<SEC-DOCUMENT>0001213900-17-000778.txt : 20170130
<SEC-HEADER>0001213900-17-000778.hdr.sgml : 20170130
<ACCEPTANCE-DATETIME>20170130171313
ACCESSION NUMBER:		0001213900-17-000778
CONFORMED SUBMISSION TYPE:	40-APP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20170130
DATE AS OF CHANGE:		20170130

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAPITAL SOUTHWEST CORP
		CENTRAL INDEX KEY:			0000017313
		IRS NUMBER:				751072796
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		40-APP
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	812-14740
		FILM NUMBER:		17558386

	BUSINESS ADDRESS:	
		STREET 1:		5400 LYNDON B. JOHNSON FREEWAY
		STREET 2:		SUITE 1300
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75240
		BUSINESS PHONE:		2142385700

	MAIL ADDRESS:	
		STREET 1:		5400 LYNDON B. JOHNSON FREEWAY
		STREET 2:		SUITE 1300
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75240
</SEC-HEADER>
<DOCUMENT>
<TYPE>40-APP
<SEQUENCE>1
<FILENAME>f40app013017_capitalsouth.htm
<DESCRIPTION>APPLICATION FOR AN AMENDED ORDER
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">File No. 812-13769</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>U.S. SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Washington, D.C.&nbsp;&nbsp;20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">APPLICATION FOR AN AMENDED ORDER PURSUANT TO
SECTION 23(c)(3) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, (THE &ldquo;<U>1940 ACT</U>&rdquo;) GRANTING AN EXEMPTION
FROM SECTION 23(c) OF THE 1940 ACT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>CAPITAL SOUTHWEST CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">5400 Lyndon B Johnson Freeway, Suite 1300</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Dallas, Texas 75240</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><I>All Communications, Notices and Orders to:</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Mr. Bowen S. Diehl</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Chief Executive Officer and President</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Capital Southwest Corporation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">5400 Lyndon B Johnson Freeway, Suite 1300</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Dallas, Texas 75240</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><I>Copy to:</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Steven B. Boehm, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Sutherland Asbill &amp; Brennan LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">700 Sixth Street, Suite 700</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Washington, DC 20001</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">January 30, 2017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>TABLE OF CONTENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; background-color: white; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="width: 94%"><FONT STYLE="font-size: 10pt">I.&nbsp;&nbsp;INTRODUCTION</FONT></TD>
    <TD STYLE="width: 6%; text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">II.&nbsp;&nbsp;CAPITAL SOUTHWEST CORPORATION</FONT></TD>
    <TD STYLE="text-align: right">2</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">A.&nbsp;&nbsp;Background</FONT></TD>
    <TD STYLE="text-align: right">2</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">B.&nbsp;&nbsp;The Business of Capital Southwest</FONT></TD>
    <TD STYLE="text-align: right">2</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">C.&nbsp;&nbsp;Capital Southwest&rsquo;s Incentive Compensation</FONT></TD>
    <TD STYLE="text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">III.&nbsp;&nbsp;TAX WITHHOLDING OBLIGATIONS AND PARTICIPANTS TO PAY THE EXERCISE PRICE OF OPTIONS WITH STOCK</FONT></TD>
    <TD STYLE="text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">A.&nbsp;&nbsp;Requested Order</FONT></TD>
    <TD STYLE="text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">B.&nbsp;&nbsp;Tax Consequences of Restricted Stock Awards</FONT></TD>
    <TD STYLE="text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">C.&nbsp;&nbsp;Tax Consequences of Stock Option Awards</FONT></TD>
    <TD STYLE="text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">D.&nbsp;&nbsp;Applicable Law and Need for Relief</FONT></TD>
    <TD STYLE="text-align: right">8</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">E.&nbsp;&nbsp;&nbsp;Capital Southwest&rsquo;s Legal Arguments</FONT></TD>
    <TD STYLE="text-align: right">8</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">F.&nbsp;&nbsp;&nbsp;&nbsp;Precedent</FONT></TD>
    <TD STYLE="text-align: right">9</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>IV. CONCLUSION<FONT STYLE="font-size: 10pt"></FONT></TD>
    <TD STYLE="text-align: right">10</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>V.&nbsp;&nbsp;PROCEDURAL MATTERS</TD>
    <TD STYLE="text-align: right">10</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">A.&nbsp;&nbsp;Communications</FONT></TD>
    <TD STYLE="text-align: right">10</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">B.&nbsp;&nbsp;Authorization</FONT></TD>
    <TD STYLE="text-align: right">10</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">VI.&nbsp;&nbsp;EXHIBITS</FONT></P>
        <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"></FONT></P></TD>
    <TD STYLE="text-align: right">11</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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    <TD STYLE="width: 10%; padding-right: 0.8pt; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Exhibits:</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 89%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">EXHIBIT A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">AMENDED AND RESTATED CAPITAL SOUTHWEST CORPORATION 2010 RESTRICTED STOCK AWARD PLAN</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">EXHIBIT B</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">RESOLUTION OF THE BOARD OF DIRECTORS OF CAPITAL SOUTHWEST CORPORATION &ndash; APPROVAL OF AMENDED AND RESTATED CAPITAL SOUTHWEST CORPORATION 2010 RESTRICTED STOCK AWARD PLAN</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNITED STATES OF AMERICA</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Before the</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
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    <TD STYLE="width: 43%; border-top: black 1pt solid; border-bottom: black 1.5pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0"><I>In the Matter of</I></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0"><B>CAPITAL SOUTHWEST CORPORATION</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">5400 Lyndon B Johnson Freeway, Suite 1300</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">Dallas, Texas 75240</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">File No. 812-13769</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">Investment Company Act of 1940, as amended</P></TD>
    <TD STYLE="width: 57%; border-left: black 1.5pt solid; padding-bottom: 1.5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.3pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.3pt 0 12.05pt">APPLICATION FOR AN AMENDED ORDER PURSUANT TO SECTION
        23(c)(3) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, (THE &ldquo;<U>1940 ACT</U>&rdquo;) GRANTING AN EXEMPTION FROM SECTION
        23(c) OF THE 1940 ACT</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>I.&nbsp;&nbsp; INTRODUCTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The undersigned applicant, Capital Southwest Corporation (&ldquo;<U>Capital
Southwest</U>&rdquo; or the &ldquo;<U>Company</U>&rdquo;), an internally managed, non-diversified, closed-end investment company
that has elected to be regulated as a business development company (a &ldquo;<U>BDC</U>&rdquo;)<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>1</SUP></FONT>
under the Investment Company Act of 1940, as amended (the &ldquo;<U>1940 Act</U>&rdquo;), hereby applies for and requests an amendment
to the prior order (the &ldquo;<U>Prior Order</U>&rdquo;)<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>2</SUP></FONT>
of the U.S. Securities and Exchange Commission (the &ldquo;<U>Commission</U>&rdquo;) pursuant to Section 6(c) of the 1940 Act<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>3</SUP></FONT>
that granted an exemption from Sections 23(a), 23(b) and 63 and&nbsp;&nbsp;pursuant to Sections 57(a)(4) and 57(i) of the 1940
Act and Rule 17d-1<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>4</SUP></FONT> under the 1940 Act authorizing
certain joint transactions otherwise prohibited by Section 57(a)(4) under the 1940 Act.&nbsp;The Prior Order permits Capital Southwest
to issue restricted shares of its common stock under the terms of Capital Southwest Corporation 2010 Restricted Stock Award Plan
(the &ldquo;<U>Plan</U>&rdquo;) as part of the compensation packages for certain of its employees and certain employees of its
wholly-owned subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest seeks an amendment to the Prior Order (the &ldquo;<U>Amended
Order</U>&rdquo;) pursuant to Section 23(c)(3) of the 1940 Act to exempt Capital Southwest from Sections 23(c)(3) of the 1940
Act to allow it to withhold shares of the Company&rsquo;s common stock or purchase shares of the Company&rsquo;s common stock
from the Participants (as defined in the Amended Plan) to satisfy tax withholding obligations relating to the vesting of Restricted
Stock (as defined in the Amended Plan) or the exercise of options that were granted to them pursuant to the pursuant to the Plan
or will be granted pursuant to the Amended and Restated Capital Southwest Corporation 2010 Restricted Stock Award Plan (the &ldquo;<U>Amended
Plan</U>&rdquo;).<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>5</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>&nbsp;</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>1</SUP> Section 2(a)(48) of the 1940 Act defines a business
development company to be any closed-end investment company that operates for the purpose of making investments in securities
described in Sections 55(a)(1) through 55(a)(3) of the 1940 Act and makes available significant managerial assistance with respect
to the issuers of such securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><SUP>2</SUP></FONT>
<I>See</I> Capital Southwest Corporation, Investment Company Act Release Nos. 29450 (notice) (September 29, 2010) and 29491 (order)
(October 26, 2010).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><SUP>3</SUP></FONT>
Unless otherwise indicated, all section references herein are to the 1940 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><SUP>4</SUP></FONT>
Unless otherwise indicated, all rule references herein are to rules promulgated under the 1940 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><SUP>5</SUP></FONT>
The &ldquo;<U>Plan</U>&rdquo; and the &ldquo;<U>Amended Plan</U>&rdquo;, together the &ldquo;<U>Plans</U>&rdquo;.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B></B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>II.&nbsp;&nbsp; CAPITAL SOUTHWEST CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>A.</B><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><B>Background</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Capital Southwest is a Texas corporation incorporated
on April 19, 1961. Until September 1969, it operated as a small business investment company (&ldquo;<U>SBIC</U>&rdquo;) licensed
under the Small Business Investment Act of 1958. At that time, Capital Southwest transferred to its wholly-owned subsidiary, Capital
Southwest Venture Corporation (&ldquo;<U>CSVC</U>&rdquo;), certain assets and its license as a SBIC. CSVC was a closed-end, non-diversified
investment company registered under the 1940 Act.&nbsp;&nbsp;Effective June 14, 2016, CSVC was dissolved and its SBIC license was
surrendered. All assets held in CSVC were transferred to Capital Southwest upon dissolution. Prior to March 30, 1988, Capital Southwest
was registered as a closed-end, non-diversified investment company under the 1940 Act.&nbsp;&nbsp;On that date, Capital Southwest
elected to be treated as a BDC subject to the provisions of the 1940 Act, as amended by the Small Business Incentive Act of 1980.&nbsp;&nbsp;In
order to remain a BDC, Capital Southwest must meet certain specified requirements under the 1940 Act, including investing at least
70% of its assets in eligible portfolio companies and limiting the amount of leverage it incurs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Capital Southwest has elected to be treated
as a regulated investment company (a &ldquo;<U>RIC</U>&rdquo;) under Subchapter M of the U.S. Internal Revenue Code of 1986, as
amended, (the &ldquo;<U>Code</U>&rdquo;) and expects to continue to make such elections in the future. As a RIC, Capital Southwest
is not required to pay corporate-level income tax on its investment income. Capital Southwest intends to maintain its RIC status,
which requires that it qualifies annually as a RIC by meeting certain specified requirements.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">On September 30, 2015, Capital Southwest completed the spin-off
of CSW Industrials, Inc. (&ldquo;<U>CSWI</U>&rdquo;). CSWI is now an independent publicly traded company. CSWI&rsquo;s common stock
trades on the Nasdaq Global Select Market under the symbol &ldquo;CSWI.&rdquo; The spin-off was effected through a tax-free, pro-rata
distribution of 100% of CSWI&rsquo;s common stock to shareholders of the Company. Each Company shareholder received one share of
CSWI common stock for every one share of Company common stock on the record date, September 18, 2015. Cash was paid in lieu of
any fractional shares of CSWI common stock. Following the spin-off, the Company has maintained operations as an internally managed
BDC and pursues a credit-focused investing strategy. The Company continues to provide capital to middle-market companies. The Company
invests primarily in debt securities, including senior secured debt and subordinated debt, and may also invest in preferred stock
and common stock alongside our debt investments or through warrants. Capital Southwest also invests in broadly syndicated first
and second lien loans in large middle-market companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest Management Company (&ldquo;<U>CSMC</U>&rdquo;),
a wholly-owned subsidiary of Capital Southwest, is the management company for Capital Southwest. CSMC generally incurs all normal
operating and administrative expenses, including, but not limited to, salaries and related benefits, rent, office expenses and
other administrative costs required for its day-to-day operations.&nbsp;&nbsp;Capital Southwest trades on the NASDAQ Global Select
Market under the symbol &ldquo;CSWC.&rdquo;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">As of January 27, 2017, there were 15,966,025 shares of Capital
Southwest&rsquo;s common stock issued and outstanding. As of January 27, 2017, Capital Southwest and its wholly-owned consolidated
subsidiaries had an aggregate of 17 employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest currently has a seven member board of directors
(&ldquo;<U>Board</U>&rdquo;), of whom two are considered to be &ldquo;interested persons&rdquo; of Capital Southwest within the
meaning of Section 2(a)(19) of the 1940 Act and five are not &ldquo;interested persons&rdquo; (the &ldquo;<U>Non-Interested Directors</U>&rdquo;).&nbsp;&nbsp;Capital
Southwest has six directors who are not officers or employees of Capital Southwest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>B.</B><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><B>The Business
of Capital Southwest</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest is an internally managed, non-diversified closed-end
investment company that has elected to be treated as a BDC under the 1940 Act.&nbsp;&nbsp;Capital Southwest specializes in providing
customized financing to middle-market companies in a broad range of investment segments located primarily in the United States.&nbsp;Capital
Southwest&rsquo;s principal investment objective is to produce attractive risk-adjusted returns by generating current income from
its debt investments and capital appreciation from its equity and equity related investments.&nbsp;&nbsp;Capital Southwest&rsquo;s
investment strategy is to partner with business owners, management teams and financial sponsors to provide flexible financing solutions
to fund growth, changes of control, or other corporate events. Capital Southwest invests primarily in senior and subordinated debt
securities secured by interests in portfolio company assets, coupled with equity interests.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>C.&nbsp;&nbsp; Capital Southwest&rsquo;s Incentive Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>The Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The Plan authorizes Capital Southwest to award restricted shares
of its common stock to certain of its employees and certain employees of its wholly-owned consolidated subsidiaries under the Plan.
<FONT STYLE="background-color: white">A restricted stock award is an award of shares of the Company&rsquo;s common stock (which
have full voting and dividend rights but are restricted with regard to sale or transfer), the restrictions on which lapse ratably
over a specified period of time (generally five years). </FONT>The Restricted Stock will be subject to restrictions on transferability
and other restrictions as required by the Compensation Committee of the Board, which is comprised solely of Non-Interested Directors,
(the &ldquo;<U>Compensation Committee</U>&rdquo;) from time to time.&nbsp;&nbsp;Except to the extent restricted under the terms
of the Plan, a Participant granted Restricted Stock will have all the rights of any other shareholder, including the right to vote
the Restricted Stock and the right to receive dividends.&nbsp;&nbsp;During the restriction period (i.e., prior to the lapse of
the applicable forfeiture restrictions), the Restricted Stock generally may not be sold, transferred, pledged, hypothecated, margined
or otherwise encumbered by the Participant.&nbsp;&nbsp;Except as the Board otherwise determines, upon termination of a Participant&rsquo;s
employment during the applicable restriction period, Restricted Stock for which forfeiture restrictions have not lapsed at the
time of such termination shall be forfeited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Pursuant to the Plan, the Board originally reserved 188,000 shares
of restricted stock for issuance to certain of our employees. At our annual shareholder meeting in August 2015, the Company&rsquo;s
shareholders approved an increase of an additional 450,000 shares to the Plan. A restricted stock award is an award of shares
of the Company&rsquo;s common stock, which generally have full voting and dividend rights but are restricted with regard to sale
or transfer.&nbsp;&nbsp;Restricted stock awards are independent of stock grants and are generally subject to forfeiture if employment
terminates prior to these restrictions lapsing. Unless otherwise specified in the award agreement, these shares vest in equal
annual installments over a four to five-year period from the grant date and are expensed over the vesting period starting on the
grant date. Subject to adjustment as provided in Section 12 of the Plan, the Plan limits the total number of shares that may be
awarded to any single Participant in a single year to 6,250.&nbsp;&nbsp;In addition, subject to adjustment as provided in Section
12 of the Plan, the maximum amount of Restricted Stock that may be issued under the Plan will be 10% of the outstanding shares
of common stock of Capital Southwest on the effective date of the Plan plus 10% of the number shares of Capital Southwest's common
stock issued or delivered by Capital Southwest (other than pursuant to compensation plans) during the term of the Plan.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>6</SUP></FONT>&nbsp;&nbsp;In
addition, no Participant may be granted more than 25% of the shares of common stock reserved for issuance under the Plan, subject
to adjustment as provided in Section 12 of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 28, 2014, the Board amended the Plan,
as permitted pursuant to Section 14 of the 2010 Plan (the &ldquo;<U>First Amendment to the Plan</U>&rdquo;).&nbsp;&nbsp;The First
Amendment to the Plan provides that an award agreement may allow an award to remain outstanding after a spin-off or change in control
of one or more wholly-owned subsidiaries of Capital Southwest. In addition, on August 28, 2014, the Board granted 127,000 shares
of restricted stock under the Spin-Off Compensation Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">Each issuance of Restricted Stock under
the Plan will be approved by the required majority, as defined in Section&nbsp;57(o) of the 1940 Act,<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>7</SUP></FONT>&nbsp;of
Capital Southwest&rsquo;s directors on the basis that the issuance is in the best interests of Capital Southwest and its shareholders.
