Exhibit 10.3

RAIT FINANCIAL TRUST

2012 INCENTIVE AWARD PLAN

SHARE APPRECIATION RIGHTS AWARD AGREEMENT

 

This SHARE APPRECIATION RIGHTS AWARD AGREEMENT, dated as
of                      February 14, 2017 (the “Date of Grant”), is delivered by
RAIT Financial Trust (“RAIT”), to [Name of Participant] (the “Participant”).  

RECITALS

A.The RAIT Financial Trust 2012 Incentive Award Plan (the “Plan”) provides for
the grant of share appreciation rights (“SARs”), which represent the right to
receive the appreciation of an equal number common shares of beneficial
interest, par value $0.03, of RAIT (“Common Shares”), in cash or Common Shares
on a future settlement date.

B.The Compensation Committee of the Board of Trustees of RAIT (the “Committee”)
has decided to make a restricted SAR grant, subject to the terms and conditions
set forth in this Share Appreciation Rights Award Agreement (the “Agreement”)
and the Plan, as an inducement for Participant to promote the best interests of
RAIT and its shareholders.  Participant may receive a copy of the Plan by
contacting the Chief Financial Officer of RAIT.

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

1.Grant of SARs.  Subject to the terms and conditions set forth in this
Agreement and the Plan, RAIT hereby grants to Participant [Number of SARs
Awarded] SARs (the “SARs”).  The SARs will become vested in accordance with
Paragraph 3 below and may be exercised in accordance with Paragraph 4
below.  Each SAR shall represent the right to receive the excess of the Fair
Market Value (as determined under the Plan) of a Common Share on the date of
exercise (“Exercise Date”) over the Fair Market Value of a Common Share on the
Date of Grant: $3.78.  Such increase in Fair Market Value is hereafter referred
to as the “Value” of the SAR.  

2.Accounts.  RAIT shall establish and maintain a SAR account (the “SAR Account”)
as a bookkeeping account on its records and shall record in such SAR Account the
number of SARs granted to Participant. Participant shall not have any interest
in any fund or specific assets of RAIT by reason of the SAR grant or the SAR
Account established for Participant.

3.Vesting.

(a)Participant will become vested in the SARs awarded pursuant to this grant
according to the following vesting schedule, provided Participant does not incur
a termination of employment or service with the Company (as defined in the Plan)
prior to the applicable vesting date (the “Vesting Date”):

 

 

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Vesting Date

Portion of
SARs Vesting

First anniversary of Date of Grant

1/3

Second anniversary of Date of Grant

1/3

Third anniversary of Date of Grant

1/3

 

The vesting of the SARs is cumulative, but shall not exceed 100% of the SARs
subject to this Agreement.  Participant’s SARs shall become fully vested if
Participant is employed by, or providing service to, the Company on the third
anniversary of the Date of Grant.  In the event that: (1) the Participant dies
or becomes disabled (as defined under section 409A(a)(2)(C) of the Internal
Revenue Code (the “Code”)) while employed by, or providing services to, the
Company; (2) the Participant’s employment with the Company is terminated
involuntarily for any reason other than a termination for cause (as defined
under the terms of the Participant’s employment or services agreement or, if no
such agreement is in force, as determined by the Company in its reasonable
discretion) or (3) the Participant Retires (as defined below), Participant shall
be deemed fully vested in all shares awarded under this Agreement.

(b)If Participant’s employment or service with the Company terminates for any
reason other than death, disability, Retirement or an involuntary termination,
other than a termination for cause, prior to Participant vesting in any of the
SARs as provided in subparagraph (a), the SARs that are not vested as of
Participant’s termination of employment or service shall terminate and
Participant shall not have any exercise rights with respect to such unvested
SARs.

 

(c)The above notwithstanding, in the event that Participant’s employment or
service with the Company is terminated for “cause” or “willful misconduct,” as
defined under the terms of the Participant’s employment or services agreement
(if applicable); or as determined in the sole and absolute discretion of the
Company, the Participant shall forfeit the right to exercise any vested SARs and
the right to settlement of exercised SARs.  Additionally, in the event that
Participant engages in any conduct in violation or post-employment or
post-services covenants or obligations to the Company, the Participant shall
forfeit the right to exercise any vested SARs and the right to settlement of
exercised SARs.

