CAPSTEAD MORTGAGE CORPORATION NONQUALIFIED STOCK OPTION AGREEMENT FOR NON- EMPLOYEE DIRECTORS
EXHIBIT 10.2
CAPSTEAD MORTGAGE CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS
FOR NON-EMPLOYEE DIRECTORS
THIS AGREEMENT, made as of this [___]day of [_________], 20[___] (hereinafter called the “Date of
Grant”), between Capstead Mortgage Corporation, a Maryland corporation (hereinafter called the
“Company”), and [____________] (hereinafter called the “Optionee”):
R E C I T A L S:
The Company has adopted the 2004 Flexible Long-Term Incentive Plan (the “Plan”), which Plan is
incorporated herein by reference and made a part of this Agreement. Capitalized terms not
otherwise defined herein shall have the same meanings as in the Plan.
The Company has determined that it is in the best interests of the Company and its
stockholders to grant the option provided for herein to the Optionee pursuant to the Plan on the
terms set forth herein as an inducement to become or remain a director of the Company, to enable
the Optionee to participate in the long-term growth and financial success of the Company and as an
increased incentive to contribute to the Company’s future success and prosperity.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
hereto agree as follows:
1. Grant of the Option. (a) The Company hereby grants to the Optionee the right and
option to purchase, on the terms and conditions hereinafter set forth, [___] Shares (the
“Option”). The purchase price of the Shares subject to this Option shall be $[___] per Share (the
“Exercise Price”). This Option is not intended to be treated as an option that complies with
Section 422 of the Code, or any successor provision thereto.
2. Option Term. The term of the Option shall begin immediately and continue until the
tenth anniversary of the Date of Grant, subject to earlier termination as hereinafter provided.
(a) If the Optionee ceases to be a director of the Company or any Affiliate by reason of the
Optionee’s discharge for cause, all rights of the Optionee to exercise the Option shall terminate,
lapse and be forfeited immediately at the time of the Optionee’s discharge for cause.
(b) If the Optionee ceases to be a director of the Company or any Affiliate by reason of
death, the personal representatives, heirs, legatees or distributees of the Optionee, as
appropriate, shall have the right to exercise the Option up to the earlier of (i) six months from
the Optionee’s death or (ii) the remaining term of the Option.
(c) If the Optionee ceases to be a director of the Company or any Affiliate by reason of the
Optionee’s resignation, Retirement, Disability or for any reason other than the Optionee’s death or
discharge for cause, all rights of the Optionee to exercise the Option shall terminate,
lapse, and be forfeited upon the earlier of (i) six months after the date Optionee’s service
as a director of the Company terminates by reason of such director’s resignation, Retirement,
Disability or such other reason or (ii) the remaining term of the Option, except that in case the
Optionee shall die within six months after the date Optionee’s service as an Eligible Director of
the Company terminates by reason of such director’s resignation, Retirement, Disability or such
other reason, the personal representatives, heirs, legatees or distributees of the Optionee, as
appropriate, shall have the right up to an additional three months from the date of the Optionee’s
death to exercise the Option.
3. Exercise of Option.
(a) This Option is immediately exercisable. Each exercise of the Option, or any part thereof,
shall be evidenced by a notice in writing to the Company. The Exercise Price of the Shares as to
which the Option shall be exercised shall be paid in full at the time of exercise, and may be paid
to the Company either:
(1) in cash (including check, bank draft or money order); or
(2) by the delivery of Shares having a Fair Market Value equal to the aggregate
Exercise Price; provided, however, that such Shares, if acquired by the exercise of an
Option shall have been owned by the Optionee for more than six months prior to exercise; or
(3) by a combination of cash and Shares as described above; or
(4) by arrangement with a broker acceptable to the Committee in which payment of the
Exercise Price is made pursuant to an irrevocable direction from the Optionee to the broker
to deliver the Company proceeds from the sale of the option Shares in an amount equal to the
exercise price of the Shares.
