Document:

Exhibit

DESCRIPTION OF THE REGISTRANT’S SECURITIES 
REGISTERED PURSUANT TO SECTION 12 
OF THE SECURITIES EXCHANGE ACT OF 1934
The following summary of the capital stock of Cavco Industries, Inc. does not purport to be complete and is qualified in its entirety by reference to our restated certificate of incorporation (as amended, our “charter”), our third amended and restated bylaws (our “bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit is a part, and certain provisions of Delaware law. Unless the context requires otherwise, all references to “we”, “us,” “our” and “Cavco” in this section refer solely to Cavco and not to our subsidiaries.
 Authorized Shares of Capital Stock
Our Certificate authorizes us to issue 40,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, each par value $0.01 per share. 
Common Stock 
Voting Rights. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors. There are no cumulative voting rights. 
Dividend Rights. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock are entitled to dividends when, as and if declared by the board of directors out of funds legally available for that purpose. 
Liquidation Rights. If we are liquidated, dissolved or wound up, the holders of common stock will be entitled to a pro rata share in any distribution to stockholders, but only after satisfaction of all of our liabilities and of the prior rights of any outstanding series of our preferred stock. 
Other. Our common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to our common stock. All outstanding shares of our common stock are fully paid and nonassessable.
 Preferred Stock 
 The Company is authorized to issue 1,000,000 shares of undesignated preferred stock. Our board of directors has the authority, without stockholder approval, to issue shares of preferred stock from time to time in one or more series, and to fix the number of shares and terms of each such series. The board may determine the designation and other terms of each series, including: dividend rates; redemption rights; liquidation rights; sinking fund provisions; conversion rights; voting rights; and any other terms.
The issuance of preferred stock, while providing desired flexibility in connection with possible acquisitions and other corporate purposes, could adversely affect the voting power of holders of common stock. It could also affect the likelihood that holders of common stock will receive dividend payments and payments upon liquidation. 
The issuance of shares of preferred stock, or the issuance of rights to purchase shares of preferred stock, could be used to discourage an attempt to obtain control of our company. For example, if, in the exercise of its fiduciary obligations, our board were to determine that a takeover proposal is not in our best interests, the board could authorize the issuance of a series of preferred stock containing class voting rights that would enable the holder or holders of the series to prevent or make the change of control transaction more difficult. Alternatively, a change of control transaction deemed by the board to be in our best interests could be facilitated by issuing a series of preferred stock having sufficient voting rights to provide a required percentage vote of the stockholders.

Classified Board of Directors
Our board of directors is divided into three classes, with directors serving staggered three-year terms.
No director of the Company may be removed from office as a director by vote or other action of the stockholders or otherwise except for cause, and then only by the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of capital stock of the Company generally entitled to vote in the election of directors, voting together as a single class. 
Anti-Takeover Provisions of Our Restated Certificate of Incorporation and Our Third Amended and Restated Bylaws
Our certificate of incorporation and bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors, including, among other things:     
		
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	no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

		
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	as discussed above, the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of an acquirer;

		
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	the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

		
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	the requirement that a special meeting of stockholders may be called only by the Chairman of the Board, Chief Executive Officer, President, or by the Board of Directors pursuant to a resolution approved by the affirmative vote of at least a majority of the members of the board of directors, and no such special meeting may be called by any other person or persons, including, without limitation, the holders of shares of the Company’s common stock, could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

		
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	the inability of stockholders to take action by consent in writing without a meeting;

		
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	the ability of our board of directors, by majority vote, to amend our bylaws, which may allow our board of directors to take additional actions to prevent a hostile acquisition and inhibit the ability of an acquirer to amend our bylaws to facilitate an acquisition; and

		
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	advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us or enact other organizational or governance initiatives.

These provisions, and our ability to issue preferred stock, are designed to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of our company to negotiate with our board of directors. We believe that the benefits of these protective provisions are that we have a greater ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us, and that these benefits outweigh the disadvantages of discouraging those proposals, because negotiation of those proposals could result in an improvement of their terms.

