exv10w5






Exhibit 10.5




STARWOOD PROPERTY TRUST, INC.




NON-EXECUTIVE DIRECTOR STOCK PLAN




 









 





STARWOOD PROPERTY TRUST INC.

NON-EXECUTIVE DIRECTOR STOCK PLAN




	 	 	 	 	 	 	 
	Section	 	 	 	Page
	 
	 	 	 	 	 	 
	1.

	 	Purpose; Types of Awards; Construction
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	3.

	 	Administration
	 	 	3	 
	 
	 	 	 	 	 	 
	4.

	 	Eligibility
	 	 	3	 
	 
	 	 	 	 	 	 
	5.

	 	Stock Subject to the Plan
	 	 	4	 
	 
	 	 	 	 	 	 
	6.

	 	Terms of Awards
	 	 	4	 
	 
	 	 	 	 	 	 
	7.

	 	Change in Control
	 	 	7	 
	 
	 	 	 	 	 	 
	8.

	 	General Provisions
	 	 	7	 






 









 






STARWOOD PROPERTY TRUST INC.




NON-EXECUTIVE DIRECTOR STOCK PLAN




     1. Purpose; Types of Awards.



     The purposes of the Starwood Property Trust Inc. Non-Executive Director Stock Plan (the
“Plan”) are to afford an incentive to the non-executive directors of Starwood Property Trust Inc.
(the “Company”) to continue as directors, to increase their efforts on behalf of the Company and to
promote the success of the Company’s business. The Plan provides for the grant of restricted
stock, restricted stock units and other equity-based awards. The Plan is also intended to
implement the Company’s non-executive director program for the payment of fees in shares of Stock.



     2. Definitions.



     For purposes of the Plan, the following terms shall be defined as set forth below:



          (a) “Award” means any award of Restricted Stock or Restricted Stock Unit or any other Other
Stock-Based Award granted under the Plan.



          (b) “Award Agreement” means any written agreement, contract or other instrument or document
evidencing an Award.



          (c) “Board” means the Board of Directors of the Company.



          (d) “Change of Control” means a change in ownership or effective control of the Company, or a
change in the ownership of a substantial portion of the assets of the Company, in any case, within
the meaning of Section 409A of the Code; provided, however, that a transaction or series of
transactions effected with the Manager and/or any Affiliate of the Manager, through the acquisition
of Stock or other Company securities (regardless of the form of such transaction or series of
transactions), changes to the membership of the Board or otherwise, shall not constitute a Change
of Control for purposes of the Plan or any Award.



          (e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the
rules and regulations promulgated thereunder.



          (f) “Committee” means the committee established by the Board to administer the Plan, the
composition of which shall at all times consist of “non-employee directors” within the meaning of
Rule 16b-3 under the Exchange Act.



          (g) “Company” means Starwood Property Trust Inc., a Maryland corporation, or any successor
corporation.



 









 





          (h) “Effective Date” means [_________], 2009, the date on which the Plan was adopted by the
Board, subject to obtaining the approval of the Company’s stockholders.



          (i) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
and the rules and regulations promulgated thereunder.



          (j) “Fair Market Value” means, with respect to Stock or other property, the fair market value
of such Stock or other property determined by such methods or procedures as shall be established
from time to time by the Board. Unless otherwise determined by the Board in good faith, the per
share Fair Market Value of Stock as of a particular date shall mean (i) the closing sales price per
share of Stock on the national securities exchange on which the Stock is principally traded, for
the last preceding date on which there was a sale of such Stock on such exchange; (ii) if the
shares of Stock are then traded in an over-the-counter market, the average of the closing bid and
asked prices for the shares of Stock in such over-the-counter market for the last preceding date on
which there was a sale of such Stock in such market; or (iii) if the shares of Stock are not then
listed on a national securities exchange or traded in an over-the-counter market, such value as the
Board, in its sole discretion, shall determine.



          (k) “Manager” means SPT Management, LLC, a Delaware limited liability company.



          (l) “Other Stock-Based Award” means a right or other interest granted to a Participant that
may be denominated or payable in, valued in whole or in part by reference to, or otherwise based
on, or related to, Stock, including but not limited to unrestricted shares of Stock or dividend
equivalent rights.



