Document:

Exhibit 10.3

 Exhibit 10.3 
 FBR CAPITAL MARKETS CORPORATION 
 Form of Non-Qualified Stock Option Agreement

 THIS STOCK OPTION AGREEMENT (this “Agreement”), dated as of the __ day of _______, 2006, between FBR CAPITAL
MARKETS CORPORATION, a Virginia corporation (the “Company”), and ___________________ (“Participant”), is made pursuant and subject to the provisions of the Company’s 2006 Long-Term Incentive Plan (the
“Plan”), a copy of which has been made available to Participant 
 1. Grant of Option. Pursuant to the Plan, the
Company, on _______, 2006 (the “Date of Grant”), granted to Participant, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, the right and Option to purchase from the
Company all or any part of an aggregate of __________ Shares at the option price of $_____ per Share (the “Option Price”). This Option is not intended to be an “incentive stock option” under Section 422 of the Code.
This Option will be exercisable as hereinafter provided. 
 2. Terms and Conditions. This Option is subject to the following terms and
conditions: 
 (a) Expiration Date. This Option shall expire at 11:59 p.m. on the day preceding the tenth anniversary of the Date of
Grant (the “Expiration Date”). 
 (b) Exercise of Option. This Option shall be fully exercisable
(“Vested”): (i) on and after the third anniversary of the Date of Grant and upon the attainment of the performance goals established by the Committee and set forth on Schedule A hereto (the “Performance
Goals”) or (ii) upon a Change in Control that occurs on or before the third anniversary of the Date of Grant. Once this Option becomes exercisable in accordance with clause (i) or clause (ii) of the preceding sentence, this
Option shall continue to be exercisable until the earlier of the termination of Participant’s rights hereunder pursuant to Paragraphs 3, 4 or 5 or until the Expiration Date. A partial exercise of this Option shall not affect Participant’s
right to exercise this Option with respect to the remaining Shares purchasable under this Option, subject to the terms and conditions of the Plan and this Agreement. 
 (c) Method of Exercise and Payment for Shares. This Option shall be exercised in accordance with the Plan by written notice delivered to the attention of the Company’s Chief Financial Officer at the
Company’s principal executive office. The exercise date shall be (i) in the case of notice by mail, the date of postmark, or (ii) if delivered in person, the date of delivery. Such notice shall be accompanied by payment of the Option
Price in full, in cash or cash equivalent acceptable to the Committee, or by the surrender of Shares that have been held by Participant for at least six months with an aggregate Fair Market Value (determined as of the preceding business day) which,
together with any cash or cash equivalent paid by Participant, is not less than the product of Option Price and the number of Shares for which the Option is being exercised. 

 (d) Transferability. During Participant’s lifetime, and subject to the provisions of
Section 12.3 of the Plan, this Option may not be transferred, sold, assigned, pledged or otherwise encumbered, other than by will or by the laws of descent and distribution, or pursuant to a qualified domestic relations order, and such Option
may only be exercised during the life of Participant only by Participant or Participant’s legal guardian and representative. Notwithstanding the foregoing, Participant may assign or transfer this Option with the consent of the Committee,
provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement relating to the transferred Option and shall execute an agreement satisfactory to the Company evidencing such
obligations. 
 3. Exercise in the Event of Death or Disability. Paragraph 2 of this Agreement to the contrary notwithstanding, if
Participant dies before the expiration of Participant’s rights under this Option or if Participant’s employment with the Company and its Subsidiaries and Affiliates terminates before the expiration of Participant’s rights under this
Option on account of disability, this Option shall be immediately Vested and exercisable, in whole or in part, and remain exercisable until the first anniversary of Participant’s death or termination on account of disability, as applicable
(even if such anniversary is after the Expiration Date). For purposes of this Agreement, “disability” means permanent and total disability as determined by the Committee, in its sole discretion. 
 4. Exercise After Retirement. Paragraph 2 of this Agreement to the contrary notwithstanding, if Participant’s employment with the Company and
its Subsidiaries and Affiliates terminates on account of retirement before the expiration of Participant’s rights under this Option, then (i) if this Option previously Vested it shall remain exercisable, in whole or in part, until the
earlier of the third anniversary of Participant’s retirement and the Expiration Date and (ii) if this Option was not Vested on the date of retirement it shall become exercisable if the Option becomes Vested in accordance with Paragraph 2
before the third anniversary of Participant’s retirement, in which case this Option may be exercised, in whole or in part, until the earlier of the third anniversary of Participant’s retirement or the Expiration Date. This paragraph shall
apply only if Participant enters into a non-compete, non-solicitation and confidentiality agreement in a form approved by the Committee. For purposes of this Agreement, “retirement” means retirement from employment with the Company, a
Subsidiary or an Affiliate of the Company as determined by the Committee, in its sole discretion. 
 5. Termination for Cause.
Paragraph 2 of this Agreement to the contrary notwithstanding, upon Participant’s termination for cause, all Options outstanding as of the date of termination, whether Vested or not Vested, shall be immediately canceled. For purposes of this
Agreement, “Cause” means (1) conviction of Participant for any crime (or upon entering a plea of guilty or nolo contendre to a charge of any crime) constituting a felony, (2) dishonesty in the course of fulfilling
Participant’s employment duties or (3) willful and deliberate failure on the part of Participant to perform his employment duties in any material respect. Notwithstanding the foregoing, if Participant is a party to an employment agreement
with the Company or any Subsidiary or Affiliate of the Company that contains a definition of “cause,” such definition shall apply to Participant for purposes of this Agreement. 
  