(b) The Optionee shall not have any of the rights of a stockholder of the Company with respect
to the Shares covered by this Agreement except to the extent that one or more certificates of such
Shares shall have been delivered to the Optionee, or the Optionee has been determined to be a
stockholder of record by the Company’s Transfer Agent, upon due exercise of the Option granted
hereunder.
4. Adjustments Upon Changes in Capitalization or Reorganization. The number of Shares
subject to the Option shall be adjusted from time to time as follows:
(a) Subject to any required action by stockholders, the number of Shares subject to the option
granted hereunder, and the Exercise Price, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of the Company resulting from a subdivision or
consolidation of Shares or the payment of a stock dividend (but only in Shares) or any other
increase or decrease in the number of Shares effected without receipt of consideration by the
Company.
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(b) Subject to any required action by stockholders, if the Company shall be the surviving
corporation in any Reorganization, merger or consolidation, the Option granted hereunder shall
pertain to and apply to the securities to which a holder of the number of Shares subject to the
Option granted hereunder would have been entitled, and if a plan or agreement reflecting any such
event is in effect that specifically provides for the change, conversion or exchange of Shares,
then any adjustment to Shares subject to the Option granted hereunder shall not be inconsistent
with the terms of any such plan or agreement.
(c) In the event of a change in the Shares of the Company as presently constituted, which is
limited to a change of par value into the same number of Shares with a different par value or
without par value, the Shares resulting from any such change shall be deemed to be the Shares
within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or securities of the Company,
such adjustments shall be made by the Committee, whose determination shall be final, binding and
conclusive.
Except as otherwise specifically provided in this Agreement, the Optionee shall have no rights
by reason of any subdivision or consolidation of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, reorganization, merger or consolidation or spin-off of
assets or stock of another corporation, and any issued by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares
subject to the Option granted hereunder.
5. Non-Transferability of the Option. This Agreement, and the Option granted
hereunder, shall not be transferable otherwise than by will or the laws of descent and distribution
and may be exercised, during the lifetime of the Optionee, only by the Optionee; provided, however,
that this Agreement, and the Option granted hereunder, may be transferred to one or more members of
the immediate family of the Optionee or to a trust for the benefit of such person or as directed
under a qualified domestic relations order. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of this Agreement and the Option granted hereunder contrary to
the provisions hereof, or the levy of any execution, attachment or similar process upon this
Agreement, and the Option granted hereunder, shall be null and void and without effect.
6. Compliance with Securities and other Laws. In no event shall the Company be
required to issue Shares under the Option granted hereunder, if the issuance thereof would
constitute a violation of applicable federal or state securities laws or regulations or a violation
of any other law or regulation of any governmental or regulatory agency or authority or any
national securities exchange. As a condition to any issuance of Shares, the Company may place
legends on shares, issue stop transfer orders and require such agreements or undertakings as the
Company may deem necessary or advisable to assure compliance with any such laws or regulations,
including, if the Company or its counsel deems it appropriate, representations from the Optionee
that the Optionee is acquiring the Shares solely for investment and not with a view to distribution
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and that no distribution of the Shares will be made unless such shares are registered pursuant
to applicable federal and state securities laws, or in the opinion of counsel of the Company, such
registration is unnecessary.
7. Issuance of Shares. Upon the Company’s determination that the Option granted
hereunder has been validly exercised as to any of the Shares, the Committee shall, at its sole
discretion, cause the Secretary of the Company to issue certificates in the Optionee’s name for
such Shares. The Company shall not be liable to the Optionee for damages relating to any delays in
issuing the certificates, if any, to the Optionee, any loss of the certificates, or any mistakes or
errors in the issuance of the certificates or in the certificates themselves.
8. Alternative Award for Cancellation of the Option. For purposes of this Agreement,
the payment to the Optionee of an alternative award or an amount in cash pursuant to the terms of
Section 16 of the Plan in consideration of the cancellation of the Option granted hereunder shall
extinguish any rights of the Optionee in connection with this Agreement.
