Document:

EX-10.13

 Exhibit 10.13 

YIRENDAI LTD. 
 2015
SHARE INCENTIVE PLAN 
 ARTICLE 1 

PURPOSE 
 The purpose of
this 2015 Share Incentive Plan (the “Plan”) is to promote the success and enhance the value of Yirendai Ltd., a company formed under the laws of the Cayman Islands (the “Company”), by linking the personal interests
of the Directors, Employees, and Consultants to those of the Company’s shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Company’s shareholders. The Plan is
further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Directors, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the
Company’s operation is largely dependent. 
 ARTICLE 2 

DEFINITIONS AND CONSTRUCTION 

Wherever the following terms are used in the Plan, they shall have the meanings specified below, unless the context clearly indicates
otherwise. The singular pronoun shall include the plural where the context so indicates. 
 2.1 “Applicable Laws” means the
legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system,
of any jurisdiction applicable to Awards granted to residents therein. 
 2.2 “Applicable Accounting Standards” shall mean
Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal
securities laws from time to time. 
 2.3 “Award” means an Option, Restricted Share or Restricted Share Unit award granted
to a Participant pursuant to the Plan or any other equity incentive award granted to a Participant by the Company pursuant to the authorizations of the Committee. 

2.4 “Award Agreement” means any written agreement, contract, or other instrument or document evidencing the grant of an Award
entered into by and between the Company and a Participant and any amendment thereto, including through electronic medium. 
 2.5
“Board” means the Board of Directors of the Company. 
 2.6 “Cause” with respect to a Participant means
(unless otherwise expressly provided in the applicable Award Agreement, or another applicable contract with the Participant that defines such term for purposes of determining the effect that a “for cause” termination has on the
Participant’s Awards) a termination of employment or service based upon a finding by the Service Recipient, acting in good faith and based on its reasonable belief at the time, that the Participant: 

(a) has been negligent in the discharge of his or her duties to the Service Recipient, has refused to perform stated or assigned duties or is
incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties; 

  
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 (b) has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a
breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information; 

(c) has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Service
Recipient; or has been convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses); 

(d) has materially breached any of the provisions of any agreement with the Service Recipient; 

(e) has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of,
the Service Recipient; or 
 (f) has improperly induced a vendor or customer to break or terminate any contract with the Service Recipient or
induced a principal for whom the Service Recipient acts as agent to terminate such agency relationship. 
 A termination for Cause shall be
deemed to occur (subject to reinstatement upon a contrary final determination by the Committee) on the date on which the Service Recipient first delivers written notice to the Participant of a finding of termination for Cause. 

2.7 “Code” means the Internal Revenue Code of 1986 of the United States, as amended. 

2.8 “Committee” means the Board or a committee of the Board described in Article 10. 

2.9 “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders bona fide services to a
Service Recipient; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the
Company’s securities; and (c) the consultant or adviser is a natural person who has contracted directly with the Service Recipient to render such services. 

2.10 “Corporate Transaction”, unless otherwise defined in an Award Agreement, means any of the following transactions,
provided, however, that the Committee shall determine under (d) and (e) whether multiple transactions are related, and its determination shall be final, binding and conclusive: 

(a) an amalgamation, arrangement or consolidation or scheme of arrangement (i) in which the Company is not the surviving entity, except
for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders of the voting securities of the Company do not continue to hold more than 50% of the
combined voting power of the voting securities of the surviving entity; 

  
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 (b) the sale, transfer or other disposition of all or substantially all of the assets of the
Company; 
 (c) the complete liquidation or dissolution of the Company; 

(d) any reverse takeover or series of related transactions culminating in a reverse takeover (including, but not limited to, a tender offer
followed by a reverse takeover) in which the Company is the surviving entity but (A) the Company’s equity securities outstanding immediately prior to such takeover are converted or exchanged by virtue of the takeover into other property,
whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or
persons different from those who held such securities immediately prior to such takeover or the initial transaction culminating in such takeover, but excluding any such transaction or series of related transactions that the Committee determines
shall not be a Corporate Transaction; or 
 (e) acquisition in a single or series of related transactions by any person or related group of
persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting
power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction. 