Delaware Anti-Takeover Statute
We are also subject to certain anti-takeover provisions under the General Corporation Law of the State of Delaware, or the DGCL. Under Section 203 of the DGCL, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or (i) our board of directors approves the transaction prior to the stockholder acquiring the 15% ownership position, (ii) upon consummation of the transaction that resulted in the stockholder acquiring the 15% ownership position, the stockholder owns at least 85% of the outstanding voting stock (excluding shares owned by directors or officers and shares owned by certain employee stock plans) or (iii) the transaction is approved by the board of directors and by the stockholders at an annual or special meeting by a vote of 66 2/3% of the outstanding voting stock (excluding shares held or controlled by the interested stockholder). These provisions in our certificate of incorporation and by-laws and under Delaware law could discourage potential takeover attempts.
In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any such entity or person.
A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or by-laws approved by its stockholders. We have not opted out of Section 203. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us.
Transfer agent and registrar 
 The transfer agent and registrar for our common stock is Computershare Investor Services.
 Listing 
 Our common stock is listed on the Nasdaq Global Select Market under the symbol “CVCO.”Exhibit

CAVCO INDUSTRIES, INC.
 CLAWBACK POLICY 
Effective as of October 21, 2019
		
	I.
	Introduction

The Board of Directors (the “Board”) of Cavco Industries, Inc. (the “Company”) believes that it is in the best interest of the Company and its shareholders to adopt this Clawback Policy (the “Policy”) providing for the recoupment from certain Covered Executives (as defined below) of Incentive Compensation (as defined below) in the event of an accounting restatement or the occurrence of the other clawback events described below. The Policy intends to comply with Section 10D of the Securities Exchange Act of 1934 (the "Exchange Act").
		
	II.
	Administration

The Board will administer the Policy as recommended by the Audit and Compensation Committees of the Board. The Board may delegate this administrative responsibility to the Compensation Committee, in which case, any references herein to the Board shall be deemed references to the Compensation Committee.  Any determinations made by the Board shall be final and binding on all affected individuals.  
		
	III.
	Covered Executives

In accordance with Section 10D of the Exchange Act, as well as the listing standards of the Nasdaq stock exchange, this Policy applies to any current or former: (a) employee designated as an “executive officer” pursuant to Section 16 of the Exchange Act, as amended; (b) president, chief executive officer or chief financial officer of the Company or any subsidiary or division of the Company; (c) employee of the Company, its subsidiaries or divisions that is serving or has served in one or more of the positions set forth in Annex A, attached hereto; and (d) any such other employees who may from time to time be designated in writing to be subject to this Policy by the Board (each, a “Covered Executive”, and collectively, the “Covered Executives”).
		
	IV.
	Recoupment; Accounting Restatement; Time Frame

The Board is authorized to recoup from all Covered Executives in the following circumstances:
(a)      Accounting Restatement. In the event the Company is required to prepare an accounting restatement of its financial statements due to material non-compliance, the Board may require reimbursement or forfeiture of certain Incentive Compensation, granted, paid, delivered, awarded or otherwise received by a Covered Executive.
(b)    Miscalculation of Performance Metric or Target. Should the Compensation Committee determine that a financial metric underlying the grant of Incentive Compensation was calculated incorrectly, whether or not the Company is required to restate its financial statements and without regard to whether such miscalculation was due to fraud or intentional misconduct, the Board may require reimbursement or forfeiture of certain Incentive Compensation granted, paid, delivered, awarded or otherwise received by a Covered Executive. Further, the Board may require the cancellation of certain unpaid or unvested Incentive Compensation based upon determination of the correct performance metric or target. 

