Document:

Exhibit 10.3  

Option No.:                          

FIELDSTONE INVESTMENT CORPORATION EQUITY INCENTIVE PLAN  

 NONQUALIFIED 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: ____________________________________ State of Residence: ____________ 

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

Number
of Shares Covered by Option: ___________________________ 

Option
Price per Share: $_______.___ 

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  

 NONQUALIFIED STOCK OPTION AGREEMENT  

	Nonqualified 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 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.
	

 	
 	

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.
	 	 	 

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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.
	

 	
 	

• 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.
	 	 	 

3

 

	

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.
	

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.
	 	 	 

4

 

	

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

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

5Exhibit 10.4  

Grant No.:                          

FIELDSTONE INVESTMENT CORPORATION EQUITY INCENTIVE PLAN  

 RESTRICTED STOCK AGREEMENT  

        Fieldstone Investment Corporation (the "Company") hereby grants shares of its common stock (the "Stock") to the Grantee named below, subject to the vesting
conditions set forth in the attachment. Additional terms and conditions of the grant 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: ____________________________________ State of Residence: ____________ 

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

Number
of Shares Covered by Option: ___________________________ 

Purchase
Price per Share of Stock: $_______.___ 

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  

 RESTRICTED STOCK AGREEMENT  

	Restricted Stock/ Nontransferability	 	This grant is an award of Stock in the number of shares set forth on the cover sheet, at the purchase price set forth on the cover sheet, and subject to the vesting conditions described below ("Restricted Stock"). You
agree to pay the purchase price for the Restricted Stock concurrent with your execution of this agreement. To the extent not yet vested, your Restricted Stock may not be transferred, assigned, pledged or hypothecated, whether by operation of law or
otherwise, nor may the Restricted Stock be made subject to execution, attachment or similar process.
	

Issuance and Vesting	
 	

The Company will issue your Restricted Stock in your name as of the Grant Date.
	

 	
 	

Your right to the Stock under this Restricted Stock grant 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.
You cannot vest in more than the number of shares covered by this grant and no additional shares of Stock will vest after your Service has terminated for any reason.
	

Forfeiture of Unvested Stock	
 	

In the event that your Service terminates for any reason other than your death or Disability, you will forfeit to the Company all of the shares of Stock subject to this grant that have not yet vested. In the event your Service terminated because of
your death or Disability, 100% of the shares of Stock under this Restricted Stock shall become vested upon your termination of Service.
	

Escrow	
 	

The certificates for the Restricted Stock shall be deposited in escrow with the Secretary of the Company to be held in accordance with the provisions of this paragraph. Each deposited certificate shall be accompanied by a duly executed Assignment
Separate from Certificate in the form attached hereto as Exhibit A. The deposited certificates shall remain in escrow until such time or times as the certificates are to be released or otherwise
surrendered for cancellation as discussed below. Upon delivery of the certificates to the Company, you shall be issued an instrument of deposit acknowledging the number of shares of Stock delivered in escrow to the Secretary of the
Company.
	

 	
 	

All regular cash dividends on the Stock (or other securities at the time held in escrow) shall be paid directly to you and shall not be held in escrow. However, in the event of any stock dividend, stock split, recapitalization or other change
affecting the Company's outstanding common stock as a class effected without receipt of consideration, any new, substituted or additional securities or other property which is by reason of such transaction distributed with respect to the Stock shall
be immediately delivered to the Secretary of the Company to be held in escrow hereunder, but only to the extent the Stock is at the time subject to the escrow requirements hereof.
	 	 	 

2

 

	

 	
 	

The shares of Stock held in escrow hereunder shall be subject to the following terms and conditions relating to their release from escrow or their surrender to the Company for cancellation:
	

 	
 	

As your interest in the shares vests as described above, the certificates for such vested shares shall be released from escrow and delivered to you, at your request, in accordance with the following schedule:
	

 	
 	

• The initial release of any vested shares (or other vested assets and securities) from escrow shall be effected promptly following the first Vesting Date shown on the cover sheet.
	

 	
 	

• Subsequent release of any vested shares from escrow shall be effected promptly following each Vesting Date.
	

 	
 	

• Upon termination of your Service, any escrowed shares in which you are at the time vested shall be promptly released from escrow.
	

 	
 	

Upon your termination of Service, the escrowed certificates for such unvested shares shall be surrendered to the Company for cancellation, and you shall have no further rights with respect to such shares of Stock.
	

Withholding Taxes	
 	

You agree, as a condition of this grant, that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the vesting of Stock acquired under this grant. In the event that the Company determines that any
federal, state, local or foreign tax or withholding payment is required relating to the vesting 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.
	

