2006 Stock Incentive Plan



 Exhibit 4.8 

MERITAGE HOMES CORPORATION 

2006 STOCK INCENTIVE PLAN 

EFFECTIVE DATE: MAY 17, 2006 

APPROVED BY STOCKHOLDERS: MAY 17, 2006 

TERMINATION DATE: MAY 16, 2016 

ARTICLE 1 

PURPOSE 

1.1 GENERAL. The purpose of the Meritage Homes Corporation 2006 Stock Incentive Plan (the
“Plan”) is to promote the success and enhance the value of Meritage Homes Corporation (the “Company”) by linking the personal interests of the members of the Board, employees, officers, executives, consultants and
advisors to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of Board members, employees, officers, executives, consultants and advisors upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is
largely dependent. 
 ARTICLE 2 

EFFECTIVE AND EXPIRATION DATE 

2.1 EFFECTIVE DATE. The Plan is effective as of the date the Plan is approved by the Company’s stockholders
(the “Effective Date”). 
 2.2 EXPIRATION DATE. The Plan will expire on, and no Award
may be granted under the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the Award Agreement.

 ARTICLE 3 

DEFINITIONS AND CONSTRUCTION 

3.1 DEFINITIONS. The following words and phrases shall have the following meanings: 

(a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Performance Share
Award, or Performance-Based Award granted to a Participant under the Plan. 
 (b) “Award
Agreement” means any written agreement, contract, or other instrument or document evidencing an Award. 

(c) “Board” means the Board of Directors of the Company. 









 (d) “Cause” means and will exist in the following
circumstances in which the Participant: (i) is convicted of a felony, (ii) engages in any fraudulent or other dishonest act to the detriment of the Company, (iii) fails to report for work on a regular basis, except for periods of
authorized absence or bona fide illness, (iv) misappropriates trade secrets, customer lists, or other proprietary information belonging to the Company for his or her own benefit or for the benefit of a competitor, (v) engages in any
willful misconduct designed to harm the Company or its stockholders, or (vi) fails to perform properly his or her assigned duties. 

(e) “Change of Control” means and includes each of the following: 

(i) A sale, transfer, or other disposition by the Company through a single transaction or a series of transactions of
securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities to any “Unrelated Person” or “Unrelated Persons” acting in concert with one another. For
purposes of this definition, the term “Person” shall mean and include any individual, partnership, joint venture, association, trust, corporation, or other entity (including a “group” as referred to in
Section 13(d)(3) of the Exchange Act). For purposes of this definition, the term “Unrelated Person” shall mean and include any Person other than the Company, or an employee benefit plan of the Company; or 

(ii) A sale, transfer, or other disposition through a single transaction or a series of related transactions of all
or substantially all of the assets of the Company to an Unrelated Person or Unrelated Persons acting in concert with one another; or 

(iii) Any consolidation or merger of the Company with or into an Unrelated Person, unless immediately after the
consolidation or merger the holders of the common stock of the Company immediately prior to the consolidation or merger are the beneficial owners of securities of the surviving corporation representing at least 50% of the combined voting power of
the surviving corporation’s then outstanding securities. 
 (f) “Code” means the
Internal Revenue Code of 1986, as amended. 
 (g) “Committee” means the committee of the
Board described in Section 4.1. 
 (h) “Covered Employee” means an employee who is, or
could be, a “covered employee” within the meaning of Section 162(m) of the Code. 

(i) “Disability” means, for purposes of this Plan, that the Participant qualifies to receive long
term disability payments under the Company’s long term disability insurance program, as it may be amended from time to time. 

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

 

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 (k) “Fair Market Value” means, as of any given date,
the fair market value of Stock on a particular date determined by such methods or procedures as may be established from time to time by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock as of any date
shall be the closing price for the Stock as reported on the New York Stock Exchange (or on any national securities exchange on which the Stock is then listed) for that date or, if no such prices are reported for that date, the average of the high
and low trading prices on the next preceding date for which such prices were reported. 

(l) “Incentive Stock Option” means an Option that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto. 
 (m) “Non-Employee
Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board. 

(n) “Non-Qualified Stock Option” means an Option that is not intended to be an Incentive Stock
Option. 
 (o) “Option” means a right granted to a Participant pursuant to Article 7
of the Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option. 

