Document:

EX-4.4

 Exhibit 4.4 

THE ADVISORY BOARD COMPANY 

INDUCEMENT STOCK INCENTIVE PLAN 

FOR ROYALL EMPLOYEES 
  

	1.	Purpose 

 The purpose of The Advisory Board Company Inducement Stock Incentive Plan for
Royall Employees (the “Plan”) is to enable The Advisory Board Company, a Delaware corporation and its Subsidiaries (collectively, the “Company”), to award Options and Restricted Stock Units to persons employed by Royall
Acquisition Co. and its Subsidiaries (collectively, “Royall”) in connection with the proposed purchase by the Company of all of the outstanding shares of Royall (the “Transaction”) as an inducement material to the
individual’s entering into and continuing employment with the Company or its current or future Subsidiaries upon consummation of the Transaction and to promote the success of the business of the Company and its current or future Subsidiaries.
The Plan is intended to comply with Section 5635(c)(4) of the NASDAQ Stock Market listing requirements which provides an exception to the shareholder approval requirement for the issuance of securities with regard to grants to prospective
employees of the Company, including without limitation grants to prospective employees in connection with a merger or other acquisition. 
  

	2.	Definitions 

 As used in the Plan, the following terms shall have the meanings set forth
below: 
 (a) “Administrator” means the Administrator of the Plan in accordance with Section 15. 

(b) “Award” means, individually or collectively, Options or Restricted Stock Units granted to a Participant pursuant to the
provisions of the Plan. 
 (c) “Award Agreement” means a written agreement or other instrument as may be approved from time to
time by the Administrator implementing the grant of each Award. An Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or
similar instruments as approved by the Administrator. 
 (d) “Board” means the board of directors of the Company. 

(e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings and regulations issues thereunder.

 (f) “Fair Market Value” means, as of any date, the official closing price per share at which the Shares are sold in the regular
way on the NASDAQ Global Select Market or, if no Shares are traded on the NASDAQ Global Select Market on the date in question, then for the next preceding date for which Shares are traded on the NASDAQ Global Select Market or, if the Shares are at
any time no longer traded on the NASDAQ Global Select Market, the closing price per share at which the Shares are sold on such other exchange, listing, quotation or similar service, or if no such closing price is available, such other method,
consistent with Section 409A of the Code, as the Administrator may determine. 
 (g) “Nonemployee Director” means each person
who is, or is elected to be, a member of the Board and who is not an employee of the Company or any Subsidiary. 
 (h) “Option”
means a nonqualified stock option granted pursuant to Section 6 of the Plan. Options granted under the Plan are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code. 

(i) “Participant” means any individual described in Section 3 to whom Awards have been granted from time to time by the
Administrator and any authorized transferee of such individual. 

 (j) “Plan” means The Advisory Board Company Inducement Stock Incentive Plan for Royall
Employees as set forth herein and as amended from time to time. 
 (k) “Restricted Stock Unit” means an Award granted to a
Participant pursuant to Section 7 pursuant to which Shares or cash in lieu thereof may be issued in the future. 
 (l)
“Retirement” has the meaning specified by the Administrator in the terms of an Award Agreement or, in the absence of any such term, shall mean retirement from active employment with the Company and its Subsidiaries at or after age 65. The
determination of the Administrator as to an individual’s Retirement shall be conclusive on all parties. 
 (m) “Share” means
a share of the Company’s common stock, par value $.01, subject to adjustment as provided in Section 10. 
 (n)
“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company where each of the corporations in the unbroken chain other than the last corporation owns stock possessing at least
50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain, and if specifically determined by the Administrator, may include an entity in which the Company has a significant
ownership interest or that is directly or indirectly controlled by the Company. When applied to Royall prior to the consummation of the Transaction, references in the foregoing sentence to “the Company” shall be replaced with “Royal
Acquisition Co.” 
 (o) “Termination of Employment” means ceasing to serve as an employee of, or otherwise to provide
services to, the Company or its Subsidiaries, except that with respect to all or any Awards held by a Participant (i) the Administrator may determine that an approved leave of absence is not considered a Termination of Employment, (ii) the
Administrator may determine that a transition of employment to service with a partnership, joint venture or corporation not meeting the requirements of a Subsidiary in which the Company or a Subsidiary is a party is not considered a Termination of
Employment, and (iii) service as a member of the Board or other service provider shall constitute continued employment with respect to Awards granted to a Participant while he or she served as an employee. The Administrator shall determine
whether any corporate transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a Termination of Employment with the Company and its Subsidiaries for purposes of any affected
Participant’s Awards, and the Administrator’s decision shall be final and binding. 
 (p) “Total and Permanent
Disablement” has the meaning specified by the Administrator in the terms of an Award Agreement or, in the absence of any such term, the inability to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The determination of the Administrator as to an individual’s Total and Permanent
Disablement shall be conclusive on all parties. 
  

	3.	Eligibility 

 Only persons who are officers or employees (within the meaning of
Section 5635(c) of the NASDAQ Stock Market listing requirements) of Royall immediately prior to consummation of the Transaction shall be eligible for selection by the Administrator for the grant of Awards hereunder, which shall be granted as an
inducement material to such individual’s entering into employment with the Company or its Subsidiary upon consummation of the Transaction. Awards shall not become effective until consummation of the Transaction and the Participant’s
commencement of employment with the Company or its Subsidiary. No Award shall be granted hereunder to any person who is an officer or employee of, or who is rendering services to, the Company or any of its Subsidiaries immediately prior to the
Transaction. 

  
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	4.	Effective Date and Termination of Plan 

 This Plan was adopted by the Board and became
effective as of January 9, 2015 (the “Effective Date”). The Plan shall continue in effect until the tenth (10th) anniversary of the Effective Date. Notwithstanding the foregoing, the Plan may be terminated at such earlier time as
the Board may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards theretofore granted and then in effect. 

 

	5.	Shares Subject to the Plan and to Awards 

 The aggregate number of Shares issuable
pursuant to all Awards shall not exceed 1,906,666. Shares granted under Awards shall be counted against this limit on a one-for-one basis. The aggregate number of Shares available for grant under this Plan and the number of Shares subject to
outstanding Awards shall be subject to adjustment as provided in Section 10. The Shares issued pursuant to Awards granted under this Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including
shares purchased in the open market. 
  

	6.	Options 

 (a) Option Awards. Options may be granted prior to the consummation
of the Transaction and prior to termination of the Plan to Participants as determined by the Administrator. No Participant shall have any rights as a stockholder with respect to any Shares subject to Option hereunder until said Shares have been
issued. Each Option shall be evidenced by an Award Agreement. Options granted pursuant to the Plan need not be identical but each Option must contain and be subject to the terms and conditions set forth below. 

(b) Price. The Administrator will establish the exercise price per Share under each Option, which, in no event will be less than
the Fair Market Value of the Shares on the date of grant. The exercise price of any Option may be paid in Shares, cash or a combination thereof, as determined by the Administrator, including an irrevocable commitment by a broker to pay over such
amount from a sale of the Shares issuable under an Option, the delivery of previously owned Shares and withholding of Shares otherwise deliverable upon exercise. 

