EX-10.5 FORM OF INDEPENDENT DIRECTORS COMP PLAN






EXHIBIT 10.5




 






NORTHSTAR REAL ESTATE INCOME TRUST, INC.

INDEPENDENT DIRECTORS COMPENSATION PLAN




 






 









 





NORTHSTAR REAL ESTATE INCOME TRUST, INC.

INDEPENDENT DIRECTORS COMPENSATION PLAN




ARTICLE 1

PURPOSE




     1.1. PURPOSE. The purpose of the Plan is to attract, retain and compensate
highly-qualified individuals who are not employees of NorthStar Real Estate Income Trust, Inc. or
any of its subsidiaries or affiliates for service as members of the Board by providing them with
competitive compensation and an ownership interest in the Stock of the Company. The Company
intends that the Plan will benefit the Company and its stockholders by allowing Independent
Directors to have a personal financial stake in the Company through an ownership interest in the
Stock and will closely associate the interests of Independent Directors with that of the Company’s
stockholders.



     1.2. ELIGIBILITY. Independent Directors of the Company who are Eligible Participants,
as defined below, shall automatically be participants in the Plan.



ARTICLE 2

DEFINITIONS




     2.1. DEFINITIONS. Capitalized terms used herein and not otherwise defined shall have
the meanings given such terms in the Incentive Plan. Unless the context clearly indicates
otherwise, the following terms shall have the following meanings:



     “Base Annual Retainer” means the annual retainer (excluding Meeting Fees and
expenses) payable by the Company to an Independent Director pursuant to Section 5.1 hereof for
service as a director of the Company (i.e., excluding any Supplemental Annual Retainer), as
such amount may be changed from time to time.



     “Effective
Date” of the Plan has the meaning set forth in Section 9.4 of the Plan.



     “Eligible Participant” means any person who is an Independent Director on the Effective Date
or becomes an Independent Director while this Plan is in effect; except that during any period a
director is prohibited from participating in the Plan by his or her employer or otherwise waives
participation in the Plan, such director shall not be an Eligible Participant.



     “Incentive Plan” means the NorthStar Real Estate Income Trust, Inc. Long Term Incentive Plan,
or any subsequent equity compensation plan approved by the Board and designated as the Incentive
Plan for purposes of this Plan.



     “Meeting Fees” means fees for attending a meeting of the Board or one of its committees as set
forth in Section 5.3 hereof.



     “Plan” means this NorthStar Real Estate Income Trust, Inc. Independent Directors Compensation
Plan, as amended from time to time.



     “Plan Year(s)” means the approximate twelve-month periods between annual meetings of the
stockholders of the Company, which, for purposes of the Plan, are the periods for which annual
retainers are earned.



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     “Supplemental Annual Retainer” means the annual retainer (excluding Meeting Fees and
expenses) payable by the Company to an Independent Director pursuant to Section 5.2 hereof for
service as the chair of the Audit Committee of the Board, as such amount may be changed from time
to time.



ARTICLE 3

ADMINISTRATION




     3.1. ADMINISTRATION. The Plan shall be administered by the Board. Subject to the
provisions of the Plan, the Board shall be authorized to interpret the Plan, to establish, amend
and rescind any rules and regulations relating to the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan. The Board’s interpretation of the Plan,
and all actions taken and determinations made by the Board pursuant to the powers vested in it
hereunder, shall be conclusive and binding upon all parties concerned, including the Company, its
stockholders and persons granted awards under the Plan. The Board may appoint a plan administrator
to carry out the ministerial functions of the Plan, but the administrator shall have no other
authority or powers of the Board.



     3.2. RELIANCE. In administering the Plan, the Board may rely upon any information
furnished by the Company, its public accountants and other experts. No individual will have
personal liability by reason of anything done or omitted to be done by the Company or the Board in
connection with the Plan. This limitation of liability shall not be exclusive of any other
limitation of liability to which any such person may be entitled under the Company’s certificate of
incorporation or otherwise.



