Document:

FORM OF EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT

 Exhibit 10.26 
 FORM OF 
 EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT 
 EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this      day of
            , 200  , by and between Teradyne, Inc., a Massachusetts corporation (“Teradyne”), and the undersigned executive officer of Teradyne
(“Employee”). 
 WITNESSETH: 
 WHEREAS, Teradyne and Employee desire to set forth certain terms and conditions relating to benefits to be afforded to Employee upon the occurrence of a Change in Control (as hereinafter defined) of Teradyne;

 NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows: 
 1. Entitlements Upon a Termination Event. During the Term, if within twenty-four (24) months following
a Change in Control or in contemplation of a Change in Control there is a Termination Event, Employee shall be entitled to the rights, payments and other benefits set forth below: 
 (a) Treatment of Awards. Equity Awards that are not subject to Performance Criteria shall be governed by Section 1(b) below, and Cash
Awards and Equity Awards that are subject to Performance Criteria shall be governed by Section 1(c) below. The parties hereto acknowledge that, except as otherwise provided herein, the terms of this Agreement are intended to modify the terms of
Employee’s existing Cash Award and Equity Award agreements and to be a supplement to Cash Award and Equity Award agreements granted on or subsequent to the date hereof. 
 (b) Acceleration of Equity Awards. All of Employee’s unvested or unexercisable Equity Awards or Equity Awards subject to restrictions on
transfer imposed by Teradyne or repurchase rights in favor of Teradyne, as applicable, granted prior to, on, or after the date hereof (but only (I) such Equity Awards as have been granted to Employee by Teradyne as of the date of the Change in
Control or (II) such Equity Awards as have been assumed by an acquiring company at the time of a Change in Control or such new cash and equity awards that have been substituted by an acquiring company for Equity Awards existing at the time of a
Change in Control, each pursuant to the terms of any Teradyne incentive plan) shall automatically become fully vested, exercisable or free of restrictions on transfer imposed by Teradyne or repurchase rights in favor of Teradyne, as applicable, as
of the date of such Termination Event, and all Equity Awards granted on or after the date hereof shall, to the extent applicable, remain exercisable for the remainder of the generally applicable term of such Equity Award. 

 (c) Satisfaction of Performance Criteria. All of Employee’s Cash Awards and Equity
Awards that are subject to Performance Criteria shall be settled and paid in the following manner: Employee shall be deemed to have satisfied the necessary percentage of the Performance Criteria to which such Cash Awards and Equity Awards are
subject as of the date of the Termination Event, that will provide Employee with the target level of such Cash Awards and Equity Awards; and Employee shall be entitled to receive that portion of each Cash Award and Equity Award payable, at the
target level. For purposes of the Cash Awards, the payment shall be multiplied by a fraction, the numerator of which shall be the number of calendar months that have passed during the period in which the Performance Criteria are to be measured
(treating the month in which the Termination Event occurs as a full calendar month) and the denominator of which shall be the total number of calendar months in such period. For purposes of this Agreement, “target level” is that percentage
of the Performance Criteria established at the beginning of the calendar year in order for the Employee to achieve model compensation. Unless otherwise required under Section 1(e) below, such Cash Awards and Equity Awards shall be paid to
Employee or the restrictions on transfer removed not later than 10 days following the Termination Event. 
 (d) Salary Continuation. Unless otherwise required under Section 1 (e) below, Teradyne shall pay Employee a monthly amount equal to 1/12th of Employee’s current annual Model Compensation as of the Termination Event for a period of 24 months following the date of the Termination Event. In the
event a Termination Event constitutes termination for Good Reason on account of a material reduction in Model Compensation, the payment obligation pursuant to this Section 1(d) shall be calculated without giving effect to any such reductions in
Model Compensation. All such continued payments shall be made in accordance with Teradyne’s customary pay practices. 
 (e) Deferred
Compensation. Notwithstanding any other provision of this Agreement, if the Employee is a “key employee” as defined in Section 416(i) of the Code without regard to paragraph 5 thereof, all payments, benefits, or removal of
restrictions on the transfer of equity under this Agreement with respect to separation from service that constitute compensation deferred under a nonqualified deferred compensation plan as defined in Section 409A of the Code to which such key
employee would otherwise be entitled during the first six months following the date of separation from service shall be made on the first day of the seventh month after the date of separation from service (or, if earlier, the date of death of the
Employee). 
 (f) Benefit Continuation. During the twenty-four (24) month salary continuation period described in
Section 1(d) above, Teradyne shall arrange or provide for continued health, dental and vision insurance plan coverage for the Employee at the same levels of coverage in existence prior to the Termination Event subject to Teradyne and Employee
each contributing to the applicable insurance premium payments on the same basis and in the same proportions as in existence at the date of the Termination Event. If the Employee is not eligible for continued health, dental and vision insurance plan
coverage for any portion of the twenty-four (24) month period defined herein, Teradyne shall provide or reimburse Employee for comparable individual insurance and, if such provision or reimbursement constitutes taxable income to the Employee,
such additional amount as is necessary to place the Employee in substantially the same after tax position as he was while an employee of Teradyne with respect to such insurance plan coverages. All other benefits, including but not limited to
flex/vacation time accrual, short and long term disability insurance, life insurance, contributions (including company matches) into savings plan and “savings plan plus”, profit sharing payments and participation in the Employee stock
purchase plan shall cease as of the date of the Termination Event. 
  