The date on which the required majority, as defined in Section&nbsp;57(o) of the 1940 Act, approves an issuance of Restricted
Stock will be deemed the date on which the subject Restricted Stock is granted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>6</SUP></FONT>
For purposes of calculating compliance with this limit, Capital Southwest counts as Restricted Stock all shares of its common stock
that are issued pursuant to the Plan, less any shares that are forfeited back to Capital Southwest and cancelled as a result of
forfeiture restrictions not lapsing.</P>

<P STYLE="margin: 0"><FONT STYLE="font-size: 10pt"><SUP>7</SUP> <FONT STYLE="font-family: Times New Roman, Times, Serif">The
term &ldquo;required majority,&rdquo; when used with respect to the approval of a proposed transaction, plan, or arrangement,
means both a majority of a BDC&rsquo;s directors or general partners who have no financial interest in such transaction, plan,
or arrangement and a majority of such directors or general partners who are not interested persons of such company.</FONT></FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest proposes to implement the Amended Plan, a copy
of which is attached as Exhibit A hereto, upon receipt of the Amended Order. The Amended Plan explicitly permits Capital Southwest
to withhold shares of the Company&rsquo;s common stock from the Participants to satisfy tax withholding obligations related to
the vesting of Restricted Stock and the exercise of options to purchase shares of the Company&rsquo;s common stock granted pursuant
to the Plan or Amended Plan. In this regard, the Amended Plan provides the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify">13. &nbsp;&nbsp;&nbsp;&nbsp;TAX
WITHHOLDING</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify">The Company&rsquo;s obligation to make cash payments pursuant to an Restricted Stock Award or deliver Shares, or any other
event with respect to rights and benefits hereunder, shall be subject to the Participant&rsquo;s satisfaction of all
applicable federal, state and local income and employment tax withholding obligations. To the extent that the Company is
required to withhold any federal, state or local income and employment taxes in respect of any compensation income realized
by the Participant in respect of Shares acquired pursuant to an Restricted Stock Award, or in respect of any Shares becoming
vested, then the Company shall deduct from any payments of any kind otherwise due to such Participant the aggregate amount of
such federal, state or local income and employment taxes required to be so withheld. If no such payments are due or become
due to such Participant, or if such payments are insufficient to satisfy such federal, state or local income or employment
taxes, then such Participant will be required to pay to the Company, or make other arrangements satisfactory to the
Company regarding payment to the Company of, the aggregate amount of any such taxes. The Committee, in its discretion, may
permit the Participant to satisfy the obligation, in whole or in part, by irrevocably electing to have the Company withhold
Shares, or to deliver to the Company Shares that he or she already owns, having a value equal to the amount required to be
withheld. The value of the Shares to be withheld, or delivered to the Company, shall be based on the Fair Market Value of
Shares on the date the amount of tax to be withheld is determined. As an alternative, the Company may retain, or sell without
notice, a number of such Shares sufficient to cover the amount required to be withheld.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The Amended Plan was approved by the Board as a whole, including
a majority of the Non-Interested Directors and the required majority as defined in Section 57(o) of the 1940 Act, on January 25,
2017. If the Commission issues the Amended Order, the Amended Plan will become effective upon receipt of the Amended Order. <FONT STYLE="background-color: white">After
adoption of the Amended Plan, the Amended Plan will not be modified without obtaining an order of the Commission or the approval
of the Commission. The Amended Plan provides that no grants may be made under the Amended Plan in contravention of the 1940 Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">2.<FONT STYLE="letter-spacing: 9pt">&nbsp;&#9;</FONT><U>The Existing
Stock Option Plans</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest has two stock options plans, the 1999 Stock Option
Plan and the Capital Southwest 2009 Stock Incentive Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest previously granted stock options under its
1999 Stock Option Plan (the &ldquo;<U>1999 Plan</U>&rdquo;), as approved by shareholders on July 19, 1999.&nbsp; The 1999
Plan expired on April 19, 2009.&nbsp; Options previously granted under the 1999 Plan and outstanding on July 20, 2009
continue in effect and are governed by the provisions of the 1999 Plan.&nbsp; All options granted under the 1999 Plan were
granted at market price on the date of grant, generally expire up to 10 years from the date of grant and are generally
exercisable on or after the first anniversary of the date of grant in five to ten annual installments. At September 30, 2016,
there were no options to acquire shares of common stock outstanding under the 1999 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Additionally, on July 20, 2009, Capital Southwest adopted the Capital
Southwest 2009 Stock Incentive Plan (the &ldquo;<U>2009 Plan</U>&rdquo;) for the purpose of advancing the interest of Capital Southwest
by providing for the grant of stock options to its employees.&nbsp;The 2009 Plan authorizes the issuance of up to 560,000 shares
of Capital Southwest&rsquo;s common stock (subject to adjustment for certain capital events such as stock splits, reverse stock
splits, reorganizations, stock dividends, and similar transactions) upon the exercise of stock options.&nbsp;Awards may be made
under the 2009 Plan to employees and officers of Capital Southwest.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">On August 28, 2014, the Board amended the 2009 Plan, as permitted
pursuant to Section 18 of the 2009 Plan (the &ldquo;<U>First Amendment to the 2009 Plan</U>&rdquo; and collectively with the 2009
Plan, the &ldquo;<U>Existing Stock Option Plans</U>&rdquo;).&nbsp;&nbsp;The First Amendment to the 2009 Plan provides that an award
agreement may allow an award to remain outstanding after a spin-off or change in control of one or more wholly-owned subsidiaries
of the Company. In addition, on August 28, 2014, options to purchase 259,000 shares at $36.60 per share were granted under the
2009 Plan, as amended. On September 8, 2015, the Board designated the spin-off of CSWI a transformative transaction for purposes
of the 2009 Plan and amended the award agreements granted under the 2009 Plan to provide for accelerated vesting of the awards
held by a participant in the event of a termination of such participant&rsquo;s service effected by the participant for good reason,
by the employer without cause, or as a result of the disability or death of the participant.&nbsp;&nbsp;One-third of these options
vested on December 29, 2015 and one-third vested on December 29, 2016, and the rest of the options will vest on December 29, 2017,
subject to accelerated vesting as described above. Unless terminated sooner by the Board, the Existing Stock Option Plans will
terminate on July 20, 2019, and no additional awards may be made after that date.&nbsp;&nbsp;As of January 27, 2017, options to
purchase 251,635 shares of Capital Southwest&rsquo;s common stock have been granted under the Existing Stock Option Plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest&rsquo;s Existing Stock Option Plans enable Capital
Southwest to provide to its officers and employees (1) incentive compensation commensurate with the creation of shareholder value;
(2) opportunities for increased stock ownership by executives; and (3) competitive levels of total compensation over a long time
horizon.&nbsp;&nbsp;Options are granted at the Nasdaq Stock Market&rsquo;s closing price of Capital Southwest&rsquo;s common stock
on the date of grant and thus have no ultimate value unless the value of Capital Southwest&rsquo;s common stock appreciates. Capital
Southwest has never granted options with an exercise price that is less than the closing price of Capital Southwest&rsquo;s common
stock on the grant date, nor has it granted options which are priced on a date other than the grant date.&nbsp;&nbsp;Capital Southwest
believes stock options provide a significant incentive for the option holders to enhance the value of Capital Southwest&rsquo;s
common stock by continually improving Capital Southwest&rsquo;s performance and its investment results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Options granted under the Existing Stock Option Plans generally
vest in five annual installments beginning on the first anniversary of the date of grant and have a term of ten years. Under the
1999 Plan, upon termination of employment or retirement, option holders have 30 days to exercise vested options to purchase shares
except in the case of death or disability (subject to a 6-month limitation).&nbsp;&nbsp;Under the 2009 Plan, upon termination of
employment or retirement, incentive stock option holders have three months and non-statutory stock option holders have one month
to exercise vested options to purchase shares except in the case of death or disability (subject to a 6-month limitation).&nbsp;&nbsp;Prior
to the exercise of options, holders have no rights as shareholders with respect to the shares subject to such option, including
voting rights and the right to receive dividends or dividend equivalents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">From time to time, the Compensation Committee has recommended and
the Board has granted qualified and non-qualified stock options to executive officers and investment associates.&nbsp;Stock option
award levels vary among participants based on their positions within Capital Southwest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">3.<FONT STYLE="letter-spacing: 9pt">&nbsp;&#9;</FONT><U>Employee
Stock Ownership Plan </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest maintains an Employee Stock Ownership Plan (&ldquo;<U>ESOP</U>&rdquo;)
for employees as part of the ESOP of one of its wholly-owned portfolio companies in which its most highly compensated officers
participate. Employees who have completed one year of credited service, as defined in the ESOP, are eligible to participate in
the ESOP. Contributions to the ESOP are discretionary, within limits established by the Code. Funds contributed to the trust established
under the ESOP are applied by the trustees to the purchase, in the open market at prevailing market prices, of Capital Southwest&rsquo;s
common stock. A participant&rsquo;s interest in contributions to the ESOP fully vests after five years (three years effective April
1, 2008) of credited service, and such vested interest is distributed to a participant at retirement, death or total disability,
or after a one year break in service resulting from termination of employment for any other reason. Thus, the ESOP rewards long-term
employees, aligning their interests with those of Capital Southwest&rsquo;s long-term shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">4.<FONT STYLE="letter-spacing: 9pt">&nbsp;&#9;</FONT><U>Retirement
Plans </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Until the spin-off of CSWI, Capital Southwest sponsored a qualified
defined benefit, non-contributory retirement plan (the &ldquo;<U>Retirement Plan</U>&rdquo;) for its employees and employees of
certain of its controlled affiliates.&nbsp;&nbsp;All officers of Capital Southwest participated in the Retirement Plan.&nbsp;The&nbsp;benefits
under the Retirement Plan were based on years of service and an average of the highest five consecutive years of compensation
during the last 10 years of employment. The Retirement Plan was closed to any employees hired or re-hired on or after January
1, 2015. In connection with the spin-off of CSWI, the Company entered into an Employee Matters Agreement with CSWI on September
8, 2015, which was amended and restated on September 14, 2015. Under the Employee Matters Agreement, Capital Southwest and CSMC
withdrew as participating employers in the Retirement Plan and CSWI became the Sponsoring Employer of the Retirement Plan and
assumed all the liabilities, assets, and future funding obligations for providing benefits for the covered participants under
the Retirement Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest also sponsored an unfunded Retirement Restoration Plan (the &ldquo;<U>Restoration Plan</U>&rdquo;),
which was a nonqualified plan that provided for the payment, upon retirement, of the difference between the maximum annual payment
permissible under the Retirement Plan pursuant to federal limitations and the amount which would otherwise have been payable under
the Retirement Plan. Effective September 30, 2015, the benefits accrued under the Restoration Plan on behalf of CSWI employees,
including employees who transferred from the Company to CSWI, were transferred to a non-qualified deferred compensation plan established
by CSWI. The Company retained all liabilities associated with benefits accrued under the Restoration Plan on behalf of individuals
who remain employees of the Company or CSMC following September 30, 2015 or who terminated employment prior to September 30, 2015
with vested benefits under the Restoration Plan. Unvested accrued benefits under the Restoration Plan were forfeited as of September
30, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">5.<FONT STYLE="letter-spacing: 9pt">&nbsp;&#9;</FONT><U>Cash Bonus
Program</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest pays discretionary cash bonus awards to its employees
annually.&nbsp;&nbsp;Capital Southwest&rsquo;s bonus program (the &ldquo;<U>Program</U>&rdquo;) is not a profit-sharing plan for
purposes of Section 57(a)(4) of the 1940 Act because the compensation paid to participating employees under the Program is not
based on Capital Southwest&rsquo;s profitability.&nbsp;&nbsp;Thus, the amount a participant will receive each year under the Program
will not be tied to Capital Southwest&rsquo;s gross or net income, or any other indicia of Capital Southwest&rsquo;s overall financial
performance.&nbsp;&nbsp;Rather, awards under the Program are discretionary cash bonus awards based on the individual performance
of the recipient.&nbsp;&nbsp;The total amount of awards made annually varies at the discretion of the Compensation Committee, depending
on the extent and duration of Capital Southwest&rsquo;s growth, the participant&rsquo;s contribution to achieving overall Company
growth over both long-term and short-term time horizons and the participant&rsquo;s creativity and effectiveness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Phantom Stock Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On January 16, 2012,
the Board approved the issuance of 104,000 phantom stock options at an exercise price of $36.74 (Net Asset Value at December 31,
2011) pursuant to the Capital Southwest Corporation Phantom Stock Option Plan (the &ldquo;<U>Phantom Stock Plan</U>&rdquo;) to
provide deferred compensation to certain key employees. On January 22, 2013, the Board granted 16,200 shares of phantom stock options
at an exercise price of $41.34 per share (Net Asset Value at December 31, 2012) to officers of the Company.&nbsp; On July 15, 2013,
the Board granted 24,000 shares of phantom stock options at an exercise price of $43.80 per share (Net Asset Value at June 30,
2013) to a key officer of the Company. Additionally, the Board granted 38,000 shares of phantom stock options at an exercise price
of $50.25 per share (Net Asset Value at December 31, 2013) to several key employees of the Company in January 2014 and March 2014.
Under the Phantom Stock Plan, awards vest on the fifth anniversary of the award date. Upon exercise of the phantom option, a cash
payment in an amount for each phantom share equal to estimated fair market value minus the phantom option exercise price, adjusted
for capital gain dividends declared, will be distributed to plan participants. There were no phantom stock options granted since
March 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>III. TAX WITHHOLDING OBLIGATIONS AND PARTICIPANTS
TO PAY THE EXERCISE PRICE OF OPTIONS WITH STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Requested Order</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><FONT STYLE="letter-spacing: 0.2pt">Capital Southwest request</FONT>s
<FONT STYLE="letter-spacing: 0.2pt">a</FONT>n <FONT STYLE="letter-spacing: 0.2pt">orde</FONT>r <FONT STYLE="letter-spacing: 0.05pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">Commissio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">fo</FONT>r
<FONT STYLE="letter-spacing: 0.05pt">relie</FONT>f <FONT STYLE="letter-spacing: 0.05pt">unde</FONT>r <FONT STYLE="letter-spacing: 0.05pt">Sectio</FONT>n
<FONT STYLE="letter-spacing: 0.05pt">23(c</FONT>) <FONT STYLE="letter-spacing: 0.05pt">t</FONT>o <FONT STYLE="letter-spacing: 0.05pt">permi</FONT>t
<FONT STYLE="letter-spacing: 0.05pt">Capital Southwest t</FONT>o <FONT STYLE="letter-spacing: 0.05pt">withhol</FONT>d <FONT STYLE="letter-spacing: 0.05pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.05pt">o</FONT>f <FONT STYLE="letter-spacing: 0.05pt">it</FONT>s <FONT STYLE="letter-spacing: 0.05pt">commo</FONT>n
<FONT STYLE="letter-spacing: 0.05pt">stock</FONT> or purchase shares of <FONT STYLE="letter-spacing: 0.05pt">Capital Southwest</FONT>&rsquo;s
common stock from participants to satisfy tax withholding obligations related to the vesting of Restricted <FONT STYLE="letter-spacing: 0.05pt">Stock
</FONT>or the exercise of options to purchase shares of <FONT STYLE="letter-spacing: 0.05pt">Capital Southwest</FONT>&rsquo;s common
stock that were granted under the Plan or will be granted pursuant to <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">Plans</FONT>.
