Attached files
| file | filename |
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| EX-5.1 - REDWOOD TRUST INC | v203744_ex5-1.htm |
| EX-10.1 - REDWOOD TRUST INC | v203744_ex10-1.htm |
| EX-10.2 - REDWOOD TRUST INC | v203744_ex10-2.htm |
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): November 30,
2010
REDWOOD
TRUST, INC.
(Exact
name of registrant as specified in its charter)
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Maryland
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001-13759
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68-0329422
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(State
or other
jurisdiction
of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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One
Belvedere Place
Suite 300
Mill
Valley, California 94941
(Address
of principal executive offices and Zip Code)
(415) 389-7373
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02.
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Compensatory
Arrangements of Certain Officers.
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(e) At a
meeting held on November 30, 2010, the Compensation Committee of the Board of
Directors of Redwood Trust, Inc. (the “Company”) considered and approved the
following compensation matters for the officers of the Company noted
below. Further disclosure regarding these and other compensation
matters will be included in the Compensation Discussion and Analysis section of
the Company’s 2011 Annual Proxy Statement to be filed with the Securities and
Exchange Commission (“SEC”) in advance of the Company’s 2011 Annual Meeting of
Stockholders, which meeting is currently scheduled to take place in May
2011.
2010 Year-End Long-Term
Equity Compensation Awards. In accordance with its previously
disclosed policy and practice, on November 30, 2010, the Compensation Committee
made 2010 year-end long-term equity compensation awards to certain officers of
the Company. Two different types of equity awards were granted:
deferred stock units (“DSUs”) and Performance Stock Units
(“PSUs”). The terms of each of these two types of awards are
summarized below.
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·
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The
DSUs granted on November 30, 2010 will vest over four years, with 25% of
each award vesting on January 1, 2012, and an additional 6.25% vesting on
the first day of each subsequent quarter, with full vesting on January 1,
2015. The shares of Company common stock underlying these DSUs will be
distributed to the recipients in shares of common stock on May 1, 2015,
unless distribution is electively deferred by a recipient under the terms
of the Company’s Executive Deferred Compensation Plan. The number of DSUs
granted to each officer was determined based on a dollar amount for each
award divided by the closing price of the Company’s common stock on the
New York Stock Exchange (“NYSE”) on the trading day immediately prior to
grant.
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Each DSU
granted on November 30, 2010 had a grant date fair value of $13.99, which was
determined in accordance with FASB Accounting Standards Codification Topic 718
at the time the grant was made. The terms of the DSUs granted on
November 30, 2010 are generally consistent with the terms of the 2009 year-end
long-term equity compensation awards made to Named Executive
Officers. The foregoing description of the terms of these DSUs is
qualified in its entirety by reference to the Form of Deferred Stock Unit Award
Agreement attached hereto as Exhibit 10.1 (which is incorporated by reference
into this Item 5.02) and the 2002 Redwood Trust, Inc. Incentive Plan (which is
incorporated by reference into this Item 5.02 from the Company’s Current Report
on Form 8-K, Exhibit 10.1, filed on May 19, 2010). Without
limiting the foregoing sentence, the terms of the DSUs include, without
limitation, provisions relating to dividend equivalent rights, forfeiture, and
change-in-control that are set forth in the above-referenced Form of Deferred
Stock Unit Award Agreement and 2002 Redwood Trust, Inc. Incentive Plan, but
which are not summarized above.
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·
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The
PSUs granted on November 30, 2010 are performance-based equity awards
under which the number of underlying shares of Company common stock that
vest and that the recipient becomes entitled to receive at the time of
vesting will generally range from 0% to 200% of the target number of PSUs
granted,
with the target number of PSUs granted being adjusted to reflect the value
of any dividends paid on Company common stock during the vesting period
(as further described below). Vesting
of these PSUs will generally occur at the end of three years (on November
30, 2013) based on three-year total stockholder return (“TSR”), as
follows:
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o
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If
three-year TSR is negative, then 0% of the PSUs will
vest;
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o
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If
three-year TSR is 25%, then 100% of the PSUs will
vest;
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§
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If
three-year TSR is between 0% and 25%, then between 0% and 100% of the PSUs
will vest determined based on a straight-line, mathematical interpolation
between the applicable vesting
percentages;
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o
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If
three-year TSR is greater than or equal to 125%, then 200% of the PSUs
will vest; and
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§
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If
three-year TSR is between 25% and 125%, then between 100% and 200% of the
PSUs will vest determined based on a straight-line, mathematical
interpolation between the applicable vesting
percentages.
