Exhibit 10.3
FBR CAPITAL MARKETS
CORPORATION
Form of Stock Option
Agreement
THIS STOCK OPTION AGREEMENT (this “ Agreement
”) between FBR CAPITAL MARKETS CORPORATION, a Virginia
corporation (the “ Company ”), and __________
(“ Participant ”), is made pursuant and subject
to the provisions of the Company’s 2006 Long-Term Incentive
Plan (the “ Plan ”), a copy of which has been
made available to Participant.
1.
Grant of Option.
Pursuant to the Plan, the Company, on August __, 2008 (the “
Date of Grant”), granted to Participant, subject to
the terms and conditions of the Plan and subject further to the
terms and conditions herein set forth, the right and Option to
purchase from the Company all or any part of an aggregate of _____
Shares at the option price of $____ per Share (the “
Option Price ”) which is not less than the Fair Market
Value on the Date of Grant. This Option is not intended to be an
“incentive stock option” under Section 422 of the
Code. This Option will be exercisable as hereinafter provided. All
capitalized terms that are defined in the Plan have the meaning
assigned by the Plan.
2.
Terms and
Conditions. This Option is subject to the following terms and
conditions:
(a)
Expiration Date.
This Option shall expire at 11:59 p.m. on the day preceding the
seventh anniversary of the Date of Grant (the “ Expiration
Date ”).
(b)
Exercise of
Option. This Option shall not be exercisable unless
Participant, before August 27, 2008, enters into a restrictive
covenant agreement in the form approved by the Committee. Subject
to the preceding sentence, this Option shall be exercisable
(“ Vested ”): (i) with respect to one-third
of the Shares subject to this Option on the third anniversary of
the Date of Grant; (ii) with respect to an additional one-third of
the Shares subject to this Option on the fourth anniversary of the
Date of Grant; and (iii) with respect to the remaining one-third of
the Shares subject to this Option on the fifth anniversary of the
Date of Grant. Once this Option becomes exercisable in accordance
with the preceding sentence, this Option shall continue to be
exercisable until the earlier of the termination of
Participant’s rights hereunder pursuant to Paragraphs 3, 4, 5
or 6 or until the Expiration Date. A partial exercise of this
Option shall not affect Participant’s right to exercise this
Option with respect to the remaining Shares purchasable under this
Option, subject to the terms and conditions of the Plan and this
Agreement.
(c)
Method of Exercise
and Payment for Shares. This Option shall be exercised in
accordance with the Plan by written notice to the Company’s
Stock Plan Administration designated agent, with a copy delivered
to the attention of the Company’s Chief Financial Officer at
the Company’s principal executive office. The exercise date
shall be (i) in the case of notice by mail, the date of
postmark, or (ii) if delivered in person, the date of
delivery. Such notice shall be accompanied by payment of the Option
Price in full, in cash or cash equivalent acceptable to the
Committee, or by the surrender of Shares that have been held by
Participant for at least six months with an aggregate Fair Market
Value (determined as of the preceding business day) which, together
with any cash or cash equivalent paid by Participant, is not less
than the product of Option Price and the number of Shares for which
the Option is being exercised.
(d)
Transferability.
During Participant’s lifetime, and subject to the provisions
of Section 12.3 of the Plan, this Option may not be
transferred, sold, assigned, pledged or otherwise encumbered, other
than by will or by the laws of descent and distribution, or
pursuant to a qualified domestic relations order, and such Option
may only be exercised during the life of Participant only by
Participant or Participant’s legal guardian and
representative. Notwithstanding the foregoing, Participant may
assign or transfer this Option with the consent of the Committee,
provided that such Permitted Assignee shall be bound by and subject
to all of the terms and co