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 (g) Release. Notwithstanding any other provision of this Agreement to the contrary, no
payment or benefit otherwise provided for under or by virtue of the foregoing provisions of this Agreement shall be paid or otherwise made available unless and until Teradyne shall have first received from Employee a valid, binding and irrevocable
general release, in the form of Attachment A to this Agreement; provided that Teradyne shall be permitted to defer any payment and any benefit provided for in this Agreement, whether pursuant to Section 1(e), 1(f) or otherwise, until the
tenth day after the later of its receipt of such release and the time at which the release has become valid, binding and irrevocable. Employee shall promptly sign such release upon a Termination Event subsequent to a Change in Control. Teradyne
agrees to provide Employee an estimate relating to payments to be made under this Agreement upon Employee’s written request. 
 (h) Certain Definitions. For purposes of this Agreement, the following terms shall have the following meanings: 
 “Cash Awards” shall mean any cash-based bonus, cash incentive or other cash awards provided by Teradyne to Employee pursuant to incentive plans that Teradyne maintains, including but not limited to its 2006 Equity and Cash
Compensation Incentive Plan. 
 “Cause” shall mean conduct involving one or more of the following: (i) the substantial
and continuing failure of Employee to render services to Teradyne in accordance with the terms or requirements of his or her employment; (ii) Employee’s disloyalty, gross negligence, willful misconduct, dishonesty, fraud or breach of
fiduciary duty to Teradyne, each in connection with Employee’s employment by Teradyne; (iii) Employee’s deliberate disregard of the rules or policies of, or breach of an agreement with, Teradyne which results in direct or indirect
material loss, damage or injury to Teradyne; (iv) the intentional unauthorized disclosure by Employee of any trade secret or confidential information of Teradyne; (v) the commission by Employee of an act which constitutes unfair
competition with Teradyne; or (vi) the conviction of, or the entry of a plea of guilty or nolo contendere by the Employee, to any crime involving moral turpitude or any felony. In the event that the Company determines that Cause may exist
pursuant to clauses (i), (iii) and (v) above, the Company shall give Employee written notice of the facts constituting such Cause and Employee shall have 30 days following receipt of such notice to remedy such Cause. 
 A “Change in Control” shall be deemed to have occurred upon the occurrence of any of the following events: (i) any consolidation,
cash tender offer, reorganization, recapitalization, merger or plan of share exchange following which the capital stock of Teradyne outstanding immediately prior to such transaction constitutes less than a majority of the combined voting power of
the then-outstanding securities of the combined corporation or person immediately after such transaction; (ii) any sale, lease, exchange or other transfer of all or substantially all of Teradyne’s assets; (iii) the adoption by the
Board of Directors of Teradyne of any plan or proposal for the liquidation or dissolution of Teradyne; (iv) a change in the majority of the Board of Directors of Teradyne through one or more contested elections occurring within a three-year
period; or (v) any person (as that term is used in Section 13(d)(3) or Section 14(d)(2) 

  

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of the Securities Exchange Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined voting power of Teradyne’s outstanding
voting securities, other than (A) as a result of a consolidation, reorganization, recapitalization, merger or plan of share exchange following which the capital stock of Teradyne outstanding immediately prior to such transaction constitutes at
least a majority of the combined voting power of the then-outstanding securities of the combined corporation or person immediately after such transaction, (B) by any trustee or other fiduciary holding securities under an employee benefit plan
of Teradyne, or (C) by a person temporarily acquiring beneficial ownership in its capacity as an underwriter (as defined pursuant to Section 2(a)(11) of the Securities Act of 1933, as amended) in connection with a public offering of
Teradyne’s securities. 
 “Equity Awards” shall mean the equity ownership, participation or appreciation opportunities
provided by Teradyne to Employee pursuant to incentive plans that Teradyne maintains, including but not limited to its 2006 Equity and Cash Compensation Incentive Plan, the Teradyne, Inc. 1991 Employee Stock Option Plan and the Teradyne, Inc. 1997
Employee Stock Option Plan, and any stock options, restricted stock units, restricted stock, stock appreciation rights, phantom stock and other stock-based awards granted thereunder. 
 “Good Reason” shall mean any one or more of the following: (i) any material reduction of Employee’s responsibilities (other
than for Cause or as a result of death or disability) as they shall exist on the date of the consummation of the Change in Control; (ii) any material reduction in Employee’s Model Compensation as in effect on the date of the consummation
of the Change in Control, or as the same may be increased from time to time, or any failure by Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written notice by Employee to Teradyne, within 45 days; (iii) a material
reduction in the value of Employee’s benefit package from the value of Employee’s benefit package on the date of the consummation of the Change in Control; or (iv) a requirement that Employee be based at an office that is greater than
50 miles from the location of Employee’s office immediately prior to the Change in Control except for required travel on Teradyne’s business to an extent substantially consistent with the business travel obligations which Employee
undertook on behalf of Teradyne prior to the date of the consummation of the Change in Control. In the event of a Termination Event in contemplation of a Change of Control, the applicable baseline measurement date shall be six months prior to such
Termination Event and not the date of the consummation of the Change in Control. 
 “Model Compensation” shall mean
Employee’s annual “Model Compensation” as determined by Teradyne’s Compensation Committee or Board of Directors, which consists of (i) a fixed monthly salary and (ii) a target annual variable amount. 
 “Performance Criteria” shall have the meaning ascribed to that term in the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive
Plan. 
 “Termination Event” shall mean (i) any termination of Employee by Teradyne without Cause or (ii) any
voluntary termination by Employee for Good Reason; provided, that it 

  

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shall not be a Termination Event merely because Employee ceases to be employed by Teradyne and becomes employed by a successor to Teradyne involved in the
Change in Control that assumes or is otherwise bound by this Agreement as provided in Section 7(a). It is expressly understood that no Termination Event shall be deemed to have occurred merely because, upon the occurrence of a Change in
Control, Employee ceases to be employed by Teradyne and does not become employed by a successor to Teradyne after the Change in Control if the successor makes an offer to employ Employee on terms and conditions which, if imposed by Teradyne, would
not give Employee a basis on which to terminate employment for Good Reason. 
 (i) Termination in Contemplation of a Change in
Control. For purposes of this Agreement, including without limitation, this Section 1, a Termination Event occurring “in contemplation of a Change in Control” means a Termination Event occurring within 3 months prior to an actual
Change in Control at the request or direction of a person who enters or has entered into an agreement the consummation of which would cause a Change in Control or who conditions entry into such an agreement on the Employee’s termination whether
or not such person actually enters into such an agreement. A termination by the Employee for Good Reason shall constitute a Termination Event in contemplation of a Change in Control if the actions constituting Good Reason were taken at the request
or direction of a person who has entered into an agreement the consummation of which would cause a Change in Control. 
 2.
(a) Parachute Payment Gross-Up. If any Payments (as hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter defined). The Gross-Up Payment
with respect to any Payment shall be paid no later than 15 days prior to the date that the Excise Tax is due with respect to such Payment. 
 (b) Definitions. For purposes of this Section 2, the following terms shall have the following meanings: 
  

	 	(i)	“Code” shall mean the Internal Revenue Code of 1986, as amended. 

  

	 	(ii)	“Excise Tax” shall mean the tax imposed by Section 4999 of the Code. The amount of the Excise Tax (if any) imposed on any non-cash benefits or any deferred
payment or benefit shall be reasonably determined by Teradyne, after consultation with its legal and tax advisors. 