<FONT STYLE="letter-spacing: 0.05pt">I</FONT>n <FONT STYLE="letter-spacing: 0.05pt">addition</FONT>, <FONT STYLE="letter-spacing: 0.05pt">Capital
Southwest request</FONT>s <FONT STYLE="letter-spacing: 0.05pt">a</FONT>n <FONT STYLE="letter-spacing: 0.05pt">exemptio</FONT>n
<FONT STYLE="letter-spacing: 0.05pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.05pt">Sectio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">23(c</FONT>)
<FONT STYLE="letter-spacing: 0.05pt">t</FONT>o <FONT STYLE="letter-spacing: 0.05pt">permi</FONT>t <FONT STYLE="letter-spacing: 0.05pt">participant</FONT>s
<FONT STYLE="letter-spacing: 0.05pt">t</FONT>o pay the exercise price of options to purchase <FONT STYLE="letter-spacing: 0.2pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.2pt">o</FONT>f <FONT STYLE="letter-spacing: 0.05pt">Capital Southwest</FONT>&rsquo;s common stock
that were granted under the Plan or will be granted to them pursuant to the Plans with shares of Capital Southwest&rsquo;s common
stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Consequences
of Restricted Stock Awards</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: 0.05pt">Generally</FONT>, a <FONT STYLE="letter-spacing: 0.05pt">gran</FONT>t <FONT STYLE="letter-spacing: 0.05pt">unde</FONT>r <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">Pla</FONT>ns <FONT STYLE="letter-spacing: 0.05pt">will
not result in taxable income to the recipient for U.S. federal income tax purposes at the time of the grant. Instead, the
value of the Restricted Stock will generally be taxable to the recipient as ordinary income in the years in which the
restrictions on the shares lapse. Such value will be the fair market value of the shares on the dates the restrictions lapse.
Any recipient, however, may elect pursuant to Section 83(b) of the Code to treat the fair market value of the shares on the
date of grant as ordinary income in the year of the grant, provided the recipient makes the election within 30 days after the
date of the grant. Generally, participants forego such elections in order to avoid the risk of being taxed on compensation
they never realize, either because they forfeit the Restricted Stock or the value of the Restricted Stock drops prior to
vesting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt"><FONT STYLE="letter-spacing: 0.15pt">O</FONT>n <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">dat</FONT>e <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Restricte</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">Stoc</FONT>k <FONT STYLE="letter-spacing: 0.15pt">vest</FONT>s <FONT STYLE="letter-spacing: 0.15pt">(assumin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">n</FONT>o <FONT STYLE="letter-spacing: 0.15pt">Sectio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">83(b</FONT>)
<FONT STYLE="letter-spacing: 0.15pt">electio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">ha</FONT>s <FONT STYLE="letter-spacing: 0.15pt">bee</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">made)</FONT>, <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">ar</FONT>e <FONT STYLE="letter-spacing: 0.15pt">release</FONT>d <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Participan</FONT>t <FONT STYLE="letter-spacing: 0.15pt">and
</FONT>available for sale <FONT STYLE="letter-spacing: 0.15pt">o</FONT>r <FONT STYLE="letter-spacing: 0.15pt">transfe</FONT>r <FONT STYLE="letter-spacing: 0.15pt">(subjec</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.15pt">shar</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">retentio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">guidelines)</FONT>. <FONT STYLE="letter-spacing: 0.15pt">I</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">accordanc</FONT>e <FONT STYLE="letter-spacing: 0.15pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">applicabl</FONT>e <FONT STYLE="letter-spacing: 0.15pt">regulation</FONT>s <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e Internal Revenue Service <FONT STYLE="letter-spacing: 0.75pt">(the &ldquo;</FONT><U>IRS</U>&rdquo;),
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest require</FONT>s <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">recipien</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">pa</FONT>y <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>t <FONT STYLE="letter-spacing: 0.15pt">a</FONT>n <FONT STYLE="letter-spacing: 0.15pt">amoun</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">sufficien</FONT>t <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">satisf</FONT>y
<FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">taxe</FONT>s <FONT STYLE="letter-spacing: 0.15pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">respec</FONT>t <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">suc</FONT>h
<FONT STYLE="letter-spacing: 0.15pt">compensatio</FONT>n income at the time the restrictions on the shares lapse or the recipient
makes a Section 83(b) election. Where the cumulative withholding for all employees exceeds $100,000, the amounts withheld generally
must be deposited with the IRS by the next business day; therefore, <FONT STYLE="letter-spacing: 0.15pt">procedure</FONT>s <FONT STYLE="letter-spacing: 0.15pt">generall</FONT>y
<FONT STYLE="letter-spacing: 0.15pt">mus</FONT>t <FONT STYLE="letter-spacing: 0.15pt">be implemente</FONT>d <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">collec</FONT>t <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.15pt">employee</FONT>s <FONT STYLE="letter-spacing: 0.15pt">o</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">vestin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">dat</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">itsel</FONT>f <FONT STYLE="letter-spacing: 0.15pt">o</FONT>r <FONT STYLE="letter-spacing: 0.15pt">a</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">soo</FONT>n <FONT STYLE="letter-spacing: 0.15pt">a</FONT>s <FONT STYLE="letter-spacing: 0.15pt">possibl</FONT>e
thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt"><FONT STYLE="letter-spacing: 0.05pt">I</FONT>n <FONT STYLE="letter-spacing: 0.05pt">lie</FONT>u
<FONT STYLE="letter-spacing: 0.05pt">o</FONT>f <FONT STYLE="letter-spacing: 0.05pt">receivin</FONT>g a <FONT STYLE="letter-spacing: 0.1pt">cas</FONT>h
<FONT STYLE="letter-spacing: 0.1pt">paymen</FONT>t <FONT STYLE="letter-spacing: 0.1pt">o</FONT>r <FONT STYLE="letter-spacing: 0.1pt">withholdin</FONT>g
<FONT STYLE="letter-spacing: 0.1pt">othe</FONT>r <FONT STYLE="letter-spacing: 0.1pt">compensatio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">fro</FONT>m
a <FONT STYLE="letter-spacing: 0.1pt">Participant</FONT>, <FONT STYLE="letter-spacing: 0.1pt">typicall</FONT>y a <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k
<FONT STYLE="letter-spacing: 0.1pt">pla</FONT>n <FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.1pt">provid</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">for </FONT><FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">share</FONT>s <FONT STYLE="letter-spacing: 0.15pt">equa</FONT>l <FONT STYLE="letter-spacing: 0.15pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">valu</FONT>e <FONT STYLE="letter-spacing: 0.15pt">a</FONT>t <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">vestin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">dat</FONT>e <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">monetar</FONT>y <FONT STYLE="letter-spacing: 0.15pt">amoun</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">company</FONT>&rsquo;s
<FONT STYLE="letter-spacing: 0.05pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.05pt">obligation</FONT>, <FONT STYLE="letter-spacing: 0.05pt">sometime</FONT>s
<FONT STYLE="letter-spacing: 0.05pt">referre</FONT>d <FONT STYLE="letter-spacing: 0.05pt">t</FONT>o <FONT STYLE="letter-spacing: 0.4pt">as</FONT>
a <FONT STYLE="letter-spacing: 0.15pt">&ldquo;ne</FONT>t <FONT STYLE="letter-spacing: 0.15pt">shar</FONT>e <FONT STYLE="letter-spacing: 0.15pt">settlement.</FONT>&rdquo;
<FONT STYLE="letter-spacing: 0.1pt">I</FONT>n <FONT STYLE="letter-spacing: 0.1pt">thi</FONT>s <FONT STYLE="letter-spacing: 0.1pt">scenario</FONT>,
<FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.1pt">valu</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">equa</FONT>l <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">ta</FONT>x <FONT STYLE="letter-spacing: 0.1pt">paymen</FONT>t <FONT STYLE="letter-spacing: 0.1pt">ar</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">withhel</FONT>d <FONT STYLE="letter-spacing: 0.1pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">awar</FONT>d <FONT STYLE="letter-spacing: 0.15pt">an</FONT>d <FONT STYLE="letter-spacing: 0.15pt">ma</FONT>y
<FONT STYLE="letter-spacing: 0.15pt">b</FONT>e <FONT STYLE="letter-spacing: 0.15pt">returne</FONT>d <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">plan </FONT><FONT STYLE="letter-spacing: 0.1pt">reserve</FONT>,
<FONT STYLE="letter-spacing: 0.1pt">i</FONT>f <FONT STYLE="letter-spacing: 0.1pt">permitte</FONT>d <FONT STYLE="letter-spacing: 0.1pt">unde</FONT>r
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">term</FONT>s <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">pla</FONT>n <FONT STYLE="letter-spacing: 0.1pt">o</FONT>r
<FONT STYLE="letter-spacing: 0.1pt">awar</FONT>d <FONT STYLE="letter-spacing: 0.1pt">agreement</FONT>. <FONT STYLE="letter-spacing: 0.1pt">I</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT> <FONT STYLE="letter-spacing: 0.1pt">withhold</FONT>s <FONT STYLE="letter-spacing: 0.15pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">satisf</FONT>y <FONT STYLE="letter-spacing: 0.15pt">thi</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">ta</FONT>x <FONT STYLE="letter-spacing: 0.15pt">obligation,
</FONT><FONT STYLE="letter-spacing: 0.1pt">instea</FONT>d <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">cash</FONT>,
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">recipien</FONT>t <FONT STYLE="letter-spacing: 0.1pt">nonetheles</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.1pt">b</FONT>e <FONT STYLE="letter-spacing: 0.1pt">require</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">includ</FONT>e <FONT STYLE="letter-spacing: 0.1pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">incom</FONT>e <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">fai</FONT>r
<FONT STYLE="letter-spacing: 0.05pt">marke</FONT>t <FONT STYLE="letter-spacing: 0.05pt">valu</FONT>e <FONT STYLE="letter-spacing: 0.05pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">share</FONT>s <FONT STYLE="letter-spacing: 0.05pt">withheld.
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt"><FONT STYLE="letter-spacing: 0.15pt">Th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">Amended</FONT>
<FONT STYLE="letter-spacing: 0.15pt">Pla</FONT>n <FONT STYLE="letter-spacing: 0.15pt">incorporate</FONT>s <FONT STYLE="letter-spacing: 0.15pt">thi</FONT>s
<FONT STYLE="letter-spacing: 0.2pt">concep</FONT>t <FONT STYLE="letter-spacing: 0.2pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">&ldquo;ne</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">shar</FONT>e <FONT STYLE="letter-spacing: 0.15pt">settlement.</FONT>&rdquo; <FONT STYLE="letter-spacing: 0.1pt">Specifically</FONT>,
<FONT STYLE="letter-spacing: 0.1pt">i</FONT>t <FONT STYLE="letter-spacing: 0.1pt">provide</FONT>s <FONT STYLE="letter-spacing: 0.1pt">tha</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT> <FONT STYLE="letter-spacing: 0.1pt">i</FONT>s <FONT STYLE="letter-spacing: 0.1pt">authorize</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">withhol</FONT>d the Company&rsquo;s common <FONT STYLE="letter-spacing: 0.1pt">stock</FONT>
(in <FONT STYLE="letter-spacing: 0.1pt">whol</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>r <FONT STYLE="letter-spacing: 0.1pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">part</FONT>) <FONT STYLE="letter-spacing: 0.1pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.1pt">an</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">awar</FONT>d <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">restricte</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">grante</FONT>d <FONT STYLE="letter-spacing: 0.1pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">satisfactio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f a <FONT STYLE="letter-spacing: 0.1pt">participant</FONT>&rsquo;s
<FONT STYLE="letter-spacing: 0.05pt">ta</FONT>x <FONT STYLE="letter-spacing: 0.05pt">obligations</FONT>. <FONT STYLE="letter-spacing: 0.05pt">However</FONT>,
<FONT STYLE="letter-spacing: 0.15pt">n</FONT>o <FONT STYLE="letter-spacing: 0.15pt">suc</FONT>h <FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">of</FONT> <FONT STYLE="letter-spacing: 0.05pt">share</FONT>s <FONT STYLE="letter-spacing: 0.05pt">wil</FONT>l
<FONT STYLE="letter-spacing: 0.05pt">tak</FONT>e <FONT STYLE="letter-spacing: 0.05pt">plac</FONT>e <FONT STYLE="letter-spacing: 0.05pt">excep</FONT>t
<FONT STYLE="letter-spacing: 0.05pt">pursuan</FONT>t <FONT STYLE="letter-spacing: 0.05pt">t</FONT>o <FONT STYLE="letter-spacing: 0.05pt">writte</FONT>n
<FONT STYLE="letter-spacing: 0.05pt">assuranc</FONT>e <FONT STYLE="letter-spacing: 0.05pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.05pt">staf</FONT>f <FONT STYLE="letter-spacing: 0.05pt">o</FONT>f <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.05pt">Commissio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">o</FONT>r <FONT STYLE="letter-spacing: 0.05pt">exemptiv</FONT>e
relief from the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Consequences
of Stock Option Awards</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><FONT STYLE="letter-spacing: 0.1pt">Option</FONT>s <FONT STYLE="letter-spacing: 0.1pt">grante</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">unde</FONT>r <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Pla</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.1pt">no</FONT>t <FONT STYLE="letter-spacing: 0.1pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">taxabl</FONT>e <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o a <FONT STYLE="letter-spacing: 0.1pt">recipien</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">a</FONT>t <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">tim</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">grant</FONT>. <FONT STYLE="letter-spacing: 0.1pt">Upo</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">the</FONT> <FONT STYLE="letter-spacing: 0.05pt">exercis</FONT>e <FONT STYLE="letter-spacing: 0.05pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.05pt">a</FONT>n <FONT STYLE="letter-spacing: 0.05pt">option</FONT>, <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">amoun</FONT>t <FONT STYLE="letter-spacing: 0.1pt">b</FONT>y <FONT STYLE="letter-spacing: 0.1pt">whic</FONT>h
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">fai</FONT>r <FONT STYLE="letter-spacing: 0.1pt">marke</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">valu</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">received</FONT>,
<FONT STYLE="letter-spacing: 0.1pt">determine</FONT>d <FONT STYLE="letter-spacing: 0.1pt">a</FONT>s <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">date </FONT><FONT STYLE="letter-spacing: 0.05pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.05pt">exercise</FONT>, <FONT STYLE="letter-spacing: 0.05pt">exceed</FONT>s <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.05pt">exercis</FONT>e <FONT STYLE="letter-spacing: 0.05pt">pric</FONT>e <FONT STYLE="letter-spacing: 0.05pt">wil</FONT>l
<FONT STYLE="letter-spacing: 0.05pt">b</FONT>e <FONT STYLE="letter-spacing: 0.05pt">treate</FONT>d <FONT STYLE="letter-spacing: 0.05pt">a</FONT>s
<FONT STYLE="letter-spacing: 0.05pt">ordinar</FONT>y <FONT STYLE="letter-spacing: 0.05pt">incom</FONT>e <FONT STYLE="letter-spacing: 0.05pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">recipien</FONT>t <FONT STYLE="letter-spacing: 0.05pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">optio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">yea</FONT>r <FONT STYLE="letter-spacing: 0.05pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.05pt">exercise</FONT>. <FONT STYLE="letter-spacing: 0.1pt">I</FONT>n <FONT STYLE="letter-spacing: 0.1pt">accordanc</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">with </FONT><FONT STYLE="letter-spacing: 0.15pt">applicabl</FONT>e <FONT STYLE="letter-spacing: 0.15pt">regulation</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">IRS</FONT>,
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest require</FONT>s <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">optione</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">pa</FONT>y <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>t <FONT STYLE="letter-spacing: 0.15pt">a</FONT>n <FONT STYLE="letter-spacing: 0.15pt">amoun</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">sufficien</FONT>t <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">satisf</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">taxe</FONT>s <FONT STYLE="letter-spacing: 0.1pt">require</FONT>d <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">b</FONT>e <FONT STYLE="letter-spacing: 0.1pt">withhel</FONT>d <FONT STYLE="letter-spacing: 0.1pt">in
respec</FONT>t <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">suc</FONT>h <FONT STYLE="letter-spacing: 0.1pt">compensatio</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">incom</FONT>e <FONT STYLE="letter-spacing: 0.1pt">a</FONT>t <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">tim</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">exercis</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">option</FONT>. <FONT STYLE="letter-spacing: 0.1pt">I</FONT>f <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT> <FONT STYLE="letter-spacing: 0.1pt">withhold</FONT>s <FONT STYLE="letter-spacing: 0.15pt">share</FONT>s <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">satisf</FONT>y <FONT STYLE="letter-spacing: 0.15pt">thi</FONT>s <FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">tax </FONT><FONT STYLE="letter-spacing: 0.1pt">obligation</FONT>, <FONT STYLE="letter-spacing: 0.1pt">instea</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">cash</FONT>, <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">optione</FONT>e <FONT STYLE="letter-spacing: 0.1pt">nonetheles</FONT>s <FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l
