Document:

2004 Performance Incentive Plan Accelerated RestrictedStock Agmt Brad A. Morrice

 Exhibit 10.20 
  
 NEW CENTURY FINANCIAL CORPORATION 
 2004 PERFORMANCE INCENTIVE PLAN 
 PERFORMANCE-ACCELERATED RESTRICTED STOCK AWARD AGREEMENT

  
 THIS PERFORMANCE-ACCELERATED RESTRICTED STOCK AWARD
AGREEMENT (this “Award Agreement”) is dated as of March 10, 2005 (the “Award Date”), by and between New Century Financial Corporation, a Maryland corporation (the “Corporation”), and Brad A.
Morrice (the “Participant”). 
  
 WITNESSETH

  
 WHEREAS, pursuant to the New Century Financial
Corporation 2004 Performance Incentive Plan (the “Plan”), the Corporation hereby grants to the Participant, effective as of the date hereof, a restricted stock award (the “Award”), upon the terms and conditions set
forth herein and in the Plan. 
  
 NOW THEREFORE, in
consideration of services rendered and to be rendered by the Participant, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows: 
  
 1. Defined Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meaning assigned to such terms in the Plan. 
  
 2. Grant. Subject to the terms of this Award Agreement, the Corporation hereby grants to the Participant an Award with respect to an aggregate of 15,628 restricted shares of Common Stock of the
Corporation (the “Restricted Stock”). The Corporation acknowledges that the consideration for the Restricted Stock shall be the services rendered to the Corporation or any of its Subsidiaries by the Participant prior to the
applicable vesting date, the fair value of which is not less than the par value per share of the Corporation’s Common Stock. 
  
 3. Vesting. Subject to Section 8 below, the Award shall vest, and restrictions (other than those set forth in Section 8.1 of the
Plan) shall lapse, with respect to 100% of the total number of shares of Restricted Stock (subject to adjustment under Section 7.1 of the Plan) on the seventh (7th) anniversary of the Award Date; provided, however, that vesting of all or a portion of the shares of Restricted Stock may be accelerated pursuant to Exhibit A attached hereto. 
  
 4. Continuance of Employment. The vesting schedule
requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable portion of the Award and the rights and benefits under this Award Agreement. Partial employment or service, even if
substantial, during any vesting period will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 8 below
or under the Plan. 
  
 Nothing contained in this Award Agreement
or the Plan constitutes an employment or service commitment by the Corporation, affects the Participant’s status as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or
in service to the Corporation or any of its Subsidiaries, interferes in any way with the right of 

  

 
the Corporation or any of its Subsidiaries at any time to terminate such employment or services, or affects the right of the Corporation or any of its
Subsidiaries to increase or decrease the Participant’s other compensation or benefits. Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant without his or her consent thereto.

  
 5. Dividend and Voting Rights. After the
Award Date, the Participant shall be entitled to cash dividends and voting rights with respect to the shares of Restricted Stock subject to the Award even though such shares are not vested, provided that such rights shall terminate immediately as to
any shares of Restricted Stock that are forfeited pursuant to Section 8 below. 
  
 6. Restrictions on Transfer. Prior to the time that they have become vested pursuant to Section 3, neither the Restricted Stock, nor any interest therein, amount payable in respect thereof, or
Restricted Property (as defined in Section 9 hereof) may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not
apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution. 
  
 7. Stock Issuance. 
  
 (a) Book Entry Form. The Corporation shall issue the shares of Restricted Stock subject to the Award in book entry form, registered
in the name of the Participant with notations regarding the applicable restrictions on transfer imposed under this Award Agreement; provided, however, that the Corporation may, in its discretion, elect to issue such shares in certificate form as
provided in Section 7(b) below. 
  
