PERFORMANCE SHARE AGREEMENT
UNDER THE THIRD AMENDED AND RESTATED
WESTWOOD HOLDINGS GROUP, INC. STOCK INCENTIVE PLAN

WHEREAS, WESTWOOD HOLDINGS GROUP, INC., a Delaware corporation (the “Company”),
previously established the Third Amended and Restated Westwood Holdings Group,
Inc. Stock Incentive Plan, as amended from time to time (the “Plan”); and
WHEREAS, this PERFORMANCE SHARE AGREEMENT (the “Agreement”), is made effective
as of the 9th day of March, 2017 (the “Date of Grant”), between the Company and
Mark R. Freeman (the “Employee”), and sets forth the terms of the award of
Performance Shares (as defined below) granted to Employee, which such award is
intended to constitute a Performance-Based Award under the Plan; and
WHEREAS, the Compensation Committee of the Board of Directors (the “Committee”)
has determined that it is in the best interests of the Company to establish a
qualifying performance-based vesting formula for the Performance Shares to
qualify for an exemption from the limits on deductibility of executive
compensation under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”); and
WHEREAS, by resolution on March 9, 2017, the Committee approved the material
terms of the performance-based vesting for the Performance Shares; and
WHEREAS, all of the terms and provisions of the Plan are incorporated herein by
reference and made a part hereof, and all capitalized terms used but not defined
in this Agreement have the meanings set forth in the Plan.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties hereto agree as follows:
 

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1.
Grant of Performance Shares.

A. The Company hereby grants to Employee, on the terms and conditions
hereinafter set forth, 20,000 performance shares (the “Performance Shares”),
subject to the vesting provisions and other terms set forth in Section 2.A.
below. Each Performance Share represents the right to receive one share of
Stock. The Performance Shares are described in the Plan as a Performance-Based
Award subject to restrictions that lapse based on the achievement of Performance
Goals during a specified Performance Cycle and time-based vesting requirements.

B. The Employee shall have the right to receive an amount (a “Dividend
Equivalent”) equal to dividends paid with respect to a number of shares of Stock
equal to the number of Performance Shares granted hereunder; provided, however,
that any such Dividend Equivalents shall be subject to the same conditions and
restrictions (including vesting) applicable to the Performance Shares as set
forth in the Agreement and the Dividend Equivalents shall be accrued (without
interest) and paid to the Employee, in the same form as the associated dividend
was paid to stockholders generally, as soon as practicable following the
applicable vesting date under Section 2 below.

 
2.
Vesting Terms.

 
 
A.
Vesting of Performance Shares. The Performance Shares, subject to the other
terms and conditions set forth herein, shall vest subject to the satisfaction of
a time-based vesting schedule and a performance-based vesting schedule. The
Performance Cycle for the Performance Shares begins on January 1, 2017 and ends
on December 31, 2017. Subject to the attainment of the Performance Goal set
forth on Exhibit A hereto with respect to the Performance Cycle, the Performance
Shares shall become earned (the “Earned Performance Shares”). The Earned
Performance Shares (if any) shall vest in accordance with the following vesting
schedule, provided that the Employee remains continuously employed by the
Company or any of its affiliates from the Date of Grant through each vesting
date:

In addition, the vesting of the Performance Shares shall only occur following
certification by the Committee of the achievement of the Performance Goal set
forth on Exhibit A hereto with respect to the Performance Cycle as soon as
practicable following December 31, 2017. For the avoidance of doubt, if the
Committee certifies that the Performance Goal set forth on Exhibit A hereto with
respect to the Performance Cycle has not been attained, no Performance Shares
shall become Earned Performance Shares and all Performance Shares shall be
forfeited to the Company without consideration. If the vesting of any Earned
Performance Shares would yield a fractional share, such fractional share shall
be rounded up to the nearest whole share.

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B.
Termination of Employment.

(i). Death or Disability. Upon the Employee’s termination of employment due to
Death or Disability, all of the Performance Shares shall become fully vested,
effective upon the date of such termination and without regard to the level of
achievement with respect to the Performance Goal.

(ii). Without Cause; for Good Reason. Upon the Employee’s termination of
employment by the Company without Cause or by the Employee for “Good Reason” (as
defined below), either (a) during the Performance Cycle, all Performance Shares
shall remain outstanding and eligible to vest following the date of termination
as if the Employee’s employment had continued, contingent upon and subject to
achievement of the Performance Goal as set forth in Section 2.A. above or (b)
following the last day of the Performance Cycle, all of the unvested Earned
Performance Shares shall become fully vested. For purposes of this Agreement,
the term “Good Reason” shall have the meaning ascribed to such term in that
certain Executive Employment Agreement dated as of November 9, 2016, by and
among the Company and the Employee, as amended from time to time (the
“Employment Agreement”).

