Exhibit 10.3

Execution Copy

PERFORMANCE AWARD

FOR

CAPITAL SENIOR LIVING CORPORATION

This Performance Award Agreement (this “Agreement”) sets forth the terms of a
PERFORMANCE AWARD (“Award”) granted on January 7, 2019 (“Date of Grant” or the
“Effective Date”), by Capital Senior Living Corporation, a Delaware Corporation
(the “Company”), to Kimberly Lody (the “Holder”). This Award is made as an
inducement to the Holder to accept employment with the Company and as such is
not subject to the terms, and provisions, of the 2007 Omnibus Stock and
Incentive Plan For Capital Senior Living Corporation as previously amended and
restated and as may be amended and restated subsequent to the Date of Grant (the
“Plan”), however, capitalized terms used but not defined in this Agreement shall
have the meanings ascribed to them in the Plan, provided, however, that the term
Change in Control as used in this Agreement shall have the meaning ascribed in
the Employment Agreement.

RECITALS

A. The Company and Holder entered into that certain employment agreement dated
January 7, 2019 (the “Employment Agreement”).

B. The Committee has determined that it is in its best interest to offer the
Holder this Performance Award as an inducement to the Holder to accept
employment with the Company.

C. Holder wishes to accept such Award on the terms and subject to the conditions
set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises set forth in this
Agreement, and for other good and valuable consideration, the adequacy of which
is acknowledged by the parties’ execution of this Agreement, the Company and the
Holder agree as follows:

1. Performance Award. The Company hereby sells, transfers, assigns and delivers
to the Holder an aggregate of 147,239 Shares of the Company as of the Date of
Grant (“Target Award Restricted Shares”) subject to the terms and conditions set
forth in this Award, including, without limitation, the Restrictions more
specifically set forth in Section 4 below (“Restrictions”), and further subject
to Holder’s execution of this Award Agreement.

2. Vesting of Target Award Restricted Shares.

(a) The Award shall be one hundred percent (100%) unvested as of the Date of
Grant. Except as otherwise provided in the Plan and this Award, the Target Award
Restricted Shares shall vest and become non-forfeitable (referred to hereafter
as “Vested Shares”) on the date that the performance results as described in
Section (i), (ii), or (iii) of this Section 2 are met (the “Performance Vesting
Date”), provided that the Holder remains in Continuous Service with the Company
or any of its Subsidiaries on the Performance Vesting Date, as applicable.

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For purposes of this Agreement, “Continuous Service” means the Holder’s service
with the Company, whether as an employee, consultant or director, is not
interrupted or terminated, other than for temporary absences, including, without
limitation, reasonable vacation time, sick leave, military leave or any other
personal or family leave of absence. The Holder’s Continuous Service shall not
be deemed to have terminated merely because of a change in the capacity in which
the Holder renders service to the Company as an employee, consultant or director
or a change in the entity for which the Holder renders such service, provided
that there is no interruption or termination of the Holder’s Continuous Service;
and provided further that if any Award is subject to Section 409A of the Code,
this sentence shall only be given effect to the extent consistent with
Section 409A of the Code.

(i) Upon the closing price of a share of the Company’s Common Stock equaling or
exceeding an increase of $2.00 above the volume weighted average selling price
of a share of CSL common stock for the 10 trading days immediately prior to
January 7, 2019, as consistent with ASC Topic 718 (the “Threshold Price”) for
fifteen (15) consecutive trading days during the Performance Period (the
“Consecutive Period”), fifty percent (50%) of the Target Award Restricted Shares
shall become vested as of the last trading day which made up the Consecutive
Period (the “Threshold Performance Vesting Date”). The period of time beginning
on the Date of Grant and ending on the Award Termination Date is the
“Performance Period.”

(ii) Upon the closing price of a share of the Company’s Common Stock equaling or
exceeding an increase of $2.00 above the Threshold Price (the “Target Price”)
for the Consecutive Period, an additional fifty percent (50%) of the Target
Award Restricted Shares shall become vested as of the last trading day which
made up the Consecutive Period (“Target Performance Vesting Date”). Therefore,
as of the Target Performance Vesting Date, 100% of the Target Award Restricted
Shares shall be Vested Shares. If the Target Performance Vesting Date is
achieved during the period from the Date of Grant through the first (1st)
anniversary of the Date of Grant (“Year One”), an additional multiplier shall be
applied thereby increasing the vested Target Award Restricted Shares by twenty
five percent (25%) for a total amount of Vested Shares equal to one hundred and
twenty-five percent (125%) of the Target Award Restricted Shares. If the Target
Performance Vesting Date is achieved during the period from the day following
the first (1st) anniversary of the Date of Grant through the second (2nd)
anniversary of the Date of Grant (“Year Two”), an additional multiplier shall be
applied thereby increasing the vested Target Award Restricted Shares by ten
percent (10%) for a total amount of Vested Shares equal to one hundred and ten
percent (110%) of the Target Award Restricted Shares.