(c) No Repricing without Stockholder Approval. Other than in connection with a change in the Company’s capitalization (as
described in Section 10), at any time when the exercise price of an Option is above the Fair Market Value of a Share, the Company shall not, without stockholder approval, reduce the exercise price of such Option and shall not exchange such
Option for cash or a new Award with a lower (or no) exercise price. 
 (d) Provisions Applicable to Options. The date on which
Options become exercisable shall be determined at the sole discretion of the Administrator and set forth in an Award Agreement. Unless provided otherwise in the applicable Award Agreement, to the extent that the Administrator determines that the
Participant is employed on a less than full-time basis or is on a leave of absence, the vesting period and/or exercisability of an Option may be adjusted by the Administrator during or to reflect the effects of any period during which the
Participant is employed on a less than full-time basis or is on a leave of absence. 
 (e) Term of Options and Termination of
Employment. The Administrator shall establish the term of each Option, which in no case shall exceed a period of seven (7) years from the date of grant. Unless an Option earlier expires upon the expiration date established pursuant to
the foregoing sentence, upon the termination of the Participant’s employment, his or her rights to exercise an Option then held shall be only as follows, unless the Administrator specifies otherwise: 

(1) Death. Upon the death of a Participant while in the employ of the Company or any Subsidiary or while serving as a member of
the Board, the Participant’s Options then held, but only to the 

  
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extent of the number of Shares as to which such Option was exercisable as of the date of death, shall be exercisable by his or her estate, heir or beneficiary at any time during the one
(1) year period commencing on the date of death. Any and all of the deceased Participant’s Options that are not exercised during the one (1) year commencing on the date of death shall terminate as of the end of such one
(1) year period. 
 If a Participant should die within ninety (90) days of his or her Termination of Employment with the Company
and its Subsidiaries, an Option shall be exercisable by his or her estate, heir or beneficiary at any time during the one (1) year period commencing on the date of termination, but only to the extent of the number of Shares as to which such
Option was exercisable as of the date of such termination. Any and all of the deceased Participant’s Options that are not exercised during the one (1) year period commencing on the date of termination shall terminate as of the end of such
one (1) year period. A Participant’s estate shall mean his or her legal representative or other person who so acquires the right to exercise the Option by bequest or inheritance or by reason of the death of the Participant. 

(2) Total and Permanent Disablement. Upon Termination of Employment as a result of the Total and Permanent Disablement of any
Participant, the Participant’s Options then held, but only to the extent of the number of Shares as to which such Option was exercisable as of the date of such termination, shall be exercisable during the one (1) year period commencing on
the date of termination. Any and all Options that are not exercised during the one (1) year period commencing on the date of termination shall terminate as of the end of such one (1) year period. 

(3) Retirement. Upon Retirement of a Participant, the Participant’s Options then held, but only to the extent of the number of
Shares as to which such Option was exercisable as of the date of such termination, shall be exercisable during the one (1) year period commencing on the date of Retirement. Any and all Options that are not exercised during the one (1) year
period commencing on the date of termination shall terminate as of the end of such one (1) year period. 
 (4) Other
Reasons. Upon the date of a Termination of Employment for any reason other than those stated above in Sections 6(e)(1), (e)(2), and (e)(3), (A) to the extent that any Option is not exercisable as of such termination date, such
portion of the Option shall remain unexercisable and shall terminate as of such date, and (B) to the extent that any Option is exercisable as of such termination date, such portion of the Option shall expire on the earlier of (i) ninety
(90) days following such date and (ii) the expiration date of such Option. 
  

	7.	Restricted Stock Units 

 (a) Restricted Stock Unit Awards. Restricted Stock
Units may be granted prior to the consummation of the Transaction and prior to termination of the Plan to Participants as determined by the Administrator. Restricted Stock Units are Awards denominated in units of Shares under which the issuance of
Shares is subject to such conditions (including continued employment and/or performance conditions) and terms as the Administrator deems appropriate. Each grant of Restricted Stock Units shall be evidenced by an Award Agreement. Unless determined
otherwise by the Administrator, each Restricted Stock Unit will be equal to one Share and will entitle a Participant to either the issuance of Shares or payment of an amount of cash determined with reference to the value of Shares. To the extent
determined by the Administrator, Restricted Stock Units may be satisfied or settled in Shares, cash or a combination thereof. Restricted Stock Units granted pursuant to the Plan need not be identical but each grant of Restricted Stock Units must
contain and be subject to the terms and conditions set forth below. 
 (b) Contents of Agreement. Each Award Agreement shall
contain provisions regarding (i) the number of Restricted Stock Units subject to such Award or a formula for determining such number, (ii) the performance criteria, if any, and level of achievement versus these criteria that shall
determine the number of Restricted Stock Units granted, issued, retainable and/or vested, (iii) such terms and conditions on the grant, issuance, vesting and/or forfeiture of the Restricted Stock Units as may be determined from time to time by
the 

  
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Administrator, (iv) the term of the performance period, if any, as to which performance will be measured for determining the number of such Restricted Stock Units, and (v) restrictions
on the transferability of the Restricted Stock Units. 
 (c) Vesting and Performance Criteria. The grant, issuance, retention,
vesting and/or settlement of Restricted Stock Units will occur when and in such installments as the Administrator determines or under criteria the Administrator establishes. The grant, issuance, retention, vesting and/or settlement of Shares under
any such Award that is based on performance criteria and level of achievement versus such criteria will be subject to a performance period of not less than twelve months, and the grant, issuance, retention, vesting and/or settlement of Shares under
any Restricted Stock Unit Award (or portion thereof) that is based solely upon continued employment and/or the passage of time may not vest or be settled in full prior to the thirty-sixth month following its date of grant, but may be subject to
pro-rata vesting over such period, except that the Administrator may provide for the satisfaction and/or lapse of all conditions under any such Award in the event of the Participant’s death, Total and Permanent Disablement, Retirement or in
connection with a change of control of the Company, and the Administrator may provide that any such restriction or limitation will not apply in the case of a Restricted Stock Unit Award that is issued in payment or settlement of compensation that
has been earned by the Participant. 
 (d) Discretionary Adjustments and Limits. Notwithstanding the satisfaction of any
performance goals, the number of Shares granted, issued, retainable and/or vested under an Award of Restricted Stock Units on account of either financial performance or personal performance evaluations may, to the extent specified in the Award
Agreement, be reduced, but not increased, by the Administrator on the basis of such further considerations as the Administrator shall determine. 

(e) Shareholder Rights. Participants shall have no shareholder rights, including without limitation voting, dividend,
distribution, or other rights, with respect to Shares underlying Restricted Stock Units unless and until such Shares are reflected as issued and outstanding Shares on the Company’s stock ledger. 

 

	8.	Deferral of Gains 

 The Administrator may, in an Award Agreement or otherwise, provide
for the deferred delivery of Shares upon settlement, vesting or other events with respect to Restricted Stock Units. Notwithstanding anything herein to the contrary, in no event will any deferral of the delivery of Shares or any other payment with
respect to any Award be allowed if the Administrator determines, in its sole discretion, that the deferral would result in the imposition of the additional tax under Section 409A(a)(1)(B) of the Code. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the Board, at the time of grant, specifically provides that the Award is not intended to comply with Section 409A of the Code. The Company shall have no liability to a
Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Board. 