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 6. Exercise After Other Termination. Paragraph 2 of this Agreement to the contrary
notwithstanding, upon a termination of Participant’s employment with the Company and its Subsidiaries and Affiliates before the expiration of Participant’s rights under this Option and for any reason not described in paragraph 3, 4 or 5,
then (i) if this Option Vested before Participant’s termination of employment it shall remain exercisable, in whole or in part, until the earlier of the ninetieth day after termination or the Expiration Date and (ii) if this Option
did not become Vested before Participant’s termination of employment it shall be canceled as of the date of Participant’s termination of employment. The Committee, in its discretion, may require Participant to enter into a non-compete,
non-solicitation and confidentiality agreement in a form acceptable to the Committee as a condition to Participant’s right to exercise this Option pursuant to this paragraph. 
 7. Fractional Shares. Fractional shares shall not be issuable hereunder, and when any provision hereof may entitle Participant to a
fractional share such fraction shall be disregarded. 
 8. Change in Capital Structure. In the event of any merger, reorganization,
consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property, but without regard to the payment of any cash dividends by the Company in the ordinary course), stock split, reverse stock split, spin-off or
similar transaction or other change in corporate structure affecting the Shares or the value thereof, the terms of this Option shall be adjusted as the Committee determines is equitably required. 
 9. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia. 
 10. Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the date hereof and the provisions of this
Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the date hereof. 
 11. Participant Bound by Plan. Participant hereby acknowledges that a copy of the Plan has been made available to Participant and agrees to be bound by all the terms and provisions thereof. 
 12. No Right to Continued Service. This Option does not confer upon Participant any right with respect to continuance of service to the
Company or an Affiliate or membership on the Board of Directors. 
 13. Binding Effect. Subject to the limitations stated above
and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of Participant and the successors of the Company. 
 [Signatures Appear on the Following Page] 
  

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 IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized
officer, and Participant has affixed his signature hereto as of the date first set forth above. 
  

			
	FBR CAPITAL MARKETS CORPORATION
		
	By:	 	  
	 Name:
 Title:
	 	

  

			
	
	  
	Participant

  

			
		
	 Printed Name:Exhibit 10.4

 Exhibit 10.4 
  

 CONTRIBUTION AGREEMENT 
 by and between 
 FBR TRS HOLDINGS, INC. 
 and 
 FBR CAPITAL MARKETS
CORPORATION 
 dated as of July 20, 2006 
  

 TABLE OF CONTENTS 
  

					
	  	  	Page
	 ARTICLE I THE CONTRIBUTION
	  	1
			
	 1.1
	  	Contribution of Equity Interests	  	1
	 1.2
	  	Consideration	  	1
		
	 ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS
	  	1
			
	 2.1
	  	Representations and Warranties of Acquirer	  	1
	 2.2
	  	Representations and Warranties of Contributor	  	2
	 2.3
	  	Covenants of Acquirer	  	3
	 2.4
	  	Covenants of Contributor	  	3
		