(iii) Upon the closing price of a share of the Company’s Common Stock equaling
or exceeding an increase of $2.00 above the Target Price (the “Maximum Price”)
for the Consecutive Period, an additional one hundred percent (100%) of the
Target Award Restricted Shares shall become vested as of the last trading day
which made up the Consecutive Period (“Maximum Performance Vesting Date”).
Therefore, as of the last of the Maximum Performance Vesting Date, 200% of the
Target Award Restricted Shares shall be Vested Shares (the “Maximum Vested
Shares”). If the Maximum Performance Vesting Date is achieved during Year One an
additional multiplier shall be applied thereby increasing the Maximum Vested
Shares by fifty percent (50%) for a total amount of Vested Shares equal to two
hundred and fifty percent (250%) of the Target Award Restricted Shares. If the
Maximum Performance Vesting Date is achieved during Year Two an additional
multiplier shall be applied thereby increasing the Maximum Vested Shares by
twenty-five percent (25%) for a total amount of Vested Shares equal to two
hundred and twenty-five percent (225%) of the Target Award Restricted Shares.

 

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(b) Notwithstanding anything herein to the contrary, shares of Common Stock
which become Vested Shares under this Agreement either in Year One or Year Two
shall be subject to a twelve (12) month holding requirement from such
Performance Vesting Date as applicable, provided however, that this twelve
(12) month holding requirement shall not apply to shares of Common Stock
withheld for the payment of taxes as provided in Section 5 of this Agreement or
sold by Holder as reasonably necessary to pay taxes associated with the vesting
of Vested Shares.

(c) Provided, however, that as of the third (3rd) anniversary of the Date of
Grant (the “Award Termination Date”), the Holder shall forfeit the unvested
Award as of the Award Termination Date.

(d) Except as otherwise provided in this Section 2, in the event that the
Holder’s Continuous Service is terminated by the Company or by the Holder for
any reason, the Holder shall forfeit the unvested Award as of the Holder’s
termination date.

(e) In the event that the Holder’s Continuous Service is terminated by the
Company due to the Holder’s death or Disability (as defined in such Holder’s
employment agreement (or, if not defined therein, as defined in the Plan)), the
unvested Award shall immediately vest in the amount of the Target Award
Restricted Shares.

3. Change in Control. Upon a Change in Control the number of shares that shall
become Vested Shares shall be determined in the same manner as provided for in
Section 2 of this Agreement. Provided, however, that in the event a Change in
Control occurs which results in the Company’s Common Stock no longer being
readily tradeable on an established securities market (“Private Transaction”),
the imputed value of the Private Transaction shall be determined on a per share
of Common Stock basis and such imputed value shall be used in determining the
number of Shares which shall become Vested Shares under Section 2 of this
Agreement without regard to the Consecutive Period.

4. Restriction - Forfeiture of Target Award Restricted Shares. The Target Award
Restricted Shares are each subject to the restrictions (“Restrictions”) that
(i) all rights of Holder to any Target Award Restricted Shares which have not
become Vested Shares shall, automatically and without notice, terminate and be
permanently forfeited on the date Holder, for any reason, ceases to be employed
by the Company, except as otherwise stated herein; and (ii) all rights of Holder
to the specified percentage of Target Award Restricted Shares which have not
become Vested Shares because the performance measures pursuant to Section 2
above have not been satisfied shall, automatically and without notice, terminate
and be permanently forfeited.

5. Tax Liability and Withholding.

a. Payment of Taxes. The Holder shall be required to pay to the Company, and the
Company shall have the right to deduct from any compensation paid to the Holder
pursuant to this Agreement, the amount of any required withholding taxes in
respect of the Target Award Restricted Shares granted under this Agreement and
to take all such other action as the Committee deems necessary to satisfy all
obligations for the payment of such withholding taxes. The Committee may permit
the Holder to satisfy any federal, state or local tax withholding obligation by
any of the following means, or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares of Common Stock
from the shares of Common Stock otherwise issuable or deliverable to the Holder
as a result of the vesting of the Target Award Restricted Shares; provided,
however, that no shares of Common Stock shall be withheld with a value exceeding
the minimum amount of tax required to be withheld by law; or (iii) delivering to
the Company previously owned and unencumbered shares of Common Stock.

 

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b. Liability. Notwithstanding any action the Company takes with respect to any
or all income tax, social insurance, payroll tax, or other tax-related
withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related
Items is and remains the Holder’s responsibility and the Company (a) makes no
representation or undertakings regarding the treatment of any Tax-Related Items
in connection with the grant, or vesting of the Target Award Restricted Shares
or the subsequent sale of any shares; and (b) does not commit to structure the
Target Award Restricted Shares to reduce or eliminate the Holder’s liability for
Tax-Related Items.