<FONT STYLE="letter-spacing: 0.1pt">b</FONT>e <FONT STYLE="letter-spacing: 0.1pt">require</FONT>d <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">includ</FONT>e <FONT STYLE="letter-spacing: 0.1pt">i</FONT>n <FONT STYLE="letter-spacing: 0.1pt">incom</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">fai</FONT>r <FONT STYLE="letter-spacing: 0.1pt">marke</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">valu</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">withheld</FONT>. <FONT STYLE="letter-spacing: 0.1pt">Whe</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">the </FONT><FONT STYLE="letter-spacing: 0.15pt">optione</FONT>e <FONT STYLE="letter-spacing: 0.15pt">sell</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">share</FONT>s <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.15pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.15pt">receive</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">upo</FONT>n <FONT STYLE="letter-spacing: 0.15pt">exercis</FONT>e <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">option</FONT>, <FONT STYLE="letter-spacing: 0.05pt">h</FONT>e
<FONT STYLE="letter-spacing: 0.05pt">o</FONT>r <FONT STYLE="letter-spacing: 0.05pt">sh</FONT>e <FONT STYLE="letter-spacing: 0.05pt">wil</FONT>l
<FONT STYLE="letter-spacing: 0.05pt">generall</FONT>y <FONT STYLE="letter-spacing: 0.05pt">recogniz</FONT>e a <FONT STYLE="letter-spacing: 0.05pt">capita</FONT>l
<FONT STYLE="letter-spacing: 0.05pt">gai</FONT>n <FONT STYLE="letter-spacing: 0.05pt">o</FONT>r <FONT STYLE="letter-spacing: 0.05pt">los</FONT>s
<FONT STYLE="letter-spacing: 0.05pt">(long</FONT>-term <FONT STYLE="letter-spacing: 0.2pt">o</FONT>r <FONT STYLE="letter-spacing: 0.2pt">short</FONT>-<FONT STYLE="letter-spacing: 0.15pt">term</FONT>,
<FONT STYLE="letter-spacing: 0.15pt">dependin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">upo</FONT>n <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">holdin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">perio</FONT>d <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.15pt">sold</FONT>)
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>n <FONT STYLE="letter-spacing: 0.15pt">a</FONT>n <FONT STYLE="letter-spacing: 0.15pt">amoun</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">equa</FONT>l <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">differenc</FONT>e <FONT STYLE="letter-spacing: 0.15pt">betwee</FONT>n <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">amoun</FONT>t <FONT STYLE="letter-spacing: 0.15pt">realize</FONT>d <FONT STYLE="letter-spacing: 0.15pt">upo</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">the</FONT> <FONT STYLE="letter-spacing: 0.2pt">sal</FONT>e <FONT STYLE="letter-spacing: 0.2pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.2pt">th</FONT>e <FONT STYLE="letter-spacing: 0.2pt">share</FONT>s <FONT STYLE="letter-spacing: 0.2pt">an</FONT>d
<FONT STYLE="letter-spacing: 0.2pt">hi</FONT>s <FONT STYLE="letter-spacing: 0.2pt">o</FONT>r <FONT STYLE="letter-spacing: 0.2pt">he</FONT>r
<FONT STYLE="letter-spacing: 0.2pt">basi</FONT>s <FONT STYLE="letter-spacing: 0.2pt">i</FONT>n <FONT STYLE="letter-spacing: 0.2pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.2pt">share</FONT>s <FONT STYLE="letter-spacing: 0.2pt">(</FONT><I>i.e.</I>, <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">exercis</FONT>e <FONT STYLE="letter-spacing: 0.1pt">pric</FONT>e <FONT STYLE="letter-spacing: 0.1pt">plu</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">amoun</FONT>t <FONT STYLE="letter-spacing: 0.1pt">taxe</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">optione</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">a</FONT>s <FONT STYLE="letter-spacing: 0.1pt">compensatio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">income).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><FONT STYLE="letter-spacing: 0.1pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><FONT STYLE="letter-spacing: 0.1pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Applicable Law and
Need for Relief </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Section 23(c), which is made applicable to BDCs by Section 63, generally
prohibits a BDC from purchasing any securities of which it is the issuer except in the open market pursuant to tenders, or &ldquo;under
such other circumstances as the Commission may permit by rules and regulations or orders for the protection of investors in order
to insure that such purchases are made in a manner or on a basis which does not unfairly discriminate against any holders of the
class or classes of securities to be purchased.&rdquo; No rule addresses &ldquo;purchases&rdquo; by a BDC in the circumstances
described in this Application. Thus, to the extent that the transactions between <FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT>
and the Participants described in this Application with respect to the Plans constitute &ldquo;purchases&rdquo; by <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT> of its own securities, Section 23(c) would prohibit these transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital Southwest&rsquo;s
Legal Arguments </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: -0.05pt">Sectio</FONT>n <FONT STYLE="letter-spacing: -0.05pt">23(c)(3</FONT>)
<FONT STYLE="letter-spacing: -0.05pt">permit</FONT>s a <FONT STYLE="letter-spacing: 0.1pt">BD</FONT>C <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">purchas</FONT>e <FONT STYLE="letter-spacing: 0.1pt">securitie</FONT>s <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">whic</FONT>h <FONT STYLE="letter-spacing: 0.1pt">i</FONT>t <FONT STYLE="letter-spacing: 0.1pt">i</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">issue</FONT>r <FONT STYLE="letter-spacing: 0.15pt">&ldquo;</FONT><FONT STYLE="letter-spacing: 0.1pt">unde</FONT>r
<FONT STYLE="letter-spacing: 0.1pt">suc</FONT>h . . . <FONT STYLE="letter-spacing: 0.1pt">circumstance</FONT>s <FONT STYLE="letter-spacing: 0.1pt">a</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Commissio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">may</FONT>
permit by . . . <FONT STYLE="letter-spacing: 0.15pt">order</FONT>s <FONT STYLE="letter-spacing: 0.15pt">fo</FONT>r <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">protectio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">investor</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>n <FONT STYLE="letter-spacing: 0.15pt">orde</FONT>r <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">insur</FONT>e <FONT STYLE="letter-spacing: 0.15pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.15pt">suc</FONT>h
<FONT STYLE="letter-spacing: 0.15pt">purchase</FONT>s <FONT STYLE="letter-spacing: 0.15pt">ar</FONT>e <FONT STYLE="letter-spacing: 0.15pt">mad</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>n a <FONT STYLE="letter-spacing: 0.15pt">manne</FONT>r <FONT STYLE="letter-spacing: 0.15pt">o</FONT>r
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>n a <FONT STYLE="letter-spacing: 0.15pt">basi</FONT>s <FONT STYLE="letter-spacing: 0.15pt">whic</FONT>h
<FONT STYLE="letter-spacing: 0.15pt">doe</FONT>s not <FONT STYLE="letter-spacing: 0.15pt">unfairl</FONT>y <FONT STYLE="letter-spacing: 0.15pt">discriminat</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">agains</FONT>t <FONT STYLE="letter-spacing: 0.15pt">an</FONT>y <FONT STYLE="letter-spacing: 0.15pt">holder</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">clas</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>r <FONT STYLE="letter-spacing: 0.15pt">classe</FONT>s <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">securitie</FONT>s <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">purchased.</FONT>&rdquo; As noted above, the transactions between <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest an</FONT>d <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Participant</FONT>s <FONT STYLE="letter-spacing: 0.15pt">describe</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>n <FONT STYLE="letter-spacing: 0.15pt">thi</FONT>s <FONT STYLE="letter-spacing: 0.15pt">Applicatio</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.15pt">respec</FONT>t <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Pla</FONT>ns <FONT STYLE="letter-spacing: 0.15pt">ma</FONT>y
<FONT STYLE="letter-spacing: 0.15pt">entai</FONT>l <FONT STYLE="letter-spacing: 0.15pt">&ldquo;</FONT>purchases&rdquo; <FONT STYLE="letter-spacing: 0.15pt">b</FONT>y
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">it</FONT>s <FONT STYLE="letter-spacing: 0.15pt">ow</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">securities withi</FONT>n <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">meanin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">Sectio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">23(c)</FONT>.
<FONT STYLE="letter-spacing: 0.15pt">However</FONT>, <FONT STYLE="letter-spacing: 0.15pt">Capital Southwest submit</FONT>s <FONT STYLE="letter-spacing: 0.15pt">tha</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">an</FONT>y <FONT STYLE="letter-spacing: 0.15pt">suc</FONT>h <FONT STYLE="letter-spacing: 0.15pt">purchase</FONT>s
will be made in a manner that does not unfairly <FONT STYLE="letter-spacing: 0.1pt">discriminat</FONT>e <FONT STYLE="letter-spacing: 0.1pt">agains</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.15pt">othe</FONT>r <FONT STYLE="letter-spacing: 0.15pt">shareholders</FONT>.
<FONT STYLE="letter-spacing: 0.15pt">I</FONT>n <FONT STYLE="letter-spacing: 0.15pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.15pt">regard</FONT>,
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest currentl</FONT>y <FONT STYLE="letter-spacing: 0.15pt">use</FONT>s <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">closin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">sale</FONT>s <FONT STYLE="letter-spacing: 0.15pt">pric</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">it</FONT>s <FONT STYLE="letter-spacing: 0.15pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.15pt">stock
</FONT>on the Nasdaq Global Select Market (or any primary exchange on which <FONT STYLE="letter-spacing: 0.15pt">it</FONT>s <FONT STYLE="letter-spacing: 0.15pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.15pt">stoc</FONT>k
<FONT STYLE="letter-spacing: 0.15pt">ma</FONT>y <FONT STYLE="letter-spacing: 0.15pt">b</FONT>e <FONT STYLE="letter-spacing: 0.15pt">trade</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>n <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">future</FONT>)
<FONT STYLE="letter-spacing: 0.15pt">a</FONT>s <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">&ldquo;</FONT><FONT STYLE="letter-spacing: -0.05pt">fai</FONT>r
<FONT STYLE="letter-spacing: -0.05pt">marke</FONT>t <FONT STYLE="letter-spacing: -0.05pt">value</FONT>&rdquo; of its common stock
under the <FONT STYLE="letter-spacing: -0.05pt">Pla</FONT>ns <FONT STYLE="letter-spacing: -0.05pt">(</FONT><I>i.e.</I>, <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">dat</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">gran</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">options)</FONT>. <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT> <FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.1pt">als</FONT>o <FONT STYLE="letter-spacing: 0.1pt">us</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">closin</FONT>g <FONT STYLE="letter-spacing: 0.1pt">sale</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">pric</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">it</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">common
</FONT>stock <FONT STYLE="letter-spacing: 0.1pt">o</FONT>n <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Nasda</FONT>q
<FONT STYLE="letter-spacing: 0.1pt">Globa</FONT>l Select <FONT STYLE="letter-spacing: 0.1pt">Marke</FONT>t <FONT STYLE="letter-spacing: 0.1pt">(o</FONT>r
<FONT STYLE="letter-spacing: 0.1pt">an</FONT>y <FONT STYLE="letter-spacing: 0.1pt">primar</FONT>y <FONT STYLE="letter-spacing: 0.1pt">exchang</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>n <FONT STYLE="letter-spacing: 0.1pt">whic</FONT>h <FONT STYLE="letter-spacing: 0.1pt">it</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">ma</FONT>y <FONT STYLE="letter-spacing: 0.1pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">trade</FONT>d <FONT STYLE="letter-spacing: 0.1pt">i</FONT>n <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">future</FONT>) <FONT STYLE="letter-spacing: 0.1pt">a</FONT>s <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">&ldquo;</FONT>fair market <FONT STYLE="letter-spacing: 0.1pt">value</FONT>&rdquo; <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">it</FONT>s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k
<FONT STYLE="letter-spacing: 0.1pt">unde</FONT>r <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Pla</FONT>ns
<FONT STYLE="letter-spacing: 0.1pt">(</FONT><I>i.e.</I>, <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">publi</FONT>c
<FONT STYLE="letter-spacing: 0.1pt">marke</FONT>t <FONT STYLE="letter-spacing: 0.1pt">pric</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">dat</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">gran</FONT>t <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">Restricte</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">Stoc</FONT>k <FONT STYLE="letter-spacing: 0.15pt">an</FONT>d <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">dat</FONT>e <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">gran</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">options). </FONT>The shares of <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">use</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">satisf</FONT>y <FONT STYLE="letter-spacing: 0.1pt">ta</FONT>x
<FONT STYLE="letter-spacing: 0.1pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.15pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">value</FONT>d <FONT STYLE="letter-spacing: 0.15pt">base</FONT>d <FONT STYLE="letter-spacing: 0.15pt">o</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">curren</FONT>t <FONT STYLE="letter-spacing: 0.15pt">fai</FONT>r
<FONT STYLE="letter-spacing: 0.15pt">marke</FONT>t <FONT STYLE="letter-spacing: 0.15pt">valu</FONT>e <FONT STYLE="letter-spacing: 0.15pt">o</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">dat</FONT>e <FONT STYLE="letter-spacing: 0.15pt">of
th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">transaction</FONT>. <FONT STYLE="letter-spacing: 0.15pt">Becaus</FONT>e <FONT STYLE="letter-spacing: 0.15pt">al</FONT>l
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">transaction</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">betwee</FONT>n <FONT STYLE="letter-spacing: 0.15pt">Capital Southwest an</FONT>d <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">Participant</FONT>s <FONT STYLE="letter-spacing: 0.15pt">describe</FONT>d <FONT STYLE="letter-spacing: 0.15pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">thi</FONT>s <FONT STYLE="letter-spacing: 0.15pt">Applicatio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">wit</FONT>h
<FONT STYLE="letter-spacing: 0.15pt">respec</FONT>t <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">Plans </FONT>will take place at the public market price for <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.1pt">stock</FONT>, <FONT STYLE="letter-spacing: 0.1pt">thes</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">transaction</FONT>s <FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.1pt">no</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">b</FONT>e <FONT STYLE="letter-spacing: 0.1pt">significantl</FONT>y <FONT STYLE="letter-spacing: 0.1pt">differen</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">tha</FONT>n <FONT STYLE="letter-spacing: 0.1pt">coul</FONT>d <FONT STYLE="letter-spacing: 0.1pt">be
</FONT>achieved by any shareholder <FONT STYLE="letter-spacing: 0.1pt">sellin</FONT>g <FONT STYLE="letter-spacing: 0.1pt">i</FONT>n
a <FONT STYLE="letter-spacing: 0.1pt">transactio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">o</FONT>n <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">Nasda</FONT>q <FONT STYLE="letter-spacing: 0.1pt">Globa</FONT>l <FONT STYLE="letter-spacing: 1.25pt">Select
</FONT><FONT STYLE="letter-spacing: 0.1pt">Market</FONT>. <FONT STYLE="letter-spacing: 0.1pt">Moreover</FONT>, <FONT STYLE="letter-spacing: 0.1pt">thes</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">transaction</FONT>s <FONT STYLE="letter-spacing: 0.1pt">ma</FONT>y <FONT STYLE="letter-spacing: 0.1pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">mad</FONT>e <FONT STYLE="letter-spacing: 0.1pt">onl</FONT>y <FONT STYLE="letter-spacing: 0.1pt">a</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">permitted b</FONT>y <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Plans</FONT>,
<FONT STYLE="letter-spacing: 0.1pt">whic</FONT>h <FONT STYLE="letter-spacing: 0.15pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.15pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">approve</FONT>d <FONT STYLE="letter-spacing: 0.15pt">b</FONT>y <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.1pt">shareholder</FONT>s <FONT STYLE="letter-spacing: 0.1pt">prio</FONT>r
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">an</FONT>y <FONT STYLE="letter-spacing: 0.1pt">applicatio</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">relief</FONT>.
