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Exhibit 10.1  

 

 

FIELDSTONE INVESTMENT CORPORATION  

 EQUITY INCENTIVE PLAN  

  

 

 
  

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	 
	 
	 	Page

	1.	 	PURPOSE	 	1
	2.	 	DEFINITIONS	 	1
	3.	 	ADMINISTRATION OF THE PLAN	 	4
	 	 	3.1.	 	Board	 	4
	 	 	3.2.	 	Committee.	 	4
	 	 	3.3.	 	Terms of Awards.	 	4
	 	 	3.4.	 	Deferral Arrangement.	 	5
	 	 	3.5.	 	No Liability.	 	5
	4.	 	STOCK SUBJECT TO THE PLAN	 	5
	5.	 	EFFECTIVE DATE, DURATION AND AMENDMENTS	 	5
	 	 	5.1.	 	Effective Date.	 	5
	 	 	5.2.	 	Term.	 	6
	 	 	5.3.	 	Amendment and Termination of the Plan	 	6
	6.	 	AWARD ELIGIBILITY AND LIMITATIONS	 	6
	 	 	6.1.	 	Service Providers; Outside Directors; and Other Persons	 	6
	 	 	6.2.	 	Successive Awards.	 	6
	 	 	6.3.	 	Limitation on Shares of Stock Subject to Awards and Cash Awards.	 	6
	 	 	6.4.	 	Limitations on Incentive Stock Options.	 	6
	 	 	6.5.	 	Stand-Alone, Additional, Tandem, and Substitute Awards	 	7
	7.	 	AWARD AGREEMENT	 	7
	8.	 	TERMS AND CONDITIONS OF OPTIONS	 	7
	 	 	8.1.	 	Option Price	 	7
	 	 	8.2.	 	Vesting.	 	7
	 	 	8.3.	 	Term.	 	7
	 	 	8.4.	 	Termination of Service.	 	8
	 	 	8.5.	 	Limitations on Exercise of Option.	 	8
	 	 	8.6.	 	Method of Exercise.	 	8
	 	 	8.7.	 	Rights of Holders of Options	 	8
	 	 	8.8.	 	Delivery of Stock Certificates or Book Entry.	 	8
	 	 	8.9.	 	No Option Repricing.	 	8
	9.	 	TRANSFERABILITY OF OPTIONS	 	9
	 	 	9.1.	 	Transferability of Options	 	9
	 	 	9.2.	 	Family Transfers.	 	9
	10.	 	STOCK APPRECIATION RIGHTS	 	9
	 	 	10.1.	 	Right to Payment.	 	9
	 	 	10.2.	 	Other Terms.	 	9
	11.	 	RESTRICTED STOCK AND STOCK UNITS	 	9
	 	 	11.1.	 	Grant of Restricted Stock or Stock Units.	 	9
	 	 	11.2.	 	Restrictions.	 	10
	 	 	11.3.	 	Restricted Stock Certificates.	 	10
	 	 	11.4.	 	Rights of Holders of Restricted Stock.	 	10
	 	 	11.5.	 	Rights of Holders of Stock Units.	 	10
	 	 	 	 	11.5.1.	Voting and Dividend Rights.	 	10
	 	 	 	 	11.5.2.	Creditor's Rights.	 	10
	 	 	11.6.	 	Termination of Service.	 	11
	 	 	11.7.	 	Purchase of Restricted Stock.	 	11
	 	 	11.8.	 	Delivery of Stock.	 	11
	12.	 	UNRESTRICTED STOCK AWARDS	 	11
	 	 	 	 	 	 	 	 

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	13.	 	FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK	 	11
	 	 	13.1.	 	General Rule.	 	11
	 	 	13.2.	 	Surrender of Stock.	 	11
	 	 	13.3.	 	Cashless Exercise.	 	12
	 	 	13.4.	 	Other Forms of Payment.	 	12
	14.	 	DIVIDEND EQUIVALENT RIGHTS	 	12
	 	 	14.1.	 	Dividend Equivalent Rights.	 	12
	 	 	14.2.	 	Termination of Service.	 	12
	15.	 	PERFORMANCE AND ANNUAL INCENTIVE AWARDS	 	12
	 	 	15.1.	 	Performance Conditions	 	12
	 	 	15.2.	 	Performance or Annual Incentive Awards Granted to Designated Covered Employees	 	13
	 	 	 	 	15.2.1.	Performance Goals Generally.	 	13
	 	 	 	 	15.2.2.	Business Criteria.	 	13
	 	 	 	 	15.2.3.	Timing For Establishing Performance Goals.	 	13
	 	 	 	 	15.2.4.	Performance or Annual Incentive Award Pool.	 	13
	 	 	 	 	15.2.5.	Settlement of Performance or Annual Incentive Awards; Other Terms.	 	13
	 	 	15.3.	 	Written Determinations.	 	14
	 	 	15.4.	 	Status of Section 15.2 Awards Under Code Section 162(m)	 	14
	16.	 	PARACHUTE LIMITATIONS	 	14
	17.	 	REQUIREMENTS OF LAW	 	15
	 	 	17.1.	 	General.	 	15
	 	 	17.2.	 	Rule 16b-3.	 	15
	18.	 	EFFECT OF CHANGES IN CAPITALIZATION	 	16
	 	 	18.1.	 	Changes in Stock.	 	16
	 	 	18.2.	 	Reorganization in Which the Company Is the Surviving Entity Which does not Constitute a Corporate Transaction.	 	16
	 	 	18.3.	 	Corporate Transaction.	 	16
	 	 	18.4.	 	Adjustments.	 	17
	 	 	18.5.	 	No Limitations on Company.	 	17
	19.	 	GENERAL PROVISIONS	 	17
	 	 	19.1.	 	Disclaimer of Rights	 	17
	 	 	19.2.	 	Nonexclusivity of the Plan	 	18
	 	 	19.3.	 	Withholding Taxes	 	18
	 	 	19.4.	 	Captions	 	18
	 	 	19.5.	 	Other Provisions	 	18
	 	 	19.6.	 	Number And Gender	 	18
	 	 	19.7.	 	Severability	 	19
	 	 	19.8.	 	Governing Law	 	19

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FIELDSTONE INVESTMENT CORPORATION
  EQUITY INCENTIVE PLAN    
    

        Fieldstone Investment Corporation, a Maryland corporation (the "Company"), sets forth herein the terms of its Equity Incentive Plan (the "Plan"), as follows: 

1.     PURPOSE  

        This Plan is intended to (a) provide incentive to eligible persons to stimulate their efforts toward the continued success of the Company and to operate
and manage their businesses in a manner that will provide for the long-term growth and profitability of the Company; and (b) provide a means of obtaining, rewarding and retaining
key personnel. To this end, the Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, unrestricted stock, dividend equivalent rights and cash awards.
Any of these awards may, but need not, be made as performance incentives to reward attainment of annual or long-term performance goals in accordance with the terms hereof. Stock options
granted under the Plan may be non-qualified stock options or incentive stock options, as provided herein. 

