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Exhibit 10.1
 
RESTRICTED COMMON SHARE AWARD AGREEMENT
(PERFORMANCE VESTED)
 
THIS RESTRICTED COMMON SHARE AWARD AGREEMENT (PERFORMANCE VESTED) (this
“Agreement”) is entered into as of                                  ,
20              (the “Effective Date”), by and between Whitestone REIT, a
Maryland real estate investment trust (the “Company”), and
                                            (the “Participant”).
 
WHEREAS, the Participant is an employee of the Company or one of its
subsidiaries or affiliates and in connection therewith has rendered services and
received compensation for those services, for and on behalf of the Company
and/or its subsidiaries or affiliates; and

WHEREAS, the Company has initiated and the shareholders have approved the 2008
Long-Term Equity Incentive Ownership Plan as it may be further amended from time
to time (the “Plan”), for the purpose of:  (a) encouraging performance beyond
the Participant’s assigned responsibilities as well as focusing on Company goals
and targets (collectively referred to as “FFO Targets”); and (b) enabling the
employee Participant to participate, through the Plan, as a shareholder after
attaining the FFO Targets; and
 
WHEREAS, the Company maintains the Plan, which is incorporated into and forms a
part of this Agreement, and the Participant has been selected by the
Compensation Committee administering the Plan (the “Committee”) to receive an
award of common shares of beneficial interest, par value $0.001 per share, of
the Company (the “Common Shares”) under the Plan.
 
NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as
follows:
 
1. Restricted Common Share Award. The Participant is hereby granted
                   Common Shares (the “Shares”) subject to the restrictions and
on the terms and conditions set forth in this Agreement (the “Award”).
 
2. Restriction on the Shares.
 
(a) Period of Restriction. Except as otherwise set forth herein, all the Shares
issued to the Participant pursuant to this Agreement shall be subject to a
period of restriction (the “Period of Restriction”) during which the
Participant’s rights in and to such Shares shall be subject to the limitations
and obligations set forth in this Section 2.

(b) Lapse of Period of Restriction. The Period of Restriction shall lapse in
accordance with the provisions of Exhibit A, which is attached hereto and forms
part of this Agreement.  During the period that the Shares are subject to the
Period of Restriction, such Shares are referred to herein as “Restricted Common
Shares.”
 
(c) Termination of Continuous Employment Notwithstanding any other provision of
this Agreement to the contrary, if the Participant is an employee of the Company
or one of its subsidiaries or affiliates, and if the Participant’s continuous
employment with the Company terminates for any reason (or no reason), other than
the Participant’s death or Disability (as defined in the Plan), any Restricted
Common Shares that are subject to the Period of Restriction on the date of the
Participant’s termination shall be immediately forfeited by the Participant and
shall be automatically transferred to and reacquired by the Company at no cost
to the Company, and neither the Participant nor his or her heirs, executors,
administrators or successors shall have any right or interest in such Restricted
Common Shares. In the event of the Participant’s death or Disability, any
Restricted Common Shares that are subject to the Period of Restriction on the
date of death or Disability shall immediately vest and the Participant or his or
her heirs, executors, administrators or successors shall have the right and
interest in such Restricted Common Shares.
 
(d) Escrow. Upon the Participant’s execution and delivery of this Agreement, the
Participant agrees to concurrently deliver one or more executed stock powers as
requested by the Company, duly endorsed in blank for transfer, in the form
attached hereto as Exhibit B, which shall be deposited with the Company during
the Period of Restriction. Each certificate representing Restricted Common
Shares shall bear the following legend until the lapse of the Period of
Restriction with respect to the shares represented by such certificate:
 
Transfer of this certificate and the shares represented hereby is restricted
pursuant to the terms of the Whitestone REIT’s 2008 Long-Term Equity Incentive
Ownership Plan (the “Plan”) and the Restricted Common Share Award Agreement
dated as of                     , 200[_], (the “Agreement”). Copies of the Plan
and the Agreement are on file at the offices of Whitestone REIT.
 

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The certificates representing the Restricted Common Shares along with the stock
power(s) shall be held in escrow by the Company until such time as either
(i) the Period of Restriction with respect to all of such Restricted Common
Shares lapses in accordance with this Agreement, in which case the shares shall
be delivered to the Participant, or (ii) any such Restricted Common Shares are
forfeited pursuant this Agreement, in which case such shares shall be
transferred to and reacquired by the Company in accordance with Section 2(c) of
this Agreement.
 