 (b)
Certificates to be Held by Corporation; Legend. Any certificates representing shares of Restricted Stock that may be delivered to the Participant by the Corporation prior to vesting shall be redelivered to the Corporation to be held by the
Corporation until the restrictions on such shares shall have lapsed and the shares shall thereby have become vested or the shares represented thereby have been forfeited hereunder. Such certificates shall bear the following legend: 
  
 “The ownership of this certificate and the shares of stock evidenced
hereby and any interest therein are subject to substantial restrictions on transfer under an Agreement entered into between the registered owner and New Century Financial Corporation. A copy of such Agreement is on file in the office of the
Secretary of New Century Financial Corporation.” 
  
 (c) Delivery of Certificates Upon Vesting. Promptly after the vesting of any shares of Restricted Stock pursuant to Section 3, the Corporation shall, as applicable, either remove the notations on any shares of
Restricted Stock issued in book entry form which have vested or deliver to the Participant a certificate or certificates evidencing the number of shares of Restricted Stock which have vested (or, in either case, such lesser number of shares as may
be permitted pursuant to Section 8.5 of the Plan). The Participant (or the beneficiary or personal representative of the Participant in the event of the Participant’s death or disability, as the case may be) shall 

  

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deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan. The shares so delivered shall
no longer be restricted shares hereunder. 
  
 (d)
Stock Power; Power of Attorney. If the Corporation elects to issue share certificates to the Participant, the Participant shall be required to execute a stock power, in a form prescribed by the Corporation, with respect to such shares. The
Corporation shall not deliver any share certificates in accordance with this Award Agreement unless and until the Corporation shall have received such stock power executed by such Participant. The Participant, by acceptance of the Award, shall be
deemed to appoint, and does so appoint by execution of this Award Agreement, the Corporation and each of its authorized representatives as the Participant’s attorney(s)-in-fact to effect any transfer of unvested forfeited shares (or shares
otherwise reacquired by the Corporation hereunder) to the Corporation as may be required pursuant to the Plan or this Award Agreement and to execute such documents as the Corporation or such representatives deem necessary or advisable in connection
with any such transfer. 
  
 8. Effect of Termination
of Employment or Services.  
  
 (a) General. Subject to earlier vesting as provided in Section 7 of the Plan and other than as expressly provided below in this Section 8, if the Participant ceases to be employed by or ceases to provide services to the Corporation
or a Subsidiary, the Participant’s shares of Restricted Stock (and related Restricted Property as defined in Section 9 hereof) shall be forfeited to the Corporation to the extent such shares have not become vested pursuant to Section 3 upon the
date the Participant’s employment or services terminate (regardless of the reason for such termination, whether with or without cause, voluntarily or involuntarily). 
  
 (b) Death or Disability. Notwithstanding Section 8(a), if the Participant ceases to be employed by or
ceases to provide services to the Corporation or a Subsidiary as a result of the Participant’s death or Disability, the Participant’s shares of Restricted Stock that have not become vested pursuant to Section 3 as of the date of such death
or Disability shall vest on a prorated basis determined in the following manner. For purposes of this Section 8(b) only, a hypothetical vesting schedule shall be created in which the number of such unvested shares of Restricted Stock shall be
divided into eighty-four (84) substantially equal installments with each such installment vesting on the last day of each month, commencing with the first month following the month in which the Award Date occurs through and including the
eighty-fourth (84th) month following the month in which the Award Date occurs. Each such installment of shares of
Restricted Stock that would have vested pursuant to the foregoing schedule as of the date of the Participant’s death or Disability shall automatically become vested as of such date. Fractional share interests shall be disregarded, but may be
cumulated. The Participant’s shares of Restricted Stock (and related Restricted Property) that would not have vested pursuant to the foregoing schedule as of the date of the Participant’s death or Disability shall be forfeited to the
Corporation as of such date. For purposes of the Award, “Disability” means a permanent disability (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Administrator). 
  