 

	9.	Conditions and Restrictions Upon Securities Subject to Awards 

 The Administrator may
provide that the Shares issued upon exercise of an Option or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Administrator in its discretion may specify prior
to the exercise of such Option or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions and method of payment for the Shares issued upon exercise,
vesting or settlement of such Award (including the actual or constructive surrender of Shares already owned by the Participant) or payment of taxes arising in connection with an Award. Without limiting the foregoing, such restrictions may address
the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any Shares issued under an Award, including without limitation (i) restrictions under an insider trading

  
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policy or pursuant to applicable law, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company equity compensation
arrangements, (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers and (iv) provisions requiring Shares to be sold on the open market or to the Company in order to satisfy tax withholding or
other obligations. 
  

	10.	Adjustment of and Changes in the Stock 

 The number and kind of Shares available for
issuance under this Plan (including under any Awards then outstanding) shall be equitably adjusted by the Administrator to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or
distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of Shares of the Company outstanding. Such adjustment may be designed to comply with
Section 424 of the Code or may be designed to treat the Shares available under the Plan and subject to Awards as if they were all outstanding on the record date for such event or transaction or to increase the number of such Shares to reflect a
deemed reinvestment in Shares of the amount distributed to the Company’s securityholders. The terms of any outstanding Award shall also be equitably adjusted by the Administrator as to price, number or kind of Shares subject to such Award and
other terms to reflect the foregoing events, which adjustments need not be uniform as between different Awards or different types of Awards. 

In the event there shall be any other change in the number or kind of outstanding Shares, or any stock or other securities into which such
Shares shall have been changed, or for which it shall have been exchanged, by reason of a change of control, other merger, consolidation or otherwise, then the Administrator shall determine the appropriate and equitable adjustment to be effected. In
addition, in the event of such change described in this paragraph, the Administrator may accelerate the time or times at which any Award may be exercised and may provide for cancellation of such accelerated Awards that are not exercised within a
time prescribed by the Administrator in its sole discretion. 
 No right to purchase fractional shares shall result from any adjustment in
Awards pursuant to this Section 10. In case of any such adjustment, the Shares subject to the Award shall be rounded down to the nearest whole share. The Company shall notify Participants holding Awards subject to any adjustments pursuant to
this Section 10 of such adjustment, but (whether or not notice is given) such adjustment shall be effective and binding for all purposes of the Plan. 
  

	11.	Transferability 

 Each Award may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated by a Participant other than by will or the laws of descent and distribution, and each Option shall be exercisable only by the Participant during his or her lifetime. Notwithstanding the foregoing, to the extent
permitted by the Administrator, the person to whom an Award is initially granted (the “Grantee”) may transfer an Award to any “family member” of the Grantee (as such term is defined in Section 1(a)(5) of the General
Instructions to Form S-8 under the Securities Act of 1933, as amended (“Form S-8”)), to trusts solely for the benefit of such family members and to partnerships in which such family members and/or trusts are the only partners;
provided that, (i) as a condition thereof, the transferor and the transferee must execute a written agreement containing such terms as specified by the Administrator, and (ii) the transfer is pursuant to a gift or a domestic relations
order to the extent permitted under the General Instructions to Form S-8. Except to the extent specified otherwise in the agreement the Administrator provides for the Grantee and transferee to execute, all vesting, exercisability and forfeiture
provisions that are conditioned on the Grantee’s continued employment or service shall continue to be determined with reference to the Grantee’s employment or service (and not to the status of the transferee) after any transfer of an Award
pursuant to this Section 11, and the responsibility to pay any taxes in connection with an Award shall remain with the Grantee notwithstanding any transfer other than by will or intestate succession. 

  
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	12.	Suspension or Termination of Awards 

 Except as otherwise provided by the Administrator,
if at any time (including after a notice of exercise has been delivered or an award has vested) the Chief Executive Officer or any other person designated by the Administrator (each such person, an “Authorized Officer”) reasonably believes
that a Participant may have committed an Act of Misconduct as described in this Section 12, the Authorized Officer, Administrator or the Board may suspend the Participant’s rights to exercise any Option, to vest in an Award, and/or to
receive payment for or receive Shares in settlement of an Award pending a determination of whether an Act of Misconduct has been committed. If the Administrator or an Authorized Officer determines a Participant has committed an act of embezzlement,
fraud, dishonesty, nonpayment of any obligation owed to the Company or any Subsidiary, breach of fiduciary duty, violation of Company ethics policy or code of conduct, or deliberate disregard of the Company or Subsidiary rules resulting in loss,
damage or injury to the Company or any Subsidiary, or if a Participant makes an unauthorized disclosure of any Company or Subsidiary trade secret or confidential information, solicits any employee or service provider to leave the employ or cease
providing services to the Company or any Subsidiary, breaches any intellectual property or assignment of inventions covenant, engages in any conduct constituting unfair competition, breaches any non-competition agreement, induces any Company or
Subsidiary customer to breach a contract with the Company or any Subsidiary or to cease doing business with the Company or any Subsidiary, or induces any principal for whom the Company or any Subsidiary acts as agent to terminate such agency
relationship (any of the foregoing acts, an “Act of Misconduct”), then except as otherwise provided by the Administrator, (i) neither the Participant nor his or her estate nor transferee shall be entitled to exercise any Option
whatsoever, vest in or have the restrictions on an Award lapse, or otherwise receive payment of an Award, (ii) the Participant will forfeit all outstanding Awards and (iii) the Participant may be required, at the Administrator’s sole
discretion, to return and/or repay to the Company any then unvested Shares previously issued under the Plan. In making such determination, the Administrator or an Authorized Officer shall give the Participant an opportunity to appear and present
evidence on his or her behalf at a hearing before the Administrator or its designee or an opportunity to submit written comments, documents, information and arguments to be considered by the Administrator. Any dispute by a Participant or other
person as to the determination of the Administrator shall be resolved pursuant to Section 20 of the Plan. 
 Any Award granted pursuant
to the Plan shall be subject to mandatory repayment by the Participant to the Company to the extent the Participant is, or in the future becomes, subject to (a) any Company “clawback” or recoupment policy that is adopted to comply
with the requirements of any applicable law, rule or regulation, or otherwise, or (b) any law, rule or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule or regulation. 

 

	13.	Compliance with Laws and Regulations 

 This Plan, the grant, issuance, vesting, exercise
and settlement of Awards thereunder, and the obligation of the Company to sell, issue or deliver Shares under such Awards, shall be subject to all applicable foreign, federal, state and local laws, rules and regulations, stock exchange rules and
regulations, and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to register in a Participant’s name or deliver any Shares prior to the completion of any registration or
qualification of such shares under any foreign, federal, state or local law or any ruling or regulation of any government body which the Administrator shall determine to be necessary or advisable. To the extent the Company is unable to or the
Administrator deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, the Company and its
Subsidiaries shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. No Option shall be exercisable and no Shares shall be issued and/or
transferable under any Restricted Stock Unit unless a registration statement with respect to the Shares underlying such Awards is effective and current or the Company has determined that such registration is unnecessary. 