  

	 	(iii)	“Gross-Up Payment” shall mean, with respect to Payments to Employee, the amount necessary so that the amount retained by Employee, after reduction for (1) any
Excise Tax on the Gross-Up Payment and (2) any federal, state, or local income and employment taxes imposed on the Gross-Up Payment, is an amount equal to the Excise Tax on the Payments to Employee, other than the Gross-Up Payment. The amount
of the Gross-Up Payment shall be reasonably determined by Teradyne after consultation with its legal and tax advisors. 

  

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	 	(1)	For purposes of determining the amount of the Gross-Up Payment, Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal, state and local income
tax in the calendar year in which the Gross-Up Payment is made (determined by reference to Employee’s residence for such calendar year), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state
and local taxes. 

  

	 	(2)	In the event that the Excise Tax with respect to the Payments is determined to exceed the amount taken into account hereunder, Teradyne shall make an additional Gross-Up Payment in
respect of such excess. For purposes of calculating such Gross-Up Payment, any interest or penalties imposed in connection with such excess Excise Tax shall be treated as an Excise Tax. 

  

	 	(3)	In the event that the Excise Tax with respect to the Payments is subsequently determined to be less than the amount taken into account for purposes of calculating the Gross-Up
Payment, Employee shall promptly repay to Teradyne the after-tax portion of the Gross-Up Payment that exceeds the Gross-Up Payment that otherwise would have been payable in connection with the actual Excise Tax imposed on the Payments.

  

	 	(iv)	“Payment” shall mean, with respect to Employee, any payment in the nature of compensation to (or for the benefit of) such individual, if such payment is contingent
on a change (i) in the ownership or effective control of Teradyne or (ii) in the ownership of a substantial portion of the assets of Teradyne (in each case, as reasonably determined by Teradyne in accordance with Section 280G(b)(2) of
the Code and the regulations promulgated thereunder). Notwithstanding the foregoing, any amount payable to (or for the benefit of) Employee shall be a Payment if an Excise Tax is imposed on Employee with respect to such payment or benefit.

 3. No Obligation of Employment. Employee understands that the employment relationship between Employee and Teradyne
will be “at will” and Employee understands that, prior to any Change in Control, Teradyne may terminate Employee with or without “Cause” at any time, including in contemplation of a Change in Control. Following any Change in
Control, Teradyne may also terminate Employee with or without “Cause” at any time subject to Employee’s rights and Teradyne’s obligations specified in this Agreement. 
  

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 4. Governing Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the Commonwealth of Massachusetts and this Agreement shall be deemed to be performable in Massachusetts. 
 5.
Severability. In case any one or more of the provisions contained in this Agreement for any reason shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement and this Agreement shall be construed to the maximum extent permitted by law. 
 6. Waivers and
Modifications. This Agreement may be modified, and the rights, remedies and obligations contained in any provision hereof may be waived, only in accordance with this Section 6. No waiver by either party of any breach by the other or any
provision hereof shall be deemed to be a waiver of any later or other breach thereof or as a waiver of any other provision of this Agreement. This Agreement may not be waived, changed, discharged or terminated orally or by any course of dealing
between the parties, but only by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. 
 7. Assignment. (a) Teradyne shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Teradyne expressly to assume and
agree to perform under the terms of this Agreement in the same manner and to the same extent that Teradyne and its affiliates would be required to perform it if no such succession had taken place (provided that such a requirement to perform which
arises by operation of law shall be deemed to satisfy the requirements for such an express assumption and agreement), and in such event Teradyne (as constituted prior to such succession) shall have no further obligation under or with respect to this
Agreement. Failure of Teradyne to obtain such assumption and agreement with respect to Employee prior to the effectiveness of any such succession shall be a breach of the terms of this Agreement with respect to Employee and shall entitle Employee to
compensation from Teradyne (as constituted prior to such succession) in the same amount and on the same terms as Employee would be entitled to hereunder were Employee’s employment terminated for Good Reason following a Change in Control, except
that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of the Termination Event. As used in this Agreement, “Teradyne” shall mean Teradyne as hereinbefore defined
and any successor to its business or assets as aforesaid which assumes and agrees (or is otherwise required) to perform this Agreement. Nothing in this Section 7(a) shall be deemed to cause any event or condition which would otherwise
constitute a Change in Control not to constitute a Change in Control. 
 (b) Notwithstanding Section 7(a), Teradyne shall remain
liable to Employee upon a Termination Event after a Change in Control if Employee is not offered continuing employment by a successor to Teradyne or is offered continuing employment by a successor to Teradyne only on a basis which would constitute
Good Reason for termination of employment hereunder. 
  

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 (c) This Agreement, and Employee’s and Teradyne’s rights and obligations hereunder, may
not be assigned by Employee or, except as provided in Section 7(a), Teradyne, respectively; any purported assignment by Employee or Teradyne in violation hereof shall be null and void. 
 (d) The terms of this Agreement shall inure to the benefit of and be enforceable by the personal or legal representatives, executors,
administrators, permitted successors, heirs, distributees, devisees and legatees of Employee. If Employee shall die while an amount would still be payable to Employee hereunder if they had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee or other designee or, if there is no such designee, Employee’s estate. 
 8. Entire Agreement. This Agreement constitutes the entire understanding of the parties relating to the subject matter hereof and supersedes and
cancels all agreements, written or oral, made prior to the date hereof between Employee and Teradyne relating to the subject matter hereof including but not limited to the Executive Officer Change in Control Agreement entered into on [insert date]
between Teradyne and Employee; provided, however, that Employee’s existing Cash Award and Equity Award agreements, as modified hereby, shall remain in effect. This Agreement shall not limit any right of Employee to receive any payments or
benefits under an employee benefit or Employee compensation plan of Teradyne, initially adopted as of or after the date hereof, which are expressly contingent thereunder upon the occurrence of a Change in Control (including, but not limited to, the
acceleration of any rights or benefits thereunder); provided that in no event shall Employee be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by Employee under any severance or
similar plan or policy of Teradyne, and in any such case Employee shall only be entitled to receive the greater of the two payments. 
 9.
Notices. All notices hereunder shall be in writing and shall be delivered in person or mailed by certified or registered mail, return receipt requested, addressed as follows: 
  

			
	If to Teradyne, to:	  	Teradyne, Inc.
		  	700 Riverpark Drive
		  	MS NR700-2-3 (Legal Department)
		  	North Reading, MA 01864
		  	Attention: General Counsel

 If to Employee, at Employee’s address set forth on the signature page hereto. 
 10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. 
 11. Section Headings. The descriptive section headings herein have been
inserted for convenience only and shall not be deemed to define, limit, or otherwise affect the construction of any provision hereof. 
  