<FONT STYLE="letter-spacing: 0.1pt">Thes</FONT>e <FONT STYLE="letter-spacing: 0.1pt">transaction</FONT>s <FONT STYLE="letter-spacing: 0.1pt">permi</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT> to <FONT STYLE="letter-spacing: 0.15pt">delive</FONT>r <FONT STYLE="letter-spacing: 0.15pt">onl</FONT>y
<FONT STYLE="letter-spacing: 0.15pt">share</FONT>s <FONT STYLE="letter-spacing: 0.15pt">ne</FONT>t <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">require</FONT>d <FONT STYLE="letter-spacing: 0.15pt">ta</FONT>x
<FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">awar</FONT>d <FONT STYLE="letter-spacing: 0.15pt">recipients</FONT>, <FONT STYLE="letter-spacing: 0.15pt">thereb</FONT>y
<FONT STYLE="letter-spacing: 0.15pt">reducin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">numbe</FONT>r
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">share</FONT>s <FONT STYLE="letter-spacing: 0.15pt">issue</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">i</FONT>n <FONT STYLE="letter-spacing: 0.1pt">connectio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">with
</FONT><FONT STYLE="letter-spacing: 0.15pt">award</FONT>s <FONT STYLE="letter-spacing: 0.15pt">grante</FONT>d <FONT STYLE="letter-spacing: 0.15pt">unde</FONT>r
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Plans</FONT>. <FONT STYLE="letter-spacing: 0.15pt">Th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">resultin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">reductio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">dilutio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">usin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">thes</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">transaction</FONT>s <FONT STYLE="letter-spacing: 0.15pt">shoul</FONT>d <FONT STYLE="letter-spacing: 0.15pt">benefi</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">al</FONT>l <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.1pt">shareholders</FONT>. <FONT STYLE="letter-spacing: 0.1pt">Finally,
</FONT><FONT STYLE="letter-spacing: 0.15pt">withou</FONT>t <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">relie</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">sough</FONT>t <FONT STYLE="letter-spacing: 0.15pt">hereby</FONT>, <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.15pt">executive</FONT>s <FONT STYLE="letter-spacing: 0.15pt">an</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">employee</FONT>s <FONT STYLE="letter-spacing: 0.15pt">ma</FONT>y <FONT STYLE="letter-spacing: 0.15pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">force</FONT>d <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">sel</FONT>l
<FONT STYLE="letter-spacing: 0.1pt">mor</FONT>e <FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">i</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">ope</FONT>n <FONT STYLE="letter-spacing: 0.1pt">marke</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>r a <FONT STYLE="letter-spacing: 0.1pt">portio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">the </FONT>non-<FONT STYLE="letter-spacing: 0.15pt">cas</FONT>h <FONT STYLE="letter-spacing: 0.15pt">award</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.15pt">ves</FONT>t <FONT STYLE="letter-spacing: 0.15pt">o</FONT>r
<FONT STYLE="letter-spacing: 0.15pt">ar</FONT>e <FONT STYLE="letter-spacing: 0.15pt">delivere</FONT>d <FONT STYLE="letter-spacing: 0.15pt">unde</FONT>r
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Pla</FONT>ns <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">satisf</FONT>y <FONT STYLE="letter-spacing: 0.1pt">thei</FONT>r <FONT STYLE="letter-spacing: 0.1pt">ta</FONT>x
<FONT STYLE="letter-spacing: 0.1pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.1pt">obligations</FONT>. A <FONT STYLE="letter-spacing: 0.1pt">larg</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">influ</FONT>x <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest&rsquo;s</FONT> <FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">int</FONT>o <FONT STYLE="letter-spacing: 0.1pt">the
ope</FONT>n <FONT STYLE="letter-spacing: 0.1pt">marke</FONT>t <FONT STYLE="letter-spacing: 0.1pt">ove</FONT>r a <FONT STYLE="letter-spacing: 0.1pt">shor</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">perio</FONT>d <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">tim</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">woul</FONT>d <FONT STYLE="letter-spacing: 0.15pt">no</FONT>t <FONT STYLE="letter-spacing: 0.15pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">beneficia</FONT>l <FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">Capital
Southwest</FONT>&rsquo;s shareholders. No transactions will be conducted pursuant to the Amended <FONT STYLE="letter-spacing: 0.15pt">Orde</FONT>r
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>n <FONT STYLE="letter-spacing: 0.15pt">day</FONT>s <FONT STYLE="letter-spacing: 0.15pt">wher</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">ther</FONT>e <FONT STYLE="letter-spacing: 0.15pt">ar</FONT>e <FONT STYLE="letter-spacing: 0.15pt">n</FONT>o
<FONT STYLE="letter-spacing: 0.15pt">reporte</FONT>d <FONT STYLE="letter-spacing: 0.15pt">marke</FONT>t <FONT STYLE="letter-spacing: 0.15pt">transaction</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">involvin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.15pt">shares</FONT>.
<FONT STYLE="letter-spacing: 0.15pt">Moreover</FONT>, <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">provision</FONT>s <FONT STYLE="letter-spacing: -0.05pt">in</FONT> <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">Pla</FONT>ns <FONT STYLE="letter-spacing: 0.15pt">d</FONT>o <FONT STYLE="letter-spacing: 0.15pt">no</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">rais</FONT>e <FONT STYLE="letter-spacing: 0.15pt">concern</FONT>s <FONT STYLE="letter-spacing: 0.15pt">abou</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">preferentia</FONT>l <FONT STYLE="letter-spacing: 0.15pt">treatmen</FONT>t <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.15pt">insider</FONT>s <FONT STYLE="letter-spacing: 0.15pt">becaus</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Pla</FONT>ns <FONT STYLE="letter-spacing: 0.15pt">are</FONT>
a <FONT STYLE="letter-spacing: 0.15pt">bon</FONT>a <FONT STYLE="letter-spacing: 0.15pt">fid</FONT>e <FONT STYLE="letter-spacing: 0.15pt">compensatio</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">pla</FONT>n <FONT STYLE="letter-spacing: 0.1pt">of </FONT>the type that is common among corporations
generally. Finally, the vesting schedule is determined at the time of the initial grant of the Restricted Stock and the option
exercise price is determined at the time of the initial grant of the options.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><FONT STYLE="letter-spacing: 0.1pt">I</FONT>n <FONT STYLE="letter-spacing: 0.1pt">ligh</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">foregoing</FONT>,
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest</FONT> <FONT STYLE="letter-spacing: 0.1pt">believe</FONT>s <FONT STYLE="letter-spacing: 0.1pt">tha</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">requeste</FONT>d <FONT STYLE="letter-spacing: 0.1pt">relie</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">meet</FONT>s <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">standard</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">Sectio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">23(c)(3)</FONT>.
<FONT STYLE="letter-spacing: 0.1pt">Moreover</FONT>, <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">importan</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">role</FONT> <FONT STYLE="letter-spacing: 0.2pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.2pt">equit</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">compensatio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">ca</FONT>n <FONT STYLE="letter-spacing: 0.1pt">pla</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">i</FONT>n <FONT STYLE="letter-spacing: 0.1pt">attractin</FONT>g <FONT STYLE="letter-spacing: 0.1pt">an</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">retainin</FONT>g <FONT STYLE="letter-spacing: 0.1pt">qualifie</FONT>d <FONT STYLE="letter-spacing: 0.1pt">personne</FONT>l
<FONT STYLE="letter-spacing: 0.1pt">ha</FONT>s <FONT STYLE="letter-spacing: 0.1pt">bee</FONT>n <FONT STYLE="letter-spacing: 0.1pt">expressl</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">recognize</FONT>d <FONT STYLE="letter-spacing: 0.1pt">b</FONT>y <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">Commissio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.1pt">respect
</FONT><FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">certai</FONT>n <FONT STYLE="letter-spacing: 0.15pt">type</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">investmen</FONT>t <FONT STYLE="letter-spacing: 0.15pt">companies</FONT>,
<FONT STYLE="letter-spacing: 0.15pt">includin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">closed</FONT>-<FONT STYLE="letter-spacing: 0.1pt">en</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">investmen</FONT>t <FONT STYLE="letter-spacing: 0.1pt">companies</FONT>, <FONT STYLE="letter-spacing: 0.1pt">SBICs
an</FONT>d <FONT STYLE="letter-spacing: 0.1pt">BDCs. </FONT><FONT STYLE="letter-spacing: 0.15pt">Capital Southwest believe</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.15pt">it</FONT>s <FONT STYLE="letter-spacing: 0.15pt">reques</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">fo</FONT>r <FONT STYLE="letter-spacing: 0.15pt">the Amended Orde</FONT>r <FONT STYLE="letter-spacing: 0.15pt">i</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">consisten</FONT>t <FONT STYLE="letter-spacing: 0.15pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">policie</FONT>s <FONT STYLE="letter-spacing: 0.15pt">underlyin</FONT>g <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">provision</FONT>s <FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
1940 <FONT STYLE="letter-spacing: 0.15pt">Ac</FONT>t <FONT STYLE="letter-spacing: 0.15pt">permittin</FONT>g <FONT STYLE="letter-spacing: 0.25pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.25pt">us</FONT>e <FONT STYLE="letter-spacing: 0.25pt">o</FONT>f <FONT STYLE="letter-spacing: 0.25pt">equity</FONT>
compensation as well as prior exemptive relief granted by the Commission for relief under Section 23(c).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: 0.1pt"><B>F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Precedent</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="letter-spacing: 0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="letter-spacing: 0.1pt">Th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Commissio</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">ha</FONT>s <FONT STYLE="letter-spacing: 0.1pt">previousl</FONT>y granted exemptive relief from
Section 23(c) to BDCs in substantially similar circumstances. <FONT STYLE="letter-spacing: 0.05pt">On January 10, 2017, the Commission
issued an order for an exemption from Section 23(c) to permit Equus Total Return, Inc. </FONT>to withhold shares of its common
stock or purchase shares of its common stock from participants to satisfy tax withholding obligations relating to the vesting of
restricted stock or the exercise of options that will be granted pursuant to its equity incentive plan<FONT STYLE="letter-spacing: 0.05pt">.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>8</SUP></FONT>
On May 10, 2016, the Commission issued an order for an exemption from Section 23(c) to permit </FONT>Newtek Business Services Corp.
<FONT STYLE="letter-spacing: 0.05pt">to </FONT>withhold shares of its common stock or purchase shares of its common stock from
participants to satisfy tax withholding obligations relating to the vesting of restricted stock or the exercise of options to purchase
shares of its common stock<FONT STYLE="letter-spacing: 0.05pt">.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>9</SUP></FONT>
On June 16, 2015, the Commission issued an order for an exemption from Section 23(c) to permit KCAP Financial, Inc. to </FONT>withhold
shares of its common stock or purchase shares of its common stock from participants to satisfy tax withholding obligations relating
to the vesting of restricted stock or the exercise of options to purchase shares of its common stock<FONT STYLE="letter-spacing: 0.05pt">.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>10</SUP></FONT></FONT>
On April 3, 2012, the Commission issued an order for an exemption from Section 23(c) to permit Harris &amp; Harris Group, Inc.
to withhold shares of its common stock from participants and to permit participants to pay the exercise price of options that were
granted to them pursuant to a predecessor plan with shares <FONT STYLE="letter-spacing: 0.05pt">of commo</FONT>n <FONT STYLE="letter-spacing: 0.05pt">stock.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>11</SUP></FONT></FONT>
On June 22, 2010, the Commission issued an amended order for an exemption from Section 23(c) permitting <FONT STYLE="letter-spacing: 0.05pt">Hercules
Capital, Inc. t</FONT>o <FONT STYLE="letter-spacing: 0.05pt">withhol</FONT>d <FONT STYLE="letter-spacing: 0.05pt">shares </FONT><FONT STYLE="letter-spacing: 0.1pt">o</FONT>f
<FONT STYLE="letter-spacing: 0.1pt">it</FONT>s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>r <FONT STYLE="letter-spacing: 0.1pt">purchas</FONT>e <FONT STYLE="letter-spacing: 0.1pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">it</FONT>s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">participant</FONT>s <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">satisf</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">ta</FONT>x withholding obligations related to the vesting of <FONT STYLE="letter-spacing: 0.1pt">restricte</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.1pt">wer</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>r <FONT STYLE="letter-spacing: 0.1pt">wi</FONT>ll <FONT STYLE="letter-spacing: 0.1pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">grante</FONT>d <FONT STYLE="letter-spacing: 0.1pt">pursuan</FONT>t <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">it</FONT>s <FONT STYLE="letter-spacing: 0.1pt">incentiv</FONT>e <FONT STYLE="letter-spacing: 0.1pt">compensatio</FONT>n
plans.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>12</SUP></FONT> On April 20, 2010, the Commission issued
an order for an exemption from Section 23(c) permitting <FONT STYLE="letter-spacing: 0.05pt">MC</FONT>G <FONT STYLE="letter-spacing: 0.05pt">Capita</FONT>l
Corporation <FONT STYLE="letter-spacing: 0.05pt">t</FONT>o <FONT STYLE="letter-spacing: 0.05pt">withhol</FONT>d <FONT STYLE="letter-spacing: 0.05pt">shares
</FONT><FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">it</FONT>s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">o</FONT>r <FONT STYLE="letter-spacing: 0.1pt">purchas</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">share</FONT>s <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">it</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">fro</FONT>m
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">participant</FONT>s <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">satisf</FONT>y <FONT STYLE="letter-spacing: 0.1pt">ta</FONT>x withholding obligations related
to the vesting of <FONT STYLE="letter-spacing: 0.1pt">restricte</FONT>d <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">tha</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">wer</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>r <FONT STYLE="letter-spacing: 0.1pt">wi</FONT>ll
<FONT STYLE="letter-spacing: 0.1pt">b</FONT>e <FONT STYLE="letter-spacing: 0.1pt">grante</FONT>d <FONT STYLE="letter-spacing: 0.1pt">pursuan</FONT>t
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">it</FONT>s <FONT STYLE="letter-spacing: 0.1pt">incentiv</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">compensatio</FONT>n plans.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>13</SUP></FONT>
<FONT STYLE="letter-spacing: 0.05pt">O</FONT>n <FONT STYLE="letter-spacing: 0.05pt">June 16</FONT>, <FONT STYLE="letter-spacing: 0.05pt">2009</FONT>,
<FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">Commissio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">issue</FONT>d
<FONT STYLE="letter-spacing: 0.05pt">a</FONT>n amended <FONT STYLE="letter-spacing: 0.05pt">order </FONT>granting Main Street Capital
Corporation et al. exemptive relief from Section 23(c) to permit it, pursuant to its Plan, to engage in certain transactions that
may constitute purchases by Main Street Capital Corporation of its own securities within the meaning of Section 23(c)<FONT STYLE="letter-spacing: 0.1pt">.</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>14</SUP></FONT>
<FONT STYLE="letter-spacing: 0.05pt">O</FONT>n <FONT STYLE="letter-spacing: 0.05pt">Ma</FONT>y <FONT STYLE="letter-spacing: 0.05pt">5</FONT>,
<FONT STYLE="letter-spacing: 0.05pt">2009</FONT>, <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">Commissio</FONT>n
<FONT STYLE="letter-spacing: 0.05pt">issue</FONT>d <FONT STYLE="letter-spacing: 0.05pt">a</FONT>n amended <FONT STYLE="letter-spacing: 0.05pt">order
</FONT>granting Triangle Capital Corporation exemptive relief from Section 23(c) in connection with withholding obligations related
to vesting Restricted Stock and option exercises, and the payment of an option <FONT STYLE="letter-spacing: 0.1pt">exercis</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">pric</FONT>e <FONT STYLE="letter-spacing: 0.1pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.1pt">share</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k
<FONT STYLE="letter-spacing: 0.1pt">alread</FONT>y <FONT STYLE="letter-spacing: 0.1pt">hel</FONT>d <FONT STYLE="letter-spacing: 0.1pt">b</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">participant.</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>15</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt"><FONT STYLE="letter-spacing: -0.05pt">Additionally</FONT>,
<FONT STYLE="letter-spacing: -0.05pt">i</FONT>n <FONT STYLE="letter-spacing: -0.05pt">1998</FONT>, <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.05pt">Commissio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">issue</FONT>d <FONT STYLE="letter-spacing: 0.1pt">Baker,
Fentress &amp; Company and Adams Express Company, et al.</FONT> <FONT STYLE="letter-spacing: 0.05pt">exemptiv</FONT>e <FONT STYLE="letter-spacing: 0.05pt">relie</FONT>f
<FONT STYLE="letter-spacing: 0.05pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.05pt">Sectio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">23(c</FONT>)
<FONT STYLE="letter-spacing: 0.05pt">i</FONT>n <FONT STYLE="letter-spacing: 0.05pt">connectio</FONT>n <FONT STYLE="letter-spacing: 0.05pt">with
</FONT>the payment of a <FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">optio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">exercis</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">pric</FONT>e <FONT STYLE="letter-spacing: 0.1pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.1pt">previousl</FONT>y
<FONT STYLE="letter-spacing: 0.1pt">acquire</FONT>d <FONT STYLE="letter-spacing: 0.1pt">stock. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt">Because the exemptive relief <FONT STYLE="letter-spacing: 0.2pt">sough</FONT>t
<FONT STYLE="letter-spacing: 0.2pt">b</FONT>y <FONT STYLE="letter-spacing: 0.2pt">thi</FONT>s <FONT STYLE="letter-spacing: 0.2pt">Applicatio</FONT>n
<FONT STYLE="letter-spacing: 0.2pt">i</FONT>s <FONT STYLE="letter-spacing: 0.2pt">substantiall</FONT>y <FONT STYLE="letter-spacing: 0.2pt">identica</FONT>l
<FONT STYLE="letter-spacing: 0.2pt">t</FONT>o <FONT STYLE="letter-spacing: 0.2pt">thos</FONT>e <FONT STYLE="letter-spacing: 0.2pt">i</FONT>n
a <FONT STYLE="letter-spacing: 0.2pt">numbe</FONT>r <FONT STYLE="letter-spacing: 0.2pt">o</FONT>f <FONT STYLE="letter-spacing: 0.2pt">order</FONT>s
<FONT STYLE="letter-spacing: 0.2pt">grante</FONT>d <FONT STYLE="letter-spacing: 0.2pt">b</FONT>y <FONT STYLE="letter-spacing: 0.2pt">the
</FONT>Commission permitting comparable <FONT STYLE="letter-spacing: 0.15pt">arrangements</FONT>, <FONT STYLE="letter-spacing: 0.15pt">includin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">order</FONT>s <FONT STYLE="letter-spacing: 0.15pt">issue</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.05pt">Equus Total Return, Inc., Newtek Business Services
Corp., KCAP Financial, Inc., Harris &amp; Harris Group, Inc.</FONT><FONT STYLE="letter-spacing: 0.9pt">, </FONT>Hercules Capital,
Inc., <FONT STYLE="letter-spacing: 0.15pt">MC</FONT>G <FONT STYLE="letter-spacing: 0.15pt">Capita</FONT>l Corporation, Main Street
Capital Corporation et al., and Triangle Capital Corporation <FONT STYLE="letter-spacing: 0.15pt">discusse</FONT>d <FONT STYLE="letter-spacing: 0.15pt">above</FONT>,
<FONT STYLE="letter-spacing: 0.15pt">Capital Southwest </FONT><FONT STYLE="letter-spacing: 0.2pt">respectfull</FONT>y <FONT STYLE="letter-spacing: 0.2pt">request</FONT>s
<FONT STYLE="letter-spacing: 0.2pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.2pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">Commissio</FONT>n
<FONT STYLE="letter-spacing: 0.05pt">gran</FONT>t <FONT STYLE="letter-spacing: 0.05pt">th</FONT>e <FONT STYLE="letter-spacing: 0.05pt">exemptiv</FONT>e
<FONT STYLE="letter-spacing: 0.05pt">relie</FONT>f <FONT STYLE="letter-spacing: 0.05pt">requeste</FONT>d <FONT STYLE="letter-spacing: 0.05pt">b</FONT>y
<FONT STYLE="letter-spacing: 0.05pt">thi</FONT>s <FONT STYLE="letter-spacing: 0.05pt">Application. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt"><FONT STYLE="letter-spacing: 0.05pt">I</FONT>n <FONT STYLE="letter-spacing: 0.05pt">addition</FONT>,
