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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 23, 2023
(Date of earliest event reported)
CLEARFIELD, INC.
(Exact Name of Registrant as Specified in Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
| 0-16106 |
|
41-1347235 |
| (Commission File No.) |
|
(IRS Employer Identification No.) |
7050 Winnetka Avenue North, Suite 100, Brooklyn
Park, Minnesota 55428
(Address of Principal Executive Offices)(Zip Code)
(763) 476-6866
(Registrant’s Telephone Number, Including
Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since
Last Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
Trading Symbol |
Name of each exchange on which registered |
| Common Stock, $0.01 par value |
CLFD |
The Nasdaq Stock Market |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Items under Sections 1 through 4 and Sections 6 through 8 are not applicable
and therefore omitted.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers. |
The Board of Directors
of Clearfield, Inc. (the “Company”) adopted the Clearfield, Inc. 2022 Stock Incentive Plan on January 6, 2023, subject to
approval by our shareholders, and then amended the 2022 Stock Incentive Plan on January 23, 2023 clarify that stock options may not be
surrendered for cash or other equity in the Company without shareholder approval (the 2022 Stock Incentive Plan, as amended, the “2022
Plan”). As described below, at the 2023 Annual Meeting of Shareholders held on February 23, 2023, the Company’s shareholders
approved the 2022 Plan. The 2022 Plan is effective on the date of shareholder approval and no further awards may be made under the Clearfield,
Inc. Amended and Restated 2007 Stock Compensation Plan (the “Prior Plan”) following the effective date of the 2022 Plan.
The total number of shares
of stock reserved and available for distribution under the 2022 Plan is 600,000 shares, plus the number of shares remaining for grant
and delivery under the Prior Plan as of the effective date of shareholder approval of the 2022 Plan, plus any shares subject to outstanding
awards under the Prior Plan as of the effective date that are forfeited, cancelled or settled for cash.
The material terms of
the 2022 Plan are described in “Proposal
No. 4 – Approval of the 2022 Stock Compensation Plan” in the Company’s definitive proxy statement on filed with
the Securities and Exchange Commission (the “SEC”) on January 10, 2023 and the definitive additional proxy soliciting material
filed with the SEC on January 25, 2023, each of which are incorporated herein by reference.
The Compensation Committee
of the Board will administer the 2022 Plan. The Compensation Committee has adopted a form of stock option agreement and a form of restricted
stock award agreement for use with the 2022 Plan setting forth the standard terms and conditions that apply to grants of these types of
awards pursuant to the 2022 Plan, although awards may be granted under the 2022 Plan that deviate from these standard terms and conditions
and the Committee may adopt different types of awards under the 2022 Plan.
The foregoing descriptions
of the 2022 Plan and the forms of award agreements thereunder are qualified in their entirety by reference to the text of the 2022 Plan
and the forms of award agreements, which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K and are incorporated
herein by reference.
| Item 5.07 | Submission of Matters to a Vote of Security Holders. |
On February 23, 2023, the Company
held its 2023 Annual Meeting of Shareholders (the “Annual Meeting”). Of the 15,212,843 shares of the Company’s common
stock outstanding and entitled to vote, 12,155,162 shares, or 79.90%, were present at the Annual Meeting.
The following describes the matters considered
by the Company’s shareholders at the Annual Meeting, as well as the results of the votes cast at the meeting:
1. To elect eight
(8) directors of the Company to serve until the next Annual Meeting of Shareholders or until their respective successors have been elected
and qualified.
| Nominee |
For |
Against |
Abstain |
Broker Non-Vote |
| Cheryl Beranek |
10,142,202 |
61,981 |
19,541 |
1,931,438 |
| Ronald G. Roth |
9,633,049 |
570,967 |
19,708 |
1,931,438 |
| Patrick Goepel |
9,999,192 |
38,055 |
186,477 |
1,931,438 |
| Roger Harding |
10,166,366 |
37,331 |
20,027 |
1,931,438 |
| Charles N. Hayssen |
10,085,293 |
118,168 |
20,263 |
1,931,438 |
| Donald R. Hayward |
9,168,092 |
1,034,873 |
20,759 |
1,931,438 |
| Walter L. Jones, Jr. |
9,838,943 |
364,060 |
20,721 |
1,931,438 |
| Carol A. Wirsbinski |
10,153,890 |
50,087 |
19,747 |
1,931,438 |
2. To
approve, on a non-binding advisory basis, the compensation paid to our named executive officers.