2.11 “Director” means a member of the Board or a member of the board of directors of any Parent, Subsidiary or Related Entity
of the Company. 
 2.12 “Disability” unless otherwise defined in an Award Agreement, means that the Participant qualifies
to receive long-term disability payments under the Service Recipient’s long-term disability insurance program, as it may be amended from time to time, to which the Participant provides services regardless of whether the Participant is covered
by such policy. If the Service Recipient to which the Participant provides service does not have a long-term disability plan in place, “Disability” means that a Participant is unable to carry out the responsibilities and functions of the
position held by the Participant by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days. A Participant will not be considered to have incurred a Disability unless he or
she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion. 
 2.13 “Effective Date”
shall have the meaning set forth in Section 11.1. 
 2.14 “Employee” means any person, including an officer or a
Director of any Group Entity, who is in the employment of a Service Recipient, subject to the control and direction of the Service Recipient as to both the work to be performed and the manner and method of performance. The payment of a
director’s fee by a Service Recipient shall not be sufficient to constitute “employment” by the Service Recipient. 
 2.15
“Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended. 

  
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 2.16 “Fair Market Value” means, as of any date, the value of Shares determined
as follows: 
 (a) If the Shares are listed on one or more established stock exchanges or national market systems, including without
limitation, the New York Stock Exchange and the Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such shares (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the
Shares are listed (as determined by the Committee) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported),
as reported in The Wall Street Journal or such other source as the Committee deems reliable; 
 (b) If the Shares are regularly quoted on an
automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such shares as quoted on such system or by such securities dealer on the date of
determination, but if selling prices are not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Shares on the date of determination (or, if no such prices were reported on that date, on the
last date such prices were reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable; or 
 (c)
In the absence of an established market for the Shares of the type described in (a) and (b), above, the Fair Market Value thereof shall be determined by the Committee in good faith and in its discretion by reference to (i) the placing
price of the latest private placement of the Shares and the development of the Company’s business operations and the general economic and market conditions since such latest private placement, (ii) other third party transactions involving
the Shares and the development of the Company’s business operation and the general economic and market conditions since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies or information as the
Committee determines to be indicative of Fair Market Value and relevant. 
 2.17 “Group Entity” means any of the Company
and Parents, Subsidiaries and Related Entities of the Company. 
 2.18 “Incentive Share Option” means an Option that is
intended to meet the requirements of Section 422 of the Code or any successor provision thereto. 
 2.19 “Independent
Director” means (i) before the Shares or other securities representing the Shares are listed on a stock exchange, a member of the Board who is a Non-Employee Director; and (ii) after the Shares or other securities representing the
Shares are listed on a stock exchange, a member of the Board who meets the independence standards under the applicable corporate governance rules of the stock exchange. 

2.20 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in
Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board. 
 2.21 “Non-Qualified Share
Option” means an Option that is not intended to be an Incentive Share Option. 
 2.22 “Option” means a right
granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of Shares at a specified price during specified time periods. An Option may be either an Incentive Share Option or a Non-Qualified Share Option. 

  
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 2.23 “Participant” means a person who, as a member of the Board, Consultant or
Employee, has been granted an Award pursuant to the Plan. 
 2.24 “Parent” means a parent corporation under
Section 424(e) of the Code. 
 2.25 “Plan” means this 2015 Share Incentive Plan, as it may be amended from time to
time. 
 2.26 “Related Entity” means any business, corporation, partnership, limited liability company or other entity in
which the Company, a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, or controls through contractual arrangements and consolidates the financial results according to the Applicable Accounting
Standards, but which is not a Subsidiary and which the Board designates as a Related Entity for purposes of the Plan. 
 2.27
“Restricted Share” means a Share awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be subject to risk of forfeiture. 

2.28 “Restricted Share Unit” means the right granted to a Participant pursuant to Article 7 to receive a Share at a future
date. 
 2.29 “Securities Act” means the Securities Act of 1933 of the United States, as amended. 