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Under the
terms of the PSUs, three-year TSR is defined as the percentage by which the Per
Share Price (defined below) as of November 30, 2013 has increased or decreased,
as applicable, relative to the Per Share Price as of November 30, 2010 ($14.14),
adjusted to include the impact on such increase or decrease that would be
realized if all cash dividends paid on a share of Company common stock during
such three-year period were reinvested in Company common stock on the applicable
dividend payment dates.
“Per
Share Price” shall mean as of any date, the average of the closing prices of a
share of Company common stock on the NYSE during the twenty (20) consecutive
trading days ending on the trading day prior to such date.
Subject
to vesting, the shares of Company common stock underlying these PSUs will be
distributed to the recipients on May 1, 2014, unless distribution is electively
deferred by a recipient under the terms of the Company’s Executive Deferred
Compensation Plan. At the time of vesting, the value of any dividends
paid during the vesting period will be reflected in the PSUs by increasing the
target number of PSUs granted by an amount corresponding to the incremental
number of shares of Company common stock that a stockholder would have acquired
during the three-year TSR measurement period had all dividends during that
period been reinvested in Company common stock on the applicable dividend
payment dates. Between the vesting of these PSUs and the delivery of
the underlying shares of Company common stock, the underlying vested award
shares will have attached dividend equivalent rights, resulting in the payment
of dividend equivalents each time the Company pays a common stock dividend
during that period.
Each PSU
granted on November 30, 2010 had a grant date fair value of $14.01, which was
determined in accordance with FASB Accounting Standards Codification Topic 718
at the time the grant was made. The foregoing description of the
terms of these PSUs is qualified in its entirety by reference to the Form of
Performance Stock Unit Award Agreement attached hereto as Exhibit 10.2 (which is
incorporated by reference into this Item 5.02) and the 2002 Redwood Trust, Inc.
Incentive Plan (which is incorporated by reference into this Item 5.02 from the
Company’s Current Report on Form 8-K, Exhibit 10.1, filed on May 19,
2010). Without limiting the foregoing sentence, the terms of
the PSUs include without limitation, provisions relating to forfeiture and
change-in-control that are set forth in the above-referenced Form of Performance
Stock Unit Award Agreement and 2002 Redwood Trust, Inc. Incentive Plan, but
which are not summarized above.
In
accordance with the requirements of Item 5.02(e) of Form 8-K, the 2010 year-end
long-term equity compensation awards granted on November 30, 2010 to the
following officers of the Company are set forth in the table below:
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Deferred Stock Units (“DSUs”)
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Performance Stock Units (“PSUs”)
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||||||||||||||
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#
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Aggregate Grant
Date Fair Value(1)
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#
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Aggregate Grant
Date Fair Value(1)
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Martin
S. Hughes,
President
& Chief Executive Officer
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80,358
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$ |
1,124,213
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80,358
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$ |
1,125,787
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Brett
D. Nicholas,
Chief
Operating Officer,
Chief
Investment Officer &
Executive
Vice President
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57,144
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$ |
799,440
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57,144
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$ |
800,560
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Diane
L. Merdian,
Chief
Financial Officer
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18,750
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$ |
262,316
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18,750
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$ |
262,684
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Harold
F. Zagunis,
Chief
Risk Officer
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18,750
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$ |
262,316
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18,750
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$ |
262,684
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Christopher
J. Abate,
Controller
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9,650
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$ |
135,000
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–
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$ |
–
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(1)
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Determined
in accordance with FASB Accounting Standards Codification Topic 718 at the
time the grant was made.
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The 2010
year-end long-term equity compensation awards granted on November 30, 2010 and
set forth in the table above are consistent with the Compensation Committee’s
prior commitment regarding performance-based equity awards, which was set forth
on page 32 of the Company’s 2010 Annual Proxy Statement. That
commitment provided for at least 50% of the 2010 year-end long-term equity
compensation awards granted to officers who would be Named Executive Officers
(“NEOs”) with respect to the 2010 annual compensation cycle to be
performance-based equity awards that would vest or be delivered based on the
achievement of metric-based performance targets established by the Compensation
Committee at the time of grant. Mr. Abate, who was an NEO with
respect to the 2009 annual compensation cycle, will not be an NEO with respect
to the 2010 annual compensation cycle and, therefore, did not receive a
performance-based equity award as part of his 2010 year-end long-term equity
compensation award.