	 ARTICLE III CONDITIONS PRECEDENT TO THE CLOSING
	  	3
			
	 3.1
	  	Conditions to Acquirer’s Obligations	  	3
	 3.2
	  	Conditions to Contributor’s Obligations	  	3
		
	 ARTICLE IV CLOSING AND CLOSING DOCUMENTS
	  	4
			
	 4.1
	  	Closing	  	4
	 4.2
	  	Contributor’s Deliveries	  	4
	 4.3
	  	Acquirer’s Deliveries	  	4
	 4.4
	  	Fees and Expenses; Closing Costs	  	5
		
	 ARTICLE V MISCELLANEOUS
	  	5
			
	 5.1
	  	Entire Agreement; Modifications and Waivers	  	5
	 5.2
	  	Successors and Assigns	  	5
	 5.3
	  	Article Headings	  	5
	 5.4
	  	Governing Law	  	5
	 5.5
	  	Counterparts	  	5
	 5.6
	  	Severability	  	5

 EXHIBITS & SCHEDULES 
  

			
	 Schedule 1
	  	Contributed Property

  

 (i) 

 CONTRIBUTION AGREEMENT 
 THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made as of this
             day of July 20, 2006 by and between FBR TRS HOLDINGS, INC., a Virginia corporation (“Contributor”) and FBR CAPITAL MARKETS CORPORATION, a Virginia
corporation (“Acquirer”). 
 RECITALS 
 A. Contributor is the record and beneficial owner of the equity interests set forth on Schedule 1 attached hereto (the “Contributed
Property”). 
 B. Contributor desires to contribute the Contributed Property to Acquirer, on the terms and conditions hereinafter
set forth. 
 C. Acquirer desires to acquire the Contributed Property from Contributor, on the terms and conditions hereinafter set forth.

 AGREEMENT 
 NOW,
THEREFORE, for and in consideration of the mutual covenants herein contained, the parties hereto agree as follows: 
 ARTICLE I

 THE CONTRIBUTION 
 1.1 Contribution of Equity Interests. Contributor agrees to contribute, transfer, assign and convey the Contributed Property to Acquirer, and Acquirer agrees to acquire and accept transfer of the Contributed Property, pursuant to the
terms and conditions set forth in this Agreement. The Contributed Property shall be transferred to Acquirer free and clear of any and all liens, encumbrances, security interests, prior assignments or conveyances, conditions, restrictions, voting
agreements, claims, and any other matters affecting title thereto. 
 1.2 Consideration. The total consideration for which Contributor
agrees to contribute and assign the Contributed Property to Acquirer, and which Acquirer agrees to pay to Contributor, subject to the terms of this Agreement, shall be 45,999,000 shares of common stock, par value $.001 per share, of Acquirer (the
“Consideration”). 
 ARTICLE II 
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
 2.1 Representations and Warranties of
Acquirer. Acquirer hereby represents and warrants to Contributor that the following statements are true, correct, and complete in all material respects as of the date of this Agreement and will be true, correct, and complete in all material
respects as of the Closing Date: 
 (a) Organization and Power. Acquirer is a corporation duly organized and validly
existing under the laws of the Commonwealth of Virginia, and has full right, power, and 

 
authority to conduct its business as presently proposed to be conducted, to enter into this Agreement and to assume and perform all of its obligations under
this Agreement; and the execution and delivery of this Agreement and the performance by Acquirer of its obligations under this Agreement have been duly authorized by all requisite action of Acquirer and require no further action or approval of
Acquirer or of any other individuals or entities to constitute this Agreement as a binding and enforceable obligation of Acquirer, assuming due authorization, execution and delivery of this Agreement by Contributor; this Agreement is the valid and
binding agreement of Acquirer, enforceable against Acquirer in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor’s rights generally, and by general
principles of equity. Acquirer is duly qualified to do business and is in good standing in each jurisdiction where such qualification is required. 
 (b) Noncontravention. None of the entry into, the performance of, or the compliance with, this Agreement by Acquirer has resulted, or will result, in any violation of, default under, or the acceleration of, any
obligation under the Acquirer’s articles of incorporation, bylaws, or any mortgage, indenture, lien agreement, note, contract, permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to Acquirer.

