Exhibit 10.3




 


  


THIRD AMENDMENT TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Agreement”), is entered into as of the 17th day of May 2012 (the “Effective Date”) by and between MARTIN
S. HUGHES (the “Executive”) and   REDWOOD TRUST, INC., a Maryland Corporation (the “Company”).


 


WHEREAS, the Executive and the Company
have entered into an Amended and Restated Employment Agreement dated as of March 31, 2009 (as subsequently amended as of March
17, 2010 and as of February 24, 2011, the “Employment Agreement”); and


 


WHEREAS, the Executive and the Company
desire to enter into this Agreement for purposes of amending the Employment Agreement as set forth herein;


 


NOW, THEREFORE, for good and valuable
consideration, the receipt and adequacy which is hereby acknowledged, the Executive and the Company hereby agree that the Employment
Agreement is hereby amended as follows effective upon the Effective Date:  


 


	 	(1)	Section 1 of the Employment Agreement shall be amended and restated to read in its entirety as follows:


 


“Employment as Chief Executive Officer of
the Company.  The Company does hereby employ the Executive as Chief Executive Officer of the Company.  The
Executive does hereby accept and agree to such employment.  The Executive’s duties shall be such executive and
managerial duties as the Board of Directors of the Company shall from time to time prescribe and as provided in the By-Laws of
the Company.  The Executive shall devote such time, energy and skill to the performance of his duties for the Company
and for the benefit of the Company as may be necessary or required for the effective conduct and operation of the Company’s
business. Furthermore, the Executive shall act only in good faith and exercise due diligence and care in the performance of his
duties to the Company under this Agreement.”


 


	 	(2)	Section 3(b) of the Employment Agreement shall be amended to replace the target annual bonus percentage of “165%” specified therein with “175%”.


 


	 	(3)	Section 10 of the Employment Agreement shall be amended by replacing “Attn: Chief Operating Officer” with “Attn: President”.


 


Except as hereby specifically amended or
modified, the terms of the Employment Agreement, as amended by this Agreement, shall remain in full force and effect.  This
Agreement may be executed by the parties hereto in two counterparts, each of which shall be an original and all of which together
shall constitute one and the same agreement.  This Agreement shall be governed in all respects by the laws of the State
of California (without regard to conflict of law principles).






 


[Signature Page Follows]


 






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IN WITNESS WHEREOF, the Company
has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed this Agreement, as of the
date first above written.


 


	REDWOOD TRUST, INC.	 
	 	 	 
	
         

        By:  
	
         

        /s/ Andrew Stone
	 
	 	Name: Andrew Stone	 
	 	Title: General Counsel & Secretary	 
	 	 	 
	
         

        MARTIN S. HUGHES
	 
	
         

         
	 
	 	/s/ Martin S. Hughes	 


 


 






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