Exhibit 10.3
FBR CAPITAL MARKETS
CORPORATION
Form of Non-Qualified Stock
Option Agreement
THIS STOCK OPTION
AGREEMENT (this “
Agreement ”), dated as of the __ day of _______, 2006,
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 _______, 2006 (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 ”). 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.
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 tenth
anniversary of the Date of Grant (the “ Expiration
Date ”).
(b) Exercise of Option. This
Option shall be fully exercisable (“ Vested ”):
(i) on and after the third anniversary of the Date of Grant
and upon the attainment of the performance goals established by the
Committee and set forth on Schedule A hereto (the “
Performance Goals ”) or (ii) upon a Change in
Control that occurs on or before the third anniversary of the Date
of Grant. Once this Option becomes exercisable in accordance with
clause (i) or clause (ii) of 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 or 5 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 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 conditions of the Plan and this Agreement relating to the
transferred Option and shall execute an agreement satisfactory to
the Company evidencing such obligations.
3. Exercise in the