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 12. Term. The term of this Agreement (the “Term”) shall commence upon the date
hereof and terminate upon the earlier of (i) twenty-four (24) months following any Change in Control of Teradyne, (ii) the date prior to any Change in Control of Teradyne that Employee for any reason ceases to be an employee of
Teradyne (other than a Termination Event in contemplation of a Change in Control) and (iii) the date following any Change in Control of Teradyne that Employee is terminated for Cause or voluntary terminates his employment (other than for Good
Reason). 
 13. Expenses. All reasonable legal fees and expenses incurred in a legal proceeding by Employee in seeking to obtain or
enforce any right or benefit provided by this Agreement against a successor to Teradyne shall be the responsibility of and paid for by the successor to Teradyne (but not Teradyne as constituted prior to such succession). Such payments are to be made
within twenty (20) days after Employee’s request for payment accompanied with such evidence of fees and expenses incurred as Teradyne’s successor reasonably may require; provided that if Employee institutes a proceeding and the judge
or other decision-maker presiding over the proceeding affirmatively finds that Employee has failed to prevail substantially, Employee shall pay Employee’s own costs and expenses (and, if applicable, return any amounts theretofore paid on
Employee's behalf under this Section 13). 
 14. Payments. Any payments hereunder shall be made out of the general assets of
Teradyne. The Employee shall have the status of general unsecured creditor of Teradyne, and this Agreement constitutes a mere promise by Teradyne to make payments under this Agreement in the future as and to the extent provided herein. Unless
otherwise determined by Teradyne in an applicable plan or arrangement, no amounts payable hereunder upon a Termination Event shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other
arrangement of Teradyne for the benefit of its employees. Teradyne shall be entitled to withhold from any payments or deemed payments any amount of tax withholding required by law. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

  

			
	TERADYNE, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	EMPLOYEE
	
	  

	Name:	 	
	Address:	 	

 ATTACHMENT A 
 Release 
 In consideration of the payments and benefits described in the Executive Officer Change in
Control Agreement dated [                 , 2007] between me and Teradyne, Inc. (the “Company”), all of which I acknowledge I would not
otherwise be entitled to receive, I hereby fully, forever, irrevocably and unconditionally release, remise and discharge the Company, its successors and assigns and their respective officers, directors, stockholders, corporate affiliates,
subsidiaries, parent companies, agents and employees (each in their individual and corporate capacities) (hereinafter, the “Released Parties”) from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights,
debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature which
I ever had or now have against the Released Parties arising out of my employment with and/or termination or separation from the Company or relating to my relationship as an officer or in any other capacity for the Company, including, but not limited
to, all employment discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans With Disabilities Act of 1990, 42 U.S.C.,
§12101 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., and the Massachusetts Fair Employment Practices Act., M.G.L. c.151B, §1 et seq., all as amended; all claims arising out of the Fair Credit Reporting Act, 15
U.S.C. §1681 et seq., the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1001 et seq., the Massachusetts Civil Rights Act, M.G.L. c.12 §§11H and 11I, the Massachusetts Equal Rights Act, M.G.L.
c.93, §102 and M.G.L. c.214, §1C, the Massachusetts Labor and Industries Act, M.G.L. c.149, §1 et seq., the Massachusetts Privacy Act, M.G.L. c. 214, §1B, and the Massachusetts Maternity Leave Act, M.G.L. c. 149, §105(d),
all as amended; all common law claims including, but not limited to, actions in tort, defamation and breach of contract; all claims to any non-vested ownership interest in the Company, contractual or otherwise, including but not limited to claims to
stock or stock options; and any claim or damage arising out of my employment with, termination or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not
expressly referenced above; provided, however, that notwithstanding the foregoing, the Company agrees and hereby acknowledges that this Release Agreement is not intended to and does not (i) apply to any claims Executive may bring to enforce the
terms of the Executive Officer Change in Control Agreement, (ii) release the Company of any obligation it may have pursuant to a written agreement, the Company’s articles of organization or bylaws, or as mandated by statute to indemnify me
as an officer of the Company; and (iii) release the Company of any obligation to provide and/or pay benefits to me or my estate, conservator or designated beneficiary(ies) under and in accordance with the terms of any applicable Company benefit
plan and/or program; provided further, that nothing in this Release Agreement prevents me from filing, cooperating with, or participating in any proceeding before the EEOC or a state Fair Employment Practices Agency (except that I acknowledge that I
may not be able to recover any monetary benefits in connection with any such claim, charge or proceeding). 
 Waiver of Rights and Claims Under the Age
Discrimination in Employment Act of 1967: Since I am 40 years of age or older, I have been informed that I have or may have specific rights and/or claims under the Age Discrimination in Employment Act of 1967 (ADEA) and I agree that:

 in consideration for the payments and benefits described in the Executive Officer Change in Control Agreement, which I am not otherwise entitled to
receive, I specifically and voluntarily waive such rights and/or claims under the ADEA I might have against the Released Parties to the extent such rights and/or claims arose prior to the date this Release Agreement was executed; 

 I understand that rights or claims under the ADEA which may arise after the date this Release Agreement is executed
are not waived by me; 
 I was advised that I have at least 21 days within which to consider the terms of this Release Agreement and to consult with
or seek advice from an attorney of my choice or any other person of your choosing prior to executing this Release Agreement; 
 I have carefully read
and fully understand all of the provisions of this Release Agreement, and I knowingly and voluntarily agree to all of the terms set forth in this Release Agreement; and 
 in entering into this Release Agreement I am not relying on any representation, promise or inducement made by the Company or its attorneys with the exception of those promises described in this document.

 Period for Review and Consideration of Agreement:  
 I acknowledge that I was informed and understand that I have twenty-one (21) days to review this Release Agreement and consider its terms before signing it. 
 The 21-day review period will not be affected or extended by any revisions, whether material or immaterial, that might be made to this Agreement.

 Accord and Satisfaction: The amounts set forth in the Executive Officer Change in Control Agreement shall be complete and unconditional
payment, settlement, accord and/or satisfaction with respect to all obligations and liabilities of the Released Parties to me, including, without limitation, all claims for back wages, salary, vacation pay, draws, incentive pay, bonuses, cash
awards, equity awards, commissions, severance pay, reimbursement of expenses, any and all other forms of compensation or benefits, attorney’s fees, or other costs or sums. 
 Revocation Period: I may revoke this Release Agreement at any time during the seven-day period immediately following my execution hereof. As a result,
this Release Agreement shall not become effective or enforceable and the Company shall have no obligation to make any payments or provide any benefits described herein until the seven-day revocation period has expired. 
  