(e) Distributions. All cash distributions on the Restricted Common Shares shall
be paid directly to the Participant and shall not be held in escrow. Any new,
substituted or additional securities or other property issued in respect of
Restricted Common Shares shall be held in escrow, together, where applicable,
with appropriate stock powers, assignments or other transfer documents which the
Participant hereby agrees to execute as a condition to receipt of such
securities or other property. If the Restricted Common Shares in respect of
which such securities or other property was issued are forfeited to the Company
pursuant to Section 2(c) of this Agreement, then such securities or other
property shall be immediately forfeited to the Company and automatically
transferred to and reacquired by the Company at no cost to the Company, to the
same extent and in accordance with Section 2(c) of this Agreement as if such
securities or other property were Restricted Common Shares hereunder.

3. Rights as a Shareholder. Upon the Participant’s execution and delivery of
this Agreement and until such time as the Restricted Common Shares are forfeited
to the Company as set forth herein, the Participant shall be the record owner of
the Restricted Common Shares and, subject to the terms of this Agreement and the
Plan, shall have all rights of a shareholder with respect to the Restricted
Common Shares, including the right to vote the Restricted Common Shares and
subject to the terms of Section 2 hereof, to receive dividends and distributions
with respect to the Restricted Common Shares.
 
4. Change in Control. Notwithstanding Section 2 of this Agreement, if the
Participant holds Restricted Common Shares at the time a Change in Control (as
defined in the Plan) occurs, the Period of Restriction with respect to such
Restricted Common Shares granted in Section 1 shall automatically lapse
immediately prior to the consummation of such Change in Control.
 
5. Withholding. If the Participant makes an election under Section 83(b) of the
Internal Revenue Code of 1986 (the “Code”) with respect to the Restricted Common
Shares, the grant made pursuant to this Award shall be conditioned upon the
prompt payment to the Company of any applicable withholding obligations or
withholding taxes by the Participant (“Withholding Taxes”). Failure by the
Participant to pay such Withholding Taxes will render this Award null and void
ab initio and the Restricted Common Shares granted hereunder will immediately be
canceled. If the Participant does not make an election under Section 83(b) of
the Code with respect to the Restricted Common Shares, upon the lapse of the
Period of Restriction with respect to any portion of the Restricted Common
Shares (or property distributed with respect thereto), the Company shall satisfy
the required Withholding Taxes as set forth in the Internal Revenue Service
guidelines for the employer’s minimum statutory withholding with respect to
Participant and issue vested share to the Participant without restriction. In
the sole discretion of the Company, the Company may satisfy the required
Withholding Taxes by withholding from the Restricted Common Shares included in
the Award that number of whole shares necessary to satisfy such taxes as of the
date the restriction lapse with respect to such Restricted Common Shares based
on the Fair Market Value (as defined in the Plan) of the Shares.
 
6. Restrictions on Transfer. During the Period of Restriction, the Participant
shall not sell, transfer, pledge, hypothecate, assign, exchange or otherwise
dispose of the Restricted Common Shares. Any attempted sale, transfer, pledge,
hypothecation, assignment, exchange or other disposition shall be null and void
and of no force or effect and the Company shall have the right to disregard the
same on its books and records and to issue “stop transfer” instructions to its
transfer agent.
 
7. Plan Provisions Control. This Agreement is subject to the terms and
conditions of the Plan, which are incorporated herein by reference.
Notwithstanding anything to the contrary contained herein, the provisions of the
Plan shall govern if and to the extent that there are inconsistencies between
the provisions of the Plan and the provisions of this Agreement. The Participant
acknowledges that the Participant has received a copy of the Plan prior to the
execution of this Agreement.

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8. Consent to Electronic Delivery.  The Company may choose to deliver certain
statutory materials relating to the Plan in electronic form. By accepting this
Agreement, the Participant agrees that the Company may deliver the Plan
prospectus and the Company’s annual report to the Participant in an electronic
format. If at any time the Participant would prefer to receive paper copies of
these documents, please contact Chief Financial Officer of the Company to
request paper copies of these documents.

9. No Rights Conferred. Nothing in this Agreement shall give the Participant any
right to continue in the employ or service of the Company, any affiliate or any
subsidiary and/or as a member of the Company’s Board of Trustees or in any other
capacity, or interfere in any way with the right of the Company, any affiliate
or any subsidiary to terminate the employment or services of the Participant.

10. Adjustments. All references to the number and class of shares covered by
this Agreement and other terms in this Agreement may be appropriately adjusted,
in the discretion of the Committee, in the event of certain unusual or
non-recurring transactions, as set forth in Section 4.2 of the Plan.
 
11. Compliance with Section 409A of the Code. The Participant hereby consents
(without further consideration) to any change to this Agreement or the Award so
the Participant can avoid paying penalties under Section 409A of the Code, even
if those changes affect the terms and conditions of this Agreement of the Award
and reduce its value or potential value.
 
12. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns. This Agreement may not be
assigned or transferred in whole or in part by the Participant, nor may the
Participant delegate any duty or obligation under this Agreement, and any
attempt to so assign, transfer or delegate shall be null and void and of no
force or effect.
 