2.     DEFINITIONS  

        For purposes of interpreting the Plan and related documents (including Award Agreements), the following definitions shall apply: 

        2.1   "Affiliate" means, with respect to the Company, any company or other trade or business that controls, is controlled by or
is under common control with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary. 

        2.2   "Annual Incentive Award" means an Award made subject to attainment of performance goals (as described in  Section 15) over a performance period of up to and
including one year (the fiscal year, unless otherwise specified by the Committee). 

        2.3   "Award" means a grant of an Option, Stock Appreciation Right, Restricted Stock, Unrestricted Stock, Stock Unit, Dividend
Equivalent Rights, or cash award under the Plan. 

        2.4   "Award Agreement" means the written agreement between the Company and a Grantee that evidences and sets out the terms and
conditions of an Award. 

        2.5   "Benefit Arrangement" shall have the meaning set forth in  Section 16 hereof. 

        2.6   "Board" means the Board of Directors of the Company. 

        2.7   "Cause" means, as determined by the Board and unless otherwise provided in an applicable agreement with the Company or an
Affiliate, (i) gross negligence or willful misconduct in connection with the performance of duties; (ii) conviction of a criminal offense (other than minor traffic offenses); or
(iii) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Service
Provider and the Company or an Affiliate. 

        2.8   "Code" means the Internal Revenue Code of 1986, as now in effect or as hereafter amended. 

        2.9   "Committee" means the Compensation Committee of the Board. 

        2.10 "Company" means Fieldstone Investment Corporation 

        2.11 "Corporate Transaction" means (i) the dissolution or liquidation of the Company or a merger, consolidation, or
reorganization of the Company with one or more other entities in which the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the Company to another person
or entity, or (iii) any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person or entity (other than
persons who are shareholders or Affiliates immediately prior to the transaction) owning 50% or more of the combined voting power of all classes of stock of the Company. 

 

        2.12 "Covered Employee" means a Grantee who is a Covered Employee within the meaning of Section 162(m)(3) of the Code. 

        2.13 "Disability" means the Grantee is unable to perform each of the essential duties of such Grantee's position by reason of
a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months; provided,
however, that, with respect to rules regarding expiration of an Incentive Stock Option following termination of the Grantee's Service, Disability shall mean the Grantee is unable to engage in any
substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. 

        2.14 "Dividend Equivalent" means a right, granted to a Grantee under  Section 14 hereof, to receive cash, Stock, other Awards or other property equal in value to
dividends paid with respect to a specified number of
shares of Stock, or other periodic payments. 

        2.15 "Effective Date" means November 10, 2003. 

        2.16 "Exchange Act" means the Securities Exchange Act of 1934, as now in effect or as hereafter amended. 

        2.17 "Fair Market Value" means the value of a share of Stock, determined as follows: if on the Grant Date or other
determination date the Stock is listed on an established national or regional stock exchange, is admitted to quotation on The Nasdaq Stock Market, Inc. or is publicly traded on an established
securities market, the Fair Market Value of a share of Stock shall be the closing price of the Stock on such exchange or in such market (if there is more than one such exchange or market the Board
shall determine the appropriate exchange or market) on the Grant Date or such other determination date (or if there is no such reported closing price, the Fair Market Value shall be the mean between
the highest bid and lowest asked prices or between the high and low sale prices on such trading day) or, if no sale of Stock is reported for such trading day, on the next preceding day on which any
sale shall have been reported. If the Stock is not listed on such an exchange, quoted on such system or traded on such a market, Fair Market Value shall be the value of the Stock as determined by the
Board in good faith. 

        2.18 "Family Member" means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent,
grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the Grantee, any person sharing the Grantee's household (other than a tenant or
employee), a trust in which any one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which any one or more of these persons (or the Grantee) control
the management of assets, and any other entity in which one or more of these persons (or the Grantee) own more than fifty percent of the voting interests. 

        2.19 "Grant Date" means, as determined by the Board or the Committee, the latest to occur of (i) the date as of which
the Board or such Committee approves an Award, (ii) the date on which the recipient of an Award first becomes eligible to receive an Award under  Section 6 hereof, or (iii) such other date
as may be specified by the Board or such Committee. 

        2.20 "Grantee" means a person who receives or holds an Award under the Plan. 

        2.21 "Incentive Stock Option" means an "incentive stock option" within the meaning of Section 422 of the Code, or the
corresponding provision of any subsequently enacted tax statute, as amended from time to time. 

        2.22 "Non-qualified Stock Option" means an Option that is not an Incentive Stock Option. 

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        2.23 "Option" means an option to purchase one or more shares of Stock pursuant to the Plan. 

        2.24 "Option Price" means the purchase price for each share of Stock subject to an Option. 

        2.25 "Other Agreement" shall have the meaning set forth in Section 16
hereof. 

        2.26 "Outside Director" means a member of the Board who is not an officer or employee of the Company. 

        2.27 "Performance Award" means an Award made subject to the attainment of performance goals (as described in  Section 15) over a performance period of more than one
year. 

        2.28 "Plan" means this Fieldstone Investment Corporation Equity Incentive Plan. 

        2.29 "Purchase Price" means the purchase price for each share of Stock pursuant to a grant of Restricted Stock or
Unrestricted Stock. 

        2.30 "Reporting Person" means a person who is required to file reports under Section 16(a) of the Exchange Act. 

        2.31 "Restricted Stock" means shares of Stock, awarded to a Grantee pursuant to  Section 11 hereof. 

        2.32 "SAR Exercise Price" means the per share exercise price of an SAR granted to a Grantee under  Section 10 hereof. 

        2.33 "Securities Act" means the Securities Act of 1933, as now in effect or as hereafter amended. 

        2.34 "Service" means service as an employee, officer, Outside Director or other Service Provider of the Company or an
Affiliate. Unless otherwise stated in the applicable Award Agreement, a Grantee's change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues
to be an employee, officer, Outside Director or other Service Provider of the Company or an Affiliate. Subject to the preceding sentence, whether a termination of Service shall have occurred for
purposes of the Plan shall be determined by the Board, which determination shall be final, binding and conclusive. 

        2.35 "Service Provider" means an employee, officer or Outside Director of the Company or an Affiliate, or a consultant or
adviser currently providing services to the Company or an Affiliate. 

        2.36 "Stock" means the common stock of the Company. 

