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INVESCO MORTGAGE CAPITAL INC. 2009 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT
Non-transferable

Award to

 
[Grantee Name]
(“Grantee” or “you”)

by Invesco Mortgage Capital Inc. (“Company”) of

[Number of Shares Granted]
Restricted Stock Units (“Grant”)

as of [Award Date] (“Award Date”)

Subject to the conditions of the Invesco Mortgage Capital Inc. 2009 Equity
Incentive Plan (“Plan”) and this Award Agreement, the Company hereby awards to
you the number of Restricted Stock Units set forth above, which shall become
vested and non-forfeitable in four (4) equal installments on each anniversary of
the Award Date.
 
 
This Grant shall be effective as of the Award Date set forth above.  By
accepting this Award Agreement, you acknowledge that you have received a copy of
the Plan’s prospectus, that you have read and understood the following Terms and
Conditions, which are incorporated herein by reference, and that you agree to
the following Terms and Conditions and the terms of the Plan and this Award
Agreement, which may be amended only by a written agreement signed by the
Company and you.  If you fail to accept this Award Agreement within sixty (60)
days of the Award Date set forth above, the Company may determine that this
Grant has been forfeited.

IN WITNESS WHEREOF, each of the Company and Grantee has caused this Award
Agreement to be executed as of the Award Date.

INVESCO MORTGAGE CAPITAL INC.
 
GRANTEE:
 
 
_____________________________
   
By:  Authorized Signatory
   

Continued on the following page

ATL01/12108087v2
 
 

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TERMS AND CONDITIONS – Restricted Stock Units
 
1. Plan Controls; Restricted Stock Units.  The terms contained in the Plan are
incorporated into and made a part of this Award Agreement, and this Award
Agreement shall be governed by and construed in accordance with the Plan.  The
term “Restricted Stock Units” (or “RSUs”) means a contractual obligation of the
Company to transfer a number of Shares to the Grantee equal to the number of
RSUs awarded under the Grant in accordance with the terms of this Award
Agreement.  Unless the context otherwise requires, and solely for purposes of
these Terms and Conditions, the term (i) “Company” means Invesco Mortgage
Capital Inc., its Subsidiaries, and their respective successors and assigns;
(ii) “Manager” means Invesco Advisers, Inc., its Affiliates other than the
Company, and their respective successors and assigns; (iii) and “Affiliate”
means a corporation or other entity controlled by, controlling or under common
control with, Invesco Advisers, Inc.  Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Plan.
 
2. Restrictions.  RSUs may not be sold, assigned, transferred, pledged or
otherwise encumbered.  Upon your Termination of Service (as defined below) for
any reason other than as set forth in paragraphs (b)-(f) of Paragraph 3 hereof,
you shall forfeit all of your right, title and interest in and to the RSUs which
remain unvested as of the date of your Termination of Service.
 
Notwithstanding any provision of the Plan, for purposes of this Award Agreement,
“Termination of Service” means the termination of your employment or consultancy
with, or performance of services for, the Manager.
 
3. Vesting and Conversion to Shares.  The RSUs will vest and be deemed earned
and payable in full upon the earliest to occur of the following (the “Vesting
Date”):
 
(a)
upon the dates specified on page 1 hereof, provided that you have not
experienced a Termination of Service prior to such respective dates, or

(b)
in the event of your Termination of Service due to Retirement (as defined below)
occurring more than three (3) years after the Award Date, and upon your
continued compliance with the covenants set forth herein, on the dates specified
on page 1 hereof, or

(c)
upon your Termination of Service due to death or Disability (as defined below),
or

(d)
upon your involuntary Termination of Service, other than for Cause (as defined
below) or Disability, and your execution and delivery of a severance agreement
in the form stipulated by the Manager (and any applicable period for revoking
such severance agreement having expired) within 60 days after your Termination
of Service, or

(e)
in the event of a Change in Control (as defined below), immediately prior to a
Change in Control if this Award Agreement is not assumed, converted or replaced
in connection with the transaction that constitutes the Change in Control,
provided, however, that the RSUs will not vest automatically upon a Change in
Control as provided in Section 16 of the Plan, or

(f)
in the event of a Change in Control (as defined below), upon your Termination of
Service during the 24-month period following the Change in Control either (i) by
the Manager other than for Cause or Disability, or (ii) by you for Good Reason
(as defined below), or

 
(g) upon the termination of the management agreement between Invesco Mortgage
Capital Inc. and Invesco Advisers, Inc.

