FIELDSTONE MORTGAGE COMPANY SENIOR MANAGER INCENTIVE AND RETENTION BONUS PLAN

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Exhibit 10.5(2)

FIELDSTONE MORTGAGE COMPANY

SENIOR MANAGER INCENTIVE AND RETENTION BONUS PLAN

1.     PURPOSE

        The purpose of the Fieldstone Mortgage Company Senior Manager Incentive Bonus and Retention Plan (the "Plan") is to provide incentives to certain senior managers of the Company to remain with the Company over time, to continue to contribute to the success of the Company, and to provide additional incentive compensation to these senior managers in connection with a Change of Control transaction.

2.     DEFINITIONS

        Capitalized terms used in this Plan have the meanings specified in the Plan and in the appendix to the Plan.

3.     ELIGIBILITY AND PARTICIPATION

        Participation in the Plan shall be limited to senior managers of the Company who are designated by the Board of Directors to be eligible. The Board of Directors will appoint a Compensation Committee of the Board of Directors, composed of selected directors and any other individuals designated by the Board of Directors. The Compensation Committee is empowered to administer the Plan in its sole discretion.

4.     DEFERRED LONG TERM INCENTIVE BONUS AWARDS

        4.1    Deferred Long-Term Incentive Bonuses    

        The Company may award long-term incentive cash bonuses from time to time at the sole discretion of the Board of Directors. If the Board of Directors, in the exercise of its discretion, deems the financial performance of the Company to be exceptional, then the Compensation Committee will recommend to the Board of Directors that it establish an aggregate amount that may be awarded as long-term incentive cash bonuses to be earned by certain senior managers over a defined period of time. The Compensation Committee shall determine both the amount to be awarded to a Participant, if any, and the timing of the payment of any deferred long-term incentive cash bonuses to be awarded for a designated year.

        4.2    Eligibility for Deferred Long-Term Incentive Bonuses    

        (a)   2005 Bonus: The entire amount of a 2005 Deferred Long Term Incentive Bonus Award granted under this Plan will be earned on June 30, 2005. Each Participant will be notified in writing of his or her award of a 2005 Deferred Long Term Incentive Bonus.

        (b)   2006 Bonus: The entire amount of a 2006 Deferred Long Term Incentive Bonus Award granted under this Plan will be earned on June 30, 2006. Each Participant will be notified in writing of his or her award of a 2006 Deferred Long Term Incentive Bonus.

        (c)   Possible Future Bonuses: If there are additional awards of Deferred Long Term Incentive Bonus amounts under this Plan, a letter from the Board of Directors to the Participants will define the amount of any such future award and the date on which any such award will be earned.

        (d)   Payment of Deferred Long-Term Incentive Bonuses when the Participant's Employment Terminates Prior to the Dates on which the Bonuses are Earned:

i.

If the Participant terminates his or her employment as a result of Normal Retirement, death or Disability prior to the dates on which the payments are earned pursuant to the prior subsections of this section 4.2, then the Participant will receive 100% of the

Deferred Long-Term Incentive Bonuses awarded to him or her in cash within 31 days following the date on which the Participant's employment terminates.

ii.

If the Company terminates the employment of a Participant without Cause prior to the dates on which the payments are earned pursuant to the prior subsections of this section 4.2, then the Participant will receive 100% of the Deferred Long-Term Incentive Bonuses awarded to him or her in cash within 31 days following the Participant's termination date.

iii.

Following a Change in Control transaction and the Closing Date, if all of the following three events occur:

(A)

the Company creates a circumstance that gives rise to Good Reason, which is deemed to occur on the date on which the Participant is notified of a circumstance that when effective will give rise to Good Reason; provided, however, that if the Participant is notified by the Company of the circumstance giving rise to Good Reason prior to the Closing Date, then the date the Good Reason is deemed to occur will be the Closing Date;

(B)

the Participant provides written notice to the Company of his or her intent to terminate his or her employment voluntarily due to the Good Reason within 14 days following the occurrence of the Good Reason; this notice must (I) identify for the Company the circumstance giving rise to Good Reason and (II) provide at least 14 days' advance notice to the Company of the Participant's intended termination date, and