        2.37 "Stock Appreciation Right" or "SAR" means a right granted to a Grantee
under Section 10 hereof. 

        2.38 "Stock Unit" means a bookkeeping entry representing the equivalent of a share of Stock, awarded to a Grantee pursuant to  Section 11 hereof. 

        2.39 "Subsidiary" means any "subsidiary corporation" of the Company within the meaning of Section 424(f) of the Code. 

        2.40 "Termination Date" means the date upon which an Option shall terminate or expire, as set forth in  Section 8.3 hereof. 

        2.41 "Ten Percent Stockholder" means an employee who owns more than ten percent (10%) of the total combined voting power of
all classes of outstanding stock of the Company, its parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied. 

        2.42 "Unrestricted Stock" means an Award pursuant to Section 12
hereof. 

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3.     ADMINISTRATION OF THE PLAN  

        3.1.    Board    

        The
Board shall have such powers and authorities related to the administration of the Plan as are consistent with the Company's certificate of incorporation and by-laws and
applicable law. The Board shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall
have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan that the Board deems to be
necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions and determinations shall be by the affirmative vote of a majority of the members of the
Board present at a meeting or by unanimous consent of the Board executed in writing in accordance with the
Company's certificate of incorporation and by-laws and applicable law. The interpretation and construction by the Board of any provision of the Plan, any Award or any Award Agreement shall
be final, binding and conclusive. 

        3.2.    Committee.    

        The
Board from time to time may delegate to the Committee such powers and authorities related to the administration and implementation of the Plan, as set forth in  Section 3.1 above and other
applicable provisions, as the Board shall determine, consistent with the certificate of incorporation and
by-laws of the Company and applicable law. The Board may also appoint one or more separate committees of the Board, each composed of one or more directors of the Company who need not be
Outside Directors, who may administer the Plan with respect to employees or other Service Providers who are not officers or directors of the Company, may grant Awards under the Plan to such employees
or other Service Providers, and may determine all terms of such Awards. In the event that the Plan, any Award or any Award Agreement entered into hereunder provides for any action to be taken by or
determination to be made by the Board, such action may be taken or such determination may be made by the Committee if the power and authority to do so has been delegated to the Committee by the Board
as provided for in this Section. Unless otherwise expressly determined by the Board, any such action or determination by the Committee shall be final, binding and conclusive. To the extent permitted
by law, the Committee may delegate its authority under the Plan to a member of the Board. 

        3.3.    Terms of Awards.    

        Subject
to the other terms and conditions of the Plan, the Board shall have full and final authority to: 

        (i)    designate
Grantees, 

        (ii)   determine
the type or types of Awards to be made to a Grantee, 

        (iii)  determine
the number of shares of Stock to be subject to an Award, 

        (iv)  establish
the terms and conditions of each Award (including, but not limited to, the exercise price of any Option, the nature and duration of any restriction or
condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock subject thereto, and any terms or conditions that may be
necessary to qualify Options as Incentive Stock Options), 

        (v)   prescribe
the form of each Award Agreement evidencing an Award, and 

        (vi)  amend,
modify, or supplement the terms of any outstanding Award, subject to Section 8.9. Such authority specifically
includes the authority, in order to effectuate the purposes of the Plan but without amending the Plan, to modify Awards to eligible individuals who are foreign 

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nationals
or are individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom. 

        The
Board shall have the right, in its discretion, to make Awards in substitution or exchange for any other award under another plan of the Company, any Affiliate, or any business entity
to be acquired by the Company or an Affiliate. Shares issued pursuant to Awards granted in substitution for awards held by employees of a business entity acquired by the Company or an Affiliate shall
not count against the shares available for issuance under the Plan. The Company may retain the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee on account of actions
taken by the Grantee in violation or breach of or in conflict with any non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any
Affiliate thereof or any confidentiality obligation with respect to the Company or any Affiliate thereof or otherwise in competition with the Company or any Affiliate thereof, to the extent specified
in such Award Agreement applicable to the Grantee. Furthermore, the Company may annul an Award if the Grantee is an employee of the Company or an Affiliate thereof and is terminated for Cause as
defined in the applicable Award Agreement or the Plan, as applicable. The grant of any Award shall be contingent upon the Grantee executing the appropriate Award Agreement. 

        3.4.    Deferral Arrangement.    

        The
Board may permit or require the deferral of any award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish, which may include
provisions for the payment or crediting of interest or dividend equivalents, including converting such credits into deferred Stock equivalents and restricting deferrals to comply with hardship
distribution rules affecting 401(k) plans. 

        3.5.    No Liability.    

        No
member of the Board or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award or Award Agreement. 

4.     STOCK SUBJECT TO THE PLAN  

        Subject to adjustment as provided in Section 18 hereof, the number of shares of Stock available for
issuance under the Plan shall be 2,700,000. Notwithstanding the preceding sentence, the aggregate number of shares of Stock which cumulatively may be available for issuance pursuant to Awards other
than Awards of Options shall not exceed 900,000. Stock issued or to be issued under the Plan shall be authorized but unissued shares or treasury shares. If any shares covered by an Award are not
purchased or are forfeited, if an Award is settled in cash or if an Award otherwise terminates without delivery of any Stock subject thereto, then the number of shares of Stock counted against the
aggregate number of shares available under the Plan with respect to such Award shall, to the extent of any such forfeiture, cash payment or termination, again be available for making Awards under the
Plan. If the Option Price of any Option granted under the Plan, the withholding obligation of any Grantee with respect to an Option pursuant to  Section 19.3 or any other payment under the Plan is
satisfied by tendering shares of Stock to the Company (by either actual delivery or by
attestation) or by withholding shares of Stock, the total number of shares of Stock issued shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for
delivery under the Plan. 

5.     EFFECTIVE DATE, DURATION AND AMENDMENTS  

        5.1.    Effective Date.    

        The
Plan shall be effective as of the Effective Date, subject to approval of the Plan by the Company's stockholders within one year of the Effective Date. Upon approval of the Plan by
the stockholders of the Company as set forth above, all Awards made under the Plan on or after the 

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Effective
Date shall be fully effective as if the stockholders of the Company had approved the Plan on the Effective Date. If the stockholders fail to approve the Plan within one year after the
Effective Date, any Awards made hereunder shall be null and void and of no effect. 

        5.2.    Term.    

        The
Plan shall terminate automatically ten (10) years after the Effective Date and may be terminated on any earlier date as provided in  Section 5.3. 

