Document:

EX-10.2

 Exhibit 10.2 

EMPLOYEE MATTERS AGREEMENT 
 BY
AND BETWEEN 
 CAPITAL SOUTHWEST CORPORATION 

AND 
 CSW INDUSTRIALS, INC. 

DATED AS OF SEPTEMBER 8, 2015 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
			
	 ARTICLE I
	 	DEFINITIONS	  	 	1	  
			
	 Section 1.1
	 	 Definitions
	  	 	1	  
	 Section 1.2
	 	 Reference; Interpretation
	  	 	5	  
	 ARTICLE II
	 	GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES	  	 	6	  
			
	 Section 2.1
	 	 General Principles
	  	 	6	  
	 Section 2.2
	 	 Service Credit
	  	 	7	  
	 Section 2.3
	 	 Transferring Employees
	  	 	8	  
	 Section 2.4
	 	 Collective Bargaining
	  	 	8	  
	 Section 2.5
	 	 Non-U.S. Regulatory Compliance
	  	 	8	  
	 ARTICLE III
	 	EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION	  	 	8	  
			
	 Section 3.1
	 	 Generally
	  	 	8	  
	 Section 3.2
	 	 Equity Incentive Awards
	  	 	9	  
	 Section 3.3
	 	 Capital Southwest Incentive Awards
	  	 	11	  
	 ARTICLE IV
	 	QUALIFIED RETIREMENT PLANS	  	 	13	  
			
	 Section 4.1
	 	 The Retirement Plan
	  	 	13	  
	 Section 4.2
	 	 401(k) Plans
	  	 	13	  
	 Section 4.3
	 	 ESOP
	  	 	13	  
	 ARTICLE V
	 	NONQUALIFIED DEFERRED COMPENSATION PLANS	  	 	14	  
			
	 Section 5.1
	 	 The Restoration Plan
	  	 	14	  
	 Section 5.2
	 	 The Executive Compensation Plan
	  	 	15	  
	 ARTICLE VI
	 	WELFARE PLANS	  	 	15	  
			
	 Section 6.1
	 	 CSWI Assumption
	  	 	15	  
	 Section 6.2
	 	 Establishment of Capital Southwest Health and Welfare Plans
	  	 	15	  
	 Section 6.3
	 	 Welfare Transition Period
	  	 	15	  
	 Section 6.4
	 	 COBRA
	  	 	16	  
	 Section 6.5
	 	 Vacation, Holidays and Leaves of Absence
	  	 	16	  
	 Section 6.6
	 	 Severance and Unemployment Compensation
	  	 	16	  
	 Section 6.7
	 	 Workers’ Compensation
	  	 	16	  
	 ARTICLE VII
	 	NON-U.S. EMPLOYEES	  	 	17	  
			
	 Section 7.1
	 	 Treatment of Non-U.S. Employees
	  	 	17	  
	 ARTICLE VIII
	 	MISCELLANEOUS	  	 	17	  
			
	 Section 8.1
	 	 At-Will Status
	  	 	17	  
	 Section 8.2
	 	 Severance
	  	 	17	  
	 Section 8.3
	 	 Change in Control
	  	 	17	  
	 Section 8.4
	 	 Employee Records
	  	 	17	  
	 Section 8.5
	 	 Preservation of Rights to Amend
	  	 	18	  
	 Section 8.6
	 	 Fiduciary Matters
	  	 	19	  
	 Section 8.7
	 	 Complete Agreement; Construction
	  	 	19	  
	 Section 8.8
	 	 Counterparts
	  	 	19	  
	 Section 8.9
	 	 Survival of Agreements
	  	 	19	  
	 Section 8.10
	 	 Notices
	  	 	19	  
	 Section 8.11
	 	 Waivers
	  	 	20	  
	 Section 8.12
	 	 Amendments
	  	 	20	  

  
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 TABLE OF CONTENTS 

(cont.) 
  

							
	 	 	 	  	Page	 
			
	 Section 8.13
	 	 Assignment
	  	 	20	  
	 Section 8.14
	 	 Successors and Assigns
	  	 	20	  
	 Section 8.15
	 	 Termination
	  	 	20	  
	 Section 8.16
	 	 Third Party Beneficiaries
	  	 	20	  
	 Section 8.17
	 	 Title and Headings
	  	 	20	  
	 Section 8.18
	 	 Governing Law
	  	 	20	  
	 Section 8.19
	 	 Waiver of Jury Trial
	  	 	21	  
	 Section 8.20
	 	 Specific Performance
	  	 	21	  
	 Section 8.21
	 	 Severability
	  	 	21	  

  
 ii 

 EMPLOYEE MATTERS AGREEMENT 

This Employee Matters Agreement, dated as of September 8, 2015 (the “Agreement”), is by and between Capital Southwest
Corporation, a Texas corporation (“Capital Southwest”), and CSW Industrials, Inc., a Delaware corporation (“CSWI,” and together with Capital Southwest, the “Parties”). 

WHEREAS, the Board of Directors of Capital Southwest (the “Capital Southwest Board”) has determined that it is in the best
interests of Capital Southwest and its shareholders to separate the CSWI Businesses from Capital Southwest’s other businesses; 

WHEREAS, in furtherance of the foregoing, the Capital Southwest Board has authorized the distribution to the holders of the issued and
outstanding shares of common stock, par value $0.25 per share, of Capital Southwest (the “Capital Southwest Shares”) as of the Record Date of all the issued and outstanding shares of common stock, par value $0.01 per share, of CSWI
(each such share is individually referred to as a “CSWI Share” and collectively referred to as the “CSWI Shares”), respectively, on the basis of one CSWI Share for every share of Capital Southwest Shares (the
“Share Distribution”); 
 WHEREAS, in order to effect the Share Distribution, Capital Southwest and CSWI have entered into
a Distribution Agreement, dated as of September 8, 2015 (the “Distribution Agreement”); and 
 WHEREAS, in addition to the
matters addressed by the Distribution Agreement, the Parties desire to enter into this Agreement to set forth the terms and conditions of certain employment, compensation and benefit matters. 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows: 

ARTICLE I 
 DEFINITIONS

 Section 1.1 Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below.
Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to them in the Distribution Agreement. 

“Agreement” has the meaning set forth in the preamble to this Agreement and shall include all Schedules hereto and all
amendments, modifications, and changes hereto. 
 “Benefit Plan” means any contract, agreement, policy, practice, program,
plan, trust, commitment or arrangement providing for benefits, perquisites or compensation of any nature from an employer to any Employee, or to any family member, dependent, or beneficiary of any such Employee, including pension plans, thrift
plans, supplemental pension plans and welfare plans, and contracts, agreements, policies, practices, programs, plans, trusts, commitments, and arrangements providing for terms of employment, fringe benefits, severance benefits, change in

 
control protections or benefits, travel and accident, life, accidental death and dismemberment, disability and accident insurance, tuition reimbursement, travel and reimbursement, vacation, sick,
personal or bereavement days, leaves of absences and holidays; provided, however, the term “Benefit Plan” does not include any governmental-sponsored benefits, such as workers’ compensation, unemployment or similar
plans, programs or policies. 
 “Capital Southwest” has the meaning set forth in the preamble to this Agreement. 

“Capital Southwest Awards” means Capital Southwest Options, Capital Southwest Restricted Stock Awards and Capital Southwest
Incentive Awards, collectively. 
 “Capital Southwest Board” has the meaning set forth in the recitals to this Agreement.

 “Capital Southwest Change of Control” has the meaning set forth in Section 3.2(c). 

“Capital Southwest Companies” means Capital Southwest and its Subsidiaries other than CSWI and the CSWI Companies. 

“Capital Southwest Company Employee” means any employee of a Capital Southwest Company that is not a CSWI Company Employee.

 “Capital Southwest Compensation Committee” means the Compensation Committee of the Capital Southwest Board. 

“Capital Southwest Equity Plan” means any equity compensation plan sponsored or maintained by Capital Southwest immediately
prior to the Distribution Date, including the Capital Southwest Corporation 1999 Stock Option Plan, the Capital Southwest Corporation 2009 Stock Incentive Plan, as amended, and the Capital Southwest Corporation 2010 Restricted Stock Award Stock
Plan, as amended. 
 “Capital Southwest Incentive Awards” means those cash incentive awards listed on
Schedule 1.1 which were granted pursuant to a phantom stock option agreement entered into with Capital Southwest that are outstanding as of immediately prior to the Distribution Date. 

“Capital Southwest Option” means an option to purchase Capital Southwest Shares granted pursuant to a Capital Southwest
Equity Plan that is outstanding as of immediately prior to the Distribution Date. 
 “Capital Southwest Ratio” means the
quotient obtained by dividing the Capital Southwest Share Value by the Post-Separation Capital Southwest Share Value. 
 “Capital
Southwest Restricted Stock Award” means a restricted stock award granted pursuant to a Capital Southwest Equity Plan that is outstanding as of immediately prior to the Distribution Date. 

“Capital Southwest Shares” has the meaning set forth in the recitals to this Agreement. 

  
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 “Capital Southwest Share Value” means the simple average of the volume weighted
average per-share price of Capital Southwest Shares trading “regular way with due bills” on NASDAQ during each of the last ten full Trading Sessions immediately prior to the Distribution Date. 

“Capital Southwest Welfare Plans” means the group health and welfare insurance benefit plans established by the Capital
Southwest Companies, effective as of January 1, 2016. 
 “Capital Southwest 401(k) Plan” means the Capital Southwest
Management Corporation Employee Savings Plan, as effective immediately following the Distribution Date. 
 “COBRA” means
the Consolidated Omnibus Budget Reconciliation Act of 1985. 
 “Code” means the Internal Revenue Code of 1986, as amended.

 “CSWI” has the meaning set forth in the preamble to this Agreement. 

“CSWI Awards” means CSWI Options and CSWI Restricted Stock Awards, collectively. 

“CSWI Benefit Plans” means any Benefit Plan established, sponsored or maintained by CSWI or a CSWI Company. 

“CSWI Change of Control” has the meaning set forth in Section 3.2(c). 

“CSWI Company Employees” means any employee of CSWI or a CSWI Company and all Transferring Employees. 

“CSWI Compensation and Benefit Liability” has the meaning set forth in Section 2.1(a). 

“CSWI Equity Plan” means the CSWI 2015 Equity and Incentive Compensation Plan. 

“CSWI Option” means an option to purchase CSWI Shares granted by CSWI pursuant to the CSWI Equity Plan in accordance with
Section 3.2(b). 
 “CSWI Shares” has the meaning set forth in the recitals to this Agreement. 

“CSWI Ratio” means the quotient obtained by dividing the Capital Southwest Share Value by the CSWI Share Value. 

“CSWI Restoration Plan” has the meaning set forth in Section 5.1. 

“CSWI Restricted Stock Award” means a restricted stock award granted pursuant to the CSWI Equity Plan in accordance with
Section 3.2(a). 
 “CSWI Share Value” means the simple average of the volume weighted average per-share price
of CSWI Shares trading on NASDAQ during each of the first ten full Trading Sessions immediately after the Distribution Date. 

  
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 “CSWI 401(k) Plan” means the CSW Industrials, Inc. Employee Savings Plan, as
effective immediately following the Distribution Date. 
 “Distribution Agreement” has the meaning set forth in the
recitals to this Agreement. 
 “DOL” means the U.S. Department of Labor. 

“Employee” means any Capital Southwest Company Employee or CSWI Company Employee. 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 

“ESOP” means the CSW Industrials, Inc. Employee Stock Ownership Plan, as effective immediately following the Distribution
Date, and as amended from time to time. 
 “ESOP Asset Transfer Date” has the meaning set forth in
Section 4.3(a). 
 “Executive Compensation Plan” means the executive compensation plan consisting of
nonqualified stock options, restricted stock and cash incentive awards adopted by Capital Southwest on August 28, 2014. 

“Former Capital Southwest Company Employee” means any individual who as of the Distribution Date is not a Capital Southwest
Company Employee or a CSWI Company Employee, but who previously was, as between the Capital Southwest Companies, CSWI and the CSWI Companies, most recently employed by one of the Capital Southwest Companies. 

“Former CSWI Company Employee” means any individual who as of the Distribution Date is not a Capital Southwest Company
Employee or a CSWI Company Employee, but who previously was, as between the Capital Southwest Companies, CSWI and the CSWI Companies, most recently employed by CSWI or one of the CSWI Companies. 