(p) “Participant” means a person who, as a member of the Board, employee, officer, or executive of,
or consultant or advisor to, the Company or any Subsidiary, has been granted an Award pursuant to the Plan. 

(q) “Performance-Based Awards” means the Performance Share Awards and Restricted Stock Awards
granted to select Covered Employees pursuant to Articles 9 and 10, respectively, but which are subject to the terms and conditions set forth in Article 11. All Performance-Based Awards are intended to qualify as “performance-based
compensation” pursuant to Section 162(m) of the Code. 
 (r) “Performance
Criteria” means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period. The Performance Criteria that will be used to establish
Performance Goals are limited to the following: pre- or after-tax net earnings, earnings before interest expense (including interest amortized to cost of sales) and income taxes, including or excluding, at the discretion of the Committee, non-cash
charges, impairments, and similar one-time, non-recurring or extraordinary charges (“EBIT”), earnings before interest expense (including interest amortized to cost of sales), income taxes, depreciation and amortization, including or
excluding, at the discretion of the Committee, non-cash charges, impairments, and similar one-time, non-recurring or extraordinary charges (“EBITDA”), revenue growth, operating income, operating cash flow, return on net assets, operating
expenses, including, without limitation, general and administrative expenses, return on shareholders’ equity, return on assets, return on capital, share price growth, shareholder returns, gross or net profit margin, earnings per share, price
per share, and market share, operational metrics, including but not limited to, number of sales per community, 
  

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community growth, specs per community or time to construct a home, objective customer service or satisfaction ratings, whether measured internally or by an accepted third party, any of which may
be measured either in absolute terms or as compared to any incremental increase or as compared to results of a budget or peer group. The Committee shall, within the time prescribed by Section 162(m) of the Code, define in an objective
fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant. 

(s) “Performance Goals” means, for a Performance Period, the goals established in writing by the
Committee for the Performance Period based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the
performance of a division, business unit, or an individual. The Committee, in its discretion, may, within the time prescribed by Section 162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance
Period in order to prevent the dilution or enlargement of the rights of Participants (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (ii) in recognition of, or
in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business
conditions. 
 (t) “Performance Period” means the one or more periods of time, which may be
of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance-Based
Award. 
 (u) “Performance Share Award” means a right granted to a Participant pursuant to
Article 9, to receive cash, Stock, or other Awards, the payment of which is contingent upon achieving certain performance goals established by the Committee. 

(v) “Plan” means this Meritage Homes Corporation 2006 Stock Incentive Plan, as amended. 

(w) “Restricted Stock Award” means Stock granted to a Participant pursuant to Article 10 that
is subject to certain restrictions and to risk of forfeiture. 
 (x) “Stock” means the
common stock of the Company and such other securities of the Company that may be substituted for Stock pursuant to Article 13. 

(y) “Stock Appreciation Right” or “SAR” means a right granted to a Participant
under Article 8 to receive the appreciation on Stock. 
 (z) “Subsidiary” means any
corporation or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. 
  

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 ARTICLE 4 

ADMINISTRATION 

4.1 COMMITTEE. The Plan shall be administered by the Executive Compensation Committee of the Board. The
Committee (or subcommittee thereof) shall consist of at least two individuals, each of whom qualifies as (i) a Non-Employee Director, and (ii) an “outside director” pursuant to Section 162(m) of the Code and the
regulations issued thereunder. 
 4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall
constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent
registered public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. 

4.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in the Plan, the Committee has the exclusive
power, authority and discretion to: 
 (a) designate Participants to receive Awards; 

(b) determine the type or types of Awards to be granted to each Participant; 

(c) determine the number of Awards to be granted and the number of shares of Stock to which an Award will relate;

 (d) determine the terms and conditions of any Award granted pursuant to the Plan, including, but not
limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof,
based in each case on such considerations as the Committee in its sole discretion determines; provided, however, that the Committee shall not (i) have the authority to accelerate the vesting or waive the forfeiture of any Performance-Based
Awards, or (ii) take any action or fail to take any action with respect to the operation of the Plan that would cause all or part of the payment under any Award to be subject to the additional tax under Section 409A of the Code;

 (e) determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or
the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; 

(f) prescribe the form of each Award Agreement, which need not be identical for each Participant; 

(g) decide all other matters that must be determined in connection with an Award; 

 

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 (h) establish, adopt, or revise any rules and regulations as it
may deem necessary or advisable to administer the Plan; 
 (i) interpret the terms of, and any matter
arising pursuant to, the Plan or any Award Agreement; and 
 (j) make all other decisions and determinations
that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan. 