        5.3.    Amendment and Termination of the Plan    

        The
Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to any shares of Stock as to which Awards have not been made. An amendment shall be contingent
on approval of the Company's stockholders to the extent stated by the Board or required by applicable law. In addition, an amendment will be contingent on approval of the Company's stockholders if the
amendment would (i) materially increase the benefits accruing to participants under the Plan, (ii) materially increase the aggregate number of shares of Stock that may be issued under
the Plan, or (iii) materially modify the requirements as to eligibility for participation in the Plan. No Awards shall be made after termination of the Plan. No amendment, suspension, or
termination of the Plan shall, without the consent of the Grantee, impair rights or obligations under any Award theretofore awarded under the Plan. 

6.     AWARD ELIGIBILITY AND LIMITATIONS  

        6.1.    Service Providers; Outside Directors; and Other Persons    

        Subject
to this Section 6, Awards may be made under the Plan to: (i) any Service Provider to the Company or of any
Affiliate, including any such Service Provider who is an officer or director of the Company, or of any Affiliate, as the Board shall determine and designate from time to time, (ii) any Outside
Director, and (iii) any other individual whose participation in the Plan is determined to be in the best interests of the Company by the Board. 

        6.2.    Successive Awards.    

        An
eligible person may receive more than one Award, subject to such restrictions as are provided herein. 

        6.3.    Limitation on Shares of Stock Subject to Awards and Cash Awards.    

        (i)    the
maximum number of shares of Stock subject to Options or SARs that can be issued under the Plan to any person eligible for an Award under  Section 6 hereof is 900,000 in any calendar year;

        (ii)   the
maximum number of shares that can be issued under the Plan, other than pursuant to an Option, SAR or time-vested Restricted Stock grant to any person
eligible for an Award under Section 6 hereof is 450,000 in any calendar year; and 

        (iii)  the
maximum amount that may be earned as an Annual Incentive Award or other cash Award in any fiscal year by any one Grantee shall be $2,000,000 and the maximum amount
that may be earned as a Performance Award or other cash Award in respect of a performance period by any one Grantee shall be $5,000,000. 

        The
preceding limitations in this Section 6.3 are subject to adjustment as provided in  Section 18 hereof. 

        6.4.    Limitations on Incentive Stock Options.    

        An
Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is an employee of the Company or any Subsidiary of the Company; (ii) to the
extent specifically provided in 

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the
related Award Agreement; and (iii) to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the shares of Stock with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Grantee's employer and its Affiliates) does not
exceed $100,000. This limitation shall be applied by taking Options into account in the order in which they were granted. 

        6.5.    Stand-Alone, Additional, Tandem, and Substitute Awards    

        Awards
granted under the Plan may, in the discretion of the Board, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any
award granted under another plan of the Company, any Affiliate, or any business entity to be acquired by the Company or an Affiliate, or any other right of a Grantee to receive payment from the
Company or any Affiliate. Such additional, tandem, and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award, the Board shall
require the surrender of such other Award in consideration for the grant of the new Award. In addition, Awards
may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Affiliate. 

7.     AWARD AGREEMENT  

        Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in such form or forms as the Board shall from time to time determine. Award
Agreements granted from time to time or at the same time need not contain similar provisions but shall be consistent with the terms of the Plan. Each Award Agreement evidencing an Award of Options
shall specify whether such Options are intended to be Non-qualified Stock Options or Incentive Stock Options, and in the absence of such specification such options shall be deemed
Non-qualified Stock Options. 

8.     TERMS AND CONDITIONS OF OPTIONS  

        8.1.    Option Price    

        The
Option Price of each Option shall be fixed by the Board and stated in the Award Agreement evidencing such Option. The Option Price of each Option shall be at least the Fair Market
Value on the Grant Date of a share of Stock; provided, however, that in the event that a Grantee is a
Ten Percent Stockholder, the Option Price of an Option granted to such Grantee that is intended to be an Incentive Stock Option shall be not less than 110 percent of the Fair Market Value of a
share of Stock on the Grant Date. In no case shall the Option Price of any Option be less than the par value of a share of Stock. 

        8.2.    Vesting.    

        Subject
to Sections 8.3 and 18 hereof, each Option granted under the Plan shall become exercisable at such times and under such conditions
as shall be determined by the Board and stated in the Award Agreement. For purposes of this Section 8.2, fractional numbers of shares of Stock
subject to an Option shall be rounded down to the next nearest whole number. No Option granted under the Plan shall be exercisable in whole or in part prior to the date the Plan is approved by the
Stockholders of the Company as provided in Section 5.1 hereof. 

        8.3.    Term.    

        Each
Option granted under the Plan shall terminate, and all rights to purchase shares of Stock thereunder shall cease, upon the expiration of ten years from the date such Option is
granted, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Board and stated in the Award Agreement relating to such Option (the
"Termination Date"); provided, however, that in the event that the Grantee is a Ten Percent Stockholder,
an Option granted to such 

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Grantee
that is intended to be an Incentive Stock Option shall not be exercisable after the expiration of five years from its Grant Date. 

        8.4.    Termination of Service.    

        Each
Award Agreement shall set forth the extent to which the Grantee shall have the right to exercise the Option following termination of the Grantee's Service. Such provisions shall be
determined in the sole discretion of the Board, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. An
Option that is intended to be an Incentive Stock Option shall no longer exercisable as an Incentive Stock Option ninety (90) days after the termination of the Grantee's Service. 

        8.5.    Limitations on Exercise of Option.    

        Notwithstanding
any other provision of the Plan, in no event may any Option be exercised, in whole or in part, prior to the date the Plan is approved by the stockholders of the Company
as provided herein, or after ten years following the Grant Date, or after the occurrence of an event referred to in Section 18 hereof which
results in termination of the Option. 

        8.6.    Method of Exercise.    

        An
Option that is exercisable may be exercised by the Grantee's delivery to the Company of written notice of exercise on any business day, at the Company's principal office, on the form
specified by the Company. Such notice shall specify the number of shares of Stock with respect to which the Option is being exercised and shall be accompanied by payment in full of the Option Price of
the shares for which the Option is being exercised. 

        8.7.    Rights of Holders of Options    

        Unless
otherwise stated in the applicable Award Agreement, an individual holding or exercising an Option shall have none of the rights of a stockholder (for example, the right to receive
cash or dividend payments or distributions attributable to the subject shares of Stock or to direct the voting of the subject shares of Stock) until the shares of Stock covered thereby are fully paid
and issued to him. Except as provided in Section 18 hereof, no adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date of such issuance. 

        8.8.    Delivery of Stock Certificates or Book Entry.    

        Promptly
after the exercise of an Option by a Grantee and the payment in full of the Option Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject to the Option. Notwithstanding any other provision of this Plan to the contrary, the Company may elect to satisfy any requirement under
this Plan for the delivery of stock certificates through the use of book-entry. 