9. Notices. Any notice necessary under this Agreement shall be in writing, signed by
the party giving or making the same, and addressed (a) to the Company in the care of its President
or Secretary at the principal executive office of the Company in Dallas, Texas, (b) to the Optionee
at the address appearing in the personnel records of the Company for such Optionee or (c) to either
party at such other address as either party hereto may hereafter designate in writing to the other.
Except as otherwise provided herein, any such notice shall be deemed effective upon receipt
thereof by the addressee.
10. Choice of Law. THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND.
11. Option Subject to Plan. The Option is subject to the Plan. The terms and
provisions of the Plan as it may be amended from time to time are hereby incorporated herein by
reference. In the event of a conflict between any term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
12. Amendment of Agreement. This Agreement may be amended, altered, suspended,
discontinued or terminated by the Committee; provided that no such amendment, alteration suspension
or termination shall materially impair the rights of the Optionee hereunder without the consent of
the Optionee.
13. Administration of Plan and Agreement. Any determinations or decisions made or
actions taken arising out of or in connection with the interpretation and administration of the
Plan and this Agreement by the Committee shall be final and conclusive.
14. Execution in Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original for all purposes and both of which taken together shall
constitute but one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Date of Grant.
By execution of this Agreement, the Optionee acknowledges receipt of a copy of the Plan, the
Company’s Annual Report on Form 10-K for the year ended December 31, 20[___] and the informational
supplement required by Rule 428(b)(1) under the Securities Act of 1933.
| CAPSTEAD MORTGAGE CORPORATION |
||||
| By: | ||||
| Xxxxxx X. Xxxxxx | ||||
| President and Chief Executive Officer | ||||
| [OPTIONEE] | ||||
| [_____________________] | ||||
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CAPSTEAD MORTGAGE CORPORATION
RESTRICTED STOCK AGREEMENT
FOR NON-EMPLOYEE DIRECTORS
FOR NON-EMPLOYEE DIRECTORS
THIS AGREEMENT made and entered into as of the [___] day of [______], 20[___] (hereinafter called
the “Award Date”), by and between Capstead Mortgage Corporation, a Maryland corporation (the
“Company”), and [____________] (the “Grantee”).
WHEREAS, the Company, having determined that its interests will be advanced by providing an
incentive to the Grantee to increase the performance of the Company and its Affiliates, has awarded
to the grantee a restricted stock award conditioned upon the execution by the Company and the
Grantee of a Restricted Stock Agreement.
THEREFORE, in consideration of the mutual promise(s) and covenant(s) contained herein, the
parties hereby agree as follows:
SECTION 1. GRANT.
1.1 Grant and Acceptance. The Company does hereby grant and transfer to the Grantee,
for no cash consideration from the Grantee, and the Grantee does hereby accept from the Company, an
aggregate of [___] shares (the “Award Shares”) of the Common Stock, $0.01 par value per share, of
the Company (the “Common Stock”) according to the terms and conditions and subject to the
restrictions hereinafter set forth.
1.2 Effect of Plan. The Award Shares shall constitute Restricted Stock and this grant
shall constitute an Award, each as defined in the Company’s 2004 Flexible Long-Term Incentive Plan
(the “Plan”). This Agreement is expressly subject to the terms and provisions of the Plan and in
the event there is a conflict between the terms of the Plan and this Agreement, the terms of the
Plan shall control. All undefined capitalized terms used herein shall have the meanings assigned
in the Plan. The Award is subject to all laws, approvals, requirements and regulations of any
governmental authority which may be applicable thereto.
SECTION 2. RIGHTS IN SHARES. The Grantee, for the duration of this Agreement, shall
be the record owner of, and shall be entitled to vote, the Award Shares and shall be entitled to
receive all dividends and any other distributions declared on the Award Shares (provided, however,
that nothing contained herein shall cause the Company to declare any such dividends or to make any
such distributions).
SECTION 3. VESTING.