2.30 “Service Recipient” means the Company, any Parent, Subsidiary or Related Entity of the Company to which a Participant
provides services as an Employee, a Consultant or a Director. 
 2.31 “Share” means ordinary shares, par value US$0.0001per
share, of the Company, and such other securities of the Company that may be substituted for Shares pursuant to Article 9. 
 2.32
“Subsidiary” means any corporation or other entity of which a majority of the outstanding voting shares or voting power is beneficially owned directly or indirectly by the Company. 

2.33 “Trading Date” means the closing of the first sale to the general public of the Shares pursuant to a registration
statement filed with and declared effective by the U.S. Securities and Exchange Commission under the Securities Act. 
 ARTICLE 3 

SHARES SUBJECT TO THE PLAN 

3.1 Number of Shares. 

(a) Subject to the provisions of Article 9 and Section 3.1(b), the maximum aggregate number of Shares which may be issued pursuant to all
Awards (including Incentive Share Options) under the Plan shall be 10,000,000. 

  
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 (b) To the extent that an Award terminates, expires, or lapses for any reason, then any Shares
subject to the Award shall again be available for the grant of an Award pursuant to the Plan. Shares delivered by the Participant or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or
tax withholding thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). If any Awards are forfeited by the Participant or repurchased by the Company, the Shares underlying such Awards may
again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). To the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in
any form of combination by a Group Entity shall not be counted against Shares available for grant pursuant to the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action
would cause an Incentive Share Option to fail to qualify as an incentive stock option under Section 422 of the Code. 
 3.2 Shares
Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury shares (subject to Applicable Laws) or Shares purchased on the open market. Additionally, in the discretion of
the Committee, American Depositary Shares in an amount equal to the number of Shares which otherwise would be distributed pursuant to an Award may be distributed in lieu of Shares in settlement of any Award. If the number of Shares represented by an
American Depositary Share is other than on a one-to-one basis, the limitations of Section 3.1 shall be adjusted to reflect the distribution of American Depositary Shares in lieu of Shares. 

ARTICLE 4 
 ELIGIBILITY
AND PARTICIPATION 
 4.1 Eligibility. Persons eligible to participate in this Plan include Employees, Consultants, and all
Directors, as determined by the Committee. 
 4.2 Participation. Subject to the provisions of the Plan, the Committee may, from time
to time, select from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award pursuant to this Plan. 

4.3 Jurisdictions. In order to assure the viability of Awards granted to Participants in various jurisdictions, the Committee may
provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides or is employed. Moreover, the Committee may
approve such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose;
provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 3.1 of the Plan. Notwithstanding the foregoing, the Committee may not take any
actions hereunder, and no Awards shall be granted, that would violate any Applicable Laws. 

  
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 ARTICLE 5 

OPTIONS 
 5.1
General. The Committee is authorized to grant Options to Participants on the following terms and conditions: 
 (a) Exercise
Price. The exercise price per Share subject to an Option shall be determined by the Committee and set forth in the Award Agreement which may be a fixed or variable price related to the Fair Market Value of the Shares. The exercise price per
Share subject to an Option may be amended or adjusted in the absolute discretion of the Committee, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any
exchange rule, a downward adjustment of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Company’s shareholders or the approval of the affected Participants. 

(b) Time and Conditions of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in
part, including exercise prior to vesting; provided that the term of any Option granted under the Plan shall not exceed ten years, except as provided in Section 12.1. The Committee shall also determine any conditions, if any, that must be
satisfied before all or part of an Option may be exercised. 
 (c) Payment. The Committee shall determine the methods by which the
exercise price of an Option may be paid, the form of payment, including, without limitation (i) cash or check denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash or check in Chinese Renminbi,
(iii) cash or check denominated in any other local currency as approved by the Committee, (iv) Shares held for such period of time as may be required by the Committee in order to avoid adverse financial accounting consequences and having a
Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, (v) after the Trading Date the delivery of a notice that the Participant has placed a market sell order with a broker
with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of
such proceeds is then made to the Company upon settlement of such sale, (vi) other property acceptable to the Committee with a Fair Market Value equal to the exercise price, or (vii) any combination of the foregoing. Notwithstanding any
other provision of the Plan to the contrary, no Participant who is a member of the Board or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of
an Option in any method which would violate Section 13(k) of the Exchange Act. 
 (d) Evidence of Grant. All Options shall be
evidenced by an Award Agreement between the Company and the Participant. The Award Agreement shall include such additional provisions as may be specified by the Committee. 