4.4 DECISIONS BINDING. The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan,
any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. 

ARTICLE 5 

SHARES SUBJECT TO THE PLAN 

5.1 NUMBER OF SHARES. Subject to adjustment provided in Article 13, the aggregate number of shares of Stock
reserved and available for grant pursuant to the Plan shall be 1,850,000, plus (i) the number of shares of Stock available for grant pursuant to the Meritage Homes Corporation Stock Option Plan (“Prior Plan”) as of the Effective Date,
and (ii) the number of shares of Stock that were previously granted pursuant to the Prior Plan and that either terminate, expire, or lapse for any reason after the Effective Date. Any shares of Stock issued in connection with Awards other
than Options and Stock Appreciation Rights shall be counted against the shares available for grant pursuant to the previous sentence as 1.38 shares for every one share issued in connection with such Award or by which the Award is valued by
reference. Notwithstanding the above, the maximum number of shares of Stock that may be awarded as Incentive Stock Options under the Plan is 1,200,000. 

5.2 LAPSED OR ASSUMED AWARDS. To the extent that an Award terminates, expires, or lapses for any reason, any
shares of Stock subject to the Award will again be available for the grant of an Award pursuant to the Plan. Additionally, to the maximum extent permitted by applicable law or any securities exchange rule, shares of Stock issued in assumption
of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or any Subsidiary shall not be counted against shares of Stock available for grant pursuant to this Plan. However, for avoidance
of doubt, the exercise of a stock-settled SAR or net-cashless exercise of an Option (or a portion thereof) will reduce the number of shares of Stock available for issuance hereunder by the entire number of shares of Stock subject to that SAR or
Option (or applicable portion thereof), even though a smaller number of shares of Stock will be issued upon such an exercise. Also, shares of Stock tendered to pay the exercise price of an Option or to satisfy a tax withholding obligation
arising in connection with an Award will not become available for grant or sale under the Plan. 
 5.3 STOCK
DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market. 

 

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 5.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO
AWARDS. Notwithstanding any provision in the Plan to the contrary, and subject to the adjustment in Article 13, the maximum number of shares (counted, as described in Section 5.1 above, as 1.38 shares awarded for every one
share issued in connection with such Award or by which the Award is valued by reference) of Stock with respect to one or more Awards that may be granted to any one Participant during a calendar year shall be 250,000. 

ARTICLE 6 

ELIGIBILITY AND PARTICIPATION 

6.1 ELIGIBILITY. 

(a) General. Persons eligible to participate in this Plan include all members of the Board,
employees, officers, and executives of, and consultants and advisors providing services to, the Company or a Subsidiary, as determined by the Committee. 

(b) Foreign Participants. In order to assure the viability of Awards granted to Participants
employed in foreign countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom. Moreover, the Committee may approve such supplements to,
or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such
supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Article 5 of the Plan. 

6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee may, from time to time, select
from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award pursuant to this Plan. 

ARTICLE 7 

STOCK OPTIONS 

7.1 GENERAL. The Committee is authorized to grant Options to Participants on the following terms and conditions:

 (a) Exercise Price. The exercise price per share of Stock pursuant to an Option shall
be determined by the Committee and set forth in the Award Agreement; provided that the exercise price for any Option shall not be less than the Fair Market Value as of the date of grant. 

(b) Time and Conditions of Exercise. The Committee shall determine the time or times at which an
Option may be exercised in whole or in part provided that the term of any Option granted under the Plan shall not exceed ten years. The Committee shall also determine the performance or other conditions, if any, that must be satisfied before
all or part of an Option may be exercised. Unless otherwise provided in an Award Agreement, an Option will lapse immediately if a Participant’s employment is terminated for Cause. 

 

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 (c) Payment. The Committee shall determine the
methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation, cash, promissory note, shares of Stock held for longer than six months (through actual tender or by attestation), or other property
acceptable to the Committee (including broker-assisted “cashless exercise” arrangements), and the methods by which shares of Stock shall be delivered or deemed to be delivered to Participants. 