“Former Employee” means any Former Capital Southwest Company Employee or Former CSWI Company Employee. 

“IRS” means the U.S. Internal Revenue Service. 

“Parties” has the meaning set forth in the preamble to this Agreement. 

“PBGC” means the U.S. Pension Benefit Guaranty Corporation. 

“Post-Separation Capital Southwest Awards” means Post-Separation Capital Southwest Options and Post-Separation Capital
Southwest Restricted Stock Awards, collectively. 
 “Post-Separation Capital Southwest Option” means a Capital Southwest
Option adjusted as of the Distribution Date in accordance with Section 3.2(b). 
 “Post-Separation Capital Southwest
Restricted Stock Award” means a Capital Southwest Restricted Stock Award adjusted as of the Distribution Date in accordance with Section 3.2(a). 

  
 4 

 “Post-Separation Capital Southwest Share Value” means the simple average of the
volume weighted average per-share price of Capital Southwest Shares trading on NASDAQ during each of the first ten full Trading Sessions immediately after the Distribution Date. 

“Restoration Plan” means the Capital Southwest and its Affiliates 2009 Restoration of Retirement Income Plan, as amended and
restated effective January 1, 2008, and as amended from time to time. 
 “Retirement Plan” means the Retirement Plan
for Employees of Capital Southwest Corporation and its Affiliates, as amended and restated effective April 1, 2011, as amended from time to time. 

“Securities Act” means the U.S. Securities Act of 1933. 

“Share Distribution” has the meaning set forth in the recitals to this Agreement. 

“Share Value Factor” means the quotient obtained by dividing (a) the Capital Southwest Share Value by (b) the sum
of (i) the CSWI Share Value and (ii) the Post-Separation Capital Southwest Share Value. 
 “Trading Session”
means the period of time during any given calendar day, commencing with the determination of the opening price on NASDAQ and ending with the determination of the closing price on NASDAQ, in which trading in Capital Southwest Shares or CSWI Shares
(as applicable) is permitted on NASDAQ. 
 “Transferring Employees” has the meaning set forth in
Section 2.3(a). 
 “U.S.” means the United States of America. 

“Welfare Plans” means the group health and welfare insurance benefits included on Schedule 1.2. 

“Welfare Transition Period” means the period commencing on the Distribution Date and continuing through December 31,
2015. 
 “401(k) Plans” means the Capital Southwest 401(k) Plan and the CSWI 401(k) Plan. 

Section 1.2 Reference; Interpretation. Unless the context requires otherwise, (a) all references to Sections, Articles or
Schedules are to the Sections, Articles or Schedules of or to this Agreement, (b) each accounting term not otherwise defined in this Agreement has the meaning commonly applied to it in accordance with United States generally accepted accounting
principles, consistently applied, and as in effect on the date of this Agreement, (c) words in the singular include the plural and vice versa, (d) all references to $ or dollar amounts will be to lawful currency of the U.S., (e) to
the extent the term “day” or “days” is used, it will mean calendar days unless Business Days are specified, (f) the pronoun “his” refers to the masculine, feminine and neuter, the words “herein,”
“hereby,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section, Article or other subdivision, (g) the term “including” means
“including without limitation,” (h) the term “or” 

  
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will be disjunctive but not exclusive, (i) the term “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase
will not mean simply “if,” and (j) any reference to any contract or Law is a reference to it as amended, modified and supplemented from time to time (and, in the case of a Law, to (i) any successor provision and (ii) the
rules and regulations promulgated thereunder). This Agreement shall not be construed against either Party as the principal draftsperson hereof or thereof. 

ARTICLE II 
 GENERAL
PRINCIPLES FOR ALLOCATION OF LIABILITIES 
 Section 2.1 General Principles. Unless otherwise provided herein, Liabilities in
respect of Employees and Former Employees for compensation, wages and employee benefits shall be allocated among Capital Southwest and CSWI according to this Section 2.1. 

(a) Acceptance and Assumption of CSWI Compensation and Benefit Liabilities. On or prior to the Distribution Date, but in any case prior
to the Share Distribution, CSWI shall retain, assume and agree, as applicable, to faithfully perform, discharge and fulfill the following Liabilities in accordance with their respective terms (each of which shall be considered a “CSWI
Compensation and Benefit Liability”), regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Distribution Date: 

(i) any and all wages, salaries, incentive compensation (as the same may be modified by this Agreement), equity compensation
(as the same may be modified by Article III of this Agreement), commissions, bonuses and any other employee compensation or benefits payable to or on behalf of any CSWI Company Employee or Former CSWI Company Employee on or after the Distribution
Date by any Capital Southwest Company or CSWI Company, in each case arising out of such CSWI Company Employee’s or Former CSWI Company Employee’s capacity as an Employee or Former Employee of any Capital Southwest Company or CSWI Company,
and, without regard to when such wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other employee compensation or benefits are or may have been awarded or earned; provided, however, with respect to
any CSWI Company Employees that are Transferring Employees, only wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other employee compensation or benefits payable to or on behalf of such Transferring Employees
that have or will be awarded or earned on and after the Distribution Date shall be assumed, performed, discharged and fulfilled by CSWI; provided, further, that any Liability expressly retained by a Capital Southwest Company pursuant
to this Agreement will remain a Liability of the applicable capital Southwest Company and will not be a CSWI Compensation and Benefit Liability; 

(ii) any and all Liabilities whatsoever with respect to claims made by or with respect to any CSWI Company Employee or Former
CSWI Company Employee in connection with any Benefit Plan not retained or assumed by any of the Capital Southwest Companies pursuant to this Agreement, the Distribution Agreement or any other Ancillary Agreement; and 

(iii) any and all Liabilities expressly assumed or retained by CSWI or any of the CSWI Companies pursuant to this Agreement.

  
 6 

 (b) Retention of Capital Southwest Compensation and Benefit Liabilities. Capital Southwest
shall retain and agree to faithfully perform, discharge and fulfill any and all Liabilities of Employees for compensation, wages and employee benefits other than the CSWI Compensation and Benefit Liabilities, in accordance with their respective
terms. 
 (c) Payroll and Related Taxes. With respect to any Transferring Employee, the Parties shall, or shall cause their
respective Subsidiaries to, (i) treat CSWI (or the applicable CSWI Companies) as a “successor employer” and Capital Southwest (or the applicable Capital Southwest Companies) as a “predecessor,” within the meaning of Sections
3121(a)(1) and 3306(b)(1) of the Code, for purposes of Taxes imposed under the United States Federal Insurance Contributions Act, as amended (“FICA”), or the United States Federal Unemployment Tax Act, as amended
(“FUTA”), (ii) cooperate with each other to avoid, to the extent possible, the restart of FICA and FUTA upon or following the Distribution Date with respect to each such CSWI Company Employee for the tax year during which the
Distribution Date occurs, and (iii) use commercially reasonably efforts to implement the alternate procedure described in Section 5 of Revenue Procedure 2004-53; provided, however, that, to the extent that CSWI (or the
applicable CSWI Companies) cannot be treated as a “successor employer” to Capital Southwest (or the applicable Capital Southwest Companies) within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code with respect to any
Transferring Employee, (x) with respect to the portion of the tax year commencing on January 1, 2015 and ending on the Distribution Date, Capital Southwest will (A) be responsible for all payroll obligations, Tax withholding and
reporting obligations for such Transferring Employee and (B) furnish a Form W-2 or similar earnings statement to all such Transferring Employees for such period, and (y) with respect to the remaining portion of such tax year, CSWI will
(A) be responsible for all payroll obligations, Tax withholding and reporting obligations regarding such Transferring Employees and (B) furnish a Form W-2 or similar earnings statement to all such Transferring Employees. 

(d) Unaddressed Liabilities. To the extent that this Agreement does not address particular Liabilities for compensation, wages or
employee benefits under any Benefit Plan and the Parties later determine that they should be allocated in connection with the Share Distribution, the Parties shall agree in good faith on the allocation, taking into account the handling of comparable
Liabilities under this Agreement. 
 Section 2.2 Service Credit. 

(a) Service for Eligibility, Vesting and Benefit Purposes. Except as otherwise provided herein or in any other Ancillary Agreement,
CSWI shall, or shall cause the CSWI Companies, respectively, to, recognize each CSWI Company Employee’s and each Former CSWI Company Employee’s full service with any of the Capital Southwest Companies or predecessor entities at or before
the Distribution Date, to the same extent that such service was credited by the Capital Southwest Companies for similar purposes prior to the Distribution Date 

  
 7 

 
as if such full service had been performed for CSWI or the applicable CSWI Company that is the Employee’s employer after the Distribution Date, for purposes of eligibility, vesting and
determination of level of benefits under any Benefit Plan sponsored by CSWI or the applicable CSWI Company. 
 (b) Credit for
Compensation. Except as otherwise provided herein or in any other Ancillary Agreement, the compensation paid by Capital Southwest and its Subsidiaries to an Employee shall be credited and recognized for all applicable purposes under the
applicable Benefit Plans following the Distribution Date as though it were compensation from CSWI or any of the CSWI Companies, as applicable. 

Section 2.3 Transferring Employees. 

(a) Transferring Employees. Capital Southwest shall, or shall cause the Capital Southwest Companies to, transfer the employment of the
employees listed on Schedule 2.3(a) (the “Transferring Employees”) to CSWI immediately prior to the Distribution Date. 

(b) Employment Agreements. To the extent necessary, Capital Southwest shall, or shall cause the Capital Southwest Companies to, use
commercially reasonable efforts to terminate any offers of employment and/or employment agreements entered into between a Transferring Employee and any of the Capital Southwest Companies, effective as of the Distribution Date. CSWI shall, or shall
cause the CSWI Companies to, enter into new employment agreements with any Transferring Employees as it deems necessary. Such new employment agreements, if any, shall supersede and replace any offers of employment and/or employment agreements
entered into between such Transferring Employee and any of the Capital Southwest Companies. 
 Section 2.4 Collective
Bargaining. CSWI shall, or shall cause the applicable CSWI Company to, retain all collective bargaining agreements (including any national, sector or local collective bargaining agreement) that cover CSWI Company Employees and the Liabilities
arising under such collective bargaining agreements. 
 Section 2.5 Non-U.S. Regulatory Compliance. Prior to the Share
Distribution, Capital Southwest may, to the extent necessary, adjust the treatment described in this Agreement with respect to Employees who are located outside of the United States in order to ensure compliance with the applicable Laws of countries
outside of the United States or to preserve the Tax benefits provided under local Tax Law. 
 ARTICLE III 

EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION 

Section 3.1 Generally. Each Capital Southwest Award that is outstanding as of immediately prior to the Distribution Date shall be
adjusted as described below; provided, however, that, effective immediately prior to the Distribution Date, the Capital Southwest Compensation Committee may provide for different adjustments with respect to some or all Capital
Southwest Awards to the extent that the Capital Southwest Compensation Committee deems such adjustments necessary and appropriate. Any adjustments made by the Capital 

  
 8 

 
Southwest Compensation Committee pursuant to the foregoing sentence shall be deemed incorporated by reference herein as if fully set forth below and shall be binding on the Parties and their
respective Affiliates. On or prior to the Distribution Date, the CSWI Equity Plan shall be established, with such terms as are necessary to permit the implementation of the provisions of Section 3.2. 

Section 3.2 Equity Incentive Awards. 