			
	  
	  	  

	Name:	  	Date
		
	  
	  	  

	Witness	  	Date

  

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	  	  	 IF YOU DO NOT WISH TO USE THE 21-
 DAY
PERIOD,

		  	 PLEASE CAREFULLY REVIEW AND SIGN
 THIS
DOCUMENT

 I,
                                        ,
acknowledge that I was informed and understand that I have 21 days within which to consider the attached Release Agreement, have been advised of my right to consult with an attorney regarding such Agreement and have considered carefully every
provision of the Agreement, and that after having engaged in those actions, I prefer to and have requested that I enter into the Agreement prior to the expiration of the 21 day period. 
  

					
	Dated:	 	  
	  	  

		 		  	Name:
			
	 Dated:
	 	  
	  	  

		 		  	Witness

  

 -3-Exhibit 10.27

 EXHIBIT 10.27 
 FBR CAPITAL MARKETS CORPORATION 
 2007 EMPLOYEE STOCK PURCHASE PLAN 
 1.    ESTABLISHMENT OF PLAN. 
 FBR
Capital Markets Corporation, a Virginia corporation (the “Company”), proposes to grant options (“Options”) for purchase of the Company’s common stock, $0.001 par value (“Common Stock”), to eligible employees of the
Company and its Designated Affiliates (as hereinafter defined) pursuant to this 2007 Employee Stock Purchase Plan (this “Plan”). For purposes of this Plan, the term “Affiliate” means a “parent corporation” or
“subsidiary corporation” as “parent corporation” and “subsidiary corporation” as defined in Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the “Code”). The Company
intends this Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code (including any amendments or successor provisions to such Section), and this Plan shall be so construed. Any term not expressly defined in
this Plan but defined for purposes of Section 423 of the Code shall have the same definition therein. 
 2.    STOCK SUBJECT TO
PLAN. 
 The total number of shares of the Common Stock available for issuance under this Plan shall be 1,000,000 shares plus up to
1,400,000 shares reallocated to this Plan from the shares authorized for issuance under the Company’s 2006 Long-Term Incentive Plan. Such number shall be subject to adjustments effected in accordance with Section 16 of this Plan. Any
shares of Common Stock that have been made subject to an Option that cease to be subject to the Option (other than by means of exercise of the Option), including, without limitation, in connection with the cancellation or termination of an Option,
shall again be available for issuance in connection with future grants of Options under this Plan. 
 3.    PURPOSE. 

The purpose of this Plan is to provide employees of the Company and its Designated Affiliates, as that term is defined in Section 5 of this Plan,
with a convenient means of acquiring an equity interest in the Company through payroll deductions, to enhance such employees’ sense of participation in the affairs of the Company and its Affiliates, and to provide an incentive for continued
employment. 
 4.    ADMINISTRATION. 
 This Plan shall be administered by a committee (the “Committee”) appointed by the Company’s Board of Directors (the “Board”) consisting of at least two members, who need not be members of the
Board and who may be eligible to participate in the Plan. Subject to the provisions of this Plan and the limitations of Section 423 of the Code or any successor provision in the Code, the Committee shall have exclusive authority, in its
discretion, to determine all 

  

 1 

 
matters relating to Options granted under this Plan, including all terms, conditions, restrictions, and limitations of Options; provided, however, that all
participants granted Options under an offering pursuant to this Plan shall have the same rights and privileges within the meaning of Code Section 423(b)(5) except as required by applicable law. The Committee shall also have exclusive authority
to interpret this Plan and may from time to time adopt rules and regulations of general application for this Plan’s administration. The Committee’s exercise of discretion and interpretation of this Plan, its rules and regulations, and all
actions taken and determinations made by the Committee pursuant to this Plan shall be conclusive and binding on all parties involved or affected. The Committee may delegate administrative duties to employees of the Company or to independent
contractors, as it deems advisable. All expenses incurred in connection with the administration of this Plan shall be paid by the Company and the Designated Affiliates; provided, however, that the Committee may require a participant to pay any costs
or fees in connection with the sale by the participant of shares of Common Stock acquired under this Plan or in connection with the participant’s request for the issuance of a certificate for shares of Common Stock held in the
participant’s account under the Plan. 
 5.    ELIGIBILITY. 
 Any employee of the Company or a Designated Affiliate is eligible to participate in the Plan for any Offering Period (as hereinafter defined) under this
Plan except the following: 
 (a) employees who are customarily employed for less than 20 hours per week; 
 (b) employees who are customarily employed for not more than five months in a calendar year; 
 (c) employees who, together with any other person whose stock would be attributed to such employee pursuant to Section 424( d) of the Code, own stock
or hold options to purchase stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or any of its Affiliates or who, as a result of being granted Options under this Plan would own
stock or hold options to purchase stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or any of its Affiliates; 
 (d) employees whose employment terms are covered by a collective bargaining agreement in situations where the applicable union or other collective
bargaining unit has either refused to bargain with respect to this Plan as an employee benefit or has considered this Plan as a potential employee benefit and has rejected this Plan or has otherwise determined that employees which such union or
other bargaining unit represents may not participate in this Plan; and 
 (e) employees who are citizens of a foreign country, which prohibits
foreign corporations from granting, stock options to any of its citizens. 
 Notwithstanding the foregoing, an employee of the Company or a Designated
Affiliate shall not be eligible to participate in the Plan for any Offering Period (as hereinafter defined) during which the employee has elected to participate in an employee stock purchase plan of an Affiliate that is intended to meet the
requirements of Code section 423 (an “Affiliate Plan”). 
  

