Document

This Performance-Based Restricted Stock Unit Award Agreement (the “Agreement”) is made and entered into as of ______, 20__ (the “Grant Date”) by and between Cavco Industries, Inc., a Delaware corporation (the “Company”) and _______ (the “Grantee”), an employee of the Company, pursuant to the Cavco Industries, Inc. 2005 Stock Incentive Plan, as amended (the “Plan”). In light of the repeal of the performance-based compensation exception to the Internal Revenue Service Code, Section 162(m) (“IRS 162(m)”). This Award is not intended to qualify as performance-based compensation for purposes of IRS 162(m), as a result, it is not subject to the restrictions set forth in the Plan that are applicable to Awards designed to comply with IRS 162(m). Except as defined herein (or as provided in Exhibit “A” attached hereto), capitalized terms used but not defined in this Agreement shall have the same meanings ascribed to them in the Plan.

Effective as of the Grant Date the Company grants to the Grantee the performance-based Restricted Stock Units (“pRSUs”) described herein (the “Award”). Each pRSU represents the right to receive one share of the Company’s common stock, par value $0.01 per share (“Common Stock”), subject to the terms and conditions of this Agreement and the Plan, including Section 11 of the Plan. The target number of shares of Common Stock subject to this Award shall be _____ (the “Target Award”) and the maximum number of shares of Common Stock subject to this Award shall be 200% of the Target Award.

This Award is subject to all of the terms, conditions, and provisions of the Plan and the administrative interpretations thereunder, if any, which have been adopted by the Administrator from time to time. The Plan and this Award shall in all respects be administered by the Administrator (or its designee) in accordance with the terms of and as provided in the Plan. The Administrator (or its designee) shall have the sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of the Administrator (or its designee) with respect thereto and to this Agreement shall be final and binding upon the Grantee and the Company. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control.

Consistent with the Plan, the issuance and transfer of Common Stock in connection with the pRSUs shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel.

The pRSUs have been credited to a bookkeeping account on the Grantee’s behalf. The Grantee may earn between 0% and 200% of the Target Award in accordance with the matrix attached hereto as Exhibit “B.” The number of earned pRSUs will depend on the Company’s level of attainment of the performance metrics (“Performance Goals”) set forth at Exhibit B. Each Performance Goal shall be weighted equally. Additional details about each Performance Goal are set out in Exhibit B. The Performance Goals will be measured over the period beginning ______, 20__ and ending ______, 20__ (the “Performance Period”).

Subject to the Grantee’s continuous employment, the pRSUs will be eligible to be earned and shall vest in whole, in part, or not at all, as of the date on which the Administrator certifies the level of attainment of one or more Performance Goals, provided, that, if the Grantee incurs a termination of employment due to Retirement, death or Disability prior to the end of the Performance Period, the Award will continue to vest on a pro-rated basis based on the number of days Grantee was employed during the Performance Period, subject to the actual attainment of the applicable Performance Goals at the end of the Performance Period, and, provided, further, that any pRSUs that are unvested at the time of the closing of a transaction that results in a Change in Control as defined in Exhibit B will immediately vest in full at the target level of attainment upon the closing of such transaction (any date on which pRSUs vest pursuant to this Section 3 shall be referred to herein as the “Vesting Date”). If the Grantee’s service terminates for any other reason before the Vesting Date, or if the Grantee’s employment is terminated for Cause before payment is made pursuant to Section 4, below, all pRSUs subject to this Agreement shall be automatically forfeited and the Company shall not have any further obligations to the Grantee under this Agreement.

The Company shall not be obligated to deliver any shares of Common Stock if counsel to the Company determines that such sale or delivery would violate any applicable law or any rule or regulations of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which the Common Stock is listed or quoted. The Company shall in no event be obligated to take any affirmative action in order to cause the delivery of shares of Common Stock to comply with any such law, rule, regulations, or agreement.

Notice or other communication to the Company with respect to this Award must be made in the following manner, using such forms as the Company may from time to time provide: (a) by electronic means as designated by the Administrator; (b) by registered or certified United States mail, postage prepaid, to Cavco Industries, Inc., Attention: Secretary, 3636 N. Central Ave., Suite 1200, Phoenix, Arizona 85012; or (c) by hand delivery or otherwise to Cavco Industries, Inc., Attention: Secretary, 3636 N. Central Ave., Suite 1200, Phoenix, Arizona 85012. Notwithstanding the foregoing, in the event that the address of the Company is changed, any such notice shall instead be made pursuant to the foregoing provisions at the Company’s current address.