 (c) Attainment of Age 65. Subject to earlier vesting
as provided in Section 7 of the Plan, if the Participant continues to be employed by or provide services to the Corporation or a Subsidiary upon the date the Participant attains age sixty-five (65), the Participant’s shares of Restricted Stock
that have not become vested pursuant to Section 3 as of such date shall vest on a 

  

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prorated basis determined in the following manner. For purposes of this Section 8(c) only, a hypothetical vesting schedule shall be created in which the
number of such unvested shares of Restricted Stock shall be divided into eighty-four (84) substantially equal installments with each such installment vesting on the last day of each month, commencing with the first month following the month in which
the Award Date occurs through and including the eighty-fourth (84th) month following the month in which the Award
Date occurs. Each such installment of shares of Restricted Stock that would have vested pursuant to the foregoing schedule as of the date the Participant attains age 65 shall automatically become vested as of such date. Subject to earlier vesting as
provided in Section 3 hereof or Section 7 of the Plan, the remaining shares of Restricted Stock will continue to vest in monthly installments according to the foregoing schedule, provided that the Participant continues to be employed by or provide
services to the Corporation or a Subsidiary through the applicable vesting date. In the event that the Participant becomes entitled to performance-accelerated vesting of the Award pursuant to Section 3 hereof, the number of shares of Restricted
Stock that shall become vested as of the date of such acceleration shall equal: (1) the total number of shares of Restricted Stock subject to the Award that would have vested pursuant to Exhibit A hereto (assuming for this purpose that no
shares had previously vested pursuant to this Section 8(c)) after giving effect to such acceleration, less (2) the number of shares of Restricted Stock subject to the Award that had previously vested (determined immediately before giving effect to
such acceleration, and including any shares that had previously vested pursuant to this Section 8(c) and any shares that would otherwise vest as of the date of such acceleration pursuant to this Section 8(c)). The shares of Restricted Stock that do
not become vested after giving effect to the foregoing sentence (if any) shall continue to vest in monthly installments in accordance with the foregoing vesting schedule, and the number of shares subject to each installment shall be adjusted
accordingly so that the remaining unvested shares of Restricted Stock are scheduled to vest in substantially equal installments. Fractional share interests that result from any calculation pursuant to this Section 8(c) shall be disregarded, but may
be cumulated. Upon the date the Participant ceases to be employed by or provide services to the Corporation and its Subsidiaries, any shares of Restricted Stock (and related Restricted Property) that have not vested in accordance with this Section
8(c) (or any other provision of this Award Agreement or the Plan) shall be forfeited to the Corporation as of such date. 
  
 (d) Forfeiture of Shares. Upon the occurrence of any forfeiture of shares of Restricted Stock under this Section 8, such unvested,
forfeited shares and related Restricted Property shall be automatically transferred to the Corporation, without any other action by the Participant (or the Participant’s beneficiary or personal representative in the event of the
Participant’s death or disability, as applicable); no consideration shall be paid by the Corporation with respect to such transfer. The Corporation may exercise its powers under Section 7(d) hereof and take any other action necessary or
advisable to evidence such transfer. The Participant (or the Participant’s beneficiary or personal representative in the event of the Participant’s death or disability, as applicable) shall deliver any additional documents of transfer that
the Corporation may request to confirm the transfer of such unvested, forfeited shares and related Restricted Property to the Corporation. 
  
 9. Adjustments Upon Specified Events. Upon the occurrence of certain events relating to the Corporation’s stock contemplated by
Section 7.1 of the Plan, the Administrator shall make adjustments if appropriate in the number and kind of securities that may become vested under the Award. If any adjustment shall be made under Section 7.1 of the Plan or an event described in

  