3.1 Vesting. The Award Shares shall vest (become nonforfeitable) in accordance with
the schedule set forth below:
| Percentage of Shares | Cumulative | |||
| Date | Vested on Specified Date | Percentage of Shares | ||
[_________]
|
[___] | [___] | ||
[_________]
|
[___] | [___] | ||
[_________]
|
[___] | [___] | ||
[_________]
|
[___] | [___] |
provided, however, that notwithstanding the foregoing schedule, and except as otherwise provided in
Sections 3.2, 3.3 and 3.4 below, no additional Award Shares shall vest after termination of
Grantee’s directorship with the Company or any Affiliate for any reason (including termination by
reason of voluntary or involuntary discharge, Disability or Retirement) in which case the Grantee
shall, at the time of termination, forfeit all right, title and interest in and to any Award Shares
not then vested.
3.2 Effect of Grantee’s Death. If the Grantee ceases to be a director of the Company
or any Affiliate by reason of death, any and all outstanding Award Shares not fully vested shall
automatically vest in full and the personal representatives heirs, legatees or distributees of the
Grantee, as appropriate, shall become fully vested in the Award Shares effective on the date of the
Grantee’s death.
3.3 Effect of Dissolution or Liquidation. In the event of the dissolution or
liquidation of the Company, any and all outstanding Award Shares not fully vested shall
automatically vest in full immediately prior to such dissolution or liquidation.
3.4 Effect of Change of Control. In the event of a Change in Control (as defined in
the Plan), any and all outstanding Award Shares not fully vested shall automatically vest in full.
The date on which such accelerated vesting shall occur shall be the date of the occurrence of the
Change in Control.
3.5 Effect of Forfeiture. Any Award Shares forfeited pursuant to Section 3.1 shall
revert to the Company.
SECTION 4. STOCK CERTIFICATES. Upon grant of the Award Shares, the Company shall
cause its Transfer Agent to record Grantee’s ownership of such Award Shares in book entry form. As
Award Shares vest hereunder, such Award Shares shall be transferred into an unrestricted account in
the name of the Grantee or, at the request of the Grantee, issued in stock certificate form. Any
such certificates shall be unencumbered by any of the restrictions enumerated herein other than
such restrictions as may be imposed by applicable federal or state securities laws and regulations.
SECTION 5. TRANSFER AND REPURCHASES UPON TERMINATION.
5.1 The unvested Award Shares shall not be offered, sold, transferred, assigned, exchanged,
pledged, encumbered or otherwise disposed of (each, a “Transfer”) for any purpose whatsoever, other
than to the Company, and shall not be subject, in whole or in part, to execution, attachment, or
similar process in all such cases until the date of vesting. Any attempted Transfer of
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the unvested Award Shares, other than in accordance with the terms set forth herein, shall be
void and of no effect.
5.2 Grantee acknowledges that any sale, assignment, transfer or other disposition of vested
Award Shares may be subject to restrictions contained in applicable federal or state securities
laws and regulations and that any such sale, assignment, transfer or other disposition of Award
Shares by him or her will be in compliance with such laws and regulations.
SECTION 6. WITHHOLDINGS. The Company and each Affiliate shall have the right to
retain and withhold from any payment (including the vesting) of Award Shares (and any dividends on
Award Shares) any amounts required to be withheld or otherwise deducted and paid with respect to
such payment (including the vesting thereof). At its discretion, the Company and each Affiliate
may require the Grantee receiving Award Shares to reimburse the Company or any Affiliate for any
such taxes required to be withheld by the Company or the Affiliate and withhold any distribution in
whole or in part until the Company and each Affiliate is so reimbursed. In lieu thereof, the
Company and each Affiliate shall have the right to withhold from any other cash amounts due or to
become due from the Company or the Affiliate to the Grantee an amount equal to such taxes required
to be withheld by the Company or the Affiliate as reimbursement for any such taxes or retain and
withhold a number of shares having a market value not less than the amount of such taxes in order
to reimburse the Company or the Affiliate for any such taxes.
SECTION 7. ADJUSTMENTS TO AWARD SHARES.
7.1 Stock Dividends and Splits and Similar Transactions. Subject to any required
action by the Company’s Board of Directors and stockholders, the number of Award Shares shall be
proportionately adjusted for any increase or decrease in the number of issued Shares of the Company
resulting from the payment of a Share dividend, a Share split, a Share reverse-split or any similar
transaction.
