UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 15, 2022

REDWOOD TRUST, INC.

(Exact name of registrant as specified in its charter)

One Belvedere Place
Suite 300
Mill Valley, California 94941
(Address of principal executive offices and Zip Code)

(415) 389-7373
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Securities registered pursuant to Section 12(b) of the Act:

Item 5.02. Compensatory Arrangements of Certain Officers.

(e) At a meeting held on December 15, 2022, the Compensation Committee of the Board of Directors of Redwood Trust, Inc. (the “Company”) considered and approved the following compensation matters for the Company’s CEO and for certain other named executive officers of the Company noted below.

Key Compensation Matters – CEO

⁽¹⁾ Determined in accordance with FASB Accounting Standards Codification Topic 718 at the time the grant was made.

Compensation Matters – CEO and Certain Other Named Executive Officers

2022 Year-End Long-Term Equity Compensation Awards. On December 15, 2022, the Compensation Committee approved 2022 year-end long-term equity-based incentive (“LTI”) awards to certain named executive officers of the Company. Three different types of equity-based awards were granted: Deferred Stock Units (“DSUs”), cash-settled Deferred Stock Units (“csDSUs”), and Performance Stock Units (“PSUs”) pursuant to the Company’s Amended and Restated 2014 Incentive Award Plan (the “2014 Incentive Plan”). The terms of each of these three types of awards are summarized below.

In the event of a termination of employment due to the officer’s death or disability, by the Company without cause, by the officer for good reason or due to the officer’s retirement (each, a “qualifying termination”), in any event, during the performance period, the PSUs will remain outstanding and eligible to vest based on the achievement of performance goals during the performance period. The number of PSUs that ultimately vest (if any) will be pro-rated in connection with a retirement during 2023 or a termination of employment by the Company without cause; the pro-ration will be applied based on the number of days the officer was employed during 2023 and the performance period, respectively.

In addition, in the event of a change in control: (i) PSUs will be earned based on the achievement of performance goals through the shortened performance period ending with the change in control (with the bvTSR goal being deemed achieved at target); (ii) the number of PSUs earned will remain outstanding and eligible to vest as time-vesting PSUs on January 1, 2026, subject to the officer’s continued employment; and (iii) if the officer experiences a qualifying termination prior to January 1, 2026, the then-outstanding time-vesting PSUs will vest.

Subject to vesting, shares of Company common stock underlying these PSUs will be distributed to the recipients within 45 days following April 1, 2026. At the time of vesting, the value of any dividends declared during the vesting period will be reflected in the PSUs by increasing the target number of PSUs granted by an amount corresponding to the incremental number of shares of Company common stock that a stockholder would have acquired during the three-year vesting period had all dividends during that period been reinvested in Company common stock. Between the vesting of these PSUs and the delivery of the underlying shares of Company common stock, the underlying vested award shares will have attached dividend equivalent rights, resulting in the payment of dividend equivalents each time the Company declares a common stock dividend during that period.

Each PSU granted on December 15, 2022 had a preliminary estimated grant date fair value of $8.67, which estimate will be finalized and determined in accordance with FASB Accounting Standards Codification Topic 718 as of the time the grant was made. The definitive terms of these PSUs are set forth in the Form of Performance Stock Unit Award Agreement (which is included as Exhibit 10.3 hereto and incorporated by reference herein) and the 2014 Incentive Plan. The foregoing description of the terms of the PSUs does not purport to be complete and is qualified in its entirety by the full text of the Form of Performance Stock Unit Award Agreement included as Exhibit 10.3 hereto and incorporated by reference herein.

In accordance with the requirements of Item 5.02(e) of Form 8-K, the 2022 year-end long-term equity compensation awards granted on December 15, 2022 to the following officers of the Company are set forth in the table below:

⁽¹⁾ Determined in accordance with FASB Accounting Standards Codification Topic 718 at the time the grant was made.

⁽²⁾ Rounded to nearest $100.00 increment.

2023 Base Salaries.  On December 15, 2022, the Compensation Committee made determinations regarding the 2023 base salaries of certain named executive officers of the Company.  In accordance with the requirements of Item 5.02(e) of Form 8-K, the 2023 base salaries of the following named executive officers of the Company are set forth in the table below:

2023 Target Annual Bonuses.  On December 15, 2022, the Compensation Committee made determinations regarding the 2023 target annual bonuses of certain named executive officers of the Company. Performance goals associated with earning at, above, or below target annual bonus for 2023 will be based on one or more financial performance goals, operational goals and individual goals pre-established by the Compensation Committee in the first quarter of 2023. In accordance with the requirements of Item 5.02(e) of Form 8-K, the 2023 target annual bonuses of the following named executive officers of the Company are set forth in the table below.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.