(e) Effects of Termination of Employment or Service on Options. Termination of employment or service shall have the following effects
on Options granted to the Participants unless otherwise provided in the Award Agreement: 
 (i) Dismissal for Cause. Unless otherwise
provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient is terminated by the Service Recipient for Cause, the Participant’s Options will terminate upon such termination, whether or not the
Option is then vested and/or exercisable; 

  
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 (ii) Death or Disability. Unless otherwise provided in the Award Agreement, if a
Participant’s employment by or service to the Service Recipient terminates as a result of the Participant’s death or Disability: 
  

	 	(a)	the Participant (or his or her legal representative or beneficiary, in the case of the Participant’s Disability or death, respectively), will have until the date that is 12 months after the Participant’s
termination of Employment to exercise the Participant’s Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the Participant’s termination of Employment on account of death or Disability;

  

	 	(b)	the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination of Employment or service on
account of death or Disability; and 

  

	 	(c)	the Options, to the extent exercisable for the 12-month period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the
last day of the 12-month period. 

 (iii) Other Terminations of Employment or Service. Unless otherwise provided in the
Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates for any reason other than a termination by the Service Recipient for Cause or because of the Participant’s death or Disability: 

 

	 	(a)	the Participant will have until the date that is 90 days after the Participant’s termination of Employment or service to exercise his or her Options (or portion thereof) to the extent that such Options were vested
and exercisable on the date of the Participant’s termination of Employment or service; 

  

	 	(b)	the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination of Employment or service; and

  

	 	(c)	the Options, to the extent exercisable for the 90-day period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the
last day of the 90-day period. 

  
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 5.2 Incentive Share Options. Incentive Share Options may be granted to Employees of the
Company, a Parent or Subsidiary of the Company. Incentive Share Options may not be granted to Employees of a Related Entity or to Independent Directors or Consultants. The terms of any Incentive Share Options granted pursuant to the Plan, in
addition to the requirements of Section 5.1, must comply with the following additional provisions of this Section 5.2: 
 (a)
Individual Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Share Options are first exercisable by a Participant in any calendar year may not
exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Share Options are first exercisable by a Participant in excess of such limitation, the excess shall be
considered Non-Qualified Share Options. 
 (b) Exercise Price. The exercise price of an Incentive Share Option shall be equal to the
Fair Market Value on the date of grant. However, the exercise price of any Incentive Share Option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting power of all classes of
shares of the Company may not be less than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more than five years from the date of grant. 

(c) Transfer Restriction. The Participant shall give the Company prompt notice of any disposition of Shares acquired by exercise of an
Incentive Share Option within (i) two years from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such Shares to the Participant. 

(d) Expiration of Incentive Share Options. No Award of an Incentive Share Option may be made pursuant to this Plan after the tenth
anniversary of the Effective Date. 
 (e) Right to Exercise. During a Participant’s lifetime, an Incentive Share Option may be
exercised only by the Participant. 
 ARTICLE 6 

RESTRICTED SHARES 
 6.1
Grant of Restricted Shares. The Committee, at any time and from time to time, may grant Restricted Shares to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the
number of Restricted Shares to be granted to each Participant. 
 6.2 Restricted Shares Award Agreement. Each Award of Restricted
Shares shall be evidenced by an Award Agreement that shall specify the period of restriction, the number of Restricted Shares granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. Unless the
Committee determines otherwise, Restricted Shares shall be held by the Company as escrow agent until the restrictions on such Restricted Shares have lapsed. 

6.3 Issuance and Restrictions. Restricted Shares shall be subject to such restrictions on transferability and other restrictions as the
Committee may impose (including, without limitation, limitations on the right to vote Restricted Shares or the right to receive dividends on the Restricted Share). These restrictions may lapse separately or in combination at such times, pursuant to
such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter. 

