Annual report pursuant to section 13 and 15(d)

Shareholders' Equity

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Shareholders' Equity
 12 Months Ended
Oct. 31, 2011
Shareholders' Equity [Abstract]  
Shareholders' Equity
6. SHAREHOLDERS' EQUITY

Common Stock Issuances

We account for stock awards granted to employees and consultants based on their grant date fair value. During the years ended October 31, 2011 and 2010, we issued 9,256,045 shares and 5,493,465 shares, respectively, of common stock to certain employees for services rendered, principally in lieu of cash compensation, pursuant to the CopyTele, Inc. 2003 Share Incentive Plan (the "2003 Share Plan") and the CopyTele, Inc. 2010 Share Incentive Plan (the "2010 Share Plan"). We recorded compensation expense for the years ended October 31, 2011 and 2010 of approximately $1,819,000 and $1,832,000, respectively, for shares of common stock issued to employees. In addition during fiscal years 2011 and 2010, we issued 510,564 shares and 223,457 shares, respectively, of common stock to consultants for services rendered pursuant to the 2003 Share Plan and 2010 Share Plan. We recorded consulting expense for the years ended October 31, 2011 and 2010 of approximately $113,000 and $76,000, respectively, for shares of common stock issued to consultants.

Preferred Stock

In May 1986, our shareholders authorized 500,000 shares of preferred stock with a par value of $100 per share. The shares of preferred stock may be issued in series at the direction of the Board of Directors, and the relative rights, preferences and limitations of such shares will all be determined by the Board of Directors. As of October 31, 2011 and 2010, there was no preferred stock issued and outstanding.

Stock Option Plans

As of October 31, 2011, we have two stock option plans: the 2003 Share Plan and the 2010 Share Plan which were adopted by our Board of Directors on April 21, 2003 and July 14, 2010, respectively.

During the year ended October 31, 2010, the remaining outstanding stock options granted under the CopyTele, Inc. 1993 Stock Option Plan (the "1993 Plan") expired. The exercise price with respect to all of the stock options granted under the 1993 Plan, since its inception, was equal to the fair market value of the underlying common stock at the grant date. Information regarding the 1993 Plan for the two years ended October 31, 2011 is as follows:

 

     Shares     Weighted Average
Exercise Price Per
Share 		     Aggregate
Intrinsic
Value 		 

Options Outstanding at October 31, 2009

      686,000      $ 1.07      

Expired

      (686,000 )    $ 1.07      
  

 

 

       

Options Outstanding and Exercisable at October 31, 2010 and 2011

      -0-      $ -0-       $  -0-   
  

 

 

       

During the year ended October 31, 2011, the remaining outstanding options granted under the CopyTele, Inc. 2000 Share Incentive Plan (the "2000 Share Plan") expired. In accordance with the provisions of the 2000 Share Plan, the plan terminated with respect to the grant of future options on May 8, 2010. The exercise price with respect to all of the stock options granted under the 2000 Share Plan, since its inception, was equal to the fair market value of the underlying common stock at the grant date. Information regarding the 2000 Share Plan for the two years ended October 31, 2011 is as follows:

 

    Shares     Weighted Average
Exercise Price Per
Share 		    Aggregate
Intrinsic
Value 		 

Options Outstanding at October 31, 2009

     1,572,466      $ 0.84     

Exercised

     (30,000 )    $ 0.40     

Expired

     (672,000 )    $ 1.08     
 

 

 

      

Options Outstanding at October 31, 2010

     870,466      $ 0.66     

Expired

     (870,466 )    $ 0.67     
 

 

 

      

Options Outstanding and Exercisable at October 31, 2011

     -0-      $ -0-      $ -0-   
 

 

 

      

 