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Section 7.3 of the Plan shall occur and the shares of Restricted Stock are not fully vested upon such event or prior thereto, the restrictions applicable to
such shares of Restricted Stock shall continue in effect with respect to any consideration or other securities (the “Restricted Property” and, for the purposes of this Award Agreement, “Restricted Stock” shall include
“Restricted Property”, unless the context otherwise requires) received in respect of such Restricted Stock. Such Restricted Property shall vest at such times and in such proportion as the shares of Restricted Stock to which the Restricted
Property is attributable vest, or would have vested pursuant to the terms hereof if such shares of Restricted Stock had remained outstanding. To the extent that the Restricted Property includes any cash (other than regular cash dividends provided
for in Section 5 hereof), such cash shall be invested, pursuant to policies established by the Administrator, in interest bearing, FDIC-insured (subject to applicable insurance limits) deposits of a depository institution selected by the
Administrator, the earnings on which shall be added to and become a part of the Restricted Property. Furthermore, the Administrator shall adjust the performance measures and performance goals referenced on Exhibit A hereto to the extent (if
any) it determines that the adjustment is necessary or advisable to preserve the intended incentives and benefits to reflect (1) any material change in corporate capitalization, any material corporate transaction (such as a reorganization,
combination, separation, merger, acquisition, or any combination of the foregoing), or any complete or partial liquidation of the Corporation, (2) any change in accounting policies or practices, (3) the effects of any special charges to the
Corporation’s earnings, or (4) any other similar special circumstances. 
  
 10. Tax Withholding. The Corporation (or any of its Subsidiaries last employing the Participant) shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct
from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to the vesting of any Restricted Stock. Alternatively, the Participant or other person in whom the Restricted Stock
vests may irrevocably elect, in such manner and at such time or times prior to any applicable tax date as may be permitted or required under Section 8.5 of the Plan and rules established by the Administrator (and subject to the requirements of
applicable law), to have the Corporation withhold and reacquire shares of Restricted Stock at their fair market value at the time of vesting to satisfy any minimum withholding obligations of the Corporation or its Subsidiaries with respect to such
vesting. Any election to have shares so held back and reacquired shall be subject to such rules and procedures, which may include prior approval of the Administrator, as the Administrator may impose, and shall not be available if the Participant
makes or has made an election pursuant to Section 83(b) of the Code with respect to such Award. 
  
 11. Notices. Any notice to be given under the terms of this Award Agreement shall be in writing and addressed to the Corporation at
its principal office to the attention of the Secretary, and to the Participant at the Participant’s last address reflected on the Corporation’s payroll records. Any notice shall be delivered in person or shall be enclosed in a properly
sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Participant is no longer an Eligible Person, shall be deemed to have been duly given five (5) business days after the date mailed in accordance with the foregoing provisions of this Section 11. 
  

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 12. Plan. The Award and all rights of the Participant under this Award Agreement are
subject to the terms and conditions of the provisions of the Plan, incorporated herein by reference. The Participant agrees to be bound by the terms of the Plan and this Award Agreement. The Participant acknowledges having read and understanding the
Plan, the Prospectus for the Plan, and this Award Agreement. Unless otherwise expressly provided in other sections of this Award Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and
shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the
Administrator under the Plan after the date hereof. 
  
 13. Entire Agreement. This Award Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Award Agreement may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 

 
 14. Section Headings. The section headings of this
Award Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof. 
  
 15. Governing Law. This Award Agreement shall be governed by and construed and enforced in accordance with the laws of the State of
Maryland without regard to conflict of law principles thereunder. 
  
 IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set his or her hand as of the date and year first above written.

  

			
	 NEW CENTURY FINANCIAL CORPORATION,
 a Maryland corporation

		
	By:	 	 /s/ Robert K. Cole

	 Name:
	 	 Robert K. Cole

	 Its:
	 	 Chairman and Chief Executive Officer

	
	PARTICIPANT
		
	 By:
	 	 /s/ Brad A. Morrice

	 Name:
	 	 Brad A. Morrice

  

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 EXHIBIT A 
  

PERFORMANCE-ACCELERATED VESTING 
  
 Subject to Section 8 of this Award Agreement, the Award shall be subject to accelerated vesting as follows: 
  

	 	(a)	If the Corporation’s Before-Tax Net Income (as defined in Appendix A of the Plan) equals or exceeds $700 million for any period of four (4) consecutive fiscal quarters of the
Corporation that commences on or after the Award Date, 33 1/3% of the Restricted Shares shall become vested on the last day of such period. 

  

	 	(b)	If vesting of the Award accelerates pursuant to clause (a) above and the Corporation’s Before-Tax Net Income equals or exceeds $850 million for any subsequent period of four
(4) consecutive fiscal quarters of the Corporation that commences after the last day of the period referred to in clause (a), an additional 33 1/3% of the Restricted Shares shall become vested on the last day of such subsequent period.

