ex10-1.htm


    
      

    

    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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      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.

      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      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.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      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:

                    
	 	 
      


            

          

        

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      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.

         

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      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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