(c)    Detrimental Conduct. To the extent that the Board determines, in its sole discretion, that one or more of the Covered Executives committed one or more willful acts of material fraud or material misconduct that directly or indirectly caused a Material Adverse Effect (as defined below), the Board may require reimbursement or forfeiture of certain Incentive Compensation granted, paid, delivered, awarded or otherwise received by a Covered Executive during the three-year period following the commission of the acts of fraud or misconduct and/or occurrence of a Material Adverse Effect, in either case, as determined by the Board in its sole discretion. Such forfeiture or reimbursement shall be sought, unless it is Impracticable to do so or the Board otherwise determines, in its sole discretion, that such forfeiture or recovery would not be in the best interests of the Company. “Material Adverse Effect” means any event, change, development or occurrence, individually or together with any other event, change, development, or occurrence, that the Board determines, in its sole discretion, is materially adverse to the finances, business, condition, assets, or results of operations of the Company. In addition to Incentive Compensation, if the Board determines that one or more of the Covered Executives committed one or more willful acts of material fraud or material misconduct that directly or indirectly caused a Material Adverse Effect the Board may require reimbursement or forfeiture of certain equity awards which vest solely based on the passage of time. 
		
	V.
	Incentive Compensation

For purposes of the Policy, provided the compensation is granted, earned or vested in whole or partially on the attainment of a financial metric, Incentive Compensation means any of the following:
		
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	Annual bonuses and other short- and long-term cash incentives;

		
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	Stock options;

		
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	Stock appreciation rights;

		
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	Restricted stock;

		
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	Restricted stock units;

		
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	Performance shares; 

		
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	Performance units; 

		
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	Stock units;

		
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	Any of the forms of compensation identified in the Company’s then existing shareholder approved stock incentive plan; and

		
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	Any other form of compensation designated by the Board in writing as “Incentive Compensation” subject to this Policy.  

Financial metrics include, but are not limited to, the following:
		
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	Any of the financial reporting measures or goals identified in the Company’s then existing shareholder approved stock incentive plan; 

		
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	Stock price;

		
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	Total shareholder return;

		
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	Revenues;

		
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	Net income;

		
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	Earnings before interest, taxes, depreciation and amortization (EBITDA);

		
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	Funds from operations;

		
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	Liquidity measures such as working capital or operating cash flow;

		
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	Return measures such as return on invested capital or return on assets; and

		
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	Earnings measures such as earnings per share.

		
	VI.
	Excess Incentive Compensation: Amount Subject to Recovery

In the case of an accounting restatement or miscalculation of a performance target or metric, the amount of Incentive Compensation to be recovered by the Company from each Covered Executive is the amount of Incentive Compensation paid to each Covered Executive that exceeds what the Covered Executive would have received based on the restated or corrected performance target or metric during the three-year period preceding the year the restatement or correction is determined to be required. 
In the case of Detrimental Conduct, the amount of Incentive Compensation to be recovered from each Covered Executive will be determined in the Board’s discretion in an amount up to but not to exceed all Incentive Compensation received by such Covered Executive during the three-year period following the commission of the acts of fraud or misconduct and occurrence of a Material Adverse Effect in either case, as determined by the Board in its sole discretion.  
Subject to compliance with any applicable law, the Company may effect recovery of Incentive Compensation under the Policy from any amount otherwise payable to a Covered Executive, including, if permitted by law, amounts payable to such individual under any otherwise applicable Company plan or program. Any recovery pursuant to this Policy shall be in addition to any other remedies that may be available to the Company under applicable law including, but not limited to, disciplinary action up to and including termination of employment or other services.
		
	VII.
	Recovery Process

The amount of the recovery pursuant to this Policy will be determined pursuant to the following process:
(a) The Audit Committee of the Board will have the initial responsibility to investigate any restatement that could reasonably be expected to trigger a potential recovery of Incentive Compensation under the Policy.  The Audit Committee will report its findings to the Compensation Committee of the Board and make recommendations to the Compensation Committee as to the recovery of Incentive Compensation;
(b) The Compensation Committee will review the Audit Committee’s report and make a determination as to the Covered Executive(s) from whom recovery will be sought and the amount of the recovery. The Compensation Committee’s determination will be reported to the Board.  
(c) The Board will then make a final review and determination as to the amount of the recovery, if any, and the Covered Executive(s) from whom recovery is sought. 
In making any determination with respect to exercise of its authority hereunder, the Audit Committee, the Compensation Committee and the Board may take into account any facts, documents, statements or other evidence that it determines to be necessary or appropriate for purposes of the Policy. Without limiting the generality of the immediately preceding sentence, the Audit Committee, the Compensation Committee and the Board may take into account any and all factors that it determines to be appropriate and relevant under the circumstances, including the likelihood and costs of recovery, compliance with applicable law, the ability of the Covered Executive(s) to repay such amount, the tax consequences of the original payment and/or the recoupment to the Covered Executive(s) (including whether recoupment shall be on a pre-tax or post-tax basis) and any other potentially adverse consequences for the Company arising from seeking enforcement of the Policy.