 (c) Consideration. The shares of common stock of Acquirer that comprise the Consideration have been duly authorized,
and, when issued and delivered to the Contributor pursuant to this Agreement, will be validly issued, fully paid and nonassessable. 
 (d) Consents. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing by or with any governmental agency or body necessary for the execution, delivery, and performance of this
Agreement or the transactions contemplated hereby by Acquirer has been obtained. 
 2.2 Representations and Warranties of Contributor.
Contributor hereby represents and warrants to Acquirer that that the following statements are true, correct, and complete in all material respects as of the date of this Agreement and will be true, correct, and complete in all material respects as
of the Closing Date: 
 (a) Organization and Power. Contributor is a corporation duly organized and validly existing
under the laws of the Commonwealth of Virginia, and has full right, power, and authority to conduct its business as presently proposed to be conducted, to enter into this Agreement and to assume and perform all of its obligations under this
Agreement; and the execution and delivery of this Agreement and the performance by Contributor of its obligations under this Agreement have been duly authorized by all requisite action of Contributor and require no further action or approval of
Contributor or of any other individuals or entities to constitute this Agreement as a binding and enforceable obligation of Contributor, assuming due authorization, execution and delivery of this Agreement by Acquirer; this Agreement is the valid
and binding agreement of Contributor, enforceable against Contributor in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor’s rights generally, and by
general principles of equity. Contributor is duly qualified to do business and is in good standing in each jurisdiction where such qualification is required. 
  

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 (b) Noncontravention. None of the entry into, the performance of, or the
compliance with, this Agreement by Contributor has resulted, or will result, in any violation of, default under, or the acceleration of, any obligation under the Contributor’s articles of incorporation, bylaws, or any mortgage, indenture, lien
agreement, note, contract, permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to Contributor. 
 (c) Consents. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing by or with any governmental agency or body necessary for the execution, delivery,
and performance of this Agreement or the transactions contemplated hereby by Contributor has been obtained. 
 2.3 Covenants of
Acquirer. In addition to the acts, instruments and agreements recited herein and contemplated to be performed, executed and delivered by Acquirer and Contributor, Acquirer shall perform, execute, and deliver or cause to be performed, executed,
and delivered at the Closing or after the Closing, any and all further acts, instruments, and agreements and provide such further assurances as Contributor may reasonably require to consummate the transactions contemplated hereunder. 
 2.4 Covenants of Contributor. In addition to the acts, instruments and agreements recited herein and contemplated to be performed, executed and
delivered by Acquirer and Contributor, Contributor shall perform, execute, and deliver or cause to be performed, executed, and delivered at the Closing or after the Closing, any and all further acts, instruments, and agreements and provide such
further assurances as Acquirer may reasonably require to consummate the transactions contemplated hereunder. 
 ARTICLE III 

CONDITIONS PRECEDENT TO THE CLOSING 
 3.1 Conditions to Acquirer’s Obligations. In addition to any other conditions set forth in this Agreement, Acquirer’s obligation to consummate the Closing is subject to the timely satisfaction of each and every one of the
conditions and requirements set forth in this Section 3.1, all of which shall be conditions precedent to Acquirer’s obligations under this Agreement. 
 (a) Contributor’s Obligations. Contributor shall have performed all of its obligations hereunder which are to be performed
prior to Closing, and shall have delivered or caused to be delivered to Acquirer all of the documents and other information required to be delivered pursuant to Section 4.2. 
 (b) Contributor’s Representations and Warranties. Contributor’s representations and warranties set forth in
Section 2.2 shall be true and correct as if made again on the Closing Date. 
 (c) No Injunction. On the Closing
Date, there shall be no effective injunction, writ, preliminary restraining order or other order issued by a court of competent jurisdiction restraining or prohibiting the consummation of the transactions contemplated hereby. 
 3.2 Conditions to Contributor’s Obligations. In addition to any other conditions set forth in this Agreement, Contributor’s obligations
to consummate the Closing is subject to the 

  

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timely satisfaction of each and every one of the conditions and requirements set forth in this Section 3.2, all of which shall be conditions precedent
to Contributor’s obligations under this Agreement. 
 (a) Acquirer’s Obligations. Acquirer shall have
performed all obligations of Acquirer hereunder which are to be performed prior to Closing, and shall have delivered or caused to be delivered to Contributor, all of the documents and other information required to be delivered pursuant to
Section 4.3. 
 (b) Acquirer’s Representations and Warranties. Acquirer’s representations and warranties
set forth in Section 2.1 shall be true and correct as if made again on the Closing Date. 
 (c) No Injunction. On
the Closing Date, there shall be no effective injunction, writ, preliminary restraining order or other order issued by a court of competent jurisdiction restraining or prohibiting the consummation of the transactions contemplated hereby. 