Notwithstanding any provision of the Plan, for purposes of this Award Agreement,
“Retirement” means your Termination of Service other than for Cause after the
attainment of age fifty-five (55) and at least ten years of service.
 
Notwithstanding any provision of the Plan, for purposes of this Award Agreement,
“Disability” means, with respect to you, (i) a “disability” (or words of similar
meaning) as defined in any written employment, consulting or similar agreement
between you and the Manager (an “Individual Agreement”) or (ii) if there is no
such agreement or it does not define “disability” (or words of similar meaning),
(A) a permanent and total disability as determined under the Manager’s long-term
disability plan applicable to you or (B) if there is no such plan applicable to
you, “Disability” as determined by the Committee.  The Committee may require
such medical or other evidence as it deems necessary to judge the nature and
permanency of your condition.
 
Notwithstanding any provision of the Plan, for purposes of this Award Agreement,
“Cause” means (i) if you are a party to an Individual Agreement at the time of
your Termination of Service that defines such term (or words of similar
meaning), the meaning given in such Individual Agreement or (ii) if there is no
such Individual Agreement, or if it does not define Cause (or words of similar
meaning):  (A) your commission of (1) a felony (or its equivalent in a
non-United States jurisdiction) or (2) other conduct of a criminal nature that
has or is likely to have an adverse effect on the reputation or standing in the
community of the Manager or the Company or that legally prohibits you from
working for the Manager; (B) breach by you of a regulatory rule that adversely
affects your ability to perform your principal employment duties for the
Manager; or (C) deliberate failure on your part (1) to perform your principal
employment duties, (2) to comply with the material policies of the Manager, (3)
to follow specific reasonable directions received from the Manager or (4) to
comply in all material respects with covenants contained in any Individual
Agreement or this Award Agreement.
 
For purposes of paragraph (e) of this Paragraph 3, “Change in Control” has the
meaning assigned to such term in the Plan.  For all other purposes of this Award
Agreement, including paragraph (f) of this Paragraph 3 and the definition of
Good Reason set forth below, Change in Control means a “Change in Control” of
Invesco Ltd. as defined under the Invesco Ltd. 2008 Global Equity Incentive
Plan, as amended from time to time.
 
“Good Reason” means, during the 24-month period following a Change in Control,
actions taken by the Manager resulting in a material negative change in your
employment relationship with the Manager including, without limitation: (i) the
assignment to you of duties materially inconsistent with your position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities, or a material diminution in such position,
authority, duties or responsibilities, in each case from those in effect
immediately prior to the Change in Control; (ii) a material reduction of your
aggregate annual compensation, including, without limitation, base salary and
annual bonus, from that in effect immediately prior to the Change in Control;
(iii) a change in your principal place of employment that increases your commute
by 40 miles or materially increases the time of your commute as compared to your
commute immediately prior to the Change in Control; or (iv) any other action or
inaction that constitutes a material breach by the Manager of any Individual
Agreement.  In order to invoke a Termination of Service for Good Reason, you
must provide written notice to the Office of the General Counsel of the Manager
of the existence of one or more of the conditions constituting Good Reason
within ninety (90) days following your knowledge of the initial existence of
such condition or conditions, specifying in reasonable detail the conditions
constituting Good Reason, and the Manager shall have thirty (30) days following
receipt of such written notice (the “Cure Period”) during which it may remedy
the condition.
 
Unless the RSUs are forfeited before the Vesting Date, the RSUs will be
converted on the Vesting Date into an equal number of Shares that will be
registered in your name and delivered to you.
 
4. No Shareholder Rights; Payment in Lieu of Dividends.  Grantee shall have none
of the rights of a shareholder of the Company with respect to the RSUs,
provided, however, that if and when cash dividends are paid with respect to the
Shares while the RSUs are outstanding, the Manager shall pay to you as
additional compensation an amount in cash equal to the amount of such dividends
with respect to the number of Shares then underlying the RSUs.
 
5. Employment Matters.  In consideration of this Grant, you hereby promise to
honor and to be bound by the Plan and this Award Agreement, which serve as the
agreed basis for your Grant.  You further agree that this Award Agreement is
entered into and is reasonably necessary to protect the Manager’s investment in
your advancement opportunity, training and development and to protect the
goodwill and other legitimate business interests of the Manager.  You also agree
that, in consideration of the confidential information, trade secrets, and
training and development provided to you, you will abide by the restrictions set
forth in this Paragraph 5, and further agree and acknowledge that the
restrictions set forth in this Paragraph 5 are reasonably necessary to protect
the confidential and trade secret information provided to you.

