UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 

 

FORM 10-K/A

(Amendment No. 1) 

 

(Mark One) 

| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------|--------------------------------------------------------------------------------------|

For the fiscal year ended December 31, 2018 

or

| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------|------------------------------------------------------------------------------------------|

For the transition period from                  to                 

Commission file number 1-14760 

 

RAIT FINANCIAL TRUST 

(Exact name of registrant as specified in its charter) 

 

 

| Maryland

(State or other jurisdiction of

incorporation or organization) |   | 23-2919819 

(IRS Employer

Identification No.) |
|---------------------------------------------------------------------------|--------|-------------------------------------------------|
| Two Logan Square, 100 N. 18th Street, 23rd Floor

Philadelphia, PA        |   | 19103                                           |
| (Address of principal executive offices)                                  |   | (Zip Code)                                      |

Registrant’s telephone number, including area code: (215) 207-2100

 

 

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

 

|   | None |
|--------|------|

 

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

| Title of Each Class                                                                                                                                                                                                                                                                                                                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Common Shares of Beneficial Interest 

7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest

8.375% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest

8.875% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest

7.625% Senior Notes Due 2024

7.625% Senior Notes Due 2019 |

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No   ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

 

| Large accelerated filer | ☐             | Accelerated filer              | ☐ |
|-----------------------------------|---------------------|-------------------------------------|---------|
| Non-accelerated filer             | ☒   | Smaller reporting company | ☒ |
|                              |                | 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.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒

The aggregate market value of the common shares of the registrant held by non-affiliates of the registrant, based upon the closing price of such shares on June 30, 2018 of $0.10, was approximately $9,081,081.

As of April 22, 2019, 1,849,530 common shares of beneficial interest, par value $1.50 per share, of the registrant were outstanding. 

 

DOCUMENTS INCORPORATED BY REFERENCE 

None.

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TABLE OF CONTENTS

 

| EXPLANATORYNOTE |   |                                                                                           | 3      |
|-----------------|--------|------------------------------------------------------------------------------------------------|--------|
|            |   |                                                                                           |   |
| PART III.       |   |                                                                                           | 4      |
| ITEM 10.        |   | TRUSTEES, EXECUTIVE OFFICERS AND TRUST GOVERNANCE                                              | 4      |
|            |   |                                                                                           |   |
| ITEM 11.        |   | EXECUTIVE COMPENSATION                                                                         | 7      |
|            |   |                                                                                           |   |
| ITEM 12.        |   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS | 21     |
|            |   |                                                                                           |   |
| ITEM 13.        |   | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND TRUSTEE INDEPENDENCE                 | 25     |
|            |   |                                                                                           |   |
| ITEM 14.        |   | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                         | 27     |
|            |   |                                                                                           |   |
| PART IV.        |   |                                                                                           | 28     |
| ITEM 15.        |   | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                        | 28     |
|            |   |                                                                                           |   |
| ITEM 16.        |   | FORM 10-K SUMMARY                                                                              | 35     |
|            |   |                                                                                           |   |
| SIGNATURES      |   |                                                                                           | 36     |

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXPLANATORY NOTE

 

This Amendment No. 1 to Form 10-K (this “Amendment”) amends the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 of RAIT Financial Trust (“RAIT”), as originally filed with the Securities and Exchange Commission (“SEC”) on March 26, 2019 (the “Original Form 10-K”). We are filing this Amendment to present the information required by Part III of Form 10-K that was previously omitted from the Original Form 10-K in reliance on General Instruction G.(3) to Form 10-K.

 

Part IV, Item 15(b) (Exhibits 31.3 and 31.4) have also been amended and restated in their entirety to contain the currently dated certifications from the Company’s principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. The certifications of the Company’s principal executive officer and principal financial officer are attached to this Amendment as Exhibits 31.3 and 31.4. Because no financial statements have been included in this Amendment and this Amendment does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. The Exhibit Index has also been amended and restated in its entirety to include the certifications as exhibits.  The Cover Page has been amended to uncheck the box by the line “Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K” due to a delinquent filing discovered subsequent to the filing of the Original Form 10-K. 