          (m) “Participant” means an eligible person who has been granted an Award under the Plan.



          (n) “Plan” means this Starwood Property Trust Inc. Non-Executive Director Stock Plan, as
amended from time to time.



          (o) “Restricted Stock” means an Award of shares of Stock to a Participant under Section
6(b)(i) that may be subject to certain restrictions and to a risk of forfeiture.



          (p) “Restricted Stock Unit” or “RSU” means a right granted to a Participant under Section
6(b)(ii) to receive Stock, cash or other property at the end of a specified period, which right may
be conditioned on the satisfaction of specified performance or other criteria.



          (q) “Securities Act” means the Securities Act of 1933, as amended from time to time, and the
rules and regulations promulgated thereunder.



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          (r) “Separation from Service” shall have the meaning attributed to such term under Section
409A of the Code.



          (s) “Stock” means shares of the common stock, par value $0.01 per share, of the Company.



     3. Administration.



     The Plan shall be administered by the Board. Except with respect to the amendment,
modification, suspension or early termination of the Plan, the Board may appoint a Committee to
administer all or a portion of the Plan. To the extent that the Board so delegates its authority,
references herein to the Board shall be deemed references to the Committee. The Board may delegate
to one or more agents such administrative duties as it may deem advisable, and the Committee or any
other person to whom the Board has delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Board or such Committee or person may have
under the Plan. No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Award granted hereunder.



     The Board shall have the authority in its discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the powers and
authorities either specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation, the authority to: (i) grant Awards;
(ii) determine the persons to whom and the time or times at which Awards shall be granted; (iii)
determine the type and number of Awards to be granted, the number of shares of Stock to which an
Award may relate and the terms, conditions, restrictions and performance criteria relating to any
Award; (iv) determine whether, to what extent, and under what circumstances an Award may be
settled, cancelled, forfeited, exchanged, or surrendered; (v) make adjustments in the terms and
conditions of Awards; (vi) construe and interpret the Plan and any Award; (vii) prescribe, amend
and rescind rules and regulations relating to the Plan; (viii) determine the terms and provisions
of the Award Agreements (which need not be identical for each Participant); and (ix) make all other
determinations deemed necessary or advisable for the administration of the Plan. All decisions,
determinations and interpretations of the Board shall be final and binding on all persons,
including but not limited to the Company, any parent or subsidiary of the Company, any Participant
(or any person claiming any rights under the Plan from or through any Participant) and any
stockholder. Notwithstanding any provision of the Plan or any Award Agreement to the contrary,
except as provided in the second paragraph of Section 5, neither the Board nor the Committee may
take any action which would have the effect of reducing the aggregate exercise, base or purchase
price of any Award without obtaining the approval of the Company’s stockholders.



     4. Eligibility.



     Awards may be granted, in the discretion of the Board, to directors of the Company who are not
officers of the Company. In determining the persons to whom



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Awards shall be granted and the type of any Award (including the number of shares to be
covered by such Award), the Board shall take into account such factors as the Board shall deem
relevant in connection with accomplishing the purposes of the Plan.



     5. Stock Subject to the Plan.



     The maximum number of shares of Stock reserved for the grant of Awards under the Plan shall be
equal to 100,000, subject to adjustment as provided herein. Stock issued under the Plan may, in
whole or in part, be authorized but unissued shares or shares that shall have been or may be
reacquired by the Company in the open market, in private transactions or otherwise. If any shares
subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award terminates or
expires without a distribution of shares to the Participant, or if shares of Stock are surrendered
or withheld by the Company as payment of either the purchase price of an Award and/or withholding
taxes in respect of an Award, the shares of Stock with respect to such Award shall, to the extent
of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration,
again be available for Awards under the Plan.



     In the event that the Board shall determine that any dividend or other distribution (whether
in the form of cash, Stock, or other property), recapitalization, Stock split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or
other similar corporate transaction or event, affects the Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights of Participants under the
Plan, then the Board shall make equitable changes or adjustments to any or all of: (i) the number
and kind of shares of Stock or other property (including cash) that may thereafter be issued in
connection with Awards; (ii) the number and kind of shares of Stock or other property (including
cash) issued or issuable in respect of outstanding Awards; (iii) the purchase price relating to any
Award and (iv) the performance goals, if any, applicable to outstanding Awards. In addition, the
Board may determine that any such equitable adjustment may be accomplished by making a payment to
the Award holder, in the form of cash or other property (including but not limited to shares of
Stock).



