Exhibit 10.1


 


Option
No.:             


 


FIELDSTONE
INVESTMENT CORPORATION EQUITY INCENTIVE PLAN


NON-QUALIFIED STOCK OPTION
AGREEMENT WITH DIVIDEND EQUIVALENTS


 


Fieldstone
Investment Corporation (the “Company”) hereby grants an option to
purchase shares of its common stock (the “Stock”) to the optionee named
below.  The terms and conditions of the
option are set forth in this cover sheet, in the attachment, and in the Company’s
Equity Incentive Plan (the “Plan”).


 


	
  Grant Date:

  	
  Option
  Expiration Date:

  



 


Name
of Optionee:                                                                         


 


Number of Shares Covered by Option:                                                   (“Option
Shares”)


 


Option Price per Share:
$            .       
(closing price of the Stock on the Grant Date)


 


	
  Vesting
  Schedule:

  	
  Vesting Date

  	
  Percentage of
  Option Shares

  



 


Dividend Equivalents:  Before the Option Shares vest, Dividend
Equivalents will be earned based on the number of Option Shares and will be
deemed to be invested in phantom shares of Stock (which will also earn Dividend
Equivalents).  Accrued Dividend
Equivalents (as adjusted for the performance of the Stock and the reinvestment
of Dividend Equivalents in phantom shares) will be paid to you in cash net of
minimum statutory withholdings, when you vest in the Option Shares.  Once the Option Shares are vested, Dividend
Equivalents will be paid to you in cash currently net of minimum statutory
withholdings based on the number of Option Shares still outstanding.  See “Dividend Equivalents”
in the Agreement for more information.


 


Option Shares are subject to forfeiture upon your
termination of Service in accordance with the Agreement and the Plan.  Vesting of Option Shares is subject to your
continued Service.


 


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.


 


 


	
  Optionee:

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  
	
  Company:

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
				



 


 


Attachment


 


This is not a stock certificate or a negotiable
instrument.


 





















 


FIELDSTONE
INVESTMENT CORPORATION EQUITY INCENTIVE PLAN


NON-QUALIFIED STOCK OPTION
AGREEMENT


 


	
  Non-qualified Stock Option

  	
   

  	
  This option is not intended to be an incentive stock
  option under Section 422 of the Internal Revenue Code and will be
  interpreted accordingly.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  This option is only exercisable before it expires
  and then only with respect to the vested portion of the option.  Subject to the preceding sentence, you may
  exercise this option, in whole or in part, to purchase a whole number of
  vested shares not less than 100 shares, unless the number of shares purchased
  is the total number available for purchase under the option, by following the
  procedures set forth in the Plan and below in this Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your right to purchase shares of Stock under this
  option vests as to 100% of the Option Shares indicated on the cover sheet on
  the Vesting Date shown on the cover sheet, provided you then continue in
  Service.  No shares of Stock will vest
  after your Service has terminated for any reason.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding the forgoing, 100% of the Option
  Shares shall become vested upon your Involuntary Termination within one year
  following a Corporate Transaction.  For
  the purpose of this Agreement, “Involuntary Termination” means a termination
  of your Service by the Company without Cause or a termination of your Service
  by you for Good Reason.  Good Reason
  shall be determined by the Board and shall mean, unless otherwise provided in
  an applicable agreement between you and the Company or an Affiliate, without
  your consent: (i) any material diminution of your duties or responsibilities
  (except in each case in connection with the termination of the your
  employment for Cause or as a result of your death or Disability), or the
  assignment to you of duties or responsibilities that are materially inconsistent
  with your then position; or (ii) a relocation by the Company of your office
  as of the Grant Date to a location more than 50 miles from the location of
  such office, other than on a temporary basis not to exceed a period equal to
  two calendar months.

  
	
   

  	
   

  	
   

  
	
  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 earlier of your termination
  of Service and the termination of the option.  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

  



 


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  credit the Dividend Equivalent to you in the
  following manner:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  While your option is unvested, Dividend Equivalents
  will be earned based on the number of Option Shares, and deemed invested in
  phantom shares of Company Stock at the closing price of the Company 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 value of credited Dividend
  Equivalents, as adjusted for the performance of Company Stock (including the
  deemed payment and reinvestment of dividends on the phantom shares), will be
  paid to you in cash at such time as your option becomes vested. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The payment of Dividend Equivalents cash value is
  subject to withholding tax at the statutory minimum level.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Once your option becomes vested, Dividend
  Equivalents will be paid to you with regard to the unexercised portion of
  your option (determined as of the ex-dividend date) in the same amount and at
  the same time as cash dividends are paid to the holders of the Company’s
  common stock. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No Dividend Equivalents will be credited or paid
  following the termination of your option.  In addition, 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 option will expire in any event at the close of
  business at Company headquarters on the Option Expiration Date shown on the
  cover sheet.  Your option will expire
  earlier (but never later) if your Service terminates, as described below.