| For |
Against |
Abstain |
Broker Non-Vote |
| 8,612,745 |
1,502,516 |
108,463 |
1,931,438 |
3. To
approve, on a non-binding advisory basis, the frequency of future advisory votes on executive compensation.
| 1 Year |
2 Years |
3 Years |
Abstain |
| 9,717,952 |
23,967 |
453,195 |
28,610 |
4. To
approve the Company’s 2022 Stock Compensation Plan.
| For |
Against |
Abstain |
Broker Non-Vote |
| 9,897,699 |
281,357 |
44,668 |
1,931,438 |
5. To
ratify the appointment of Baker Tilly US, LLP as the independent registered public accounting firm for the Company for the fiscal year
ending September 30, 2023.
| For |
Against |
Abstain |
| 12,067,755 |
56,263 |
31,144 |
As a result, all nominees identified in Proposal 1 were elected as
directors. With respect to Proposal 2, the shareholders approved, on an advisory basis, the compensation paid to our named executive officers.
With respect to Proposal 3, the shareholders approved, on an advisory basis, holding future advisory votes on executive compensation every
year. Further, shareholders approved each of Proposals 4 and 5.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CLEARFIELD, INC. |
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| Dated: February 24, 2023 |
By: |
/s/ Daniel Herzog |
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Daniel Herzog, Chief Financial Officer |
EXHIBIT 10.2
Clearfield, Inc.
2022 Stock Compensation Plan
Non-Qualified Stock Option Agreement
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| Participant: |
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| Grant Date: |
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| Number Of Option Shares: |
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| Exercise Price Per Share: |
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| Expiration Date: |
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| Exercise Schedule: |
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Portion of Option Shares
Vesting and Date Exercisable |
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THIS NON-QUALIFIED STOCK
OPTION AWARD AGREEMENT (this “Agreement”) is made as of the Grant Date set forth above, by and between Clearfield, Inc.,
a Minnesota corporation (the “Company”), and the person named above (the “Participant”) setting forth the terms
and conditions of an award of Stock Options granted pursuant to the terms of the Clearfield, Inc. 2022 Stock Compensation Plan (the “Plan”).
Capitalized terms used herein
and not defined shall have the meaning given such terms in the Plan.
1.
Grant. The Company hereby grants to Participant the right and option to purchase all or any part of the aggregate
number of Shares set forth above as the Option Shares on the terms and conditions set forth in the Plan and this Agreement. This Stock
Option is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
2.
Exercise Price. The purchase price of each Option Share shall be the Exercise Price Per Share set forth above.
3.
Exercise Schedule. Subject to the provisions of this Agreement, this Stock Option shall vest and become exercisable
as to the number of Option Shares on the dates specified in the Exercise Schedule. Except as provided in Sections 6 and 7 of this Agreement,
the Stock Option shall not be exercisable until the first anniversary of the Grant Date. The Exercise Schedule shall be cumulative; thus,
to the extent this Stock Option has not already been exercised and has not expired, terminated or been cancelled, Participant may at any
time, and from time to time, purchase all or any portion of the Option Shares then purchasable under the Exercise Schedule until the expiration
of the Stock Option. In the case of fractional shares, the number of Option Shares vesting on any date shall be rounded down to the nearest
whole share and the number of Option Shares vesting on the last date shall be correspondingly increased by such fractional remainders.
4.
Expiration. This Stock Option shall expire at the earliest of:
(a)
5:00 p.m. Central Time on the Expiration Date specified above;
(b)
following termination of employment of Participant other than for Cause, 5:00 p.m. Central Time on the last day this Stock Option
is exercisable as provided in Section 6 of this Agreement; or
(c)
following termination of employment of Participant for Cause, immediately as of the date of the event giving rise to Cause.