        8.9.    No Option Repricing.    

        Notwithstanding
any other provision in the Plan to the contrary, the Option Price of an Option may not be amended or modified after the Grant Date, and an Option may not be surrendered
in consideration of or exchanged for cash, a grant of Restricted Stock or a new option having an Option Price below that of the Option which was surrendered or exchanged without approval of the
Company's stockholders. 

8

   9.     TRANSFERABILITY OF OPTIONS  

        9.1.    Transferability of Options    

        Except
as provided in Section 9.2, during the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or
incompetency, the Grantee's guardian or legal representative) may exercise an Option. Except as provided in Section 9.2, no Option shall be
assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution. 

        9.2.    Family Transfers.    

        If
authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or part of an Option which is not an Incentive Stock Option to any Family Member. For the
purpose of this Section 9.2, a "not for value" transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic
relations order in settlement of marital property rights; or (iii) a transfer to an entity in which more than fifty percent of the voting interests are owned by Family Members (or the Grantee)
in exchange for an interest in that entity. Following a transfer under this Section 9.2, any such Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer. Subsequent transfers of transferred Options are prohibited except to Family Members of the original Grantee in accordance with
this Section 9.2 or by will or the laws of descent and distribution. The events of termination of Service of  Section 8.4 hereof shall continue to
be applied with respect to the original Grantee, following which the Option shall be exercisable by the
transferee only to the extent, and for the periods specified, in Section 8.4. 

10.   STOCK APPRECIATION RIGHTS  

        The Board is authorized to grant Stock Appreciation Rights ("SARs") to Grantees on the following terms and conditions: 

        10.1.    Right to Payment.    

        A
SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of
exercise over (B) the grant price of the SAR as determined by the Board. The Award Agreement for an SAR shall specify the grant price of the SAR, which shall be fixed at the Fair Market Value
of a share of Stock on the date of grant. 

        10.2.    Other Terms.    

        The
Board shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time or times at which SARs shall cease to be or become exercisable following termination of Service or upon other conditions,
the method of exercise, method of settlement, form of consideration payable in settlement which may be cash or Stock, method by or forms in which Stock will be delivered or deemed to be delivered to
Grantees, whether or not a SAR shall be in tandem or in combination with any other Award, and any other terms and conditions of any SAR. 

11.   RESTRICTED STOCK AND STOCK UNITS  

        11.1.    Grant of Restricted Stock or Stock Units.    

        The
Board may from time to time grant Restricted Stock or Stock Units to persons eligible to receive Awards under Section 6 hereof,
subject to such restrictions, conditions and other terms, if any, as the Board may determine. Awards of Restricted Stock may be made for no consideration (other than par value of the shares which is
deemed paid by Services already rendered). 

9

 

        11.2.    Restrictions.    

        At
the time a grant of Restricted Stock or Stock Units is made, the Board may, in its sole discretion, establish a period of time (a "restricted period") applicable to such Restricted
Stock or Stock Units. Each Award of Restricted Stock or Stock Units may be subject to a different restricted period. The Board may, in its sole discretion, at the time a grant of Restricted Stock or
Stock Units is made, prescribe restrictions in addition to or other than the expiration of the restricted period, including the satisfaction of corporate or individual performance objectives, which
may be applicable to all or any portion of the Restricted Stock or Stock Units in accordance with Section 15.1 and  15.2. Notwithstanding the foregoing,
 Restricted Stock that vests solely by the passage of time shall not vest in full in less than three
(3) years from the Grant Date. Restricted Stock for which vesting may be accelerated by achieving performance targets or which is earned based on the achievement of performance targets shall
not vest in full in less than one (1) year from the Grant Date. Neither Restricted Stock nor Stock Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of
during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Board with respect to such Restricted Stock or Stock Units. 

        11.3.    Restricted Stock Certificates.    

        The
Company shall issue, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates representing the total number of shares of Restricted Stock granted to
the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an Award Agreement that either (i) the Secretary of the Company, or his delegate, shall hold such
certificates for the Grantee's benefit until such time as the Restricted Stock is forfeited to the Company or the restrictions lapse, or (ii) such certificates shall be delivered to the
Grantee, provided, however, that all such certificates, regardless of whether held by the Secretary, his
delegate or delivered to the Grantee, shall bear a legend or legends that comply with the applicable securities laws and regulations and makes appropriate reference to the restrictions imposed under
the Plan and the Award Agreement. 

        11.4.    Rights of Holders of Restricted Stock.    

        Unless
the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall have the right to vote such Stock and the right to receive any dividends declared or paid
with respect to such Stock. The Board may provide that any dividends paid on Restricted Stock must be reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of
shares, or other similar transaction shall be subject to the restrictions applicable to the original Grant. 

        11.5.    Rights of Holders of Stock Units.    

        11.5.1.    Voting and Dividend Rights.    

        Unless
the Board otherwise provides in an Award Agreement, holders of Stock Units shall have no rights as stockholders of the Company. The Board may provide in an Award Agreement
evidencing a grant of Stock Units that the holder of such Stock Units shall be entitled to receive, upon the Company's payment of a cash dividend on its outstanding Stock, a cash payment for each
Stock Unit held equal to the per-share dividend paid on the Stock. Such Award Agreement may also provide that such cash payment will be deemed reinvested in additional Stock Units at a
price per unit equal to the Fair Market Value of a share of Stock on the date that such dividend is paid. 

        11.5.2.    Creditor's Rights.    

        A
holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to
the terms and conditions of the applicable Award Agreement. 

10

 

        11.6.    Termination of Service.    

        Unless
the Board otherwise provides in an Award Agreement or in writing after the Award Agreement is issued, upon the termination of a Grantee's Service, any Restricted Stock or Stock
Units held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of
Restricted Stock or Stock Units, the Grantee shall have no further rights with respect to such Award, including but not limited to any right to vote Restricted Stock or any right to receive dividends
with respect to shares of Restricted Stock or Stock Units. 

        11.7.    Purchase of Restricted Stock.    

        The
Grantee shall be required, to the extent required by applicable law, to purchase the Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the
aggregate par value of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, if any, specified in the Award Agreement relating to such Restricted Stock. The
Purchase Price shall be payable in a form described in Section 13 or, in the discretion of the Board, in consideration for past Services rendered
to the Company or an Affiliate. 

        11.8.    Delivery of Stock.    

        Upon
the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Board, the restrictions applicable to shares of Restricted
Stock or Stock Units settled in Stock shall lapse, and, unless otherwise provided in the Award Agreement, a stock certificate for such shares shall be delivered, free of all such restrictions, to the
Grantee or the Grantee's beneficiary or estate, as the case may be. Stock Units may also be settled in cash upon the determination of the Board or as specified in the applicable Award Agreement. 

