Exhibit 10.1


CORNELL
COMPANIES, INC.


 


RESTRICTED
STOCK AWARD


(Performance Based)


 


This
Award is made effective as of [Date] (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, performance-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 exact number of Restricted Shares that
will actually vest and be earned by you (if any) is expressly subject to the
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 a portion of the
Restricted Shares vest, the Company will distribute such vested Shares to the
Participant in a reasonable time period after the performance determination is
made in a manner to be determined by Company from time to time, 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)           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 for any reason, including but not
limited to retirement, voluntary termination, involuntary termination, death,
or disability, the Participant shall, for no consideration, forfeit to the
Company all Restricted Shares which have not vested at 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.


 


(b)           Vesting Requirements.  Subject in all respects to this Agreement,
the Restricted Shares shall vest only upon the Company achieving the
performance criteria set forth below. 
The performance criteria shall be based upon the Company’s annual
earnings before interest and taxes and including depreciation allowance (“EBITDA”)
targets set forth below, calculated as described and contemplated herein.  These contingent Restricted Shares shall vest
(if at all) as follows: one-third (33.33%) of such shares (XX shares) vest upon
the achievement of each of the EBITDA targets set forth below with respect to a
fiscal year up of the Company up to and including [Year] and beginning with [Year]:


 


Performance-based Vesting
Requirements


 


	
  EBITDA Targets*
  (in millions)

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
  # Shares Vested
  and Distributed (reduced by any EBITDA awards distributed in prior periods;
  not in addition**)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*                 Determination of Performance Results.  EBITDA shall be calculated and determined by
the Company.  The Company may decide in
its sole and exclusive discretion to adjust the calculation of EBITDA 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 exclusive discretion, so calculate and determine EBITDA and the associated
performance under the targets, and (ii) Company’s determination will be
conclusive, final and binding.  


 


2

















 


from this facility will be excluded in the
final determination of [Year] EBITDA.


 


**          By way of illustration, if
prior to any EBITDA targets being met, the EBITDA for a particular covered year
were the amount set forth in Column 2, then two-thirds (66.67%) of the
Restricted Shares would vest (i.e., one-third for achieving the EBITDA target
in Column 1 and an additional one-third for achieving the EBITDA target in
Column 2).


 


(d)           Except as
expressly set forth below in this subsection (d) or in the Plan, the
Participant must be employed by the Company at the time a performance
determination is made and finalized hereunder with respect to any particular
fiscal year in order to be eligible to vest in any remaining unvested portion
of the award.  Notwithstanding the
foregoing, a Participant shall be entitled to that portion of the award related
to any fiscal year covered hereby that would otherwise be earned in the event that (i) the
Participant’s employment is terminated after completion of such fiscal year but
prior to the time the performance determination is made and finalized
for such year, and (ii) such termination was a result of the Participant’s death or
disability (as determined by the Company) or the Participant’s employment was
terminated for the convenience of the Company as determined by the Company in
its sole and absolute discretion.


 


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 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 


 


3

















 


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 set forth herein and in the
Plan.


 


 


	
  CORNELL
  COMPANIES, INC.

  	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   Patrick N.
  Perrin

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   Senior
  Vice President,

  	
   

  	
   

  
	
   

  	
   Chief
  Administrative Officer

  	
   

  	
   

  
						



 


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