means the right to receive Shares to the extent Performance Goals are achieved (or other requirements are met).

Performance Shares. The Committee may grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares and the terms and conditions of each such Award.

Performance Shares. All performance shares you hold as of the Effective Date will be amended concurrent with the delivery of this Offer Letter pursuant to the Amended and Restated Notice of Performance Stock Award delivered to you concurrent herewith to provide that all vesting/repurchase criteria thereunder will be deemed satisfied if # GECM, directly or indirectly, sells, assigns, distributes, participates, delegates or encumbers its economic interest (other than to GECC GP Corp or GECG) under the Investment Management Agreement, dated as of September 27, 2016, by and between GECM and Great Elm Capital Corp. (as such agreement may be amended from time to time, the “IMA”) or # GECG or any of its affiliates receives any compensation in connection with the transfer, sale, assignment, distribution, participation, delegation, encumbrance, termination, modification or amendment of the IMA.

The Committee may grant Performance Shares to eligible Service Providers. Whenever the Committee grants Performance Shares, a Grant Agreement shall be given to the Service Provider stating the number of Performance Shares granted and the terms and conditions to which the Award of Performance Shares is subject, and, at that time, the Service Provider shall become a Participant.

Subject to the terms of the Plan, Performance Units or Performance Shares may be granted to Eligible Employees in such amounts and upon such terms, and at any time and from time to time, as the Committee determines.

Each Performance Unit will have a target or initial value established by the Committee as of the Grant Date. Each Performance Share will have an initial value equal to the Fair Market Value on the Grant Date. The Committee will set performance objectives in its discretion which, depending on the extent to which they are met, will determine the number or value (or both) of Performance Units or Performance Shares that will be paid out to the Participant. For purposes of this ARTICLE X, the Performance Period will be set by the Committee in its discretion.

Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Performance Units or Performance Shares will be entitled to receive a payout with respect to the number and/or value of Performance Units or Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives have been achieved.

Performance Conditions for Awarding of Performance Shares. Except as otherwise provided in Section 4 of this Agreement in the event of a Change in Control or the termination of the Grantee's employment with the Company as a result of death or Disability, the percentages, if any, of the Tranche 1 Performance Shares and the Tranche 2 Performance Shares that will be treated as awarded (the "Awarded Performance Shares"), and therefore eligible to become vested and nonforfeitable in accordance with Section 3 of this Agreement, will be based on the level of achievement of the applicable performance goals set forth below during the three-year (3-year) period beginning on January 1, 20​, and ending on December 31, 20​ (the “Performance Period”), subject to the terms and conditions of this Section 2.

Grant of Performance Units and Performance Shares. Subject to the terms and conditions of the Plan, Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as shall be determined by the Administrator in its sole discretion. The Administrator shall have complete discretion in determining the number of Performance Units and Performance Shares granted to each Service Provider.

Cancellation of Performance Units or Performance Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units and Performance Shares shall be forfeited to the Company, and again shall be available for grant under the Plan.