     6. Terms of Awards.



          (a) General. The term of each Award shall be for such period as may be determined by
the Board. Subject to the terms of the Plan and any applicable Award Agreement, payments to be
made by the Company upon the grant, vesting or delivery of an Award may be made in such forms as
the Board shall determine at the date of grant or thereafter, including, without limitation, cash,
Stock or other property, and may be made in a single payment or transfer, in installments or on a
deferred basis. The Board may make rules relating to installment or deferred payments with respect
to Awards, including the rate of interest to be credited with respect to such payments. In
addition to the foregoing, the Board may impose on any Award or the exercise thereof, at the date
of grant or thereafter, such additional terms and conditions, not inconsistent with the provisions
of the Plan, as the Board shall determine.



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          (b) Terms of Specified Awards. The Board is authorized to grant the Awards described
in this Section 6(b), under such terms and conditions as deemed by the Board to be consistent with
the purposes of the Plan. Such Awards may be granted with vesting, value and/or and payment
contingent upon attainment of one or more performance goals. Except as otherwise set forth herein
or as may be determined by the Board, each Award granted under the Plan shall be evidenced by an
Award Agreement containing such terms and conditions applicable to such Award as the Board shall
determine at the date of grant or thereafter.




          (i) Restricted Stock. The Board is authorized to grant Restricted
Stock to Participants on the following terms and conditions:




          (A) Issuance and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability and other restrictions, if
any, as the Board may impose at the date of grant or thereafter, which
restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Board may
determine. The Board may place restrictions on Restricted Stock that
shall lapse, in whole or in part, only upon the attainment of one or more
performance goals. Unless otherwise determined by the Board, a
Participant granted Restricted Stock shall have all of the rights of a
stockholder including, without limitation, the right to vote Restricted
Stock and the right to receive dividends thereon.




          (B) Forfeiture. Subject to Section 7, upon termination of
service to the Company during the applicable restriction period,
Restricted Stock and any accrued but unpaid dividends shall be forfeited;
provided, that the Board may provide, by rule or regulation or in any
Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of terminations resulting from
specified causes, and the Board may in other cases waive in whole or in
part the forfeiture of Restricted Stock.




          (C) Certificates for Stock. Restricted Stock granted under
the Plan may be evidenced in such manner as the Board shall determine. If
certificates representing Restricted Stock are registered in the name of
the Participant, such certificates shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, and the Company shall retain physical possession of the
certificate.




          (D) Dividends/Distributions. Unless otherwise determined by
the Board, except as provided in the immediately following sentence,
dividends and distributions paid on Restricted



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Stock shall be paid at the dividend or distribution payment date in
the same form as dividends and distributions are paid to other Company
stockholders. Unless otherwise determined by the Board, Stock distributed
in connection with a stock split or stock dividend, and other property
distributed as a dividend or distribution, shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted
Stock with respect to which such Stock or other property has been
distributed.




          (ii) Restricted Stock Units. The Board is authorized to grant RSUs to
Participants, subject to the following terms and conditions:




          (A) Award and Restrictions. Delivery of Stock, cash or other
property, as determined by the Board, will occur upon expiration of the
period specified for RSUs by the Board during which forfeiture conditions
apply, or such later date as the Board shall determine. The Board may
place restrictions on RSUs that shall lapse, in whole or in part, only
upon the attainment of one or more performance goals.




          (B) Forfeiture. Subject to Section 7, upon termination of
service to the Company prior to the vesting of RSUs, or upon failure to
satisfy any other conditions precedent to the delivery of Stock or cash to
which such RSUs relate, all RSUs and any accrued but unpaid dividend
equivalents that are then subject to deferral or restriction shall be
forfeited; provided, that the Board may provide, by rule or regulation or
in any Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to RSUs will be waived in
whole or in part in the event of termination resulting from specified
causes, and the Board may in other cases waive in whole or in part the
forfeiture of RSUs.