(a) Restricted Stock. Each holder of an outstanding Capital Southwest Restricted Stock Award immediately prior to the
Distribution Date shall receive, as of the Distribution Date, a CSWI Restricted Stock Award for such number of CSWI Shares as is determined in the same way as if the outstanding Capital Southwest Restricted Stock Award comprised fully vested Capital
Southwest Shares as of the Distribution Date. Except as set forth in this Section 3.2, the Post-Separation Capital Southwest Restricted Stock Award and the CSWI Restricted Stock Award issued in accordance with this Section 3.2 both
shall be subject to substantially the same terms and conditions (including with respect to vesting) immediately after the Distribution Date as were applicable to the Capital Southwest Restricted Stock Award immediately prior to the Distribution Date
(except as otherwise provided herein, including in Section 3.2(c)).  
 (b) Stock Options. Each Capital Southwest
Option that is outstanding immediately prior to the Distribution Date, regardless of by whom held, shall be converted as of the Distribution Date into both a Post-Separation Capital Southwest Option and a CSWI Option and shall be subject to
substantially the same terms and conditions (including with respect to vesting and expiration) after the Distribution Date as were applicable to such Capital Southwest Option immediately prior to the Distribution Date (except as otherwise provided
herein, including in Section 3.2(c)); provided, however, that from and after the Distribution Date: 

(i) the number of Capital Southwest Shares subject to such Post-Separation Capital Southwest Option shall be equal to the
product obtained by multiplying (A) the number of Capital Southwest Shares subject to the corresponding Capital Southwest Option immediately prior to the Distribution Date by (B) the Share Value Factor, with the resulting number rounded
down to the nearest whole share; 
 (ii) the number of CSWI Shares subject to such CSWI Option shall be equal to the product
obtained by multiplying (A) the number of Capital Southwest Shares subject to the corresponding Capital Southwest Option immediately prior to the Distribution Date by (B) the Share Value Factor, with the resulting number rounded down to
the nearest whole share; 
 (iii) the per share exercise price of such Post-Separation Capital Southwest Option shall be
equal to the quotient obtained by dividing (A) the per share exercise price of the corresponding Capital Southwest Option immediately prior to the Distribution Date by (B) the Capital Southwest Ratio, with the resulting number rounded up
to the nearest cent; and 
 (iv) the per share exercise price of such CSWI Option shall be equal to the quotient obtained by
dividing (A) the per share exercise price of the corresponding Capital Southwest Option immediately prior to the Distribution Date by (B) the CSWI Ratio, with the resulting number rounded up to the nearest cent. 

  
 9 

 Notwithstanding anything to the contrary in this Section 3.2(b), the exercise price, the number of
Capital Southwest Shares and CSWI Shares subject to each Post-Separation Capital Southwest Option and CSWI Option, and the terms and conditions of exercise of such options shall be determined in a manner consistent with the requirements of
Section 409A of the Code. For purposes of Section 409A of the Code, the Capital Southwest Share Value shall be treated as the fair market value of a Capital Southwest Share immediately prior to the substitutions described in this
Section 3.2(b) and the Post-Separation Capital Southwest Share Value and the CSWI Share Value shall be treated as the fair market value of a Capital Southwest Share and the fair market value of a CSWI Share, respectively, immediately
after such substitutions. 
 (c) Miscellaneous Award Terms. With respect to Post-Separation Capital Southwest Awards and CSWI Awards,
(i) employment with or service to the Capital Southwest Companies shall be treated as employment with and service to CSWI with respect to CSWI Awards held by Capital Southwest Company Employees and (ii) employment with or service to CSWI
or a CSWI Company shall be treated as employment with or service to Capital Southwest with respect to Post-Separation Capital Southwest Awards held by CSWI Company Employees. In addition, none of the Share Distribution or any employment action
described in Section 2.3 shall constitute a termination of employment for any Employee for purposes of any Post-Separation Capital Southwest Award or any CSWI Award. After the Distribution Date, for any award adjusted under this
Section 3.2, any reference to a “change in control,” “change of control” or similar definition in an award agreement, employment agreement or Capital Southwest Equity Plan applicable to such award (A) with respect to
Post-Separation Capital Southwest Awards, shall be deemed to refer to a “change in control,” “change of control” or similar definition as set forth in the applicable award agreement, employment agreement or Capital Southwest
Equity Plan (a “Capital Southwest Change of Control”) and (B) with respect to CSWI Awards, shall be deemed to refer to a “Change in Control” as defined in the CSWI Equity Plan (a “CSWI Change of
Control”). Without limiting the foregoing, with respect to provisions related to vesting of awards, a Capital Southwest Change of Control shall be treated as a CSWI Change of Control for purposes of CSWI Awards held by Capital Southwest
Company Employees and a CSWI Change of Control shall be treated as a Capital Southwest Change of Control for purposes of Post-Separation Capital Southwest Awards held by CSWI Company Employees. 

(d) Tax Reporting and Withholding.  

(i) Except as otherwise provided in this Section 3.2(d), after the Distribution Date, Post-Separation Capital
Southwest Awards, regardless of by whom held, shall be settled by Capital Southwest, and CSWI Awards, regardless of by whom held, shall be settled by CSWI. 

(ii) Upon the vesting or exercise, as applicable, of CSWI Awards, CSWI shall be solely responsible for ensuring (A) the
satisfaction of all applicable Tax withholding requirements on behalf of each CSWI Company Employee and (B) the collection and remittance of employee withholding Taxes to the Capital Southwest Companies with

  
 10 

 
respect to each Capital Southwest Company Employee (with Capital Southwest Companies being responsible for remittance of the applicable employee Taxes and payment and remittance of the applicable
employer Taxes relating to Capital Southwest Company Employees to the applicable Governmental Authority). 
 (iii) Upon the
vesting or exercise, as applicable, of Post-Separation Capital Southwest Awards, Capital Southwest shall be solely responsible for ensuring (A) the satisfaction of all applicable Tax withholding requirements on behalf of each Capital Southwest
Company Employee and (B) the collection and remittance of employee withholding Taxes to CSWI or the CSWI Companies with respect to each CSWI Company Employee (with CSWI or the CSWI Companies being responsible for remittance of the applicable
employee Taxes and payment and remittance of the applicable employer Taxes relating to CSWI Company Employees to the applicable Governmental Authority). 

(iv) Following the Distribution Date, CSWI will be responsible for all income Tax reporting in respect of Post-Separation
Capital Southwest Awards and CSWI Awards held by CSWI Company Employees, and Capital Southwest shall be responsible for all income Tax reporting in respect of Post-Separation Capital Southwest Awards and CSWI Awards held by Capital Southwest Company
Employees. 
 (v) Following the Distribution Date, if any Post-Separation Capital Southwest Award held by a CSWI Company
Employee shall fail to become vested, such Post-Separation Capital Southwest Award shall be forfeited to Capital Southwest, and if any CSWI Award held by a Capital Southwest Company Employee shall fail to become vested, such CSWI Award shall be
forfeited to CSWI. 
 (e) Registration and Other Regulatory Requirements. CSWI agrees to file Forms S-1, S-3 and S-8 registration
statements, as applicable, with respect to, and to cause to be registered pursuant to the Securities Act, the CSWI Shares authorized for issuance under the CSWI Equity Plan, as required pursuant to the Securities Act, before the date of issuance of
any CSWI Shares pursuant to the CSWI Equity Plan. The Parties shall take such additional actions as are deemed necessary or advisable to effectuate the foregoing provisions of this Section 3.2(e), including compliance with securities
Laws and other legal requirements associated with equity compensation awards in affected non-U.S. jurisdictions. Capital Southwest agrees to facilitate the adoption and approval of the CSWI Equity Plan consistent with the requirements of Treasury
Regulations Section 1.162-27(f)(4)(iii). 
 Section 3.3 Capital Southwest Incentive Awards. 

(a) Awards Granted Prior to the Share Distribution. Capital Southwest will use commercially reasonable efforts to enter into an
agreement with each holder of a Capital Southwest Incentive Award that is outstanding immediately prior to the Distribution Date to cause the “Phantom Share Value” (as defined in the Capital Southwest Incentive Award) for purposes of any
future exercise of such award to be determined based upon the net asset value of Capital Southwest as of the last day of the fiscal quarter ending immediately prior to the Distribution Date. After the Distribution Date, Capital Southwest shall
retain all Liabilities 

  
 11 

 
associated with the Capital Southwest Incentive Awards held by Capital Southwest Company Employees or Transferring Employees, including any replacement awards issued to any Capital Southwest
Company Employees pursuant to Section 3.3(b), and CSWI shall assume all Liabilities associated with the Capital Southwest Incentive Awards held by CSWI Company Employees who are not Transferring Employees, as well as any replacement
awards issued to CSWI Company Employees (including Transferring Employees) pursuant to Section 3.3(b). Employment with or service to CSWI or a CSWI Company shall be treated as employment with or service to Capital Southwest with respect
to Capital Southwest Incentive Awards held by CSWI Company Employees following the Distribution Date. In addition, none of the Share Distribution or any employment action described in Section 2.3 shall constitute a termination of
employment for any Employee for purposes of any Capital Southwest Incentive Award. 
 (b) Replacement Awards. Capital Southwest and
CSWI shall use commercially reasonable efforts to agree with each holder of Capital Southwest Incentive Awards to enter into a new agreement regarding acceptable replacement awards to be issued by Capital Southwest, if such holder is a Capital
Southwest Company Employee, or CSWI, if such holder is a CSWI Company Employee, effective as of the Distribution Date. Each such replacement award shall be subject to substantially the same terms and conditions with respect to vesting and the time
and manner of payment as applied to the applicable Capital Southwest Incentive Award immediately prior to the Distribution Date to the extent necessary to comply with Section 409A of the Code. 

(c) Tax Reporting and Withholding.  

(i) Upon the vesting or exercise, as applicable, of Capital Southwest Incentive Awards, CSWI shall be solely responsible for
ensuring (A) the satisfaction of all applicable Tax withholding requirements on behalf of each CSWI Company Employee (excluding Transferring Employees), (B) the collection and remittance of employee withholding Taxes to the applicable
Governmental Authority with respect to each CSWI Company Employee (excluding Transferring Employees), and (C) the remittance of employee withholding Taxes received from Capital Southwest to the applicable Governmental Authority with respect to
each Transferring Employee, and Capital Southwest shall be solely responsible for ensuring (A) the satisfaction of all applicable Tax withholding requirements on behalf of each Capital Southwest Company Employee and each Transferring Employee,
(B) the collection and remittance of employee withholding Taxes to the applicable Governmental Authority with respect to each Capital Southwest Company Employee, and (c) the collection and remittance of employee withholding Taxes to CSWI
with respect to each Transferring Employee. 
 (ii) Upon the vesting or exercise, as applicable, of any replacement award
issued pursuant to Section 3.3(b), CSWI shall be solely responsible for ensuring (A) the satisfaction of all applicable Tax withholding requirements on behalf of each CSWI Company Employee (including Transferring Employees) and
(B) the collection and remittance of employee withholding Taxes to the applicable Governmental Authority with respect to each CSWI Company Employee, and Capital Southwest shall be solely responsible for ensuring (A) the satisfaction of all
applicable Tax withholding requirements on behalf of each Capital Southwest Company Employee and (B) the collection and remittance of employee withholding Taxes to the applicable Governmental Authority with respect to each Capital Southwest
Company Employee. 
 (iii) Following the Distribution Date, CSWI will be responsible for all income Tax reporting in respect
of Capital Southwest Incentive Awards and any replacement awards issued pursuant to Section 3.3(b) held by CSWI Company Employees, and Capital Southwest shall be responsible for all income Tax reporting in respect of Capital Southwest Incentive
Awards and any replacement awards issued pursuant to Section 3.3(b) held by Capital Southwest Company Employees. 
  

  
 12 

 ARTICLE IV 

QUALIFIED RETIREMENT PLANS 

Section 4.1 The Retirement Plan. 

(a) CSWI Assumption. As of the Distribution Date, CSWI will take all actions necessary to assume sponsorship of the Retirement
Plan and be substituted as the party to any trust and/or custodian agreement related thereto. Prior to the Distribution Date, Capital Southwest shall take all actions necessary to transfer the sponsorship of the Retirement Plan to CSWI, to be
effective as of the Distribution Date. The Retirement Plan shall make payments to Capital Southwest Company Employees and Former Employees with vested rights thereunder in accordance with the terms of the Retirement Plan as in effect from time to
time.  
 (b) No Loss of Unvested Benefits; Distributions. The Transferring Employees will not lose their unvested
accrued benefits (if any) under the Retirement Plan, which shall be assumed by CSWI as provided herein. No Transferring Employee shall be entitled to a distribution of his or her benefit under the Retirement Plan as a result of such transfer of
employment. Capital Southwest Company Employees and Former Employees shall be entitled to a distribution of their vested benefits (if any) under the Retirement Plan, following the Share Distribution, in accordance with the terms of the Retirement
Plan, in effect from time to time. 
 (c) PBGC Notice. Capital Southwest shall file all applicable notices with the
PBGC as required under Section 4043 of ERISA that are triggered as a result of the transfer of sponsorship of the Retirement Plan to CSWI, either alone or in combination with any other event or circumstance. 

Section 4.2 401(k) Plans. 

(a) Capital Southwest 401(k) Plan. As of the Distribution Date, Capital Southwest will take all actions necessary to assume
sponsorship of the Capital Southwest 401(k) Plan and be substituted as the party to any trust and/or custodian agreement related thereto. 

