Form of Non-Qualified Stock Option Award  Agreement



 Exhibit 10.6 
 COLONY FINANCIAL, INC. 
 2011 EQUITY INCENTIVE PLAN 

NON-QUALIFIED OPTION AGREEMENT 
 Colony Financial, Inc., a Maryland corporation (the “Company”), hereby grants an option to purchase shares of its common stock, par value $0.01 (the “Option”), to the optionee named
below, subject to the vesting and other conditions set forth below. Additional terms and conditions of the grant are set forth in this cover sheet and in the attachment (collectively, the “Agreement”), and in the Company’s 2011 Equity
Incentive Plan (as amended from time to time, the “Plan”). 
 Grant Date:
            , 20     
 Name of Optionee:
                                         
                                        

Optionee’s Social Security Number:              -
             -              
 Number of Shares Covered by
Option:                                       

 Option Price per Share: $        .     (At least 100% of Fair Market
Value) 
 Vesting Schedule [            ] 

By your signature below, you agree to all of the terms and conditions described herein, 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 cover sheet or Agreement should appear to be inconsistent. 

 

							
	Optionee:	 	  
	  	Date:	  	  

		 	(Signature)	  		  	
	Company:	 	  
	  	Date:	  	  

		 	(Signature)	  		  	
	Title:	 	  
	  		  	

 Attachment 
 This is not a stock certificate or a negotiable instrument. 







 COLONY FINANCIAL, INC. 

2011 EQUITY INCENTIVE PLAN 
 NON-QUALIFIED OPTION AGREEMENT 
  

	 Non-qualified Option 
	This Agreement evidences an award of an Option exercisable for that number of shares of Stock set forth on the cover sheet and subject to the vesting and other conditions set forth herein, in
the Plan and on the cover sheet. This option is not intended to be an incentive option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. 


 

	 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. The Option may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered, whether by operation of law or otherwise, nor may the Option be made subject to execution, attachment or similar process. 


 

	 	If you attempt to do any of these things, this Option will immediately become forfeited. 


 

	 	Notwithstanding these restrictions on transfer, the Plan administrator may authorize, in its sole discretion, the transfer of a vested Option (in whole or in part) to a
member of your immediate family or a trust for the benefit of your immediate family. 

  

	 Vesting 
	Your Option shall vest in accordance with the vesting schedule shown on the cover sheet so long as you continue in Service on the vesting dates set forth on the cover sheet and is exercisable
only as to its vested portion. 

  

	 	No additional shares of Stock will vest after your Service has terminated for any reason. 

  

	 Change in Control 
	Notwithstanding the vesting schedule set forth above, upon the consummation of a Change in Control, this option will become 100% vested (i) if it is not assumed, or equivalent options are not
substituted for the options, by the Company or its successor, or (ii) if assumed or substituted for, upon your Involuntary Termination within the 12-month period following the consummation of the Change in Control. Notwithstanding any other
provision in this Agreement, if assumed or substituted for, the option will expire one year after the date of your termination of Service, for any reason, within such 12-month period. 


 

	 	“Involuntary Termination” means termination of your Service by reason of (i) your involuntary dismissal by the Company or its 



  
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	 	 successor for reasons other than Cause; or (ii) your voluntary resignation for Good Reason as defined in any applicable employment or
severance agreement, plan, or arrangement between you and the Company, or if none, then as set forth in the Plan following (x) a substantial adverse alteration in your title or responsibilities from those in effect immediately prior to the Change in
Control; (y) a reduction in your annual base salary as of immediately prior to the Change in Control (or as the same may be increased from time to time) or a material reduction in your annual target bonus opportunity as of immediately prior to the
Change in Control; or (z) the relocation of your principal place of employment to a location more than 35 miles from your principal place of employment as of the Change in Control or the Company’s requiring you to be based anywhere other than
such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with your business travel obligations as of immediately prior to the Change in
Control. To qualify as an “Involuntary Termination” you must provide notice to the Company of any of the foregoing occurrences within 90 days of the initial occurrence and the Company shall have 30 days to remedy such occurrence.



  

	 Forfeiture of Unvested Options / Term 
	Unless the termination of your Service triggers accelerated vesting or other treatment of your Option pursuant to the terms of this Agreement, the Plan, or any other written agreement between an
Applicable Entity and you, you will automatically forfeit to the Company those portions of the Option that have not yet vested in the event your Service terminates for any reason. 


 

	 	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. 

  

	 Expiration of Vested Options After Service Terminates 
	If your Service terminates for any reason, other than death, Disability or Cause, then the vested portion of your Option will expire at the close of business at Company headquarters on the 90th
day after your termination date. 

  

	 	If your Service terminates because of your death or Disability, or if you die during the 90-day period after your termination for any reason (other than Cause), then
the vested portion of your Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of your death or termination for Disability. During that twelve (12) month period, your estate or heirs may
exercise the vested portion of your Option. 

  

	 	If your Service is terminated for Cause, then you shall immediately 


  
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forfeit all rights to your entire Option and the Option shall immediately expire. 


  

	 Forfeiture of Rights 
	If you should take actions in violation or breach of or in conflict with any (a) employment agreement, (b) non-competition agreement, (c) agreement prohibiting solicitation of employees or
clients of the Company or any Affiliate, (d) confidentiality obligation with respect to the Company or any Affiliate, (e) secondment agreement, or (f) other agreement or any confidentiality obligation with respect to the Company or any Affiliate or
otherwise in competition with the Company or any Affiliate, the Company has the right to cause an immediate forfeiture of your rights to this Option and the Option shall immediately expire. 