 

(d)For purposes of this agreement, “Retirement” shall mean the Participant’s
voluntary separation of employment following satisfaction of the Rule of 70. The
Rule of 70 is satisfied upon (1) completion of at least fifteen (15) years of
service with the Company or its related entities; (2) attainment of the age of
fifty-five (55) and (3) such Participant’s combined age and service equals at
least seventy (70). A Participant may separate upon Retirement subject to
providing at least six (6) months’ advance notice to the Company and entering
into a separate three-year non-competition and non-solicitation agreement, if
requested by the Company.

 

4.Exercise and Settlement of SAR   Each SAR shall be exercisable on or after its
applicable Vesting Date in accordance with the terms of Exhibit A of this
Agreement and the Plan.

5.Change of Control.  If a Change of Control (as defined in the Plan) occurs,
unless the Committee determines otherwise as provided under the terms of the
Plan and in accordance with the requirements of section 409A of the Code, (i)
all of Participant’s unvested SARs as of such date shall continue to vest in
accordance with their terms and (ii) all of Participant’s vested SARs as of such
date shall be deemed exercised by Participant and shall be settled in accordance
with the terms of Paragraph 4.  

 

6.Acknowledgment by Participant.  By executing this Agreement, Participant
hereby acknowledges that with respect to any right of settlement or payment
pursuant to this Agreement, Participant is and shall be an unsecured general
creditor of RAIT without any preference as against other unsecured general
creditors of RAIT, and Participant hereby covenants for himself or herself, and
anyone at any time claiming through or under Participant not to claim any such
preference, and hereby disclaims and waives any such preference which may at any
time be at issue, to the fullest extent permitted by applicable law.  

 

 

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Participant also hereby agrees to be bound by the terms and conditions of the
Plan and this Agreement.  Participant further agrees to be bound by the
determinations and decisions of the Committee with respect to this Agreement and
the Plan and Participant’s rights to benefits under this Agreement and the Plan,
and agrees that all such determinations and decisions of the Committee shall be
binding on Participant, his or her beneficiaries and any other person having or
claiming an interest under this Agreement and the Plan on behalf of Participant.

7.Restrictions on Exercise and Settlement of SARs.

(a) Participant agrees to be bound by RAIT’s policy regarding the transfer of
interests in the Company and acknowledges that such policy may limit timing and
manner in which Participant may exercise the SARs granted pursuant to this
Agreement and/or sell any Common Shares issued by the Company in settlement of
the SARs granted pursuant to this Agreement. The RAIT Insider Trading Policy is
attached to this Agreement.

(b)The decision of RAIT to deliver Common Shares in settlement of the SARs shall
be subject to the condition that if at any time the Committee shall determine in
its discretion that the listing, registration or qualification of the Common
Shares upon 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 issuance of Common
Shares, the Common Shares may not be issued in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the
Committee.  The issuance of Common Shares and/or the payment of cash to
Participant pursuant to this Agreement are subject to any applicable taxes and
other laws or regulations of the United States or of any state having
jurisdiction thereof.

8.Grant Subject to Plan Provisions.  This grant is made pursuant to the Plan,
the terms of which are incorporated herein by reference, and in all respects
shall be interpreted in accordance with the Plan.  In the event of any
contradiction, distinction or difference between this Agreement and the terms of
the Plan, the terms of the Plan will control.  Except as otherwise defined in
this Agreement, capitalized terms used in this Agreement shall have the meanings
set forth in the Plan.  This grant is subject to the interpretations,
regulations and determinations concerning the Plan established from time to time
by the Committee in accordance with the provisions of the Plan, including, but
not limited to, provisions pertaining to (i) rights and obligations with respect
to withholding taxes, (ii) the registration, qualification or listing of the
Common Shares, (iii) changes in capitalization of RAIT, and (iv) other
requirements of applicable law. The Committee shall have the authority to
interpret and construe this grant pursuant to the terms of the Plan, its
decisions shall be conclusive as to any questions arising hereunder and
Participant’s acceptance of this grant is Participant’s agreement to be bound by
the interpretations and decisions of the Committee with respect to this grant
and the Plan.