(b) CSWI 401(k) Plan. As of the Distribution Date, CSWI will take all actions necessary to assume sponsorship of the CSWI 401(k)
Plan and be substituted as the party to any trust and/or custodian agreement related thereto. Prior to the Distribution Date, Capital Southwest shall take all actions necessary to cause the applicable CSWI Company to transfer sponsorship of the CSWI
401(k) Plan to CSWI, to be effective as of the Distribution Date. 
 Section 4.3 ESOP. 

(a) Treatment of the ESOP. As of the Distribution Date, CSWI will assume sponsorship of the ESOP and will be substituted as the
party to any trust and/or custodian agreement related thereto. Prior to the Distribution Date, Capital Southwest shall take all actions necessary to cause the applicable CSWI Companies to transfer sponsorship of the ESOP to 

  
 13 

 
CSWI, to be effective as of the Distribution Date. As soon as administratively practicable following the Distribution Date, CSWI shall cause a transfer of the plan assets of the Capital Southwest
Company Employees who have an account balance under the ESOP as of the Distribution Date, valued as of the date such assets are transferred, from the trust maintained with respect to the ESOP to the trust maintained with respect to the Capital
Southwest 401(k) Plan, and Capital Southwest will cause the trust maintained with respect to the Capital Southwest 401(k) Plan to accept such transfer of assets (the date on which such transfer occurs is referred to as the “ESOP Asset
Transfer Date”). On and after the Distribution Date and until the ESOP Asset Transfer Date, the ESOP shall make payments to Employees and Former Employees with respect to their vested benefits thereunder in accordance with the terms of the
ESOP, as in effect from time to time. On and after the ESOP Asset Transfer Date, the Capital Southwest 401(k) Plan shall make payments to Capital Southwest Company Employees with respect to their vested benefits transferred from the ESOP, in
accordance with the terms of the Capital Southwest 401(k) Plan, as in effect from time to time, and the ESOP shall make payments to CSWI Company Employees and Former Employees with respect to their vested benefits under the ESOP in accordance with
the terms of the ESOP, as in effect from time to time. 
 (b) CSWI Shares in the ESOP. CSWI Shares distributed in connection
with the Share Distribution in respect of Capital Southwest Shares held in the ESOP shall be allocated to the applicable Employees’ and Former Employees’ account under the ESOP. 

(c) No Loss of Unvested Benefits; No Distributions. The Transferring Employees will not lose their unvested benefits (if any)
under the ESOP, which shall be assumed by CSWI as provided herein. No Transferring Employee shall be entitled to a distribution of his or her benefit under the ESOP as a result of such transfer of employment nor shall any Capital Southwest Company
Employee be entitled to a distribution of his or her benefit that is transferred from the ESOP to the Capital Southwest 401(k) Plan as a result of the Share Distribution. 

ARTICLE V 
 NONQUALIFIED
DEFERRED COMPENSATION PLANS 
 Section 5.1 The Restoration Plan. Capital Southwest shall retain sponsorship of the
Restoration Plan. Effective as of the Distribution Date, all CSWI Company Employees shall cease active participation in the Restoration Plan. CSWI shall take all actions necessary to establish a non-qualified deferred compensation plan containing
substantially the same terms as the Restoration Plan, effective as of the Distribution Date (the “CSWI Restoration Plan”). All Liabilities with respect to benefits accrued under the Restoration Plan on behalf of CSWI Company
Employees shall be transferred to the CSWI Restoration Plan and assumed by CSWI. All CSWI Company Employees who participated in the Restoration Plan immediately prior to the Distribution Date shall become active participants in the CSWI Restoration
Plan effective on the Distribution Date. After the Distribution Date, Capital Southwest shall make payments to Capital Southwest Company Employees and Former Employees with vested benefits under the Restoration Plan in accordance with the terms of
the Restoration Plan, as in effect from time to time, and CSWI shall make payments to CSWI Company Employees under the CSWI Restoration Plan in accordance with the terms of the CSWI Restoration Plan, as in effect from time to time. 

  
 14 

 Section 5.2 The Executive Compensation Plan. Capital Southwest shall retain the cash
incentive awards granted under the Executive Compensation Plan, and from and after the Distribution Date, all Liabilities with respect to such cash incentive awards shall remain Liabilities of Capital Southwest. Capital Southwest shall pay such cash
incentive awards to Employees who are entitled to payment thereunder in the time and manner provided under the Executive Compensation Plan. After the Distribution Date, any reference to a “change in control,” “change of control”
or similar definition in a cash incentive award agreement entered pursuant to the Executive Compensation Plan shall be deemed to refer to a Capital Southwest Change of Control for purposes of awards held by Capital Southwest Company Employees and to
either a CSWI Change of Control or Capital Southwest Change in Control for purposes of such awards held by CSWI Company Employees. 

ARTICLE VI 
 WELFARE
PLANS 
 Section 6.1 CSWI Assumption. Prior to the Distribution Date, CSWI shall take all actions necessary to assume
sponsorship of the Welfare Plans and any insurance policies related thereto, and from and after the Distribution Date, all assets and Liabilities thereunder shall be assets and Liabilities of CSWI. Prior to the Distribution Date, Capital Southwest
shall take all actions necessary to transfer the sponsorship of the Welfare Plans and assign any insurance policies related thereto to CSWI, to be effective as of the Distribution Date. Strathmore Products, Inc. shall retain sponsorship of the
health and welfare plans sponsored by Strathmore Products, Inc. 
 Section 6.2 Establishment of Capital Southwest Health and Welfare
Plans. Effective January 1, 2016, Capital Southwest shall establish the Capital Southwest Welfare Plans, and the Capital Southwest Company Employees and (if applicable) the Former Capital Southwest Company Employees shall cease
participation in the Welfare Plans and shall be eligible to participate in the Capital Southwest Welfare Plans. All assets and Liabilities under the Capital Southwest Welfare Plans shall be assets and Liabilities of Capital Southwest or one of its
Subsidiaries. 
 Section 6.3 Welfare Transition Period. During the Welfare Transition Period, Capital Southwest Company
Employees and (if applicable) Former Capital Southwest Company Employees will continue to participate in the Welfare Plans at the same level such Capital Southwest Company Employees and (if applicable) such Former Capital Southwest Company Employees
participated in the Welfare Plans immediately prior to the Distribution Date. During the Welfare Transition Period, Capital Southwest shall (A) pay CSWI for the employer portion of insurance premiums and flexible spending account contributions for
all Capital Southwest Company Employees and (if applicable) Former Capital Southwest Company Employees participating in the Welfare Plans, (B) collect the employee portion of such premiums and contributions from such Capital Southwest Company
Employees and (if applicable) such Former Capital Southwest Company Employees and (C) remit the employee portion of such premiums and contributions to CSWI. 

  
 15 

 Section 6.4 COBRA. CSWI will be responsible for complying with, and providing
coverage pursuant to, the health care continuation requirements of COBRA and the corresponding provisions of the Welfare Plans with respect to any Employee and any Former Employee who incurs a qualifying event under COBRA before, as of, or after the
Distribution Date; provided, however, that Capital Southwest will be responsible for complying with, and providing coverage pursuant to, the health care continuation requirements of COBRA and the corresponding provisions of the Capital
Southwest Welfare Plans with respect to any Capital Southwest Company Employee or any Former Capital Southwest Company Employee who incurs a qualifying event under COBRA on or after January 1, 2016. The Parties agree that the consummation of
the transactions contemplated by the Distribution Agreement shall not constitute a COBRA qualifying event for any purpose of COBRA. 

Section 6.5 Vacation, Holidays and Leaves of Absence. Without limiting the generality of Section 2.1, effective as of
the Distribution Date, CSWI shall assume all Liabilities with respect to vacation, holiday, annual leave of absence, and required payments related thereto, for each Transferring Employee. Capital Southwest or one of its Subsidiaries shall retain all
Liabilities with respect to vacation, holiday, annual leave of absence, and required payments related thereto, for each Capital Southwest Company Employee and each Former Capital Southwest Company Employee, and CSWI or one of the CSWI Companies
shall retain all Liabilities with respect to vacation, holiday, annual leave of absence, and required payments related thereto, for each CSWI Company Employee (excluding the Transferring Employees) and each Former CSWI Company Employee. 

Section 6.6 Severance and Unemployment Compensation. Without limiting the generality of Section 2.1, effective as of
the Distribution Date, CSWI shall assume any and all Liabilities to, or relating to, the Transferring Employees in respect of severance and unemployment compensation with respect to Liabilities that are triggered by events occurring after the
Distribution Date. Capital Southwest or one of its Subsidiaries shall be responsible for any and all Liabilities to, or relating to, the Capital Southwest Company Employees and Former Capital Southwest Company Employees in respect of severance and
unemployment compensation, regardless of whether the event giving rise to the Liability occurred before, at or after the Distribution Date, and CSWI or one of the CSWI Companies shall be responsible for any and all Liabilities to, or relating to,
the CSWI Company Employees (excluding the Transferring Employees) and Former CSWI Company Employees in respect of severance and unemployment compensation, regardless whether the event giving rise to the Liability occurred before, at or after the
Distribution Date. 
 Section 6.7 Workers’ Compensation. With respect to claims for workers’ compensation,
(a) CSWI or a CSWI Company shall be responsible for claims in respect of CSWI Company Employees (excluding the Transferring Employees) and Former CSWI Company Employees, whether occurring before, at or after the Distribution Date, and
(b) Capital Southwest or one of its Subsidiaries shall be responsible for all claims in respect of Capital Southwest Company Employees and Former Capital Southwest Company Employees, whether occurring before, on or after the Distribution Date.
CSWI shall be responsible for any and all Liabilities with respect to claims for 

  
 16 

 
workers’ compensation by the Transferring Employees occurring after the Distribution Date, and Capital Southwest shall retain all Liabilities with respect to claims for workers’
compensation by the Transferring Employees occurring on or prior to the Distribution Date. Notwithstanding anything contained herein to the contrary, to the extent any claims occurring before the Distribution Date are covered by any insurance
contract, such claims shall continue to be paid, administered and processed under such insurance contract. 
 ARTICLE VII 

NON-U.S. EMPLOYEES 

Section 7.1 Treatment of Non-U.S. Employees. CSWI Company Employees and Former CSWI Company Employees who are residents outside of
the United States or otherwise are subject to non-U.S. Law and their related benefits and Liabilities shall be treated in the same manner as the CSWI Company Employees and Former CSWI Company Employees, respectively, who are residents of the United
States and are not subject to non-U.S. Law. Notwithstanding anything in this Agreement to the contrary, all actions taken with respect to non-U.S. Employees or U.S. Employees working in non-U.S. jurisdictions shall be subject to and accomplished in
accordance with applicable Law in the custom of the applicable jurisdictions. 
 ARTICLE VIII 

MISCELLANEOUS 

Section 8.1 At-Will Status. Nothing in this Agreement shall create any obligation on the part of the Parties or any of their
Subsidiaries to (i) continue the employment of any Employee or permit the return from a leave of absence for any period after the date of this Agreement (except as required by applicable Law) or (ii) change the employment status of any
Employee from “at-will,” to the extent that such Employee is an “at-will” employee under applicable Law. 

Section 8.2 Severance. The Parties acknowledge and agree that the Share Distribution and the assignment, transfer or continuation
of the employment of the Employees as contemplated by this Agreement shall not be deemed an involuntary termination of employment entitling any Capital Southwest Company Employee or CSWI Company Employee to severance payments or benefits. 

Section 8.3 Change in Control. The Parties acknowledge and agree that neither the consummation of the Share Distribution nor any
transaction contemplated by this Agreement, the Distribution Agreement or any other Ancillary Agreement shall be deemed a “change of control,” “change in control,” or term of similar import for purposes of any Benefit Plan
sponsored or maintained by any of the Capital Southwest Companies, CSWI or any of the CSWI Companies. 
 Section 8.4 Employee
Records. 
 (a) Sharing of Information. Subject to any limitations imposed by applicable Law, each Party will, and will
cause its Subsidiaries to, provide to the other Party and such other Party’s authorized agents and vendors all information necessary for the Parties to perform their respective duties under this Agreement.  