12.   UNRESTRICTED STOCK AWARDS  

        The Board may, in its sole discretion, grant (or sell at par value or such other higher purchase price determined by the Board) an Unrestricted Stock Award to any
Grantee pursuant to which such Grantee may receive shares of Stock free of any restrictions ("Unrestricted Stock") under the Plan. Unrestricted Stock Awards may be granted or sold as described in the
preceding sentence in respect of past services and other valid consideration, or in lieu of, or in addition to, any cash compensation due to such Grantee. 

13.   FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK  

        13.1.    General Rule.    

        Payment
of the Option Price for the shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents
acceptable to the Company. 

        13.2.    Surrender of Stock.    

        To
the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be
made all or in part through the tender to the Company of shares of Stock, which shares, if acquired from the Company, shall have been held for at least six months at the time of tender and which shall
be valued, for purposes of determining the extent to which the Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of exercise. 

11

 

        13.3.    Cashless Exercise.    

        With
respect to an Option only (and not with respect to Restricted Stock), to the extent the Award Agreement so provides and subject to compliance with applicable law, payment of the
Option Price for shares purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a form acceptable to the Board) of an irrevocable direction to a licensed securities
broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and any withholding taxes described in  Section 19.3. 

        13.4.    Other Forms of Payment.    

        To
the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to exercise of an Option or the Purchase Price for Restricted Stock may be made
in any other form that is consistent with applicable laws, regulations and rules. 

14.   DIVIDEND EQUIVALENT RIGHTS  

        14.1.    Dividend Equivalent Rights.    

        A
Dividend Equivalent Right is an Award entitling the recipient to receive credits based on cash distributions that would have been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the recipient. A Dividend Equivalent Right may be granted hereunder to any Grantee as a component of
another
Award or as a freestanding award. The terms and conditions of Dividend Equivalent Rights shall be specified in the grant. Dividend Equivalents credited to the holder of a Dividend Equivalent Right may
be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date
of reinvestment. Dividend Equivalent Rights may be settled in cash or Stock or a combination thereof, in a single installment or installments, all determined in the sole discretion of the Board. A
Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions
on, such other award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other award. A Dividend Equivalent Right granted as a component
of another Award may also contain terms and conditions different from such other award. 

        14.2.    Termination of Service.    

        Except
as may otherwise be provided by the Board either in the Award Agreement or in writing after the Award Agreement is issued, a Grantee's rights in all Dividend Equivalent Rights or
interest equivalents shall automatically terminate upon the Grantee's termination of Service for any reason. 

15.   PERFORMANCE AND ANNUAL INCENTIVE AWARDS  

        15.1.    Performance Conditions    

        The
right of a Grantee to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Board.
The Board may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce the amounts
payable under any Award subject to performance conditions, except as limited under Sections 15.2 hereof in the case of a Performance Award or Annual
Incentive Award intended to qualify under Code Section 162(m). If and to the extent required under Code Section 162(m), any power or authority relating to a Performance Award or Annual
Incentive Award intended to qualify under Code Section 162(m), shall be exercised by the Committee and not the Board. 

12

 

        15.2.    Performance or Annual Incentive Awards Granted to Designated Covered Employees    

        If
and to the extent that the Committee determines that a Performance or Annual Incentive Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered
Employee should qualify as "performance-based compensation" for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance or Annual Incentive Award shall be
contingent upon achievement of pre-established performance goals and other terms set forth in this Section 15.2. 

        15.2.1.    Performance Goals Generally.    

        The
performance goals for such Performance or Annual Incentive Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with this Section 15.2. Performance goals shall be objective and shall otherwise meet the
requirements of Code Section 162(m) and regulations thereunder including the requirement that the level or levels of performance targeted by the Committee result in the achievement of
performance goals being "substantially uncertain." The Committee may determine that such Performance or Annual Incentive Awards shall be granted, exercised and/or settled upon achievement of any one
performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance or Annual Incentive Awards. Performance goals may
differ for Performance or Annual Incentive Awards granted to any one Grantee or to different Grantees. 

        15.2.2.    Business Criteria.    

        One
or more of the following business criteria for the Company, on a consolidated basis, and/or specified subsidiaries or business units of the Company (except with respect to the total
stockholder return and earnings per share criteria), shall be used exclusively by the Committee in establishing performance goals for such Performance or Annual Incentive Awards: (1) total
stockholder return; (2) such total stockholder return as compared to total return (on a comparable basis) of a publicly available index such as, but not limited to, the Standard & Poor's
500 Stock Index, (3) net income; (4) pretax earnings; (5) earnings before interest expense and taxes; (6) earnings before interest expense, taxes, depreciation and
amortization (EBITDA); (7) operating margin; (8) earnings per share; (9) return on equity; (10) return on capital; (11) return on assets; (12) return on
investment; (13) operating earnings; (14) working capital; (15) ratio of debt to stockholders' equity; (16) funds from operations; (17) revenue; (18) book
value; and (19) loan quality, loan production, or loan trading margins. 

        15.2.3.    Timing For Establishing Performance Goals.    

        Performance
goals shall be established not later than 90 days after the beginning of any performance period applicable to such Performance or Annual Incentive Awards, or at such
other date as may be required or permitted for "performance-based compensation" under Code Section 162(m). 

        15.2.4.    Performance or Annual Incentive Award Pool.    

        The
Committee may establish a Performance or Annual Incentive Award pool, which shall be an unfunded pool, for purposes of measuring Company performance in connection with Performance or
Annual Incentive Awards. 

        15.2.5.    Settlement of Performance or Annual Incentive Awards; Other Terms.    

        Settlement
of such Performance or Annual Incentive Awards shall be in cash, Stock, other Awards or other property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance or Annual Incentive Awards. The Committee shall specify the circumstances in which such
Performance or Annual Incentive 

13

 

Awards
shall be paid or forfeited in the event of termination of Service by the Grantee prior to the end of a performance period or settlement of Performance Awards. 

        15.3.    Written Determinations.    

        All
determinations by the Committee as to the establishment of performance goals, the amount of any Performance Award pool or potential individual Performance Awards and as to the
achievement of performance goals relating to Performance Awards, and the amount of any Annual Incentive Award pool or potential individual Annual Incentive Awards and the amount of final Annual
Incentive Awards, shall be made in writing in the case of any Award intended to qualify under Code Section 162(m). To the extent required to comply with Code Section 162(m), the
Committee may delegate any responsibility relating to such Performance Awards or Annual Incentive Awards. 