 

	 	In addition, if you have exercised any options during the two year period prior to your actions, you will owe the Company a cash payment (or forfeiture of shares of
Stock) in an amount determined as follows: (1) for any shares of Stock that you have sold prior to receiving notice from the Company, the amount will be the proceeds received from the sale(s), less the option exercise price, and (2) for any shares
of Stock that you still own, the amount will be the number of shares of Stock owned times the Fair Market Value of the shares of Stock on the date you receive notice from the Company, less the option exercise price (provided, that the Company may
require you to satisfy your payment obligations hereunder either by forfeiting and returning to the Company the shares or any other shares of Stock or making a cash payment or a combination of these methods as determined by the Company in its sole
discretion). 

  

	 Leaves of Absence 
	For purposes of this Agreement, your Service does not terminate when you go on a bona fide leave of absence that was approved by your employer in writing if the terms of the leave provide
for continued Service crediting, or when continued Service crediting is required by applicable law. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work. 


 

	 	Your employer may determine, in its discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan in accordance with
the provisions of the Plan. Notwithstanding the foregoing, the Company may determine, in its discretion, that a leave counts for this purpose even if your employer does not agree. 


 

	 Notice of Exercise 
	 The Option may be exercised, in whole or in part, to purchase a whole number of vested shares of Stock of not less than 100 shares, unless the number of vested shares purchased is the total
number available for purchase under the option, by following the procedures set forth in 



  
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	 	 the Plan and in this Agreement. 


  

	 	When you wish to exercise this Option, you must exercise in a manner required or permitted 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.


  

	 	Notwithstanding any other provision in this Agreement, if you are an employee of the Manager or an Affiliate of the Manager on the Grant Date you must exercise your
Option, if you elect to exercise it at all, on the earliest to occur of (1) [DATE] (or a later date within the same calendar year), (2) your termination from Service for any reason with the Manager or Affiliate (or a later date within the
same calendar year), or (3) the latest date you would otherwise be eligible to exercise your Option. 

  

	 Form of Payment 
	When you exercise your Option, you must include payment of the option price indicated on the cover sheet 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 are owned by you and which are surrendered to the Company. The Fair Market Value of the shares as of the effective date of the
option exercise will be applied to the option price. 


  

	 	•	 	 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 (if approved in advance by the Committee of the Board if you are either an executive officer or a director of the
Company). 


  

	 	•	 	 By directing the Company to withhold shares of Stock issuable on exercise of this Option in payment of the aggregate option price and any withholding
taxes. 


  

	 Evidence of Issuance 
	The issuance of the shares upon exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry,
direct registration or issuance of one or more stock certificates. 


  
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	 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 Option exercise or sale of Stock
acquired under this Option. In the event that any Applicable Entity determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise of this Option or sale of Stock arising from this Option, the
Applicable Entity shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Applicable Entity (including withholding the delivery of vested shares of Stock otherwise deliverable under
this Agreement). 

  

	 Retention Rights 
	This Agreement and this Option do not give you the right to be retained by any Applicable Entity in any capacity. Unless otherwise specified in an employment or other written agreement between
the Applicable Entity and you, the Applicable Entity reserves the right to terminate your Service at any time and for any reason. 

  

	 Stockholder Rights 
	You, or your estate or heirs, have no rights as a shareholder of the Company until the Stock has been issued upon exercise of your Option and either a certificate evidencing your Stock has been
issued or an appropriate entry has been made on the Company’s books. No adjustments are made for dividends, distributions or other rights if the applicable record date occurs before your certificate is issued (or an appropriate book entry is
made), except as described in the Plan. 

  

	 	Your Option shall be subject to the terms of any applicable agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate
activity. 

  

	 Clawback 
	This Award is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company “clawback” or recoupment policy that requires
the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy. 


 

	 	If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial
reporting requirement under the securities laws and you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct or were grossly negligent in failing to prevent the
misconduct, you shall reimburse the Company the amount of any payment in settlement of this Award earned or accrued during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission
(whichever first occurred) of the financial document that contained such material 


  
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	 	 noncompliance. 


  

	 	[Notwithstanding any other provision of the Plan or any provision of this Agreement, if the Company is required to prepare an accounting restatement, then you
shall forfeit any cash or Stock received in connection with this Award (or an amount equal to the fair market value of such Stock on the date of delivery if you no longer hold the shares of Stock) if pursuant to the terms of this Agreement, the
amount of the Award earned or the vesting in the Award was explicitly based on the achievement of pre-established performance goals set forth in this Agreement (including earnings, gains, or other criteria) that are later determined, as a result of
the accounting restatement, not to have been achieved.] [Include if any performance goals are included in award] 

  

	 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 grant are superseded; except that any written employment, consulting, confidentiality, non-competition, non-solicitation and/or severance agreement between you and any Applicable Entity shall supersede this Agreement with respect to
its subject matter. 

  

	 Data Privacy 
	In order to administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other
appropriate personal and financial data about you such as your contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. 


 

	 	By accepting this grant, you give explicit consent to the Company to process any such personal data. 


 

	 Code Section 409A 
	 It is intended that this Award comply with Code Section 409A or an exemption to Code Section 409A. To the extent that the Company determines that you would be subject to the additional 20%
tax imposed on certain non-qualified deferred compensation plans 



  
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pursuant to Code Section 409A as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such additional tax.
The nature of any such amendment shall be determined by the Company. For purposes of this Award, a termination of Service only occurs upon an event that would be a Separation from Service within the meaning of Code Section 409A.



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

  
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