  
 17 

 (b) Transfer of Personnel Records and Authorization. Subject to any limitation
imposed by applicable Law and to the extent that it has not done so before the Distribution Date, Capital Southwest shall transfer to CSWI any and all employment records (including any Form I-9, Form W-2 or other IRS forms) with respect to CSWI
Company Employees and Former CSWI Company Employees and other records reasonably requested by CSWI to enable CSWI to properly to carry out its obligations under this Agreement. Such transfer of records generally shall occur as soon as
administratively practicable at or after the Distribution Date. Pursuant to Section 5.1 and Section 5.2 of the Distribution Agreement, each Party will permit the other reasonable access to Employee records, to the extent reasonably
necessary for such accessing Party to carry out its obligations hereunder.  
 (c) Access to Records. To the extent,
due to restrictions by applicable Law, any employment records (including any Form I-9, Form W-2 or other IRS forms) with respect to CSWI Company Employees and Former CSWI Company Employees that are not transferred to CSWI pursuant to
Section 8.4(b), from and after the Distribution Agreement, Capital Southwest shall provide CSWI access to such records in accordance with Sections 5.1 and 5.2 of the Distribution Agreement. 

(d) Maintenance of Records. With respect to retaining, destroying, transferring, sharing, copying and permitting access to all
Employee-related information, each Party shall, and shall cause its Subsidiaries to, comply with all applicable Laws and internal policies, and shall indemnify and hold harmless the other from and against any and all Losses that arise from a failure
(by the indemnifying Party or its Subsidiaries or their respective agents) to so comply with all applicable Laws and internal policies applicable to such information.  

(e) Cooperation. Each Party shall use commercially reasonable efforts to cooperate and work together to unify, consolidate and
share (to the extent permissible under applicable privacy/data protection Laws) all relevant documents, resolutions, government filings, data, payroll, employment and benefit plan information on regular timetables and cooperate as needed with
respect to (i) any Action with respect to any employee benefit plan, policy or arrangement contemplated by this Agreement, (ii) efforts to seek a determination letter, private letter ruling or advisory opinion from the IRS or DOL on behalf
of any employee benefit plan, policy or arrangement contemplated by this Agreement, and (iii) any filings that are required to be made or supplemented to the IRS, PBGC, DOL or any other Governmental Authority; provided, however,
that requests for cooperation must be reasonable and not interfere with daily business operations.  
 (f)
Confidentiality. Notwithstanding anything in this Agreement to the contrary, all confidential records and data relating to Employees to be shared or transferred pursuant to this Agreement shall be subject to Section 5.4 of the
Distribution Agreement and the requirements of applicable Law.  
 Section 8.5 Preservation of Rights to Amend. The
rights of the Capital Southwest Companies, CSWI and the CSWI Companies to amend, waive, or terminate any Benefit Plan or any other plan, arrangement, agreement, program, or policy referred to herein shall not be limited in any way by this Agreement.

  
 18 

 Section 8.6 Fiduciary Matters. Each Party acknowledges that actions required to be
taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable Law, and no Party shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based
upon its good-faith determination (as supported by advice from counsel experienced in such matters) that to do so would violate such a fiduciary duty or standard. Each Party shall be responsible for taking such actions as are deemed necessary and
appropriate to comply with its own fiduciary responsibilities and shall fully release and indemnify the other Party for any Liabilities caused by the failure to satisfy any such responsibility. 

Section 8.7 Complete Agreement; Construction. This Agreement, including the schedules attached hereto, the Distribution Agreement
and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. 

Section 8.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the
same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party. The delivery of an executed Agreement by facsimile or other electronic delivery shall be
sufficient to bind the Party so delivering such Agreement. 
 Section 8.9 Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date. 

Section 8.10 Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall
be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on
which such notice is received: 
 To Capital Southwest: 

Capital Southwest Corporation 

5400 Lyndon B. Johnson Freeway, Suite 1300 

Dallas, Texas 75240 
 Attention:
Chief Executive Officer 

  
 19 

 To CSWI: 

CSW Industrials, Inc. 
 5400
Lyndon B. Johnson Freeway, Suite 1300 
 Dallas, Texas 75240 

Attention: Chief Executive Officer 

Section 8.11 Waivers. The failure of any Party to require strict performance by any other Party of any provision in this Agreement
will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof. 

Section 8.12 Amendments. This Agreement may not be modified or amended except by an agreement in writing signed by each of the
Parties. 
 Section 8.13 Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any
Party without the prior written consent of the other Party and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided, however, that either Party may assign this
Agreement to a purchaser of all or substantially all of the properties and assets of such Party; provided, that no such assignment will relieve the assigning Party of its obligations hereunder. 

Section 8.14 Successors and Assigns. The provisions to this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and permitted assigns. 
 Section 8.15 Termination. This Agreement
may be terminated at any time prior to the Share Distribution by and in the sole discretion of Capital Southwest without the approval of CSWI or the shareholders of Capital Southwest. In the event of such termination, no Party shall have any
liability of any kind to any other Party or any other Person. After the Share Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties. 

Section 8.16 Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties and their respective Subsidiaries,
Affiliates, successors and assigns and shall not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. The Parties agree
that each CSWI Indemnitee and Capital Southwest Indemnitee who is not a party to this Agreement is an intended third party beneficiary of the indemnification provisions of this Agreement. 

Section 8.17 Title and Headings. Titles and headings to Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this Agreement. 
 Section 8.18 Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE. 

  
 20 

 Section 8.19 Waiver of Jury Trial. The Parties hereby irrevocably waive any and all
right to trial by jury in any legal proceeding arising out of or related to this Agreement. 
 Section 8.20 Specific
Performance. From and after the Share Distribution, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Parties agree that the Party to this Agreement who is or is
to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and
remedies shall be cumulative. The Parties agree that, from and after the Share Distribution, the remedies at Law for any breach or threatened breach of this Agreement, including monetary damages, are inadequate compensation for any loss, that any
defense in any action for specific performance that a remedy at Law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived. 

Section 8.21 Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 

[Signature page follows] 

  
 21 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and
year first above written. 
  

			
	CAPITAL SOUTHWEST CORPORATION
		
	By:    	 	 /s/ Bowen S. Diehl

	Name: Bowen S. Diehl
	Title: Chief Investment Officer

 
			
	
	CSW INDUSTRIALS, INC.
		
	By:    	 	 /s/ Joseph B. Armes

	Name: Joseph B. Armes
	Title: Chief Executive Officer

 [Signature Page to Employee Matters Agreement]EX-10.6

 Exhibit 10.6 

CSW INDUSTRIALS, INC. 

2015 EQUITY AND INCENTIVE COMPENSATION PLAN 

1. Purpose. The purpose of this Plan is to attract and retain officers, non-employee Directors, officers and other key employees
of the Company and its Subsidiaries and to provide to such persons incentives and rewards for performance. In addition, this Plan permits the issuance of awards in substitution for awards relating to common shares of Capital Southwest immediately
prior to the Share Distribution, in accordance with the terms of the Employee Matters Agreement. 
 2. Definitions. As used in
this Plan: 
 (a) “Affiliate” means any corporation, partnership, joint venture or other entity, directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common control with the Company as determined by the Committee or the Board, as applicable, in its discretion. 

(b) “Appreciation Right” means a right granted pursuant to Section 5 of this Plan, and will include both
Free-Standing Appreciation Rights and Tandem Appreciation Rights. 
 (c) “Award Agreement” means an agreement, certificate,
resolution or other type or form of writing or other evidence approved by the Committee that sets forth the terms and conditions of the awards granted under this Plan. An Award Agreement may be in an electronic medium, may be limited to notation on
the books and records of the Company and, unless otherwise determined by the Committee, need not be signed by a representative of the Company or a Participant. With respect to Replacement Awards, the term also includes any memorandum or summary of
terms that may be specified by the Committee, together with any award agreement under any Capital Southwest Plan that may be referred to therein. 

(d) “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Free-Standing
Appreciation Right or a Tandem Appreciation Right. 
 (e) “Board” means the Board of Directors of the Company. 

(f) “Capital Southwest” means Capital Southwest Corporation, a Texas corporation. 

(g) “Capital Southwest Participant” means a current or former employee, officer or director of Capital Southwest or any of
its Subsidiaries or any other person who holds a stock option, incentive award or restricted share award granted and outstanding under a Capital Southwest Plan as of the date immediately prior to the Distribution Date. 

(h) “Capital Southwest Plan” means the Capital Southwest 2009 Stock Incentive Plan, Capital Southwest 2010 Restricted Stock
Award Plan and the Capital Southwest 2014 Executive Compensation Plan, or any similar or predecessor plans or agreements sponsored or entered into by Capital Southwest or any of its Subsidiaries including any phantom equity incentive award
agreements, under which any awards remain outstanding as of the date immediately prior to the Distribution Date. 

 (i) “Cash Incentive Award” means a cash award granted pursuant to
Section 8 of this Plan. 
 (j) “Change in Control” has the meaning set forth in
Section 12 of this Plan. 
 (k) “Code” means the Internal Revenue Code of 1986, as amended from time to
time. 
 (l) “Committee” means the Compensation Committee of the Board (or its successor(s)), or any other committee of the
Board designated by the Board to administer this Plan pursuant to Section 10 of this Plan consisting solely of no fewer than two Non-Employee Directors; provided, however, that prior to the initial formation of the
Compensation Committee of the Board, references in this Plan to the Committee will be deemed to be references to the Board. 
 (m)
“Common Shares” means the common shares, par value $.01 per share, of the Company or any security into which such common shares may be changed by reason of any transaction or event of the type referred to in
Section 11 of this Plan. 
 (n) “Company” means CSW Industrials, Inc., a Delaware corporation, and its
successors. 
 (o) “Covered Employee” means a Participant who is, or is determined by the Committee to be likely to become,
a “covered employee” within the meaning of Section 162(m) of the Code (or any successor provision). 
 (p) “Date of
Grant” means the date specified by the Committee on which a grant of Option Rights, Appreciation Rights, Performance Shares, Performance Units, Cash Incentive Awards, or other awards contemplated by Section 9 of this
Plan, or a grant or sale of Restricted Shares, Restricted Stock Units, or other awards contemplated by Section 9 of this Plan, will become effective (which date will not be earlier than the date on which the Committee (or its
authorized delegate) takes action with respect thereto). 
 (q) “Distribution Date” means the effective date of the
distribution, in connection with the Share Distribution, of the Common Shares to the holders of common shares of Capital Southwest. 
 (r)
“Director” means a member of the Board. 
 (s) “Employee Matters Agreement” means that certain
Employee Matters Agreement entered by and between the Company and Capital Southwest in connection with the Share Distribution, dated September 8, 2015. 

(t) “Effective Date” means the Distribution Date. 

  
 2 

 (u) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time. 
 (v) “Free-Standing
Appreciation Right” means an Appreciation Right granted pursuant to Section 5 of this Plan that is not granted in tandem with an Option Right. 

(w) “Incentive Stock Options” means Option Rights that are intended to qualify as “incentive stock options” under
Section 422 of the Code or any successor provision. 
 (x) “Management Objectives” means the measurable performance
objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights,
Restricted Shares, Restricted Stock Units, dividend equivalents or other awards contemplated by Section 9 of this Plan. Management Objectives may be described in terms of Company-wide objectives or objectives that are related to
the performance of the individual Participant or of one or more of the Subsidiaries, divisions, departments, regions, functions or other organizational units within the Company or its Subsidiaries. The Management Objectives may be made relative to
the performance of other companies or subsidiaries, divisions, departments, regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves.
The Committee may grant awards subject to Management Objectives that are either Qualified Performance-Based Awards or are not Qualified Performance-Based Awards. The Management Objectives applicable to any Qualified Performance-Based Award to a
Covered Employee will be based on one or more, or a combination, of the following metrics (including relative or growth achievement regarding such metrics): 
  

	 	(i)	Profits (e.g., operating income, EBIT, EBT, net income, earnings per share, residual or economic earnings, economic profit – these profitability metrics could be measured before certain specified special
items and/or subject to GAAP definition); 

  

	 	(ii)	Cash Flow (e.g., EBITDA, free cash flow, free cash flow with or without specific capital expenditure target or range, including or excluding divestments and/or acquisitions, total cash flow, cash flow in excess
of cost of capital or residual cash flow or cash flow return on investment); 

  

	 	(iii)	Returns (e.g., profits or cash flow returns on assets, invested capital, net capital employed, and equity); 

  

	 	(iv)	Working Capital (e.g., working capital divided by sales, days’ sales outstanding, days’ sales in inventory, and days’ sales in payables); 

  
 3 

	 	(v)	Profit Margins (e.g., profits divided by revenues, gross margins and material margins divided by revenues, and material margin divided by sales pounds); 

 

	 	(vi)	Liquidity Measures (e.g., debt-to-capital, debt-to-EBITDA, and total debt ratio); 

  

	 	(vii)	Sales, Margin, Cost Initiative and Stock Price Metrics (e.g., revenues, revenue growth, revenue growth outside the United States, gross margin and gross margin growth, material margin and material margin growth,
stock price appreciation, total return to stockholders, sales and administrative costs divided by sales, and sales and administrative costs divided by profits); and 

 

	 	(viii)	Strategic Initiative Key Deliverable Metrics (e.g., one or more of the following: product development, strategic partnering, research and development, vitality index, market penetration, geographic business
expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of
subsidiaries, affiliates and joint ventures). 