(d) Evidence of Grant. All Options shall be evidenced by a written Award Agreement between the
Company and the Participant in the form attached to this Plan as Exhibit A. The Award Agreement shall include such additional provisions as may be specified by the Committee. 

7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be granted only to employees and the terms of any
Incentive Stock Options granted pursuant to the Plan must comply with the following additional provisions of this Section 7.2: 

(a) Exercise Price. Subject to Section 7.2(d), the exercise price per share of Stock shall be
set by the Committee, provided that the exercise price for any Incentive Stock Option may not be less than the Fair Market Value as of the date of the grant. 

(b) Exercise. In no event, may any Incentive Stock Option be exercisable for more than ten years
from the date of its grant. 
 (c) Lapse of Option. An Incentive Stock Option shall lapse
pursuant to the following circumstances. 
 (i) The Incentive Stock Option shall lapse ten years from the
date it is granted, unless an earlier time is set in the Award Agreement. 
 (ii) The Incentive Stock Option
shall lapse upon termination of employment for Cause or for any other reason other than the Participant’s death or Disability, unless otherwise provided in the Award Agreement. 

(iii) If the Participant terminates employment on account of Disability or death before the Option lapses pursuant to
paragraph (1) or (2) above, the Incentive Stock Option shall lapse, unless it is previously exercised, on the earlier of (i) the scheduled termination date of the Option; or (ii) 12 months after the date of the Participant’s
termination of employment on account of Disability or death. Upon the Participant’s Disability or death, any Incentive Stock Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s legal
representative or representatives, by the person or persons entitled to do so pursuant to the Participant’s last will and testament, or, if the Participant fails to make testamentary disposition of such Incentive Stock Option or dies intestate,
by the person or persons entitled to receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution. 
  

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 (d) Individual Dollar Limitation. The aggregate Fair
Market Value (determined as of the time an Award is made) of all shares of Stock with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed $100,000.00 or such other limitation as imposed
by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.

 (e) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual
who, at the date of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not less than 110% of Fair Market Value on the date of
grant and the Option is exercisable for no more than five years from the date of grant. 

(f) Expiration of Incentive Stock Options. No Award of an Incentive Stock Option may be made
pursuant to this Plan after the tenth anniversary of the Effective Date. 
 (g) Right to
Exercise. Except as provided in Section 12.5, during a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant. 

ARTICLE 8 

STOCK APPRECIATION RIGHTS 

8.1 GRANT OF SARS. The Committee is authorized to grant SARs to Participants on the following terms and
conditions: 
 (a) Right to Payment. Upon the exercise of a SAR, the Participant to whom
it is granted has the right to receive the excess, if any, of: 
 (i) the Fair Market Value of a share of
Stock on the date of exercise; over 
 (ii) the grant price of the SAR as determined by the Committee, which
shall not be less than the Fair Market Value of a share of Stock on the date of grant. 

(b) Term. The term of each SAR shall not exceed ten years from the date of grant. 

(c) Other Terms. All SARs grants will be evidenced by an Award Agreement. The terms, methods
of exercise, methods of settlement, and any other terms and conditions of any SAR will be determined by the Committee at the time of the grant of the Award and as set forth in the Award Agreement; provided that the form of consideration payable in
settlement of a SAR shall be Stock. 
  

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 ARTICLE 9 

PERFORMANCE SHARES 

9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant Performance Shares to Participants on such
terms and conditions as may be selected by the Committee; provided, however and except as otherwise provided in Section 12.8 of the Plan, the minimum vesting period for Performance Share Awards shall be (i) one year in the case of
non-tenure Performance Share Awards (i.e., Performance Share Awards subject to performance vesting criteria), and (ii) pro rata over three years in the case of tenure Performance Share Awards. Subject to Section 12.8, the Committee
shall have the complete discretion to determine the number of Performance Shares granted to each Participant. All Awards of Performance Shares shall be evidenced by an Award Agreement. 