2011 Base
Salaries. In accordance with its previously disclosed policy
and practice, on November 30, 2010, the Compensation Committee made
determinations regarding the 2011 base salaries of certain officers of the
Company. In accordance with the requirements of Item 5.02(e) of Form
8-K, the 2011 base salaries of the following officers of the Company are set
forth in the table below, together with the percentage increase from their 2010
base salaries:
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2011 Base Salary
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% Change from
2010 Base Salary
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Martin
S. Hughes,
President
& Chief Executive Officer
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$
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700,000
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0%
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Brett
D. Nicholas,
Chief
Operating Officer,
Chief
Investment Officer &
Executive
Vice President
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$
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500,000
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0%
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Diane
L. Merdian,
Chief
Financial Officer
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$
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400,000
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0%
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Harold
F. Zagunis,
Chief
Risk Officer
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$
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400,000
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0%
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2011 Target Annual
Bonuses. In accordance with its previously disclosed policy
and practice, on November 30, 2010, the Compensation Committee made
determinations regarding the 2011 target annual bonuses of certain officers of
the Company. As in past years, target annual bonuses for 2011 will
continue to be weighted 75% on the achievement of overall Company financial
performance and 25% on the achievement of pre-established individual
goals. In accordance with the requirements of Item 5.02(e) of Form
8-K, the 2011 target annual bonuses of the following officers of the Company are
set forth in the table below, together with a comparison to their target annual
bonuses for 2010.
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2011 Target Annual Bonus
(as a % of Base Salary)
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2011 Target Annual Bonus ($)
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% Change from
2010
Target Annual Bonus
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Martin
S. Hughes,
President
& Chief Executive Officer
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165%
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$
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1,155,000 |
0%
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Brett
D. Nicholas,
Chief
Operating Officer,
Chief
Investment Officer &
Executive
Vice President
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150%
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$
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750,000 |
0%
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Diane
L. Merdian,
Chief
Financial Officer
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100%
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$
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400,000 |
33%
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Harold
F. Zagunis,
Chief
Risk Officer
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100%
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$
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400,000 |
33%
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Subsequent Compensation
Matter Determinations. At one or more subsequent meetings of
the Compensation Committee, additional determinations regarding compensation
matters for executive officers and other employees of the Company will be
made. These matters will include, without limitation, determinations
regarding 2010 annual Company performance bonuses, 2010 annual individual
performance bonuses, and the 2011 annual company performance bonus
formula. As required by SEC regulations, determinations relating to
these matters will be disclosed on Form 8-K (or Form 10-K) and/or within the
Company’s 2011 Annual Proxy Statement.
Item
8.01. Other Events.
In
connection with the Company filing with the SEC on November 4, 2010 a prospectus
supplement dated November 4, 2010 relating to the Company’s Direct Stock
Purchase and Dividend Reinvestment Plan, the Company is filing the opinion dated
November 30, 2010 of its Maryland counsel, Venable LLP, regarding the legality
of the shares of common stock issued in connection therewith. The
opinion is filed as Exhibit 5.1 hereto and is incorporated herein by
reference and is also hereby being filed as an exhibit to, and is hereby
incorporated by reference in, the Company’s Registration Statement on Form S-3,
File No. 333-168617.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
Exhibit
5.1 Opinion
of Venable LLP
Exhibit
10.1 Form of
Deferred Stock Unit Award Agreement under 2002 Incentive Plan
Exhibit
10.2 Form of
Performance Stock Unit Award Agreement under 2002 Incentive Plan
Exhibit
23.1 Consent of
Venable LLP (contained in its opinion filed as Exhibit 5.1)
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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Date:
December 2, 2010
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REDWOOD
TRUST, INC.
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By:
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/s/
Andrew
P. Stone
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Andrew
P. Stone
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General
Counsel & Secretary
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Exhibit
Index
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Exhibit
No.
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Exhibit Title
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5.1
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Opinion
of Venable LLP
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10.1
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Form
of Deferred Stock Unit Award Agreement under 2002 Incentive
Plan
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10.2
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Form
of Performance Stock Unit Award Agreement under 2002 Incentive
Plan
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23.1
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Consent
of Venable LLP (contained in its opinion filed as Exhibit
5.1)
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