 2 

 For all purposes of this Plan, the term “Designated Affiliate” shall mean an Affiliate listed
on Annex A to this Plan or any Affiliate which may hereafter be determined by the Committee or the Board to be a Designated Affiliate. A Designated Affiliate will cease to be a Designated Affiliate on the earlier of (i) the date the Committee
or the Board determines that such Affiliate is no longer a Designated Affiliate or (ii) the date such Designated Affiliate ceases for any reason to be a “parent corporation” or “subsidiary corporation” as defined in Sections
424(e) and 424(f), respectively, of the Code. 
 6.    OFFERING PERIODS. 
 The offering periods of this Plan (individually, an “Offering Period”) shall be of periods not to exceed the maximum period permitted by
Section 423 of the Code. Until determined otherwise by the Committee or the Board, (a) Offering Periods shall commence on January 1 and July 1 of each calendar year; provided, however, that the first Offering Period may begin on
any date as shall be determined by the Committee or the Board, and (b) each Offering Period (with the exception of the first Offering Period if commenced on a date other than January 1 or July 1) shall consist of one six-month
purchase period during which payroll deductions of the participants are accumulated under this Plan. The first day of each Offering Period is referred to as the “Offering Date.” The last day of each Offering Period is referred to as the
“Purchase Date.” Subject to the requirements of Section 423 of the Code, the Committee or the Board shall have the power to change the duration of Offering Periods with respect to future offerings if such change is announced at least
15 days prior to the Offering Date of the first Offering Period to be affected by such change. 
 7.    PARTICIPATION IN THIS PLAN.

 Eligible employees may become participants in an Offering Period under this Plan on any Offering Date by delivering an enrollment form
provided by the Company to the administrator for this Plan (“Plan Administrator”) not later than the 15th day of the month (or if such day is not a business day for the Company or the applicable Affiliate, on the immediately preceding
business day) before such Offering Date unless a later time for filing the enrollment form authorizing payroll deductions is set by the Committee for all eligible employees with respect to a given Offering Period. Once an employee becomes a
participant in the Plan with respect to an Offering Period, such employee will automatically participate in the Offering Period commencing immediately following the last day of the prior Offering Period unless the employee withdraws from this Plan
or terminates further participation in the Offering Period as set forth in Sections 13 and 14 below. Such participant is not required to file any additional enrollment form in order to continue participation in this Plan, except that the Committee
may require the filing of new enrollment forms by participants who transfer to another division of the Company or a Designated Affiliate. 
 8.    GRANT OF OPTION ON ENROLLMENT. 
 Enrollment by an eligible employee in this Plan with respect to an
Offering Period will constitute the grant by the Company to such employee of an Option to purchase on the Purchase Date up to that number of whole shares of Common Stock of the Company determined by dividing (a) the amount accumulated in such
employee’s Employee Account (as defined in 

  

 3 

 
Section 10(c)) during the Offering Period ending on such Purchase Date, by (b) the Purchase Price (as defined in Section 9); provided,
however, that the number of shares which may be purchased pursuant to an Option may in no event exceed the number of shares determined in the manner set forth in Section 11(b) of the Plan or such other maximum number of shares as may be
specified in the future by the Committee in lieu of the limitation set forth in Section 11(b). 
 9.    PURCHASE PRICE.

 The purchase price per share (the “Purchase Price”) at which a share of Common Stock will be sold in any Offering Period
shall initially be the lower of (a) 85 percent of the fair market value of such share on the Offering Date or (b) 85 percent of the fair market value of such share on the Purchase Date; provided, however, that in no event may the purchase
price per share of Common Stock be below the par value per share of Common Stock. 
 For purposes of this Plan, the “fair market
value” of a share of Common Stock on a particular date shall be deemed to be the closing price of a share of Common Stock as reported on the principal stock exchange on which the shares are listed for trading for the immediately preceding day
or, if no closing price was recorded on such day, then on the next preceding day on which such a closing price was recorded. If the Common Stock is not listed on an exchange, fair market value shall be determined by the Committee using any
reasonable method and in good faith. The Committee may change the manner in which the Purchase Price is determined with respect to future offerings (provided such determination does not have the effect of lowering the Purchase Price to an amount
less than that which would be computed utilizing the method for determining the Purchase Price set forth in the first paragraph of this Section 9) if such changed manner of computation is announced at least 15 days prior to the Offering Date of
the first Offering Period to be affected by such change. 
 10.    PURCHASE OF SHARES; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF
SHARES. 
 (a) Funds contributed by each participant for the purchase of shares under this Plan shall be accumulated by regular payroll
deductions made during each Offering Period. The deductions shall be made as a percentage of the participant’s Compensation in 1 percent increments comprising not less than 1 percent and not more than 15 percent of the participant’s
Compensation. As used herein, “Compensation” shall mean all base salary, cash bonuses, wages, commissions, and overtime; provided, however, that, for purposes of determining a participant’s Compensation, any election by such
participant to reduce his or her regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the participant did not make such election. “Compensation” does not include severance pay, hiring and relocation
allowances, pay in lieu of vacation, automobile allowances, imputed income arising under any Company group insurance or benefit program, income received in connection with stock options, or any other special items of remuneration. Payroll deductions
shall commence on the first payday following the Offering Date and shall continue through the last payday of the Offering Period unless sooner altered or terminated as provided in this Plan. 
 (b) A participant may increase or decrease the rate of payroll deductions during an Offering Period by filing with the Plan Administrator a new
authorization for payroll deductions 

  

 4 

 
on a form provided by the Company, in which case the new rate shall become effective for the next payroll period commencing more than 15 days after the Plan
Administrator’s receipt of the authorization and shall continue for the remainder of the Offering Period unless changed pursuant to this Section 10(b). Such change in the rate of payroll deductions may be made at any time during an
Offering Period, but not more than two increases and two decreases may be made effective during any Offering Period. Notwithstanding the foregoing, a participant may lower the rate of payroll deductions to zero for the remainder of the Offering
Period. A participant may increase or decrease the rate of payroll deductions for any subsequent Offering Period by filing with the Plan Administrator a new authorization for payroll deductions not later than the 15th day of the month (or if such
date is not a business day, the immediately preceding business day) before the beginning of such Offering Period. A participant who has decreased the rate of withholding to zero will be deemed to continue as a participant in the Plan until the
participant withdraws from the Plan in accordance with the provisions of Section 13 or his or her participation is terminated in accordance with the provisions of Section 14. A participant shall have the right to withdraw from this Plan in
the manner set forth in Section 13 regardless of whether the participant has exercised his or her right to lower the rate at which payroll deductions are made during the applicable Offering Period. 
 (c) All payroll deductions made for a participant will be credited to an unfunded and unsecured bookkeeping account maintained on behalf of the
participant (the “Employee Account”) and deposited with the general funds of the Company. No interest will accrue on payroll deductions. All payroll deductions received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll deductions. Contributions to an Employee Account other than by payroll deduction are not permitted. 
 (d) On each Purchase Date, provided that the participant has not withdrawn from the Plan pursuant to Section 13 or terminated employment pursuant to
Section 14, in either case on or before the 15th day (or if such date is not a business day, on the immediately preceding business day) of the last month of the Offering Period in accordance with Section 13 or 14 of this Plan, or the Plan
has not been terminated prior to the date referred to in the foregoing clause, the Company shall apply the funds then in the participant’s Employee Account to the purchase at the Purchase Price of whole shares of Common Stock issuable under the
Option granted to such participant with respect to the Offering Period to the extent that such Option is exercisable on the Purchase Date. Shares may be purchased in the public equity markets, directly from the Company or in privately negotiated
transactions. 
 (e) During a participant’s lifetime, such participant’s Option to purchase shares hereunder is exercisable only by
him or her or, in the event of the participant’s disability, the participant’s legal representatives. The participant will have no interest or voting right in shares covered by his or her Option until such Option has been exercised.

