Document:

exv10w16

 

Exhibit 10.16

November 18, 2005

Calavo Growers, Inc.

Attn: Arthur J. Bruno

Vice President, Finance

1141A Cummings Rd.

Santa Paula, California 93060

Re:     Renewal Notice for Business Loan Agreement, dated as of January 30, 2004, between
Bank
of America and Calavo Growers, Inc.

Ladies and Gentlemen:

     Pursuant to Section 1.2 of the above referenced Business Loan Agreement, the “Expiration Date”
thereunder is hereby extended to April 1, 2008 or such earlier date as the availability may
terminate as provided in such Business Loan Agreement.

In addition, this is to confirm that the term “current liabilities” as used in Section 7.18 of such
Business Loan Agreement includes amounts outstanding on revolving lines of credit without regard to
the ultimate maturity of such line of credit.

     Please acknowledge the foregoing by signing the enclosed copy of this letter at the place
indicated and returning it to us.

	 	 	 	 	 
	 	Sincerely, 

 	 
	 	/s/ Robert L. Munn, Jr.
 	 
	 	 	 
	 	 	 
	 

Receipt of the foregoing letter on November 22, 2005

is hereby acknowledged:

Calavo Growers, Inc.

	 	 	 	 	 
	By

	 	/s/ Arthur J. Bruno
	 	/s/ Scott H. Runge
	 

	 	 
	 	 
	Its:

	 	Chief Financial Officer
	 	Treasurerexv10w17

 

Exhibit 10.17

STOCK OPTION AGREEMENT

     This Stock Option Agreement (the “Agreement”) is entered into as of August 25, 2005 by
and between Calavo Growers, Inc., a California corporation (the “Company”), and
__________________________ (the “Option Holder”).

RECITALS

     A.     The Company has adopted the 2005 Stock Incentive Plan (the “Plan”). The Option
Holder has had an opportunity to review the Plan.

     B.     The Option Holder is a director, officer and/or employee of the Company and, therefore, is
eligible to receive option grants under the Plan. This Agreement is intended by the parties to
evidence the Company’s grant to the Option Holder of an option to purchase shares of its common
stock.

     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, the Company and the Option Holder
hereby agree as follows:

     1.     Option Grant and Exercise Price.

          (a)     Effective as of the date set forth in the first paragraph of this Agreement, the Company
hereby grants to the Option Holder the right and option (the “Option”) to purchase, on the
terms and conditions set forth in this Agreement and in the Plan, ___________________ (________)
shares of its common stock, par value $0.001 per share (“Common Stock”), at an exercise
price of Nine Dollars and Ten Cents ($9.10) per share. The Option exercise price is equal to or in
excess of the fair market value of the Common Stock on the Option grant date as determined in
accordance with Section 6.1.9 of the Plan.

          (b)     The Option is not intended by the Company and the Option Holder to be an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

     2.     Vesting and Term of the Option.

          (a)     Option Vesting. Subject to the terms and conditions of this Agreement, the Option
shall fully vest and become exercisable as to all _________________ (________) shares of Common Stock that
are covered by the Option on August 25, 2006, but only if the closing price of the Common Stock on
the Nasdaq National Market (or other principal market on which the Common Stock is traded) on
August 25, 2006 is at least Eleven Dollars ($11.00) per share. If the closing price of the Common
Stock is less than $11.00 per share on August 25, 2006, then the Option shall fully vest and become
exercisable on the first date after August 25, 2006 on which the closing price of the Common Stock
is at least $11.00 per share. The Option Holder shall at no time be allowed to exercise any
portion of the Option prior to its vesting date.

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          (b)     Option Term. Subject to the possibility of earlier termination as described in
Section 2(c), the Option shall terminate on August 25, 2010, and no portion of the Option may be
exercised on or after August 25, 2010.

          (c)     Early Option Termination. If for any reason the Option Holder ceases to be a
director, officer or employee of the Company or of a subsidiary of the Company, any portion of the
Option that has vested and is unexercised at the date of the termination of the Option Holder’s
service may be exercised in whole or in part at any time within ninety days after the date of the
Option Holder’s service termination but not thereafter, provided that the Option may in no event be
exercised on or after the Option termination date described in Section 2(b). If the Option has not
vested as of the date that the Option Holder’s service terminates, the Option shall not be
exercisable by the Option Holder at any time after the termination of his service. The Option is
also subject to early termination upon the occurrence of a “Corporate Transaction” that is
described in Section 6.1.2 of the Plan.