Section 83(b) Election	
 	

Under Section 83 of the Internal Revenue Code of 1986, as amended (the "Code"), the difference between the purchase price paid for the shares of Stock and their fair market value on the date any forfeiture restrictions applicable to such shares lapse
will be reportable as ordinary income at that time. For this purpose, "forfeiture restrictions" include the forfeiture as to unvested Stock described above. You may elect to be taxed at the time the shares are acquired, rather than when such shares
cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30) days after the Grant Date. You will have to make a tax payment to the extent the purchase
price is less than the fair market value of the shares on the Grant Date. No tax payment will have to be made to the extent the purchase price is at least equal to the fair market value of the shares on the Grant Date. The form for making this
election is attached as Exhibit B hereto. Failure to make this filing within the thirty (30) day period will result in the recognition of ordinary income by you (in the event the fair market value of the
shares as of the vesting date exceeds the purchase price) as the forfeiture restrictions lapse.
	 	 	 

3

 

	

 	
 	
YOU ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF.
YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY 83(b) ELECTION.
	

Market Stand-off Agreement	
 	

In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933 (the "Securities Act"), including the Company's initial public offering,
 you agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any shares of vested
Stock without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in
length).
	

Retention Rights	
 	

This Agreement does not 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 have the right to vote the Restricted Stock and to receive any dividends declared or paid on such stock. Any distributions you receive as a result of any stock split, stock dividend, combination of shares or other similar transaction shall be
deemed to be a part of the Restricted Stock and subject to the same conditions and restrictions applicable thereto. The Company may in its sole discretion require any dividends paid on the Restricted Stock to be reinvested in shares of Stock, which
the Company may in its sole discretion deem to be a part of the shares of Restricted Stock and subject to the same conditions and restrictions applicable thereto. Except as described in the Plan, no adjustments are made for dividends or other rights
if the applicable record date occurs before your stock certificate is issued.
	

Adjustments	
 	

In the event of a stock split, a stock dividend or a similar change in the Company stock, the number of shares covered by this grant may be adjusted pursuant to the Plan. Your Restricted Stock 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.
	 	 	 

4

 

	

Legends	
 	

All certificates representing the Stock issued in connection with this grant shall, where applicable, have endorsed thereon the following legends:
	

 	
 	

"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND FORFEITURE PROVISIONS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE."
	

 	
 	

"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."
	

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 grant of Restricted Stock. Any prior agreements, commitments or negotiations concerning this grant are superseded.
	

Consent to Electronic Delivery	
 	

The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this 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.
	

Other Agreements	
 	

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

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

5

ASSIGNMENT SEPARATE FROM CERTIFICATE  

        FOR VALUE RECEIVED,                          hereby sells,
assigns and transfers unto Fieldstone Investment Corporation (the "Company"),
                        
(                        ) shares of common stock of the Company represented by Certificate
No.      herewith and does hereby irrevocable constitute and appoint
                         Attorney to transfer the said stock on
the books of the Company with full power of substitution in the premises. 

        Dated:
                        , 2003 

	

 	
 	

 Print Name
	

 	
 	

 Signature

Spouse Consent (if applicable) 

                                
(Purchaser's spouse) indicates by the execution of this Assignment his or her consent to be bound by the terms herein as to his or her
interests, whether as community property or otherwise, if any, in the shares of common stock of the Company. 

	

 	
 	

 Signature

INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE.  

EXHIBIT B  

ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE  

        The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies
the following information in accordance with the regulations promulgated thereunder: 

        1.     The
name, address and social security number of the undersigned: 

	 	Name:	 	 
	 	 	

	

 	

Address:	

 	

 
	 	 	

	

 	

	

 	

Social Security No.:	

 
	 	 	 	

        2.     Description
of property with respect to which the election is being made: 

                          shares
of common stock, par value $.     per share,
Fieldstone Investment Corporation, (the "Company"). 

        3.     The
date on which the property was transferred is                              , 2003. 

        4.     The
taxable year to which this election relates is calendar year 2003. 

        5.     Nature
of restrictions to which the property is subject: 

The
shares of stock are subject to the provisions of a Restricted Stock Agreement between the undersigned and the Company. The shares of stock are subject to forfeiture under the terms of the
Agreement. 

        6.     The
fair market value of the property at the time of transfer (determined without regard to any lapse restriction) was
$                         per
share, for a total of $                        . 

        7.     The
amount paid by taxpayer for the property was $                        . 

        8.     A
copy of this statement has been furnished to the Company. 

Dated:
                        , 2003 

	

 	
 	

 Taxpayer's Signature
	

 	
 	

 Taxpayer's Printed Name

PROCEDURES FOR MAKING ELECTION

UNDER INTERNAL REVENUE CODE SECTION 83(b)  

        The following procedures must be followed with respect to the attached form for making an election under Internal
Revenue Code section 83(b) in order for the election to be effective:1 

        1.     You
must file one copy of the completed election form with the IRS Service Center where you file your federal income tax returns within  30 days after the Grant Date of your Restricted Stock.

        2.     At
the same time you file the election form with the IRS, you must also give a copy of the election form to the Secretary of the Company. 

        3.     You must file another copy of the election form with your federal income tax return (generally, Form 1040) for the taxable year in which
the stock is transferred to you.  

  

	1
	Whether
or not to make the election is your decision and may create tax consequences for you. You are advised to consult your tax advisor if you are unsure whether or not to make the
election.

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