13. Interpretation of this Agreement. All determinations and interpretations
made by the Committee with regard to any questions arising under the Plan or
this Agreement shall be final, binding and conclusive as to all persons,
including without limitation the Participant and any person claiming rights from
or through the Participant.
 
14. Venue. Each party to this Agreement hereby irrevocably (i) consents and
submits to the exclusive jurisdiction of the state and federal courts in Harris
County, Texas in connection with any disputes arising out of this Agreement, and
(ii) waives any objection based on venue or inconvenient forum with respect to
any action instituted therein arising under this Agreement or the transactions
contemplated hereby, and agrees that any dispute with respect to such matters
shall be heard only in the courts described above.
 
15. Governing Law; Entire Agreement; Amendment. This Agreement shall be governed
by and construed in accordance with the laws of the State of Maryland, without
regard to such state’s conflict of laws principles. The Plan and this Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior understandings and agreements, written or
oral, of the parties hereto with respect to the subject matter hereof. This
Agreement may be amended by the Committee, subject to the Participant’s consent
if such amendment materially and adversely affects the rights of the
Participant, except that the consent of the Participant shall not be required
for any amendment made pursuant to Section 4.2 or Section 15.11 of the Plan, or
as set forth in Section 11 of this Agreement.
 
16. Tax Elections. THE PARTICIPANT UNDERSTANDS THAT HE OR SHE (AND NOT THE
COMPANY) SHALL BE RESPONSIBLE FOR THE PARTICIPANT’S OWN TAX LIABILITY THAT MAY
ARISE AS A RESULT OF THE ACQUISITION OF THE SHARES HEREUNDER. THE PARTICIPANT
ACKNOWLEDGES AND AGREES THAT HE OR SHE HAS CONSIDERED THE ADVISABILITY OF ALL
TAX ELECTIONS IN CONNECTION WITH THE ISSUANCE OF THE SHARES, INCLUDING THE
MAKING OF AN ELECTION UNDER SECTION 83(b) OF THE CODE. THE PARTICIPANT FURTHER
ACKNOWLEDGES AND AGREES THAT, IF THE PARTICIPANT DETERMINES TO MAKE AN ELECTION
UNDER SECTION 83(b) OF THE CODE, (i) THE PARTICIPANT (AND NOT THE COMPANY) IS
SOLELY RESPONSIBLE FOR PROPERLY AND TIMELY COMPLETING AND FILING ANY SUCH
SECTION 83(b) ELECTION, AND (ii) THE PARTICIPANT AGREES TO TIMELY PROVIDE A COPY
OF THE ELECTION TO THE COMPANY AS REQUIRED UNDER THE CODE.
 
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17. Notices. Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed given (i) when
delivered personally, or (ii) three days after being deposited in the United
States mail, by certified or registered mail, postage prepaid, or (iii) the next
business day after sent by nationally recognized overnight delivery service, and
addressed, if to the Company, at its principal place of business, Attention:
Chief Financial Officer, and if to the Participant, at his or her most recent
address as shown in the employment or stock records of the Company.
 
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
 

 
Whitestone REIT
 
By:
   
Name:
   
Title:
       
Participant:
     
Date:
   

 
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Exhibit A  

LAPSE OF PERIOD OF RESTRICTION

The purpose of this Exhibit A is to set forth the performance goals and measures
that will be applied to determine the amount of the award to be made under the
terms of the attached Restricted Common Share Award Agreement (the “Agreement”).
This Exhibit A is incorporated into and forms a part of the Agreement.

The Period of Restriction will lapse as follows:

(a) 10% of these Shares will vest when the Company meets the annual FFO (as
defined below) goal of $__________.
(b) 20% of these Shares will vest when the Company meets the annual FFO goal of
$__________.
(c) 20% of these Shares will vest when the Company meets the annual FFO goal of
$__________.
(d) 25% of these Shares will vest when the Company meets the annual FFO goal of
$__________.
(e) 25% of these Shares will vest when the Company meets the annual FFO goal of
$__________.

FFO is defined as the net income (loss) available to common shareholders
computed in accordance withU.S. generally accepted accounting principles,
excluding gains or losses from sales of operating real estateassets and
extraordinary items, plus depreciation and amortization of operating properties,
including our share of unconsolidated real estate joint ventures and
partnerships.  For purposes of this Award, FFO will be based on the annual
audited FFO as it appears in the Company’s annual report of Form 10-K.
 
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Exhibit B
 
STOCK POWER
 
For value received, I hereby sell, assign and transfer unto
                                              Common Shares of Whitestone REIT
standing in my name on the books of said Company represented by Certificate(s)
Number(s)             herewith, and do hereby irrevocably constitute and appoint
            attorney to transfer the said stock on the books of said Company
with full power of substitution in the premises.
 
Date:
         
Printed Name:
         
Signature:
         
Witness Signature:
   

 
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