CASH BONUS AWARD AGREEMENT
Exhibit 10.1
This Cash Bonus Award Agreement (the “Agreement”) is entered into as of August 31,
2006 by and between Calavo Growers, Inc., a California corporation (“Calavo”), and Xxxxx X.
Xxxx (“Xxxx”).
RECITALS
A. On June 1, 2005, Calavo purchased 172,857 shares of the common stock of Limoneira Company,
a Delaware corporation (“Limoneira”), for an aggregate purchase price of $23,450,000, which
equals $135.66 per share. The current value of the Limoneira common stock as reported on the Pink
Sheets is approximately $190 per share.
B. On June 1, 2005, Calavo and Limoneira completed several other transactions, including (i)
Limoneira’s purchase of 1,000,000 shares of Calavo common stock, (ii) Calavo’s lease from Limoneira
of office space in Santa Paula, California, and (iii) the execution of an avocado marketing
agreement between Calavo and Limoneira.
X. Xxxx is the Chairman of the Board, Chief Executive Officer and President of Calavo.
Calavo’s Board of Directors and Compensation Committee have determined that Xxxx was primarily
responsible for the completion of the transactions described in Recitals A and B and that these
transactions, particularly Calavo’s purchase of 172,857 shares of Limoneira common stock, have
benefited Calavo.
D. On August 24, 2006, Calavo’s Compensation Committee and Board of Directors decided to
reward Xxxx for his valuable contributions related to the Limoneira transactions by paying to him,
over a four-year period, cash bonuses that are equivalent to the market value of 3,690 shares of
Limoneira common stock, subject to the requirement that Xxxx must continue to serve as Calavo’s
Chief Executive Officer in order to obtain such bonuses.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, Calavo and Xxxx hereby agree as
follows:
1. Cash Bonus Awards.
(a) As promptly as practicable after the date of this Agreement, Calavo shall pay to Xxxx a
cash bonus in the pre-tax amount of $140,220, which is equal to the last reported sales price of
$190 per share for Limoneira’s common stock on the Pink Sheets on August 24, 2006, multiplied by
738.
(b) On August 24, 2007, and on each of the following three anniversaries of that date, Calavo
shall pay to Xxxx an additional cash bonus in a pre-tax amount that is equal to (i) 738, multiplied
by (ii) the trading volume weighted average last reported sales price of Limoneira’s common stock
for the immediately preceding thirty business days on the Pink Sheets (or on a national stock
exchange, Nasdaq or the OTC Bulletin Board, if the common stock is traded on such other market at
the time). If Limoneira’s common stock is not traded on the Pink Sheets or another national market
as of any applicable bonus payment date, Xxxx and
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Calavo shall cooperate in good faith in determining the appropriate amount of the cash bonus
to be paid to Xxxx based upon the fair market value of Limoneira’s common stock. If any August 24
on which a bonus is payable to Xxxx is not a business day, Calavo shall make the bonus payment on
the next business day.
(c) Xxxx shall not be entitled to receive any bonus from Calavo under this Agreement unless he
is serving as the Chief Executive Officer of Calavo on the applicable date described in Section
1(b). For example, if Xxxx’x service as Calavo’s Chief Executive Officer terminates for any reason
on June 15, 2007, he shall not be entitled to receive the bonus that is scheduled to be paid to him
on August 24, 2007 or on any subsequent date.
2. Tax Withholding. At the time of each bonus payment under this Agreement, Calavo
shall withhold all applicable amounts for federal, state and local taxes (including for FICA and
Medicaid).
3. Xxxx’x Representations. Xxxx understands that Calavo is not making any
representations to him regarding the future value of the Limoneira common stock, and that this
Agreement does not provide him with any right to continue serving as Calavo’s Chief Executive
Officer. Xxxx understands that Calavo is not making any representations to him regarding the
amount of taxes that he will be obligated to pay as a result of his receipt of cash bonuses under
this Agreement, and that he has been advised to consult with his accountant or other tax adviser
regarding such tax consequences.
4. Complete Agreement. This Agreement constitutes the complete and exclusive
agreement between Calavo and Xxxx with respect to the subject matter herein and replaces and
supersedes any and all other prior written and oral agreements or statements by the parties
relating to such subject matter. This Agreement may be amended or terminated only by a writing
executed by both Calavo and Xxxx.
IN WITNESS WHEREOF, Calavo and Xxxx have executed and delivered this Agreement as of the day
and year first written above.
| CALAVO GROWERS, INC. |
|||||
| By: | /s/ Xxxxxx X. Xxxxx | ||||
| Name: | Xxxxxx X. Xxxxx | ||||
| Title: | Chief Operating Officer | ||||
| /s/ Xxxxx X. Xxxx | |||||
| XXXXX X. XXXX | |||||
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