Document:

ex10-3.htm

    
      

    

    Exhibit
10.3

     

    
      
        RESTRICTED
UNIT AWARD AGREEMENT

         

        THIS
RESTRICTED UNIT AWARD AGREEMENT (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 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 and focusing as well on company goals and targets
(collectively referred to as “FFO Targets”); and
(b) enabling the 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 under the
Plan.

        

        NOW,
THEREFORE, IT IS AGREED, by and between the Company and the Participant, as
follows:

         

        1. Restricted Unit
Award. The Participant is hereby allocated                    Units (the
“Units”)
subject to the restrictions and on the terms and conditions set forth in this
Agreement (the “Award”). Each Unit
shall represent the right to receive one (1) common share of beneficial
interest, par value $0.001 per share, of the Company (the “Common Shares”). The
number of Units subject to this Award and the number of Common Shares
deliverable with respect to such Units may be adjusted from time to time for
capitalization adjustments as described in Section 4.2 of the Plan.

         

        2. Restriction on the
Units.

         

        (a) Period of
Restriction. Except as otherwise set forth herein, all the Units 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 Units
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 Units are subject to the Period
of Restriction, such Units are referred to herein as “Restricted
Units.”

        

        (c) Delivery of the Common
Shares. Subject to Section 2(d) below, upon the lapse of the Period of
Restriction with respect to a Unit, the Unit shall be converted into the right
to receive a Common Share, and the Company will deliver to the Participant a
number of Common Shares equal to the number of Units subject to this Award, on
the applicable date of the lapse of the Period of Restriction or as soon as
practicable thereafter. The form of delivery (e.g., a share certificate or
electronic entry evidencing such shares) shall be determined by the
Company.

        

        (d) 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 Units
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
Units or the underlying Common Shares. In the event of the Participant’s death
or Disability, any Restricted Units 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 Units.

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        3. No Rights as a
Shareholder. Until Common Shares shall have been delivered to the
Participant in accordance with Section 2(c) hereof, subject to the terms of this
Agreement and the Plan, shall have no rights of a shareholder with respect to
the Restricted Units, including no right to vote the Restricted Units and no
right to receive current dividends and distributions, with respect to the
Restricted Units.

         

        4.  Change in Control.
Notwithstanding Section 2 of this Agreement, if the Participant holds
Restricted Units at the time a Change in Control (as defined in the Plan)
occurs, the Period of Restriction with respect to such Restricted Units granted
in Section 1 shall automatically lapse immediately prior to the consummation of
such Change in Control. In addition, if there are any Restricted Units that have
been allocated pursuant to this Agreement, but not yet granted as set forth in
Exhibit A at
the time of the Change in Control and the Participant remains employed with the
acquiring or successor entity (or parent thereof), then the Participant must
receive an award of a comparable value covering shares of a successor
corporation (with appropriate adjustments as to the number and kind of shares
and the purchase price).

         

        5. Withholding. All
deliveries and distributions under this Agreement shall be subject to
withholding of all applicable taxes. The Participant agrees to make appropriate
arrangements with the Company for satisfaction of any applicable federal, state
or local income tax, withholding requirements or like requirements, including
the payment to the Company upon the lapse of the Period of Restriction with
respect to the Restricted Units (or such later date as may be applicable under
the Internal Revenue Code of 1986, as amended (the “Code”)), or other
settlement in respect of, the Restricted Units of all such taxes and
requirement.. The Participant agrees that the Company shall be authorized to
take such action as the Company may deem necessary (including, without
limitation, in accordance with applicable law, withholding amounts from any
compensation or other amount owing from the Company to the Participant) to
satisfy all obligations for the payment of such taxes.

         

        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 Units. 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.

        

        8. 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.

        

        9. 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.

        

        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.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

           

        

        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 UNITS 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 UNITS.

         

        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:

                          
	 	 
      

                  

                   

                  
                    
                      
                      

                    

                    
                      3

                      
                        

                      

                    

                    
                      
                      

                    

                     

                  

                

              

            

          

        

        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 Unit
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 Units will vest when
the Company meets the annual FFO (as defined below) goal of
$__________.

        (b) 20% of these Units will vest when
the Company meets the annual FFO goal of $__________.

        (c) 20% of these Units will vest when
the Company meets the annual FFO goal of $__________.

        (d) 25% of these Units will vest when
the Company meets the annual FFO goal of $__________.

        (e) 25% of these Units 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.

         

         

        4ex10-1.htm

    
      

    

    Exhibit
10.1

     

    FIRST
AMENDMENT TO

    EMPLOYMENT
AGREEMENT

     

    This
FIRST AMENDMENT to the Employment Agreement by and among H. B. LIPHAM, III (the
“Executive”), and FIRST
NATIONAL BANK OF GEORGIA F/K/A WEST GEORGIA NATIONAL BANK (the
“Bank”) and the Bank’s sole shareholder, WGNB CORP. (“WGNB”), is entered into by the
parties thereto on this 31st day of December, 2008.