 (f) Unless the Committee shall in the future determine otherwise, the maximum amount which may be deducted from any participant’s
Compensation for the purpose of purchasing Common Stock under this Plan shall not exceed $21,250 in any single calendar year. 
  

 5 

 (g) No fractional shares of Common Stock shall be purchased by or issued to a participant. Any portion of
the payroll deductions credited to an Employee Account which is not utilized to purchase Common Stock because it is insufficient to purchase an additional whole share of Common Stock shall be retained in the participant’s Employee Account and
applied to the purchase of Common Stock in the succeeding Offering Period. No interest will accrue on any amounts retained in an Employee Account. 
 11.    LIMITATIONS ON RIGHTS TO PURCHASE. 
 (a) No employee shall be granted an Option to purchase Common
Stock under this Plan at a rate which, when aggregated with his or her rights to purchase stock under all Affiliate Plans, exceeds $25,000 in fair market value, determined as of the applicable date of the grant of the Option, for each calendar year
in which the employee participates in this Plan (or any other employee stock purchase plan described in this Section 11 (a)). 
 (b) The number of shares which may be purchased by any employee on the first Purchase Date to occur in any calendar year may not exceed the number of shares determined by dividing $25,000 by the fair market value (as defined in
Section 9) of a share of Common Stock on the Offering Date of the Offering Period in which such Purchase Date occurs. The number of shares which may be purchased by any employee on any subsequent Purchase Date which occurs in the same calendar
year (as that referred to in the preceding sentence) shall not exceed the number of shares determined by performing the calculation described below, with all computations to be made to the nearest ten thousandth of a whole share of Common Stock or
one hundredth of one cent, as the case may be. 
 Step One: The number of shares purchased by the employee during any previous Offering Period
which occurred in the same calendar year shall be multiplied by the fair market value (as defined in Section 9) of a share of Common Stock on the first day of such previous Offering Period in which such shares were purchased or the number of
shares purchased by the employee under an Affiliate Plan during any previous offering period under such plan which occurred in the same calendar year shall be multiplied by the fair market value of such shares on the first day of such previous
offering period. 
 Step Two: The amount determined in Step One shall be subtracted from $25,000. 
 Step Three: The amount determined in Step Two shall be divided by the fair market value (as defined in Section 9) of a share of Common Stock on the
Offering Date of the Offering Period in which the subsequent Purchase Date (for which the maximum number of shares which may be purchased is being determined by this calculation) occurs. The quotient so obtained shall be the maximum number of shares
that may be purchased by any employee on such subsequent Purchase Date. 
 Subject to the limitations of Section 423 of the Code, the Committee may from
time to time determine that a different maximum number of shares may be purchased on any given Purchase Date in lieu of the maximum amounts described above in this Section 11(b), in which case the number of shares which may be purchased by any
employee on such Purchase Date may not exceed such different limitation. 
  

 6 

 (c) If the number of shares to be purchased on a Purchase Date by all employees participating in this
Plan exceeds the number of shares then available for issuance under this Plan, then the Company will make a pro rata allocation of the remaining shares in as uniform a manner as shall be reasonably practicable and as the Committee shall determine to
be equitable. In such event, the Company shall give written notice of such reduction of the number of shares to be purchased under a participant’s Option to each participant affected thereby. 
 (d) Any payroll deductions accumulated in an Employee Account which are not used to purchase stock due to the limitations in this Section 11 shall
be returned to the participant as soon as practicable after the end of the applicable Offering Period without interest. 
 12.    EVIDENCE OF STOCK OWNERSHIP. 
 (a) As soon as administratively practicable following the Purchase
Date, the shares of Common Stock purchased on behalf of a participant pursuant to the exercise of his or her Option will be credited to an account at the Company’s transfer agent or with a securities brokerage firm, as determined by the Company
(the “Plan Financial Agent”), in the name of the participant. By electing to participate in the Plan, a participant will be deemed to authorize the establishment of an account (the “Stock Account”) in his or her name with the
Plan Financial Agent selected by the Company. A participant may request that the Plan Financial Agent arrange, subject to any applicable fee, for the delivery to the participant or an account designated by the participant of some or all of the
Common Stock held in the participant’s Stock Account. If the participant desires to sell some or all of his or her shares of Common Stock held in his or her Stock Account, he or she may do so either (i) by disposing of the shares of Common
Stock through the Plan Financial Agent subject to any applicable fee, or (ii) through such other means as the Company may permit. 
 (b)
Following termination of a participant’s employment with the Company and its Affiliates for any reason, the participant shall have a period of 30 days to notify the Plan Financial Agent whether such participant desires (i) to receive a
certificate representing all shares then in the participant’s Stock Account with the Plan Financial Agent, (ii) to transfer the shares in the participant’s Stock Account to a securities account designated by the participant, or
(iii) to sell the shares in the participant’s Stock Account through the Plan Financial Agent. If the terminated participant fails to file such notice with the Plan Financial Agent within 30 days after termination, he or she shall be deemed
to have elected the alternative set forth in clause (i) above. 
 (c) Dividends credited to a participant’s Stock Account shall be
paid periodically to a participant at such times as the Board or the Committee shall designate. Copies of annual reports, proxy statements and any other materials issued to shareholders of the Company generally will be mailed to a participant
provided the balance in his or her Stock Account is one share of Common Stock or more. In the absence of timely instructions from a participant with respect to tenders or exchanges of shares of Common Stock, the Company and the Plan Financial Agent
will be deemed authorized to tender or exchange the participant’s shares of Common Stock held in his or her Stock Account whenever the Company deems it to be in the best interest of the participant to do so. 
  

