Exhibit 10.3

 

WALKER & DUNLOP, INC.

2010 EQUITY INCENTIVE PLAN

 

PERFORMANCE STOCK UNIT AGREEMENT

 

Walker & Dunlop, Inc., a Maryland corporation (the “Company”), hereby grants
performance stock units relating to shares of its common stock, par value $0.01
per share (the “Stock”) to the Participant named below, subject to the
achievement of performance goals and vesting conditions set forth in the
attached Performance Stock Unit Agreement (the “Agreement”). Additional terms
and conditions of the grant are set forth on this cover sheet to the Agreement
and in the Agreement and the Company’s 2010 Equity Incentive Plan (as amended
from time to time, the “2010 Plan”).

 

Participant Name:

 

Grant Date:

 

Threshold Number of Performance Stock Units:

 

Target Number of Performance Stock Units:

 

Maximum Number of Performance Stock Units:

 

By your signature below, you agree to all of the terms and conditions described
in the Agreement and in the 2010 Plan, copies of which will be provided on
request. You acknowledge that you have carefully reviewed the 2010 Plan, and
agree that the 2010 Plan will control in the event any provision of this cover
sheet or Agreement should appear to be inconsistent.

 

Participant:

 

 

Date:

 

 

(Signature)

 

 

 

 

 

 

 

 

Company:

 

 

Date:

 

 

(Signature)

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

Attachment

 

This is not a stock certificate or a negotiable instrument.

 

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WALKER & DUNLOP, INC.

2010 EQUITY INCENTIVE PLAN

 

PERFORMANCE STOCK UNIT AGREEMENT

 

Performance Stock Units

 

This Agreement evidences an award of performance stock units in the number set
forth on the cover sheet and subject to the terms and conditions set forth in
the Agreement and the 2010 Plan (the “Performance Stock Units”).

 

Subject to satisfaction of the time-based vesting requirement set forth below,
the number of shares of Stock, if any, that may be issued pursuant to the terms
of this Agreement will be calculated based on the attainment, as determined by
the Committee, of the performance goals described in Exhibit A to this Agreement
(the “Performance Goals”) over the period beginning on                       
and ending on                        (the “Performance Period”), which number of
shares of Stock may be equal to all or a portion, including none, of the Maximum
Number of Performance Stock Units set forth on the cover sheet. If the
Performance Goals are not achieved during the Performance Period, you will
forfeit all of your unvested Performance Stock Units as of the end of the
Performance Period, except as otherwise provided in this Agreement.

 

 

 

Performance Stock Unit Transferability

 

Your Performance Stock Units may not be sold, assigned, transferred, pledged,
hypothecated, or otherwise encumbered, whether by operation of law or otherwise,
nor may the Performance Stock Units be made subject to execution, attachment or
similar process. If you attempt to do any of these things, you will immediately
forfeit your Performance Stock Units.

 

 

 

Vesting

 

Your Performance Stock Units will vest on the date the Committee certifies the
achievement of the Performance Goals following the close of the Performance
Period (the “Certification Date”), and subject to your continued Service from
the Grant Date through the Certification Date, but only to the extent that the
Performance Goals have been satisfied. Promptly following the completion of the
Performance Period (and no later than 75 days following the end of the
Performance Period), the Committee will review and certify in writing
(i) whether, and to what extent, the Performance Goals for the Performance
Period have been achieved, and (ii) the number of Performance Stock Units that
will vest. Such certification will be final, conclusive and binding.
Notwithstanding the foregoing or anything in this Agreement to the contrary, the
Committee reserves the right to adjust the number of Performance Stock Units
that will vest based on the achievement of the Performance Goals downward,
including to zero, in its sole discretion. You will forfeit to the Company all
of the unvested Performance Stock Units to the extent the specified Performance
Goals have not been achieved, as determined by the Committee, effective as of
the Certification Date.

 

 

 

Vesting upon Termination of Service

 

Death or Disability. If your Service terminates during the Performance Period as
a result of your death or Disability, your Performance Stock Units will vest as
to the Target Number of Performance Stock Units set forth on the cover sheet on
the effective date of your termination of Service. If your Service terminates
following the end of the Performance Period but prior to the Certification Date,
your Performance Stock Units will vest to the extent that

 

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the Performance Goals have been satisfied as if your Service had not terminated,
effective as of the Certification Date.

 

Termination without Cause or for Good Reason. If your Service terminates prior
to the Certification Date because of your involuntary termination of Service by
the Company without Cause or your voluntary termination for Good Reason (as
defined below), you will vest in a pro rata portion of the Performance Stock
Units that vest to the extent that the Performance Goals have been satisfied as
if your Service had not terminated, which pro rata portion will be calculated by
multiplying the total number of the Performance Stock Units that vest based on
actual performance by a fraction, the numerator of which equals the number of
days that you provided Service during the Performance Period and the denominator
of which equals the total number of days in the Performance Period, effective as
of the Certification Date.