 

Except as described above, no other changes have been made to the Original Form 10-K. This Amendment does not otherwise update information in the Original Form 10-K to reflect facts or events occurring subsequent to the filing date of the Original Form 10-K. This Amendment should be read in conjunction with the Original Form 10-K and with any of our filings made with the SEC subsequent to filing of the Original Form 10-K.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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PART III

 

|          |                                                   |
|----------|---------------------------------------------------|
| ITEM 10. | TRUSTEES, EXECUTIVE OFFICERS AND TRUST GOVERNANCE |

Names of Trustees, Principal Occupations and Other Information 

 

Michael J. Malter, age 61, has served as chairman of the Board of Trustees of RAIT (the “Board”) since October 2016 and as a Trustee of RAIT since November 2015. He is a retired investment banker having served in a variety of senior management positions at JPMorgan Chase & Co. (“JPM”), a financial services firm, and its predecessor firms from 1988 until 2005. He retired as the Co-Head of the Global Financial Institutions Group of JPM in 2005. From 2003 to 2005, he was responsible for oversight of JPM’s banking and investment banking activities with banks and other financial institutions; oversaw mergers and acquisitions assignments, strategic advisory work, capital raising, hedging and derivatives assignments and lending; and was a member of the management committee of JPM’s investment banking division. From 2001 to 2003, he was responsible for JPM’s structured finance businesses in North America and the investment grade capital markets and origination business and was a member of the management committee of the North American Credit Markets Division. In the period from 1988 to 2001, he held a series of management positions with JPM’s predecessors responsible for commercial mortgage loan origination, securitization and trading, asset-backed securities and conduit lending. Since approximately 2009, Mr. Malter has served as a director or member of the advisory committee of several investment vehicles (the “Varadero Vehicles”) that use Varadero Capital, L.P., an SEC registered investment adviser, as their respective investment manager.  Several of the Varadero Vehicles use strategies that focus primarily on investing in asset-backed securities, including investment- and non-investment-grade residential and commercial mortgage-backed securities and collateralized debt obligations. Mr. Malter has served as a director of SCGE Management, L.P. (“SCGE”), an SEC registered investment adviser, and SCGE (LTGP), L.P. since October 2017. SCGE is affiliated with private investment funds and other related entities with an investment objective to generate superior long-term capital appreciation investing primarily in the publicly traded equity securities of companies in the technology, media, and telecommunications sectors and also in energy/clean-tech, financial technology, information services, and technology-enabled consumer businesses.   

Justin P. Klein, age 72, has served as a Trustee of RAIT since July 2017.  Mr. Klein is a partner at Ballard Spahr LLP (“Ballard Spahr”), a national law firm with which he has been a partner since 1992.  Mr. Klein is a respected corporate counselor and practitioner in the areas of securities law and corporate governance and also represents parties in regulatory and enforcement proceedings before the SEC, state securities commissions, and securities industry self-regulatory organizations.  Mr. Klein has chaired the Business Law Section of the Philadelphia Bar Association and the National Mediation and Arbitration Committee of the National Association of Securities Dealers, Inc. (now FINRA).   Prior to entering private practice, Mr. Klein held numerous positions at the SEC between 1974 and 1983, ending as Assistant Director of the Division of Corporation Finance. 