 In the case of a Qualified Performance-Based Award, each Management Objective
will be objectively determinable to the extent required under Section 162(m) of the Code, and, unless otherwise determined by the Committee and to the extent consistent with Code Section 162(m), will exclude the effects of certain
designated items identified at the time of grant. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or
circumstances render the Management Objectives unsuitable, the Committee may in its discretion modify such Management Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and
equitable, except in the case of a Qualified Performance-Based Award (other than in connection with a Change in Control) where such action would result in the loss of the otherwise available exemption of the award under Section 162(m) of the
Code. In such case, the Committee will not make any modification of the Management Objectives or minimum acceptable level of achievement with respect to such Covered Employee. Notwithstanding the foregoing, with respect to a Replacement Award,
“Management Objectives” shall mean any performance objectives defined in the applicable Award Agreement. 
 (y)
“Market Value per Share” means, as of any particular date, the closing price of a Common Share as reported for that date on the NASDAQ Stock Market, LLC or, if the Common Shares are not then listed on the NASDAQ Stock Market, LLC,
on any other national securities exchange on which the Common Shares are listed, or if there are no sales on such date, on the next preceding trading day during which a sale occurred. If there is no regular public trading market for the Common
Shares, then the Market Value per Share shall be the fair market value as determined in good faith by the Committee. The Committee is authorized to adopt 

  
 4 

 
another fair market value pricing method provided such method is stated in the Award Agreement and is in compliance with the fair market value pricing rules set forth in Section 409A of the
Code. 
 (z) “Non-Employee Director” means a person who is a “Non-Employee Director” of the Company within the
meaning of Rule 16b-3 promulgated under the Exchange Act and an “outside director” within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder by the U.S. Department of the Treasury. 

(aa) “Optionee” means the optionee named in an Award Agreement evidencing an outstanding Option Right. 

(bb) “Option Price” means the purchase price payable on exercise of an Option Right. 

(cc) “Option Right” means the right to purchase Common Shares upon exercise of an option granted pursuant to
Section 4 of this Plan. 
 (dd) “Participant” means a person who is selected by the Committee to receive
benefits under this Plan and who is at the time (i) an officer or other key employee of the Company or any Subsidiary, (ii) a person who provides services to the Company or a Subsidiary that are equivalent to those typically provided by an
employee (provided that such person satisfies the Form S-8 definition of an “employee”), or (iii) a non-employee Director. Notwithstanding any provision of this Plan to the contrary, the term “Participant” shall include a
Capital Southwest Participant; provided that, pursuant to Section 23, a Capital Southwest Participant who is not otherwise eligible to be a Participant pursuant to the previous sentences of this definition may receive only
Replacement Awards. 
 (ee) “Performance Period” means, in respect of Performance Shares, Performance Units or Cash
Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Shares, dividend equivalents or other awards contemplated by Section 9 of this Plan, a period of time established by the
Committee within which the Management Objectives relating to such Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Shares, dividend equivalents or
other awards contemplated by Section 9 of this Plan are to be achieved. 
 (ff) “Performance Share”
means a bookkeeping entry that records the equivalent of one Common Share awarded pursuant to Section 8 of this Plan. 

(gg) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 8 of this Plan that records
a unit equivalent to $1.00 or such other value as is determined by the Committee. 
 (hh) “Plan” means this 2015 Equity and
Incentive Compensation Plan. 
 (ii) “Qualified Performance-Based Award” means any Cash Incentive Award or award of
Performance Shares, Performance Units, Restricted Shares, Restricted Stock Units or 

  
 5 

 
other awards contemplated under Section 9 of this Plan, or portion of such award, to a Covered Employee that is intended to satisfy the requirements for “qualified
performance-based compensation” under Section 162(m) of the Code. 
 (jj) “Replacement Award” means an award that
is issued under this Plan in accordance with the terms of the Employee Matters Agreement in substitution of, or in accordance with, a stock option, restricted share or incentive award that was granted under a Capital Southwest Plan. Notwithstanding
anything in this Plan to the contrary, the Replacement Awards will reflect substantially the original terms of the awards being adjusted, and they need not comply with other specific terms of this Plan. 

(kk) “Restricted Shares” means Common Shares granted or sold pursuant to Section 6 of this Plan as to
which neither the substantial risk of forfeiture nor the prohibition on transfers has expired. 
 (ll) “Restriction Period”
means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 7 of this Plan. 

(mm) “Restricted Stock Units” means an award made pursuant to Section 7 of this Plan of the right to
receive Common Shares, cash or a combination thereof at the end of a specified period. 
 (nn) “Share Distribution” means
the spin-off of the Company pursuant to a distribution to the holders of common stock of Capital Southwest of all Common Shares issued and outstanding as of the Distribution Date. 

(oo) “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over the
Option Price or Base Price provided for in the related Option Right or Free-Standing Appreciation Right, respectively. 
 (pp)
“Stockholder” means an individual or entity that owns one or more Common Shares. 
 (qq) “Subsidiary”
means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have
outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, or unincorporated association), but more than 50% of whose ownership interest representing the right generally to make decisions for
such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company; provided, however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, “Subsidiary” means any corporation in which at the time the Company owns or controls, directly or indirectly, more than 50% of the total combined Voting Power represented by all classes of stock issued by such corporation.

 (rr) “Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 5 of this
Plan that is granted in tandem with an Option Right. 
 (ss) “Voting Power” means at any time, the combined voting power of
the then-outstanding securities entitled to vote generally in the election of Directors in the case of the Company, or members of the board of directors or similar body in the case of another entity. 

  
 6 

 3. Shares Available Under the Plan. 

(a) Maximum Shares Available Under Plan. 
  

	 	(i)	Subject to adjustment as provided in Section 11 of this Plan, the number of Common Shares that may be issued or transferred (A) upon the exercise of Option Rights or Appreciation Rights,
(B) as Restricted Shares and released from substantial risks of forfeiture thereof, (C) in payment of Restricted Stock Units, (D) in payment of Performance Shares or Performance Units that have been earned, (E) as awards
contemplated by Section 9 of this Plan, or (F) in payment of dividend equivalents paid with respect to awards made under the Plan will not exceed in the aggregate 1,230,000 Common Shares, plus any Common Shares that become
available under this Plan as a result of forfeiture, cancellation, expiration, or cash settlement of awards, as provided in Section 3(b) below. Such shares may be shares of original issuance or treasury shares or a combination of
the foregoing. 

  

	 	(ii)	The aggregate number of Common Shares available for issuance or transfer under Section 3(a)(i) of this Plan will be reduced by one Common Share for every Common Share issued or transferred upon
exercise of an Option Right or Appreciation Right granted under this Plan or issued or transferred in connection with an award other than an Option Right or Appreciation Right granted under this Plan. Subject to the provisions of
Section 3(b) of this Plan, Common Shares covered by an award granted under this Plan will not be counted as used unless and until they are actually issued or transferred. 

(b) Share Counting Rules. 

(i) If any Common Shares issued or transferred pursuant to an award granted under this Plan are forfeited, or an award granted
under this Plan is cancelled or forfeited, expires or is settled for cash (in whole or in part), the Common Shares issued or transferred pursuant to, or subject to, such award (as applicable) will, to the extent of such cancellation, forfeiture,
expiration, or cash settlement, be available for issuance or transfer under Section 3(a) above. 
 (ii)
Notwithstanding anything to the contrary contained in this Section 3, the following Common Shares will not be added to the aggregate number of Common Shares available for issuance or transfer under Section 3(a)
above: (A) Common Shares tendered or otherwise used in payment of the Option Price of an Option Right; (B) Common Shares withheld or otherwise used by the Company to satisfy a tax withholding

  
 7 

 
obligation; and (C) Common Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Option Rights. In addition, if, under this Plan, a
Participant has elected to give up the right to receive compensation in exchange for Common Shares based on fair market value, such Common Shares will not count against the aggregate plan limit under Section 3(a) above. 

(c) Limit on Incentive Stock Options. Notwithstanding anything in this Section 3, or elsewhere in this Plan, to the
contrary and subject to adjustment as provided in Section 11 of this Plan, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 1,230,000
Common Shares. 
 (d) Individual Participant Limits. Notwithstanding anything in this Section 3, or elsewhere in
this Plan, to the contrary, and subject to adjustment as provided in Section 11 of this Plan: 
  

	 	(i)	No Participant will be granted Option Rights and/or Appreciation Rights, in the aggregate, for more than 400,000 Common Shares during any calendar year. 

 

	 	(ii)	No Participant will be granted Qualified Performance-Based Awards of Restricted Shares, Restricted Stock Units, Performance Shares and/or other awards under Section 9 of this Plan, in the aggregate,
for more than 400,000 Common Shares during any calendar year. 

  

	 	(iii)	In no event will any Participant in any calendar year receive Qualified Performance-Based Awards of Performance Units and/or other awards payable in cash under Section 9 of this Plan having an
aggregate maximum value as of their respective Dates of Grant in excess of $5,000,000. 

  

	 	(iv)	In no event will any Participant in any calendar year receive Qualified Performance-Based Awards that are Cash Incentive Awards having an aggregate maximum value in excess of $5,000,000. 

 

	 	(v)	No non-employee Director will be granted, in any period of one calendar, awards under the plan in excess of 40,000 Common Shares. 

4. Option Rights. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the
granting to Participants of Option Rights. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions: 

(a) Each grant will specify the number of Common Shares to which it pertains subject to the limitations set forth in
Section 3 of this Plan. 

  
 8 

 (b) Each grant will specify an Option Price per share, which (except with respect to Replacement
Awards or awards under Section 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant. 

(c) Each grant will specify whether the Option Price will be payable (i) in cash or by check acceptable to the Company or by wire
transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company of Common Shares owned by the Optionee (or other consideration authorized pursuant to Section 4(d) of this Plan) having a
value at the time of exercise equal to the total Option Price, (iii) subject to any conditions or limitations established by the Committee, the Company’s withholding of Common Shares otherwise issuable upon exercise of an Option Right
pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the Common Shares so withheld will not be treated as issued and acquired by the
Company upon such exercise), (iv) by a combination of such methods of payment, or (v) by such other methods as may be approved by the Committee. 

(d) To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or
broker on a date satisfactory to the Company of some or all of the shares to which such exercise relates. 
 (e) Successive grants may be
made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised. 
 (f) Each grant
may specify the period or periods of continuous service by the Optionee with the Company or any Subsidiary that is necessary before the Option Rights or installments thereof will become exercisable, and any such grant may provide for the earlier
exercise of such Option Rights, including in the event of the retirement, death or disability of a Participant or a Change in Control. 

(g) Any grant of Option Rights may specify Management Objectives that must be achieved as a condition to the exercise of such rights. 

(h) Option Rights granted under this Plan may be (i) options, including, without limitation, Incentive Stock Options that are intended to
qualify under particular provisions of the Code, (ii) options that are not intended so to qualify, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of
“employees” under Section 3401(c) of the Code. 
 (i) The exercise of an Option Right will result in the cancellation on a
share-for-share basis of any Tandem Appreciation Right authorized under Section 5 of this Plan. 
 (j) No Option Right
will be exercisable more than 10 years from the Date of Grant. 
 (k) Option Rights granted under this Plan may not provide for any
dividends or dividend equivalents thereon. 
 (l) Each grant of Option Rights will be evidenced by an Award Agreement. Each Award Agreement
will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. 

  
 9 

 5. Appreciation Rights. 

(a) The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting (i) to any
Optionee, of Tandem Appreciation Rights in respect of Option Rights granted hereunder and (ii) to any Participant, of Free-Standing Appreciation Rights. A Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender of
the related Option Right, to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise. Tandem Appreciation Rights may be granted at any time
prior to the exercise or termination of the related Option Rights; provided, however, that a Tandem Appreciation Right awarded in relation to an Incentive Stock Option must be granted concurrently with such Incentive Stock Option. A
Free-Standing Appreciation Right will be a right of the Participant to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise. 