6.4 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon
termination of employment or service during the applicable restriction period, Restricted Shares that are at that time subject to restrictions shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee
may provide in any Restricted Share Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Shares will be waived in whole or in part in the event of terminations resulting from specified causes, and in other
cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Shares. 

  
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 6.5 Certificates for Restricted Shares. Restricted Shares granted pursuant to the Plan may
be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Shares are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Shares, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse. 

6.6 Removal of Restrictions. Except as otherwise provided in this Article 6, Restricted Shares granted under the Plan shall be released
from escrow as soon as practicable after the last day of the period of restriction. The Committee, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed. After the restrictions have lapsed, the Participant
shall be entitled to have any legend or legends under Section 6.5 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant, subject to applicable legal restrictions. The Committee (in its
discretion) may establish procedures regarding the release of Shares from escrow and the removal of legends, as necessary or appropriate to minimize administrative burdens on the Company. 

ARTICLE 7 
 RESTRICTED
SHARE UNITS 
 7.1 Grant of Restricted Share Units. The Committee, at any time and from time to time, may grant Restricted Share
Units to Participants as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Restricted Share Units to be granted to each Participant. 

7.2 Restricted Share Units Award Agreement. Each Award of Restricted Share Units shall be evidenced by an Award Agreement that shall
specify any vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. 

7.3 Performance Objectives and Other Terms. The Committee, in its discretion, may set performance objectives or other vesting criteria
which, depending on the extent to which they are met, will determine the number or value of Restricted Share Units that will be paid out to the Participants. 

7.4 Form and Timing of Payment of Restricted Share Units. At the time of grant, the Committee shall specify the date or dates on which
the Restricted Share Units shall become fully vested and nonforfeitable. Upon vesting, the Committee, in its sole discretion, may pay Restricted Share Units in the form of cash, in Shares or in a combination thereof. 

7.5 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon
termination of employment or service during the applicable restriction period, Restricted Share Units that are at that time unvested shall be forfeited or repurchased in accordance with the Award Agreement; provided, however, the Committee may
(a) provide in any Restricted Share Unit Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Share Units will be waived in whole or in part in the event of terminations resulting from specified
causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Share Units. 

  
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 ARTICLE 8 

PROVISIONS APPLICABLE TO AWARDS 

8.1 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations
for each Award which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind an Award. 
 8.2 No Transferability; Limited Exception to Transfer Restrictions. 

8.2.1 Limits on Transfer. Unless otherwise expressly provided in (or pursuant to) this Section 8.2, by Applicable Laws and by the
Award Agreement, as the same may be amended: 
 (a) all Awards are non-transferable and will not be subject in any manner to sale, transfer,
anticipation, alienation, assignment, pledge, encumbrance or charge; 
 (b) Awards will be exercised only by the Participant; and 

(c) amounts payable or shares issuable pursuant to an Award will be delivered only to (or for the account of), and, in the case of Shares,
registered in the name of, the Participant. 
 In addition, the shares shall be subject to the restrictions set forth in the applicable
Award Agreement. 
 8.2.2 Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 8.2.1 will
not apply to: 
 (a) transfers to the Company or a Subsidiary; 

(b) transfers by gift to “immediate family” as that term is defined in SEC Rule 16a-1(e) promulgated under the Exchange Act; 

(c) the designation of a beneficiary to receive benefits if the Participant dies or, if the Participant has died, transfers to or exercises by
the Participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution; 

(d) if the Participant has suffered a disability, permitted transfers or exercises on behalf of the Participant by the Participant’s duly
authorized legal representative; or 

