CALAVO GROWERS INC Stock Compensation Disclosure

12. Stock-Based Compensation

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The 2020 Equity Incentive Plan

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In April 2021, our shareholders approved the Calavo Growers, Inc. 2020 Equity Incentive Plan (the “2020 Plan”). In April 2025, our shareholders approved the Amended and Restated Calavo Growers, Inc. 2020 Equity Incentive Plan (the “Restated 2020 Plan”), which restated and replaced the original 2020 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 Restated 2020 Plan. The Restated 2020 Plan has a five-year term, with up to 1,500,000 shares issuable through December 9, 2030.

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Restricted Stock Awards (RSAs)

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The Company recognized no stock-based compensation expense related to RSAs for the year ended October 31, 2025, and less than $0.1 million for the year ended October 31, 2024. As of October 31, 2025, there was no unrecognized stock-based compensation cost related to non-vested RSAs. All RSAs are vested as of October 31, 2025.

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Restricted Stock Units (RSUs) and Performance Restricted Stock Units (PRSUs)

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The total recognized stock-based compensation expense for RSUs was $1.1 million and $1.4 million for the years ended October 31, 2025 and 2024. As of October 31, 2025, there was $0.5 million of unrecognized stock-based compensation costs related to non-vested RSUs, which the Company expects to recognize over a weighted-average period of 0.5 years.

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A combined summary of RSU activity, under our 2020 Plan and Restated 2020 Plan, is as follows (in thousands, except for per share amounts):

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At the end of each reporting period, the Company will adjust compensation expense for the PRSUs based on its best estimate of attainment of the specified performance targets. The cumulative effect on current and prior periods of a change in the estimated number of PRSUs that are expected to be earned will be recognized as an adjustment in the period of the adjustment. As of October 31, 2025, the Company determined that it was not probable that any of the PRSUs for the 2023 or 2024 three-year cumulative performance grants would vest. The Company did not recognize any stock-based compensation expense for PRSUs for the year ended October 31, 2025. The total recognized stock-based compensation expense for PRSUs was $0.2 million for the year ended October 31, 2023.

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Stock Options

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In June 2024, our Board approved the grant of 10,000 options to purchase our common stock to a new member of our Board.  Such grant vests in equal increments over a five-year period and has an exercise price of $25.84 per share. Vested options have an exercise period of five years from the vesting date.  The market price of our common stock at the grant date was $25.84. The estimated fair market value of such option grant was approximately $0.1 million, which will be recognized over the remaining service period of 60 months. The total recognized stock-based compensation expense for these options was insignificant for the year ended October 31, 2025.

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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 vest 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.

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The value of each option award is estimated using a lattice-based option valuation model. We primarily consider the following assumptions when using these models: (1) expected volatility, (2) expected dividends, (3) expected life and (4) risk-free interest rate. Such models also consider the intrinsic value in the estimation of fair value of the option award.

We measure the fair value of our stock option awards on the date of grant. The following assumptions were used in the estimated grant date fair value calculations for the stock options granted in the third quarter of fiscal 2024:

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The expected stock price volatility rates were based on the historical volatility of our common stock. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant for periods approximating the expected life of the options. The expected life represents the average period of time that options granted are expected to be outstanding, as calculated using the simplified method described in the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107.

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The Black-Scholes-Merton and lattice-based option valuation models were developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Because options held by our directors and employees have characteristics significantly different from those of traded options, in our opinion, the existing models do not necessarily provide a reliable single measure of the fair value of these options.

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The total recognized stock-based compensation expense for options was less than $0.1 million, $0.7 million and $1.3 million for the years ended October 31, 2025, 2024 and 2023. As of October 31, 2025, there was $0.1 million of unrecognized stock-based compensation costs related to options, which the Company expects to recognize over a weighted-average period of 1.6 years.

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A summary of stock option activity, related to our 2020 Management Incentive Plan, is as follows (in thousands, except for per share amounts):

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