(iii). Change in Control. Notwithstanding anything contained in this Agreement
or the Employment Agreement to the contrary, upon the occurrence of a Change in
Control, all of the Performance Shares shall become fully vested, effective upon
the date of such Change in Control and without regard to the level of
achievement with respect to the Performance Goal.

(iv). Other Terminations. Upon the Employee’s termination of employment for
Cause by the Company or by the Employee without Good Reason at any time, any
Performance Shares (including Earned Performance Shares as well as any accrued
Dividend Equivalents) that have not vested prior to such date of termination
shall be forfeited to the Company without consideration.

 3.
Settlement. Payment in respect of vested Performance Shares shall be made as
soon as administratively practicable, but in no event later than the
25th business day, following the applicable vesting date pursuant to Section 2
above, upon which the Company shall issue and deliver to the Employee (A) the
number of shares of Stock equal to the number of vested Performance Shares, and
(B) cash, shares of Stock or other property (as applicable) equal to any
Dividend Equivalents accrued with respect to such vested Performance Shares.
 
 
4.
Employment of Employee. As an inducement to the Company to issue the Performance
Shares to Employee, and as a condition thereto, Employee acknowledges and agrees
that, without limitation of his rights under any employment agreement with the
Company, neither the issuance of the Performance Shares to Employee nor any
provision contained herein shall entitle Employee to remain in the employment of
the Company or its affiliates or affect the right of the Company to terminate
Employee’s employment at any time.

 

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5.
Restrictions on Transfer.

 
 
A.
The Employee agrees that he shall not dispose of (meaning, without limitation,
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of) any
Performance Shares or other rights hereby acquired prior to the date the
Performance Shares are vested and settled. Any attempted disposition of the
Performance Shares in violation of the preceding sentence shall be null and void
and the Performance Shares that the Employee attempted to dispose of shall be
forfeited.

 
 
B.
The spouse of Employee shall execute a signature page to this Agreement as of
the date hereof and agree to be bound in all respects by the terms hereof to the
same extent as Employee. The spouse further agrees that should she predecease
Employee or become divorced from Employee, any of the Performance Shares which
such spouse may own or in which she may have an interest shall remain subject to
this Agreement.

 
6.
Notices; Deliveries. Any notice or delivery required to be given under the terms
of this Agreement shall be addressed to the Company at its principal office, and
any notice or delivery to be given to Employee shall be addressed to him at the
address given by him and appearing in the Company’s records or such other
address as either party hereto may hereafter designate in writing to the other.
Any such notice or delivery shall be deemed to have been duly given when
addressed as aforesaid, registered or certified mail, and deposited (postage or
registration or certification fee prepaid) in a post office or branch post
office regularly maintained by the United States.

 
7.
Disputes. As a condition of the granting of the Performance Shares hereby,
Employee and his heirs and successors agree that any dispute or disagreement
which may arise hereunder shall be determined by the Company’s Board of
Directors in its sole discretion and judgment, and that any such determination
and any interpretation by the Board of Directors of the terms of this grant of
Performance Shares shall be final and shall be binding and conclusive, for all
purposes, upon the Company, Employee, his heirs and personal representatives.

 
8.
Interpretation. The Performance Shares granted hereby are subject to the Plan.
If a conflict exists between any term or provision contained herein and a term
or provision of the Plan, the applicable terms and provisions of the Plan will
govern and prevail. Notwithstanding the preceding sentence, in the event of any
direct conflict between Section 2.B.(iii). of this Agreement and either the Plan
or the Employment Agreement, the terms of this Agreement shall govern and
prevail.

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9.
Miscellaneous.

 
 
A.
Employee hereby agrees that the Company may withhold from any amount payable to
the Employee an amount sufficient to cover any federal, state or local
withholding taxes which may become required with respect to the vesting or
settlement of the Performance Shares or take any other action it deems necessary
to satisfy any income or other tax withholding requirements as a result of the
vesting or settlement of the Performance Shares. The Committee, in its
discretion (which such discretion, if the Employee is a “statutory insider”
within the meaning of Section 16(a) of the Exchange Act, may not be delegated to
management), may allow the Employee to pay his withholding tax obligation in
connection with the vesting or settlement of the Performance Shares by (i)
making a cash payment to the Company, (ii) having withheld a portion of the
shares of Stock that would otherwise be delivered to the Employee in connection
with the vesting of Performance Shares or (iii) surrendering shares of Stock
owned by the Employee prior to the vesting of the Performance Shares, in each
case, having an aggregate Fair Market Value equal to the amount of such
withholding taxes.

