Exhibit 10.1


 


REDWOOD TRUST, INC. 


[FORM OF] 


DEFERRED STOCK UNIT AWARD AGREEMENT


 


DEFERRED STOCK UNIT AWARD
AGREEMENT dated as of the [Date] day of [Month] [Year] (the “Award Agreement”), by and between
Redwood Trust, Inc., a Maryland corporation (the “Company”), and [First Name] [Last Name], an Employee,
Consultant or non-employee Director of the Company (the “Participant”). References to the Company herein shall include
the subsidiaries and Affiliates (as defined in Exhibit A).


 


Pursuant to the Redwood Trust, Inc.
Amended and Restated 2014 Incentive Award Plan (as may be amended from time to time, the “Plan”), the Compensation
Committee (the “Committee”) of the Board of Directors of the Company has determined that the Participant is to be granted
an award of Deferred Stock Units for shares of the Company’s common stock, par value $0.01 per share (“Common Stock”),
on the terms and conditions set forth herein (the “Award”), and the Company hereby grants such Award.   Any
capitalized terms not defined herein shall have the meaning set forth in the Plan.


 


1.             Number
of Shares Awarded.  This Award entitles the Participant to receive [Number of shares (_____)] shares of Common
Stock (the “Award Shares”), following the expiration of the Restricted Period described below.


 


2.             Dividends.  In
accordance with Section 10.4 of the Plan, the number of Award Shares set forth in Section 1 shall not be adjusted to reflect
the payment of regular cash dividends declared on Common Stock during the Restricted Period.  The Participant will be
entitled to a Dividend Equivalent (each, a “DER”) for each Award Share pursuant to which the Participant will be entitled
to receive, pursuant to the Plan, an amount equal to the aggregate regular cash dividends with a record date occurring after the Grant
Date (as defined below) and prior to the date the Award Share is settled or forfeited that would have been payable to the Participant
with respect to the share of Common Stock underlying the Award Share had it been outstanding on the applicable record date. DERs shall
remain outstanding from the Grant Date until the earlier of the payment / delivery or forfeiture of the underlying Award Share, at which
point, the corresponding DER will be forfeited. Any DER amounts that may become payable in respect of this Section 2 shall be paid
as and when the dividends in respect of which such DER payments arise are paid to holders of Common Stock, without regard to the vested
status of the underlying Award Share. Any DER amounts that may become payable in respect of this Section 2 shall be treated separately
from the Award Shares and the rights arising in connection therewith for purposes of Section 409A of the Code.


 


3.             Vesting
and Restricted Periods.


 


		(a)	The Award Shares shall vest on the following schedule:



 


As of [1st year + 1 month
anniversary of the date of this Award Agreement], 25%;


 


At the beginning of each subsequent calendar
quarter (beginning [January 1, April 1, July 1 or October 1 following the 1st year anniversary of this
Award Agreement, as applicable]), 6.25%; and


 


All Award Shares shall be fully vested
as of [One day before the 4th year anniversary of the date of this Award Agreement].


 


Award Shares that have become
vested pursuant to this Section 3 are referred to as “Vested Award Shares”.  The period from the date
of this Award to the applicable date or dates specified for delivery of such shares is referred to as the “Restricted Period”.
Vested Award Shares shall not be forfeited in the event of the Participant’s Termination of Service but shall remain outstanding
to be settled by delivery / payment of shares in accordance with Section 3(f), subject to withholding in accordance with Section 11.


 






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(b)           Upon
the Participant’s Termination of Service due to Disability or death or a Qualifying CIC Termination (as defined below), in each
case, prior to the expiration of the vesting period in Section 3(a), any Award Shares not vested at the time of such termination
shall immediately vest and shall not be forfeited. Notwithstanding anything herein or in the Plan, for purposes of this Award Agreement,
a “Disability” shall only exist if the Participant is “disabled” within the meaning of Section 409A
of the Code.


