PERFORMANCE-BASED RESTRICTED SHARE AGREEMENT

Exhibit 10.2

PERFORMANCE-BASED

RESTRICTED SHARE AGREEMENT

(Non-Assignable)

Regarding a target amount of                      Common Shares

(maximum amount of                  Common Shares)

Of

Beneficial Interest, par value $0.01 per share of

LASALLE HOTEL PROPERTIES

THIS CERTIFIES that, effective as of                      (the “Date of Grant”),                      (the “Grantee”) will be granted an award of                      (the “Target Amount”) restricted common shares of beneficial interest, par value $0.01 per share (the “Common Shares”), of LASALLE HOTEL PROPERTIES (the “Company”), subject to increase to a maximum of _______ Common Shares (the “Maximum Amount”), upon and subject to the following terms and conditions and the applicable terms and conditions of the 1998 Share Option and Incentive Plan, as amended and as in effect from time to time (the “Plan”):

1. Status of Underlying Shares; Restrictions : No restricted Common Shares covered by this Agreement shall be issued or outstanding until earned and awarded pursuant to Section 2. Thereafter, awarded Common Shares shall be validly issued, fully paid and non-assessable but forfeitable and non-transferable by the Grantee until such shares become vested pursuant to Section 3. After restricted Common Shares are earned and awarded pursuant to Section 2, the transfer agent for the Company shall be instructed (i) to issue any certificates representing such shares with appropriate legends and (ii) not to process any transfers of such shares unless, and only to the extent that, it has been notified by the Compensation Committee (the “Committee”) of the Board of Trustees (the “Board”) of the Company that some or all of such shares have become vested and are no longer subject to forfeiture.

2. Performance Award :

(a) The shares to be awarded pursuant to this Section 2, subject to further vesting pursuant to Section 3 below, in accordance with the rules set forth below.

(b) The total number of shares that will be awarded pursuant to this Section 2 will be determined on January 1, 2010 and will equal the sum of the number of shares awarded pursuant to Sections 2(c), (d) and (e) below. In each case, the determination will depend on the Total Return (as defined below) of the Company over the Measuring Period (as defined below), as compared to the applicable benchmark.

(c) Up to forty percent of the Maximum Amount of restricted shares to be awarded under this Section 2 will be based on the Target Amount and the Company’s Total Return compared to the Total Return of the companies comprising the NAREIT Equity Index (as defined below) as set forth in the table below. More specifically, the amount to be awarded under this Section 2(c) is calculated as the product of (i) the applicable percent earned determined using the table below and (ii)                      shares (a number of shares equal to 40% of the Target Amount). In no event may more than                      shares (calculated as 200% of 40% of Target Amount) be awarded pursuant to this Section 2(c).

2

In the event that the Company’s percentile ranking is in between (i) 40% and 60% or (ii) 60% and 80%, then the percent earned shall be calculated by linear interpolation to the nearest 1/100th of a percent using the nearest lower and nearest higher percent earned figures set forth in the table above.

(d) Up to forty percent of the Maximum Amount of restricted shares to be awarded under this Section 2 will be based on the Target Amount and the Company’s Total Return compared to the Total Return of the companies comprising the Peer Group (defined below) and including the Company as set forth in the table below. More specifically, the amount to be awarded under this Section 2(d) is calculated as the product of (i) the applicable percent earned determined using the table below and (ii)                      shares (a number of shares equal to 40% of the Target Amount). In no event may more than                      shares (calculated as 200% of 40% of Target Amount) be awarded pursuant to this Section 2(d).

3

In the event that the Company’s percentile ranking is in between (i) 40% and 60% or (ii) 60% and 80%, then the percent earned shall be calculated by linear interpolation to the nearest 1/100th of a percent using the nearest lower and nearest higher percent earned figures set forth in the table above.

(e) Up to twenty percent of the Maximum Amount of restricted shares to be awarded under this Section 2 will be based on the Target Amount and the Company’s Total Return as set forth in the table below. More specifically, the amount to be awarded under this Section 2(e) is calculated as the product of (i) the applicable percent earned determined using the table below and (ii)                   shares (a number of shares equal to 20% of the Target Amount). In no event may more than                  shares (calculated as 200% of 20% of Target Amount) be awarded pursuant to this Section 2(e). The Grantee acknowledges that the Total Return threshold for a 50% earning is based on a 7% compounded annual Total Return; the threshold for a 100% earning is based on a 9% compounded annual Total Return; and the threshold for a 200% earning is based on a 11% compounded annual Total Return (such bases collectively, the “Determinative Percentages”).

4

In the event that the Company’s Total Return is in between (i) 22.5% and 29.5% or (ii) 29.5% and 36.8%, then the percent earned shall be calculated by linear interpolation to the nearest 1/100th of a percent using the nearest lower and nearest higher percent earned figures set forth in the table above.

3. Vesting :

(a) The restricted Common Shares that are awarded pursuant to Section 2 above will generally become cumulatively vested and transferable to the extent of one-third of such shares on                      ; one-third of such shares on                      ; and one-third of such shares on                      .

4. General Earning and Vesting Provisions :

(a) Upon the occurrence of a Change in Control of the Company (as defined below), then, (i) notwithstanding Section 2(b), the total number of shares that are awarded pursuant to Section 2 will be determined and will be awarded as of (i.e., the Measuring Period will end and performance will be measured as of) the date of such Change in Control of the Company (unless already awarded because such date is after the Measuring Period), provided tha t the Total Returns in the table contained in Section 2(e) table will be reduced pro rata (using the Determinative Percentages and based on the portion of the Measuring Period not yet elapsed

5

relative to the total Measuring Period); and (ii) notwithstanding Section 3(a), all such shares so awarded as of such Change in Control in the Company (or the shares previously awarded because such date is after the Measuring Period) shall be become fully vested and transferable.

(b) As a condition to the accelerated earning and vesting described in Section 4(a), the Grantee agrees, for a one-year period commencing on the date of the Change in Control of the Company the Grantee will not engage in Competitive Activities (as defined below).

(c) The Grantee agrees that the covenant contained in Section 4(b) of this Agreement is reasonably necessary to protect the legitimate interests of the Company and its affiliates, is reasonable with respect to time and territory and that Grantee has read and understands the description of the covenant so as to be informed as to its meaning and scope.

(d) The Company and the Grantee agree that in the event of the Grantee’s breach of Section 4(b), the Grantee will immediately pay the Company in cash an amount equal to the market value of the restricted Common Shares that received accelerated awarding, as compared to the awarding schedule set forth in Section 2, as a result of the operation of Section 4(a) (it being understood and agreed that shares that had already been awarded under Section 2 and that received accelerated vesting only with respect to Section 3 are not addressed by this sentence). Market value for purposes of the preceding sentence will be the market value as of the date of such acceleration. Such payment shall be the Company’s sole remedy for a breach of Section 4(b).

(e) In the event that the Grantee’s employment by the Company (or any of its affiliates) ceases by reason of the Grantee’s death, disability (disability to be determined in accordance with the Company’s then applicable long-term disability insurance policy plan),

6

retirement (retirement to be determined in accordance with then prevailing Company policy established by the Board), termination by the Company (or any of its affiliates) without Cause (as defined below) or termination by the Grantee for Good Reason (as defined below), then, (i) notwithstanding Section 2(b), the total number of shares that are awarded pursuant to Section 2 will be determined and will be awarded as of (i.e., the Measuring Period will end and performance will be measured as of) the date of such event (unless already awarded because such date is after the Measuring Period), provided that (x) the Target Amount will be reduced pro rata (based on the portion of the Measuring Period not yet elapsed relative to the total Measuring Period),