9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the Participant rights, valued as determined by the
Committee, and payable to, or exercisable by, the Participant to whom the Performance Shares are granted, in whole or in part, as the Committee shall establish at grant or thereafter. Subject to the terms of the Plan, the Committee shall set
performance goals and other terms or conditions to payment of the Performance Shares in its discretion which, depending on the extent to which they are met, will determine the number and value of Performance Shares that will be paid to the
Participant. 
 9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or other property,
and have such other terms and conditions as determined by the Committee and reflected in a written Performance Share Award Agreement. Unless otherwise provided in an Award Agreement, Performance Shares will lapse immediately if a
Participant’s employment is terminated for Cause. 
 ARTICLE 10 

RESTRICTED STOCK AWARDS 

10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards of Restricted Stock to Participants in
such amounts and subject to such terms and conditions as determined by the Committee; provided, however and except as otherwise provided in Section 12.8 of the Plan, the minimum vesting period for Restricted Stock Awards shall be (i) one
year in the case of non-tenure Restricted Stock Awards (i.e., Restricted Stock Awards subject to performance vesting criteria), and (ii) pro rata over three years in the case of tenure Restricted Stock Awards. All Awards of Restricted
Stock shall be evidenced by a written Restricted Stock Award Agreement. 
 10.2 ISSUANCE AND
RESTRICTIONS. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to
receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter. 
  

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 10.3 FORFEITURE. Except as otherwise determined by the Committee at
the time of the grant of the Award or thereafter, upon termination of employment during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited; provided, however, that the Committee may
provide in any Restricted Stock Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock. Unless otherwise provided in an Award Agreement, Restricted Stock will be forfeited immediately if a Participant’s employment is terminated
for Cause. 
 10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted pursuant to the Plan may
be evidenced in such manner as the Committee shall determine. If certificates representing shares of Restricted Stock are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse. 

ARTICLE 11 

PERFORMANCE-BASED AWARDS 

11.1 PURPOSE. The purpose of this Article 11 is to provide the Committee the ability to qualify the
Performance Share Awards pursuant to Article 9 and the Restricted Stock Awards pursuant to Article 10 as “performance-based compensation” pursuant to Section 162(m) of the Code. If the Committee, in its discretion,
decides to grant a Performance-Based Award to a Covered Employee, the provisions of this Article 11 shall control over any contrary provision contained in Articles 9 or 10. 

11.2 APPLICABILITY. This Article 11 shall apply only to those Covered Employees selected by the Committee to
receive Performance-Based Awards. The Committee may, in its discretion, grant Restricted Stock Awards or Performance Share Awards to Covered Employees that do not satisfy the requirements of this Article 11. The designation of a
Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period
shall not require designation of such Covered Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in
such period or in any other period. 
 11.3 DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE
AWARDS. With regard to a particular Performance Period, the Committee shall have full discretion to select the length of such Performance Period (provided, however, and except as otherwise provided in Section 12.8 of the Plan,
that, in no event may the Performance Period be for less than one year), the type of Performance-Based Awards to be issued, the kind and/or level of the Performance Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary or
any division or business unit thereof. Unless otherwise provided in an Award Agreement, Performance-Based Awards will be forfeited if a Participant’s employment is terminated for Cause. 

 

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 11.4 PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in the
relevant Award Agreement, a Participant must be employed by the Company or a Subsidiary on the day a Performance Award for such Performance Period is paid to the Participant. Furthermore, a Participant shall be eligible to receive payment
pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved. In determining the actual size of an individual Performance-Based Award, the Committee may reduce or eliminate the amount
of the Performance-Based Award earned for the Performance Period, if in its sole and absolute discretion, such reduction or elimination is appropriate. 

11.5 MAXIMUM AWARD PAYABLE. The maximum Performance-Based Award payable to any one Participant pursuant to the
Plan for a Performance Period is 250,000 shares (counted, as described in Section 5.1 above, as 1.38 shares awarded for every one share issued in connection with such Award or by which the Award is valued by reference) of Stock. 

ARTICLE 12 

PROVISIONS APPLICABLE TO AWARDS 

12.1 STAND-ALONE AND TANDEM AWARDS. Awards granted pursuant to the Plan may, in the discretion of the Committee,
be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the
grant of such other Awards. 
 12.2 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any Option or Stock Appreciation Right granted in tandem with the Incentive Stock Option exceed a period of ten years from the date of its grant. 

