.16.1 If the stock is listed on a securities exchange, the Nasdaq
National Market, the Nasdaq Small Cap Market or is otherwise regularly quoted
by a recognized securities dealer and if closing prices are reported, its fair
market value shall be the closing price of such stock on the last business day
preceding the date on which the fair market value of the stock is to be
determined, but if closing prices are not reported, its fair market value shall
be the average of the high bid and low asked quoted prices for such stock on
the last business day preceding the date on which the fair market value of the
stock is to be determined (or if there are no closing or quoted prices for such
specified business day, then for the last preceding business day on which there
were closing or quoted prices).


          5.16.2 In the absence of an established market for the stock, the fair
market value thereof shall be determined in good faith by the Administrator,
with reference to the Company’s net worth, prospective earning power,
dividend-paying capacity and other relevant factors, including the goodwill of
the Company, the economic outlook in the Company’s industry, the Company’s
position in the industry, the Company’s management and the values of the stock
of other corporations in the same or a similar line of business.



	6.	  	NO GUARANTEE OF CONTINUED EMPLOYMENT; DISCRETIONARY NATURE OF THE PLAN; FINANCIAL STATEMENTS.



     Neither the Plan nor the granting of any Stock Purchase Award shall
interfere with or limit in any way the Company’s right to terminate the
employment of any officer or employee at any time and with or without cause.
The granting of the right to purchase shares of Common Stock under the Plan,
and the terms and conditions of each such grant, shall be entirely
discretionary with the Administrator, and nothing in the Plan shall be deemed
to give any officer or employee any right to participate in the Plan or to
purchase shares of Common Stock unless and until the Administrator elects to
make a Stock Purchase Award to such officer or employee. On an annual basis,
the Company shall deliver copies of its audited financial statements to all
persons who hold shares of Common Stock that they have purchased under the
Plan, or who hold outstanding Stock Purchase Awards, at the time that it
delivers its audited financial statements to its other shareholders in
compliance with applicable provisions of the Exchange Act in connection with
its annual meeting of shareholders.


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	7.	  	NON-EXCLUSIVITY OF THE PLAN.



     The Plan shall not be construed as creating any limitations on the power
of the Company to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options and
other stock purchase rights to directors, officers, employees and other persons
other than under the Plan.



	8.	  	AMENDMENT OR TERMINATION OF THE PLAN.



     The Board may at any time amend, suspend or terminate the Plan. If not
earlier terminated, the Plan shall automatically terminate ten (10) years after
the date of its adoption by the Board. Except as provided in Section 5.15 with
respect to a Corporate Transaction, termination of the Plan shall not affect
the terms and conditions of any outstanding Stock Purchase Awards. Without the
consent of the affected officer or employee, no amendment or suspension of the
Plan may adversely affect outstanding Stock Purchase Awards except to conform
the Plan to the requirements of applicable laws. Neither the Plan nor any
amendment, suspension or termination of the Plan shall require shareholder
approval unless (i) shareholder approval is required under other applicable
laws or under the regulations of any stock exchange or Nasdaq market system on
which the Common Stock is listed or (ii) the Board otherwise concludes that
shareholder approval is advisable.



	9.	  	EFFECTIVE DATE OF THE PLAN; GOVERNING LAW.



     The effective date of the Plan is December 17, 2001. The Plan shall be
governed by, and construed and enforced in accordance with, the internal laws
of the State of California without giving effect to conflict-of-law principles.



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