In no event may this Stock Option be exercised,
in whole or in part, after it has expired, notwithstanding any other provision of this Agreement.
5.
Procedure to Exercise Stock Option.
(a)
Notice of Exercise. Subject to the other provisions of this Agreement, this Stock Option may be exercised in whole or in
part as to the Option Shares vested and exercisable in accordance with the Exercise Schedule at any time until the expiration of this
Stock Option by giving written notice of exercise to the Company specifying the number of Option Shares to be purchased in the Company’s
Exercise Notice Form.
(b)
Effective Date of Exercise. This Stock Option shall be deemed to be exercised on the date the Company receives both the
properly completed and signed Exercise Notice and payment in full of the aggregate Exercise Price Per Share for all Option Shares being
purchased. No Shares shall be issued until full payment therefor has been made.
(c)
Tender of Payment. Participant shall provide for payment of the aggregate Exercise Price Per Share for the Option Shares
being purchased through one or a combination of the following methods, at the election of Participant:
| (1) | Cash (including check, bank draft or money order); |
| (2) | To the extent permitted by law, through a broker-assisted cashless exercise in which Participant simultaneously
exercises the Stock Option and sells all or a portion of the Option Shares thereby acquired pursuant to a brokerage or similar relationship
and uses the proceeds from such sale to pay the aggregate Exercise Price Per Share of the Option Shares being purchased; |
| (3) | By tender of a full recourse promissory note having such terms as may be approved by the Committee; |
| (4) | By delivery to the Company (or by attestation to the Company) of unencumbered Shares owned by Participant
having an aggregate Fair Market Value on the date of exercise equal to the aggregate Exercise Price Per Share of the Option Shares being
purchased; or |
| (5) | By authorizing the Company to retain from the total number of Option Shares as to which the Stock Option
is exercised that number of Option Shares having a Fair Market Value on the date of exercise equal to the aggregate Exercise Price Per
Share of the Option Shares being purchased. |
(d)
Limitation. Notwithstanding the foregoing, Participant shall not be permitted to pay any portion of the purchase price with
Shares or by authorizing the Company to retain Option Shares upon exercise of the Stock Option, if the Committee, in its sole discretion,
determines that payment in such manner shall not be permitted.
6.
Employment Requirement. This Stock Option may be exercised only while Participant remains employed with the Company
or a Subsidiary thereof, and only if Participant has been continuously so employed since the Grant Date; provided that:
(a)
This Stock Option may be exercised for ninety (90) days after Participant’s employment by the Company terminates by reason
other than death, Disability or for Cause, but only to the extent that it was exercisable immediately prior to the date of termination
of employment.
(b)
This Stock Option may be exercised for twelve (12) months after Participant’s employment by the Company terminates because
of death or Disability of Participant, but only to the extent that it was exercisable immediately prior to the date of termination of
employment.
(c)
This Stock Option shall expire, and all rights to purchase Option Shares hereunder shall terminate, immediately as of the date
of the event giving rise termination of employment of Participant for Cause.
Notwithstanding the above, the
Stock Option may not be exercised after 5:00 p.m. Central Time on the Expiration Date.
7.
Acceleration of Vesting. Notwithstanding any other provision of this Agreement, the Stock Option shall become fully
exercisable and vested upon (1) a termination of employment by the Company without Cause or by the Participant for Good Reason, within
twenty-four (24) months following a Change in Control where the Plan is assumed by the successor corporation or the Company is the surviving
entity and the Plan continues, or (2) the occurrence of a Change in Control, if the Plan is not assumed by the successor corporation.
8.
Limitation on Transfer. During the lifetime of Participant, only Participant or Participant’s guardian or legal
representative may exercise the Stock Option. The Stock Option may not be assigned or transferred by Participant otherwise than by will
or the laws of descent and distribution.
9.
No Shareholder Rights Before Exercise. No person shall have any of the rights of a shareholder of the Company with
respect to any Option Shares until such Option Shares are actually issued upon exercise of the Stock Option.
