CAPSTEAD MORTGAGE
CORPORATION
NONQUALIFIED STOCK OPTION
AGREEMENT
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”):
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.
(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
3
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 amou
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