7.2 Change in Par Value. In the event of a change in the Company’s Shares which is
limited to a change of all of its authorized shares with par value into the same number of shares
with a different par value or without par value, the shares resulting from any such change shall be
deemed to be shares within the meaning of the Plan.
7.3 Other Capital Adjustments. Except as hereinbefore expressly provided in Section
7.1 and except for rights that all holders of Common Stock shall have, Grantee shall have no rights
by reason of any subdivision or consolidation of Shares of any class or payment of any share
dividend or any other increase or decrease in the number of shares of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock of another
corporation; any issuance by the Company of Shares of any class, or securities convertible into
Shares of any class, shall not affect the Award, and no adjustment by reason thereof shall be made
with respect to the number or price of the Company’s Shares subject to the Award. An Award of
Restricted Stock shall not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell or transfer all or any part of its business or
assets.
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SECTION 8. GRANTEE’S REPRESENTATIONS AND WARRANTIES. Grantee represents and warrants
that:
(a) such Grantee has not and will not, directly or indirectly, Transfer any Award Shares
except in accordance with the terms of this Agreement;
(b) such Grantee has, or such Grantee together with such Grantee’s advisors, if any, have such
knowledge and experience in financial, business and tax matters that such Grantee is, or such
Grantee together with such Grantee’s advisors, if any, are capable of evaluating the merits and
risks relating to such Grantee’s investment in the Award Shares and making an investment decision
with respect to the Company;
(c) such Grantee has been given the opportunity to obtain information and documents relating
to the Company and to ask questions of and receive answers from representatives of the Company
concerning the Company and such Grantee’s investment in the Award Shares; and
(d) such Grantee realizes that there are substantial risks incident to an investment in the
Award Shares.
SECTION 9. IMPACT ON OTHER BENEFITS. The value of the Award Shares (either on the
Award Date or at the time the shares are vested) shall not be includable as compensation or
earnings for purposes of any other benefit plan offered by the Company.
SECTION 10. ADMINISTRATION. The Committee shall have full authority and discretion
(subject only to the express provisions of the Plan) to decide all matters relating to the
administration and interpretation of the Plan and this Agreement. All such Committee
determinations shall be final, conclusive, and binding upon the Company, the Grantee, and any and
all interested parties.
SECTION 11. AMENDMENT(S). This Agreement shall be subject to the terms of the Plan,
as amended from time to time, except that the Award that is the subject of this Agreement may not
in any way be restricted or limited by any amendment or termination approved after the Award Date
without the Grantee’s written consent.
SECTION 12. FORCE AND EFFECT. The various provisions of this Agreement are severable
in their entirety. Any determination of invalidity or unenforceability of any one provision shall
have no effect on the continuing force and effect of the remaining provisions.
SECTION 13. GOVERNING LAWS. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Maryland.
SECTION 14. MISCELLANEOUS.
14.1 Any notice necessary under this Agreement shall be in writing, signed by the party
giving or making the same, and addressed (a) to the Company in the care of its President or
Secretary at the principal executive office of the Company in Dallas, Texas, (b) to the Grantee at
the address appearing in the personnel records of the Company for such Grantee or (c) to either
party at
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such other address as either party hereto may hereafter designate in writing to the other.
Except as otherwise provided herein, any such notice shall be deemed effective upon receipt thereof
by the addressee.
14.2 This Agreement may be executed in counterparts, each of which shall be deemed an
original for all purposes and both of which taken together shall constitute but one and the same
instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date hereof. By
execution of this Agreement, the Grantee acknowledges receipt of a copy of the Plan, the Company’s
Annual Report on Form 10-K for the year ended December 31, 20[___] and the informational supplement
required by Rule 428(b)(1) under the Securities Act of 1933.
| CAPSTEAD MORTGAGE CORPORATION |
||||
| By: | ||||
| Xxxxxx X. Xxxxxx | ||||
| President and Chief Executive Officer | ||||
| [GRANTEE] | ||||
| [_____________________] | ||||
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