ARTICLE 4

SHARES




     4.1. SOURCE OF SHARES FOR THE PLAN. The shares of Stock that may be issued pursuant
to the Plan shall be issued under the Incentive Plan, subject to all of the terms and conditions of
the Incentive Plan. The terms contained in the Incentive Plan are incorporated into and made a
part of this Plan with respect to shares of stock, Restricted Stock and any other equity granted pursuant
hereto and any such grant shall be governed by and construed in accordance with the Incentive
Plan. In the event of any actual or alleged conflict between the provisions of the Incentive Plan
and the provisions of this Plan, the provisions of the Incentive Plan shall be controlling and
determinative. This Plan does not constitute a separate source of
shares for the grant of Restricted stock or shares of stock described herein.



ARTICLE 5

RETAINERS, MEETING FEES AND EXPENSES




     5.1. BASE ANNUAL RETAINER. Each Eligible Participant shall be paid a Base Annual
Retainer for service as a director during each Plan Year payable in
such form as shall be elected by the Eligible Participant in
accordance with Section 6.1. The amount of the Base Annual Retainer shall be established from time to time by the Board. Until changed by the Board, the Base
Annual Retainer for a full Plan Year shall be $45,000. The Base Annual  Retainer shall be
payable in approximately equal quarterly installments in advance, beginning on the date of the
annual stockholders meeting. A pro rata Base Annual Retainer will be paid to any person who
becomes an Eligible Participant on a date other than the beginning of a Plan Year, based on the
number of full months he or she serves as an Independent Director during the Plan Year. Payment of
such prorated Base Annual Retainer shall begin on the date that the person first becomes an
Eligible Participant, and shall resume on a quarterly basis



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thereafter. In no event shall any installment of the Base Annual Retainer be paid later than
March 15 of the year following the year to which such installment relates.






     5.2. AUDIT COMMITTEE CHAIRPERSON SUPPLEMENTAL ANNUAL RETAINER. The chairperson
of the Audit Committee of the Board shall be paid a Supplemental Annual Retainer for his or
her service as such chairperson during a Plan Year, payable at the same times as installments of
the Base Annual Retainer are paid and in such form as shall be
elected by such chairperson in accordance with Section 6.1. The amount of the Supplemental Annual Retainer for the
chairperson of the Audit Committee shall be established from time to time by the Board. Until
changed by the Board, the Supplemental Annual Retainer for a full Plan Year for the
chairperson of the Audit Committee shall be $10,000. A prorata Supplemental Annual Retainer
will be paid to any Eligible Participant who becomes the chairperson of the Audit Committee of the
Board on a date other than the beginning of a Plan Year, based on the number of full months he or
she serves as a chairperson of the Audit Committee of the Board during the Plan Year. Payment of
such prorated Supplemental Annual Retainer shall begin on the date that the person first
becomes chairperson of the Audit Committee, and shall resume on a quarterly basis thereafter. In no
event shall any installment of the Supplemental Annual Retainer be paid later than March 15
following the end of the given quarter.






     5.3. MEETING FEES. Each Independent Director shall be paid Meeting Fees for attending
meetings of the Board or its committees payable in such form as shall
be elected by the Independent Director in accordance with
Section 6.2. The amount of the Meeting Fees shall be established from
time to time by the Board. Until changed by the Board, the Meeting Fee for attending a meeting of
the Board in person shall be $2,500 and the Meeting Fee for attending a meeting of a committee of
the Board in person shall be $2,000. Until changed by the Board, the Meeting Fee for participation
in a telephonic meeting of the Board or a committee of the Board, provided that minutes are kept at
such telephonic meeting, shall be $1,000 if such meeting lasts less than one hour, or $1,500 if
such meeting lasts more than one hour. If an Independent Director attends a Board meeting and a
committee meeting on a single day, he or she shall only receive a Meeting Fee for the Board meeting
attended. Meeting Fees shall be payable on the date of the applicable meeting to which they
relate.