  
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 In the event an Award is granted to or held by a Participant who is employed or providing
services outside the United States, the Administrator may, in its sole discretion, modify the provisions of the Plan or of such Award as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law,
currency or tax policy. The Administrator may also impose conditions on the grant, issuance, exercise, vesting, settlement or retention of Awards in order to comply with such foreign law and/or to minimize the Company’s obligations with respect
to tax equalization for Participants employed outside their home country. 
  

	14.	Withholding 

 To the extent required by applicable federal, state, local or foreign law,
a Participant shall be required to satisfy, in a manner satisfactory to the Company, any withholding tax obligations that arise by reason of an Option exercise, the vesting of or settlement of an Award, or otherwise with respect to an Award. The
Company and its Subsidiaries shall not be required to issue Shares, make any payment or recognize the transfer or disposition of Shares until all such obligations are satisfied. The Administrator may provide for or permit these obligations to be
satisfied through the mandatory or elective sale of Shares and/or by having the Company withhold a portion of the Shares that otherwise would be issued to him or her upon exercise of the Option or the vesting or settlement of an Award, or by
tendering Shares previously acquired. 
  

	15.	Administration of the Plan 

 (a) Administrator of the Plan. The Plan shall be
administered by the Administrator who shall be the Compensation Committee of the Board or, in the absence of a Compensation Committee, the Board itself. Any power of the Administrator may also be exercised by the Board, except to the extent that the
grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 13 of the Securities Exchange Act of 1934. To the extent that any
permitted action taken by the Board conflicts with action taken by the Administrator, the Board action shall control. To the extent permitted by applicable law, the Compensation Committee may by resolution authorize one or more officers of the
Company to perform any or all things that the Administrator is authorized and empowered to do or perform under the Plan, and for all purposes under this Plan, such officer or officers shall be treated as the Administrator; provided, however, that
the resolution so authorizing such officer or officers shall specify the total number of Awards (if any) such officer or officers may award pursuant to such delegated authority, and any such Award shall be subject to the form of Award Agreement
theretofore approved by the Compensation Committee. No such officer shall designate himself or herself as a recipient of any Awards granted under authority delegated to such officer. The Compensation Committee hereby designates the Secretary of the
Company and the head of the Company’s human resource function to assist the Administrator in the administration of the Plan and execute Award Agreements evidencing Awards made under this Plan or other documents entered into under this Plan on
behalf of the Administrator or the Company. In addition, the Compensation Committee may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers or employees of the Company or any Subsidiary, and/or to one or
more agents. 
 (b) Powers of Administrator. Subject to the express provisions of this Plan, the Administrator shall be authorized
and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including, without limitation: (i) to prescribe, amend and rescind rules and regulations relating to this Plan
and to define terms not otherwise defined herein; (ii) to determine which persons are Participants, to which of such Participants, if any, Awards shall be granted hereunder and the timing of any such Awards; (iii) to grant Awards to
Participants and determine the terms and conditions thereof, including the number of Shares subject to Awards and the exercise price of such Shares and the circumstances under which Awards become exercisable or vested or are forfeited or expire,
which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events (including events which the Board or the Administrator determine constitute a
change of control), or other factors; (iv) to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or

  
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ability to retain any Award; (v) to prescribe and amend the terms of the agreements or other documents evidencing Awards made under this Plan (which need not be identical) and the terms of
or form of any document or notice required to be delivered to the Company by Participants under this Plan; (vi) to determine the extent to which adjustments are required pursuant to Section 10; (vii) to interpret and construe this
Plan, any rules and regulations under this Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions if the Administrator, in good faith, determines that it is necessary to do so in light of
extraordinary circumstances and for the benefit of the Company; (viii) to approve corrections in the documentation or administration of any Award; and (ix) to make all other determinations deemed necessary or advisable for the
administration of this Plan. The Administrator may, in its sole and absolute discretion, without amendment to the Plan, waive or amend the operation of Plan provisions respecting exercise after Termination of Employment or service to the Company or
an affiliate and, except as otherwise provided herein, adjust any of the terms of any Award. The Administrator may also (A) accelerate the date on which any Award granted under the Plan becomes exercisable or (B) accelerate the vesting
date or waive or adjust any condition imposed hereunder with respect to the vesting or exercisability of an Award, provided that the Administrator, in good faith, determines that such acceleration, waiver or other adjustment is necessary or
desirable in light of extraordinary circumstances. 
 (c) Determinations by the Administrator. All decisions, determinations and
interpretations by the Administrator regarding the Plan, any rules and regulations under the Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs,
assigns or other persons holding or claiming rights under the Plan or any Award. The Administrator shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations
including, without limitation, the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select. 

(d) Subsidiary Awards. In the case of a grant of an Award to any Participant employed by a Subsidiary, such grant may, if the
Administrator so directs, be implemented by the Company issuing any subject Shares to the Subsidiary, for such lawful consideration as the Administrator may determine, upon the condition or understanding that the Subsidiary will transfer the Shares
to the Participant in accordance with the terms of the Award specified by the Administrator pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Award may be issued by and in the name of the Subsidiary and shall
be deemed granted on such date as the Administrator shall determine. 
 (e) Other Committees. The Board may appoint one or more
committees of the Board, each composed of one or more directors of the Company who need not be Nonemployee Directors, which may administer the Plan with respect to Participants who are not “officers” as defined in Rule 16a-1(f) under the
Securities Exchange Act of 1934, as amended, or directors of the Company, may grant Awards under the Plan to such Participants, and may determine all terms of such Awards, subject to the requirements of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended, and, for so long as the Stock is listed on The NASDAQ Stock Market LLC, the rules of such stock exchange. 
  

	16.	Amendment of the Plan or Awards 

 The Board may amend, alter or discontinue this Plan and
the Administrator may amend, or alter any agreement or other document evidencing an Award made under this Plan but, except as provided pursuant to the provisions of Section 10, no such amendment shall, without the approval of the stockholders
of the Company: 
 (a) increase the maximum number of Shares for which Awards may be granted under this Plan; 

(b) reduce the price at which Options may be granted below the Fair Market Value as provided for in Section 6(b); 

  
 9 

 (c) reduce the exercise price of outstanding Options; 

(d) extend the term of this Plan; 

(e) change the class of persons eligible to be Participants; or 

(f) otherwise amend the Plan in any manner requiring stockholder approval by law or under the NASDAQ Stock Market listing requirements. 

No amendment or alteration to the Plan or an Award or Award Agreement shall be made which would impair the rights of the holder of an Award,
without such holder’s consent, provided that no such consent shall be required if the Administrator determines in its sole discretion and prior to the date of any change of control (as defined in the applicable Award Agreement) that such
amendment or alteration either is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard.