The 2003 Share Plan provides for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to key employees and consultants. The maximum number of shares of common stock available for issuance under the 2003 Share Plan is 70,000,000 shares. The 2003 Share Plan was administered by the Stock Option Committee through June 2004, from June 2004 through July 2010, the 2003 Share Plan was administered by the Board of Directors and since July 2010, the 2003 Share Plan has been administered by the Stock Option Committee, which determines the option price, term and provisions of each option. The exercise price with respect to all of the options granted under the 2003 Share Plan since its inception was equal to the fair market value of the underlying common stock at the grant date. As of October 31, 2011, the 2003 Share Plan had 178,650 shares available for future grants. Information regarding the 2003 Share Plan for the two years ended October 31, 2011 is as follows:

 

    Shares     Current
Weighted Average
Exercise  Price Per
Share 		    Aggregate
Intrinsic
Value 		 

Options Outstanding at October 31, 2009

     18,252,045      $ 0.80     

Expired

     (115,000 )    $ 0.63     

Granted

     1,610,000      $ 0.51     

Exercised

     (1,635,000 )    $ 0.52     
 

 

 

      

Options Outstanding and Exercisable at October 31, 2010

     18,112,045      $ 0.80     

Expired

     (60,000 )    $ 0.59     

Exercised

     (500,000 )    $ 0.25     
 

 

 

      

Options Outstanding and Exercisable at October 31, 2011

     17,552,045      $ 0.81      $ -0-   
 

 

 

      

 

The following table summarizes information about stock options outstanding under the 2003 Share Plan as of October 31, 2011:

 

      Options Outstanding & Exercisable  

Range of

Exercise Prices

     Number
Outstanding		     Weighted
Average
Remaining
Contractual
Life 		    Weighted
Average
Exercise
Price 		 
  $0.25 - $0.65        4,600,970        3.58        $0.57   
  $0.68 - $0.84        5,156,075        4.82        $0.79   
  $0.86 - $0.92        4,665,000        5.85        $0.89   
  $1.04 - $1.46        3,130,000        4.15        $1.10   

The 2010 Share Plan provides for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to key employees and consultants. The maximum number of shares of common stock available for issuance under the 2010 Share Plan was initially 15,000,000 shares. On July 6, 2011, the 2010 Share Plan was amended by our Board of Directors to increase the maximum number of shares of common stock that may be granted to 27,000,000 shares. Current and future non-employee directors are automatically granted nonqualified stock options to purchase up to 60,000 shares of common stock upon their initial election to the Board of Directors and 60,000 shares of common stock at the time of each subsequent annual meeting of our shareholders at which they are elected to the Board of Directors. The 2010 Share Plan is administered by the Stock Option Committee, which determines the option price, term and provisions of each option. The exercise price with respect to the options granted under the 2010 Share Plan was equal to the fair market value of the underlying common stock at the grant date. As of October 31, 2011, the 2010 Share Plan had 7,415,905 shares available for future grants. Information regarding the 2010 Share Plan for the two years ended October 31, 2011 is as follows:

 

     Shares     Weighted Average
Exercise Price Per
Share 		     Aggregate
Intrinsic
Value 		 

Options Outstanding at October 31, 2009

      —        $ -0-      

Granted

      2,835,000      $ 0.22      

Exercised

      (1,800,000 )    $ 0.22      
  

 

 

       

Options Outstanding at October 31, 2010

      1,035,000      $ 0.21      
  

 

 

       

Granted

      5,135,000      $ 0.25      

Exercised

      (5,120,000 )    $ 0.23      
  

 

 

       

Options Outstanding at October 31, 2011

      1,050,000      $ 0.31       $ -0-   
  

 

 

       

Options Exercisable at October 31, 2011

      990,000      $ 0.32       $ -0-   
  

 

 

       

The following table summarizes information about stock options outstanding under the 2010 Share Plan as of October 31, 2011:

 

   

Options Outstanding

  

Options Exercisable

Range of

Exercise Prices

  

Number

Outstanding

  

Weighted

Average

Remaining

Contractual

Life

  

Weighted

Average

Exercise

Price

  

Number

Exercisable

  

Weighted

Average

Remaining

Contractual

Life

  

Weighted

Average

Exercise

Price
$0.17 - $0.37   1,050,000   9.25   $0.31   990,000   9.51   $0.32