  
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 (e) subject to the prior approval of the Committee or an executive officer or director of the
Company authorized by the Committee, transfer to one or more natural persons who are the Participant’s family members or entities owned and controlled by the Participant and/or the Participant’s family members, including but not limited to
trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participant’s family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions and
procedures as the Committee or may establish. Any permitted transfer shall be subject to the condition that the Committee receives evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes and on a basis
consistent with the Company’s lawful issue of securities. 
 Notwithstanding anything else in this Section 8.2.2 to the contrary,
but subject to compliance with all Applicable Laws, Incentive Share Options, Restricted Shares and Restricted Share Units will be subject to any and all transfer restrictions under the Code applicable to such Awards or necessary to maintain the
intended tax consequences of such Awards. Notwithstanding clause (b) above but subject to compliance with all Applicable Laws, any contemplated transfer by gift to “immediate family” as referenced in clause (b) above is subject
to the condition precedent that the transfer be approved by the Administrator in order for it to be effective. 
 8.3 Beneficiaries.
Notwithstanding Section 8.2, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s
death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the
Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and resides in a community property state, a designation of a person other than the
Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or
revoked by a Participant at any time provided the change or revocation is filed with the Committee. 
 8.4 Share Certificates.
Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing the Shares pursuant to the exercise of any Award, unless and until the Committee has determined, with advice of
counsel, that the issuance and delivery of such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded. All Share
certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with all Applicable Laws, and the rules of any national securities exchange or
automated quotation system on which the Shares are listed, quoted, or traded. The Committee may place legends on any Share certificate to reference restrictions applicable to the Shares. In addition to the terms and conditions provided herein, the
Committee may require that a Participant make such reasonable covenants, agreements, and representations as the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall
have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee. 

  
 12 

 8.5 Paperless Administration. Subject to Applicable Laws, the Committee may make Awards,
provide applicable disclosure and procedures for exercise of Awards by an internet website or interactive voice response system for the paperless administration of Awards. 

8.6 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the discretion of the Committee, be granted either
alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other
Awards. 
 8.7 Foreign Currency. A Participant may be required to provide evidence that any currency used to pay the exercise price
of any Award was acquired and taken out of the jurisdiction in which the Participant resides in accordance with Applicable Laws, including foreign exchange control laws and regulations. In the event the exercise price for an Award is paid in Chinese
Renminbi or other foreign currency, as permitted by the Committee, the amount payable will be determined by conversion from U.S. dollars at the official rate promulgated by the People’s Bank of China for Chinese Renminbi, or for jurisdictions
other than the People’s Republic of China, the exchange rate as selected by the Committee on the date of exercise. 
 ARTICLE 9

 CHANGES IN CAPITAL STRUCTURE 

9.1 Adjustments. In the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or
consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change affecting the shares of Shares or the share price of a Share, the Committee shall make such
proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan (including, but not limited to,
adjustments of the limitations in Section 3.1); (b) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise
price per share for any outstanding Awards under the Plan. 
 9.2 Corporate Transactions. Except as may otherwise be provided in any
Award Agreement or any other written agreement entered into by and between the Company and a Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate Transaction, the Committee may, in its sole discretion,
provide for (i) any and all Awards outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise the vested portion of such Awards during a period of time as the Committee shall
determine, or (ii) the purchase of any Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award (and, for the avoidance of doubt, if as of such date the Committee determines in good faith
that no amount would have been attained upon the exercise of such Award, then such Award may be terminated by the Company without payment), or (iii) the replacement of such Award with other rights or property selected by the Committee in its
sole discretion or the assumption of or substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of Shares and prices, or (iv) payment of
Award in cash based on the value of Shares on the date of the Corporate Transaction plus reasonable interest on the Award through the date when such Award would otherwise be vested or have been paid in accordance with its original terms, if
necessary to comply with Section 409A of the Code. 

  
 13 

 9.3 Outstanding Awards – Other Changes. In the event of any other change in the
capitalization of the Company or corporate change other than those specifically referred to in this Article 9, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards outstanding on
the date on which such change occurs and in the per share grant or exercise price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of rights. 

9.4 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or
consolidation of Shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly
provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares subject to an Award or the grant or exercise price of any Award. 
 ARTICLE 10 

ADMINISTRATION 
 10.1
Committee. The Plan shall be administered by the Board or a committee of one or more members of the Board to whom the Board shall delegate the authority to grant or amend Awards to Participants other than any of the Committee members. Any
grant or amendment of Awards to any Committee member shall then require an affirmative vote of a majority of the Board members who are not on the Committee. 