5.1 Notice Period.  During your employment with the Manager, you and, in the
absence of Cause, the Manager shall be required to give to the other [xxx (x)]
months’ advance written notice of the intent to terminate your employment
relationship (the “Notice Period”).  Your employment with the Manager shall not
terminate until the expiration of the Notice Period, provided, however, the
Manager shall have the right, in its sole discretion, to relieve you of all of
your duties and responsibilities by placing you on paid administrative leave
during the Notice Period and shall not be required to provide you with work or
access to the Manager's offices during such leave.  You shall be entitled to
continue to receive full compensation and participate in applicable employee
benefit plans and arrangements for the entire Notice Period, regardless of
whether the Manager exercises its right to place you on paid administrative
leave.  You are prohibited from working in competition with the Manager, or
taking affirmative steps to assist or establish a competitive firm, during the
Notice Period.  Notwithstanding the foregoing, at any time during your
employment relationship the Manager may, effective immediately and without the
benefit of the Notice Period, terminate the employment relationship for
Cause.  Your employment shall terminate on the earlier of (i) your termination
of employment by the Manager for Cause, and (ii) expiration of the Notice Period
(the “Termination Date”).
 

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5.2 Nondisclosure.  You agree that, in the event of your Termination of Service
for any reason,  whether during or following the Restriction Period (as defined
below), you shall not, for a period of  six (6) months following the Termination
Date (the “Nondisclosure Period”) directly or indirectly transmit or disclose
any Confidential Information (as defined below) or Trade Secrets (as defined
below) to any person or make use of any such Confidential Information or Trade
Secret without the prior written consent of the Manager or the Company (as
appropriate), provided, however, that Trade Secrets shall remain protected for
so long as they remain Trade Secrets under applicable law. “Restriction Period”
means the period commencing with the Award Date and ending upon the expiration
of all vesting conditions applicable to the RSUs.  “Trade Secret” means
information with respect to the Company or the Manager that is defined as a
trade secret by the Georgia Trade Secrets Act and shall be deemed to include all
customer information – including without limitation all information pertaining
to customer identity, customer account numbers and/or assets in customer
accounts.  “Confidential Information” means all information regarding the
Company, the Manager or their respective business or customers that is not
generally known to persons not employed by the Manager but that does not rise to
the level of a Trade Secret, that is not generally disclosed to non-employees,
and that is the subject of reasonable efforts to protect its confidentiality,
provided, however, that “Confidential Information” does not include information
that has become generally available to the public by the act of a person who has
the right to disclose such information.
 
5.3 Nonrecruitment; Nonsolicitation.  You agree that, in the event of your
Termination of Service for any reason, whether during or following the
Restriction Period, you shall not, for a period of six (6) months following the
Termination Date (the “Covenant Period”), directly or indirectly, individually
or in concert with any other person or entity (i) recruit, induce or attempt to
recruit or induce any employee of the Manager with whom you worked or otherwise
had Material Contact (as defined below) during your employment to leave the
employ of the Manager or otherwise lessen that party’s affiliation with the
Company or the Manager, or (ii) solicit, divert, take away or attempt to
solicit, divert or take away any then-current client or customer of the Company
or the Manager with whom you had Material Contact during your employment for
purposes of offering, providing, or selling investment management products or
services offered by the Company or the Manager at the date of your Termination
of Service that were offered, provided, and/or sold by you on the Company’s or
Manager’s behalf.  For purposes of this provision, you had “Material Contact”
with an employee if (i) you had a supervisory relationship with the employee or
(ii) you worked or communicated with the employee on a regular basis; and you
had “Material Contact” with a client or customer if (i) you had business
dealings with the client or customer on behalf of the Company or the Manager or
(ii) you supervised or coordinated the dealings between the Company or the
Manager, on the one hand, and the client or customer, on the other hand.
 
5.4 Works for Hire.  You acknowledge that in the course of your employment with
the Manager, you may from time to time create or have created copyrightable or
patentable works for the Manager.  All such works related to or useful in the
business of the Manager are specifically intended to be works made for hire by
you for the benefit of the Manager.  You hereby irrevocably transfer and assign
to the Manager all right, title and interest in or to any and all documentation,
information or materials conceived, discovered, developed or created by you in
the course of your employment with the Manager, whether or not the same would
otherwise constitute “works made for hire” under applicable law.
 