     5.4. TRAVEL EXPENSE REIMBURSEMENT. All Eligible Participants shall be reimbursed for
reasonable travel expenses (including spouse’s expenses to attend events to which spouses are
invited) in connection with attendance at meetings of the Board and its committees, or other
Company functions at which the Chief Executive Officer or Chair of the Board requests the
Independent Director to participate. Notwithstanding the foregoing, the Company’s reimbursement
obligations pursuant to this Section 5.4 shall be limited to expenses incurred during such
director’s service as an Independent Director. Such payments will be made within 30 days after
delivery of the Independent Director’s written requests for payment, accompanied by such evidence
of expenses incurred as the Company may reasonably require, but in no event later than the last day
of the Independent Director’s tax year following the tax year in which the expense was incurred.
The amount reimbursable in any one tax year shall not affect the amount reimbursable in any other
tax year. Independent Directors’ right to reimbursement pursuant to this Section 5.4 shall not be
subject to liquidation or exchange for another benefit.



ARTICLE 6


ALTERNATIVE FORM OF PAYMENT FOR BASE ANNUAL RETAINER, 

SUPPLEMENTAL ANNUAL RETAINER AND MEETING FEES



     6.1.         PAYMENT OF BASE ANNUAL RETAINER AND SUPPLEMENTAL ANNUAL
RETAINER. At the election of each Eligible Participant, the Base Annual Retainer or the Supplemental Annual Retainer
for a given Plan Year shall be either (i) payable in cash in approximately equal quarterly installments in
advance, beginning on the date of the annual stockholders meeting, or (ii) subject to share availability
under the Incentive Plan, payable by a grant on the day an installment of the Base Annual Retainer or
Supplemental Annual Retainer is normally paid (the “Stock Grant Date”) of that number of shares of
Stock (rounded up to the nearest whole share) determined by dividing the Base Annual Retainer or
Supplemental Annual Retainer installment otherwise payable by (a) if the Stock Grant Date occurs
during any public offering of the Company’s Stock, the offering price of the Stock, net of dealer
manager fees and selling commissions, or (b) if the Stock Grant Date occurs after the termination
of any public offering of the Company's Stock, the per share estimated value of the Stock disclosed
in the Company’s most recent annual report distributed to investors pursuant
to Section 13(a) of the 1934 Act, or (c) in any case, the
Fair Market Value as otherwise determined by the Committee.  Any shares of Stock granted under the Plan as the Base Annual
Retainer or Supplemental Annual Retainer under clause (ii) above will be 100% vested and nonforfeitable as of the Stock
Grant Date, and the Eligible Participant receiving such shares of Stock (or his or her custodian, if any) will have
immediate rights of ownership in the shares of Stock, including the right to vote the shares of Stock and the right
to receive dividends or other distributions thereon.




     6.2.         PAYMENT
OF MEETING FEES. At the election of each
Eligible Participant, the Meeting Fees to be earned during a Plan Year by such Eligible Participant shall be
either (i) payable in cash at each meeting date or such other date(s) on which such fees are normally
paid, or (ii) subject to share availability under the Incentive Plan, payable by a grant on the day
following each meeting date (the “Meeting Fee Stock Grant Date”) of that number of shares of
Stock (rounded up to the nearest whole share) determined by dividing the Meeting Fee
otherwise payable by (a) if the Meeting Fee Stock Grant Date occurs during any public
offering of the Company's Stock, the offering price of the Stock, net of dealer manager fees and
selling commissions, or (b) if the Meeting Fee Stock Grant Date occurs after the termination of
any public offering of the Company’s Stock, the per share estimated value of the Stock disclosed
in the Company's most recent annual report distributed to investors pursuant to Section 13(a) of
the 1934 Act, or (c) in any case, the Fair Market Value as otherwise determined by
the Committee. Any shares of Stock granted under the Plan as Meeting Fees under
clause (ii) above will be 100% vested and nonforfeitable as of the Meeting Fee
Stock Grant Date, and the Eligible Participant receiving such shares of
Stock (or his or her custodian, if any) will have immediate rights of
ownership in the shares of Stock, including the right to vote the shares of Stock
and the right to receive dividends or other distributions thereon.