  
	
   

  	
   

  	
   

  
	
  Regular Termination

  	
   

  	
  If your Service terminates for any reason, other
  than: (i) your death, (ii) your Disability or (iii) Cause, then if your
  option is unvested it will expire immediately (accrued Dividend Equivalents
  will also expire immediately) and if your option is vested, it will expire at
  the close of business at Company headquarters on the 90th day after your
  termination date.

  
	
   

  	
   

  	
   

  
	
  Termination for Cause

  	
   

  	
  If your Service is terminated for Cause, then you
  shall immediately forfeit all rights to your option (including any accrued
  Dividend Equivalents) and the option shall immediately expire.

  
	
   

  	
   

  	
   

  
	
  Death

  	
   

  	
  If your Service terminates because of your death,
  then your option shall become 100% vested and will expire at the close of
  business at Company headquarters on the date twelve (12) months after the
  date of death.  During that twelve
  month period, your estate or

  



 


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  heirs may exercise the vested portion of your
  option.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In addition, if you die during the 90-day period
  described in connection with a regular termination (i.e., a termination of
  your Service not on account of your death, Disability or Cause), and a vested
  portion of your option has not yet been exercised, then your option will
  instead expire on the date twelve (12) months after your termination date.  In such a case, during the period following
  your death up to the date twelve (12) months after your termination date,
  your estate or heirs may exercise the vested portion of your option.

  
	
   

  	
   

  	
   

  
	
  Disability

  	
   

  	
  If your Service terminates because of your
  Disability, then your option shall become 100% vested and will expire at the
  close of business at Company headquarters on the date twelve (12) months
  after your termination date.

  
	
   

  	
   

  	
   

  
	
  Leaves of Absence

  	
   

  	
  For purposes of this option, 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 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.

  
	
   

  	
   

  	
   

  
	
  Notice of Exercise

  	
   

  	
  When you wish to exercise this option, you must
  notify the Company by filing the proper “Notice of Exercise” form at the
  address given on the form.  Your notice
  must specify how many shares you wish to purchase (in a parcel of at least
  100 shares generally). Your notice must also specify how your shares of Stock
  should be registered (in your name only or in your and your spouse’s names as
  joint tenants with right of survivorship). The notice will be effective when
  it is received by the Company.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If someone else wants to exercise this option after
  your death, that person must prove to the Company’s satisfaction that he or
  she is entitled to do so.

  
	
   

  	
   

  	
   

  
	
  Form of Payment

  	
   

  	
  When you submit your notice of exercise, you must
  include payment of the option price for the shares you are purchasing.  Payment may be made in one (or a
  combination) of the following forms:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •                                          Cash,
  your personal check, a cashier’s check, a money order

  



 


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  or another cash equivalent acceptable to the
  Company.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •                                          Shares
  of Stock which have already been owned by you for more than six months and
  which are surrendered to the Company.  The
  value of the shares, determined as of the effective date of the option
  exercise, will be applied to the option price.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •                                          To
  the extent a public market for the Stock exists as determined by the Company,
  by delivery (on a form prescribed by the Company) of an irrevocable direction
  to a licensed securities broker acceptable to the Company to sell Stock and
  to deliver all or part of the sale proceeds to the Company in payment of the
  aggregate option price and any withholding taxes.  You shall be responsible for any commissions
  imposed by the broker.

  
	
   

  	
   

  	
   

  
	
  Withholding Taxes

  	
   

  	
  You will not be allowed to exercise this option
  unless you make acceptable arrangements to pay any withholding or other taxes
  that may be due as a result of the option exercise or sale of Stock acquired
  under this option.  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 or the exercise or sale of shares arising from this grant, 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.  Withholding shall be made
  at the statutory minimum level.

