Restricted Stock Plan

EXHIBIT 10.26


CAPSTEAD MORTGAGE CORPORATION AND SUBSIDIARIES
1994 CAPSTEAD INC. RESTRICTED STOCK PLAN


CAPSTEAD INC.


1994 RESTRICTED STOCK PLAN


Section 1. PURPOSE OF THE PLAN


The purposes of the Capstead Inc. 1994 Restricted Stock Plan (the "Plan") are to promote the interests of Capstead Inc. (together with any successor thereto, the "Company") and its stockholders, including Capstead Mortgage Corporation ("CMC"), by enabling the Company and its Affiliates to attract, motivate, reward and retain key officers and to encourage the holding of proprietary interests in the Company by persons who occupy key positions in the Company or its Affiliates by enabling the Company and CMC to grant such key officers Restricted Stock in the Company as awards that recognize the creation of value for the stockholders of the Company and, therefore, for the stockholders of CMC and promote the Company's long-term growth and success.


Section 2. DEFINITIONS


As used in this Plan, the following terms shall have the meanings set forth below unless the content otherwise requires:


2.1 "Affiliate" shall mean (i) (a) any corporation, partnership or
other entity that, directly or indirectly, is controlled by the Company,
(b) any entity in which the Company has a significant equity interest, (c)
any entity that provides substantial management advisory services for the
Company, (d) any corporation, partnership or other entity that, directly or
indirectly, is controlled by CMC and (e) any entity in which CMC has a
significant equity interest, in each case as determined by the Committee,
and (ii) CMC.


2.2 "Award" shall mean a grant of Restricted Stock pursuant to this
Plan.


2.3 "Board" shall mean the Board of Directors of the Company, as the
same may be constituted from time to time.


2.4 "Book Value" shall mean with respect to the Shares, as of any
date, the book value of the Shares as of the end of the most recent
calendar quarter as determined by the Committee; provided however, that on
and after December 31, 2003, "Book Value" shall mean with respect to the
Shares, as of any date, the greater of (i) the book value of the Shares as
of the end of the most recent calendar quarter as determined by the
Committee and the (ii) the amount determined as described in clause (i)
adjusted as most recently determined by the Board in its sole discretion.


2.5 "Change in Control" shall mean, after the effective date of this
Plan, (i) the occurrence of an event of a nature that would be required to
be reported in response to Item 1 or Item 2 of a Form 8-K Current Report of
CMC promulgated pursuant to Sections 13 and 15(d) of the Exchange Act;
provided that, without limitation, such a Change in Control shall be deemed
to have occurred if (a) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than CMC, any trustee or other
fiduciary holding securities under any employee benefit plan of CMC, or any
company owned, directly or indirectly, by the stockholders of CMC in
substantially the same proportions as their ownership of stock of CMC), is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of CMC representing
twenty-five percent (25%) or more of the combined voting power of CMC's
then outstanding securities or (b) during any period of two consecutive
years, individuals who at the beginning of such period constitute the board
of directors of CMC cease for any reason to constitute at least a majority
thereof, unless the election by the board of directors of CMC or the
nomination for election by CMC's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved; (ii) the stockholders
of CMC approve a


merger or consolidation of CMC with any other corporation, other than a merger or consolidation that would result in the voting securities of CMC outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of CMC or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a reorganization or recapitalization of CMC, or a similar transaction (collectively, a "Reorganization"), in which no "person" acquires more than twenty percent (20%) of the combined voting power of CMC's then outstanding securities shall not constitute a Change in Control of CMC; or (iii) the stockholders of CMC approve a plan of complete liquidation of CMC or an agreement for the sale or disposition by CMC of all or substantially all of CMC's assets.


2.6 "CMC" shall mean Capstead Mortgage Corporation, a Maryland
corporation, together with any successor.


2.7 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.


2.8 "Committee" shall mean a committee of the Board consisting of
such number of members of the Board as the Board shall determine who are
appointed by, and serve at the pleasure of, the Board.


2.9 "Common Stock" shall mean the Class A Common Stock, par value
$.01 per share, of the Company.


2.10 "Company" shall mean Capstead Inc., a Delaware corporation,
together with any successor.


2.11 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.


2.12 "Initial Public Offering" shall mean the completion of the first
sale of shares of Common Stock by the Company pursuant to an effective
registration statement under the Securities Act of 1933, as amended, other
than a registration statement on Form S-4 of Form S-8 or successor or
similar forms, or the exchange of shares of Common Stock, pursuant to a
merger, reorganization or recapitalization involving the Company, for
consideration which includes securities which have been registered under
the Securities Act of 1933, as amended, or are otherwise publicly
tradeable.


2.13 "Plan" shall mean the Capstead Inc. 1994 Restricted Stock Plan
set forth herein.


2.14 "Recipient" shall mean an officer of the Company or an Affiliate
to whom an Award has been made under the Plan, or such individual's
designated beneficiary, surviving spouse, estate or legal representative;
provided, however, any such beneficiary, spouse, estate or legal
representative shall be considered as one person with the officer.


2.15 "Restricted Stock" shall mean any Shares granted under this Plan.


2.16 "Restricted Stock Agreement" shall mean any agreement between the
Company and a Recipient or between the Company, CMC and a Recipient
providing for an Award and the terms and conditions of such Award.


2.17 "Shares" shall mean shares of the Company's Common Stock and any
shares of capital stock or other securities of the Company hereafter issued
or issuable upon, in respect of or in substitution or exchange for such
Shares and shall include shares of the Company's stock that automatically
convert to the Company's Common Stock upon transfer from CMC to any other
person.


2.18 "Transfer" shall mean to offer, sell, transfer, assign, exchange,
pledge, encumber or otherwise dispose of in any manner.


Section 3. ADMINISTRATION OF THE PLAN


3.1 Committee. The Plan shall be administered and interpreted by the
Committee.


3.2 Duties and Authority of Committee. Subject to the provisions of
the Plan and directions from the Board, the Committee is authorized to:


(a) determine, with respect to Awards made by the Company, the
persons to whom Awards are to be made;


(b) determine, with respect to Awards made by the Company, the
number of Shares to be covered by the Award, the pricing of the
Restric ...