 
 
B.
If any party to this Agreement so required under this Agreement fails or refuses
to comply with the provisions of this Agreement, then, in addition to any other
remedies provided by law or this Agreement, the party affected thereby may
institute and maintain a proceeding to compel the specific performance of this
Agreement by the party so defaulting.

 
 
C.
This Agreement shall be binding upon and inure to the benefit of any successor
or successors of the Company.

 
D.
The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of Texas.

 
 
E.
This Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which collectively shall constitute a single
instrument.

 

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F.
If any one or more of the provisions or parts of a provision contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement or any other jurisdiction, but this Agreement shall be reformed
and construed in any such jurisdiction as if such invalid or illegal or
unenforceable provision or part of a provision had never been contained herein
and such provision or part shall be reformed so that it would be valid, legal
and enforceable to the maximum extent permitted in such jurisdiction.
 
 
 
 
G.
The Performance Shares and any other amounts paid or credited pursuant to this
Agreement are intended to either comply with, or be exempt from, the
requirements of Section 409A of the Code and the regulations issued thereunder
(“Section 409A”), and shall be interpreted accordingly where applicable. To the
extent that the Committee determines that any Performance Shares or other
amounts are not exempt from Section 409A, the Committee may (but shall not be
required to) amend this Agreement in a manner intended to comply with the
requirements of Section 409A or an exemption therefrom (including amendments
with retroactive effect). Notwithstanding anything in this Agreement to the
contrary, to the extent that any payment or benefit hereunder constitutes
non-exempt “nonqualified deferred compensation” for purposes of Section 409A,
(A) if such payment or benefit would otherwise be payable or distributable
hereunder by reason of the Employee’s termination of employment, then all
references to the Employee’s termination of employment shall be construed to
mean a “separation from service” within the meaning of Section 409A, and (B) if
such payment or benefit would otherwise be payable or distributable hereunder
upon a Change in Control, then no such payment or distribution shall be made
unless such Change in Control also constitutes a “change in the ownership of a
corporation,” a “change in the effective control of a corporation,” or a “change
in the ownership of a substantial portion of a corporation’s assets,” in each
case, within the meaning of Section 409A. Notwithstanding anything to the
contrary in this Agreement, to the extent that the Employee is a “specified
employee” within the meaning of Section 409A, no amount that may constitute a
deferral of compensation that is not otherwise exempt from Section 409A and
which is payable on account of the Employee’s termination of employment shall be
paid to the Employee before the date (the “Delayed Payment Date”) which is first
day of the seventh month after such termination of employment or, if earlier,
the date of the Employee’s death following such date of termination. All such
amounts that would, but for this Section 9.G., become payable prior to the
Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.
No interest will be paid by the Company with respect to any such delayed
payments. For purposes of Section 409A, each payment or amount due under this
Agreement shall be considered a separate payment.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has, effective as of the date and place first
above written, caused this Agreement to be executed on its behalf by its
authorized officer and Employee has hereunto set his hand as of the 9th day of
March 2017.
 

WESTWOOD HOLDINGS GROUP, INC.

By: /s/ Brian O. Casey
Name: Brian O. Casey
President & CEO

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EMPLOYEE SIGNATURE PAGE
TO PERFORMANCE SHARE AGREEMENT
 
 
 
 
 
 

Employee Name:
 
Mark Freeman
 
 
 
 
 
Signature
 
/s/ Mark Freeman
 
 

I, the undersigned, being the spouse of the above-named Employee, hereby
acknowledge that I have read and understand the foregoing Performance Share
Agreement under the Third Amended and Restated Westwood Holdings Group, Inc.
Stock Incentive Plan (as amended from time to time), and I agree to be bound by
the terms thereof.
 
 
 
 
 
 
Spouse Name:
 
Tara Freeman
 
 
 
 
 
Signature
 
/s/ Tara Freeman
 
 

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Exhibit A
Performance Goals
Performance Shares
The Performance Shares shall become Earned Performance Shares subject to the
attainment of the Performance Goal set forth in the table below with respect to
the Performance Cycle (which, for the avoidance of doubt, begins on January 1,
2017 and ends on December 31, 2017):
Performance Goal
$[l] of Earnings Before Taxes*

* For purposes of the Agreement and this Exhibit A, “earnings before taxes” is
determined based on the Company’s audited financial statements for the
applicable Performance Cycle and equals the Company’s revenues minus expenses,
excluding tax. In the sole discretion of the Committee, earnings before taxes
may exclude start up, non-recurring, mergers and acquisitions, litigation or
claim adjustments or settlements, lift outs and other similar expense items;
provided, however, that any such exclusion shall comply with Treas. Reg. §
1.162-27(e)(2)(iii).