  

	 	(c)	If vesting of the Award accelerates pursuant to clause (b) above and the Corporation’s Before-Tax Net Income equals or exceeds $1 billion for any subsequent period of four (4)
consecutive fiscal quarters of the Corporation that commences after the last day of the period referred to in clause (b), the Award shall become fully vested on the last day of such subsequent period. 

  

 72004 Performance Incentive Plan Accelerated Stock Agreement with Brad A. Morrice

 Exhibit 10.21 
  
 NEW CENTURY FINANCIAL CORPORATION 
 2004 PERFORMANCE INCENTIVE PLAN 
 PERFORMANCE-ACCELERATED STOCK OPTION AGREEMENT 
  
 THIS PERFORMANCE-ACCELERATED STOCK OPTION AGREEMENT (this
“Option Agreement”) dated March 10, 2005, by and between NEW CENTURY FINANCIAL CORPORATION, a Maryland corporation (the “Corporation”), and Brad A. Morrice (the “Grantee”) evidences the
incentive stock option (the “Option”) granted by the Corporation to the Grantee as to the number of shares of the Corporation’s Common Stock first set forth below. 
  

								
				
	 Number of Shares of Common Stock:1
	  	 	39,568	  	Award Date:	  	3/10/05
				
	 Exercise Price per Share:1
	  	$	49.27	  	Expiration Date:1,2	  	3/10/15

  
 Vesting1,2 The Option shall become vested as to 100% of the total number of shares of Common Stock subject to the Option on the
fifth (5th) anniversary of the Award Date; provided, however, that vesting of all or a portion of the shares of
Common Stock subject to the Option may be accelerated pursuant to Exhibit A attached hereto. 
  
 The Option is granted under the New Century Financial Corporation 2004 Performance Incentive Plan (the “Plan”) and subject to the Terms and Conditions of Incentive Stock Option (the
“Terms”) attached to this Option Agreement (incorporated herein by this reference) and to the Plan. The Option has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or
to be paid to the Grantee. The Option is intended as an incentive stock option within the meaning of Section 422 of the Code (an “ISO”). Capitalized terms are defined in the Plan if not defined herein. The Corporation and the
Grantee agree to the terms of the Option set forth herein. The Grantee acknowledges receipt of a copy of the Terms, the Plan and the Prospectus for the Plan. 
  

									
	GRANTEE	 	 	 	 NEW CENTURY FINANCIAL CORPORATION,
 a Maryland corporation

					
	By:	 	 /s/ Brad A. Morrice
	 	 	 	By:	 	 /s/ Robert K. Cole

	 Name:
	 	 Brad A. Morrice
	 	 	 	 Name:
	 	 Robert K. Cole

	 	 	 	 	 	 	 Its:
	 	 Chairman and Chief Executive Officer

	1	Subject to adjustment under Section 7.1 of the Plan. 

  

	2	Subject to early termination under Section 4 of the Terms and Section 7.4 of the Plan. 

  

 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTION 
  

	1.	Vesting; Limits on Exercise. 

  
 The Option shall vest and become exercisable as set forth on the cover page of this Option Agreement. The Option may be exercised only to the extent the
Option is vested and exercisable. 
  

	 	•	 	Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not previously exercised),
and such right shall continue, until the expiration or earlier termination of the Option. 

  

	 	•	 	No Fractional Shares. Fractional share interests shall be disregarded, but may be cumulated. 

  

	 	•	 	Minimum Exercise. No fewer than 1001 shares of Common Stock may be purchased at any one time, unless the number purchased is the total number at the time exercisable under
the Option. 

  

	 	•	 	ISO Value Limit. If the aggregate fair market value of the shares with respect to which ISOs (whether granted under the Option or otherwise) first become exercisable by the
Grantee in any calendar year exceeds $100,000, as measured on the applicable Award Dates, the limitations of Section 5.1.2 of the Plan shall apply and to such extent the Option will be rendered a nonqualified stock option. 