10.
Withholding Taxes. Participant will be responsible for all tax obligations that arise as a result of the grant, vesting,
or settlement of this Stock Option. The Company has the right to deduct from any payment made under this Agreement or to require Participant
to pay the amount of any federal, state or local taxes of any kind required by law to be withheld with respect to the grant, vesting,
payment or settlement of this Stock Option or otherwise under this Agreement, or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes. Unless Participant has made arrangements prior to the
date of exercise to satisfy such tax withholding amount in cash or by delivery to the Company (or by attestation to the Company) of unencumbered
Shares owned by Participant, Participant acknowledges and agrees that such tax withholding amount shall be satisfied by the Company retaining
from the number of Option Shares that would otherwise be deliverable to Participant such number of Shares as the Company determines to
be sufficient to satisfy such tax withholding obligation. Notwithstanding the foregoing, in no event shall payment of withholding taxes
be made by retention of Shares by the Company unless the Company retains only shares with a Fair Market Value equal to the minimum amount
of taxes required to be withheld. The Company may also deduct from any award under the Plan payment of any other amounts due by Participant
to the Company.
11.
Interpretation of this Agreement. This Stock Option is in all respects subject to and governed by all of the provisions
of the Plan. In accordance with the Plan, all decisions of the Board or Committee shall be final and binding upon Participant and the
Company. If there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern.
12.
Discontinuance of Employment. This Agreement shall not give Participant a right to continued employment with the
Company or any parent or Subsidiary of the Company, and the Company or any such parent or Subsidiary employing Participant may terminate
Participant’s employment at any time and otherwise deal with Participant without regard to the effect it may have upon Participant
under this Agreement.
13.
Binding Effect. This Agreement shall be binding in all respects on the heirs, representatives, successors and assigns
of Participant.
14.
Governing Law. This Agreement and any matter relating to the Stock Option or the Option Shares will be construed,
administered and governed in all respects under and by the applicable laws of the State of Minnesota, excluding any conflicts or choice
of law rule or principle that might otherwise refer construction or interpretation of this Agreement, the Plan, this Award of Stock Options
or the Option Shares to the substantive law of another jurisdiction.
15.
Tax Consequences. The Participant may incur tax liability as a result of the exercise of the Stock Option and/or
the subsequent disposition of Option Shares. THE PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE STOCK OPTION OR THE DISPOSITION
OF THE OPTION SHARES.
16.
Representations by Participant. The Participant has read this Agreement and is familiar with its terms and provisions.
The Participant has reviewed with personal tax advisors the Federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by this Agreement. The Participant is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Participant understands that he or she (and not the Company) shall be responsible for any tax
liability that may arise as a result of this investment or the transactions contemplated by this Agreement. The Participant hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of the Board (or committee with delegated authority) upon
any questions arising under this Agreement.
IN WITNESS WHEREOF,
the Company and Participant have executed and delivered this Agreement as of the Grant Date set forth above.
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CLEARFIELD, INC. |
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Its: |
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| PARTICIPANT: |
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| Print Name of Participant |
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| Signature of Participant |
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EXHIBIT 10.3
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CLEARFIELD, INC.
2022 STOCK COMPENSATION PLAN
RESTRICTED STOCK AWARD AGREEMENT |
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| PARTICIPANT: |
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| AWARD DATE: |
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| SHARES OF RESTRICTED STOCK: |
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| LAPSE OF RESTRICTIONS: |
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The Restricted Stock shall vest and the Restrictions on the Restricted
Stock shall lapse on _____________ (except as otherwise provided in this Agreement) |
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THIS RESTRICTED STOCK AWARD
AGREEMENT (this “Agreement”) is made as of the Award Date set forth above, by and between Clearfield, Inc., a Minnesota
corporation (the “Company”), and the person named above (“Participant”) setting forth the terms and conditions
of an award of Restricted Stock granted pursuant to the terms of the Clearfield, Inc. 2022 Stock Compensation Plan (the “Plan”).
Capitalized terms used herein
and not defined shall have the meaning given such terms in the Plan.
1.