  
	
   

  	
   

  	
   

  
	
  Transfer of Option

  	
   

  	
  During your lifetime, only you (or, in the event of
  your legal incapacity or incompetency, your guardian or legal representative)
  may exercise the option.  You cannot
  transfer or assign this option.  For
  instance, you may not sell this option or use it as security for a loan.  If you attempt to do any of these things,
  this option will immediately become invalid.  You may, however, dispose of this option 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 honor a notice of exercise from
  your spouse, nor is the Company obligated to recognize your spouse’s interest
  in your option in any other way.

  
	
   

  	
   

  	
   

  
	
  Retention Rights

  	
   

  	
  Neither your option nor this Agreement give you the
  right to be retained by the Company (or any Affiliate) in any capacity.  The Company (and any Affiliates) reserve the
  right to terminate your Service at any time and for any reason.

  
	
   

  	
   

  	
   

  
	
  Shareholder Rights

  	
   

  	
  You, or your estate or heirs, have no rights as a
  shareholder of the Company until a certificate for your option’s shares has been
  issued (or an appropriate book entry has been made). No adjustments are made
  for dividends or other rights if the applicable

  



 


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  record date occurs before your stock certificate is
  issued (or an appropriate book entry has been made), except as described in
  the Plan.

  
	
   

  	
   

  	
   

  
	
  Investment Representation

  	
   

  	
  If the sale of Stock under the Plan is not
  registered under the Securities Act, but an exemption is available which
  requires an investment or other representation, you shall represent and agree
  at the time of exercise that the Stock being acquired upon exercise of this
  option is being acquired for investment, and not with a view to the sale or
  distribution thereof, and shall make such other representations as are deemed
  necessary or appropriate by the Company and its counsel.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock split, a stock dividend or a
  similar change in the Stock, the number of shares covered by this option and
  the option price per share shall be adjusted (and rounded down to the nearest
  whole number) if required pursuant to the Plan.  Your option shall be subject to the terms of
  the agreement of merger, liquidation or reorganization in the event the
  Company is subject to such corporate activity.

  
	
   

  	
   

  	
   

  
	
  Applicable Law

  	
   

  	
  This Agreement will be interpreted and enforced
  under the laws of the State of Maryland, other than any conflicts or choice
  of law rule or principle that might otherwise refer construction or
  interpretation of this Agreement to the substantive law of another
  jurisdiction.

  
	
   

  	
   

  	
   

  
	
  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 option.  Any prior agreements, commitments or
  negotiations concerning this option are superseded.

  
	
   

  	
   

  	
   

  
	
  Other Agreements

  	
   

  	
  You agree, as a condition of the grant of this
  option, that in connection with the exercise of the option, 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.

  
	
   

  	
   

  	
   

  
	
  Stock Ownership

  	
   

  	
  Your right to this option is subject to your
  compliance with the

  



 


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  Requirements

  	
   

  	
  stock ownership requirement (“Stock Ownership
  Requirement”) set forth in this section of the Agreement.  You are required to continue to hold an
  aggregate of sixty percent (60%) of the shares of Stock acquired by you
  pursuant to this option together with all other shares of Stock acquired by
  you pursuant to any other option grant made under the Plan (such 60% to be
  determined after reducing the shares of Stock covered by this grant and all
  other option grants made to you under the Plan by the number shares of Stock
  equal in value to the amount required to be withheld to pay taxes in
  connection with the exercise of this Option and such other option grants and
  by the number of shares of Stock equal in value to the Option Price as of the
  date of exercise) until the number of shares of Stock owned by you satisfies
  the Company’s stock ownership guidelines.  If the number of shares of Stock owned by
  you satisfies the Company’s stock ownership guidelines, you may dispose of
  the shares of Stock acquired pursuant to this option as long as you continue
  to satisfy the Company’s stock ownership guidelines after the disposition.  The Stock Ownership Requirements shall lapse
  upon your termination of Service.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Company shall have the right to enforce the
  Stock Ownership Requirements contained in this Agreement through the use of
  an escrow arrangement.  In the event
  the Company uses an escrow, the certificates for the shares issued pursuant
  to the exercise of this option shall be deposited in escrow with the
  Secretary of the Company to be held in accordance with the this section of
  the Agreement.  The shares of Stock
  held in escrow shall be subject to the following terms and conditions
  relating to their release from escrow: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •                                          All
  shares shall be released upon your termination of Service.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •                                          Upon
  your written request, the shares (or a portion thereof) shall be released to
  you from the escrow upon presentation of evidence satisfactory to the Company
  that the disposition of such shares would not cause you to violate the Stock
  Ownership Requirements.

  



 


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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