Redwood Trust Inc.

12/13/2024 | Press release | Distributed by Public on 12/13/2024 16:06

Management Change/Compensation Form 8 K

Item 5.02. Compensatory Arrangements of Certain Officers.

(e) At a meeting held on December 12, 2024, the Compensation Committee of the Board of Directors of Redwood Trust, Inc. (the "Company") considered and approved the following compensation matters for the Company's CEO and for certain other named executive officers of the Company noted below.

2024 Year-End Long-Term Equity Compensation Awards. On December 12, 2024, the Compensation Committee approved 2024 year-end long-term equity-based incentive ("LTI") awards to certain named executive officers of the Company to be granted on December 19, 2024. Three different types of equity-based awards were granted: Deferred Stock Units ("DSUs"), cash-settled Restricted Stock Units ("csRSUs"), and Performance Stock Units ("PSUs") pursuant to the Company's Second Amended and Restated 2014 Incentive Award Plan (the "2014 Incentive Plan"). The terms of each of these three types of awards are summarized below.

· The DSUs and csRSUs that were approved for grant will vest over four years, as follows: for DSUs, 25% of each award will vest on January 31, 2026, and an additional 6.25% will vest on the first day of each subsequent quarter (beginning April 1, 2026), with full vesting of the final 6.25% on December 18, 2028; for csRSUs, 25% of each award will vest on December 18, 2025, and an additional 25% will vest on each subsequent December 18th (beginning December 18, 2026), with full vesting of the final 25% on December 18, 2028. The DSUs and csRSUs will vest in full upon a termination of service (i) either without "cause" or for "good reason", in either case, on or within 24 months following a change in control or externalization event, or (ii) due to the officer's death or disability. In addition, the DSUs and csRSUs are subject to partial or full accelerated vesting upon a termination of service due to the officer's "retirement". With respect to DSUs, shares of Company common stock underlying the DSUs will be distributed to the recipients not later than December 31, 2028. With respect to csRSUs, on each vesting date, cash in an amount equal to the value of the common stock underlying the csRSUs that vest on such vesting date will be distributed to the recipients promptly following each such vesting date.
· Each DSU and csRSU approved for grant will have a grant date fair value of the closing price of the Company's common stock on the New York Stock Exchange ("NYSE") on the grant date, as determined in accordance with FASB Accounting Standards Codification Topic 718 at the time the grant is made. The number of DSUs and csRSUs granted to each officer will be determined based on a dollar amount for each award divided by the closing price of the Company's common stock on the NYSE on the grant date. The DSUs and csRSUs have attached dividend equivalent rights, resulting in the payment of dividend equivalents each time the Company declares a common stock dividend during the vesting period and until the underlying shares of common stock or cash are distributed.
· The definitive terms of the DSUs that were approved for grant will be set forth in a form of Deferred Stock Unit Award Agreement (which is included as Exhibit 10.1 hereto and incorporated by reference herein) and the 2014 Incentive Plan. The foregoing description of the terms of the DSUs does not purport to be complete and is qualified in its entirety by the full text of the form of Deferred Stock Unit Award Agreement included as Exhibit 10.1 hereto.
· The terms of the csRSUs that were approved for grant are generally consistent with the terms of the DSUs that were approved for grant, except that on each vesting date, cash in an amount equal to the value of the common stock underlying the csRSUs that vest on such vesting date will be distributed to the recipients promptly following each such vesting date, rather than through the delivery of shares of common stock. The definitive terms of the csRSUs that were approved for grant will be set forth in a form of Cash-Settled Restricted Stock Unit Award Agreement (which is included as Exhibit 10.2 hereto and incorporated by reference herein) and the 2014 Incentive Plan. The foregoing description of the terms of the csRSUs does not purport to be complete and is qualified in its entirety by the full text of the form of Cash-Settled Restricted Stock Unit Award Agreement included as Exhibit 10.2 hereto.