          (C) Dividend/Distribution Equivalents. The Board is
authorized to grant to Participants the right to receive dividend
equivalent payments and/or distribution equivalent payments for the period
prior to settlement of the RSU. Dividend equivalents or distribution
equivalents may be paid currently or credited to an account for the
Participant, and may be settled in cash or Stock, as determined by the
Committee. Any such settlements, and any such crediting of dividend
equivalents or distribution equivalents or reinvestment in Stock, may be
subject to such conditions, restrictions and contingencies as the
Committee shall establish, including the reinvestment of such credited
amounts in Stock equivalents. Unless otherwise determined by the Board,
any such dividend equivalents or distribution equivalents shall be paid or
credited, as applicable, on the dividend payment



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date to the Participant as though each RSU held by such Participant
were a share of outstanding Stock.




          (iii) Other Stock-Based Awards. The Board is authorized to grant
Awards to Participants in the form of Other Stock-Based Awards, as deemed by the
Board to be consistent with the purposes of the Plan. Awards granted pursuant to
this paragraph may be granted with vesting, value and/or payment contingent upon
the attainment of one or more performance goals. The Board shall determine the
terms and conditions of such Awards at the date of grant or thereafter. Without
limiting the generality of this paragraph, Other Stock-Based Awards may include
grants of shares of Stock that are not subject to any restrictions or a substantial
risk of forfeiture. Subject to Section 7, upon termination of service to the
Company prior to the vesting of an Other Stock-Based Award, or upon failure to
satisfy any other conditions precedent to the delivery of Stock or cash to which
such Other Stock-Based Award relates, all Other Stock-Based Awards that are then
subject to deferral or restriction shall be forfeited; provided, that the Board may
provide, by rule or regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating to such Other
Stock-Based Award will be waived in whole or in part in the event of termination
resulting from specified causes, and the Board may in other cases waive in whole or
in part the forfeiture of such Other Stock-Based Award.



     7. Change in Control. In the event of a Change in Control, any Award that was not
previously vested will become fully vested and/or payable, and any performance conditions imposed
with respect to the Award will be deemed to be fully achieved; provided, however, that for any
Award subject to Section 409A of the Code, no payment may be made to the holder of such Award
unless the transaction constituting a Change in Control also constitutes, within the meaning of
Section 409A of the Code, a “change in the ownership or effective control” of the Company or a
“change in the ownership of a substantial portion of the assets” of the Company.



     8. General Provisions.



          (a) Nontransferability. Unless otherwise provided in an Award Agreement, Awards shall
not be transferable by a Participant except by will or the laws of descent and distribution and
shall be exercisable during the lifetime of a Participant only by such Participant or his guardian
or legal representative.



          (b) No Right to Continued Service, etc. Nothing in the Plan or in any Award, any
Award Agreement or other agreement entered into pursuant hereto shall confer upon any Participant
the right to continue as a director of, or continue to provide services to, the Company or any
parent, subsidiary or Affiliate of the Company or the Manager or to be entitled to any remuneration
or benefits not set forth in the Plan



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or such Award Agreement or other agreement or to interfere with or limit in any way the right
of the Company to terminate such Participant’s service.



          (c) Taxes. The Company or any parent or subsidiary of the Company is authorized to
withhold from any Award granted, any payment relating to an Award under the Plan, including from a
distribution of Stock, or any other payment to a Participant, amounts of withholding and other
taxes due in connection with any transaction involving an Award, and to take such other action as
the Board may deem advisable to enable the Company and Participants to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Stock or other property and to make cash payments in
respect thereof in satisfaction of a Participant’s tax obligations. The Board may provide in the
Award Agreement that in the event that a Participant is required to pay any amount to be withheld
in connection with the issuance of shares of Stock in settlement or exercise of an Award, the
Participant may satisfy such obligation (in whole or in part) by electing to have the Company
withhold a portion of the shares of Stock to be received upon settlement or exercise of such Award
that is equal to the minimum amount required to be withheld.



          (d) Effective Date; Amendment and Termination.