9.No Rights as Shareholder.  Participant shall not have any rights as a
shareholder of RAIT, including the right to any cash dividends, or the right to
vote, with respect to any SARs.

10.No Rights to Continued Employment or Service. This grant shall not confer
upon Participant any right to be retained in the employment or service of the
Company and shall not interfere in any way with the right of the Company to
terminate Participant’s employment or service at any time.  The right of the
Company to terminate at will Participant’s employment or service at any time for
any reason is specifically reserved.

11.Assignment and Transfers.  No SARs awarded to Participant under this
Agreement may be transferred, assigned, pledged, or encumbered by Participant.
All SARs shall be settled during the lifetime of Participant only for the
benefit of Participant.  Any attempt to transfer, assign, pledge, or encumber
the SAR by Participant shall be null, void and without effect.  The rights and
protections of RAIT hereunder

 

 

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shall extend to any successors or assigns of RAIT.  This Agreement may be
assigned by RAIT without Participant’s consent.

12.Withholding.  Participant shall be required to pay to the Company, or make
other arrangements satisfactory to the Company to provide for the payment of,
any federal, state, local or other taxes that the Company is required to
withhold with respect to the exercise and settlement of the SARs.  Participant
may elect to satisfy any tax withholding obligation of the Company with respect
to the SARs by having cash or Common Shares withheld from the proceeds of such
settlement up to an amount that does not exceed the minimum applicable
withholding tax rate for federal (including FICA), state, local and other tax
liabilities.

13.Effect on Other Benefits.  The value of cash and/or Common Shares paid with
respect to the SARs shall not be considered eligible earnings for purposes of
any other plans maintained by the Company.  Neither shall such value be
considered part of Participant’s compensation for purposes of determining or
calculating other benefits that are based on compensation, such as life
insurance.

14.Termination of SAR. Participant’s right to exercise vested SARs shall
terminate upon the earlier of (i) 30 days following termination of employment or
service; or (ii) the 5th anniversary of the Date of Grant.

15.Applicable Law.  The validity, construction, interpretation and effect of
this Agreement shall be governed by and construed in accordance with the laws of
the State of Maryland without giving effect to the conflicts of laws provisions
thereof.

16.Notice.  Any notice to RAIT provided for in this instrument shall be
addressed to RAIT in care of the Board of Trustees at the principal office of
RAIT, and any notice to Participant shall be addressed to such Participant at
the current address shown on the payroll records of the Company, or to such
other address as Participant may designate to RAIT in writing.  Any notice shall
be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope
addressed as stated above, registered and deposited, postage prepaid, in a post
office regularly maintained by the United States Postal Service.

17.Section 409A of the Code.  This Agreement is intended to comply with the
requirements of section 409A of the Code and shall in all respects be
administered in accordance with such requirements.  Notwithstanding any
provision in this Agreement to the contrary, redemption and payment may only be
made under this Agreement upon an event or in a manner permitted by section 409A
of the Code or an applicable exemption.  Each payment under this Agreement shall
be treated as a separate payment for purposes of section 409A of the Code.  In
no event may Participant designate the calendar year of a payment.

 

 

[Signatures Follow]

 

 

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IN WITNESS WHEREOF, RAIT has caused its duly authorized officer to execute this
Share Appreciation Rights Award Agreement, and Participant has placed his or her
signature hereon, effective as of the Date of Grant.

RAIT FINANCIAL TRUST

 

By:

      Name:

      Title:

 

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I hereby accept the award of SARs described in this Agreement, and I agree to be
bound by the terms of this Agreement and the Plan.  I hereby acknowledge and
agree that all of the decisions, interpretations and determinations of the
Committee with respect to the SARs shall be final, binding and conclusive on me,
my beneficiaries and any other persons having or claiming an interest under this
Agreement.