 

	2.	Continuance of Employment/Service Required; No Employment/Service Commitment. 

  
 The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the
vesting of the applicable portion of the Option and the rights and benefits under this Option Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan. 
  
 Nothing contained in this Option Agreement or the Plan constitutes a continued employment or service commitment by the
Corporation or any of its Subsidiaries, affects the Grantee’s status, if he or she is an employee, as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the
Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or service, or affects the right of the Corporation or any Subsidiary to increase or decrease the
Grantee’s other compensation. 
  

	3.	Method of Exercise of Option. 

  
 The Option shall be exercisable by the delivery to the Secretary of the Corporation (or such other person as the Administrator may require pursuant to
such administrative exercise procedures as the Administrator may implement from time to time) of: 
  

	 	•	 	a written notice stating the number of shares of Common Stock to be purchased pursuant to the Option or by the completion of such other administrative exercise procedures as the
Administrator may require from time to time, 

  

	 	•	 	payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to the Corporation, or (subject to compliance with all applicable
laws, rules, regulations and listing requirements and further subject to such rules as the Administrator may adopt as to any non-cash payment) in shares of Common Stock already owned by the Grantee, valued at their Fair Market Value on the exercise
date, provided, however, that any shares initially acquired upon exercise of a stock option or otherwise from the Corporation must have been owned by the Grantee for at least six (6) months before the date of such exercise; 

 

	 	•	 	any written statements or agreements required pursuant to Section 8.1 of the Plan; and 

  

	 	•	 	satisfaction of the tax withholding provisions of Section 8.5 of the Plan. 

  
 The Administrator also may, but is not required to, authorize a non-cash payment alternative by notice and third party payment in such manner as may be authorized by the
Administrator. 
  
 The Grantee may irrevocably elect, in such manner and at such
time or times prior to any applicable tax date as may be permitted or required under Section 8.5 of the Plan and rules established by the Administrator (and subject to the requirements of applicable law), to have the Corporation withhold shares of
Common Stock issuable on exercise of the Option at their fair market value at the time of exercise to satisfy any minimum withholding obligations of the Corporation or its Subsidiaries with respect to such exercise. 
  
 The Option will qualify as an ISO only if it meets all of the applicable requirements of the
Code. The Option may be rendered a nonqualified stock option if the Administrator permits the use of one or more of the non-cash payment alternatives referenced above. 
  

	4.	Early Termination of Option. 

  
 4.1 Possible Termination of Option upon Change in Control. The Option is subject to termination in connection with a Change in Control Event or
certain similar reorganization events as provided in Section 7.4 of the Plan. 
  
 4.2 Termination of Option upon a Termination of Grantee’s Employment or Services. Subject to earlier termination on the Expiration Date of the Option or pursuant to Section 4.1 above, if the Grantee ceases
to be employed by or ceases to provide services to the Corporation or a Subsidiary, the following rules shall apply (the last day that the Grantee is employed by or provides services to the Corporation or a Subsidiary is referred to as the
Grantee’s “Severance Date”): 
  

	 	•	 	 other than as expressly provided below in this Section 4.2, (a) the Grantee will have until the date that is 30 days after his or her Severance Date to exercise the
Option (or portion 

  

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thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the
Severance Date, and (c) the Option, to the extent exercisable for the 30-day period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 30-day period;

  

	 	•	 	if the termination of the Grantee’s employment is the result of the Grantee’s voluntary Retirement (as defined below and other than a termination by the Corporation or a
Subsidiary for Cause as provided below), then (a) the Grantee will have until the date that is 3 years after his or her Severance Date to exercise the Option (or portion thereof) to the extent that it was vested on the Severance Date or becomes
vested pursuant to the following, (b) the Option shall continue to vest for the 3-year period following the Severance Date to the extent that it was scheduled to vest during such period (on the date that the Option would have vested had the Grantee
remained employed by the Corporation or a Subsidiary, subject to acceleration pursuant to Sections 7.2 and 7.3 of the Plan and the attached Exhibit A), (c) to the extent the Option was not vested on the Severance Date or scheduled to vest during
such 3-year period, such portion of the Option shall terminate on the Severance Date, and (d) the Option, to the extent exercisable and not exercised at the end of such 3-year period, shall terminate at the close of business on the last day of the
3-year period; 