 


(c)            Upon
the Participant’s Termination of Service due to Retirement (as defined below) on or following the one-year anniversary of the Grant
Date (as defined below), any Award Shares not vested at the time of such termination shall immediately vest and shall not be forfeited.
Upon the Participant’s Termination of Service due to Retirement prior to the one-year anniversary of the Grant Date, a number of
Award Shares not vested at the time of such Termination of Service shall vest such that the total number of Award Shares vested with respect
to this Award equals the total number of Award Shares, pro-rated based on (x) the number of days from the Grant Date through the
date on which the Participant experiences a Termination of Service due to Retirement, divided by (y) [366/365], and such pro-rata
portion of the Award Shares shall not be forfeited.


 


(d)           Upon
the Participant’s Termination of Service prior to the expiration of the vesting period in Section 3(a), any Award Shares not
vested at the time of such termination (after taking into account any vesting that occurs in connection with Disability or death, Retirement
or a Qualifying CIC Termination), shall be forfeited.


 


(e)            The
Restricted Period shall expire on the day prior to the fourth anniversary of the Grant Date. The Company shall pay and deliver to the
Participant any Vested Award Shares within 30 days following the first to occur of (i) a “change in control event” of
the Company (within the meaning of Section 409A of the Code), (ii) the Participant’s death, (iii) the Participant’s
 “separation from service” from the Company (within the meaning of Section 409A of the Code) and (iv) the last day
of the Restricted Period. Notwithstanding anything to the contrary contained herein, the exact delivery / payment date of any Vested Award
Shares shall be determined by the Company in its sole discretion (and the Participant shall not have a right to designate the time of
delivery / payment).


 


(f)            For
purposes of this Agreement, the following terms have the meanings set forth below:


 


(i)            A
 “Qualifying CIC Termination” means the Participant’s Termination of Service by the Company without Cause or by
the Participant for Good Reason, in either case, on or within twenty-four (24) months following a Change in Control (as defined in the
Plan).


 


(ii)           “Cause”
shall have such meaning defined in the Participant’s employment agreement with the Company or, if no such agreement exists or does
exist but does not contain such a definition, shall mean: (i) the Participant’s failure to competently perform the Participant’s
job or duties to the Company, as reasonably determined by the Company, which failure shall continue for thirty (30) days after written
notice thereof by the Company to the Participant; (b) any act of negligence or misconduct by the Participant that has had or is reasonably
likely to have an adverse effect on, or has injured or harmed or is reasonably likely to injure or harm, the Company or any of its business
affairs, reputation, counterparties, employees, agents or vendors; (c) the Participant’s breach of any fiduciary duty or obligation
to the Company; (d) (A) the Participant’s breach of any Company policy (including any code of conduct or harassment policies),
which is reasonably likely to have an adverse effect on, or has injured or harmed or is reasonably likely to injure or harm, the Company
or (B) any breach by the Participant of an agreement with the Company; (e) the Participant’s commission of, indictment
for, or plea of nolo contendere to, a felony or any other crime involving moral turpitude; (f) the Participant’s theft, misappropriation,
or embezzlement, or attempted theft, misappropriation, or embezzlement, of money or tangible or intangible assets or property of the Company
or any of its employees, customers, clients, or others having business relations with any of them; (g) any act of moral turpitude,
dishonesty, or similar behavior by the Participant injurious to the interests, property, operations, business or reputation of the Company;
or (h) the Participant’s unauthorized use or disclosure of trade secrets or confidential or proprietary information of the
Company or pertaining to any of its business or operations.