        15.4.    Status of Section 15.2 Awards Under Code Section 162(m)    

        It
is the intent of the Company that Performance Awards and Annual Incentive Awards under Section 15.2 hereof granted to persons
who are designated by the Committee as likely to be Covered Employees within the meaning of Code Section 162(m) and regulations thereunder shall, if so designated by the Committee, constitute
"qualified performance-based compensation" within the meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of  Section 15.2, including the definitions of Covered
Employee and other terms used therein, shall be interpreted in a manner consistent with Code
Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Grantee will be a Covered Employee with respect
to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of Performance Awards or an Annual
Incentive Award, as likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan or any agreement relating to such Performance Awards or Annual Incentive Awards does
not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to
such requirements. 

16.   PARACHUTE LIMITATIONS  

        Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Grantee with the
Company or any Affiliate, except an agreement, contract, or understanding between the Grantee and the Company or any Affiliate that modifies or excludes application of this paragraph (an "Other
Agreement"), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Grantee (including groups or classes of Grantees or
beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a "Benefit Arrangement"), if the
Grantee is a "disqualified individual," as defined in Section 280G(c) of the Code, any Option, Restricted Stock or Stock Unit held by that Grantee and any right to receive any payment or other
benefit under this Plan shall not become exercisable or vested (i) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or
benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Grantee under this Plan to be considered a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code as then in effect (a "Parachute Payment") and (ii) if, as a result of
receiving a Parachute Payment, the aggregate after-tax amounts received by the Grantee from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less
than the maximum after-tax amount that could be received by the Grantee without causing any such payment or benefit to be considered a Parachute Payment. In the event that the receipt of
any such right to exercise, vesting, payment, or benefit under this Plan, in conjunction with all other rights, payments, or benefits to or for the Grantee 

14

 

under
any Other Agreement or any Benefit Arrangement would cause the Grantee to be considered to have received a Parachute Payment under this Plan that would have the effect of decreasing the
after-tax amount received by the Grantee as described in clause (ii) of the preceding sentence, then the Grantee shall have the right, in the Grantee's sole discretion, to designate
those rights, payments, or benefits under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Grantee
under this Plan be deemed to be a Parachute Payment. 

17.   REQUIREMENTS OF LAW  

        17.1.    General.    

        The
Company shall not be required to sell or issue any shares of Stock under any Award if the sale or issuance of such shares would constitute a violation by the Grantee, any other
individual exercising an Option, or the Company of any provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or
regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any shares subject to an Award upon any securities exchange or under any
governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares hereunder, no shares of Stock may be issued or sold to the Grantee or any other individual
exercising an Option pursuant to such Award unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the
Company, and any delay caused thereby shall in no way affect the date of termination of the Award. Specifically, in connection with the Securities Act, upon the exercise of any Option or the delivery
of any shares of Stock underlying an Award, unless a registration statement under such Act is in effect with respect to the shares of Stock covered by such Award, the Company shall not be required to
sell or issue such shares unless the Board has received evidence satisfactory to it that the Grantee or any other individual exercising an Option may acquire such shares pursuant to an exemption from
registration under the Securities Act. Any determination in this connection by the Board shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option or the issuance of shares of
Stock pursuant to the Plan to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that an Option shall not be exercisable
until the shares of Stock covered by such Option are registered or are exempt from registration, the exercise of such Option (under circumstances in which the laws of such jurisdiction apply) shall be
deemed conditioned upon the effectiveness of such registration or the availability of such an exemption. 

        17.2.    Rule 16b-3.    

        During
any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan
and the exercise of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by
the Board does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and deemed advisable by the Board, and shall not affect
the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan in any respect necessary to satisfy the
requirements of, or to take advantage of any features of, the revised exemption or its replacement. 

15

 

18.   EFFECT OF CHANGES IN CAPITALIZATION  

        18.1.    Changes in Stock.    

        If
the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number or kind of shares or other securities
of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares for which grants of
Options and other Awards may be made under the Plan shall be adjusted proportionately and accordingly by the Company. In addition, the number and kind of shares for which Awards are outstanding shall
be adjusted proportionately and accordingly so that the proportionate interest of the Grantee immediately following such event shall, to the extent practicable, be the same as immediately before such
event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option Price or SAR Exercise Price payable with respect to shares that are subject to the unexercised portion
of an outstanding Option or SAR, as applicable, but shall include a corresponding proportionate adjustment in the Option Price or SAR Exercise Price per share. The conversion of any convertible
securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution to the Company's
stockholders of securities of any other entity or other assets without receipt of consideration by the Company, the Company may, in such manner as the Company deems appropriate, adjust (i) the
number and kind of shares subject to outstanding Awards and/or (ii) the exercise price of outstanding Options and Stock Appreciation Rights to reflect such distribution. 

        18.2.    Reorganization in Which the Company Is the Surviving Entity Which does not Constitute a Corporate
Transaction.    

        Subject
to Section 18.3 hereof, if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the
Company with one or more other entities which does not constitute a Corporate Transaction, any Option or SAR theretofore granted pursuant to the Plan shall pertain to and apply to the securities to
which a holder of the number of shares of Stock subject to such Option or SAR would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the Option Price or SAR Exercise Price per share so that the aggregate Option Price or SAR Exercise Price thereafter shall be the same as the aggregate Option Price or SAR
Exercise Price of the shares remaining subject to the Option or SAR immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Award Agreement
evidencing an Award, any restrictions applicable to such Award shall apply as well to any replacement shares received by the Grantee as a result of the reorganization, merger or consolidation. 

        18.3.    Corporate Transaction.    

        Subject
to the exceptions set forth in the last sentence of this Section 18.3 and the last sentence of  Section 18.4:

        (i)    upon
the occurrence of a Corporate Transaction, all outstanding shares of Restricted Stock shall be deemed to have vested, and all restrictions and conditions applicable
to such shares of Restricted Stock
shall be deemed to have lapsed, immediately prior to the occurrence of such Corporate Transaction, and 

        (ii)   either
of the following two actions shall be taken: 

        (A)  fifteen
days prior to the scheduled consummation of a Corporate Transaction, all Options and SARs outstanding hereunder shall become immediately exercisable and shall
remain exercisable for a period of fifteen days, or 

16

 

        (B)  the
Board may elect, in its sole discretion, to cancel any outstanding Awards of Options, Restricted Stock, and/or SARs and pay or deliver, or cause to be paid or
delivered, to the holder thereof an amount in cash or securities having a value (as determined by the Board acting in good faith), in the case of Restricted Stock, equal to the formula or fixed price
per share paid to holders of shares of Stock and, in the case of Options or SARs, equal to the product of the number of shares of Stock subject to the Option or SAR (the "Award Shares") multiplied by
the amount, if any, by which (I) the formula or fixed price per share paid to holders of shares of Stock pursuant to such transaction exceeds (II) the Option Price or SAR Exercise Price
applicable to such Award Shares. 