6. Issuance of Shares. During the Restricted Period (as defined in the Plan),
the certificates representing the Target Award Restricted Shares, and any
Restricted Share Distributions, shall be registered in the Holder’s name and
bear a restrictive legend disclosing the Restriction and the existence of this
Award. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit the transfer to the Company of all or any portion of
the Target Award Restricted Shares, and any assets constituting Restricted Share
Distributions, which shall be subject to forfeiture in accordance with the terms
of this Award. The Company will retain custody of all related Restricted Share
Distributions (i.e., dividends, which will be subject to the same Restriction,
terms, and conditions as the related Target Award Restricted Shares) unless and
until Holder is entitled to receive the certificates for the related Vested
Shares; provided, however, that any Restricted Share Distributions shall not
bear interest or be segregated into a separate account but shall remain a
general asset of the Company, subject to the claims of the Company’s creditors,
until the conclusion of the applicable restricted period; and provided, further,
that any material breach of any terms of this Award, as reasonably determined by
the Committee, will cause a forfeiture of both Target Award Restricted Shares
and Restricted Share Distributions.

Target Award Restricted Shares shall constitute issued and outstanding Common
Stock for all corporate purposes and, without limitation, Holder shall have all
of the rights and privileges of an owner of the Target Award Restricted Shares
(including voting rights) except that Holder shall not be entitled to delivery
of the certificates evidencing any of the Target Award Restricted Shares, nor
the related Restricted Share Distributions, unless and until they become Vested
Shares.

7. Administration of Award. The determinations under, and the interpretations
of, any provision of this Award by the Committee shall, in all cases, be in its
sole discretion, and shall be final and conclusive.

8. No Transfers Permitted. Any attempt to assign, alienate, pledge, attach, sell
or otherwise transfer or encumber the Target Award Restricted Shares or the
rights relating thereto shall be wholly ineffective and, if any such attempt is
made, the Target Award Restricted Shares will be forfeited by the Holder and all
of the Holder’s rights to such shares shall immediately terminate without any
payment or consideration by the Company.

 

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9. Section 83(b) Election. Holder may elect under Section 83(b) of the Code to
include in his or her gross income, for his or her taxable year in which the
Target Award Restricted Shares are transferred to such Holder under this Award,
the excess of the fair market value (determined without regard to any
Restriction other than one which by its terms will never lapse), of such Target
Award Restricted Shares at the Date of Grant, over the amount (if any) paid for
the Target Award Restricted Shares. If the Holder makes the Section 83(b)
election described above, the Holder shall (i) make such election in a manner
that is satisfactory to the Committee, (ii) provide the Committee with a copy of
such election, (iii) agree to promptly notify the Company if any Internal
Revenue Service or state tax agent, on audit or otherwise, questions the
validity or correctness of such election or of the amount of income reportable
on account of such election, and (iv) agree to pay the withholding amounts
described in Section 5(a) above.

10. Interpretation. Any dispute regarding the interpretation of this Award shall
be submitted by the Holder or the Company to the Committee for review. The
resolution of such dispute by the Committee shall be final and binding on the
Holder and the Company. In the event of any inconsistency between the terms and
conditions of this Award and any existing employment agreement, service contract
or other agreement between the Holder and the Company (each, a “Service
Agreement”), the terms and conditions of the Service Agreement shall control.

(a) Headings contained in this Award are for convenience only and shall in no
manner be construed as part of this Award.

(b) Any reference to the masculine, feminine, or neuter gender shall be a
reference to such other gender as is appropriate.

11. Adjustment. Unless the Committee specifically determines otherwise, the
Target Award Restricted Shares shall be subject to adjustment or substitution as
to the number, or, if applicable, kind of shares of stock or other consideration
subject to such Awards or as otherwise determined by the Committee to be
equitable (a) in the event of changes in the outstanding Common Stock or in the
capital structure of the Company, by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any such Award or (b) in the event of any change in applicable
laws or any change in circumstances which results in or would result in any
substantial dilution or enlargement of the rights granted to, or available for,
the Holder under this Agreement, or which otherwise warrants equitable
adjustment because it interferes with the intended operation of the Agreement.
The Company shall give each Holder notice of an adjustment hereunder and, upon
notice, such adjustment shall be conclusive and binding for all purposes.

12. Amendment. The Committee has the right to amend, alter, suspend, discontinue
or cancel any unvested Target Award Restricted Shares granted under this
Agreement, prospectively or retroactively; provided, that, no such amendment,
shall adversely affect the Holder’s material rights or vested Target Award
Restricted Shares under this Agreement without the Holder’s consent.

13. Assignment. The Company may assign any of its rights under this Award. This
Award will be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth in
this Award, this Award will be binding upon the Holder and the Holder’s
beneficiaries, executors, administrators and the person(s) to whom the Target
Award Restricted Shares may be transferred by will or the laws of descent or
distribution.