 






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(iii)          “Good
Reason” shall have such meaning defined in the Participant’s employment agreement with the Company or, if no such agreement
exists or does exist but does not contain such a definition, shall mean the occurrence of any one or more of the following events, without
the Participant’s prior written consent: (i) a material reduction (at the direction of the Company) in the value of the Participant’s
total compensation package (salary, wages, bonus opportunity, equity or other long-term incentive award opportunities, and benefits) if
such a reduction is not linked to the performance of the Company or one or more of its business units or subsidiaries or made in proportion
to an across-the-board reduction for all similarly-situated employees of the Company or the applicable business unit or employing subsidiary;
or (ii) the relocation of the Participant’s principal Company office to a location more than 25 miles from its location as
of the date of the Participant’s Participation Notice, except for required travel on the Company’s business to the extent
necessary to fulfill the Participant’s obligations to the Company or any of its subsidiaries or affiliates.  Notwithstanding
the foregoing, the Participant will not be deemed to have resigned for Good Reason unless (1) the Participant provides the Company
with written notice setting forth in reasonable detail the facts and circumstances claimed by the Participant to constitute Good Reason
within 90 days after the date of the occurrence of any event that the Participant knows or should reasonably have known to constitute
Good Reason, (2) the Company fails to cure such acts or omissions within 30 days following its receipt of such notice, and (3) the
effective date of the Participant’s termination for Good Reason occurs no later than 30 days after the expiration of the Company’s
cure period.


 


(iv)          “Grant
Date” means the date first written above in this Agreement.


 


(v)           “Retirement”
shall mean a Termination of Service due to retirement (as determined by the Committee in its sole discretion) if such Termination of Service
(i) occurs on or after the completion by the Participant of [ten (10)] years of employment with the Company (which need not be continuous)
and (ii) the sum of the Participant’s age and years of service as an Employee equals or exceeds [seventy (70)] (in each case
measured in years, rounded down to the nearest whole number). [Notwithstanding the generality of the foregoing, a Termination of Service
shall only constitute a Retirement if the Participant provides the Company with at least [12] months’ written notice of his or her
anticipated retirement.]


 


4.             At-Will
Employment.  This Award Agreement is not an employment contract and nothing in this Award Agreement shall be deemed
to create in any way whatsoever any obligation of the Participant to continue as an Employee, Consultant or Director of the Company or
on the part of the Company to continue the employment or other service relationship of the Participant with the Company.  It
is understood and agreed to by the Participant that the Award and participation in the Plan does not alter the at-will nature of the Participant’s
relationship with the Company (subject to the terms of any separate employment agreement the Participant may have with the Company).  The
at-will nature of the Participant’s relationship with the Company can only be altered by a writing signed by both the Participant
and the Chief Executive Officer or the President of the Company.


 


5.             Notices.  Any
notice required or permitted under this Award Agreement shall be deemed given when delivered personally, or when deposited in a United
States Post Office, postage prepaid, addressed, as appropriate, to the Participant either at the Participant’s address set forth
below or such other address as the Participant may designate in writing to the Company, and to the Company:  Attention:  Chief
Legal Officer, at the Company’s address or such other address as the Company may designate in writing to the Participant.


 


6.             Failure
to Enforce Not a Waiver.  The failure of the Company to enforce at any time any provision of this Award Agreement shall
in no way be construed to be a waiver of such provision or of any other provision hereof.


 


7.             Restrictive
Covenants; Arbitration. The Participant agrees and acknowledges that the Participant’s right to receive the Award Shares
and any DER payments is subject to and conditioned upon the Participant’s continued compliance with the restrictive covenants contained
in Exhibit A attached hereto. In addition, the Participant agrees and acknowledges that any dispute arising with respect
to this Award and this Award Agreement will be subject to the Alternative Dispute Resolution provisions set forth in an Employment and
Confidentiality Agreement (or any other arbitration or alternative dispute resolution provisions or agreements) by and between the Participant
and the Company.


 






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8.             Existing
Agreements.  This Award Agreement does not supersede nor does it modify any existing agreements between the Participant
and the Company.


 


9.             Incorporation
of Plan.  The Plan is incorporated by reference and made a part of this Award Agreement, and this Award Agreement is
subject to all terms and conditions of the Plan as in effect from time to time.


 


10.           Amendments.    This
Award Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto.


 


11.           Withholding.     The
Company shall withhold, or cause to be withheld, amounts payable in respect of Award Shares in satisfaction of any applicable withholding
tax obligations. Amounts which may be so withheld shall be no greater than the aggregate amount of such liabilities based on the maximum
individual statutory withholding rates in the Participant’s applicable jurisdictions for federal, state, local and foreign income
tax and payroll tax purposes that are applicable to such taxable income.