Date:
Signature of Participant

Name of Participant

 

 

 

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EXHIBIT A

 

RAIT FINANCIAL TRUST

2012 INCENTIVE AWARD PLAN

Exercise AND SETTLEMENT OF Vested SARS

 

Capitalized terms used herein are defined as defined in the Share Appreciation
Rights Award Agreement (the “Agreement”) to which this Exhibit is attached
unless otherwise defined herein. This Exhibit sets forth the procedures the
Participant must follow to exercise the SARs granted to the Participant pursuant
to the Agreement.  

 

Each SAR shall be exercisable on or after its applicable Vesting Date in
accordance with the terms of the Agreement and the Plan.  Any such vesting is
subject to the terms and conditions of the Plan and your SARs Award. A SAR shall
be exercised upon delivery by the Participant to RAIT’s Human Resources
department of a completed exercise election form (“Election Form”) substantially
in the form attached as Appendix A to this Exhibit specifying the number of SARs
to be exercised and the date of exercise (which shall be prospective).  The
number of SARs to be exercised may not exceed the number of vested SARs as of
the date of exercise.  Upon approval by the Committee, the aggregate Value of
exercised SARs shall be settled and paid to Participant in cash, an equivalent
value of Common Shares or any combination thereof as determined in the sole and
exclusive discretion of the Committee.

 

In the Election Form, the Participant must designate a specific Exercise Date
(MM/DD/YYYY).  Such Exercise Date must be (i) during the period (the “Vested
Period”) at any time on or after the date the Vesting Date until the termination
of the vested SARs in accordance with the terms and conditions of the Plan and
the Agreement, (ii) prospective and (iii) no later than thirty (30) days
following submission of the Election Form.  An Exercise Date is “prospective” if
it is submitted to, and accepted and approved by, RAIT before the determination
of the Fair Market Value on the relevant Exercise Date.  You may designate the
Exercise Date that is the same date you submit the attached Election Form
provided all the conditions specified above are met.  Your designation of the
Exercise Date is irrevocable and is binding upon you and RAIT once it is
accepted and approved by RAIT.  Settlement will be completed within five (5)
business days of the Exercise Date.  Settlement will be made in cash, an
equivalent value of Common Shares, or a combination of the two as determined in
the sole discretion of the Committee.  

 

 

 

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APPENDIX A

 

RAIT FINANCIAL TRUST

2012 INCENTIVE AWARD PLAN

SARS EXERCISE ELECTION FORM

 

I, a participant under the RAIT Financial Trust (“RAIT”) 2012 Incentive Award
Plan (the “Plan”), or a person otherwise entitled to exercise the Share
Appreciation Rights (“SARs”) thereunder, do hereby exercise the right to
settlement of the following SARs on the date of exercise (the “Exercise Date”)
identified below:

 

Exercise Date:_______________

Number of SARs:_______________

Date of Grant:02/22/2016

Date of Vesting:_______________

 

(The Exercise Date must comply with the conditions set forth in the Notice of
Ability to Exercise Vested Share Appreciation Rights relating to these SARs.)  I
understand that RAIT may reduce the amount paid to me as necessary to satisfy
withholding tax obligations.  I further understand that RAIT may settle the
exercised SARs in cash or in the equivalent value of Common Share of Beneficial
Interest of RAIT, or a combination of the two as determined in the sole
discretion of the Compensation Committee of the Board of Trustees of RAIT.  

 

Send a completed copy of this SAR Exercise Form to:

 

RAIT Financial Trust

Cira Center

2929 Arch Street, 17th Floor

Philadelphia, PA   19104

Attn:  Michele Rudoi

Human Resources

 

I understand that this election and the designation of the Exercise Date above
are irrevocable once accepted and approved by RAIT.  

 

Print NameDate

 

Signature

 

 

 

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ACCEPTED AND APPROVED ON BEHALF OF RAIT:

 

 

By:   Name & Title:Date