12.3 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any applicable law or Award Agreement,
payments or transfers to be made by the Company or a Subsidiary on the grant or exercise of an Award may be made in such forms as the Committee determines at or after the time of grant, including, without limitation, cash, promissory note, Stock
held for more than six months, other Awards, or other property, or any combination, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case determined in accordance with rules adopted by, and at
the discretion of, the Committee. 
 12.4 LIMITS ON TRANSFER. 

(a) General. Except as provided in Section 12.4(b) or Section 12.5, no right or
interest of a Participant in any Award may be pledged, encumbered, or hypothecated to, or in favor of, any party other than the Company or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party
other than the Company or a Subsidiary. Except as provided in Section 12.4(b) or Section 12.5, and except as otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwise disposed of by a Participant
other than by will or the laws of descent and distribution. 
  

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 (b) Transfers to Family Members. The Committee shall
have the authority, in its discretion, to grant (or to sanction by way of amendment to an existing Award) Awards which may be transferred by the Participant during his or her lifetime to any Family Member (as defined below). Unless transfers
for the Participant have been previously approved by the Committee, a transfer of an Award pursuant hereto may only be affected by the Company at the written request of the Participant. In the event an Award is transferred as contemplated
herein, such transferred Award may not be subsequently transferred by the transferee (other than another transfer meeting the conditions herein) except by will or the laws of descent and distribution. A transferred Award shall continue to be
governed by and subject to the terms and limitations of the Plan and relevant Award Agreement, and the transferee shall be entitled to the same rights as the Participant, as if the transfer had not taken place. For purposes of this
Section 12.4(b), the term “Family Member” means spouse and any parent, stepparent, grandparent, child, stepchild, or grandchild, including adoptive relationships or a trust or any other entity in which these persons (or the
Participant) have more than 50% of the beneficial interest. 
 12.5 BENEFICIARIES. Notwithstanding
Section 12.4, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and
Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and resides in a community property state, a designation of a person other than the
Participant’s spouse as his beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or
revoked by a Participant at any time provided the change or revocation is provided to the Committee. 
 12.6 STOCK
CERTIFICATES. Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Board has
determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of
Stock are listed or traded. All Stock certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with Federal, state, or foreign
jurisdiction, securities or other laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any
Stock certificate to reference restrictions applicable to the Stock. In 
  

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addition to the terms and conditions provided herein, the Board may require that a Participant make such reasonable covenants, agreements, and representations as the Board, in its discretion,
deems advisable in order to comply with any such laws, regulations, or requirements. 
 12.7 ACCELERATION UPON A
CHANGE OF CONTROL. If a Change of Control occurs and Awards are converted, assumed, or replaced by a successor, the Committee shall have the discretion to cause all outstanding Awards to become fully exercisable and all restrictions on
outstanding Awards to lapse. If a Change of Control occurs and Awards are not converted, assumed, or replaced by a successor, all outstanding Awards shall automatically become fully exercisable and all restrictions on outstanding Awards shall
lapse. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(d), the excess Options shall be deemed to be Non-Qualified Stock Options. Upon, or in anticipation of,
such an event, the Committee may cause every Award outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise Awards during a period of time as the Committee, in its sole and absolute
discretion, shall determine. 
 12.8 LIMITATION ON GRANTS OF AWARDS. Notwithstanding the provisions of
Section 9.1, Section 10.1 and Section 11.3 of the Plan, the Committee shall not have the authority to grant shares pursuant to any Performance Share Award or Restricted Stock Award that does not comply with the minimum vesting period
or minimum Performance Period that exceeds five percent (5%) of the aggregate number of shares of Stock authorized for grant pursuant to Section 5.1 of the Plan. 

ARTICLE 13 

CHANGES IN CAPITAL STRUCTURE 

13.1 SHARES AVAILABLE FOR GRANT. In the event of any change in the number of shares of Stock outstanding by
reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or similar corporate change, the maximum aggregate number of shares of Stock with respect to which the Committee may grant Awards, the
number of shares of Stock subject to any Award, and any numeric limitation expressed in the Plan shall be appropriately adjusted by the Committee. 

13.2 OUTSTANDING AWARDS—INCREASE OR DECREASE IN ISSUED SHARES WITHOUT CONSIDERATION. Subject to any required
action by the stockholders of the Company, in the event of any increase or decrease in the number of issued shares of Stock resulting from a subdivision or consolidation of shares of Stock or the payment of a stock dividend (but only on the shares
of Stock), or any other increase or decrease in the number of such shares effected without receipt or payment of consideration by the Company, the Committee shall proportionally adjust the number of shares of Stock subject to each outstanding Award
and the exercise price per share of Stock of each such Award. 
  