Any notices provided for in this Agreement or in the Plan shall be given in writing or by such electronic means, as permitted by the Administrator, and shall be deemed effectively delivered or given upon receipt or, in the case of notices delivered by the Company to the Grantee, five days after deposit in the United States mail, postage prepaid, addressed to the Grantee at the address specified at the end of this Agreement or at such other address as the Grantee hereafter designates by written notice to the Company.

Except as otherwise permitted by the Administrator, the Grantee’s rights under the Plan and this Agreement are personal; no assignment or transfer of the Grantee’s rights under and interest in this Award may be made by the Grantee other than by will, by beneficiary designation, by the laws of descent and distribution or by a qualified domestic relations order; and this Award is payable only to the Grantee during his lifetime, except as otherwise provided in this Agreement. After the death of the Grantee, payment of the Award shall be permitted only to the Grantee’s designated beneficiary or, in the absence of a designated beneficiary and as required by applicable law, the Grantee’s spouse or executor or the personal representative of the Grantee’s estate (or by his assignee, in the event of a permitted assignment) and only to the extent that the Award was payable on the date of the Grantee’s death.

Certificates, if any, representing the shares of Common Stock issued pursuant to the Award will bear all legends required by law and necessary or advisable to effectuate the provisions of the Plan and this Award. The Company may place a “stop transfer” order against shares of the Common Stock issued pursuant to this Award until all restrictions and conditions set forth in the Plan or this Agreement and in the legends referred to in this Section 7 have been complied with.

The Grantee shall have no rights of a stockholder with respect to shares of Common Stock subject to the Award unless and until (i) such time as the Award has been paid pursuant to Section 4 and (ii) shares of Common Stock have been transferred to the Grantee (including, without limitation, through a book entry credit or electronic delivery of certificates). For the avoidance of doubt, the Grantee shall not be credited with any dividend or dividend equivalents with respect to the Award in the event that, prior to the settlement date, the Company declares a dividend on the shares of Common Stock.

This Agreement shall bind and inure to the benefit of and be enforceable by the Grantee, the Company and their respective permitted successors and assigns (including personal representatives, heirs and legatees), except that the Grantee may not assign any rights or obligations under this Agreement except to the extent and in the manner expressly permitted herein.

The Grantee acknowledges that neither the Company nor any of its representatives has provided to the Grantee any tax-related advice with respect to the matters covered by this Agreement. Pursuant to the Plan, the Company shall have the right to deduct or withhold from any payments or issuance of Common Stock made by Company to the Grantee, or to require that Grantee remit to Company, an amount sufficient to satisfy any federal, state or local taxes of any kind as are required by law to be withheld with respect to this Agreement and the settlement or vesting of the pRSUs.

This Agreement shall not be construed to confer upon the Grantee any right to continue service with the Company and shall not limit the right of the Company, in its sole and absolute discretion, to terminate the Grantee’s service at any time for any reason. In addition, the Award is a one-time discretionary award and the Company has no obligation to make a like award or any other award in any future period.

The Plan and this Agreement and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Act or other securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to any conflicts of law principles thereof that would require the application of the laws of another jurisdiction. The Company and the Grantee hereby submit to the jurisdiction of the state and federal courts of Arizona with respect to matters relating to the Plan and this Agreement and agree not to raise or assert the defense that such forum is not convenient for such party.

This Agreement (including all exhibits attached hereto, which are incorporated herein and made a part hereof for all purposes), together with the Plan and all administrative interpretations thereunder, shall constitute the entire agreement between the parties hereto relating to the subject matter hereof. This Agreement cannot be modified, altered, or amended except by an agreement, in writing, signed by both the Company and the Grantee. If any provision of this Agreement, or the application of any such provision to any person or circumstance, is held to be unenforceable or invalid by any court of competent jurisdiction or under any applicable law, the parties hereto shall negotiate an equitable adjustment to the provisions of this Agreement with the view to effecting, to the greatest extent possible, the original purpose and intent of this Agreement, and in any event, the validity and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

The Grantee authorizes, agrees and unambiguously consents to the transmission by the Company of any personal data information related to this Award for legitimate business purposes (including, without limitation, the administration of this Award and the Plan). This authorization and consent is voluntarily and freely given by the Grantee.