<FONT STYLE="letter-spacing: 0.05pt">i</FONT>t <FONT STYLE="letter-spacing: 0.05pt">i</FONT>s <FONT STYLE="letter-spacing: 0.05pt">importan</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">t</FONT>o <FONT STYLE="letter-spacing: 0.15pt">highligh</FONT>t <FONT STYLE="letter-spacing: 0.15pt">tha</FONT>t
<FONT STYLE="letter-spacing: 0.15pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.15pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.15pt">withholdin</FONT>g
<FONT STYLE="letter-spacing: 0.15pt">provision</FONT>s <FONT STYLE="letter-spacing: 0.15pt">an</FONT>d <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">othe</FONT>r <FONT STYLE="letter-spacing: 0.15pt">provision</FONT>s <FONT STYLE="letter-spacing: 0.15pt">containe</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">i</FONT>n <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.15pt">Pla</FONT>ns
<FONT STYLE="letter-spacing: 0.15pt">describe</FONT>d <FONT STYLE="letter-spacing: 0.15pt">in thi</FONT>s <FONT STYLE="letter-spacing: 0.15pt">Applicatio</FONT>n
<FONT STYLE="letter-spacing: 0.15pt">ar</FONT>e <FONT STYLE="letter-spacing: 0.15pt">commo</FONT>n <FONT STYLE="letter-spacing: 0.15pt">feature</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">foun</FONT>d <FONT STYLE="letter-spacing: 0.15pt">i</FONT>n <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.15pt">equit</FONT>y <FONT STYLE="letter-spacing: 0.15pt">compensatio</FONT>n <FONT STYLE="letter-spacing: 0.15pt">plan</FONT>s
<FONT STYLE="letter-spacing: 0.15pt">o</FONT>f <FONT STYLE="letter-spacing: 0.15pt">man</FONT>y <FONT STYLE="letter-spacing: 0.15pt">publi</FONT>c
<FONT STYLE="letter-spacing: 0.15pt">companie</FONT>s <FONT STYLE="letter-spacing: 0.15pt">no</FONT>t <FONT STYLE="letter-spacing: 0.15pt">regulate</FONT>d
<FONT STYLE="letter-spacing: 0.15pt">unde</FONT>r <FONT STYLE="letter-spacing: 0.15pt">th</FONT>e <FONT STYLE="letter-spacing: 0.75pt">1940
</FONT><FONT STYLE="letter-spacing: 0.15pt">Ac</FONT>t <FONT STYLE="letter-spacing: 0.15pt">wit</FONT>h <FONT STYLE="letter-spacing: 0.15pt">which
</FONT>Capital Southwest <FONT STYLE="letter-spacing: 0.15pt">compete</FONT>s <FONT STYLE="letter-spacing: 0.15pt">fo</FONT>r <FONT STYLE="letter-spacing: 0.15pt">personne</FONT>l
<FONT STYLE="letter-spacing: 0.15pt">resources.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt"><FONT STYLE="letter-spacing: 0.1pt">Accordingly</FONT>,
<FONT STYLE="letter-spacing: 0.25pt">Capital Southwest</FONT> <FONT STYLE="letter-spacing: 0.1pt">respectfull</FONT>y <FONT STYLE="letter-spacing: 0.1pt">request</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">tha</FONT>t <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Commissio</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">issu</FONT>e <FONT STYLE="letter-spacing: 0.1pt">a</FONT>n <FONT STYLE="letter-spacing: 0.1pt">orde</FONT>r
<FONT STYLE="letter-spacing: 0.1pt">unde</FONT>r <FONT STYLE="letter-spacing: 0.1pt">Sectio</FONT>n <FONT STYLE="letter-spacing: 0.1pt">23(c</FONT>)
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">permi</FONT>t <FONT STYLE="letter-spacing: 0.1pt">(1</FONT>)
<FONT STYLE="letter-spacing: 0.25pt">Capital Southwest</FONT> <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">withhold
</FONT>shares of its common stock or purchase shares of <FONT STYLE="letter-spacing: 0.25pt">Capital Southwest</FONT>&rsquo;s <FONT STYLE="letter-spacing: 0.1pt">commo</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">stoc</FONT>k <FONT STYLE="letter-spacing: 0.1pt">fro</FONT>m <FONT STYLE="letter-spacing: 0.1pt">participant</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">satisf</FONT>y <FONT STYLE="letter-spacing: 0.1pt">ta</FONT>x
<FONT STYLE="letter-spacing: 0.1pt">withholdin</FONT>g <FONT STYLE="letter-spacing: 0.1pt">obligation</FONT>s <FONT STYLE="letter-spacing: 0.1pt">relate</FONT>d
to the vesting of Restricted Stock or the exercise of options to purchase shares of <FONT STYLE="letter-spacing: 0.25pt">Capital
Southwest</FONT>&rsquo;s common stock that were granted under the Plan or <FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.1pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">grante</FONT>d <FONT STYLE="letter-spacing: 0.1pt">pursuan</FONT>t <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Plans</FONT>, <FONT STYLE="letter-spacing: 0.1pt">an</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">(2</FONT>) <FONT STYLE="letter-spacing: 0.1pt">Participant</FONT>s <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o
<FONT STYLE="letter-spacing: 0.1pt">pa</FONT>y <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">exercis</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">pric</FONT>e <FONT STYLE="letter-spacing: 0.1pt">o</FONT>f <FONT STYLE="letter-spacing: 0.1pt">option</FONT>s
<FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">purchas</FONT>e shares of <FONT STYLE="letter-spacing: 0.25pt">Capital
Southwest</FONT>&rsquo;s common stock that <FONT STYLE="letter-spacing: 0.1pt">wer</FONT>e <FONT STYLE="letter-spacing: 0.1pt">grante</FONT>d
<FONT STYLE="letter-spacing: 0.1pt">unde</FONT>r <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e <FONT STYLE="letter-spacing: 0.1pt">Pla</FONT>n
<FONT STYLE="letter-spacing: 0.1pt">o</FONT>r <FONT STYLE="letter-spacing: 0.1pt">wil</FONT>l <FONT STYLE="letter-spacing: 0.1pt">b</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">grante</FONT>d <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">the</FONT>m
<FONT STYLE="letter-spacing: 0.1pt">pursuan</FONT>t <FONT STYLE="letter-spacing: 0.1pt">t</FONT>o <FONT STYLE="letter-spacing: 0.1pt">th</FONT>e
<FONT STYLE="letter-spacing: 0.1pt">Pla</FONT>ns with shares of <FONT STYLE="letter-spacing: 0.25pt">Capital Southwest</FONT>&rsquo;s
<FONT STYLE="letter-spacing: 0.25pt">common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 2.6pt 0 2pt"><FONT STYLE="letter-spacing: 0.25pt">&nbsp;</FONT></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>8</SUP> Equus Total Return, Inc., Investment Company Act Release
No. 32421 (January 10, 2017).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><SUP>9</SUP></FONT>
Newtek Business Services Corp., Investment Company Act Release No. 32109 (May 10, 2016).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><SUP>10
</SUP></FONT><FONT STYLE="color: Black">KCAP Financial, Inc., Investment Company Act Release No. 31676 (June 16. 2015).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><SUP>11
</SUP></FONT><FONT STYLE="color: Black">Harris &amp; Harris Group, Inc., Investment Company Act Release No. 30027 (April 3, 2012).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><SUP>12
</SUP></FONT><FONT STYLE="color: Black">Hercules Capital, Inc., Investment Company Act Release No. 29303 (June 22, 2010).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><SUP>13
</SUP></FONT><FONT STYLE="color: Black">MCG Capital Corporation, Investment Company Act Release No. 29210 (April 20, 2010).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><SUP>14
</SUP></FONT><FONT STYLE="color: Black">Main Street Capital Corporation et al., Investment Company Act Release No. 28769 (June
16, 2009).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><SUP>15
</SUP></FONT>Triangle Capital Corporation, Investment Company Act Release No. 28718 (May 5, 2009).</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>IV. CONCLUSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">For the reasons set forth above, Capital Southwest believes that
granting an exemption from the above provisions would be appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. It would not involve any overreaching
and the terms are fair and reasonable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>V.&nbsp;&nbsp; PROCEDURAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><B>Communications</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Please address all communications concerning this Application and
the Notice and the Order to:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Mr. Bowen S. Diehl</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Chief Executive Officer and President</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Capital Southwest Corporation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">5400 Lyndon B Johnson Freeway, Suite 1300</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Dallas, Texas 75240</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Please address any questions concerning this Application and a copy
of any communications, notice, or order to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Steven B. Boehm, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Sutherland Asbill &amp; Brennan LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">700 Sixth Street, NW, Suite 700</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Washington, DC 20001</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(202) 383-0176</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><B>Authorization</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The filing of Capital Southwest&rsquo;s Application
for the Amended Order sought hereby and the taking of all acts reasonably necessary to obtain the relief requested herein was authorized
by the unanimous consent of the Board&nbsp;&nbsp;dated January 25, 2017.&nbsp;&nbsp;A copy of the resolution then adopted by the
Board is attached as Exhibit B.&nbsp;Such authorization still remains in full force and effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>VI.&nbsp;&nbsp; EXHIBITS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="width: 15%; padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">Exhibit A&nbsp;</FONT></TD>
    <TD STYLE="width: 85%; padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">Amended and Restated Capital Southwest Corporation 2010 Restricted Stock Award Plan</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">Exhibit B</FONT></TD>
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">Resolution of the Board of Directors of Capital Southwest Corporation &ndash; Approval of Amended and Restated Capital Southwest Corporation 2010 Restricted Stock Award Plan</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><BR>
&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Capital Southwest has caused this Application to be duly signed
on its behalf, in the County of Dallas, State of Texas, on the 30th day of January, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left"><B>CAPITAL
                                         SOUTHWEST CORPORATION</B></P>



<B></B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: left">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 35%; text-align: left">/s/ <FONT STYLE="text-transform: uppercase">Bowen S. Diehl</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"></TD>
    <TD STYLE="text-align: left">Name:<BR>
Title:</TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid; text-align: left">Bowen S. Diehl<BR>Chief Executive Officer and President</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>AMENDED AND RESTATED CAPITAL SOUTHWEST CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>2010 RESTRICTED STOCK AWARD PLAN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">1.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">PURPOSE</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">This Plan is intended to foster and promote
the long-term financial success of Capital Southwest Corporation and its Subsidiaries (the &ldquo;<U>Company Group</U>&rdquo;);
to reward performance and to increase shareholder value by providing Participants appropriate incentives and rewards; to enable
the Company Group to attract and retain the services of outstanding individuals upon whose judgment, interest and dedication the
successful conduct of the Company Group&rsquo;s businesses are largely dependent; to encourage Participants&rsquo; ownership interest
in Capital Southwest Corporation; and to align the interests of employees with that of the Company&rsquo;s shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">2.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">DEFINITIONS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(a)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;1940
Act&rdquo; means the Investment Company Act of 1940, as amended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Affiliate&rdquo;
means any &ldquo;parent corporation&rdquo; or &ldquo;subsidiary corporation&rdquo; of the Company, as such term is defined in Code
Sections 424(e) and 424(f).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(c)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Award
Agreement&rdquo; means a written or electronic agreement evidencing and setting forth the terms of a Restricted Stock Award.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(d)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Board
of Directors&rdquo; means the board of directors of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(e)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Cause&rdquo;
means, unless otherwise specified in the Award Agreement or in an employment agreement with any member of Company Group, with respect
to a Participant:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(i)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Commission
of any act or acts of personal dishonesty intended to result in substantial personal enrichment to the Employee to the detriment
of any Company Group member;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">(ii) &nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">Conviction of, or entering into
a plea of <I>nolo contendere</I> to, a felony;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(iii)</FONT><FONT STYLE="letter-spacing: 9pt"> </FONT>&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">In
the case of an Employee, repeated failures to perform his responsibilities that are demonstrably willful and deliberate,
provided that such failures have continued for more than 10 days following written notice from the Company of its intent to
terminate his employment based on such failures;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(iv)&nbsp;&nbsp;&nbsp;&nbsp;Intentional,
repeated or continuing violation of any of the applicable Company Group member&rsquo;s policies or procedures that occurs or continues
after notice to the Participant that he or she has violated such policy or procedure; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(v)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Any
material breach of a written covenant or agreement with a Company Group member, including the terms of this Plan or any material
breach of fiduciary duty to a Company Group member.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A Participant shall be considered to have been
discharged for Cause if the Company determines within 30 days after his resignation or discharge that discharge for Cause was warranted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(f)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Change
in Control&rdquo; means</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The date any
one person, or more than one &ldquo;person&rdquo; acting as a group, acquires (or has acquired during the twelve-month period
ending on the date of the most recent acquisition by such person(s)) ownership of Common Stock possessing 51% or more of the total
voting power of the Common Stock of the Company;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Individuals
who at any time during the term of this Agreement constitute the board of directors of the Company (the &ldquo;Incumbent Board&rdquo;)
cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election or nomination for election was approved by a vote of at least 75% of the directors comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee
for director, without objection to such nomination) shall be, for purposes of this clause (ii) considered as though such person
were a member of the Incumbent Board;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(iii)&nbsp;&nbsp;&nbsp;&nbsp;Any consolidation
or merger to which the Company is a party, if following such consolidation or merger, shareholders of the Company immediately
prior to such consolidation or merger shall not beneficially own securities representing at least 51% of the combined voting power
of the outstanding voting securities of the surviving or continuing corporation; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(iv)&nbsp;&nbsp;&nbsp;&nbsp;Any sale,
lease, exchange or other transfer (in one transaction or in a series of related transactions) of all, or substantially all, of
the assets of the Company, other than to an entity (or entities) of which the Company or the shareholders of the Company immediately
prior to such transaction beneficially own securities representing at least 51% of the combined voting power of the outstanding
voting securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(g)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Code&rdquo;
means the Internal Revenue Code of 1986, as amended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(h)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Committee&rdquo;
means the Compensation Committee of the Board of Directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Common
Stock&rdquo; means the Common Stock of the Company, par value, $1.00 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(j)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Company&rdquo;
means Capital Southwest Corporation, a corporation organized under the laws of the State of Texas, and all successors to it.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(k)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Covered
Employee&rdquo; means an Employee who is, or is determined by the Committee may become, a &ldquo;covered employee&rdquo; within
the meaning of Code Section 162(m).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Date
of Grant&rdquo; means the date when the Company completes the corporate action necessary to create the legally binding right constituting
an Restricted Stock Award, as provided in Code Section 409A and the regulations thereunder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(m)&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Disability&rdquo;
has the meaning set forth in Code Section 22(e)(3).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(n)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Effective
Date&rdquo; means the date the Plan is approved by the shareholders of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(o)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Employee&rdquo;
means any person employed by the Company or a Subsidiary.&nbsp;&nbsp;Directors who are employed by the Company or a Subsidiary
shall be considered Employees under the Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(p)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Exchange
Act&rdquo; means the Securities Exchange Act of 1934, as amended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(q)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Fair
Market Value&rdquo; on any date means the market price of Common Stock, determined by the Committee as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT><FONT STYLE="letter-spacing: 9pt"></FONT><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Common Stock is listed and traded on a national securities exchange (as such term is defined by the Exchange Act, as amended)
or on the NASDAQ National Market System on the date of determination, then the Fair Market Value per share shall be the closing
price of a share of the Common Stock on said national securities exchange or the NASDAQ National Market System on the date of determination.&nbsp;&nbsp;If
the Common Stock is traded in the over-the-counter market, the Fair Market Value per share shall be the average of the closing
bid and asked prices of a share on the date of determination;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 16 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-2</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">If
the Common Stock is listed on a national securities exchange or on the NASDAQ National Market System but no shares of the Common
Stock are traded on the date of determination, but there were shares traded on dates within a reasonable period before the date
of determination, the Fair Market Value shall be the closing price of a share of the Common Stock on the most recent date before
the date of determination.&nbsp;&nbsp;If the Common Stock is regularly traded in the over-the-counter market but no shares of the
Common Stock are traded on the date of determination, but there were shares traded on dates within a reasonable period before the
date of determination, the Fair Market Value shall be the average of the closing bid and asked prices of a share of the Common
Stock on the most recent date before the date of determination on which trading occurred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(iii)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">If
neither of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith
on such basis as it deems appropriate, in accordance with Code Section 409A.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Whenever possible, the determination of Fair
Market Value by the Committee shall be based on the prices reported in The Wall Street Journal.&nbsp;&nbsp;The Committee&rsquo;s
determination of Fair Market Value shall be conclusive and binding on all persons.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(r)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Participant&rdquo;