(b) Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be subject to all of the requirements, contained
in the following provisions: 
  

	 	(i)	Each grant may specify that the amount payable on exercise of an Appreciation Right will be paid by the Company in cash, Common Shares or any combination thereof. 

 

	 	(ii)	Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Committee at the Date of Grant. 

 

	 	(iii)	Any grant may specify waiting periods before exercise and permissible exercise dates or periods. 

  

	 	(iv)	Each grant of Appreciation Rights may specify the period or periods of continuous service by the Participant with the Company or any Subsidiary that is necessary before the Appreciation Rights or installments thereof
will become exercisable, and any such grant of Appreciation Rights may provide for the earlier exercise of such Appreciation Rights, in the event of the retirement, death or disability of a Participant or a Change in Control. 

 

	 	(v)	Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such Appreciation Rights. 

 

	 	(vi)	Each grant of Appreciation Rights will be evidenced by an Award Agreement, which Award Agreement will describe such Appreciation Rights, identify the related Option Rights (if applicable), and contain such other terms
and provisions, consistent with this Plan, as the Committee may approve. 

  
 10 

 (c) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights may
be exercised only at a time when the related Option Right is also exercisable and at a time when the Spread is positive, and by surrender of the related Option Right for cancellation. Successive grants of Tandem Appreciation Rights may be made to
the same Participant regardless of whether any Tandem Appreciation Rights previously granted to the Participant remain unexercised. 
 (d)
Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon. 
 (e) Regarding
Free-Standing Appreciation Rights only: 
  

	 	(i)	Each grant will specify in respect of each Free-Standing Appreciation Right a Base Price, which (except with respect to Replacement Awards or awards under Section 22 of this Plan) may not be less than
the Market Value per Share on the Date of Grant; 

  

	 	(ii)	Successive grants may be made to the same Participant regardless of whether any Free-Standing Appreciation Rights previously granted to the Participant remain unexercised; and 

 

	 	(iii)	No Free-Standing Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. 

6. Restricted Shares. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the
grant or sale of Restricted Shares to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions: 

(a) Each such grant or sale will constitute an immediate transfer of the ownership of Common Shares to the Participant in consideration of the
performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referenced. 

(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant. 
 (c) Each such grant or sale will provide that the Restricted Shares covered by such
grant or sale will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee at the Date of Grant or until achievement of Management Objectives
referred to in subparagraph (e) below. 

  
 11 

 (d) Each such grant or sale will provide that during or after the period for which such
substantial risk of forfeiture is to continue, the transferability of the Restricted Shares will be prohibited or restricted in the manner and to the extent prescribed by the Committee at the Date of Grant (which restrictions may include, without
limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of any transferee). 

(e) Any grant of Restricted Shares may specify Management Objectives that, if achieved, will result in termination or early termination of the
restrictions applicable to such Restricted Shares. 
 (f) Each grant of Restricted Shares may specify the period or periods of continuous
service by the Participant with the Company or any Subsidiary that is necessary before the termination of restrictions on such Restricted Shares, and any such grant or sale of Restricted Shares may provide for the earlier termination of restrictions
on such Restricted Shares, including in the event of the retirement, death or disability of a Participant or a Change in Control. Notwithstanding any provision of the Plan to the contrary, no award of Restricted Shares intended to be a Qualified
Performance-Based Award will provide for such early termination of restrictions (other than in connection with the death or disability of the Participant or a Change in Control) to the extent such provisions would cause such award to fail to be a
Qualified Performance-Based Award. 
 (g) Any such grant or sale of Restricted Shares may require that any or all dividends or other
distributions paid thereon during the period of such restrictions be automatically deferred and reinvested in additional Restricted Shares, which may be subject to the same restrictions as the underlying award; provided, however, that
dividends or other distributions on Restricted Shares with restrictions that lapse as a result of the achievement of Management Objectives will be deferred until and paid contingent upon the achievement of the applicable Management Objectives. 

(h) Each grant or sale of Restricted Shares will be evidenced by an Award Agreement and will contain such terms and provisions, consistent
with this Plan, as the Committee may approve. Unless otherwise directed by the Committee, (i) all certificates representing Restricted Shares will be held in custody by the Company until all restrictions thereon will have lapsed, together with
a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares or (ii) all Restricted Shares will be held at the Company’s transfer agent in book entry form
with appropriate restrictions relating to the transfer of such Restricted Shares. 
 7. Restricted Stock Units. The Committee may,
from time to time and upon such terms and conditions as it may determine, authorize the granting or sale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of
the requirements, contained in the following provisions: 
 (a) Each such grant or sale will constitute the agreement by the Company to
deliver Common Shares or cash, or a combination thereof, to the Participant in the future in consideration of the performance of services, subject to the fulfillment of such conditions (which may include the achievement of Management Objectives)
during the Restriction Period as the Committee may specify. 

  
 12 

 (b) Each such grant or sale may be made without additional consideration or in consideration of a
payment by such Participant that is less than the Market Value per Share at the Date of Grant. 
 (c) Each grant or sale of Restricted Stock
Units may specify the period or periods of continuous service by the Participant with the Company or any Subsidiary that is necessary before the termination of restrictions on such Restricted Stock Units, and any such grant or sale of Restricted
Stock Units may provide for the earlier lapse or other modification of the Restriction Period, including in the event of the retirement, death or disability of a Participant or a Change in Control. Notwithstanding any provision of the Plan to the
contrary, no award of Restricted Stock Units intended to be a Qualified Performance-Based Award will provide for such early lapse or modification of the Restriction Period (other than in connection with the death or disability of the Participant or
a Change in Control) to the extent such provisions would cause such award to fail to be a Qualified Performance-Based Award. 
 (d) During
the Restriction Period, the Participant will have no right to transfer any rights under his or her award and will have no rights of ownership in the Common Shares deliverable upon payment of the Restricted Stock Units and will have no right to vote
them, but the Committee may, at the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on either a current or deferred or contingent basis, either in cash or in additional Common Shares; provided,
however, that dividend equivalents or other distributions on Common Shares underlying Restricted Stock Units with restrictions that lapse as a result of the achievement of Management Objectives will be deferred until and paid contingent upon
the achievement of the applicable Management Objectives. 
 (e) Each grant or sale of Restricted Stock Units will specify the time and
manner of payment of the Restricted Stock Units that have been earned. Each grant or sale will specify that the amount payable with respect thereto will be paid by the Company in Common Shares or cash, or a combination thereof. 

(f) Each grant or sale of Restricted Stock Units will be evidenced by an Award Agreement and will contain such terms and provisions,
consistent with this Plan, as the Committee may approve. 
 8. Cash Incentive Awards, Performance Shares and Performance Units.
The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of Cash Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all of the authorizations,
and will be subject to all of the requirements, contained in the following provisions: 
 (a) Each grant will specify the number or
amount of Performance Shares or Performance Units, or amount payable with respect to Cash Incentive Awards, to which it pertains, which number or amount may be subject to adjustment to reflect changes in compensation or other factors;
provided, however, that no such adjustment will be made in the case of a Qualified Performance-Based Award (other than in connection with the death or disability of the Participant or a Change in Control) where such action would result
in the loss of the otherwise available exemption of the award under Section 162(m) of the Code. 

  
 13 

 (b) The Performance Period with respect to each Cash Incentive Award, Performance Share or
Performance Unit will be such period of time as will be determined by the Committee at the time of grant, and any such grant of Performance Shares, Performance Units or Cash Incentive Award may provide for the earlier lapse or other modification, of
the Performance Period, including in the event of the retirement, death or disability of a Participant or a Change in Control. Notwithstanding any provision of the Plan to the contrary, no such adjustment will be made in the case of a Qualified
Performance-Based Award (other than in connection with the death or disability of the Participant or a Change in Control) where such action would result in the loss of the otherwise available exemption of the award under Section 162(m) of the
Code. 
 (c) Any grant of Cash Incentive Awards, Performance Shares or Performance Units will specify Management Objectives which, if
achieved, will result in payment or early payment of the award, and each grant may specify in respect of such specified Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number
of Performance Shares or Performance Units, or amount payable with respect to Cash Incentive Awards, that will be earned if performance is at or above the minimum or threshold level or levels, or is at or above the target level or levels, but falls
short of maximum achievement of the specified Management Objectives. 
 (d) Each grant will specify the time and manner of payment of Cash
Incentive Awards, Performance Shares or Performance Units that have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in Common Shares, in Restricted Shares or Restricted Stock Units
or in any combination thereof. 
 (e) Any grant of Cash Incentive Awards, Performance Shares or Performance Units may specify that the
amount payable or the number of Common Shares or Restricted Shares or Restricted Stock Units with respect thereto may not exceed a maximum specified by the Committee at the Date of Grant. 

(f) The Committee may, at the Date of Grant of Performance Shares, provide for the payment of dividend equivalents to the holder thereof
either in cash or in additional Common Shares, subject in all cases to deferral and payment on a contingent basis based on the Participant’s earning of the Performance Shares with respect to which such dividend equivalents are paid. 

(g) Each grant of Cash Incentive Awards, Performance Shares or Performance Units will be evidenced by an Award Agreement and will contain such
other terms and provisions, consistent with this Plan, as the Committee may approve. 
 9. Other Awards. 

(a) Subject to applicable law and the applicable limits set forth in Section 3 of this Plan, the Committee may grant to any
Participant such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or 

  
 14 

 
related to, Common Shares or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or
exchangeable into Common Shares, purchase rights for Common Shares, awards with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the
Committee, and awards valued by reference to the book value of the Common Shares or the value of securities of, or the performance of specified Subsidiaries or affiliates or other business units of the Company. The Committee will determine the terms
and conditions of such awards, including any Management Objectives, if applicable. Common Shares delivered pursuant to an award in the nature of a purchase right granted under this Section 9 will be purchased for such
consideration, paid for at such time, by such methods, and in such forms, including, without limitation, Common Shares, other awards, notes or other property, as the Committee determines. 

(b) Cash awards, as an element of or supplement to any other award granted under this Plan, may also be granted pursuant to this Section
9. 
 (c) The Committee may grant Common Shares as a bonus, or may grant other awards in lieu of obligations of the Company or a
Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code. 

(d) Each grant of an award under this Section 9 may specify the period or periods of continuous services by the Participant
with the Company or any Subsidiary that is necessary before such award is earned, vested, or no longer subject to applicable restrictions, and any grant of an award under this Section 9 may provide for the earlier earning or
vesting of, or elimination of restrictions applicable to, such award, including in the event of the retirement, death or disability of the Participant or a Change in Control. Notwithstanding any provision of this Plan to the contrary, no such
adjustment will be made in the case of a Qualified Performance-Based Award (other than in connection with the death or disability of the Participant or a Change in Control) where such action would result in the loss of the otherwise available
exemption of the award under Section 162(m) of the Code. In such event, the Award Agreement will specify the time and terms of delivery. 

10. Administration of this Plan. 

(a) This Plan will be administered by the Committee. The Committee may from time to time delegate all or any part of its authority under this
Plan to a subcommittee thereof. To the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such subcommittee. 

(b) The interpretation and construction by the Committee of any provision of this Plan or of any Award Agreement (or related documents) and
any determination by the Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good
faith. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan Section or other provision of
this Plan is intended or may be deemed to constitute a limitation on the authority of the Committee. 