(C)

the Company fails to eliminate the circumstance that gave rise to Good Reason within five days following its receipt of notice from the Participant

then the Participant will receive 100% of the Deferred Long-Term Incentive Bonuses awarded to him or her in cash within 31 days following the dates on which those amounts otherwise would have been earned. If the Company does eliminate the circumstances that gave rise to Good Reason within the five days following its receipt of the above-mentioned notice from the Participant and the Participant chooses not to remain an employee of the Company or its successor, then the Participant will forfeit all remaining unearned Deferred Long-Term Incentive Bonuses (see section 10.8).

        (e)   Forfeiture of Deferred Long-Term Incentive Bonuses when the Participant's Employment Terminates Prior to the Dates on which the Bonuses are Earned:

i.

If a Participant is not an employee in good standing on the dates on which the Deferred Long-Term Incentive Bonuses are earned for any reason except those specifically provided in subsection 4.2 (d), then the Participant will forfeit any unearned Deferred Long-Term Incentive Bonuses in their entirety and will not receive any of the unearned Deferred Long-Term Incentive Bonuses awarded to him or her.

ii.

If the Company terminates the employment of a Participant for Cause prior to the dates on which the payments are earned (pursuant to the prior subsections of this section 4.2), then the Participant will forfeit any unearned Deferred Long Term Incentive Bonus and will not receive any of the unearned Deferred Long-Term Incentive Bonuses awarded to him or her.

iii.

Following a Change in Control transaction and the Closing Date, if the Participant terminates his or her employment voluntarily without Good Reason, but prior to the dates on which the payments are earned (pursuant to the prior subsections of this section 4.2), then the Participant will forfeit any unearned Deferred Long-Term Incentive

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Bonus and will not receive any of the unearned Deferred Long-Term Incentive Bonuses awarded to him or her.

iv.

Following a Change in Control transaction and the Closing Date, if any one of the following events occur prior to the dates on which the payments are earned (pursuant to the prior subsections of this section 4.2):

(A)

the Participant terminates his or her employment voluntarily without Good Reason;

(B)

the Participant terminates his or her employment voluntarily more than 14 days following the later to occur of (I) the date on which the Participant is notified of a circumstance that when effective will give rise to Good Reason or (II) the Closing Date,

(C)

the Participant provides less than 14 days' advance written notice to the Company of his or her intent to terminate his or her employment, regardless of whether a circumstance that gives rise to Good Reason has occurred, or

(D)

the Company eliminates the circumstances that gave rise to Good Reason within five days following its receipt of the Participant's written notice provided in section 4.2.d.iii. and the Participant nevertheless voluntarily terminates his or her employment with the Company then the Participant will forfeit any unearned Deferred Long Term Incentive Bonus and will not receive any of the unearned Deferred Long-Term Incentive Bonuses awarded to him or her (see section 10.8).

        4.3    Form and Timing of Deferred Long-Term Incentive Bonus Distributions    

        Deferred Long-Term Incentive Bonus amounts that have been earned pursuant to this Section 4, if any, shall be distributed to the Participant in the form of a cash lump sum payment (net of withholding taxes) within 31 days after such Bonus Amounts have been earned, or, as appropriate, to the Participant's beneficiaries as specified in Section 8.

5.     CHANGE IN CONTROL BONUS AWARDS

        5.1    Change in Control/Retention Bonuses    

        (a)   If a Change in Control event occurs, the Board of Directors will determine in its sole discretion:

i.

the aggregate amount of the Change in Control/Retention Bonuses to be paid to the Participants and

ii.

the form and timing of the payment of any Change in Control/Retention Bonuses to be paid.

The Compensation Committee will determine each Participant's portion of the Change in Control/Retention Bonus pool based on that Participant's responsibilities and relative contributions to the business of the Company in the period immediately prior to the Change of Control event.