Pursuant to Section 21 of the Plan, Awards issued under the Plan are subject to potential forfeiture or recovery to the fullest extent called for by law, any applicable listing standard, or any current or future clawback policy that may be adopted by the Company from time to time, including, without limitation, any clawback policy adopted to comply with the final rules issued by the Securities and Exchange Commission and the final listing standards to be adopted by the NASDAQ pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. By accepting this Award, the Grantee consents to the potential forfeiture or recovery of this Award pursuant to applicable law, listing standard, and/or Company clawback policy, and agrees to be bound by and comply with the clawback policy and to return to the Company the full amount required by the clawback policy.

This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Grantee on account of non-compliance with Section 409A of the Code. If the Company concludes that this Agreement is subject to the requirements of Section 409A, neither the time nor the schedule of the payment of the pRSUs may be accelerated or subject to a further deferral except as permitted pursuant to Section 409A of the Code and the applicable regulations. In addition, if the Company concludes that this Agreement is subject to Section 409A, payment of the pRSUs may be delayed only in accordance with Section 409A of the Code and the applicable regulations.

(a)The acquisition by any Person of beneficial ownership of securities of the Company (including any such acquisition of beneficial ownership deemed to have occurred pursuant to Rule 13d-5 under the Exchange Act) if, immediately thereafter, such Person is the beneficial owner of (i) 50% or more of the total number of outstanding shares of any single class of Company Common Stock or (ii) 40% or more of the total number of outstanding shares of all classes of Company Common Stock, unless such acquisition is made (a) directly from the Company in a transaction approved by a majority of the members of the Incumbent Board or (b) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company;

(b)Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (or who is otherwise designated as a member of the Incumbent Board by such a vote) shall be considered as though such individual were a member of the Incumbent Board, except that any such individual shall not be considered a member of the Incumbent Board if his or her initial assumption of office occurs as a result of either an actual or threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c)The consummation of a Business Combination, unless, immediately following such Business Combination, (i) more than 50% of both the total number of then outstanding shares of common stock of the parent corporation resulting from such Business Combination and the combined voting power of the then outstanding voting securities of such parent corporation entitled to vote generally in the election of directors will be (or is) then beneficially owned, directly or indirectly, by all or substantially all of the Persons who were the beneficial owners, respectively, of the outstanding shares of Company Common Stock immediately prior to such Business Combination in substantially the same proportions as their ownership immediately prior to such Business Combination of the outstanding shares of Company Common Stock, (ii) no Person (other than any employee benefit plan (or related trust) of the Company or any corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 40% or more of the total number of then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the parent corporation resulting from such Business Combination were members of the Incumbent Board immediately prior to the consummation of such Business Combination; or

(d)Approval by the Board and the stockholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) a Major Asset Disposition (or, if there is no such approval by stockholders, consummation of such Major Asset Disposition) unless, immediately following such Major Asset Disposition, (A) Persons that were beneficial owners of the outstanding shares of Company Common Stock immediately prior to such Major Asset Disposition beneficially own, directly or indirectly, more than 50% of the total number of then outstanding shares of common stock and the combined voting power of the then outstanding shares of voting stock of the Company (if it continues to exist) and of the Acquiring Entity in substantially the same proportions as their ownership immediately prior to such Major Asset Disposition of the outstanding shares of Company Common Stock; (B) no Person (other than any employee benefit plan (or related trust) of the Company or such entity) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities of the Company (if it continues to exist) and of the Acquiring Entity entitled to vote generally in the election of directors and (C) at least a majority of the members of the Board of the Company (if it continues to exist) and of the Acquiring Entity were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such Major Asset Disposition.