 


12.           Section 409A.
Notwithstanding anything to the contrary contained in this Award Agreement, this Award Agreement is intended to comply with Section 409A
of the Code and this Award Agreement and the Plan shall be interpreted in a manner consistent with such intent, and any provisions of
this Award Agreement or the Plan that would cause the Award to fail to be exempt from or to satisfy the requirements for an effective
deferral of compensation under Section 409A of the Code shall have no force and effect. Any right under this Award Agreement to
a series of installment payments shall be treated as a right to a series of separate payments. Notwithstanding anything to the contrary
in this Award Agreement, no amounts shall be paid to the Participant under this Award Agreement during the six (6)-month period following
the Participant’s “separation from service” (within the meaning of Section 409A of the Code) to the extent that
the Administrator determines that the Participant is a “specified employee” (within the meaning of Section 409A of the
Code) at the time of such separation from service and that paying such amounts at the time or times indicated in this Award Agreement
would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amounts is delayed
as a result of the previous sentence, then on the first business day following the end of such six (6)-month period (or such earlier
date upon which such amount can be paid under Section 409A of the Code without being subject to such additional taxes), the Company
shall pay to the Participant in a lump-sum all amounts that would have otherwise been payable to the Participant during such six (6)-month
period under this Award Agreement.


 


[Signature page follows...]


 






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IN WITNESS WHEREOF,
the parties have executed this Award Agreement on the day and year first above written.


 


	 	REDWOOD TRUST, INC.
	 	 	 
	 	By:	 
	 	 	[Andrew P. Stone]
	 	 	[Chief Legal Officer & Secretary]
	 	 	One Belvedere Place, Suite 300
	 	 	Mill Valley, CA  94941
	 	 	 
	 	
    The undersigned hereby accepts and
agrees to all the terms and provisions of this Award Agreement and to all the terms and provisions of the Plan herein incorporated by
reference.

		
     

	 	 
	 	[First Name] [Last Name]
	 	c/o Redwood Trust, Inc.
	 	One Belvedere Place, Suite 300
	 	Mill Valley, CA  94941


 






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EXHIBIT A - Restrictive Covenants


 


		1.	Non-Disparagement. While providing services to the Company and thereafter, the Participant agrees
not to make negative comments or statements about, or otherwise criticize or disparage, in any format or through any medium, the Company
or any entity controlled by, controlling or under common control with the Company (“Affiliates”) or any of the officers,
directors, managers, employees, services, operations, investments or products of the Company or any of its Affiliates. For purposes of
the foregoing sentence, disparagement shall include, but not be limited to, negative comments or statements intended or reasonably likely
to be harmful or disruptive to a person’s or entity’s respective business, business reputation, business operations, or personal
reputation.



 


		2.	Non-Solicitation. While providing services to the Company and, for a period of one (1) year
thereafter, the Participant shall not directly or indirectly solicit, induce, or encourage any employee or consultant of any member of
the Company and its subsidiaries or Affiliates to terminate their employment or other relationship with the Company and its Affiliates
or to cease to render services to any member of the Company and its subsidiaries or Affiliates and the Participant shall not initiate
discussion with any such person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other
individual or entity. While providing services to the Company and thereafter, the Participant shall not use any confidential information
or trade secret of the Company or its subsidiaries or Affiliates to solicit, induce, or encourage any customer, client, vendor, or other
party doing business with any member of the Company and its subsidiaries or Affiliates to terminate its relationship therewith or transfer
its business from any member of the Company and its subsidiaries or Affiliates and the Participant shall not initiate discussion with
any such person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other individual or
entity.