14. Waiver. No delay or omission by the Company in exercising any right under
this Award shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.

 

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15. JURY WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT
LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS AGREEMENT,
ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS
AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN
CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF
COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF
THE CONSENT OF THE COMPANY AND HOLDER OF THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY
ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS
READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY
ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE
TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE
TERMS OF THIS SECTION.

16. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and a complete set of which, when taken together,
shall constitute one and the same document. Confirmation of execution by
electronic transmission of a facsimile or .pdf signature page shall be binding,
and each party hereby irrevocably waives any objection that it has or may have
in the future as to the validity of any such electronic transmission of a
signature page.

17. Entire Agreement. This Agreement and the defined terms referenced in the
Plan constitute the sole and entire agreement of the parties with respect to the
subject matter of this Agreement and supersedes all prior and contemporaneous
understandings, agreements, representations and warranties, both written and
oral, with respect to such subject matter.

18. Severability. The invalidity or unenforceability of any provision of this
Award shall not affect the validity or enforceability of any other provision of
this Award, and each provision of this Award shall be severable and enforceable
to the extent permitted by law.

19. Governing Law, Venue and Jurisdiction. This Award shall be governed in all
respects by the laws of the State of Texas without regard to conflicts-of-law
principles. Any civil action or legal proceeding arising out of or relating to
this Award shall be brought in the courts of record of the State of Texas in
Dallas County, Texas. Each party consents to the jurisdiction of such Texas
court in any such civil action or legal proceeding and waives any objection to
the laying of venue of any such civil action or legal proceeding in such Texas
court. Service of any court paper may be affected on such party by mail, as
provided in this Award, or in such other manner as may be provided under
applicable laws, rules of procedure or local rules.

20. No Impact on Other Benefits. The value of the Holder’s Target Award
Restricted Shares granted under this Award is not part of her normal or expected
compensation for purposes of calculating any severance, retirement, welfare,
insurance or similar employee benefit.

 

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21. Acceptance. The Holder hereby acknowledges receipt of a copy of this
Agreement. The Holder has read and understands the terms and provisions this
Agreement, and accepts the Target Award Restricted Shares granted under this
Agreement subject to all of the terms and conditions of this Agreement. The
Holder acknowledges that there may be tax consequences upon the grant, vesting,
or exercise of the Target Award Restricted Shares granted under this Award
and/or the disposition of the underlying shares and that the Holder has been
advised to consult a tax advisor prior to such grant, vesting, or disposition.

22. Further Instruments. The Company and the Holder agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Award.

23. Notices. Any notice required to be delivered to the Company under this Award
shall be in writing and addressed to the Chief Financial Officer of the Company
at the Company’s principal corporate offices. Any notice required to be
delivered to the Holder under this Award shall be in writing and addressed to
the Holder at the Holder’s address as shown in the records of the Company.
Either party may designate another address by delivering notice of such
designation in accordance with this Section.

24. Section 409A. This Agreement is intended to be interpreted and applied so
that the Target Award Restricted Shares set forth herein shall either be exempt
from the requirements of Section 409A, or shall comply with the requirements of
Section 409A, and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be exempt from or in compliance with Section 409A.

The Company and the Holder have executed this Performance Award Agreement as of
the Effective Date.

 

COMPANY:                      HOLDER: CAPITAL SENIOR LIVING CORPORATION     By:
 

/s/ Carey P. Hendrickson

   

/s/ Kimberly S. Lody

Carey P. Hendrickson     Kimberly Lody Senior Vice President and Chief    
Financial Officer    

 

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Assignment Separate From Certificate

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
Capital Senior Living Corporation the Target Award Restricted Shares subject to
this Award, standing in the undersigned’s name on the books of said Capital
Senior Living Corporation, represented by a Stock Certificate herewith and do
hereby irrevocably constitute and appoint the corporate secretary of Capital
Senior Living Corporation as attorney to transfer the said stock on the books of
Capital Senior Living Corporation with full power of substitution in the
premises.

 

Dated                                                                          
                                      

 

Kimberly Lody, Holder

ACKNOWLEDGMENT

The undersigned hereby acknowledges (i) my receipt of this Award, (ii) my
opportunity to discuss this Award with a representative of the Company, and my
personal advisors, to the extent I deem necessary or appropriate, (iii) my
understanding of the terms and provisions of this Award, and (iv) my
understanding that, by my signature below, I am agreeing to be bound by all of
the terms and provisions of this Award.

Without limitation, I agree to accept as binding, conclusive and final all
decisions or interpretations of the Committee (as defined in the Plan) upon any
questions arising under this Award.

 

Dated                                                                          
                                      

 

Kimberly Lody, Holder

 

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