  

	17.	No Liability of Company 

 The Company, Royall, and any of their Subsidiaries or
affiliates which are in existence or hereafter comes into existence shall not be liable to a Participant or any other person as to: (i) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory
body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder; and (ii) any tax consequence expected, but not realized, by any Participant or other person due
to the receipt, exercise or settlement of any Award granted hereunder. 
  

	18.	Non-Exclusivity of Plan 

 The adoption of this Plan by the Board shall not be construed
as creating any limitations on the power of the Board or the Administrator to adopt such other incentive arrangements as either may deem desirable, including without limitation, the granting of stock options or restricted stock units otherwise than
under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 
  

	19.	Governing Law 

 This Plan and any agreements or other documents hereunder shall be
interpreted and construed in accordance with the laws of the Delaware and applicable federal law. Any reference in this Plan or in the agreement or other document evidencing any Awards to a provision of law or to a rule or regulation shall be deemed
to include any successor law, rule or regulation of similar effect or applicability. 
  

	20.	Arbitration of Disputes 

 In the event a Participant or other holder of an Award or
person claiming a right under an Award or the Plan believes that a decision by the Administrator with respect to such person or Award was arbitrary or capricious, the person may request arbitration with respect to such decision. The review by the
arbitrator shall be limited to determining whether the Participant or other Award holder has proven that the Administrator’s decision was arbitrary or capricious. This arbitration shall be the sole and exclusive review permitted of the
Administrator’s decision. Participants, Award holders and persons claiming rights under an Award or the Plan explicitly waive any right to judicial review. 

Notice of demand for arbitration shall be made in writing to the Administrator within thirty (30) days after the applicable decision by
the Administrator. The arbitrator shall be selected by those members of the Board who are neither members of the Compensation Committee of the Board nor employees of the Company or any Subsidiary. If there are no such members of the Board, the
arbitrator shall be selected by the Board. The arbitrator shall be an individual who is an attorney licensed to practice law in the jurisdiction in which the 

  
 10 

 
Company’s headquarters are then located. Such arbitrator shall be neutral within the meaning of the Commercial Rules of Dispute Resolution of the American Arbitration Association; provided,
however, that the arbitration shall not be administered by the American Arbitration Association. Any challenge to the neutrality of the arbitrator shall be resolved by the arbitrator whose decision shall be final and conclusive. The arbitration
shall be administered and conducted by the arbitrator pursuant to the Commercial Rules of Dispute Resolution of the American Arbitration Association. Each side shall bear its own fees and expenses, including its own attorney’s fees, and each
side shall bear one half of the arbitrator’s fees and expenses. The decision of the arbitrator on the issue(s) presented for arbitration shall be final and conclusive and may be enforced in any court of competent jurisdiction. 

 

	21.	No Right to Employment, Reelection or Continued Service 

 Nothing in this Plan or an
Award Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries and/or its affiliates to terminate any Participant’s employment or service for the Company at any time or for any reason not prohibited by law,
nor shall this Plan or an Award itself confer upon any Participant any right to continue his or her employment or service for any specified period of time. Neither an Award nor any benefits arising under this Plan shall constitute an employment
contract with the Company, any Subsidiary and/or their affiliates. Subject to Sections 4 and 16, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Board without giving rise to any
liability on the part of the Company, its Subsidiaries and/or its affiliates. 
  

	22.	Unfunded Plan 

 The Plan is intended to be an unfunded plan. Participants are and shall
at all times be general creditors of the Company with respect to their Awards. If the Administrator or the Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject
to the claims of the creditors of the Company in the event of its bankruptcy or insolvency. 
 * * * 

  
 11 

 The Plan was adopted by the Board as of January 9, 2015, and the consummation of the
Transaction occurred as of January 9, 2015. 
  

			
	THE ADVISORY BOARD COMPANY
		
	By:		 /s/ Evan R. Farber

	Name:		Evan R. Farber
	Title:		General Counsel and Corporate Secretary

  
 12EX 10.1 Director Nomination Agreement

Exhibit 10.1
EXECUTION VERSION

DIRECTOR NOMINATION AGREEMENT 
February 9, 2015
This Director Nomination Agreement, dated as of February 9, 2015 (this “Agreement”), is by and between (i) Forestar Group Inc., a Delaware corporation (the “Company”) and (ii) SpringOwl Associates LLC (together with its Affiliates, “SOA”) and Cove Street Capital, LLC (together with its Affiliates, “Cove Street” and, collectively with SOA, the “Investors”).  The Investors and the Company shall collectively be referred to herein as the “Parties.” In consideration of, and reliance upon, the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
		
	1.
	Board Representation and Board Matters.  Each Party agrees that:

		
	(a)
	As promptly as practicable after the execution and delivery of this Agreement, the Board of Directors of the Company (the “Board”) will increase its size by two directorships, appoint Mr. David L. Weinstein to the Board as a director of the class of directors whose terms expire in 2017 (the “2017 Class”), appoint Mr. Daniel B. Silvers to the Board as a director of the class of directors whose terms expire in 2015 (the “2015 Class”) and include Mr. David L. Weinstein as a nominee to the 2017 Class and Mr. Daniel B. Silvers as a nominee of the class of directors whose terms expire in 2018 on the slate of directors to be elected at the annual meeting of stockholders of the Company to be held in 2015 (the “2015 Annual Meeting”).  Mr. David L. Weinstein and Mr. Daniel B. Silvers shall collectively be referred to herein as the “New Nominees”.  The Investors acknowledge that within ten calendar days of the date of execution of this Agreement, a Form 3 is required to be filed with the U.S. Securities and Exchange Commission (the “SEC”) via EDGAR for each of the New Nominees in connection with the appointment of the New Nominees to the Board.  With respect to Form 4 filings, the Company will make such filings for the New Nominees consistent with its practice with respect to the other directors.  

		
	(b)
	Mr. David L. Weinstein will be offered the opportunity to become a member of the Board’s (i) Compensation Committee, (ii) Executive Committee and (iii) Audit Committee and Mr. Daniel B. Silvers will be offered the opportunity to become a member of the Board’s (i) Nominating and Governance Committee, (ii) Executive Committee and (iii) Audit Committee; provided, that each New Nominee, subject to satisfying the Company’s governance policies in effect as of the date hereof and as in effect from time to time (to the extent any changes in the Company’s governance policies are not, and could not reasonably be construed to have been, implemented for the purpose of removing the New Nominees from a committee) and applicable law and the rules and regulations of the New York Stock Exchange (or any other securities exchange on which the Company’s securities are then traded) as in effect from time to time, shall continue to have the right to serve on such committees for so long as he serves on the Board.  SOA and Cove Street acknowledge that if the Board determines in its good faith judgment that the New Nominees no longer satisfy the Company’s governance policies, applicable law or the rules and regulations of the New York Stock Exchange (or any other securities exchange on which the Company’s securities are then traded), as in effect from time to time, with respect to service on a committee of the Board, the Board shall have the discretion to remove any New Nominee from a committee set forth above, so long as (i) the treatment of the New Nominees is not inconsistent with the treatment of the other directors and (ii) any changes in the Company’s governance policies are not, and could not reasonably be construed to have been, implemented for the purpose of removing the New Nominees from a committee.