10.2 Action by the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members of the
Committee present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith,
rely or act upon any report or other information furnished to that member by any officer or other employee of a Group Entity, the Company’s independent certified public accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan. 
 10.3 Authority of the Committee. Subject to any specific
designation in the Plan, the Committee has the exclusive power, authority and discretion to: 
 (a) designate Participants to receive Awards;

 (b) determine the type or types of Awards to be granted to each Participant; 

(c) determine the number of Awards to be granted and the number of Shares to which an Award will relate; 

  
 14 

 (d) determine the terms and conditions of any Award granted pursuant to the Plan, including, but
not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines; 

(e) determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be
paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; 
 (f) prescribe the form of
each Award Agreement, which need not be identical for each Participant; 
 (g) decide all other matters that must be determined in connection
with an Award; 
 (h) establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

 (i) interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; 

(j) reduce the exercise price per Share underlying an Option; and 

(k) make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to
administer the Plan. 
 10.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted pursuant to the
Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. 

ARTICLE 11 
 EFFECTIVE
AND EXPIRATION DATE 
 11.1 Effective Date. This Plan shall become effective on the date of its adoption by the Board (the
“Effective Date”); provided the Plan shall be approved by the shareholders of the Company according to its Memorandum of Association and Articles of Association no later than twelve months following the Effective Date. If the Plan
is not so approved by the shareholders of the Company, all Awards granted under this Plan shall be rescinded and shall be void. 
 11.2
Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in
force according to the terms of the Plan and the applicable Award Agreement. 

  
 15 

 ARTICLE 12 

AMENDMENT, MODIFICATION, AND TERMINATION 

12.1 Amendment, Modification, And Termination. With the approval of the Board, at any time and from time to time, the Committee may
terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with Applicable Laws or stock exchange rules, the Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required, unless the Company decides to follow home country practice, and (b) unless the Company decides to follow home country practice, shareholder approval is required for any amendment to the Plan that
(i) increases the number of Shares available under the Plan (other than any adjustment as provided by Article 9), or (ii) permits the Committee to extend the term of the Plan or the exercise period for an Option beyond ten years from the
date of grant. 
 12.2 Awards Previously Granted. Except with respect to amendments made pursuant to Section 12.1, no
termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant. 

ARTICLE 13 
 GENERAL
PROVISIONS 
 13.1 No Rights to Awards. No Participant, employee, or other person shall have any claim to be granted any Award
pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly. 

13.2 No Shareholders Rights. No Award gives the Participant any of the rights of a Shareholder of the Company unless and until Shares
are in fact issued to such person in connection with such Award. 
 13.3 Taxes. No Shares shall be delivered under the Plan to any
Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and employment tax withholding obligations under Applicable Laws. The relevant Group Entity shall have the authority and the
right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the Participant’s payroll tax obligations) required or permitted by Applicable Laws to be withheld
with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold Shares
otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the
issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy any income and payroll tax liabilities
applicable to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding
or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll tax purposes that are applicable to such supplemental taxable income. 

  
 16 

 13.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall
interfere with or limit in any way the right of the Service Recipient to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employment or services of any Service
Recipient. 
 13.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation.
With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the relevant Group
Entity. 
 13.6 Indemnification. To the extent allowable pursuant to Applicable Laws, each member of the Committee or of the Board
shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he
or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding
against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of Association, as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless. 
 13.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into
account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of any Group Entity except to the extent otherwise expressly provided in writing in such other plan or
an agreement thereunder. 
 13.8 Expenses. The expenses of administering the Plan shall be borne by the Group Entities. 

13.9 Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event
of any conflict, the text of the Plan, rather than such titles or headings, shall control. 
 13.10 Fractional Shares. No fractional
Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down as appropriate. 

13.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award
granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by the Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule. 

  
 17 

 13.12 Government and Other Regulations. The obligation of the Company to make payment of
awards in Shares or otherwise shall be subject to all Applicable Laws, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register any of the Shares paid pursuant to the Plan under the
Securities Act or any other similar law in any applicable jurisdiction. If the Shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act or other Applicable Laws, the Company may
restrict the transfer of such Shares in such manner as it deems advisable to ensure the availability of any such exemption. 
 13.13
Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the Cayman Islands. 