Grant of Restricted Stock. In accordance with the terms of the Plan and subject to the further terms, conditions
and restrictions contained in this Agreement, the Company hereby grants to Participant the number of shares of Restricted Stock set forth
above. “Restricted Stock” means shares of the Company’s common stock (the “Shares”) subject to the Restrictions
set forth in Section 3 of this Agreement.
2.
Certificates for Shares.
(a)
Certificates evidencing the Restricted Stock shall be subject to the control of the Company (either through appropriate entries
in accounts at the Company’s transfer agent or through the Company’s physical control of a certificate relating to the Restricted
Stock) until such Shares are released to Participant or forfeited in accordance with this Agreement. If requested by the Company, Participant
shall, simultaneously with the delivery of this Agreement, deliver to the Company a stock power, in blank, executed by Participant. If
any Restricted Stock is forfeited, the Company shall direct the transfer agent of the Shares to make the appropriate entries in its records
showing the cancellation of the certificate or certificates for such Restricted Stock and the Shares represented thereby shall have the
status as authorized but unissued Shares.
(b)
The Share certificate or certificates evidencing the Restricted Stock issued hereunder shall be endorsed with the following legend
(in addition to any other legend or legends required under applicable Federal and state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN ANY AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDERS
AND IN THE CLEARFIELD, INC. 2022 STOCK COMPENSATION PLAN, ALL AS MAY BE AMENDED FROM TIME TO TIME. ANY PERSON OR ENTITY TO WHOM SHARES
REPRESENTED BY THIS CERTIFICATE, OR ANY INTEREST THEREIN, ARE TRANSFERRED SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY SUCH AGREEMENT.
COPIES OF SUCH AGREEMENTS AND THE PLAN MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
3.
Restrictions. During the period prior to the vesting and lapse of the restrictions as set forth in Section 5 (the
“Restriction Period”) and subject to earlier termination of the Restriction Period or forfeiture of the Restricted Stock,
the Restricted Stock and all rights with respect to the Restricted Stock, may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered or disposed of and shall be subject to the risk of forfeiture contained in Section 4 of this Agreement
(such limitations on transferability and risk of forfeiture being herein referred to as “Restrictions”), but Participant shall
have all other rights of a stockholder, including, but not limited to, the right to vote and receive dividends on the Restricted Stock.
4.
Forfeiture of Restricted Stock. If Participant shall cease to be an employee of the Company and/or any of its Subsidiaries
for any reason, all Shares that at that time are Restricted Stock shall thereupon be forfeited by Participant to the Company without payment
of any consideration therefor, and neither Participant, nor any successor, heir, assign or personal representative shall have any right
or interest in or to such Restricted Stock or the certificates evidencing the Restricted Stock.
5.
Lapse of Restrictions.
(a)
Except as provided in Section 4 or in Section 5(b), the Restricted Stock shall vest and the Restrictions on the Restricted Stock
granted under this Agreement shall lapse as to the number of Shares of Restricted Stock and on the dates stated above under “Lapse
of Restrictions.” Upon vesting and lapse of the Restrictions in accordance with this Section, the Company shall, as soon as practicable
thereafter, deliver to Participant a certificate or cause the Company’s transfer agent to make appropriate credits to Participant’s
book entry account for the Shares with respect to which such Restrictions have vested and lapsed.
(b)
Notwithstanding any other provision of this Agreement, the Restricted Stock shall vest in full and all Restrictions with respect
to any Restricted Stock shall lapse upon (1) a termination of employment by the Company without Cause or by the Participant for Good Reason,
within twenty-four (24) months following a Change in Control where the Plan is assumed by the successor corporation or the Company is
the surviving entity and the Plan continues, or (2) the occurrence of a Change in Control, if the Plan is not assumed by the successor
corporation.
6.
Non-Transferability. Neither the Restricted Stock nor this Agreement nor any interest in the Shares or this award
may be alienated, encumbered, sold, pledged, assigned, transferred or subjected to any charge or legal process, other than by will or
the laws of descent and distribution, so long as the Restrictions have not lapsed as to any share of Restricted Stock and the Shares have
not been delivered in accordance with the Plan, and any sale, pledge, assignment or other attempted transfer shall be null and void.