John J. Reyle, age 40, has served as our chief executive officer (“CEO”) and president since June 2018 and as our general counsel since February 2017.  Mr. Reyle served as our interim CEO and interim president from February 2018 to June 2018, as our senior managing director—chief legal officer from January 2015 to February 2017, as our senior vice president-corporate counsel from January 2014 to December 2014, as our vice president—corporate counsel from May 2012 to December 2013 and as our corporate counsel from August 2009 to May 2012. Prior to joining RAIT, Mr. Reyle was an associate in the real estate legal departments of Ledgewood, P.C., a law firm, from October 2005 to February 2009, and Cozen O’Conner, P.C., a law firm, from August 2004 to October 2005. During that time, Mr. Reyle concentrated his practice in the area of commercial real estate representing a variety of clients in connection with real estate-based financing, acquisitions and dispositions of commercial real estate, commercial leasing matters, real estate development and basic corporate transactions related to the foregoing. 

  Jon C. Sarkisian, age 57, has served as a Trustee of RAIT since December 2011. Mr. Sarkisian has been an executive vice president of CBRE Group, Inc. (“CBRE”), a publicly traded commercial real estate services firm, since July 2003. Mr. Sarkisian joined CBRE when it acquired Insignia/ESG (“Insignia”) a commercial real estate services firm, in July 2003. Mr. Sarkisian was an executive vice president at Insignia from June 1998 to July 2003. Mr. Sarkisian joined Insignia when it acquired Jackson-Cross Company (“Jackson-Cross”), a commercial real estate services firm, in June 1998. Mr. Sarkisian was a senior vice president for Jackson-Cross from October 1988 to June 1998. 

 Thomas D. Wren, age 67, has served as a Trustee of RAIT since February 2017. Mr. Wren was a special advisor at Promontory Financial Group, a bank and financial services consulting firm, from March 2006 to October 2011. Prior to that, Mr. Wren was group head and treasurer of MBNA Corporation (“MBNA”), a publicly-held bank holding company, from July 1995 to January 2006. At MBNA, Mr. Wren was responsible for the daily management of the global money market and fixed income investment portfolios and the wholesale funding programs for the $140.0 billion total managed assets credit card bank. From May 1992 to June 1995, Mr. Wren served as executive vice president-chief investment and funding officer of Shawmut National Corporation, a publicly-held bank holding company. From June 1973 to April 1992, Mr. Wren served in numerous roles at the Office of the Comptroller of the Currency (the “OCC”), a federal banking regulatory agency, ending as manager-large bank supervision in the OCC’s Washington D.C. office. Mr. Wren has served on the governing boards of numerous financial institutions, including service as an independent director of each of ACM Financial Trust, Inc., a privately-held residential mortgage backed securities real estate investment trust (“REIT”), since December 2005, and Hatteras Financial Corp. (“Hatteras”), a publicly-traded mortgage backed securities REIT, from November 2007 until Hatteras was acquired by Annaly Capital Management, Inc. in July 2016. 

4

 

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Our Nominating Committee has not adopted specific, minimum qualifications or specific qualities or skills that must be met by a Nominating Committee-recommended nominee. For a discussion of the methods the Nominating Committee uses for identifying and evaluating nominees for Trustee, see “Information Concerning Our Board of Trustees, Committees and Governance-Nominating and Governance Committee.”  Set forth below is a brief discussion of the specific experience, qualifications, attributes or skills that led to the conclusion that each person listed above should serve as a Trustee of RAIT: 

Mr. Malter has significant investment banking and capital markets experience, including commercial real estate lending and financing, and has advised numerous public companies on matters of corporate finance, capital structure, and accessing public and private markets across the capital spectrum. 

Mr. Klein has extensive legal experience with respect to corporate and financial matters, governance, securities issues affecting public companies and his understanding of complex transactions and business structures.       

Mr. Reyle has served as an executive officer of RAIT since February 2015 and currently serves as our CEO, President and General Counsel. His career has been focused on financing, owning, operating, managing and investing in commercial real estate and legal, business and operational issues related thereto, which gives him broad knowledge of, and experience addressing, the operational, financial and strategic issues and opportunities facing RAIT as it implements the 2019 strategic steps. 

Mr. Sarkisian has over 30 years’ experience in commercial real estate and plays a leading role in the Philadelphia region for a major commercial real estate company. 