  
 15 

 (c) To the extent permitted by law, the Committee may delegate to one or more of its members or
to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee, the subcommittee, or any person to whom duties or powers have been delegated as
aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under the Plan. The Committee may, by resolution, authorize one or more officers of the Company to
do one or both of the following on the same basis as the Committee: (i) designate employees to be recipients of awards under this Plan; (ii) designate Capital Southwest Participants to be recipients of Replacement Awards and the applicable
terms and number of Common Shares subject to such Replacement Awards; and (iii) determine the size of any such awards; provided, however, that (A) the Committee will not delegate such responsibilities to any such officer for
awards granted to an employee who is an officer, Director, or more than 10% beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in
accordance with Section 16 of the Exchange Act, or any Covered Employee; (B) the resolution providing for such authorization sets forth the total number of Common Shares such officer(s) may grant; and (C) the officer(s) will report
periodically to the Committee regarding the nature and scope of the awards granted pursuant to the authority delegated. 
 11.
Adjustments. The Committee shall make or provide for such adjustments in the numbers of Common Shares covered by outstanding Option Rights, Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance Shares and Performance
Units granted hereunder and, if applicable, in the number of Common Shares covered by other awards granted pursuant to Section 9 hereof, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation
Rights, in the kind of shares covered thereby, in Cash Incentive Awards, and in other award terms, as the Committee, in its sole discretion, exercised in good faith, shall determine is equitably required to prevent dilution or enlargement of the
rights of Participants or Optionees that otherwise would result from (a) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) any merger, consolidation,
spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect
similar to any of the foregoing. Moreover, in the event of any such transaction or event or in the event of a Change in Control, the Committee shall provide in substitution for any or all outstanding awards under this Plan such alternative
consideration (including cash), if any, as it, in good faith, shall determine to be equitable in the circumstances and shall require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of
the Code. In addition, for each Option Right or Appreciation Right with an Option Price or Base Price greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its discretion
elect to cancel such Option Right or Appreciation Right without any payment to the person holding such Option Right or Appreciation Right. The Committee shall also make or provide for such adjustments in the numbers of shares specified in
Section 3 of this Plan as the Committee in its sole discretion, exercised in good faith, shall determine is appropriate to reflect any transaction or event described in this Section 11; provided,
however, 

  
 16 

 
that any such adjustment to the number specified in Section 3(c) will be made only if and to the extent that such adjustment would not cause any Option Right
intended to qualify as an Incentive Stock Option to fail to so qualify. 
 12. Change in Control. For purposes of this
Plan, except as may be otherwise prescribed by the Committee in an Award Agreement made under this Plan, a “Change in Control” will be deemed to have occurred upon the occurrence (after the Effective Date) of any of the following
events: 
 (a) any one person, or more than one “person” acting as a group, acquires (or has acquired during the
twelve-month period ending on the date of the most recent acquisition by such person(s)) ownership of Common Stock possessing 33 1/3% or more of the total voting power of the Common Stock of the Company; 

(b) individuals who at any time during the term of this Agreement constitute the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election or nomination for election was approved by a vote of at least 75% of the directors comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be, for purposes of this clause (b) considered as though
such person were a member of the Incumbent Board; 
 (c) any consolidation or merger to which the Company is a party, if following such
consolidation or merger, stockholders of the Company immediately prior to such consolidation or merger shall not beneficially own securities representing at least 33 1/3% of the combined voting power of the outstanding voting securities of the
surviving or continuing corporation; or 
 (d) any sale, lease, exchange or other transfer (in one transaction or in a series of related
transactions) of all, or substantially all, of the assets of the Company, other than to an entity (or entities) of which the Company or the stockholders of the Company immediately prior to such transaction beneficially own securities representing at
least 51% of the combined voting power of the outstanding voting securities. 
 13. Detrimental Activity and Recapture
Provisions. Any Award Agreement may provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any gain related to an award, or other provisions intended to have a similar effect, upon such terms and
conditions as may be determined by the Committee from time to time, if a Participant, either (a) during employment or other service with the Company or a Subsidiary or (b) within a specified period after termination of such employment or
service, shall engage in any detrimental activity. In addition, notwithstanding anything in this Plan to the contrary, any Award Agreement may also provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company
of any gain related to an award, or other provisions intended to have a similar effect, upon such terms and conditions as may be required by the Committee or under Section 10D of the Exchange Act and any applicable rules or regulations
promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Shares may be traded. 

  
 17 

 14. Non U.S. Participants. In order to facilitate the making of any grant or
combination of grants under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America or who provide
services to the Company under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to
or amendments, restatements or alternative versions of this Plan (including, without limitation, sub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other
purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will
include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the Stockholders. 

15. Transferability. 

(a) Except as otherwise determined by the Committee, no Option Right, Appreciation Right, Restricted Shares, Restricted Stock Unit,
Performance Share, Performance Unit, Cash Incentive Award, award contemplated by Section 9 of this Plan or dividend equivalents paid with respect to awards made under this Plan will be transferable by the Participant except by
will or the laws of descent and distribution. In no event will any such award granted under the Plan be transferred for value. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the
Participant’s lifetime only by him or her or, in the event of the Participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law or court
supervision. 
 (b) The Committee may specify at the Date of Grant that part or all of the Common Shares that are (i) to be issued or
transferred by the Company upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units or
(ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, will be subject to further restrictions on transfer. 

16. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with
any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a
portion of such benefit. If a Participant’s benefit is to be received in the form of Common Shares, and such Participant fails to make arrangements for the payment of tax, then, unless otherwise determined by the Committee, the Company will
withhold Common Shares having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Company an amount required to be withheld under applicable

  
 18 

 
income and employment tax laws, the Participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from the shares
required to be delivered to the Participant, Common Shares having a value equal to the amount required to be withheld or by delivering to the Company other Common Shares held by such Participant. The shares used for tax withholding will be valued at
an amount equal to the market value of such Common Shares on the date the benefit is to be included in Participant’s income. In no event will the market value of the Common Shares to be withheld and delivered pursuant to this Section to satisfy
applicable withholding taxes in connection with the benefit exceed the minimum amount of taxes required to be withheld. Participants will also make such arrangements as the Company may require for the payment of any withholding tax obligation that
may arise in connection with the disposition of Common Shares acquired upon the exercise of Option Rights. 
 17. Compliance with
Section 409A of the Code.  
 (a) To the extent applicable, it is intended that this Plan and any grants made hereunder
comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner
consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the
Internal Revenue Service. 
 (b) Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to
subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except
as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced
by, or offset against, any amount owing by a Participant to the Company or any of its Subsidiaries. 
 (c) If, at the time of a
Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology
selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is
required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled
payment date but will instead pay it, without interest, on the fifth business day of the seventh month after such separation from service. 

(d) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper
application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under

  
 19 

 
Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a
Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to indemnify or
otherwise hold a Participant harmless from any or all of such taxes or penalties. 
 18. Amendments. 

(a) The Board may at any time and from time to time amend this Plan in whole or in part; provided, however, that if an amendment
to this Plan (i) would materially increase the benefits accruing to participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the
requirements for participation in this Plan, or (iv) must otherwise be approved by the Stockholders in order to comply with applicable law or the rules of the NASDAQ Stock Market, LLC or, if the Common Shares are not traded on the NASDAQ Stock
Market, LLC, the principal national securities exchange upon which the Common Shares are traded or quoted, then, such amendment will be subject to Stockholder approval and will not be effective unless and until such approval has been obtained. 

(b) Except in connection with a corporate transaction or event described in Section 11 of this Plan, the terms of
outstanding awards may not be amended to reduce the Option Price of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding Option Rights or Appreciation Rights in exchange for cash, other awards or
Option Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the original Option Rights or Base Price of the original Appreciation Rights, as applicable, without Stockholder approval.
This Section 18(b) is intended to prohibit the repricing of “underwater” Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments provided for in Section 11 of this
Plan. Notwithstanding any provision of this Plan to the contrary, this Section 18(b) may not be amended without approval by the Stockholders. 

(c) If permitted by Section 409A of the Code and Section 162(m) of the Code, but subject to the paragraph that follows, including in
the case of termination of employment by reason of death, disability or retirement, or in the case of unforeseeable emergency or other special circumstances or in the event of a Change in Control, to the extent a Participant holds an Option Right or
Appreciation Right not immediately exercisable in full, or any Restricted Shares as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction
Period has not been completed, or any Cash Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any other awards made pursuant to Section 9 subject to any vesting schedule or transfer
restriction, or who holds Common Shares subject to any transfer restriction imposed pursuant to Section 15(b) of this Plan, the Committee may, in its sole discretion, accelerate the time at which such Option Right, Appreciation
Right or other award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Cash Incentive Awards,
Performance Shares or Performance Units will be deemed to have been fully earned or 

  
 20 

 
the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award, except in the case of a Qualified Performance-Based Award where such
action would result in the loss of the otherwise available exemption of the award under Section 162(m) of the Code. 
 (d) Subject to
Section 18(b) hereof, the Committee may amend the terms of any award theretofore granted under this Plan prospectively or retroactively, except in the case of a Qualified Performance-Based Award (other than in connection with the
Participant’s death or disability, or a Change in Control) where such action would result in the loss of the otherwise available exemption of the award under Section 162(m) of the Code. In such case, the Committee will not make any
modification of the Management Objectives or the level or levels of achievement with respect to such Qualified Performance-Based Award. Subject to Section 11 above, no such amendment will impair the rights of any Participant
without his or her consent. The Board may, in its discretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants or their successors under any awards outstanding hereunder and not exercised in full
on the date of termination. 
 19. Governing Law. This Plan and all grants and awards and actions taken hereunder will be
governed by and construed in accordance with the internal substantive laws of the State of Delaware. 
 20. Effective
Date/Termination. This Plan will be effective as of the Effective Date. No grant will be made under this Plan on or after the tenth anniversary of the Effective Date, but all grants made on or prior to such date will continue in effect
thereafter subject to the terms thereof and of this Plan. 
 21. Miscellaneous Provisions. 

(a) The Company will not be required to issue any fractional Common Shares pursuant to this Plan. The Committee may provide for the
elimination of fractions or for the settlement of fractions in cash. 
 (b) This Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other
service at any time. 
 (c) Except with respect to Section 21(e), to the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option
Rights and there will be no further effect on any provision of this Plan. 
 (d) No award under this Plan may be exercised by the holder
thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan. 

  
 21 

 (e) Absence on leave approved by a duly constituted officer of the Company or any of its
Subsidiaries will not be considered interruption or termination of service of any employee for any purposes of this Plan or awards granted hereunder. 

(f) No Participant will have any rights as a Stockholder with respect to any Common Shares subject to awards granted to him or her under this
Plan prior to the date as of which he or she is actually recorded as the holder of such shares upon the stock records of the Company. 
 (g)
The Committee may condition the grant of any award or combination of awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company
or a Subsidiary to the Participant. 
 (h) Except with respect to Option Rights and Appreciation Rights, the Committee may permit
Participants to elect to defer the issuance of Common Share under the Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan and which are intended to comply with the requirements of Section 409A of
the Code. The Committee also may provide that deferred issuances and settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts. 

(i) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any
award under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it will be stricken and the remainder of this Plan
will remain in full force and effect. 
 22. Stock-Based Awards in Substitution for Option Rights or Awards Granted by Other Company.
Notwithstanding anything in this Plan to the contrary: 
 (a) Awards may be granted under this Plan in substitution for or in conversion of,
or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction
with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the
Code. The awards so granted may reflect the original terms of the awards being assumed, substituted or converted and need not comply with other specific terms of this Plan, and may account for Common Shares substituted for the securities covered by
the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction. 

(b) In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares
available under a pre-existing plan previously approved by stockholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to
reflect such acquisition or merger) may be used for awards made after such 

  
 22 

 
acquisition or merger under the Plan; provided, however, that awards using such available shares may not be made after the date awards or grants could have been made under the terms
of the pre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger. 

(c) Any Common Shares that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the
Company under Sections 22(a) or 22(b) above will not reduce the Common Shares available for issuance or transfer under the Plan or otherwise count against the limits contained in Section 3 of
the Plan. In addition, no Common Shares that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company under Sections 22(a) or 22(b) above will be
added to the aggregate plan limit contained in Section 3 of the Plan. 
 23. Capital Southwest Awards. 

(a) The Company is authorized to issue Replacement Awards to Capital Southwest Participants in connection with the adjustment and replacement
by Capital Southwest of certain stock options, restricted share awards and incentive awards previously granted by Capital Southwest under a Capital Southwest Plan. Notwithstanding any other provision of this Plan to the contrary, the number of
Common Shares to be subject to a Replacement Award and the other terms and conditions of each Replacement Award, including option exercise price, as applicable, shall be determined by the Committee, all in accordance with the terms of the Employee
Matters Agreement. 
 (b) Any Common Shares that are issued by, or that are subject to any Replacement Awards that are granted by, the
Company under Section 23(a) above will not reduce the Common Shares available for issuance or transfer under the Plan or otherwise count against the limits contained in Section 3 of the Plan. In addition, no
Common Shares that are issued by, or that are subject to any Replacement Awards that are granted by, the Company under Section 23(a) above will be added to the aggregate plan limit contained in Section 3 of the
Plan. 

  
 23

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