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 13.3 OUTSTANDING AWARDS—CERTAIN MERGERS. Subject to any
required action by the stockholders of the Company, in the event that the Company shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Award outstanding on the date of such merger or consolidation shall pertain to and apply to the securities that a holder of the number of shares of Stock subject to such Award would have received in such
merger or consolidation. 
 13.4 OUTSTANDING AWARDS—OTHER CHANGES. In the event of any other change
in the capitalization of the Company or corporate change other than those specifically referred to in Article 13, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards
outstanding on the date on which such change occurs and in the per share exercise price of each Award as the Committee may consider appropriate to prevent the dilution or enlargement of rights relating to Awards granted under the Plan. 

13.5 NO OTHER RIGHTS. Except as expressly provided in the Plan, no Participant shall have any rights by reason of
any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company or any
other corporation. Except as expressly provided in the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number of shares of Stock subject to an Award or the exercise price of any Award. 
 ARTICLE 14 

 AMENDMENT, MODIFICATION, AND TERMINATION 

14.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the Board, at any time and from time to time,
the Committee may terminate, amend or modify the Plan; provided, however, that (i) to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any
Plan amendment in such a manner and to such a degree as required, (ii) shareholder approval is required for any amendment to the Plan that (A) increases the number of shares available under the Plan (other than any adjustment as provided
by Article 13), (B) permits the Committee to grant Options with an exercise price that is below Fair Market Value on the date of grant, (C) permits the Committee to extend the exercise period for an Option beyond ten years from the
date of grant, or (D) permits the Committee to reprice previously granted Options, and (iii) no such action shall be taken that would cause all or part of the payment under any Award to be subject to the additional tax under
Section 409A of the Code. 
 14.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant. 
  


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 ARTICLE 15 GENERAL PROVISIONS 

15.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person shall have any claim to be granted any Award
pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly. 

15.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the rights of a stockholder of the Company
unless and until shares of Stock are in fact issued to such person in connection with such Award. 

15.3 WITHHOLDING. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any taxable event concerning a
Participant arising as a result of this Plan. With the Committee’s consent, a Participant may elect to (i) have the Company withhold from those shares of Stock that would otherwise be received upon the exercise of any Option, a number
of shares having a Fair Market Value equal to the minimum statutory amount necessary to satisfy the Company’s applicable federal, state, local or foreign income and employment tax withholding obligations with respect to such Participant, or
(ii) tender previously-owned shares of Stock held by the Participant for six months or longer to satisfy the Company’s applicable federal, state, local, or foreign income and employment tax withholding obligations with respect to the
Participant. 
 15.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employ or service of the Company
or any Subsidiary. 
 15.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded”
plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary. 
 15.6 INDEMNIFICATION. To the extent allowable
pursuant to applicable law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection
with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him
or her in satisfaction of judgment in such action, suit, or proceeding against him or her provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on
his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 
  

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 15.7 RELATIONSHIP TO OTHER BENEFITS. No payment pursuant to the Plan
shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary. 

15.8 EXPENSES. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

 15.9 TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for convenience of
reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. 

15.10 FRACTIONAL SHARES. No fractional shares of Stock shall be issued and the Committee shall determine, in its
discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate. 

15.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on the relevant date, obligated to file
reports pursuant to Section 16 of the Exchange Act, transactions pursuant to this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors pursuant to the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be void to the extent permitted by law and voidable as deemed advisable by the Committee. 

15.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to make payment of awards in Stock or
otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register pursuant to the Securities Act of 1933, as amended,
any of the shares of Stock paid pursuant to the Plan. If the shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act of 1933, as amended, the Company may restrict the transfer of
such shares in such manner as it deems advisable to ensure the availability of any such exemption. 
 15.13 GOVERNING
LAW. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of Maryland. 

15.14 SECTION 409A. If any payments under this Plan are subject to the provisions of Section 409A of
the Code, it is intended that the terms of this Plan will comply fully with and meet all the requirements of Section 409A of the Code. 
  

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