  

	 	•	 	if the termination of the Grantee’s employment is the result of the Grantee’s death or Disability (as defined below), then (a) the Grantee (or his beneficiary or personal
representative, as the case may be) will have until the date that is 3 years after the Grantee’s Severance Date to exercise the Option, (b) the Option, to the extent not otherwise vested on the Severance Date, shall automatically become fully
vested as of the Severance Date, and (c) the Option, to the extent exercisable for the 3-year period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 3-year period;

  

	 	•	 	if the termination of the Grantee’s employment is the result of a termination by the Corporation or a Subsidiary for Cause (as defined below), the Option (whether vested or
not) shall terminate on the Severance Date. 

  
 For
purposes of the Option, “Disability” means a permanent and total disability (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Administrator). For purposes of the Option,
“Retirement” means a termination of employment by the Grantee that occurs upon or after the Grantee’s attainment of age 65 and in accordance with the retirement policies of the Corporation (or the Subsidiary that employs the
Grantee) then in effect. For purposes of the Option, “Cause” means that the Grantee: (a) has been negligent in the discharge of his or her duties to the Corporation or a Subsidiary or has refused or failed to adequately perform
stated or assigned duties (other than by reason of a disability or analogous condition), which shall be determined by the Corporation or a Subsidiary in its sole discretion; (b) has been dishonest or committed or engaged in any act of theft,
embezzlement, dishonesty or fraud, breach of confidentiality, or unauthorized disclosure or use of inside information, customer lists, associate information, trade secrets or other confidential information of the Corporation or a Subsidiary or

  

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any other misuse of data, information or documents acquired in connection with employment by the Corporation or a Subsidiary; (c) has breached a fiduciary
duty, or otherwise violated any duty, law, rule, regulation or policy of the Corporation or a Subsidiary; (d) has misused or misappropriated the assets of the Corporation or a Subsidiary; (e) has been convicted of, or pled guilty or nolo contendere
to, any felony or any misdemeanor involving moral turpitude or otherwise causing embarrassment to the Corporation or a Subsidiary; (f) has materially breached any of the provisions of any agreement with the Corporation or a Subsidiary; (g) has
engaged in unfair competition with, or otherwise acted intentionally or negligently in a manner injurious to the reputation, goodwill, business or assets of, the Corporation or a Subsidiary; or (h) has induced a vendor or customer to breach or
terminate any contract with the Corporation or a Subsidiary or induced a principal for whom the Corporation or a Subsidiary acts as agent to breach or terminate such agency relationship. “Cause” shall also include any resignation by the
Grantee in anticipation of a discharge for “Cause” (as provided above) or resignation by the Grantee accepted by the Corporation or a Subsidiary in lieu of a formal discharge for “Cause.” 
  
 In all events the Option is subject to earlier termination on the Expiration
Date of the Option or as contemplated by Section 4.1. The Administrator shall be the sole judge of whether the Grantee continues to render employment or services for purposes of this Option Agreement. 
  
 Notwithstanding any post-termination exercise period provided for herein or
in the Plan, the Option will qualify as an ISO only if it is exercised within the applicable exercise periods for ISOs under, and meets all of the other requirements of, the Code. If the Option is not exercised within the applicable exercise periods
for ISOs or does not meet such other requirements, the Option will be rendered a nonqualified stock option. 
  

	5.	Non-Transferability. 

  
 The Option and any other rights of the Grantee under this Option Agreement or the Plan are nontransferable and exercisable only by the Grantee, except as
set forth in Section 5.7 of the Plan. For purposes of clarity, the Administrator has not authorized any transfer exceptions as contemplated by Section 5.7.2 of the Plan. 
  