It is expected that the Board will interpret the Policy as necessary to resolve any dispute, or correct any error or ambiguity, on an individual basis. The Board shall be under no obligation to treat Covered Executive(s) in a similar manner under this Policy whether or not such Covered Executive(s) are similarly situated, or to treat similar but unrelated recovery events under this policy in a similar manner.  Any determination by the Board under this Policy shall be final, binding and conclusive on all Covered Executives.
		
	VIII.
	Method of Recoupment

The Board will determine, in its sole discretion, the method for recouping Incentive Compensation hereunder and such method may include, to the extent permitted by applicable law and Section 409A of the Internal Revenue Code, but not be limited to:
(a) Reimbursement or repayment of cash Incentive Compensation previously paid;
(b) Seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer or other disposition of any equity-based awards;
(c) offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive See Note 2 above.  ;
(d) Cancelling all or a portion of outstanding vested or unvested equity awards (including any related dividend amounts paid or accrued with respect to such awards); 
(e) Reducing the amount of any current or future compensation that may be awarded or become due and owing to the Covered Executive; and/or
(f) Taking any other remedial and recovery action permitted by law, as determined by the Board, including, without limitation, requiring the return of shares or the reimbursement of any net proceeds received as a result of the sale of shares.
		
	IX.
	No Indemnification

The Company shall not indemnify any Covered Executives against the loss of any incorrectly awarded Incentive Compensation.
		
	X.
	     Interpretation

The Board will interpret and construe the Policy as well as make all determinations necessary, appropriate or advisable for the administration of the Policy. It is intended that the Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act and any applicable rules or standards adopted by the Securities and Exchange Commission (the “SEC”) or the Nasdaq stock exchange on which the Company's securities are listed. 
If any provision of this Policy is or becomes or is deemed to be invalid or unenforceable in any jurisdiction or as to any Covered Executive, such provision shall be construed or deemed amended to the conform with applicable law.
This Policy shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to any conflicts of law principles thereof that would require the application of the laws of another jurisdiction.
		
	XI.
	    Effective Date

This Policy shall be effective as of the date of adoption by the Board (the "Effective Date") and shall apply to Incentive Compensation approved, awarded or granted to Covered Executives on or after that date.

		
	XII.
	Amendment; Termination

In its sole discretion, from time to time, the Board may amend the Policy for any reason, including, to reflect final regulations adopted by the SEC under Section 10D of the Exchange Act and to comply with any rules or standards adopted by Nasdaq on which the Company's securities are listed. 
		
	XIII.
	Other Recoupment Rights

The Board intends that the Policy will be applied to the fullest extent of the law. The Board may require that any employment agreement, equity award agreement or similar agreement entered into on or after the Effective Date shall, as a condition of the grant, require a Covered Executive to agree to abide by the terms of the Policy. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.
		
	XIV.
	Impracticability

The Board shall recover any excess Incentive Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Board in accordance with Rule 10D-1 of the Exchange Act and the listing standards of Nasdaq on which the Company's securities are listed.
XV.     Successors
This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, transferees, heirs, executors, administrators or other legal representatives.

ANNEX A
SPECIFIED OFFICERS

Chief Executive Officer
Chief Financial Officer
General Counsel
Chief Human Resources Officer
Chief Accounting Officer
Controller / VP Finance
Assistant Controller
President - Retail
President - CountryPlace Mortgage
President - Standard Casualty Company

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