 7 

 13.    WITHDRAWAL. 
 Each participant may withdraw from participation in the Plan by signing and delivering to the Plan Administrator a written notice to that effect on a form
provided by the Company for such purpose. Upon withdrawal from this Plan, the participant’s participation in this Plan shall terminate, subject to Section 15. In the event a participant elects to withdraw from the Plan pursuant to this
Section 13, he or she may not resume his or her participation in this Plan during the same Offering Period, but he or she may participate in any subsequent Offering Period by filing a new enrollment form in the same manner as set forth above
for initial participation in this Plan. 
 14.    TERMINATION OF EMPLOYMENT; LEAVE OF ABSENCE. 
 Termination of a participant’s employment with the Company and its Affiliates for any reason, including resignation, retirement termination or death,
or the failure of a participant to remain an eligible employee, immediately terminates his or her participation in this Plan, subject to Section 15. For purposes of this Section 14, an employee will not be deemed to have terminated
employment or failed to remain in the continuous employ of the Company in the case of any leave of absence approved by the Committee. 
 15.    RETURN OF PAYROLL DEDUCTIONS. 
 In the event a participant’s participation in this Plan is
terminated by withdrawal pursuant to Section 13 or termination of employment pursuant to Section 14, or in the event this Plan is terminated by the Board, the Company shall promptly deliver to the participant, or in the case of the
participant’s death to his or her beneficiaries or heirs, all payroll deductions of the participant which have not yet been applied to the purchase of stock; provided, however, that if such withdrawal or termination of employment occurs later
than the 15th day of the last month of an Offering Period (or if such date is not a business day, on the preceding business day), then such payroll deductions will be utilized to purchase Common Stock for the participant on the Purchase Date at the
end of such Offering Period; provided, further, that upon termination of the Plan the Board may accelerate the Purchase Date. No interest shall accrue on the payroll deductions of a participant in this Plan. 
 16.    CAPITAL CHANGES. 
 In the
event of any change in corporate capitalization, such as a stock split or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, any reorganization
(whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company or sale of all or substantially all of the Company’s assets or stock then the
Committee, in its sole discretion, shall make such equitable adjustments as it shall deem appropriate in the circumstances in the maximum number and kind of shares of stock subject to this Plan as set forth in Sections 1 and 2, the number and kind
of shares subject to outstanding Options, and/or the Purchase Price. The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding. 
  

 8 

 17.     NONASSIGNABILITY. 
 Neither payroll deductions credited to an Employee Account nor any rights with regard to the exercise of an Option or to receive shares under this Plan
may be assigned, transferred, pledged, or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 23 hereof) by the participant. Any such attempt at assignment, transfer, pledge, or
other disposition shall be void and without effect. 
 18.     REPORTS AND STATUS OF ACCOUNTS. 
 Individual account records will be maintained for each participant’s Employee Account and Stock Account. The Plan Financial Agent shall send to each
participant promptly after the end of each Offering Period a report of his or her account setting forth with respect to such Offering Period the number of shares purchased and the price per share thereof, and also setting forth the total number of
shares then held in his or her Stock Account. Neither the Company nor any Designated Affiliate shall have any liability for any error or discrepancy in any such report. 
 19.     NO RIGHTS TO CONTINUED EMPLOYMENT; NO IMPLIED RIGHTS. 
 Neither this Plan
nor the grant of any Option hereunder shall confer any right on any employee to remain in the employ of the Company or any Affiliate or restrict the right of the Company or any Affiliate to terminate such employee’s employment. The grant of any
Option hereunder during any Offering Period shall not give a participant any right to similar grants thereafter. 
 20.     EQUAL
RIGHTS AND PRIVILEGES. 
 All eligible employees shall have equal rights and privileges with respect to this Plan except as required by
applicable law so that this Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any successor provision of the Code and the related regulations. Any provision of this Plan which is inconsistent
with Section 423 or any successor provision of the Code shall, without further act or amendment by the Company, the Board, or the Committee, be reformed to comply with the requirements of Section 423. This Section 20 shall take
precedence over all other provisions in this Plan. 
 21.     AMENDMENT OF PLAN. 
 The Board may amend this Plan in such respects as it shall deem advisable; provided, however, that stockholder approval will be required for any amendment
that will increase the total number of shares as to which Options may be granted under this Plan or, but for such shareholder approval, cause this Plan to fail to continue to qualify as an “employee stock purchase plan” under
Section 423 of the Code. 
 22.     TERMINATION OF THE PLAN. 
 The Board may suspend or terminate this Plan at any time. Unless this Plan shall have been terminated by the Board, this Plan shall terminate on, and no
Options shall be granted after, December 14, 2016. No Options shall be granted during any period of suspension of this Plan. 
  

 9 

 23.    DESIGNATION OF BENEFICIARY. 
 (a) A participant may file a written designation on a form provided by the Company of a beneficiary who is to receive any cash and shares, if any, from
the participant’s Employee Account and Stock Account under this Plan in the event of such participant’s death. 
 (b) Such
designation of beneficiary may be changed by the participant at any time on a form provided by the Company for such purpose. In the event of the death of a participant and in the absence of a beneficiary validly designated under this Plan who is
living at the time of such participant’s death, the Company shall deliver such cash or shares to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such cash or shares to the spouse or to any one or more dependents or relatives of the participant or, if no spouse, dependent, or relative is known to the Company, to such other person as the
Company may in good faith determine to be an appropriate designee. 
 24.    CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF
SHARES. 
 No shares shall be issued with respect to an Option unless the Plan is approved by shareholders on or before June 30, 2007
(and if such approval is not obtained, the balance credited to each employee’s Employee Account shall be refunded to such employee). Shares shall not be issued with respect to an Option unless the exercise of such Option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange or automated quotation system upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such
compliance. 
 25.    PLAN DATES. 
 The effective date of the Plan is January 1, 2007, subject to the approval of the Company’s shareholders on or before June 30, 2007. The first Offering Period under the Plan shall commence on
January 1, 2007. 
  

 10 

 ANNEX A TO 
 2007 EMPLOYEE STOCK PURCHASE PLAN 
 DESIGNATED AFFILIATES 
 AS OF JANUARY 1, 2007 
 The
“Affiliates” of FBR Capital Markets Corporation that are “Designated Affiliates” for purposes of Section 5 of the 2007 Employee Stock Purchase Plan are as follows: 
 Friedman, Billings, Ramsey & Co., Inc. 
 FBR Fund Advisors, Inc. 
 FBR Investment Management, Inc. 
 Friedman, Billings, Ramsey International Ltd. 

FBR Capital Markets PT, Inc. 
  

 11

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