1

		
	(c)
	Each of the Investors shall, severally, but not jointly, and shall, severally, but not jointly, cause their respective Affiliates to, immediately cease all communication efforts, direct or indirect, in furtherance of any potential efforts to influence the management and policies of the Company.  Prior to the execution of this Agreement, Cove Street shall have taken down the website www.valueforshareholders.com so that the website is no longer accessible and Cove Street shall, and SOA shall use its best efforts to cause Cove Street to, cause such website to remain inaccessible during the Standstill Period.

		
	(d)
	Prior to the execution of this Agreement, Mr. Carl A. Thomason shall have delivered his unconditional resignation from his current position as a director of the Company to the Company, which resignation shall be effective immediately upon the execution of this Agreement. Prior to or concurrently with the execution of this Agreement, the Company has (i) accepted Mr. Carl A. Thomason’s resignation from such position as director on the Board and (ii) has approved the decrease in the size of the Board from thirteen to twelve directors.  During the Standstill Period, the Board will not increase the size of the Board and will not permit Section IV.E of the Company’s Corporate Governance Guidelines to be amended.

		
	(e)
	Prior to the execution of this Agreement and in compliance with Section IV.E of the Company’s Corporate Governance Guidelines, (i) Mr. Michael E. Dougherty shall have delivered an executed and irrevocable resignation (due to reaching the retirement age) effective prior to or at the 2016 annual meeting of stockholders of the Company and (ii) the Board has accepted such resignation and shall not re-appoint Mr. Michael E. Dougherty for election thereafter.  As promptly as practicable after the retirement of Mr. Michael E. Dougherty from the Board, the Board will decrease its size from twelve to eleven directors. During the Standstill Period, the Board will not increase the size of the Board to more than eleven directors. 

		
	(f)
	The Board will exercise its reasonable best efforts, including the solicitation of proxies, to elect each of Mr. Daniel B. Silvers and David L. Weinstein at the 2015 Annual Meeting (it being understood that such efforts shall not be less than the efforts used by the Company to obtain the election of any other director nominee nominated to serve as director on the Board of the 2015 Annual Meeting).

		
	(g)
	If either of the New Nominees resigns or is otherwise unable to serve as director (other than as a result of removal, or the failure to be elected at the 2015 annual meeting by the stockholders of the Company), the Company and the Investors shall select a replacement director, mutually acceptable to the Company and the Investors, which acceptance shall not be unreasonably withheld.

		
	(h)
	If SOA (and for the avoidance of doubt, not Cove Street) materially breaches its commitments or obligations under this Agreement, upon written notice from the Company (specifying the relevant facts), SOA agrees to cause Mr. Daniel B. Silvers (or his replacement director selected pursuant to Section 1(g)) to resign promptly from the Board and the provisions of Sections 1(a), 1(b) and 1(e) – 1(g) shall terminate with respect to Mr. Daniel B. Silvers, except that if such material breach can be cured, SOA shall have fifteen business days after the date of such written notice within which to cure its material breach and this Section 1(h) shall not apply in the event of such cure.

		
	2.
	Proxy Solicitation Materials.  The Company agrees that the Company’s “proxy statement” (as defined in Rule 14a-1 promulgated under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with respect to the 2015 Annual Meeting (such proxy statement, the “2015 Proxy Statement”) and 

2

all other solicitation materials to be delivered to stockholders in connection with the 2015 Annual Meeting will be prepared in accordance with, and in a manner consistent with the intent and purpose of, this Agreement.  The Company will provide each Investor with a true and complete copy of any portion of the 2015 Proxy Statement or other “soliciting materials” (as used in Rule 14a-6 promulgated under the Exchange Act) with respect to the 2015 Annual Meeting, in each case that refer to the Investors, the New Nominees or this Agreement, at least two business days before filing such materials with the SEC in order to permit the Investors a reasonable opportunity to review and comment on such portions, and will consider in good faith any comment received from the Investors and their respective counsel relating to such portions.  
Except as required by applicable law, the Company will use the same or substantially similar language, or any summary thereof that is agreed upon for the foregoing filings, in all other filings with the SEC that disclose, discuss, refer to or are being filed in response to or as a result of this Agreement.  Each Investor will promptly provide all information relating to the New Nominees and other information to the extent required under applicable law to be included in the Company’s 2015 Proxy Statement and any other soliciting materials (as such term is used in Rule 14a-6 promulgated under the Exchange Act) to be filed with the SEC or delivered to stockholders of the Company in connection with the 2015 Annual Meeting. The 2015 Proxy Statement and other soliciting materials will contain the same type of information and manner of presentation concerning the New Nominees as provided for the Company’s other independent director nominees.
		
	3.
	Standstill.  Except with the prior written consent of the Company, at all times during the Standstill Period (as defined below in Section 21), each Investor agrees, severally, but not jointly, not to, directly or indirectly, and will cause each of its respective Affiliates (as defined in Section 21) not to, directly or indirectly: 

		
	(a)
	effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or participate in or in any way assist, facilitate or encourage any other individual, general or limited partnership, corporation, limited liability or unlimited liability company, joint venture, estate, trust, group, association or other entity of any kind or structure (collectively, a "Person") to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, any "solicitation" of "proxies" (as such terms are used in the proxy rules of SEC) to vote any Voting Securities of the Company or consent to any action from any holder of any Voting Securities of the Company or conduct or suggest any binding or nonbinding referendum or resolution or seek to advise, encourage or influence any Person with respect to the voting of or the granting of any consent with respect to any Voting Securities of the Company; 

		
	(b)
	propose or nominate, or cause or encourage any Person to propose or nominate, any candidates to stand for election to the Board, or seek the removal of any member of the Board;

		
	(c)
	form, join or otherwise participate in any "partnership, limited partnership, syndicate or other group" (other than any group among some or all of the Affiliates of the Investors) within the meaning of Section 13(d)(3) of the Exchange Act with respect to the Common Stock, or deposit any shares of Common Stock in a voting trust or similar arrangement, or subject any shares of Common Stock to any voting agreement or pooling arrangement, or grant any proxy with respect to any shares of Common Stock (other than to a designated representative of the Company pursuant to a proxy statement of the Company) or otherwise act in concert with any Person with respect to the Common Stock (other than Affiliates of the Investors);

3

		
	(d)
	seek to call, or to request the call of, or call a special meeting of the stockholders of the Company, or make a request for a list of the Company's stockholders or other Company records;

		
	(e)
	otherwise act, alone or in concert with others, to control or seek to control, to seek representation on, or to influence or seek to influence, whether through litigation or otherwise, the management, the Board or the policies of the Company; provided, however, that nothing herein shall prohibit the Investors from complying with legal or regulatory requirements, including, without limitation, the filing of any report or schedule required to be filed with the SEC, and provided, further that each of the Investors and their Affiliates, may privately communicate their views to the management or the Board;

		
	(f)
	effect, seek to effect or in any way assist or facilitate any other Person in effecting or seeking to effect any: (i) tender offer or exchange offer to acquire securities of the Company; (ii) acquisition of any interest in any material asset or business of the Company or any of its subsidiaries; (iii) merger, acquisition, share exchange or other business combination involving the Company or any of its subsidiaries; or (iv) recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries or material portion of its or their businesses;

		
	(g)
	other than through open market broker sale transactions where the identity of the purchaser is unknown, sell, offer or agree to sell directly or indirectly, through any swap or hedging transaction or otherwise, any security of the Company or any right decoupled from such underlying security held by either Investor to any Person that would knowingly result in such Person, together with its Affiliates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of 10% or more of the shares of Common Stock  outstanding at such time or would increase the beneficial or other ownership interest of any Person who, together with its Affiliates, has a beneficial or other ownership interest in the aggregate of 10% or more of the shares of the Common Stock outstanding at such time, except in each case in a transaction approved by the Board;

		
	(h)
	request that the Company or any of its Representatives amend or waive any provision of this Section 3; or

		
	(i)
	otherwise take, or solicit, cause or encourage others to take, any action inconsistent with any of the foregoing.

