Document:

Exhibit 10.1

 

CORNELL
COMPANIES, INC.

 

RESTRICTED
STOCK AWARD

(Profitability &
Time- Based)

 

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

 

1.             Grant.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

	
  (i)

  	
   

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

  
	
  (ii)

  	
   

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

  
	
  (iii)

  	
   

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

  
	
  (iv)

  	
   

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

  
	
  (v)

  	
   

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

  
	
  (vi)

  	
   

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

  
	
  (vii)

  	
   

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

  

 

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

 

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

 

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

 

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

 

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

 

·      Certain
unbudgeted capital transactions; and

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

set forth herein
and in the Plan.

 

 

	
  PARTICIPANT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CORNELL COMPANIES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Patrick N. Perrin

  	
   

  
	
   

  	
  Title: Senior Vice
  President

  	
   

  
	
   

  	
  Chief Administrative
  OfficerExhibit 10.2

 

CORNELL
COMPANIES, INC.

 

RESTRICTED
STOCK AWARD

(Performance
Based)

 

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

 

1.             Grant.

 

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

 

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

 

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

 

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

 

(f)            In the event of termination of the Participant’s
employment with the Company or an Affiliate because of involuntary termination
without Cause (as hereinafter defined), death or disability (each, an “Involuntary
Event”), the Participant shall vest in any Restricted Shares accumulated
through the date of such event, and if such event occurs following the
completion of a fiscal year but prior to the time the performance determination
is made and finalized for such year, then Participant shall also vest in any
Restricted Shares that would otherwise have been accumulated for that fiscal
year.  Participant shall, for no
consideration, forfeit to the Company any remaining Restricted Shares which do
not vest in accordance with the preceding sentence.

 

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

 

 

	
  (viii)

  	
   

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

  
	
  (ix)

  	
   

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

  
	
  (x)

  	
   

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

  
	
  (xi)

  	
   

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

  
	
  (xii)

  	
   

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

  
	
  (xiii)

  	
   

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

  
	
  (xiv)

  	
   

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

  

 

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

 

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

 

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

 

(i)            Subject in all
respects to this Agreement, the Restricted Shares shall accumulate (but not
vest) only upon the Company achieving the performance criteria set forth below
and provided that Participant remains employed with the Company at the date of
determination that the Company achieved the performance criteria as described
below.  Accumulated Restricted Shares are
not earned or vested until three (3) years following the Date of Grant as
provided in Section 2 (e).  The
performance criteria shall be based upon the Company’s annual earnings before
interest and taxes and including depreciation allowance (“EBITDA”) targets set
forth below, calculated as described and contemplated herein. The accumulation of Restricted Shares is
subject to achievement of three separate EBITDA targets, with such shares
accumulating in one-third increments upon the achievement of each of the EBITDA
targets with respect to any calendar year from 2009 up to and including
2011.  These contingent Restricted
Shares shall accumulate (if at all) as follows: one-third (33.33%) of such
shares
(                        
shares) accumulate upon the achievement of each of the EBITDA targets set forth
below with respect to a fiscal year of the Company up to and including 2011:

 

Performance-based Accumulation Requirements

 

	
  EBITDA Targets*

  (in millions)

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  # Shares
  Accumulated (reduced by any

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EBITDA awards
  accumulated in prior periods; not in addition**)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

*      Determination of Performance Results.  EBITDA shall be calculated and determined by
the Company.  The Company may decide in
its sole and exclusive discretion to adjust the calculation of EBITDA for any
given year.  Examples of items for which
an adjustment might be made include, but are not limited to, the following:

 

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

 

·      Certain
unbudgeted capital transactions; and

 

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

 

Participant expressly agrees
that (i) the Company shall, in its sole and absolute discretion, so
calculate and determine EBITDA and the associated performance under the
targets, and (ii) Company’s determination will be conclusive, final and
binding.

 

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

 

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

 

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

 

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

 

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

 

6.             Defined Terms.  Unless otherwise specifically defined herein, each
term used herein which is defined in 

 

 

the Plan shall
have the meaning assigned such term in the Plan.

 

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

 

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

 

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

 

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

 

By acceptance of
this Award Agreement, the Participant acknowledges acceptance of the terms and
conditions set forth herein and in the Plan.

 

 

	
  PARTICIPANT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CORNELL COMPANIES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Patrick N. Perrin

  	
   

  
	
   

  	
  Title: Senior Vice
  President

  	
   

  
	
   

  	
  Chief Administrative
  Officer

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