means any person who holds an outstanding Restricted Stock Award.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(s)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Performance
Criteria&rdquo; means the criteria the Committee selects for purposes of establishing the Performance Goal or Performance Goals
for a Participant for a Performance Period.&nbsp;&nbsp;The Performance Criteria that will be used to establish Performance Goals
are limited to the following: economic value added (as determined by the Committee); achievement of profit, loss or expense ratio;
cash flow; book value; sales of products; net income (either before or after taxes); operating earnings; return on capital; return
on net assets; return on shareholders&rsquo; equity; return on assets; shareholder returns; productivity; expenses; margins; operating
efficiency; customer satisfaction; earnings per share; price per share of Common Stock; and market share, any of which may be measured
either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.&nbsp;&nbsp;The Committee
shall, within the time prescribed by Code Section 162(m), define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period for such Participant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(t)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Performance
Goals&rdquo; means the goals established in writing by the Committee for the Performance Period based upon the Performance Criteria.&nbsp;&nbsp;Depending
on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall
Company performance or the performance of a Subsidiary or an individual.&nbsp;&nbsp;The Committee shall establish Performance Goals
for each Performance Period prior to, or as soon as practicable after, the commencement of such Performance Period.&nbsp;&nbsp;The
Committee, in its discretion, may, within the time prescribed by Code Section 162(m), adjust or modify the calculation of Performance
Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants (i) in the event
of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (ii) in recognition
of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company,
or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(u)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Performance
Period&rdquo; means the designated period during which the Performance Goals must be satisfied with respect to the Restricted Stock
Award to which the Performance Goals relate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(v)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Plan&rdquo;
means this Capital Southwest Corporation 2010 Restricted Stock Award Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 17 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(w)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Qualified
Performance-Based Award&rdquo; means a Restricted Stock Award that is intended to qualify as &ldquo;qualified performance-based
compensation&rdquo; within the meaning of Code Section 162(m) and is designated as a Qualified Performance-Based Award pursuant
to Section 8 hereof.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(x)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Restricted
Stock&rdquo; or &ldquo;Restricted Stock Award&rdquo; means, individually or collectively, a grant of Shares under the Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(y)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Share&rdquo;
means a share of Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(z)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Subsidiary&rdquo;
means Capital Southwest Management Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(aa)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">&ldquo;Termination
of Service&rdquo; shall mean the termination of employment of an Employee by the Company and all Subsidiaries.&nbsp;&nbsp;A Participant&rsquo;s
service shall not be deemed to have terminated because of a change in the entity for which the Participant renders such service,
provided that there is no interruption or termination of the Participant&rsquo;s service.&nbsp;&nbsp;Furthermore, a Participant&rsquo;s
service with the Company Group shall not be deemed to have terminated if the Participant takes any military leave, sick leave,
or other bona fide leave of absence approved by the Company or a Subsidiary;&nbsp;&nbsp;provided, however, that if any such leave
exceeds 90 days, on the 91st day of such leave the Participant&rsquo;s service shall be deemed to have terminated unless the Participant&rsquo;s
leave of absence is approved by the Committee.&nbsp;&nbsp;The Participant&rsquo;s service shall be deemed to have terminated upon
the entity for which the Participant performs service ceasing to be a Subsidiary (or any successor).&nbsp;&nbsp;Subject to the
foregoing, the Company, in its discretion, shall determine whether a Participant&rsquo;s service has terminated and the effective
date of such termination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">3.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">ADMINISTRATION</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Committee shall administer the Plan.&nbsp;&nbsp;The
Committee shall consist of two or more disinterested directors of the Company, who shall be appointed by the Board of Directors.&nbsp;&nbsp;A
member of the Board of Directors shall be deemed to be &ldquo;disinterested&rdquo; only if he satisfies (i) such requirements as
the Securities and Exchange Commission may establish for non-employee directors administering plans intended to qualify for exemption
under Rule 16b-3 (or its successor) under the Exchange Act and (ii) such requirements as the Internal Revenue Service may establish
for non-employee directors acting under plans intended to qualify for exemption under Code Section 162(m)(4)(C).&nbsp;&nbsp;The
Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan and subject
to the approval by the required majority of the Company's directors, as defined in Section 57(o) of the 1940 Act:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(a)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">The
Committee shall have the sole and complete authority to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(i)&nbsp;&nbsp;&nbsp;&nbsp;Determine
the Employees to whom Restricted Stock Awards are granted, the type and amounts of Restricted Stock Awards to be granted and the
time of all such grants;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)&nbsp;&nbsp;&nbsp;Determine
the terms, conditions and provisions of, and restrictions relating to, each Restricted Stock Award granted;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(iii) &nbsp;Interpret
and construe the Plan and all Award Agreements;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(iv)
&nbsp;Prescribe, amend and rescind rules and regulations relating to the Plan;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(v)&nbsp;&nbsp;&nbsp;Determine
the content and form of all Award Agreements;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(vi)&nbsp;&nbsp;Determine
all questions relating to Restricted Stock Awards under the Plan, including whether any conditions relating to a Restricted Stock
Award have been met;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 18 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(vii)
Consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Restricted Stock
Award or amend the exercise date or dates thereof, provided that the Committee shall not have any discretion or authority to
make changes to any Restricted Stock Award that is intended to qualify as a Qualified Performance-Based Award to the extent
that the existence of such discretion or authority would cause such Restricted Stock Award not to so qualify;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(viii)&nbsp;Determine
the duration and purpose of leaves of absence that may be granted to a Participant without constituting termination of the Participant&rsquo;s
employment for the purpose of the Plan or any Restricted Stock Award;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(ix)
&nbsp;Maintain accounts, records and ledgers relating to Restricted Stock Awards;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(x)
&nbsp;&nbsp;Maintain records concerning its decisions and proceedings;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(xi)&nbsp;&nbsp;Employ agents,
attorneys, accountants or other persons for such purposes as the Committee considers necessary or desirable; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(xii)&nbsp;Do and
perform all acts which it may deem necessary or appropriate for the administration of the Plan and to carry out the objectives
of the Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Each
Restricted Stock Award shall be evidenced by an Award Agreement containing such provisions as may be approved by the Committee.&nbsp;&nbsp;Each
Award Agreement shall constitute a binding contract between the Company and the Participant, and every Participant, upon acceptance
of the Award Agreement, shall be bound by the terms and restrictions of the Plan and the Award Agreement.&nbsp;&nbsp;The terms
of each Award Agreement shall be in accordance with the Plan, but each Award Agreement may include such additional provisions and
restrictions determined by the Committee, in its discretion, provided that such additional provisions and restrictions are not
inconsistent with the terms of the Plan.&nbsp;&nbsp;In particular, and at a minimum, the Committee shall set forth in each Award
Agreement (i) the number of Shares subject to the Restricted Stock Award; (ii) the expiration date of the Restricted Stock Award;
(iii) the manner, time, and rate (cumulative or otherwise) of vesting of such Restricted Stock Award; and (iv) the restrictions,
if any, placed upon such Restricted Stock Award, or upon Shares which may be issued upon vesting of such Restricted Stock Award.&nbsp;&nbsp;The
Chairman of the Committee and such other directors and officers as shall be designated by the Committee is hereby authorized to
execute Award Agreements on behalf of the Company and to cause them to be delivered to the recipients of Restricted Stock Awards.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">4.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">STOCK SUBJECT TO THE PLAN</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(a)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>General
Limitations</U>.&nbsp;&nbsp;Subject to adjustment as provided in Section 12 of the Plan, the maximum number of Shares reserved
for issuance in connection with Restricted Stock Awards under the Plan is 47,000 Shares.&nbsp;&nbsp;Notwithstanding the preceding,
grants of Restricted Stock Awards shall be subject to the following limitations:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Subject
to adjustment as provided in Section 12 of the Plan, the total number of Shares that may be outstanding as Restricted Stock under
all of the Company's compensations plans shall not exceed 10% of the outstanding Shares on the effective date of the Plan plus
10% of the Shares issued or delivered by the Company (other than pursuant to any Employee compensation plans) during the term of
the Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">The
amount of voting securities that would result from the exercise of all the Company's outstanding warrants, options, and rights,
together with any Restricted Stock issued pursuant to this Plan and any other compensation plan of the Company, at the time of
issuance shall not exceed 25% of the outstanding voting securities of the Company; provided, however, that if the amount of voting
securities that would result from the exercise of all the Company's outstanding warrants, options, and rights issued to the Company's
directors, officers, and employees, together with any Restricted Stock issued pursuant to this Plan and any other compensation
plan of the Company, would exceed 15% of the outstanding voting securities of the Company, then the total amount of voting securities
that would result from the exercise of all outstanding warrants, options, and rights, together with any Restricted Stock issued
pursuant to this Plan and any other compensation plan of the Company, at the time of issuance shall not exceed 20% of the outstanding
voting securities of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 19 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Individual
Limitations</U>.&nbsp;&nbsp;Subject to adjustment as provided in Section 12 of the Plan, in no event may Qualified Performance-Based
Awards be granted to a single Participant in any 12-month period in respect of more than 6,250 Shares (if the Restricted Stock
Award is denominated in Shares).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(c)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Other
Rules</U>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">The
number of Shares associated with an Restricted Stock Award originally counted against the limitations as the result of the grant
of the Restricted Stock Award shall be restored against the limitations and be available for reissuance under this Plan if and
to the extent the Restricted Stock Award is surrendered, cancelled, expires, terminates or is forfeited for any reason.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Shares
withheld by, or otherwise remitted to satisfy a Participant&rsquo;s tax withholding obligations upon the lapse of restrictions
on a Restricted Stock, or upon any other payment or issuance of Shares under the Plan shall not become available for issuance or
reissuance under the Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(d)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Shares
issued under the Plan may be either authorized but unissued Shares, authorized Shares previously issued held by the Company in
its treasury which have been reacquired by the Company, or Shares purchased by the Company in the open market.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">5.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">ELIGIBILITY</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Subject to the terms of the Plan, all Employees shall be eligible
to receive Restricted Stock Awards under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">6.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">RESTRICTED STOCK AWARDS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Committee may, subject to the limitations
of the Plan and the availability of Shares reserved but not previously awarded under this Plan, grant Restricted Stock Awards to
eligible Employees upon such terms and conditions as it may determine to the extent such terms and conditions are consistent with
the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(a)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Payment
of the Restricted Stock Award</U>.&nbsp;&nbsp;The Restricted Stock Award may only be made in whole Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Terms
of the Restricted Stock Awards</U>.&nbsp;&nbsp;The Committee shall determine the dates on which Restricted Stock Awards granted
to a Participant shall vest and any specific conditions or Performance Goals which must be satisfied prior to the vesting of any
installment or portion of the Restricted Stock Award.&nbsp;&nbsp;Notwithstanding other paragraphs in this Section 6, the Committee
may, in its sole discretion, accelerate the vesting of any Restricted Stock Awards except for any Restricted Stock Awards that
are Qualified Performance-Based Awards under Section 8 hereof.&nbsp;&nbsp;The acceleration of any Restricted Stock Award shall
create no right, expectation or reliance on the part of any other Participant or that certain Participant regarding any other Restricted
Stock Awards.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(c)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Termination
of Service</U>.&nbsp;&nbsp;Unless otherwise determined by the Committee, upon a Participant&rsquo;s Termination of Service for
any reason, including retirement, other than Disability or death, the Participant&rsquo;s unvested Restricted Stock Awards as of
the date of termination shall be forfeited and any rights the Participant had to such unvested Restricted Stock Awards shall become
null and void.&nbsp;&nbsp;Unless otherwise provided in the applicable Award Agreement, in the event of a Participant&rsquo;s Termination
of Service due to Disability or death, all unvested Restricted Stock Awards held by such Participant, including any portion of
a Restricted Stock Award subject to a Performance Goal, shall immediately vest.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 20 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(d)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Acceleration
Upon a Change in Control</U>.&nbsp;&nbsp;In the event of a Change in Control, all unvested Restricted Stock Awards held by a Participant
shall become immediately vested.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">7.</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(a)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Dividends</U>.&nbsp;&nbsp;A
Participant holding a Restricted Stock Award shall, unless otherwise provided in the applicable Award Agreement, be entitled to
receive, with respect to each such Share covered by a Restricted Stock Award, a payment equal to any dividends or distributions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Voting
of Restricted Stock Awards</U>.&nbsp;&nbsp;After a Restricted Stock Award has been granted, but for which Shares covered by such
Restricted Stock Award have not yet vested, the Participant shall be entitled to vote such Shares subject to the rules and procedures
adopted by the Committee for this purpose.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(c)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Restrictive
Legend</U>.&nbsp;&nbsp;Each certificate issued in respect of a Restricted Stock Award shall be registered in the name of the Participant
and, at the discretion of the Board of Directors, each such certificate shall be held by the Company until the Restricted Stock
has vested.&nbsp;&nbsp;Each such certificate shall bear the following (or a similar) legend:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify">&ldquo;The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in the Capital Southwest Corporation 2010 Restricted Stock Plan and an agreement entered into between the registered owner and Capital Southwest Corporation.&nbsp;&nbsp;A copy of such plan and agreement is on file at the principal office of Capital Southwest Corporation.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">8.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">QUALIFIED PERFORMANCE-BASED AWARDS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(a)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Purpose</U>.<B>&nbsp;</B>
The purpose of this Section 8 is to provide the Committee the ability to grant Restricted Stock as Qualified Performance-Based
Awards.&nbsp;&nbsp;If the Committee, in its discretion, decides to grant to a Covered Employee a Restricted Stock Award that is
intended to constitute a Qualified Performance-Based Award, the provisions of this Section 8 shall control over any contrary provision
contained herein; <I>provided, however</I>, that the Committee may grant Restricted Stock Awards to Covered Employees that are
based on Performance Criteria or Performance Goals that do not satisfy the requirements of this Section 8.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Applicability</U>.&nbsp;&nbsp;This
Section 8 shall apply only to those Covered Employees selected by the Committee to receive Qualified Performance-Based Awards.&nbsp;&nbsp;The
designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to
receive an Restricted Stock Award for the relevant Performance Period.&nbsp;&nbsp;Moreover, designation of a Covered Employee as
a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any
subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other
Covered Employees as a Participant in such period or in any other period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(c)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Procedures
with Respect to Qualified Performance-Based Awards</U>.&nbsp;&nbsp;To the extent necessary to comply with the Qualified Performance-Based
Award requirements of Code Section 162(m)(4)(C), with respect to any Restricted Stock Award that may be granted to one or more
Covered Employees, no later than 90 days following the commencement of any fiscal year in question or any other designated fiscal
period or period of service (or such other time as may be required or permitted by Code Section 162(m)), the Committee shall, in
writing, (i) designate one or more Covered Employees, (ii) select the Performance Criteria applicable to the Performance Period,
(iii) establish the Performance Goals, and amounts of such Restricted Stock Awards, as applicable, which may be earned for such
Performance Period, and (iv) specify the relationship between Performance Criteria and the Performance Goals and the amounts of
such Restricted Stock Awards, as applicable, to be earned by each Covered Employee for such Performance Period.&nbsp;&nbsp;Following
the completion of each Performance Period, the Committee shall certify in writing whether the applicable Performance Goals have
been achieved for such Performance Period.&nbsp;&nbsp;No Restricted Stock Award or portion thereof that is subject to the satisfaction