 


		3.	Confidentiality. The Participant shall keep secret and retain in the strictest confidence all confidential,
proprietary and non-public matters, tangible or intangible, of or related to the Company, its stockholders, subsidiaries, affiliates,
successors, assigns, officers, directors, attorneys, fiduciaries, representatives, employees, licensees and agents including, without
limitation, trade secrets, business strategies and operations, seller, counterparty and customer lists, manufacturers, vendors, material
suppliers, financial information, personnel information, legal advice and counsel obtained from counsel, information regarding litigation,
actual, pending or threatened, research and development, identities and habits of employees and agents and business relationships, and
shall not disclose them to any person, entity or any federal, state or local agency or authority, except as may be required by law; provided
that, in the event disclosure is sought as a result of any subpoena or other legal process initiated against the Participant, the Participant
shall immediately give the Company’s Chief Legal Officer written notice thereof in order to afford the Company an opportunity to
contest such disclosure (such notice to be delivered to: Redwood Trust, Inc., One Belvedere Place, Suite 300, Mill Valley, CA,
94941, Attn: Chief Legal Officer).



 


		4.	Exceptions. Nothing herein shall prohibit or restrict the Participant from: (i) making any
disclosure of information required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation
or proceeding brought by, any federal or state regulatory or law enforcement agency or legislative body, any self-regulatory organization,
or the Company’s Human Resources, Legal, or Compliance Departments; (iii) testifying, participating in or otherwise assisting
in a proceeding relating to an alleged violation of the Sarbanes-Oxley Act of 2002, any federal, state or municipal law relating to fraud
or any rule or regulation of any self-regulatory organization; or (iv) filing a charge with, reporting possible violations to,
or participating or cooperating with the Securities and Exchange Commission or any other federal, state or local regulatory body or law
enforcement agency (each a “Governmental Agency”). Nothing herein shall be construed to limit the Participant’s
right to receive an award for any information provided to a Governmental Agency in relation to any whistleblower, anti-discrimination,
or anti-retaliation provisions of federal, state or local law or regulation. In addition, notwithstanding the foregoing obligations, pursuant
to 18 U.S.C. § 1833(b), the Participant understands and acknowledges that the Participant shall not be held criminally or civilly
liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made: (1) in confidence to a
federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting
or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if
such filing is made under seal and protected from public disclosure. Nothing in this Agreement is intended to conflict with 18 U.S.C.
 § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).



 


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It is expressly agreed by Participant that each
breach of the restrictive covenants set forth in this Exhibit A is a distinct and material breach of the attached Award Agreement
and that solely a monetary remedy would be inadequate, impracticable and extremely difficult to prove, and that each such breach would
cause the Company irreparable harm. It is further agreed that, notwithstanding any other terms of the attached Award Agreement, in addition
to any and all remedies available at law or equity (including money damages), the Company shall be entitled to temporary and permanent
injunctive relief to enforce the restrictive covenants set forth in this Exhibit A, without the necessity of proving actual damages.
It is further agreed that the Company shall be entitled to seek such equitable relief in any forum, including a court of law, notwithstanding
the provisions of any arbitration or other alternative dispute resolution provisions or agreement between the undersigned and the Company.
The Participant further agrees that, in addition to any other remedy which may be available at law or in equity, the Company will be entitled
to specific performance and injunctive relief without the requirement to post any bond. The Company may pursue any of the remedies described
herein concurrently or consecutively in any order as to any such breach or violation, and the pursuit of one of such remedies at any time
will not be deemed an election of remedies or waiver of the right to pursue any of the other such remedies.


 


The Participant understands that the restrictive
covenants and other terms set forth in this Exhibit A are intended to protect the Company’s (and its subsidiaries’ and
affiliates’) established employee, customer, client, and/or counterparty relations, and the general goodwill of the business of
the Company and its subsidiaries and affiliates. The Participant and the Company agree that the covenants set forth in this Exhibit A
are reasonable with respect to duration, geographical area, and scope. If the final judgment of a court of competent jurisdiction declares
that any term or provision of this Exhibit A is invalid or unenforceable, the parties agree that the court making the determination
of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable
and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Exhibit A shall be
enforceable as so modified after the expiration of the time within which the judgment may be appealed.


 






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