Exhibit 10.1

 

CORNELL COMPANIES, INC.

 

RESTRICTED STOCK AWARD

(Profitability & Time- Based)

 

This Award is made effective as of April 1, 2009 (the “Date of Grant”) by
CORNELL COMPANIES, INC. (the “Company”) to                              (the
“Participant”).

 

1.             Grant.

 

(a)           Shares.  Pursuant to the Company’s 2006 Equity Incentive Plan (the
“Plan”), contingent, profitability and time-based restricted shares (the
“Restricted Shares”) of the Company’s common stock, par value $0.001, will be
issued as hereinafter provided in the Participant’s name.  Such Restricted
Shares shall be subject to certain restrictions as hereinafter described
pursuant to the Plan and this Award.  The Restricted Shares will accumulate (but
not vest) as hereinafter provided and will vest in accordance with the
provisions of Section 2(e).  The exact number of Restricted Shares that will
actually accumulate and thereafter vest and be earned by you (if any) is
expressly subject to the accumulation and vesting requirements described below.

 

(b)           Issuance of Shares.  The Restricted Shares will be issued upon
acceptance hereof by the Participant.  The Restricted Shares may, in the
discretion of the Company, be issued in either book entry or certificate form
prior to any vesting hereunder.  The Participant shall have voting rights and
the right to receive dividends on the Restricted Shares.  To the extent that all
or a portion of the Restricted Shares vest as provided in this Agreement, the
Company will distribute such vested Shares to the Participant in a reasonable
time period after vesting, which may consist of share certificates or electronic
transfer to brokerage accounts required to be established by the Participant. 
Participant agrees that Participant may be required to open a brokerage account
as directed by Company for administration of Participants equity awards from
Company.

 

(c)           Plan Incorporated.  The Participant acknowledges receipt of a copy
of the Plan, and agrees that this grant of Restricted Shares shall be subject to
all of the terms and provisions of the Plan, including future amendments
thereto, if any.

 

2.             Restrictions. The Participant hereby accepts the Restricted
Shares when issued and agrees with respect thereto as follows:

 

(a)           In the event of termination of the Participant’s employment with
the Company or an Affiliate because of involuntary termination without Cause (as
hereinafter defined), death or disability (each, an “Involuntary Event”), the
Participant shall vest  (i) in any Restricted Shares accumulated through the
date of such event, (ii) if such event occurs following the completion of a
fiscal year but prior to the time the performance determination is made and
finalized for such year, in any Restricted Shares that would otherwise have been
accumulated for that fiscal year, and (iii) in a proportionate amount (based on
the number of days in the fiscal year to the date such Involuntary Event occurs)
of Restricted Shares that would have accumulated in the fiscal year during which
the Involuntary Event occurs if positive income had been achieved.  Participant
shall, for no consideration, forfeit to the Company any remaining Restricted
Shares that do not vest as described in the preceding sentence.

 

(b)           “Cause” shall mean any of the following events:

 

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(i)

 

the conviction of the Participant or a plea of guilty of nolo contendere by the
Participant, whether or not appeal be taken, of any misdemeanor, or felony
crime, involving personal dishonesty, moral turpitude or willfully violent
conduct;

(ii)

 

the commission of any act of theft, fraud, embezzlement or wrongful diversion of
funds of the Company by the Participant, regardless of whether a criminal
conviction is pursued or obtained;

(iii)

 

gross business misconduct by the Participant, provided that this shall not
include any negligence, omissions, actions or judgments, if made in good faith
by Participant;

(iv)

 

the willful violation by the Participant of federal or state securities laws, as
determined in good faith by the Company’s Board of Directors;

(v)

 

the violation of the Company’s policies and procedures, provided such conduct
results in substantial harm to the Company;

(vi)

 

the material breach by Participant of his or her fiduciary and loyal duties to
the Company;

(vii)

 

if Participant and the Company have entered into an employment agreement, the
material breach by Participant of any provision of such agreement not fully
remedied within twenty (20) days of written notice from Company.

 

To the extent that Participant and the Company have entered into an employment
agreement that requires certain determinations or procedures by the Company, its
Board or Directors or Participant prior to a finding of cause, then such
determinations and/or procedures shall be deemed incorporated into this
definition of Cause for so long as such employment agreement is in force.

 

(c)           Except as may be otherwise provided in the Plan or this Award, in
the event of termination of the Participant’s employment with the Company or an
Affiliate prior to April 1, 2012 for any reason other than an Involuntary Event,
Participant shall, for no consideration, forfeit to the Company all Restricted
Shares, including any Restricted Shares that may have accumulated prior to the
time of termination.

 

The Committee may, in its discretion and pursuant to the Plan, accelerate the
time at which vesting conditions have been achieved.