of any condition shall be considered to be earned or vested until the Committee certifies in writing that the conditions to which
the distribution, earning or vesting of such Restricted Stock Award is subject have been achieved.&nbsp;&nbsp;The Committee may
not increase during a year the amount of a Qualified Performance-Based Award that would otherwise be payable upon satisfaction
of the conditions but may reduce or eliminate the payments as provided for in the Award Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Page; Sequence: 21 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(d)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Payment
of Qualified Performance-Based Awards</U>.&nbsp;&nbsp;Unless otherwise provided in the applicable Award Agreement, a Participant
must be employed by the Company or a subsidiary on the day a Qualified Performance-Based Award for such Performance Period is paid
to the Participant.&nbsp;&nbsp;Furthermore, a Participant shall be eligible to receive payment pursuant to a Qualified Performance-Based
Award for a Performance Period only if the Performance Goals for such period are achieved.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(e)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Acceleration
Upon a Change in Control</U>.&nbsp;&nbsp;In the event of a Change in Control, all unvested Qualified Performance-Based Awards held
by a Participant shall become vested upon the Change in Control.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(f)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Dividends
and Other Distributions</U>.&nbsp;&nbsp;The Participant shall not be paid any dividends or distributions or other distributions
with respect to Qualified Performance-Based Awards until the Participant has become vested in the Shares covered by the Qualified
Performance-Based Awards.&nbsp;&nbsp;At the time of vesting, the Participant shall receive a cash payment equal to the aggregate
cash dividends (without interest) (other than distributions in Shares) and the number of Shares equal to any stock dividends that
the Participant would have received if the Participant had owned all of the Shares which vested for the period beginning on the
date of the Restricted Stock Award, and ending on the date of vesting or payment.&nbsp;&nbsp;No dividends shall be paid to the
Participant with respect to any Qualified Performance-Based Awards that are forfeited by the Participant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(g)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Additional
Limitations</U>.&nbsp;&nbsp;Notwithstanding any other provision of the Plan, any Restricted Stock Award granted to a Covered Employee
that is intended to constitute a Qualified Performance-Based Award shall be subject to any additional limitations set forth in
Code Section 162(m) or any regulations or rulings issued thereunder that are requirements for qualification as qualified performance-based
compensation as described in Code Section 162(m)(4)(C), and the Plan shall be deemed amended to the extent necessary to conform
to such requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(h)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Effect
on Other Plans and Arrangements</U>.&nbsp;&nbsp;Nothing contained in the Plan will be deemed in any way to limit or restrict the
Committee from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing
or hereafter in effect.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">9.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">RIGHTS OF PARTICIPANTS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Nothing contained in this Plan or in any Award
Agreement confers on any person any right to continue in the employ or service of the Company or an Affiliate or interferes in
any way with the right of the Company or an Affiliate to terminate a Participant&rsquo;s services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">10.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">DESIGNATION OF BENEFICIARY</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A Participant may, with the consent of the
Committee, designate a person or persons to receive, in the event of death, any Restricted Stock Award to which the Participant
would then be entitled.&nbsp;&nbsp;Such designation will be made upon forms supplied by and delivered to the Company and may be
revoked in writing.&nbsp;&nbsp;If a Participant fails to designate a beneficiary, then the Participant&rsquo;s estate will be deemed
to be the beneficiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">11.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">TRANSFERABILITY OF RESTRICTED STOCK AWARDS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No Restricted Stock Award granted hereunder
shall be transferable, voluntarily or involuntarily, other than by will or by the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<!-- Field: Page; Sequence: 22 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">12.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR A CHANGE OF CONTROL</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustment
Clause</U>.&nbsp;&nbsp;In the event of any change in the outstanding Shares by reason of any stock dividend, split, spinoff, recapitalization,
merger, consolidation, combination, extraordinary dividend, exchange of shares or other change affecting the outstanding shares
of Stock as a class without the Company&rsquo;s receipt of consideration, or other equity restructuring within the meaning of Financial
Accounting Standard No. 123 (revised 2004), appropriate adjustments shall be made to (i) the aggregate number of shares of Stock
with respect to which Restricted Stock Awards may be made under the Plan, (ii) the terms and the number of shares and/or the price
per share of any outstanding Stock Options, and (iii) the share limitations set forth in Section&nbsp;4 hereof.&nbsp;&nbsp;The
Committee shall also make appropriate adjustments described in (i)-(iii) of the previous sentence in the event of any distribution
of assets to shareholders other than a normal cash dividend.&nbsp;&nbsp;Adjustments, if any, and any determination or interpretations,
made by the Committee shall be final, binding and conclusive.&nbsp;&nbsp;Any adjustment made under this <U>Section 12</U> will
be made in accordance with any required action by shareholders of the Company,&nbsp;&nbsp;the provisions of any applicable corporate
law and the approval of the required majority, as defined in Section 57(o) of the 1940 Act, of the Company's directors.&nbsp;&nbsp;Conversion
of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration.&nbsp;&nbsp;Except
as expressly provided herein, 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 or price of shares subject to an Restricted
Stock Award.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Change
of Control</U>.&nbsp;&nbsp;If a Change of Control occurs, the Committee may, in its discretion and without limitation:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Cancel
outstanding Restricted Stock Awards in exchange for payments of cash, property or a combination thereof having an aggregate value
equal to the value of such Restricted Stock Awards, as determined by the Committee or the Board of Directors in its sole discretion;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Substitute
other property (including, without limitation, cash or other securities of the Company and securities of entities other than the
Company) for Shares subject to outstanding Restricted Stock Awards; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(iii)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">Arrange
for the assumption of Restricted Stock Awards, or replacement of Restricted Stock Awards with new awards based on other property
or other securities (including, without limitation, other securities of the Company and securities of entities other than the Company),
by the affected Subsidiary, Affiliate, or division or by the entity that controls such Subsidiary, Affiliate, or division following
the transaction (as well as any corresponding adjustments to Restricted Stock Awards that remain outstanding based upon Company
securities);</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No such adjustments may, however, materially
change the value of benefits available to a Participant under an outstanding Restricted Stock Award.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">(c)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><U>Section
409A Provisions with Respect to Adjustments</U>.&nbsp;&nbsp;Notwithstanding the foregoing: (i) any adjustments made pursuant to
this Section to Restricted Stock Awards that are considered &ldquo;deferred compensation&rdquo; within the meaning of Code Section
409A shall be made in compliance with the requirements of Code Section 409A unless the Participant consents otherwise; (ii) any
adjustments made to Restricted Stock Awards that are not considered &ldquo;deferred compensation&rdquo; subject to Code Section
409A shall be made in such a manner as to ensure that after such adjustment, the Restricted Stock Awards either continue not to
be subject to Code Section 409A or comply with the requirements of Code Section 409A unless the Participant consents otherwise;
and (iii) the Committee shall not have the authority to make any adjustments under this Section to the extent that the existence
of such authority would cause an Restricted Stock Award that is not intended to be subject to Code Section 409A to be subject thereto.
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px; text-align: justify"><FONT STYLE="font-size: 10pt">13.&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">TAX WITHHOLDING</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s obligation to make cash
payments pursuant to an Restricted Stock Award or deliver Shares, or any other event with respect to rights and benefits hereunder,
shall be subject to the Participant&rsquo;s satisfaction of all applicable federal, state and local income and employment tax withholding
obligations. To the extent that the Company is required to withhold any federal, state or local income and employment taxes in
respect of any compensation income realized by the Participant in respect of Shares acquired pursuant to an Restricted Stock Award,
or in respect of any Shares becoming vested, then the Company shall deduct from any payments of any kind otherwise due to such
Participant the aggregate amount of such federal, state or local income and employment taxes required to be so withheld. If no
such payments are due or become due to such Participant, or if such payments are insufficient to satisfy such federal, state or
local income or employment taxes, then such Participant will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any such taxes. The Committee, in its discretion, may
permit the Participant to satisfy the obligation, in whole or in part, by irrevocably electing to have the Company withhold Shares,
or to deliver to the Company Shares that he or she already owns, having a value equal to the amount required to be withheld. The
value of the Shares to be withheld, or delivered to the Company, shall be based on the Fair Market Value of Shares on the date
the amount of tax to be withheld is determined. As an alternative, the Company may retain, or sell without notice, a number of
such Shares sufficient to cover the amount required to be withheld.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<!-- Field: Page; Sequence: 23 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">14.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">AMENDMENT OF THE PLAN AND RESTRICTED STOCK AWARDS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(a)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">The
Board of Directors may at any time, and from time to time, modify or amend the Plan in any respect, prospectively or retroactively.&nbsp;&nbsp;Failure
to ratify or approve amendments or modifications by shareholders shall be effective only as to the specific amendment or modification
requiring such approval or ratification.&nbsp;&nbsp;Other provisions of this Plan will remain in full force and effect.&nbsp;&nbsp;No
such termination, modification or amendment may adversely affect the rights of a Participant under an outstanding Restricted Stock
Award without the written permission of such Participant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">(b)</FONT><FONT STYLE="letter-spacing: 9pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt">The
Committee may amend any Award Agreement, prospectively or retroactively; provided, however, that no such amendment shall adversely
affect the rights of any Participant under an outstanding Restricted Stock Award without the written consent of such Participant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">15.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">RIGHT OF OFFSET</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The Company will have the right to offset against its obligation
to deliver Shares (or other property) under the Plan or any Award Agreement any outstanding amounts (including, without limitation,
travel and entertainment or advance account balances, loans, repayment obligations under any Restricted Stock Awards, or amounts
repayable to the Company pursuant to tax equalization, housing, automobile or other employee programs) that the Participant then
owes to the Company and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement;
provided, however, that no such offset shall be permitted if it would constitute an &ldquo;acceleration&rdquo; of a payment hereunder
within the meaning of Code Section 409A.&nbsp;&nbsp;This right of offset shall not be an exclusive remedy and the Company&rsquo;s
election not to exercise the right of offset with respect to any amount payable to a Participant shall not constitute a waiver
of this right of offset with respect to any other amount payable to the Participant or any other remedy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">16.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">EFFECTIVE DATE OF PLAN</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The Plan shall become effective immediately upon its approval by
the Company&rsquo;s shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">17.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">TERMINATION OF THE PLAN</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The right to grant Restricted Stock Awards under the Plan will terminate
10 years after the Effective Date.&nbsp;&nbsp;The Board of Directors has the right to suspend or terminate the Plan at any time,
provided that no such action will, without the consent of a Participant, adversely affect a Participant&rsquo;s rights under an
outstanding Restricted Stock Award.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">18.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">APPLICABLE LAW; COMPLIANCE WITH LAWS</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The Plan will be administered in accordance with the laws of the
State of Texas and applicable federal law.&nbsp;&nbsp;Notwithstanding any other provision of the Plan, the Company shall have no
liability to issue any Shares under the Plan unless such issuance would comply with all applicable laws and the applicable requirements
of any securities exchange or similar entity.&nbsp;&nbsp;Prior to the issuance of any Shares under the Plan, the Company may require
a written statement that the recipient is acquiring the shares for investment and not for the purpose or with the intention of
distributing the shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<!-- Field: Page; Sequence: 24 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">19.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">PROHIBITION ON DEFERRED COMPENSATION</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">It is the intention of the Company that no Restricted Stock Award
shall be &ldquo;deferred compensation&rdquo; subject to Code Section 409A unless and to the extent that the Committee specifically
determines otherwise, and the Plan and the terms and conditions of all Restricted Stock Awards shall be interpreted accordingly.&nbsp;&nbsp;The
terms and conditions governing any Restricted Stock Awards that the Committee determines will be subject to Code Section 409A,
including any rules for elective or mandatory deferral of the delivery of cash or Shares pursuant thereto, shall be set forth in
the applicable Award Agreement, and shall comply in all respects with Code Section 409A.&nbsp;&nbsp;Notwithstanding any provision
herein to the contrary, any Restricted Stock Award issued under the Plan that constitutes a deferral of compensation under a &ldquo;nonqualified
deferred compensation plan&rdquo; as defined under Code Section 409A(d)(1) and is not specifically designated as such by the Committee
shall be modified or cancelled to comply with the requirements of Code Section 409A, including any rules for elective or mandatory
deferral of the delivery of cash or Shares pursuant thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px"><FONT STYLE="font-size: 10pt">20.&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">NO GRANTS IN CONTRAVENTION OF THE 1940 ACT</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">At all times during such periods as the Company qualifies or intends
to qualify as a &ldquo;business development company,&rdquo; no Restricted Stock Award may be granted under the Plan if the grant
or terms of such Restricted Stock Award would cause the Company to violate Section 61 of the 1940 Act (or any other provision of
the 1940 Act applicable to &ldquo;business development companies&rdquo;), and, if approved for grant, such an award will be void
and of no effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">In furtherance of the intent that Restricted Stock Awards available
to be granted under the Plan be limited to those that can be granted by a &ldquo;business development company&rdquo; qualifying
as such under the 1940 Act, except as otherwise permitted by exemptive relief or other relief that may be granted by the Securities
and Exchange Commission or its staff and determined by the Board of Directors, Restricted Stock may be awarded only in exchange
for full payment thereof (as determined by the Board of Directors).</P>

<!-- Field: Page; Sequence: 25 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt; font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; vertical-align: baseline">Exhibit A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence -->&nbsp;</FONT></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>RESOLUTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>CAPITAL SOUTHWEST CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Adopted on January 25, 2017</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><U>Approval of Amended and Restated Capital Southwest Corporation
2010 Restricted Stock Award Plan</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify; text-indent: 0.5in"><B>RESOLVED</B>,
that the Board of Directors (the <B><I>&ldquo;Board&rdquo;</I></B>) of Capital Southwest Corporation (the <B><I>&ldquo;Company&rdquo;</I></B>)
hereby directs that the officers and directors of the Company apply to the Securities and Exchange Commission (the <B><I>&ldquo;Commission&rdquo;</I></B>)
for an amended exemptive order (collectively, the <B><I>&ldquo;Amended Order&rdquo;</I></B>) pursuant to the Investment Company
Act of 1940, as amended, (the <B><I>&ldquo;1940 Act&rdquo;</I></B>) allowing it to withhold shares of the Company&rsquo;s common
stock or purchase shares of the Company&rsquo;s common stock from Participants to satisfy tax withholding obligations relating
to the vesting of Restricted Stock or the exercise of Options that will be granted pursuant to the Amended and Restated 2010 Restricted
Stock Plan (the <B><I>&ldquo;Amended Plan&rdquo;</I></B>);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify; text-indent: 0.5in"><B>FURTHER RESOLVED</B>,
that, subject to the issuance of the Amended Order, the Board hereby approves and adopts the Amended Plan;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify; text-indent: 0.5in"><B>FURTHER RESOLVED</B>,
that the officers of the Company be, and each hereby is, authorized for and on behalf of the Company to prepare, execute and file
with the Commission pursuant to the 1940 Act one or more applications for an Amended Order and any amendments thereto that such
officer deems to be necessary, desirable or appropriate, together with any and all exhibits and documents or supplemental information
relating thereto, in connection with the Amended Plan and that the form or any amendment or supplements thereto will be as approved
by the officers of the Company executing the same, the approval by the Company of such officers to be evidenced conclusively by
their execution of the same; <U>and</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.5in; text-align: justify; text-indent: 0.5in"><B>FURTHER RESOLVED</B>,
that the Company&rsquo;s directors, the members of the Compensation Committee, and any officers of the Company be, and each of
them herby is, authorized and empowered in the name and on behalf of the Company to do or cause to be done all such acts and to
sign, execute, certify to, verify, acknowledge, deliver, accept, file, and record any and all such documents as, in the judgment
of any such person, are deemed to be necessary, desirable, or appropriate to effect the purposes of these resolutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0">Exhibit B-1</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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