     3.     Manner of Exercising the Option. The Option Holder may exercise the vested Option
in whole or in part prior to the Option’s termination, provided that a partial exercise of the
Option may not be for fewer than one hundred (100) shares of Common Stock unless fewer than one
hundred (100) shares subject to the vested Option remain unexercised, in which event the entire
remaining portion of the Option must be exercised at one time. The Option shall not be exercisable
with respect to a fraction of a share of Common Stock. The Option Holder may exercise the vested
Option, in whole or in part, by delivering to the Company’s Controller written notice of exercise
in the form of the notice attached to this Agreement. Such notice shall specify the number of
shares of Common Stock to be purchased and shall be accompanied by payment of the purchase price
of the shares. No shares shall be issued by the Company until full payment of the purchase price
has been made.

     4.     Payment of the Option Exercise Price. Unless the Company’s Board of Directors (the
“Board”) elects in its discretion to allow one of the alternative methods of payment
described in Section 6.1.6 of the Plan (including, without limitation, a so-called cashless Option
exercise conducted through a broker), payment of the exercise price of the shares of Common Stock
subject to the exercised portion of the Option shall be made by the Option Holder’s delivery to the
Company of a check payable to the order of the Company. As provided in Section 6.1.7 of the Plan,
the Company has the right to require the Option Holder to satisfy any applicable withholding
obligations at the time of the exercise of the Option.

     5.     Transferability of the Option.

          (a)     Except as provided in this Section 5, the Option Holder may not assign or otherwise
transfer the Option, either voluntarily or by operation of law, other than by will or the laws of
descent and distribution, and the Option shall be exercisable during the Option Holder’s lifetime
only by the Option Holder or by the Option Holder’s legal representative. Following the death of
the Option Holder, the Option shall be exercisable by the Option Holder’s legal representative,
executor and beneficiaries.

          (b)     The Option Holder may assign and transfer part or all of the Option to a family member or
family trust during the Option Holder’s lifetime but only if: (i) the transfer is

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made by a gift and not for consideration; (ii) the transferee is a “family member” (including,
without limitation, a family trust) as defined in General Instruction A.1(a)(5) of Form S-8 under
the Securities Act of 1933, as amended (the “Securities Act”); (iii) the Option Holder
gives the Company at least ten days’ prior written notice of the proposed transfer; and (iv) the
transferee executes and delivers to the Company any documents requested by the Company (including,
without limitation, a counterpart of this Agreement) in order to document the transfer. Any such
transferee of all or part of the Option shall be bound by all of the terms and conditions of the
Plan and this Agreement, and the Option Holder shall be personally liable to the Company for any
breach by the transferee of any of the terms of the Plan or this Agreement.

     6.     Securities Law Compliance. As provided in Section 10.1 of the Plan, no shares of
Common Stock shall be issued or delivered upon exercise of the Option unless and until the Board
determines that the exercise of the Option and the issuance and delivery of such shares pursuant
thereto will comply with all relevant provisions of law, including, without limitation, 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.

     7.     Incorporation by Reference of the Plan. The Plan and all of its terms and
conditions, as amended from time to time, are incorporated by reference into this Agreement. The
Option Holder acknowledges that he has received and reviewed a copy of the Plan. This Agreement is
not a complete restatement of all of the terms and conditions of the Plan. The Company and the
Option Holder agree to be bound by the Plan, as amended from time to time, and agree that the terms
and conditions of the Plan shall govern if and to the extent that there are any inconsistencies
between the Plan and this Agreement. If the Plan is administered by a committee as permitted by
Section 4.1 of the Plan, references in this Agreement to the Board shall, as appropriate, apply
instead to such committee.

     8.     Option Holder’s Representations and Warranties. In connection with the receipt of
the Option pursuant to this Agreement and in contemplation of the Option Holder’s purchase of
shares of Common Stock upon exercise of the Option, the Option Holder hereby agrees, represents and
warrants as follows; provided that all of the following agreements, representations and warranties
shall be deemed to have been given again by the Option Holder as of the date that he exercises the
Option:

          (a)     Access to Information. The Option Holder has had a sufficient opportunity to
review (i) the Plan, (ii) the Prospectus that the Company has distributed regarding the Plan, and
(iii) all registration statements, annual and periodic reports and proxy and information statements
that the Company has filed with the Securities and Exchange Commission (the “SEC”) during
the preceding twelve months. Neither the Company nor any of its officers, directors, employees or
other agents has made any representation or recommendation to the Option Holder about the
advisability of the Option Holder’s purchase of the shares of Common Stock that are subject to the
Option.