     

    W I T N E S S E T
H

     

    WHEREAS,
the parties entered into that certain employment agreement effective May 9, 2006
(the “Agreement”).

     

    WHEREAS,
the parties desire to amend the Agreement to comply with the final regulations
issued under Section 409A of the Internal Revenue Code.

     

    NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree, effective as of January 1, 2009, to amend the Agreement as
follows:

     

    1.           By
deleting the existing Section 1.9(ii) of the Agreement and substituting therefor
the following:

     

    “(ii)          Change in Effective
Control.  A change in effective control of WGNB that occurs on
the date that either:

     

    (A)           any
one person, or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of WGNB possessing 35 percent or more
of the total voting power of the stock of WGNB; or

     

    (B)           a
majority of the members of the Board of WGNB is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of such Board prior to the date of the appointment or
election.”

     

    2.           By
deleting the existing Section 1.19 of the Agreement and substituting therefor
the following:

     

    “1.19        Termination Date
shall mean the effective date of the Executive’s termination of
employment.”

     

    3.           By
adding the following to the end of the existing Section 3.5 of the
Agreement:

     

    “Such
monthly allowance will be paid on a monthly basis.”

     

    4.           By
adding the following new Section 3.9:

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

       

    

    “3.9          Rules Governing
Reimbursements and In-Kind Benefits.  All expenses eligible for
reimbursement described in this Agreement must be incurred by the Executive
during the Term of this Agreement (or, with respect to Section 5.2(c), during
the period specified thereunder) to be eligible for reimbursement. All in-kind
benefits described in this Agreement must be provided by the Bank and/or WGNB,
as applicable, during the Term of this Agreement. To the extent any such
reimbursement or in-kind benefit is taxable to the Executive, the amount of
reimbursable expenses incurred, and the amount of in-kind benefits provided, in
one taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits provided, in any other taxable year. Each category of
reimbursement shall be paid as soon as administratively practicable, but in no
event shall any such reimbursement be paid after the last day of the calendar
year following the calendar year in which the expense was incurred. Neither
rights to reimbursement nor in-kind benefits are subject to liquidation or
exchange for other benefits.”

     

    5.           By
deleting the last two sentences of the existing Section 5.2(c) and substituting
therefore the following:

     

    “In
addition, if the Executive or his eligible qualified beneficiaries have elected
COBRA continuation coverage under the Bank’s group health plan and any one of
them becomes eligible for COBRA continuation coverage beyond the initial
18-month period due to a second qualifying event, the Executive shall be
entitled to a reimbursement for the cost of such COBRA continuation coverage,
provided that the Executive or the applicable qualified beneficiary must elect
such coverage and pay the applicable premium.”

     

    6.           By
adding the following new Sections 5.8 and 5.9:

     

    “5.8          Specified
Employee.  Notwithstanding the timing of payment under Article
5, if the Executive is determined to be a ‘specified employee’ as defined in
Code Section 409A, then to the extent necessary to avoid the imposition of tax
on the Executive under Code Section 409A, any payments that are otherwise
payable to the Executive within the first six (6) months following the effective
date of the Executive’s termination of employment, shall be suspended (without
interest) and paid on the first day of the seventh month following the such
effective date.

     

    5.9           Separation from
Service.  References to termination, termination of employment,
resign, resignation or similar terms hereunder shall mean a ‘separation from
service’ within the meaning of Treasury Regulations Section
1.409A-1(h).”

     

    7.           By
adding the following to the end of the existing Section 6.1(c) of the
Agreement:

     

    “In the
event that any payment or benefit is required to be reduced pursuant to this
Section, the portions of amounts paid or benefits provided latest in time will
be reduced first and if portions of the amounts to be paid or benefits to be
provided at the same time must be reduced, noncash benefits will be reduced
before cash payments.”

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    Except as
provided herein, the terms of the Agreement shall remain in full force and
effect.

     

    IN
WITNESS WHEREOF, the Executive and the Bank have each executed and delivered
this First Amendment as of the date first above written.

     

    
      
        
          
            	 	EXECUTIVE:	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ H.B.
      Lipham, III	 
	 	 	H.B.
      Lipham, III	 

          

        

      

    

    
       

      
        
          	 	
                  FIRST NATIONAL BANK OF GEORGIA
      

                  F/K/A WEST GEORGIA NATIONAL
      BANK

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Steven
      J. Haack	 
	 	 	 	 
	 	Name:
       	Steven
      J. Haack 	 
	 	 	 	 
	 	Title:
      	Chief
      Financial Officer	 
	 	 	 	 

        

      

       

      
        
          
            
              
                
                  
                    	 	WGNB CORP.	 
	 	 	 	 
	
                             

                          	
                            By:
      

                          	/s/ Steven
      J. Haack	 
	 	 	 	 
	 	Name:
      	Steven
      J. Haack	 
	 	 	 	 
	 	Title:
      	Secretary/Treasurer	 
	 	 	 	 

                  

                

              

            

          

        

         

         

        3

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