ARTICLE IV 
 CLOSING AND
CLOSING DOCUMENTS 
 4.1 Closing. The consummation and closing (the “Closing”) of the transactions
contemplated under this Agreement shall take place at the offices of Hunton & Williams LLP, 1900 K Street, N.W., Washington, D.C. 20006, or such other place as is mutually agreeable to the parties as soon as reasonably practicable following
the satisfaction of the conditions set forth in Article III of this Agreement (the “Closing Date”), or as otherwise set by agreement of the parties. 
 4.2 Contributor’s Deliveries. At the Closing, Contributor shall deliver the following to Acquirer: 
 (a) Authority Documents. Evidence reasonably satisfactory to Acquirer that the person or persons executing the documents required pursuant to this Agreement on behalf of Contributor has full right, power, and
authority to do so. 
 (b) Stock Certificates. Certificates representing all of the Contributed Property, duly endorsed
and assigned to Acquirer. 
 (c) Other Documents. Contributor shall have executed and delivered any other document or
instrument reasonably requested by Acquirer or required hereby. 
 4.3 Acquirer’s Deliveries. At the Closing, Acquirer shall
deliver the following to the Contributors: 
 (a) The Consideration. Acquirer shall have executed and delivered to
Contributor a duly signed and endorsed stock certificate representing the Consideration. 
 (b) Authority Documents.
Evidence reasonably satisfactory to Contributor that the person or persons executing the documents required pursuant to this Agreement on behalf of Acquirer have full right, power, and authority to do so. 
  

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 (c) Other Documents. Acquirer shall have executed and delivered any other document
or instrument reasonably requested by Contributor or required hereby. 
 4.4 Fees and Expenses; Closing Costs. Acquirer shall pay all
fees, expenses and closing costs relating to the transactions contemplated by this Agreement; provided however, that Contributor shall pay its own attorneys’ and consultants’ fees and expenses. 
 ARTICLE V 
 MISCELLANEOUS

 5.1 Entire Agreement; Modifications and Waivers. This Agreement constitutes the entire agreement among the parties hereto
and may not be modified or amended except by instrument in writing signed by the parties hereto. 
 5.2 Successors and Assigns. Except
as set forth in this Article, this Agreement may not be assigned by Acquirer or Contributor without the prior approval of the other party hereto. This Agreement shall be binding upon, and inure to the benefit of, the Contributor and Acquirer, and
their respective legal representatives, successors, and permitted assigns. 
 5.3 Article Headings. Article headings and article and
section numbers are inserted herein only as a matter of convenience and in no way define, limit, or prescribe the scope or intent of this Agreement or any part hereof and shall not be considered in interpreting or construing this Agreement.

 5.4 Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Virginia.

 5.5 Counterparts. This Agreement may be executed in any number of counterparts and by any party hereto on a separate counterpart,
each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same instrument. 
 5.6 Severability. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
 [SIGNATURES APPEAR ON FOLLOWING
PAGES] 
  

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 IN WITNESS WHEREOF, this Agreement has been entered into effective as of the date above first written.

  

			
	CONTRIBUTOR:
	
	FBR TRS HOLDINGS, INC.,
a Virginia corporation
		
	By:	 	/s/ Kurt R. Harrington
	 Name:
	 	Kurt R. Harrington
	 Title:
	 	CFO and Treasurer
	
	ACQUIRER:
	
	FBR CAPITAL MARKETS CORPORATION,
a Virginia corporation
		
	By:	 	/s/ William J. Ginivan
	 Name:
	 	William J. Ginivan
	 Title:
	 	SVP, General Counsel and Secretary

  

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