(vii)the phrase “parent corporation resulting from a Business Combination” means the Company if its stock is not acquired or converted in the Business Combination and otherwise means the entity which as a result of such Business Combination owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries;

(viii)the term “Major Asset Disposition” means the sale or other disposition in one transaction or a series of related transactions of 50% or more of the assets of the Company and its subsidiaries on a consolidated basis; and any specified percentage or portion of the assets of the Company shall be based on fair market value, as determined by a majority of the members of the Incumbent Board;

(ix)the term “Acquiring Entity” means the entity that acquires the largest portion of the assets sold or otherwise disposed of in a Major Asset Disposition (or the entity, if any, that owns a majority of the outstanding voting stock of such acquiring entity entitled to vote generally in the election of directors or members of a comparable governing body); and

(x)the phrase “substantially the same proportions,” when used with reference to ownership interests in the parent corporation resulting from a Business Combination or in an Acquiring Entity, means substantially in proportion to the number of shares of Company Common Stock beneficially owned by the applicable Persons immediately prior to the Business Combination or Major Asset Disposition, but is not to be construed in such a manner as to require that the same ratio or number of shares of such parent corporation or Acquiring Entity be issued, paid or delivered in exchange for or in respect of the shares of each class of Company Common Stock.

The transfer of equity interests or assets of the Company in connection with a bankruptcy filing by or against the Company under Title 11 of the United States Code will not be considered to be a “Change in Control” for purposes of this Agreement. Notwithstanding the foregoing a Change in Control shall not occur in the case of Awards that are subject to the requirements of Section 409A of the Code unless such Change in Control constitutes a “change in control event” as defined in Section 409A of the Code and the regulations thereunder.


Goal (Each Performance Measure Shall be Allocated Equally and Individually at 1/3rd)	Threshold	Target	Maximum
Relative Total Shareholder Return (rTSR) A 1/3 payout will be made if the Company’s rTSR for the Performance Period places it in either the Threshold, Target, or Maximum range as shown to the right.	20th Percentile	50th Percentile	80th Percentile
Market Share A 1/3 payout will be made if the Company’s Market Share metric for the Performance Period places it in either the Threshold, Target, or Maximum range as shown to the right.	> 0%	5%	10%
Operational Improvement A 1/3 payout will be made if the Company’s operational improvement metric for the Performance Period places it in either the Threshold, Target, or Maximum range shown to the right.	> 2%	5%	8%

Certification: No later than 90 days after the end of the Performance Period, the Administrator shall determine and certify the level of attainment, if any, of the Performance Goals and the resulting number of pRSUs earned and vested. Payouts between performance levels will be determined based on straight line interpolation. The Administrator may modify a Performance Goal, in whole or in part, as it deems appropriate, if it determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company conducts its business, or other unusual or non-recurring events or circumstances render the Performance Goal(s) to be unsuitable.

Market Share: Market share shall be determined by reference to the percentage difference between: (i) the total number of Company units shipped during the fiscal year ending immediately prior to the Performance Period divided by the number of Housing and Urban Development Code Home shipments during the same period and (ii) the total number of Company units shipped during the last fiscal year of the Performance Period divided by the number of Housing and Urban Development Code Home shipments during the same period. For this purpose, all shipments shall include acquisitions and all units shipped, whether HUD code homes or other.

Operational Improvement: Operational improvement shall be determined by dividing: (i) the total number of floors produced per employee equivalent during the last fiscal year of the Performance Period by (ii) the total number of floors produced per employee equivalent during the fiscal year ending immediately prior to the Performance Period.

Relative Total Shareholder Return (“rTSR”): rTSR shall be determined with respect to the Company and the rTSR Comparator Companies by dividing: (a) the sum of (i) the difference between the applicable Beginning Stock Price and the applicable Ending Stock Price plus (ii) all dividends and other distributions on the respective shares with an ex-dividend date that falls during the Performance Period by (b) the applicable Beginning Stock Price. To determine the Company’s applicable percentile ranking, the Company and each rTSR Comparator Company are arranged by their respective total shareholder returns (highest to lowest). For this purpose:

•“rTSR Comparator Companies” for the Company shall be: Lennar Corporation, D.R. Horton, Inc., Sherwin-Williams Company, PPG Industries, Inc. PulteGroup, Inc., Mohawk Industries, Inc., Builders FirstSource, Inc., NVR, Inc., Masco Corporation, Toll Brothers, Inc., Owens Corning, Beacon Roofing Supply, Inc., Taylor Morrison Homes Corp., Fortune Brands Home and Security, Inc., Watsco, Inc. Meritage Homes Corporation, KB Home, M.D.C. Holdings, Inc., Lennox International Inc., Tri Pointe Homes, Inc., Century Communities, Inc., TopBuild Corp., LGI Homes, Inc., American Woodmark Corporation, Skyline Champion Corporation, Simpson Manufacturing Co., Inc., Legacy Housing Corp.