The Company's authorized capital stock consists of 100,000,000 shares of preferred stock, $0.01 par value per share, and 500,000,000 shares of common stock, $0.01 par value per share.

On August 17, 2009, we sold 47,575,000 shares of our common stock (including 1,000,000 shares sold to an entity controlled by Starwood Capital Group pursuant to a simultaneous private placement) in our IPO at an offering price of $20 per share.

In December 2010, we completed a follow-on offering of 23,000,000 shares of our common stock at a price of $19.73 per share.

In May 2011, we completed another follow-on offering of 22,000,000 shares of our common stock at a price of $21.67 per share.

At the time of our IPO in 2009, the underwriters for the IPO agreed to defer and condition the receipt of a portion of their underwriting fees on our future achievement of certain minimum investment returns. Similarly, at the time of the IPO our Manager agreed to pay to the underwriters a separate portion of the underwriting fees on our behalf, with our reimbursement of our Manager of those amounts conditioned upon our achievement of the same investment returns. In the absence of the achievement of such investment returns, we would not pay the underwriters the deferred portion of the underwriting fees nor would our Manager be reimbursed for the portion of the underwriting fees that it paid on our behalf. Specifically, pursuant to the IPO underwriting agreement among the underwriters, our Manager and us, we were required to pay to the underwriters $18.1 million of underwriting fees if during any full four calendar quarter period during the 24 full calendar quarters after the consummation of the IPO our Core Earnings for any such four-quarter period exceeded the product of (x) the weighted-average of the issue price per share of all public offerings of our common stock, multiplied by the weighted-average number of shares outstanding (including any restricted stock units, any restricted shares of common stock and any other shares of common stock underlying awards granted under our equity incentive plans) in such four-quarter period and (y) 8%. Additionally, because at the time of our IPO our Manager paid $9.1 million of underwriting fees on our behalf, pursuant to our management agreement with our Manager, we agreed to reimburse our Manager for such payments to the extent the same 8% performance threshold was exceeded. For the four calendar quarter periods ended March 31, 2011 we exceeded the threshold and therefore paid $27.2 million related to these contingent arrangements during the second quarter of 2011. Prior to 2011, we had recorded a deferred liability and an offsetting reduction to additional paid-in-capital for the full $27.2 million based upon actual and forecasted operating results at the time. Refer to Note 9 for disclosure of the expenses incurred for the year ended December 31, 2011.

In August 2011, our board of directors authorized us to repurchase up to $100.0 million of our outstanding common stock over a one-year period. Purchases made pursuant to the program are to be made in either the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases are determined by us and are subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. Through December 31, 2011, we purchased 625,850 shares of common stock on the open market at an aggregate cost of approximately $10.6 million, resulting in a weighted-average share cost of $17.00.

The Company's board of directors declared a dividend of $0.42 per share of common stock for the quarter ended March 31, 2011 on March 1, 2011. The dividend was paid on April 15, 2011 to common stockholders of record as of March 31, 2011. The board also declared a dividend of $0.44 per share of common stock for the quarter ended June 30, 2011. The dividend was paid on July 15, 2011 to common stockholders of record as of June 30, 2011. The board further declared a dividend of $0.44 per share of common stock for the quarter ended September 30, 2011. The dividend was paid on October 14, 2011 to common stockholders of record as of September 30, 2011. On November 4, 2011, the board declared a dividend of $0.44 per share of common stock for the quarter ended December 31, 2011. The dividend was paid on January 13, 2012 to common stockholders of record as of December 31, 2011.

We have reserved an aggregate of 3,112,500 shares of common stock for issuance under the Starwood Property Trust, Inc. Equity Plan and Starwood Property Trust, Inc. Manager Equity Plan and an additional 100,000 shares of common stock for issuance under the Starwood Property Trust, Inc. Non-Executive Director Stock Plan. These plans provide for the issuance of restricted stock or restricted stock units. The holders of awards of restricted stock or restricted stock units will be entitled to receive dividends or "distribution equivalents," which will be payable at such time dividends are paid on our outstanding shares of common stock.

We granted each of our four independent directors 2,200 shares of restricted stock concurrently with our IPO, with a total fair value of approximately $175,000. The grants vest ratably in three annual installments on each of the first, second, and third anniversaries of the grant date, respectively, subject to the director's continued service. Effective August 19, 2010, we granted each of our four independent directors an additional 1,000 shares of restricted stock, with a total fair value of approximately $75,000. The grants vested in one annual installment on the first anniversary of the grant. Effective August 19, 2011, we granted each of our four independent directors an additional 2,877 shares of restricted stock, with a total fair value of approximately $200,000. The grant will vest in one annual installment on the first anniversary of the grant, subject to the director's continued service. For the years ended December 31, 2011 and 2010 and the period from Inception through December 31, 2009, approximately $179 thousand, $86 thousand and $16 thousand was included in general and administrative expense, respectively, related to the grants.

In August 2009, we granted 1,037,500 restricted stock units with a fair value of approximately $20.8 million at the grant date to our Manager under the Manager Equity Plan. The grants vest ratably in quarterly installments over three years beginning on October 1, 2009, with 86,458 shares vesting each quarter, respectively. In connection with the supplemental equity offering in December 2010, we granted 1,075,000 restricted stock units with a fair value of approximately $21.8 million at the grant date to our Manager under the Manager Equity Plan. The grants vest ratably in quarterly installments over three years beginning on March 31, 2011, with 89,583 shares vesting each quarter. For the years ended December 31, 2011, December 31, 2010, and the period from Inception through December 31, 2009, approximately 704,164, 432,292, and 86,458 shares have vested, respectively, and approximately $13.5 million, $7.4 million, and $2.4 million have been included in management fees related to these grants, respectively.

In May 2011, we issued 9,021 shares of common stock to our Manager at a price of $22.08 per share. The shares were issued to our Manager as part of the incentive compensation due to our Manager under the management agreement. See Note 8.

In August 2011, we issued 54,234 shares of common stock to our Manager at a price of $18.58 per share. The shares were issued to our Manager as part of the incentive compensation due to our Manager under the management agreement. See Note 8.

We granted 5,000 restricted stock units with a fair value of $100,000 to an employee under the Starwood Property Trust, Inc. Equity Plan in August 2009. The award was scheduled to vest ratably in quarterly installments over three years beginning on October 1, 2009. Upon the departure of this employee in July 2010, we issued 1,250 shares of our common stock relating to the vested portion of the award, while the remaining 3,750 unvested units were forfeited. In February 2011, we granted 11,082 restricted stock units with a fair value of $250,000 to an employee under the Starwood Property Trust, Inc. Equity Plan. The award vests ratably in quarterly installments over three years beginning on March 31, 2011. For the years ended December 31, 2011 and December 31, 2010 and the period from Inception through December 31, 2009, 3,694, 1,250, and 417 shares have vested, respectively, and approximately $71 thousand, $16 thousand, and $11 thousand, respectively, was included in general and administrative expense related to the grants.



Balance as of December 31, 2010	10,601		—		1,680,208		1,690,809
Granted	11,508		11,082		—		22,590
Vested	(6,934	)	(3,697	)	(704,164	)	(714,795	)
Forfeited	—		—		—		—

Balance as of December 31, 2011	15,175		7,385		976,044		998,604



2012	2,934	3,694	617,708	624,336
2013	12,241	3,691	358,336	374,268

Total	15,175	7,385	976,044	998,604