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Stock-Based Compensation
 12 Months Ended
Oct. 31, 2011
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

13. Stock-Based Compensation

The Employee Stock Purchase Plan

The employee stock purchase plan was approved by our Board of Directors and shareholders. Participation in the employee stock purchase plan is limited to employees. The plan provides the Board of Directors, or a plan administrator, the right to make available up to 2,000,000 shares of common stock at a price not less than fair market value. In March 2002, the Board of Directors awarded selected employees the opportunity to purchase up to 474,000 shares of common stock at $7.00 per share, the closing price of our common stock on the date prior to the grant. The plan also permits us to advance all or some of the purchase price of the purchased stock to the employee upon the execution of a full-recourse note at prevailing interest rates. These awards expired in April 2002, with 84 participating employees electing to purchase approximately 279,000 shares. There was no activity related to such plan since this award.

The 2005 Stock Incentive Plan

The 2005 Stock Incentive Plan, was a stock-based compensation plan, under which employees and directors may be granted options to purchase shares of our common stock. We anticipate terminating such plan in the near future.

Stock options are granted with exercise prices of not less than the fair market value at grant date, generally vest over one to five years and generally expire two to five years after the grant date. We settle stock option exercises with newly issued shares of common stock.

We measure compensation cost for all stock-based awards at fair value on the date of grant and recognize compensation expense in our consolidated statements of operations over the service period that the awards are expected to vest. We measure the fair value of our stock based compensation awards on the date of grant.

Subject to the adjustment provisions of the 2005 Plan that are applicable in the event of a stock dividend, stock split, reverse stock split or similar transaction, up to 2,500,000 shares of common stock may be issued under the 2005 Plan and no person shall be granted awards under the 2005 Plan during any 12-month period that cover more than 500,000 shares of common stock.

In December 2006, our Board of Directors approved the issuance of options to acquire a total of 20,000 shares of our common stock to two members of our Board of Directors. Each grant to acquire 10,000 shares vests in increments of 2,000 per annum over a five-year period and has an exercise price of $10.46 per share. Vested options have a term of five years from the vesting date. The market price of our common stock at the grant date was $10.46. The estimated fair market value of such option grant was approximately $40,000. The total compensation cost not yet recognized as of October 31, 2011 was not significant.

 

In May 2008, our Board of Directors approved the issuance of options to acquire a total of 58,000 shares of our common stock to three members of our Board of Directors. Each grant vests in equal increments over a five-year period and has an exercise price of $14.58 per share. Vested options have a term of five years from the vesting date. The market price of our common stock at the grant date was $14.58. The estimated fair market value of such option grants were approximately $184,000. The total compensation cost not yet recognized as of October 31, 2011 was approximately $55,000, which will be recognized over the remaining service period of 19 months.

In December 2008, our Board of Directors approved the issuance of options to acquire a total of 10,000 shares of our common stock to one member of our Board of Directors. Such grant vests in equal increments over a five-year period and has an exercise price of $8.05 per share. Vested options have a term of five years from the vesting date. The market price of our common stock at the grant date was $8.05. The estimated fair market value of such option grant was approximately $37,000. The total compensation cost not yet recognized as of October 31, 2011 was approximately $15,000, which will be recognized over the remaining service period of 25 months.

In August 2010, our Board of Directors approved the issuance of options to acquire a total of 10,000 shares of our common stock to one member of our Board of Directors. Such grant vests in equal increments over a five-year period and has an exercise price of $19.20 per share. Vested options have a term of five years from the vesting date. The market price of our common stock at the grant date was $19.20. The estimated fair market value of such option grant was approximately $64,000. The total compensation cost not yet recognized as of October 31, 2011 was approximately $44,000, which will be recognized over the remaining service period of 45 months.

A summary of stock option activity is as follows (in thousands, except for share amounts):

 

                                 
    Number of Shares     Weighted-Average
Exercise Price		     Weighted-Average
Fair-Value 		    Aggregate
Intrinsic  Value		  

Outstanding at October 31, 2008

     360     $ 10.02                  

Granted

     10     $ 8.05     $ 3.67/share          

Exercised

     (86 )    $ 9.10                  
   

 

 

                          

Outstanding at October 31, 2009

     284     $ 10.23                  

Granted

     10     $ 19.20     $ 6.36/share          

Exercised

     (207 )    $ 9.13                  
   

 

 

                          

Outstanding at October 31, 2010

     87     $ 13.89                  

Exercised

     (15 )    $ 14.58                  
   

 

 

                          

Outstanding at October 31, 2011

     72     $ 13.75             $ 583  
   

 

 

                    

 

 

  

Exercisable at October 31, 2011

     31     $ 12.69             $ 284  
   

 

 

                    

 

 

  

The weighted average remaining life of such outstanding options is 5.1 years and the total intrinsic value of options exercised during fiscal 2011 was $0.1 million. The weighted average remaining life of such exercisable options is 3.1 years. The fair value of shares vested during the year ended October 31, 2011, 2010, and 2009 was approximately $0.7 million, $0.7 million, and $0.2 million.

The 2011 Management Incentive Plan

In April 2011, our shareholders approved the Calavo Growers, Inc. 2011 Management Incentive Plan (the 2011 Plan). All directors, officers, employees and consultants (including prospective directors, officers, employees and consultants) of Calavo and its subsidiaries are eligible to receive awards under the 2011 Plan. Up to 1,500,000 shares of common stock may be issued by Calavo under the 2011 Plan. As a result of such new plan, no new awards will be made under our 2005 Stock Incentive Plan.

In April 2011, our Board of Directors approved the issuance of options to acquire a total of 60,000 shares of our common stock to each member of our board of directors, except Lee Cole Chief Executive Officer (CEO). Each non-employee director was granted 5,000 shares of options at $21.82 per share. Such grant vests over a one-year period. Vested options have a term of one year from the vesting date. The market price of our common stock at the grant date was $21.82. The estimated fair market value of such option grant was approximately $202,000. The total compensation cost not yet recognized as of October 31, 2011 was approximately $85,000, which will be recognized over the remaining service period of 5 months.

In October 2011, our Board of Directors approved the issuance of options to acquire a total of 10,000 shares of our common stock by one member of our Board of Directors. Such grant vests in equal increments over a five-year period and has an exercise price of $21.80 per share. Vested options have a term of five years from the vesting date. The market price of our common stock at the grant date was $21.80. The estimated fair market value of such option grant was approximately $88,000. The total compensation cost not yet recognized as of October 31, 2011 was approximately $88,000, which will be recognized over the remaining service period of 60 months.

A summary of stock option activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts):

 

                                 
    Number of Shares     Weighted-Average
Exercise Price		     Weighted-Average
Fair-Value 		    Aggregate
Intrinsic  Value		  

Granted

     70     $ 21.82     $ 4.15/share          

Forfeited

Outstanding at October 31, 2011

    

 

 (5

65

 ) 

  

   $

$

 21.82

21.82

   

  

           $ —    
   

 

 

                    

 

 

  

Exercisable at October 31, 2011

     —       $ —               $ —    
   

 

 

                    

 

 

  

The weighted average remaining life of such outstanding options is 1.6 years. No shares are vested or exercisable as of October 31, 2011.