 

Other Terminations. If, prior to the Certification Date, you incur a termination
of Service for any reason other than those specified above, whether voluntary or
involuntary and prior to a Change in Control, you will forfeit to the Company
all of the unvested Performance Stock Units on the date of your termination of
Service.

 

For purposes of this Agreement, unless otherwise provided in an applicable
agreement with the Company, “Good Reason” for termination will mean, without
your consent: (i) the assignment to you of substantial duties or
responsibilities inconsistent with your position at the Company, or any other
action by the Company that results in a substantial diminution of your duties or
responsibilities other than any such reduction that is remedied by the Company
within 30 days of receipt of written notice thereof from you; (ii) a requirement
that you work principally from a location that is 35 miles further from your
residence than your principal place of employment as of the Date of Grant;
(iii) a ten percent or greater reduction in your aggregate base salary and other
compensation (including any target bonus amount and/or retirement plan, welfare
plans and fringe benefits) taken as a whole, excluding any reductions caused by
the failure to achieve performance targets; or (iv) any material breach by the
Company of your employment agreement, if any. Good Reason will not exist
pursuant to any subsection in the foregoing sentence unless (A) you have
delivered written notice to the Company within 90 days of the occurrence of the
event constituting Good Reason, and (B) the Company fails to remedy the
circumstances giving rise to your notice within 30 days of receipt of notice. In
addition, you must terminate your employment for Good Reason at a time agreed
reasonably with the Company, but in any event within 150 days from the
occurrence of the event constituting Good Reason. For purposes of Good Reason,
the Company will be defined to include any successor to the Company that has
assumed the obligations of the Company through merger, acquisition, stock
purchase, asset purchase or otherwise.

 

 

 

Change in Control

 

Notwithstanding the vesting schedule set forth above, upon the consummation of a
Change in Control during the Performance Period, you will vest in a number of
Performance Stock Units equal to the greater of (i) the number of Performance
Stock Units that would vest based on pro rata actual performance of the
Performance Goals as of a date reasonably proximal to the date of the

 

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consummation of the Change in Control, as determined by the Committee in its
sole discretion, and that level of performance will be treated as achieved
immediately prior to the Change in Control, or (ii) the Target Number of
Performance Stock Units set forth on the cover sheet. Notwithstanding the
foregoing, if the Company achieves Return on Equity (as defined below) during
the Performance Period of [          ], as of a date reasonably proximal to the
date of the consummation of the Change in Control, as determined by the
Committee in its sole discretion, the Maximum Number of Performance Stock Units
will vest.

 

For purposes of this agreement “Return on Equity” means the Company’s net
income, as reported in the Company’s audited financial statements, divided by
the average common stockholders’ equity, determined in accordance with U.S.
generally accepted accounting principles (“U.S. GAAP”). Net income and average
common stockholders’ equity will be adjusted to exclude any amounts that are
generally required to be reported separately under U.S. GAAP as Extraordinary
Items (as described in Exhibit A).

 

 

 

Delivery

 

Delivery of the shares of Stock represented by your vested Performance Stock
Units will be made as soon as practicable after the date on which your
Performance Stock Units vest and, in any event, by no later than March 15th of
the calendar year after your Performance Stock Units vest.

 

 

 

Evidence of Issuance

 

The issuance of the shares of Stock with respect to the Performance Stock Units
will be evidenced in such a manner as the Company, in its discretion, deems
appropriate, including, without limitation, book-entry, registration or issuance
of one or more share certificates.

 

 

 

Withholding

 

In the event that the Company or an Affiliate determines that any federal,
state, local or foreign tax or withholding payment is required relating to this
grant of Performance Stock Units, or the issuance of shares of Stock with
respect to this grant, the Company or an Affiliate will have the right to
(i) require you to tender a cash payment, (ii) deduct from payments of any kind
otherwise due to you, (iii) permit or require you to enter into a “same day
sale” commitment with a broker-dealer that is a member of the Financial Industry
Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a
portion of the shares of Stock to be delivered in connection with the
Performance Stock Units to satisfy withholding obligations and whereby the FINRA
Dealer irrevocably commits to forward the proceeds necessary to satisfy the
withholding obligations directly to the Company or an Affiliate, or
(iv) withhold the delivery of vested shares of Stock otherwise deliverable under
this Agreement to meet such obligations; provided that the shares of Stock so
withheld will have an aggregate Fair Market Value not exceeding the minimum
amount of tax required to be withheld by applicable law.