Notwithstanding anything to the contrary, nothing in this Agreement shall prohibit or restrict any director of the Company, including any New Nominee, from exercising his or her rights and fiduciary duties as a director of the Company.
		
	4.
	Non-Disparagement.  During the Standstill Period, each Investor, severally, but not jointly, agrees that neither it nor any of its respective partners, officers, directors or employees shall, and the each Investor, severally, but not jointly, shall cause each of its Affiliates not to, make, or cause to be made, any comments or statements by press release or similar public statement to the press or media, or in any SEC filing, any statement or announcement that disparages, the Company, its partners, officers, directors or employees.  During the Standstill Period, neither the Company nor any of its officers or directors shall, make, or cause to be made, by press release or similar public statement, including to the press or media or in an SEC filing, any statement or announcement that disparages, the Investors, their respective Affiliates, officers, directors 

4

or employees; provided that nothing herein shall be deemed to prevent either of the Investors or the Company from complying with their respective disclosure obligations under applicable law or the rules and regulations of the New York Stock Exchange (or any other securities exchange on which the Company’s securities are traded). 
		
	5.
	Voting.  Notwithstanding anything in this Agreement to the contrary, until the end of the Standstill Period, each Investor, severally, but not jointly, agrees to cause, and for purposes of the number of shares held in SOA’s separately managed account, SOA agrees to use its reasonable best efforts to cause, all Voting Securities with respect to which it has any voting authority, whether owned of record or beneficially owned, as of the record date for any annual or special meeting of stockholders or in connection with any solicitation of stockholder action by written consent (each a “Stockholders Meeting”) within the Standstill Period, in each case that are entitled to vote at any such Stockholders Meeting to be present for quorum purposes and to be voted at all such Stockholders Meetings or at any adjournment or postponement thereof:

		
	(i)
	for all existing directors nominated by the Board for election at such Stockholders Meeting, as well as the New Nominees; and

		
	(ii)
	in accordance with any recommendation of the Board on any proposal or other business set forth on Schedule 1 hereto.

SOA hereby represents and warrants to the Company that there are no more than 25,000 shares of Voting Securities held in SOA’s separately managed account.
		
	6.
	Public Announcement.  As soon as practicable on or after the date hereof, the Company shall issue a joint press release, a copy of which is attached hereto as Exhibit A (the “Press Release”).

		
	7.
	Representations and Warranties of each Party.  The Company represents and warrants to each Investor and each of the Investors, severally, but not jointly, represents and warrants to the Company that: 

		
	(a)
	Such Party has all requisite company and other power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

		
	(b)
	This Agreement has been duly and validly authorized, executed and delivered by it and is a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

		
	(c)
	This Agreement will not result in a violation of any term or condition of any agreement to which such Party is party or by which such Party may otherwise be bound or of any law, rule, license, regulation, judgment, order or decree governing or affecting such Party.

		
	8.
	Representations and Warranties of SOA.  SOA represents and warrants that, as of the date hereof:

		
	(a)
	It beneficially owns 359,224 shares of Common Stock.

		
	(b)
	It has an economic exposure to, including without limitation, through derivative transactions, an aggregate of 359,224 shares of Common Stock.

		
	(c)
	Except for such ownership or exposure, neither SOA nor any of its Affiliates has any other direct or indirect beneficial ownership (as defined in Section 21) of, and/or economic exposure to, any 

5

Voting Securities or rights or options to own or acquire any Voting Securities, including through any derivative transaction.
		
	(d)
	It acknowledges that the New Nominees may not share confidential information relating to the Company with SOA, any of its directors, officers, other employees or attorneys.  

		
	9.
	Representations and Warranties of Cove Street.  Cove Street represents and warrants that, as of the date hereof:

		
	(a)
	It beneficially owns 2,132,059 shares of Common Stock.

		
	(b)
	It has an economic exposure to, including without limitation, through derivative transactions, an aggregate of 2,132,059 shares of Common Stock.

		
	(c)
	Except for such ownership or exposure, neither Cove Street nor any of its Affiliates has any other direct or indirect beneficial ownership of, and/or economic exposure to, any Voting Securities or rights or options to own or acquire any Voting Securities, including through any derivative transaction.

		
	(d)
	It acknowledges that the New Nominees may not share confidential information relating to the Company with Cove Street, any of its directors, officers, other employees or attorneys.  

		
	10.
	Miscellaneous.  Each Party recognizes and agrees that if for any reason any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy.  Accordingly, each Party agrees that, in addition to any other remedy the other Party may be entitled to at law or equity, the other Party is entitled to an injunction or injunctions to prevent any breach of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in the Chancery Court of the State of Delaware or, if that court lacks subject matter jurisdiction, the United States District Court for the District of Delaware (collectively, the “Chosen Courts”).  THIS AGREEMENT IS GOVERNED IN ALL RESPECTS, INCLUDING WITHOUT LIMITATION VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

If any action is brought in equity to enforce any provision of this Agreement, no Party will allege, and each party hereby waives the defense, that there is an adequate remedy at law.  Furthermore, each Party:
		
	(a)
	Consents to submit itself to the personal jurisdiction of the Chosen Courts if any dispute arises out of this Agreement or the transactions contemplated hereby.

		
	(b)
	Agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any Chosen Court.

		
	(c)
	Agrees that it will not bring any action relating to this Agreement or the transactions contemplated by thereby in any court other than the Chosen Courts and each Party irrevocably waives any right to trial by jury.

6

		
	(d)
	Agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief.

		
	(e)
	Irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address of such parties’ principal place of business or as otherwise provided by applicable law.  

		
	(f)
	WAIVES ANY RIGHT TO A JURY TRIAL OF ANY CONTROVERSY OR CLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE MAKING, PERFORMANCE OR INTERPRETATION THEREOF, INCLUDING FRAUDULENT INDUCEMENT THEREOF.

		
	11.
	No Waiver.  Any waiver by any Party of a breach of any provision of this Agreement does not operate as, nor is construed to be, a waiver of any other breach of such provision or of any breach of any other provision of this Agreement.  The failure of any Party to insist upon strict adherence to any term of this Agreement on one or more occasions is not a waiver and does not deprive that Party of the right thereafter to insist upon strict adherence to that or any other term of this Agreement.