     6.3.         TIMING
AND MANNER OF PAYMENT ELECTION. Each Eligible
Participant shall elect the form of payment desired for his or her Base Annual Retainer, Supplemental
Annual Retainer (if applicable) and Meeting Fees for a Plan Year by delivering a valid election form in such form as the
Board or the plan administrator shall prescribe (the “Election Form”) to the Board or the plan administrator prior to
the beginning of such Plan Year, which will be effective as of the first day of the Plan Year beginning after the
Board or the plan administrator receives the Eligible Participant’s Election Form. The Election Form signed by
the Eligible Participant prior to the Plan Year will be irrevocable for the coming Plan Year. However, prior to
the commencement of the following Plan Year, an Eligible Participant may change his or her election for future
Plan Years by executing and delivering a new Election Form indicating different choices. If an Eligible
Participant fails to deliver a new Election Form prior to the commencement of the new Plan Year, his or
her Election Form in effect during the previous Plan Year shall continue in effect during the new Plan
Year. If no Election Form is filed or effective, or if there are insufficient shares of Stock in the
Incentive Plan, the Base Annual Retainer, Supplemental Annual Retainer (if applicable) and Meeting
Fees will be paid in cash.





ARTICLE 7
EQUITY COMPENSATION


     7.1. INITIAL RESTRICTED STOCK GRANT. Subject to share availability under the Incentive
Plan, each Independent Director shall receive on the first date he or she is initially elected or
appointed to the Board, 5,000 shares of Restricted Stock. Notwithstanding the


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foregoing, each Independent Director elected or appointed to the Board prior to the Company’s
initial public offering of its common stock being declared effective by the Securities and Exchange
Commission (the “IPO Effective Date”) and who remains as an Independent Director as of such date
shall receive such Restricted Stock grant on the IPO Effective Date. Such Restricted Stock shall be
subject to the terms and restrictions described below in this Article 7.



     7.2. SUBSEQUENT RESTRICTED STOCK GRANT. Subject to share availability under the
Incentive Plan, on the date following an Independent Director’s subsequent re-election to the
Board, such director shall receive 2,500 shares of Restricted Stock.



     7.3. TERMS AND CONDITIONS OF RESTRICTED STOCK. Shares of Restricted Stock shall be
evidenced by a written Award Certificate, and shall be subject to such restrictions and risk of
forfeiture as determined by the Board, and shall be granted under and pursuant to the terms of the
Incentive Plan. Unless and until provided otherwise by the Board, the Restricted Stock granted
pursuant to Section 7.1 and Section 7.2 herein shall vest and become non-forfeitable in equal
quarterly installments beginning on the first day of the first quarter following the Grant Date;
provided, however, that the shares of Restricted Stock shall become fully vested on the earlier
occurrence of (i) the termination of the Independent Director’s service as a director of the
Company due to his or her death or Disability, or (ii) a Change in Control of the Company. If the
Independent Director’s service as a director of the Company terminates other than as described in
clause (i) of the foregoing sentence, then the Independent Director shall forfeit all of his or her
right, title and interest in and to any unvested shares of Restricted Stock as of the date of such
termination from the Board and such Restricted Stock shall be reconveyed to the Company without
further consideration or any act or action by the Independent Director.



ARTICLE 8

AMENDMENT, MODIFICATION AND TERMINATION




     8.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board may, at any time and from
time to time, amend, modify or terminate the Plan without stockholder approval; provided, however,
that if an amendment to the Plan would, in the reasonable opinion of the Board, require stockholder
approval under applicable laws, policies or regulations or the applicable listing or other
requirements of a securities exchange on which the Stock is listed or traded, then such amendment
shall be subject to stockholder approval; and provided further, that the Board may condition any
other amendment or modification on the approval of stockholders of the Company for any reason.



ARTICLE 9

GENERAL PROVISIONS




     9.1. ADJUSTMENTS. The adjustment provisions of the Incentive Plan shall apply with
respect to Restricted Stock or other equity awards outstanding or to be granted pursuant to this
Plan.



     9.2. DURATION OF THE PLAN. The Plan shall remain in effect until terminated by the
Board.



     9.3. EXPENSES OF THE PLAN. The expenses of administering the Plan shall be borne by
the Company.



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     9.4. EFFECTIVE DATE. The Plan was originally adopted by the Board on
                                                            , 2009, and became effective on that date (the “Effective Date”).



*****




     The foregoing is hereby acknowledged as being the NorthStar Real Estate Income Trust, Inc.
Independent Directors Compensation Plan as adopted by the Board.



	 	 	 	 	 	 	 
	 	 	NORTHSTAR REAL ESTATE INCOME TRUST, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 







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