        (b)   the aggregate value of the Change in Control/Retention Bonuses for all of the Participants as a group will be determined by the Compensation Committee of the Company in its sole discretion within 31 days following a Change of Control event. The aggregate pool value of the Change in Control/Retention Bonuses will be a percentage of the total valuation of the Company established by the Change of Control event, so that the aggregate value of the Change of Control/Retention Bonuses will increase as the valuation of the Company increases.

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        5.2    Eligibility for Change in Control/Retention Bonuses    

        (a)   Each Participant individually may only earn the portion of the Change in Control/Retention Bonus awarded to him or her under the Plan by remaining an employee in good standing of the Company continuously through the Closing Date.

        (b)   Forfeiture of Change in Control/Retention Bonuses When the Participant's Employment Terminates Prior to the Closing Date: A Change in Control/Retention Bonus awarded under the Plan shall be forfeited in its entirety by any Participant if the Participant's employment is terminated for any reason prior to the Closing Date, including from death, Disability or Normal Retirement.

        5.3    Form and Timing of Change in Control/Retention Bonus Distributions    

        (a)   Subject to the provisions of subsections (b) and (c) of this section, each Change in Control/Retention Bonus paid to a Participant under the Plan (or to a Participant's Beneficiary) shall be paid in the same form as the consideration received by the Company's shareholders (the "Shareholders") as outlined in the Closing Documents and shall be paid at the same time as such consideration is paid to the Shareholders, unless the Compensation Committee determines otherwise in its sole discretion.

        (b)   If all or a portion of the sales proceeds received by the Shareholders is either (i) "restricted securities" (as such term is defined under the Securities Act of 1933, as amended, and the regulations promulgated thereunder) or (ii) subject to contractual transfer restrictions, then a corresponding portion of the Change in Control/Retention Bonus shall be retained by the Company until both (x) the securities are registered or may be sold pursuant to an exemption from the registration requirements and (y) the contractual transfer restrictions lapse, as may be outlined in the Closing Documents.

        (c)   Notwithstanding paragraphs (a) and (b) of this section, if the Change of Control transaction is an IPO, the Change in Control/Retention Bonuses paid to Participants under the Plan may be paid in the form of restricted shares of the Company's common stock that are subject to forfeiture, in their entirety, if the Participant voluntarily terminates his or her employment with the Company before the first anniversary of the IPO.

6.     EXTENDED SEVERANCE PAYMENTS

        6.1    Extended Severance Payments    

        (a)   A Participant may be entitled to an Extended Severance Payment in the event of a Change in Control under this Plan, as specifically provided in the eligibility provisions of section 6.2 below.

        (b)   The Compensation Committee will determine in its sole discretion any Extended Severance Payment amounts for which each Participant may be eligible. The amount of any Extended Severance Payment amount will be communicated in writing to the Participant, signed by the Chief Executive Officer or President of the Company.

        (c)   A Participant that is eligible for an Extended Severance Payment will be eligible for both the basic severance payment to which he or she is entitled under the Company's regular severance plans and this additional extended severance payment.

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        6.2    Eligibility Requirements for Extended Severance Payments    

        (a)   Except as is specifically provided in section 6.2 (c) below, to earn an Extended Severance Payment under the Plan a Participant must meet both of the following eligibility requirements:

i.

the Participant must be an employee in good standing of the Company on the Closing Date; and

ii.

one of the following two circumstances must also occur, either:

A.

on or prior to the Closing Date the Participant receives notice from the Company that his or her employment will be terminated following the Closing Date; or

B.

on or prior to the Closing Date: (I) the Participant receives a written offer describing the terms of the Participant's employment following the Closing Date, (II) one or more of the terms of that written offer would give rise to Good Reason, (III) the Participant notifies the Company in writing within 14 days of his or her receipt of the Company's written offer that he or she will not accept the terms of the written offer and will voluntarily terminate his or her employment not less than 14 days following the date of the notice and (IV) the Company fails to revise the terms of the written offer within five days of its receipt of the Participant's written notice to eliminate the term(s) that gave rise to Good Reason (see section 10.8).

        (b)   A Participant will forfeit the entire amount of an Extended Severance Payment award available under the Plan if any one or more o