		
	12.
	Entire Agreement.  This Agreement and the exhibits hereto contain the entire understanding of the Parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the Parties.

		
	13.
	Notice.  All notices, consents, requests, instructions, approvals or other communications provided for herein and all legal process with regard hereto will be in writing and will be deemed validly given, made or served, if:

		
	(a)
	Given by facsimile or email, when such facsimile or email is transmitted to the facsimile number or email address below.

		
	(b)
	Or if given by any other means, when actually received during normal business hours at the applicable address specified as follows:

		
	(i)
	if to the Company:

Forestar Group Inc. 
6300 Bee Cave Road, Building 2, Suite 500 
Austin, TX 78746 
Attn:  David M. Grimm, Esq.,    
Executive Vice President, General Counsel and Secretary 
Facsimile:  (512) 433-5203 
Email:  david.grimm@forestargroup.com
		
	(ii)
	with a copy, which will not constitute notice, to: 

7

Skadden, Arps, Slate, Meagher & Flom LLP 
1440 New York Avenue, NW 
Washington, DC 20005 
Attn:  Jeremy D. London  
Facsimile:  (202) 661-8299  
Email:  jeremy.london@skadden.com
Attn:  Richard J. Grossman 
Facsimile:  (917) 777-2116
Email:  richard.grossman@skadden.com
		
	(iii)
	if to SOA:

Spring Owl Associates LLC 
1370 Avenue of the Americas, 28th Floor 
New York, NY 10019 
Attn:    Andrew Wallach 
Managing Member 
Facsimile:  (212) 445-7801 
Email:  awallach@springowl.com
		
	(iv)
	or if to Cove Street:

Cove Street Capital, LLC 
2101 East El Segundo Boulevard, Suite 302 
New York, NY 10019 
Attn:    Daniele Beasley 
Chief Compliance Officer; Member 
Facsimile:  (424) 221-5888 
Email:  dbeasley@covestreetcapital.com
		
	(v)
	with a copy, which will not constitute notice, to:

Schulte Roth & Zabel LLP 
919 Third Avenue  
New York, NY 10022 
Attn:  David E. Rosewater 
Facsimile: (212) 593-5955 
Email:     david.rosewater@srz.com
		
	14.
	Severability.  If at any time after the date hereof, any provision of this Agreement is held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision has no force or effect, but the illegality or unenforceability of such provision has no effect on the legality or enforceability of any other provision of this Agreement. 

		
	15.
	Counterparts.  This Agreement may be executed in counterparts, which together will constitute a single agreement.

8

		
	16.
	Successors and Assigns.  This Agreement is not assignable by any Party but is binding on any successor of such Party.

		
	17.
	No Third-Party Beneficiaries.  This Agreement is solely for the benefit of the Parties and is not enforceable by any other Person.

		
	18.
	Fees and Expenses.  The Company will reimburse the Investors up to an aggregate of $175,000 in documented out-of-pocket costs, fees and other expenses incurred by either Investor in connection with, relating to or resulting from its efforts and actions, and any preparations therefor, prior to the execution and delivery of this Agreement in connection with the Company.  Except as provided in this Section 18, no Party is responsible for any cost, fee or expense of any other Party in connection with this Agreement.

		
	19.
	Expiration of Standstill Period.  Upon the expiration of the Standstill Period in accordance with Sections 3 and 21, this Agreement immediately and automatically terminates in its entirety and no Party has any further right or obligation under this Agreement; provided, that:

		
	(a)
	Section 1(b) survives in accordance with its terms; 

		
	(b)
	The obligation of the Company to (i) procure Mr. Michael E. Dougherty’s resignation, (ii) not re-appoint Mr. Michael E. Dougherty to the Board thereafter and (iii) decrease the size of the Board to eleven directors, each as outlined in Section 1(e) survives in accordance with its terms; and

		
	(c)
	no Party is released from any breach of this Agreement that occurred before its termination.

		
	20.
	Interpretation and Construction.  Each Party acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that each Party has executed the same with the advice of said counsel.  Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and any and all drafts relating thereto exchanged among the Parties is deemed the work product of all Parties and may not be construed against any Party by reason of its drafting or preparation.  Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each Party and any controversy over any interpretation of this Agreement will be decided without regard to events of drafting or preparation.  The section headings contained in this Agreement are for reference only and do not affect in any way the meaning or interpretation of this Agreement.

		
	21.
	Other Definitions.  As used in this Agreement:

		
	(a)
	“Affiliate” has the meaning in Rule 12b-2, promulgated by the SEC under the Exchange Act.

		
	(b)
	“Beneficial owner” and “beneficially own” have their respective meanings in Rule 13d-3 promulgated by the SEC under the Exchange Act.

		
	(c)
	“Person” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.

9

		
	(d)
	 “Standstill Period” means the period from the date hereof until the earlier of (x) February 1, 2016, (y) 25 days before the nomination deadline for the 2016 annual meeting of the stockholders of the Company and (z) ten business days after such date, if any, that either Investor provides written notice to the Company (specifying the relevant facts) that the Company has materially breached any of its commitments or obligations under this Agreement, except that if such material breach can be cured, the Company shall have fifteen business days after the date of such written notice within which to cure its material breach and this clause (z) shall not apply in the event of such cure.

		
	(e)
	“Voting Securities” means:

		
	(i)
	the common stock, par value $0.01 per share, of the Company (the “Common Stock”).

		
	(ii)
	all other securities of the Company entitled to vote in the election of directors.

		
	(iii)
	all securities convertible into, or exercisable or exchangeable for Common Stock or other securities, whether or not subject to the passage of time or any other contingency.

***

10

IN WITNESS WHEREOF, each Party has executed this Agreement or caused the same to be executed by its duly authorized representative as of the date first above written.
	
				
	 
	FORESTAR GROUP INC.

	 
	 

	 
	 

	 
	By:
	/s/ J M. DeCosmo

	 
	 
	James M. DeCosmo

	 
	 
	President and Chief Executive Officer

[Signature Page to Director Nomination Agreement]

	
				
	 
	SPRINGOWL ASSOCIATES LLC

	 
	 
	 
	 

	 
	 
	 
	 

	 
	By: SpringOwl Asset Management LLC

	 
	 

	 
	 

	 
	By:
	/s/ A Wallach

	 
	Name:
	Andrew Wallach

	 
	Title:
	Managing Member

[Signature Page to Director Nomination Agreement]

	
				
	 
	COVE STREET CAPITAL, LLC

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 

	 
	By:
	/s/ Jeff Bronchick

	 
	Name:
	Jeff Bronchick

	 
	Title:
	Principal + CIO

[Signature Page to Director Nomination Agreement]

Schedule I

		
	1.
	Advisory approval of the Company’s executive compensation.

		
	2.
	To ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the year 2015.

		
	3.
	To approve the amendments to the Company's Amended and Restated Certificate of Incorporation to declassify the Company's Board of Directors.

[Schedule I to the Director Nomination Agreement]

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