          (b)     Ability to Bear Investment Risk. The Option Holder is aware that any purchase of
stock involves an element of risk. The Option Holder can afford to bear the risks of an investment
in the Company. The Option Holder has sufficient knowledge and experience in financial and
investment matters to enable him to evaluate the merits and risks of the proposed

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purchase of the shares of Common Stock subject to the Option and to make an informed
investment decision. The Option Holder has had a sufficient opportunity to consult with his
advisers about the merits and legal implications of the proposed transaction.

          (c)     Resale Restrictions. The Option Holder understands that: (i) neither the SEC nor
any state or other regulatory authority has made any recommendation or finding concerning the value
of the shares of Common Stock subject to the Option; and (ii) the shares may be offered, sold or
otherwise transferred by the Option Holder only if the transaction is registered and qualified
under the applicable provisions of federal and state securities laws or if the shares can be sold
under Rule 144 of the Securities Act or if another exemption from such registration and
qualification is available. The Option Holder agrees not to sell, pledge or otherwise transfer any
of the shares of Common Stock acquired upon exercise of the Option except in full compliance with
all applicable federal and state securities laws, rules and regulations.

          (d)     Applicability to Transferees. If the Option Holder transfers part or all of the
Option to a family member or family trust pursuant to Section 5(b), the transferee shall be deemed
to have made all of the representations, warranties and agreements that are set forth in this
Section 8, and the Option Holder shall be personally liable to the Company for any and all losses,
damages, expenses and liabilities (including, but not limited to, court costs and reasonable
attorneys’ fees) that the Company may incur as a result of any breach of such representations,
warranties and agreements by the transferee.

          (e)     No Continuing Employment Right. The Option Holder understands that nothing in the
Plan or this Agreement gives the Option Holder a right to continue in the employment of the Company
or a subsidiary and that, if the Option Holder is a director, nothing in the Plan or this Agreement
gives the Option Holder a right to continue to serve as a director of the Company.

     9.     Miscellaneous Provisions.

          (a)     Further Instruments. The Company and the Option Holder agree to execute such
further instruments and to take such further actions as may be reasonably necessary to carry out
the intent of this Agreement.

          (b)     Provisions Subject to Applicable Law. If any provision of this Agreement is held
by an arbitrator or a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect without being impaired or
invalidated in any way and shall be construed in accordance with the purposes and intent of this
Agreement.

          (c)     Complete Agreement. This Agreement and the Plan constitute the complete and
exclusive agreement between the Company and the Option Holder with respect to the subject matter
herein and replace and supersede any and all other prior written and oral agreements or statements
by the parties relating to such subject matter.

          (d)     Successors and Assigns. Subject to the provisions of this Agreement and the Plan
relating to the transferability of the Option and the shares of Common Stock acquired

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upon exercise of the Option, this Agreement shall be binding upon and inure to the benefit of
the Company and the Option Holder and their respective successors and assigns. Whenever
appropriate in this Agreement, references to the Company or the Option Holder shall be deemed to
refer to such person’s legal representative, estate or other transferees, successors or assigns, as
applicable.

          (e)     Notices. Any notice required or permitted to be given to the Company or the
Option Holder must be in writing and personally delivered or sent by registered or certified United
States mail (postage prepaid and return receipt requested), by overnight delivery service or by
facsimile transmission, addressed to the address hereinafter shown below such party’s signature or
to such other address as the party may designate in the foregoing manner to the other party. Any
such notice that is sent by the Company or the Option Holder in the foregoing manner shall be
deemed to have been delivered upon (i) personal delivery, (ii) actual receipt by facsimile
transmission, (iii) three days after deposit in the United States mail, or (iv) one day after
delivery to an overnight delivery service.

          (f)     Amendment and Termination. This Agreement may be amended or terminated only by a
writing executed by both the Company and the Option Holder.

          (g)     Counterparts. This Agreement may be executed by facsimile and in two
counterparts, each of which shall be deemed an original, but both of which shall constitute one and
the same instrument.

          (h)     Governing Law; Enforcement of this Agreement.

               (i)     This Agreement shall be governed by, and construed and enforced in accordance with, the
internal laws of the State of California without giving effect to such state’s conflict-of-law
principles.

               (ii)     To the fullest extent permitted by applicable law, all disputes concerning the
interpretation or enforcement of this Agreement shall be submitted to final and binding
confidential arbitration, before one arbitrator, in accordance with the applicable Comprehensive
Arbitration Rules and Procedures of JAMS in effect on the date of such arbitration including,
without limitation, the discovery rights that are expressly provided by the Comprehensive
Arbitration Rules and Procedures of JAMS. All arbitration proceedings shall be conducted in Los
Angeles, California or Ventura, California and shall be administered by JAMS. Each party consents
to such venue and jurisdiction and agrees that personal jurisdiction over such party for purposes
of the arbitration proceeding or for any court action that is permitted by this Agreement may be
effected by service of process addressed and delivered as provided above in Section 9(e).