13.14 Section 409A. To the extent that the Committee determines that any Award granted under the Plan is or may become subject to
Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and the Award Agreements shall be interpreted in
accordance with Section 409A of the Code and the U.S. Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulation or other guidance that may be issued after the
Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related Department of Treasury
guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the
benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related U.S. Department of Treasury guidance. 

13.15 Appendices. With the approval of the Board, the Committee may approve such supplements, amendments or appendices to the Plan as
it may consider necessary or appropriate for purposes of compliance with Applicable Laws or otherwise and such supplements, amendments or appendices shall be considered a part of the Plan; provided, however, that no such supplements shall increase
the share limitation contained in Section 3.1 of the Plan. 
 [Remainder of Page Intentionally Left Blank] 

  
 18EX-10.2

 Exhibit 10.2 

AMENDED AND RESTATED 
 EMPLOYEE
MATTERS AGREEMENT 
 BY AND BETWEEN 

CAPITAL SOUTHWEST CORPORATION 

AND 
 CSW INDUSTRIALS, INC. 

DATED AS OF SEPTEMBER 14, 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
	  	 	14	  
			
	 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
	  	 	16	  
	 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
	  	 	17	  
			
	 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
	  	 	18	  
	 Section 8.4
	  	 Employee Records
	  	 	18	  
	 Section 8.5
	  	 Preservation of Rights to Amend
	  	 	19	  
	 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	  

  
 i 

 TABLE OF CONTENTS 

(cont.) 
  

							
	 	  	 	  	Page	 
	 Section 8.10
	  	 Notices
	  	 	19	  
	 Section 8.11
	  	 Waivers
	  	 	20	  
	 Section 8.12
	  	 Amendments
	  	 	20	  
	 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
	  	 	21	  
	 Section 8.18
	  	 Governing Law
	  	 	21	  
	 Section 8.19
	  	 Waiver of Jury Trial
	  	 	21	  
	 Section 8.20
	  	 Specific Performance
	  	 	21	  
	 Section 8.21
	  	 Severability
	  	 	21	  

  
 ii 

 EMPLOYEE MATTERS AGREEMENT 

This Amended and Restated Employee Matters Agreement, dated as of September 14, 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. 

  
 2 

 “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 pursuant to Section 6.2. 
 “Capital Southwest 401(k) Plan” means the Capital Southwest Management
Corporation Employee Savings Plan, as effective 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. 

  
 3 

 “CSWI 401(k) Plan” means the Balco, Inc. Profit Sharing 401(k) Plan as effective
on the Distribution Date, which shall include the assets and account balances merged into such plan from the Strathmore Products, Inc. 401(k) Profit Sharing Plan. 

“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 on 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 ending on the date that the Capital
Southwest Company Employees and (if applicable) the Former Capital Southwest Company Employees begin participation in the newly formed Capital Southwest Welfare Plans; provided, however, that in no event will the Welfare Transition
Period continue after 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,

  
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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” 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; 

  
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 (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. 
 (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 

  
 7 

 
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 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 

  
 8 

 
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 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 

  
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 (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. 

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 

  
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remittance of employee withholding Taxes to the Capital Southwest Companies with 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 

  
 11 

 
Distribution Date. After the Distribution Date, Capital Southwest shall retain all Liabilities 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 

  
 12 

 
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. 

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. Prior to the Distribution Date, Capital Southwest will take all actions necessary to cause Capital
Southwest Management Corporation to establish the Capital Southwest 401(k) Plan to be effective following the Distribution Date. Media Recovery, Inc. shall retain sponsorship of the Media Recovery, Incorporated Employee Savings Plan following the
Distribution Date, and such plan shall be merged into the Capital Southwest 401(k) Plan as soon as administratively practicable following the Distribution Date. 

  
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 (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 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 

  
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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. 
 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 as soon as administratively possible following the Distribution Date but in no event later than December 31, 2015, 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 newly formed 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. 

  
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 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. 

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. 

  
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 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 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 on or 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. 

  
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 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. 

(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. 

  
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 (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. 

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. 

  
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 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. 
 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] 

  
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 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

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