 

(d)           Subject in all respects to this Agreement, the Restricted Shares
shall accumulate (but not vest) as follows:  one-third (1/3) of the Restricted
shares shall accumulate for each calendar year of the performance period (eg,
2009, 2010 and 2011) for which the Company achieves positive net income provided
that Participant remains employed with the Company at the date of determination
of performance results as described below.  Accumulated Restricted Shares are
not earned or vested until three (3) years following the Date of Grant as
provided in Section 2 (e). Income shall be calculated and determined by the
Company.  The Company may decide in its sole and exclusive discretion to adjust
the calculation of income for any given year.  Examples of items for which an
adjustment might be made include, but are not limited to, the following:

 

·      Changes to accounting standards as required by Generally Accepted
Accounting Procedures (GAAP) or the Financial Accounting Standards Board (FASB)
after the performance goal has been set;

 

·      Certain unbudgeted capital transactions; and

 

·      Profit or loss during a Plan Year that is attributable to certain
entities, programs or contracts acquired by the Company during such Plan Year,
or other adjustments relating to a significant acquisition, divestiture or
corporate transaction.

 

Participant expressly agrees that (i) the Company shall, in its sole and
absolute discretion, so calculate

 

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and determine income and (ii) Company’s determination will be conclusive, final
and binding.

 

(e)           The Restricted Shares, to the extent accumulated, will vest on
April 1, 2012, provided that Participant remains employed with the Company at
April 1, 2012.  Any shares of Restricted Stock that did not accumulate on or
prior to April 1, 2012 shall be forfeited and shall revert back to the Company
without any payment to you, and you shall not thereafter have any rights with
respect to such shares of Restricted Stock.

 

3.             No Transfer.  The Restricted Shares granted hereunder are not
transferable by the Participant and may not be sold, assigned, pledged,
exchanged, hypothecated or otherwise transferred or disposed of until after the
share(s) are vested and distributed to the Participant.  Any such attempted
transfer or pledge shall be null and void.  Notwithstanding the foregoing
restriction, in the event any such attempted transfer or pledge shall be found
for any reason to be effective by operation or in accordance with applicable
law, the vesting requirements shall be binding upon and enforceable against any
such transferee of Restricted Shares.

 

4.             Taxes.  All distributions under this Award are subject to
withholding of all applicable taxes.  Subject to the rules as may be established
by the Committee, such withholding obligations may be satisfied through the
surrender of Restricted Shares that the Participant is otherwise entitled to
under the Plan.

 

5.             Binding.  This Award shall be binding upon and inure to the
benefit of any successor to the Company and all persons lawfully claiming under
the Participant.

 

6.             Defined Terms.  Unless otherwise specifically defined herein,
each term used herein which is defined in the Plan shall have the meaning
assigned such term in the Plan.

 

7.             Amendment; Modification.  This Award may be amended by agreement
of the Participant and the Company, without the consent of any other person. 
The Company shall have the rights of amendment and modification set forth in the
Plan.

 

8.             Governing Law.  This Award shall be governed by, and construed in
accordance with the laws of the State of Texas.

 

9.             Restrictions on Resale.  Other than the restrictions expressly
described herein, there are no additional restrictions imposed by the Plan on
the resale of vested Restricted Shares acquired under the Plan.  However, under
the provisions of the Securities Act of 1933 (the “Securities Act”) and the
rules and regulations of the Securities and Exchange Commission (the “SEC”),
resales of shares acquired under the Plan by certain officers and directors of
the Company who may be deemed to be “affiliates” of the Company must be made
pursuant to an appropriate effective registration statement filed with the SEC,
pursuant to the provisions of Rule 144 issued under the Securities Act, or
pursuant to another exemption from registration provided in the Securities Act. 
At the present time, the Company does not have a currently effective
registration statement pursuant to which such resales may be made by
affiliates.  These restrictions do not apply to persons who are not affiliates
of the Company; provided, however, that all employees are subject to the
Company’s policies against insider trading, and restrictions on resale may be
imposed by the Company from time-to-time as may be necessary under applicable
law.

 

10.           Effect on Other Benefits.  Income recognized by you as a result of
the grant or vesting of Restricted Shares or dividends on your Restricted Shares
will not be included in the formula for calculating benefits under any of the
Company’s retirement and disability plans or any other benefit plans.

 

By acceptance of this Award Agreement, the Participant acknowledges acceptance
of the terms and conditions

 

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set forth herein and in the Plan.

 

 

PARTICIPANT

 

 

 

 

 

 

 

 

 

CORNELL COMPANIES, INC.

 

 

 

 

 

By:

 

 

Name:

Patrick N. Perrin

 

 

Title: Senior Vice President

 

 

Chief Administrative Officer

 

 

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