Company: OCC
Filing Date: 2025-02-18
Form Type: PRE 14A
Source: 0001437749-25-004188
Chunk: 32

Company: OPTICAL CABLE CORP
Filing Date: 2025-02-18
Form: PRE 14A
Chunk 32
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 time the restrictions lapse in the case of a restricted stock award. If the Participant does not make a valid election under Section 83(b) of the Code, the Participant generally will recognize compensation income with respect to the restricted stock equal to the fair market value of the Common Shares subject to the award at the time or times the restrictions lapse.

A Participant generally will incur federal income tax (in the form of ordinary income) when a stock award vests. The income is equal to the fair market value of the Common Shares subject to the stock award on the date of grant.

The amount included in a Participant's income under a restricted stock award or a stock award will become the Participant's basis in the shares subject to that award. If the Participant is an employee, this income is subject to applicable tax withholding. Any profit or loss realized on the later sale or exchange of the Common Shares relative to the Participant's basis in the shares will be treated as a capital gain or a capital loss.

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Restricted Stock Units and Performance Grants. Generally, a Participant who receives restricted stock units will not incur federal income tax, and the Company will not be allowed a deduction, at the time the award is granted. When the Participant receives payment for such awards in cash or Common Shares, the amount of the cash and the fair market value of the Common Shares received will be ordinary income to the employee and will be allowed as a deduction for federal income tax purposes to the Company. The Company generally will be entitled to a deduction equal in amount to the ordinary income realized by the recipient in the year paid.

Impact of Section 409A of the Internal Revenue Code. The discussion above is subject to the applicable provisions of Internal Revenue Code Section 409A. If at any time the 2017 Plan, any incentive award under the 2017 Plan, or any arrangement required to be aggregated with the 2017 Plan or any incentive award under the 2017 Plan fails to comply with the applicable requirements of Section 409A of the Code, all amounts (including earnings) deferred under the 2017 Plan or the award for the taxable year and all preceding taxable years by any Participant with respect to whom the failure relates are includible in that Participant's gross income for the taxable year, to the extent the amounts are not subject to a substantial risk of forfeiture and have not previously been included in the Participant 's gross income. These amounts are also subject to an additional income tax equal to twenty percent of the amount required to be included in