        With
respect to the Company's establishment of an exercise window, (i) any exercise of an Option or SAR during such fifteen-day period shall be conditioned upon the
consummation of the event and shall be effective only immediately before the consummation of the event, and (ii) upon consummation of any Corporate Transaction the Plan, and all outstanding but
unexercised Options and SARs shall terminate. The Board shall send written notice of an event that will result in such a termination to all individuals who hold Options and SARs not later than the
time at which the Company gives notice thereof to its stockholders. This Section 18.3 shall not apply to any Corporate Transaction to the extent
that provision is made in writing in connection with such Corporate Transaction for the assumption or continuation of the Options, SARs and Restricted Stock theretofore granted, or for the
substitution for such Options, SARs and Restricted Stock for new common stock options and stock appreciation rights and new common stock restricted stock relating to the stock of a successor entity,
or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any consideration that is not common stock) and option and stock appreciation right exercise
prices, in which event the Plan, Options, SARs and Restricted Stock theretofore granted shall continue in the manner and under the terms so provided. 

        18.4.    Adjustments.    

        Adjustments
under this Section 18 related to shares of Stock or securities of the Company shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the nearest whole share. The Board shall determine the effect of a Corporate Transaction upon Awards other than Options, SARs,
and Restricted Stock, and such effect shall be set forth in the appropriate Award Agreement. The Board may provide in the Award Agreements at the time of grant, or any time thereafter with the consent
of the Grantee, for different provisions to apply to an Award in place of those described in Sections 18.1,  18.2, and 18.3.

        18.5.    No Limitations on Company.    

        The
making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of
its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets. 

19.   GENERAL PROVISIONS  

        19.1.    Disclaimer of Rights    

        No
provision in the Plan or in any Award or Award Agreement shall be construed to confer upon any individual the right to remain in the employ or service of the Company or any Affiliate,
or to interfere in any way with any contractual or other right or authority of the Company either to increase or decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the Company. In addition, 

17

 

notwithstanding
anything contained in the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change of duties or
position of the Grantee, so long as such Grantee continues to be a director, officer, consultant or employee of the Company or an Affiliate. The obligation of the Company to pay any benefits pursuant
to this Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the
Plan. 

        19.2.    Nonexclusivity of the Plan    

        Neither
the adoption of the Plan nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations upon the right and
authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a
particular individual or particular individuals) as the Board in its discretion determines desirable, including, without limitation, the granting of stock options otherwise than under the Plan. 

        19.3.    Withholding Taxes    

        The
Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any Federal, state, or local taxes of any kind
required by law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award or upon the issuance of any shares of Stock upon the exercise of an Option or
pursuant to an Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or the Affiliate, as the case may be, any amount that the Company or the Affiliate may
reasonably determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as
the case may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company or the Affiliate to withhold shares of Stock
otherwise issuable to the Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock already owned by the Grantee. The shares of Stock so delivered or withheld shall have an
aggregate Fair Market Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to satisfy such withholding obligation shall be determined by the Company or the
Affiliate as of the date that the amount of tax to be withheld is to
be determined. A Grantee who has made an election pursuant to this Section 19.3 may satisfy his or her withholding obligation only with shares of
Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. 

        19.4.    Captions    

        The
use of captions in this Plan or any Award Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award Agreement. 

        19.5.    Other Provisions    

        Each
Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Board, in its sole discretion. 

        19.6.    Number And Gender    

        With
respect to words used in this Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as the context requires. 

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        19.7.    Severability    

        If
any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and
thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction. 

        19.8.    Governing Law    

        The
validity and construction of this Plan and the instruments evidencing the Award hereunder shall be governed by 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 Plan and the instruments evidencing the Awards granted hereunder to the substantive laws of any other
jurisdiction. 

*        *        *

19

 

        To
record adoption of the Plan by the sole director of the Board as of November 10, 2003, and approval of the Plan by its sole stockholder as of November 10, 2003, the
Company has caused its authorized officer to execute the Plan. 

	

 	

FIELDSTONE INVESTMENT CORPORATION
	

 	

 	

 
	 	/s/ Michael J. Sonnenfeld

	 	By:	Michael J. Sonnenfeld
	 	Title:	President & Chief Executive Officer

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TABLE OF CONTENTS

FIELDSTONE INVESTMENT CORPORATION EQUITY INCENTIVE PLANExhibit 10.2  

Option No.:                           

 FIELDSTONE INVESTMENT CORPORATION EQUITY INCENTIVE PLAN  

 INCENTIVE STOCK OPTION AGREEMENT  

        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: ____________________, 200__ 

Name
of Optionee: _____________________________________________ 

Optionee's
Social Security Number: ________-________-________ 

Number
of Shares Covered by Option: ___________________________ 

Option
Price per Share: $_______.___ (At least 100% of Fair Market Value)

Vesting
Schedule: Vesting Date                Number of Shares 

        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  

 INCENTIVE STOCK OPTION AGREEMENT  

	Incentive Stock Option	 	This option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. If you cease to be an employee of the Company, its parent or a subsidiary
("Employee") but continue to provide Service, this option will be deemed a nonstatutory stock option three months after you cease to be an Employee. In addition, to the extent that all or part of this option exceeds the $100,000 rule of section
422(d) of the Internal Revenue Code, this option or the lesser excess part will be deemed to be a nonstatutory stock option.
	

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 the number of shares of Stock indicated in the vesting schedule on the cover sheet, on each of the Vesting Dates shown on the cover sheet, provided you then continue in Service. The
resulting aggregate number of vested shares will be rounded to the nearest whole number, and you cannot vest in more than the number of shares covered by this option.
	

 	
 	

No additional shares of Stock will vest after your Service has terminated for any reason.
	

Term	
 	

Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier if your Service terminates, as described
below.
	

Regular Termination	
 	

If your Service terminates for any reason, other than death, Disability or Cause, then your option 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 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 heirs may exercise the vested portion of your option.
	 	 	 

2

 

	

 	
 	

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 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.
	 	 	 

3

 

	

 	
 	

• 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.
	

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 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.
	

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 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.
	 	 	 

4

 

	

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.
	

Legends	
 	

All certificates representing the Stock issued upon exercise of this option shall, where applicable, have endorsed thereon the following legend:
	

 	
 	

"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION OR QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION'S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED."
	

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 Secretary of the Company to request paper copies of these
documents.
	

Certain Dispositions	
 	

If you sell or otherwise dispose of Stock acquired pursuant to the exercise of this option sooner than the one year anniversary of the date you acquired the Stock, then you agree to notify the Company in writing of the date of sale or disposition,
the number of share of Stock sold or disposed of and the sale price per share within 30 days of such sale or disposition.

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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