 

 

 

Notice and Non-Solicitation

 

The following notice and non-solicitation provisions will apply to you unless
you have entered into an applicable employment agreement with the Company or any
Affiliate that has more restrictive notice and non-solicitation provisions (in
which case, the more restrictive provisions in such employment agreement will
apply).

 

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You agree as a condition of this grant that in the event you decide to leave the
Company or an Affiliate for any reason, you will provide the Company or the
Affiliate with 30 days’ prior notice of your departure (during which period, in
the Company’s or its Affiliate’s sole discretion, you may be placed on paid
leave) and you will not commence employment with anyone else during that period.
For a period of 90 days following the termination of your employment for any
reason, you will not directly or indirectly solicit any employees of the Company
or its Affiliates for employment, or encourage any employee to leave the Company
or an Affiliate.

 

 

 

Retention Rights

 

This Agreement and the grant of Performance Stock Units evidenced by this
Agreement do not give you the right to be retained by the Company or any
Affiliate in any capacity. Unless otherwise specified in an employment or other
written agreement between the Company or any Affiliate, as applicable, and you,
the Company or any Affiliate, as applicable, reserves the right to terminate
your service with the Company or an Affiliate at any time and for any reason.

 

 

 

Stockholder Rights

 

You do not have any of the rights of a stockholder with respect to the
Performance Stock Units unless and until the Stock relating to the Performance
Stock Units has been delivered to you.

 

 

 

Clawback

 

The Performance Stock Units are subject to mandatory repayment by you to the
Company to the extent you are or in the future become subject to any Company
“clawback” or recoupment policy that requires the repayment by you to the
Company of compensation paid by the Company to you in the event that you fail to
comply with, or violate, the terms or requirements of such policy.

 

If the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, and you are subject
to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 or
you knowingly engaged in the misconduct, were grossly negligent in engaging in
the misconduct, knowingly failed to prevent the misconduct or were grossly
negligent in failing to prevent the misconduct, you will reimburse the Company
the amount of any payment in settlement of the Performance Stock Units earned or
accrued during the 12-month period following the first public issuance or filing
with the Securities and Exchange Commission (whichever first occurred) of the
financial document that contained such material noncompliance.

 

 

 

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of
Maryland, other than any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction.

 

 

 

The 2010 Plan

 

The text of the 2010 Plan is incorporated into this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the 2010 Plan,
and have the meaning set forth in the 2010 Plan.

 

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This Agreement and the 2010 Plan constitute the entire understanding between you
and the Company regarding this grant of Performance Stock Units. Any prior
agreements, commitments or negotiations concerning this grant are superseded.

 

 

 

Data Privacy

 

To administer the 2010 Plan, the Company may process personal data about you.
Such data includes, but is not limited to, information provided in this
Agreement and any changes to such information, other appropriate personal and
financial data about you such as your contact information, payroll information
and any other information that might be deemed appropriate by the Company to
facilitate the administration of the 2010 Plan.

 

By accepting this grant, you give explicit consent to the Company to process any
such personal data.

 

 

 

Disclaimer of Rights

 

The grant of Performance Stock Units under this Agreement will in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to you. You
will have no rights under this Agreement or the 2010 Plan other than those of a
general unsecured creditor of the Company. Performance Stock Units represent
unfunded and unsecured obligations of the Company, subject to the terms and
conditions of the 2010 Plan and this Agreement.

 

 

 

Code Section 409A

 

The grant of Performance Stock Units under this Agreement is intended to comply
with Section 409A to the extent subject thereto, and, accordingly, to the
maximum extent permitted, this Agreement will be interpreted and administered to
be in compliance with Section 409A. Notwithstanding anything to the contrary in
the 2010 Plan or this Agreement, neither the Company, its Affiliates, the Board
nor the Committee will have any obligation to take any action to prevent the
assessment of any excise tax or penalty on you under Section 409A and neither
the Company, its Affiliates, the Board nor the Committee will have any liability
to you for such tax or penalty.

 

To the extent that the Performance Share Units constitute “deferred
compensation” under Section 409A, a termination of Service occurs only upon an
event that would be a “separation from service” within the meaning of
Section 409A. If, at the time of your separation from service, (1) you are a
“specified employee” within the meaning of Section 409A, and (2) the Company
makes a good faith determination that an amount payable on account of your
separation from service constitutes deferred compensation (within the meaning of
Section 409A), the payment of which is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A to avoid taxes or penalties under
Section 409A (the “Delay Period”), then the Company will not pay such amount on
the otherwise scheduled payment date but will instead pay it in a lump sum on
the first business day after the Delay Period (or upon your death, if earlier),
without interest. Each installment of Performance Share Units that vest under
this Agreement (if there is more than one installment) will be considered one of
a series of separate payments for purposes of Section 409A.

 

By signing this Agreement, you agree to all of the terms and conditions
described above and in the 2010 Plan.

 

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