          (i) The Plan shall take effect upon the Effective Date, subject to the
approval of the Company’s stockholders.




          (ii) The Board may at any time and from time to time terminate, amend, modify
or suspend the Plan in whole or in part; provided, however, that unless otherwise
determined by the Board, an amendment that requires stockholder approval in order
for the Plan to comply with any law, regulation or stock exchange requirement shall
not be effective unless approved by the requisite vote of stockholders. The Board
may at any time and from time to time amend any outstanding Award in whole or in
part. Notwithstanding the foregoing sentence of this clause (ii), no amendment or
modification to or suspension or termination of the Plan or amendment of any Award
shall affect adversely any of the rights of any Participant, without such
Participant’s consent, under any Award theretofore granted under the Plan.



          (e) Expiration of Plan. Unless earlier terminated by the Board pursuant to the
provisions of the Plan, the Plan shall expire on the tenth anniversary of the Effective Date. No
Awards shall be granted under the Plan after such expiration date. The expiration of the Plan
shall not affect adversely any of the rights of any Participant, without such Participant’s
consent, under any Award theretofore granted.



          (f) Deferrals. The Board shall have the authority to establish such procedures and
programs that it deems appropriate to provide Participants with the ability to defer receipt of
cash, Stock or other property payable with respect to Awards granted under the Plan.



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          (g) No Rights to Awards; No Stockholder Rights. No Participant shall have any claim
to be granted any Award under the Plan. There is no obligation for uniformity of treatment among
Participants. Except as provided specifically herein, a Participant or a transferee of an Award
shall have no rights as a stockholder with respect to any shares covered by the Award until the
date of the issuance of a stock certificate to him for such shares.



          (h) Unfunded Status of Awards. The Plan is intended to constitute an “unfunded” plan
for incentive and deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general creditor of the Company.



          (i) No Fractional Shares. No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award. The Board shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.



          (j) Regulations and Other Approvals.




          (i) The obligation of the Company to sell or deliver Stock with respect to any
Award granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed necessary
or appropriate by the Board.




          (ii) Each Award is subject to the requirement that, if at any time the Board
determines, in its absolute discretion, that the listing, registration or
qualification of Stock issuable pursuant to the Plan is required by any securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the grant of an Award or the issuance of Stock, no such Award
shall be granted or payment made or Stock issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected or
obtained free of any conditions not acceptable to the Board.




          (iii) In the event that the disposition of Stock acquired pursuant to the Plan
is not covered by a then-current registration statement under the Securities Act
and is not otherwise exempt from such registration, such Stock shall be restricted
against transfer to the extent required by the Securities Act or regulations
thereunder, and the Board may require a Participant receiving Stock pursuant to the
Plan, as a condition precedent to receipt of such Stock, to represent to the
Company



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in writing that the Stock acquired by such Participant is acquired for
investment only and not with a view to distribution.




          (iv) The Board may require a Participant receiving Stock pursuant to the Plan,
as a condition precedent to receipt of such Stock, to enter into a stockholder
agreement or “lock-up” agreement in such form as the Board shall determine is
necessary or desirable to further the Company’s interests.



          (k) Registration on Form S-8. The Company shall file with the Securities and Exchange
Commission a registration statement on Form S-8 with respect to the securities to be offered to
Participants under the Plan and shall during the term of the Plan keep such registration statement
effective.



          (l) Governing Law. The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of Maryland without giving effect to the conflict of laws
principles thereof.



          (m) Section 409A. It is intended that the payments and benefits under the Plan comply
with, or as applicable, constitute a short-term deferral or otherwise be exempt from, the
provisions of Section 409A of the Code. The Plan will be administered and interpreted in a manner
consistent with this intent, and any provision that would cause the Plan or any Award to fail to
satisfy Section 409A of the Code will have no force and effect until amended to comply therewith
(which amendment may be retroactive to the extent permitted by Section 409A of the Code). To the
extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of
the Code, amounts that would otherwise be payable and benefits that would otherwise be provided
pursuant to this Plan during the six-month period immediately following Participant’s termination
of employment shall instead be paid on the first business day after the date that is six months
following Participant’s termination of employment (or upon Participant’s s death, if earlier).




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