5.5 Enforceability of Covenants.  You acknowledge that the Manager and the
Company have a current and future expectation of business from the current and
proposed customers of the Manager and the Company.  You acknowledge that the
term and scope of the covenants set forth herein are reasonable, and you agree
that you will not, in any proceeding, assert the unreasonableness of the
premises, consideration or scope of the covenants set forth herein.  You agree
that if any portion of the foregoing covenants is deemed to be unenforceable
because any of the restrictions contained in this Award Agreement are deemed too
broad, the court shall be authorized to substitute an enforceable term or
otherwise modify the Award Agreement in a manner that will enable the
enforcement of the covenants to the maximum extent possible under applicable
law.  You agree that any breach of these covenants will result in irreparable
damage and injury to the Manager and the Company and that the Manager and the
Company will be entitled to injunctive relief without the necessity of posting
any bond.  You also agree that you shall be responsible for all damages incurred
by the Manager and the Company due to any breach of the restrictive covenants
contained in this Award Agreement and that the Manager and the Company shall be
entitled to have you pay all costs and attorneys’ fees incurred by the Manager
and the Company in enforcing the restrictive covenants in this Award Agreement.
 
5.6 Relationship to Other Agreements.  In the event of any actual or alleged
conflict between the provisions of (i) this Award Agreement and (ii) any
applicable Individual Agreement or other agreement regarding your employment
with the Manager (collectively, the “Other Agreement”), the provisions hereof
shall control and, to the extent necessary, be deemed an amendment of such Other
Agreement, provided, however, that if the Notice Period, Nondisclosure Period or
the Covenant Period referred to in this Paragraph 5 is of shorter duration than
that provided in the Other Agreement, the Notice Period,  Nondisclosure Period
or Covenant Period (as applicable) set forth in the Other Agreement shall apply.
 
6. Employee Data Privacy. By signing this Award Agreement, you (a) explicitly
consent to the collection, use and transfer, in electronic or other form, of any
of your personal data that is necessary to facilitate the administration of your
Grant and the Plan, (b) agree that the Company and the Manager may, for the
purpose of administering the Plan, hold certain personal information about you,
including without limitation your name, home address and telephone number, date
of birth, social insurance or other identification number, salary, nationality,
job title, and details of all awards or entitlements to Shares granted to you
under the Plan or otherwise (“Data”), (c) agree that Data may be transferred to
any third parties assisting in the implementation, administration of the Plan,
including any broker with whom the Shares issued upon vesting of the Grant may
be deposited, and that these recipients may be located in your country or
elsewhere, and that the  recipient’s country may have different data privacy
laws and protections than your country; (d) waive any data privacy rights you
may have with respect to the Data, and (e) authorize the Company and the Manager
and their respective agents to store and transmit the Data in electronic form.
 
7. Code Section 409A.  It is the intention of the Manager and the Company that
the Grant shall not constitute a “nonqualified deferred compensation plan”
subject to Section 409A of the Code, and the Plan and the terms and conditions
of this Award Agreement shall be interpreted accordingly.  Notwithstanding
anything herein to the contrary, in the event you are eligible for Retirement,
the Vesting Date under Section 3(b) of this Award Agreement shall not be later
than March 1 of the tax year following the later of (i) the tax year in which
you become eligible for Retirement or (ii) the tax year in which the third
anniversary of the Award Date occurs.  In addition, notwithstanding any other
provision of the Plan or this Award Agreement to the contrary, in the event that
any amounts payable pursuant to Section 5.1 of this Award Agreement constitute
nonqualified deferred compensation subject to Section 409A of the Code, the
payment thereof upon the Grantee’s Separation from Service (as defined under
Section 409A of the Code) shall be delayed until the first day of the seventh
month following the Grantee’s Separation from Service if the Grantee is a
“specified employee” within the meaning of Section 409A of the Code (as
determined in accordance with the uniform policy adopted by the Committee with
respect to all of the arrangements subject to Section 409A of the Code
maintained by the Company).
 
8. Notice.  Notices and communications under this Award Agreement must be in
writing and either personally delivered or sent by registered or certified mail,
return receipt requested, postage prepaid.  Notices to the Company or the
Manager must be addressed to Invesco, Manager, Executive Compensation, 1555
Peachtree Street, NE, Atlanta, Georgia 30309, or to any other address designated
by the Manager in a written notice to you.  Notices to you will be directed to
your address then currently on file with the Manager, or to any other address
given by you in a written notice to the Manager.

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