Exhibit 10.2

 

DER No.:              

 

FIELDSTONE INVESTMENT CORPORATION EQUITY INCENTIVE PLAN

 

DIVIDEND EQUIVALENT RIGHTS AWARD AGREEMENT

 

Fieldstone Investment Corporation (the “Company”) hereby grants an award with
respect to dividend equivalent rights (the “Dividend Equivalent Rights”) on the
Company’s common stock (the “Stock”) to the Holder named below.  The terms and
conditions of the Dividend Equivalent Rights are set forth in this cover sheet,
in the attachment, and in the Company’s Equity Incentive Plan (the “Plan”).

 

Grant Date:                                         

 

Dividend Equivalent Rights Expiration Date: 
                                                       

 

Name of Holder: 
                                                                                                    

 

Number of Dividend Equivalent Rights: 
                                                               

 

Option:  Non Qualified Option Agreement dated                  between the
Company and the Holder.

 

Option Shares: Number of Shares Covered by the Option Agreement

 

By signing this cover sheet, you agree to all of the terms and conditions
described in the attached Agreement and in the Plan, a copy of which is also
attached.  You acknowledge that you have carefully reviewed the Plan, and agree
that the Plan will control in the event any provision of this Agreement should
appear to be inconsistent.

 

 

Holder:

 

 

 

(Signature)

 

 

 

Company:

 

 

 

(Signature)

 

 

 

 

Title:

 

 

 

Attachment

 

This is not a stock certificate or a negotiable instrument.

 

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Dividend Equivalents

 

You will be entitled to a cash payment (the “Dividend Equivalent”) based on the
amount of any cash dividends paid by the Company on the Stock after the Grant
Date and prior to the termination of the Dividend Equivalent Rights. The
Dividend Equivalent will be calculated as the product of: (a) the number of
shares remaining subject to the Option as of the ex-dividend date for the Stock
times (b) the per share cash dividend amount paid to holders of the Stock.

 

The Company will pay the Dividend Equivalent to you in the following manner:

 

•      While the Option is unvested, Dividend Equivalents will be credited and
deemed invested in phantom shares of Stock at the closing price of the Stock on
the dividend payment date. The phantom shares shall themselves be credited with
dividend equivalents at the same time, and in the same amount, as cash dividends
are paid on the Stock. The total amount of credited Dividend Equivalents, as
adjusted for the performance of Stock (including the deemed payment and
reinvestment of dividends on the phantom shares), will be paid to you in cash at
such time as the Option becomes vested. The cash value of any phantom shares
credited as Dividend Equivalents shall be determined by dividing the number of
phantom shares by the Fair Market Value of the Stock on the vesting date.

 

•     Once the Option becomes vested, Dividend Equivalents will be paid to you
with regard to the unexercised portion of the Option (determined as of the
ex-dividend date) at the same time as cash dividends are paid to the holders of
Stock.

 

No Dividend Equivalents will be credited or paid based on dividends that have an
ex-dividend date that is later than the date on which your Service terminates
for any reason.

 

 

 

Term

 

Your Dividend Equivalent Rights will expire in any event at the close of
business at Company headquarters on the Dividend Equivalent Rights Expiration
Date shown on the cover sheet. Your Dividend Equivalent Rights will expire on
the earlier of (i) termination of your Services, as described below, (ii) the
full exercise of the Option, or (iii) termination of the Option. No Dividend
Equivalents will be credited or paid following the

 

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termination of your Dividend Equivalent Rights.

 

 

 

Termination for
Cause

 

If your Service is terminated for Cause, then you shall immediately forfeit all
rights to your Dividend Equivalents and the Dividend Equivalent Rights shall
immediately expire.

 

 

 

Death

 

If your Service terminates because of your death, the total amount of credited
Dividend Equivalents will be paid to your estate or heirs in cash no later than
one hundred eighty (180) days following your Death. The cash value of any
phantom shares credited as Dividend Equivalents shall be determined by dividing
the number of phantom shares by the Fair Market Value of the Stock on the date
of your Death. Upon the payment of the Dividend Equivalents, your Dividend
Equivalent Rights will expire.

 

 

 

Disability

 

If your Service terminates because of your Disability, the total amount of
credited Dividend Equivalents will be paid to you in cash no later than one
hundred eighty (180) days following the termination date.The cash value of any
phantom shares credited as Dividend Equivalents shall be determined by dividing
the Fair Market Value of the Stock on the date of the termination of your
Services due to Disability. Upon the payment of the Dividend Equivalents, your
Dividend Equivalent Rights will expire.

 

 

 

Leaves of Absence

 

For purposes of your Dividend Equivalent Rights, your Service does not terminate
when you go on a bona fide employee leave of absence that was approved by the
Company in writing, if the terms of the leave provide for continued Service
crediting, or when continued Service crediting is required by applicable law.
However, your Service will be treated as terminating ninety (90) days after you
went on employee leave, unless your right to return to active work is guaranteed
by law or by a contract. Your Service terminates in any event when the approved
leave ends unless you immediately return to active employee work.

 

The Company determines, in its sole discretion, which leaves count for this
purpose, and when your Service terminates for all purposes under the Plan.

 

 

 

Withholding Taxes

 

In the event that the Company determines that any federal, state, local or
foreign tax or withholding payment is required relating to the payment of
Dividend Equivalents, the Company shall have the right to require such payments
from you, or withhold such amounts from other payments due to you from the
Company or any Affiliate.

 

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Transfer of Dividend Equivalent Rights

 

You cannot transfer or assign your Dividend Equivalents or Dividend Equivalent
Rights. For instance, you may not sell your Dividend Equivalents or Dividend
Equivalent Rights or use them as security for a loan. If you attempt to do any
of these things, your Dividend Equivalent and Dividend Equivalent Rights will
immediately become invalid. You may, however, dispose of your Dividend
Equivalent Rights in your will or it may be transferred upon your death by the
laws of descent and distribution.

 

Regardless of any marital property settlement agreement, the Company is not
obligated to recognize your spouse’s interest in your Dividend Equivalent Rights
in any other way.

 

 

 

The Plan

 

The text of the Plan is incorporated in this Agreement by reference. Certain
capitalized terms used in this Agreement are defined in the Plan, and have the
meaning set forth in the Plan.

 

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this Agreement. Any prior agreements, commitments or
negotiations concerning this Agreement are superseded.

 

 

 

Other Agreements

 

You agree, as a condition of the grant of this Award, that you will execute such
document(s) as necessary to become a party to any shareholder agreement or
voting trust as the Company may require.

 

 

 

Consent to Electronic Delivery

 

The Company may choose to deliver certain statutory materials relating to the
Plan in electronic form. By accepting this option grant you agree that the
Company may deliver the Plan prospectus and the Company’s annual report to you
in an electronic format. If at any time you would prefer to receive paper copies
of these documents, as you are entitled to, the Company would be pleased to
provide copies. Please contact the Secretary of the Company to request paper
copies of these documents.

 

 

 

Section 409A

 

Anything in this Agreement to the contrary notwithstanding, if under the terms
of this Agreement you would receive any payment that, absent the application of
this paragraph, would be subject to interest and additional tax imposed pursuant
to Section 409A(a) of the Code, then no such payment shall be payable prior to
the date that will cause such payment not to be subject to such interest and
additional tax.

 

By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.

 

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