7.
Successors and Heirs. This Agreement shall be binding upon and inure to the benefit of the Company and its successors
and assigns, and upon any person that is an acquiring person in a Change in Control involving the Company. In the event of Participant’s
death, any Shares to which Participant may become entitled pursuant to this Agreement or the Plan will be delivered to his or her heirs
or personal representative in accordance with the terms of the Plan.
8.
Governing Law. This Agreement and any matter relating to the Restricted Stock will be construed, administered and
governed in all respects under and by the applicable laws of the State of Minnesota, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of this Agreement, the Plan, this Award of Restricted Stock or the
Restricted Stock to the substantive law of another jurisdiction.
9.
Tax Withholding. Participant will be responsible for all tax obligations that arise as a result of the grant, vesting
and lapse of the Restrictions, or settlement of the Restricted Stock. Participant acknowledges that unless Participant makes a proper
and timely Section 83(b) election as further described below, then at the time of vesting and lapse of the Restrictions on the Restricted
Stock, Participant will be obligated to recognize ordinary income in an amount equal to the Fair Market Value, as of the date of vesting
and lapse of Restrictions, of those Shares issuable to the Participant upon the vesting and lapse of Restrictions. Participant understand
that Participant may file, within 30 days of the Award Date, an election with the Internal Revenue Service pursuant to Section 83(b) of
the Internal Revenue Code to be taxed currently on the Fair Market Value of the Restricted Stock as of the Award Date. Participant acknowledges
that it is Participant’s sole responsibility to timely file an election under Section 83(b) of the Code. If Participant makes such
an election, Participant must promptly provide the Company with a copy. The Company has no, and shall incur no, liability or obligation
with respect to the Section 83(b) election made, or not made, by the Participant.
The Company shall have the
power and the right to deduct or withhold, or require Participant to remit to the Company, as a condition precedent for the delivery by
the Company of the Shares deliverable upon vesting and lapse of Restrictions, an amount sufficient to satisfy federal, state and local
taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the
grant, vesting and lapse of the Restrictions, or settlement of the Restricted Stock. Unless Participant has made arrangements prior to
the date the tax withholding obligation arises to satisfy such tax withholding amount in cash or has made an election under Section 83(b)
of the Internal Revenue Code, Participant acknowledges and agrees that such tax withholding amount shall be satisfied by the Company retaining
the number of Shares from those Shares issuable to the Participant at the time of the vesting and lapse of Restrictions as the Company
determines to be sufficient to satisfy such tax withholding obligation. Notwithstanding the foregoing, in no event shall payment of withholding
taxes be made by retention of Shares by the Company unless the Company retains only Shares with a Fair Market Value equal to the minimum
amount of taxes required to be withheld. The Company may also deduct from any award under the Plan payment of any other amounts due by
Participant to the Company.
10.
Plan Controls. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject
to the terms of the Plan. In accordance with the Plan, all decisions of the Committee shall be final and binding upon Participant and
the Company.
11.
Tax Consequences. The Participant may incur tax liability as a result of the vesting and/or disposition of the Restricted
Stock, or in connection with a Section 83(b) election. THE PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE MAKING A SECTION 83(b) ELECTION,
THE VESTING OF THE RESTRICTED STOCK OR THE DISPOSITION OF SUCH SHARES.
12.
Representations by Participant. The Participant has read this Agreement and is familiar with its terms and provisions.
The Participant has reviewed with personal tax advisors the Federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by this Agreement. The Participant is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Participant understands that he or she (and not the Company) shall be responsible for any tax
liability that may arise as a result of this investment or the transactions contemplated by this Agreement. The Participant hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of the Board (or committee with delegated authority) upon
any questions arising under this Agreement.
IN WITNESS WHEREOF,
the Company and Participant have each executed and delivered this Agreement as of the date first above written.
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CLEARFIELD, INC. |
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| Print Name of Participant |
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| Signature of Participant |
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