               (iii)      A party shall be entitled to initiate an arbitration proceeding if a dispute cannot be
resolved amicably within thirty days after the other party has been notified in writing of the
existence of the dispute. The parties shall attempt to agree upon the arbitrator, who shall be a
retired California state or federal court judge who is on the JAMS panel of arbitrators. If the
parties cannot agree upon an arbitrator within fifteen days after the matter is submitted for
arbitration, a retired California state or federal court judge from the JAMS panel of

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arbitrators promptly shall be appointed in accordance with the applicable rules of JAMS to
serve as the sole arbitrator. Each party shall have the right to be represented by counsel in the
arbitration proceeding and, if required by JAMS, the arbitration proceeding shall comply with the
JAMS “Minimum Standards of Procedural Fairness for Employment Arbitration.”

               (iv)     The arbitrator is instructed to interpret and enforce this Agreement in strict accordance
with its terms, and the arbitrator shall not have the right or power to alter or amend any term of
this Agreement except to the limited extent expressly provided above in Section 9(b), entitled
Provisions Subject to Applicable Law. The arbitrator is required to apply applicable substantive
law in making an award, and the arbitrator is required to issue a written decision that summarizes
the findings and conclusions upon which the award is based. An award of the arbitrator that is in
violation of the requirements of either of the two immediately preceding sentences shall constitute
an action that exceeds the arbitrator’s power under this Agreement and, as such, may be vacated by
a court of competent jurisdiction. The arbitrator’s award may be enforced in any court having
jurisdiction over the matter. Notwithstanding the preceding provisions of this Section 9(h), each
party is entitled to bring an action for temporary or preliminary injunctive relief at any time in
any court of competent jurisdiction in order to prevent immeasurable and irreparable injury that
might result from a breach of this Agreement. Each party agrees that all rights to a trial by
a jury of any claim arising out of or relating to this Agreement are forever and absolutely
waived.

               (v)     To the fullest extent permitted by applicable law, the unsuccessful party to any
arbitration proceeding or to any court action that is permitted by this Agreement shall pay to the
prevailing party all costs and expenses, including, without limitation, reasonable attorneys’ fees,
incurred in the arbitration proceeding or the court action by the successful party, all of which
shall be included in and as a part of the award rendered in the proceeding or action. For purposes
of this paragraph, attorneys’ fees shall include, without limitation, fees incurred in connection
with post-judgment and post-award actions. Notwithstanding the preceding provisions of this
paragraph, if required by applicable California law, the Company shall pay the fees of the
arbitrator and all other fees that are charged by JAMS in connection with the arbitration
proceeding.

[signature page follows]

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     IN WITNESS WHEREOF, the Company and the Option Holder have executed and delivered this
Agreement as of the day and year first written above.

	 	 	 	 	 
	 	CALAVO GROWERS, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 	Address:  	 	 
	 
	 	1141A Cummings Road

Santa Paula, CA 93060

Attention: Controller

Fax: (805) 921-3223

_________________________________________________________

OPTION HOLDER

Address:

_________________________________________________________

_________________________________________________________

Fax: _______________________

 	 
	 	 	 
	 	 	 
	 	 	 
	 

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OPTION EXERCISE NOTICE

Calavo Growers, Inc.

1141A Cummings Road

Santa Paula, CA 93060

Attention: Controller

     I hereby notify Calavo Growers, Inc. (the “Company”) of my election to purchase
_________shares of the Company’s common stock at a purchase price of $9.10 per share pursuant to an
option that was granted under the Stock Option Agreement dated as of August 25, 2005 (the
“Agreement”) between the Company and ____________________________.

     If the Option Holder named above assigned part or all of the option to a family member or
family trust pursuant to Section 5(b) of the Agreement, this Option Exercise Notice is being
executed by the transferee instead of the Option Holder.

     Concurrently with the delivery to the Company of this notice, I have delivered to the Company
the purchase price of the shares in the manner provided in the Agreement.

     I agree to execute whatever additional documents are requested by the Company in order to
complete the exercise of my option. All of the representations and warranties that I made in
Section 8 of the Agreement remain accurate as of the date of this notice.

	 	 	 
	Dated:___________________________________
	 	__________________________________________________________________
	 

	 	Signature
	 
	 	 
	 

	 	__________________________________________________________________
	 

	 	Print Name

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