	6.	Notices. 

  
 Any notice to be given under the terms of this Option Agreement shall be in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Grantee at the address last reflected on the Corporation’s payroll records, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in
person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United
States Government. Any such notice shall be given only when received, but if the Grantee is no longer employed by the Corporation or a Subsidiary, shall be deemed to have been duly given five (5) business days after the date mailed in accordance
with the foregoing provisions of this Section 6. 
  

 5 

	7.	Plan. 

  
 The Option and all rights of the Grantee under this Option Agreement are subject to the terms and conditions of the Plan, incorporated herein by this
reference. The Grantee agrees to be bound by the terms of the Plan and this Option Agreement (including these Terms). The Grantee acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Option Agreement. Unless
otherwise expressly provided in other sections of this Option Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such
rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof. 
  

	8.	Entire Agreement. 

  
 This Option Agreement (including these Terms) and the Plan together constitute the entire agreement and supersede all prior understandings and agreements,
written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Option Agreement may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation
may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision hereof. 
  

	9.	Governing Law. 

  
 This Option Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland without regard to conflict of
law principles thereunder. 
  

	10.	Effect of this Agreement. 

  
 Subject to the Corporation’s right to terminate the Option pursuant to Section 7.4 of the Plan, this Option Agreement shall be assumed by, be binding
upon and inure to the benefit of any successor or successors to the Corporation. 
  

	11.	Section Headings. 

  
 The section headings of this Option Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

  

	12.	Notice of Sale of ISO Shares. 

  
 The Grantee agrees that, upon any sale or other transfer of shares of Common Stock purchased pursuant to the Option within either one (1) year of the date
that they are acquired by the Grantee or two (2) years after the Award Date set forth above, the Grantee shall promptly provide to the Corporation written notice of such sale or other transfer. 
  

 6 

 EXHIBIT A 
  

PERFORMANCE-ACCELERATED VESTING 
  
 Subject to early termination of the Option under Section 4 of the Terms, the Option shall immediately become vested as to the percentage of the total
number of shares of Common Stock subject to the Option set forth on the table below (the “Vesting Percentage”) at the end of any period of ten (10) consecutive trading days on which the Common Stock is actively listed or traded on a
national securities exchange or on the New York Stock Exchange Reporting System and the closing or last price, as applicable, for a share of the Common Stock (“Stock Price”) on each of such trading days equals or exceeds the
applicable threshold amount set forth below (the “Stock Price Threshold”). For avoidance of doubt, the Option may vest only once with respect to any Stock Price Threshold so that, for example, if the Stock Price equals or exceeds
the 25% Stock Price Threshold below for ten (10) consecutive trading days and 25% of the shares subject to the Option vest accordingly, no additional shares subject to the Option shall vest if the Stock Price declines below the 25% Stock Price
Threshold and subsequently increases above the 25% Stock Price Threshold. Furthermore, the Vesting Percentages do not cumulate so that, for example, if the Stock Price equals or exceeds the 25% Stock Price Threshold for ten (10) consecutive trading
days and 25% of the shares subject to the Option vest accordingly, an additional 25% of the shares subject to the Option (not an additional 50% of such shares) shall vest if the Stock Price subsequently equals or exceeds the 50% Stock Price
Threshold for ten (10) consecutive trading days. 
  

				
	 Vesting Percentage

	  	Stock Price
Threshold

	 25%
	  	$	62.50
	 50%
	  	$	70.00
	 75%
	  	$	77.50
	 100%
	  	$	85.00

  
 Adjustments. The Administrator shall adjust the Stock Price Thresholds referenced above to the extent (if any) it determines that the adjustment is necessary or advisable to preserve the intended incentives and benefits to
reflect (1) any stock split, reverse stock split, stock dividend, material change in corporate capitalization, any material corporate transaction (such as a reorganization, combination, separation, merger, acquisition, or any combination of the
foregoing), or any complete or partial liquidation of the Corporation, (2) any change in accounting policies or practices, (3) the effects of any special charges to the Corporation’s earnings, or (4) any other similar special circumstances.

  

 7

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