X0303 4 2010-11-30 0 0000930236 REDWOOD TRUST INC RWT 0001024553 Hughes Martin S 1 BELVEDERE PLACE SUITE 300 MILL VALLEY CA 94941 0 1 0 0 Chief Executive Officer Deferred Stock Units 13.99 2010-11-30 4 A 0 80358.33 0 A Common Stock 80358.33 80358.33 D Performance Stock Units 14.01 2010-11-30 4 A 0 80358.33 0 A Common Stock 80358.33 80358.33 D This transaction relates to the grant of Deferred Stock Units. Represents grant date fair value of the DSUs issued, based on the fair market value RWT common stock on transaction date under the 2002 Incentive Plan. 25% vests 1/1/2012, 6.25% every quarter thereafter. Fully vested 1/1/2015. No expiration date is applicable to deferred stock units. This transaction relates to the grant of Performance Stock Units ("PSUs"), which are performance-based equity awards. The number of underlying shares of common stock of Redwood Trust, Inc. ("Common Stock") that vest and that the recipient becomes entitled to receive at the time of vesting will generally range from 0% to 200% of a target number of PSUs granted, contingent on the achievement of a pre-established performance metric (with the target number of PSUs granted being adjusted to reflect the value of any dividends on Common Stock paid during the vesting period). Vesting of these PSUs will generally occur at the end of three years (on November 30, 2013) based on three-year total stockholder return. Please refer to Item 5.02(e) of the Current Report on Form 8-K filed on December 2, 2010 by Redwood Trust, Inc. for a description of the terms of these PSUs, which Item 5.02(e) qualifies, in its entirety, the description set forth in this footnote (5) and footnote (7) below. Represents grant date fair value of the PSUs issued, based on the fair market value of RWT common stock on the transaction date under the 2002 Incentive Plan. Represents the target number of PSUs granted. Shares are subject to minimum mandatory holding period and will be delivered to the Participant no sooner than May 1, 2014. No expiration date is applicable to performance stock units. Attorney In Fact: Andrew P. Stone 2010-12-02