Mr. Wren has substantial senior leadership experience at large publicly-traded financial services companies and experience as a federal banking regulator, including extensive and relevant experience serving as an independent director at a publicly-traded mortgage-backed securities REIT. 

Except as may be otherwise provided in RAIT’s declaration of trust and bylaws, at each annual meeting of RAIT’s shareholders, the shareholders elect Trustees to serve on the Board until the next annual meeting and until their successors are duly elected and qualified.

 

Name of Executive Officer Who is Not a Trustee, Principal Occupations and Other Information

 

Alfred J. Dilmore, age 37, has served as our chief financial officer (“CFO”) and treasurer since June 2018 and as our chief accounting officer since March 2016.  Mr. Dilmore served as RAIT’s interim CFO and interim treasurer from August 2017 to June 2018 and as our senior managing director-accounting and reporting from June 2015 to March 2016. Prior to joining RAIT, Mr. Dilmore was a director of accounting policy at the Federal Home Loan Mortgage Corporation (“Freddie Mac”), a publicly-traded government-sponsored enterprise, from 2010 through June 2015. Prior to that, Mr. Dilmore worked at Deloitte & Touche LLP, a public accounting firm, in advisory and audit roles from 2003 to 2010 serving a variety of large financial institutions.

5

 

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our officers, Trustees and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC and to furnish RAIT with copies of all such reports.  Based solely on our review of the reports received by us, or representations from certain reporting persons that no Form 5 filings were required for those persons, we believe that during 2018, no officers, Trustees or beneficial owners failed to file reports of ownership and changes of ownership on a timely basis, except for one delinquent report previously reported in our 2018 Proxy Statement filed with the SEC on May 29, 2018 and except that Charles L. Frischer, who has reported that he beneficially owns more than ten percent of RAIT’s outstanding common shares of beneficial interest (the “Common Shares”) in his SEC filings, filed one Form 3 Initial Statement of Beneficial Ownership of Securities relating to the Common Shares two days after the filing deadline relating to the date of the event requiring the disclosure.

 

Code of Ethics

 

As previously reported, RAIT’s publicly traded securities were delisted from the New York Stock Exchange (the “NYSE”) effective December 17, 2018.  We have adopted a Code of Business Conduct and Ethics (the “Code”) for our trustees, officers and employees intended to satisfy NYSE listing standards and the definition of a “code of ethics” set forth in Item 406 of Regulation S-K.  We have continued to require compliance with the Code after our delisting.  The Code is available on our website at http://www.rait.com. Any information relating to amendments to the Code or waivers of a provision of the Code otherwise required to be disclosed pursuant to Item 5.05 of Form 8-K will be disclosed through our website.

Trustee Candidates Recommended by Shareholders 

Our Board, through our Nominating and Governance Committee (the “Nominating Committee”), will consider nominees recommended by shareholders. A shareholder wishing to recommend a candidate must submit the following documents to the Secretary, RAIT Financial Trust, Two Logan Square, 100 N. 18th Street, 23rd Floor, Philadelphia, Pennsylvania, 19103: 

|   | • | A recommendation that identifies the candidate and provides contact information for that candidate; |
|--------|---------|-----------------------------------------------------------------------------------------------------|

|   | • | The written consent of the candidate to serve as a Trustee of RAIT, if elected; and |
|--------|---------|-------------------------------------------------------------------------------------|

|   | • | If the candidate is to be evaluated by the Nominating Committee, the Secretary will request from the candidate a detailed resume, an autobiographical statement explaining the candidate’s interest in serving as a Trustee of RAIT, a completed statement regarding conflicts of interest, and a waiver of liability for a background check. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

These documents must be received from the candidate before the first day of February preceding the annual meeting of shareholders. 

The Nominating Committee evaluates all candidates, regardless of who recommended the candidate, based on the same criteria.

Audit Committee 

The Audit Committee of the Board (the “Audit Committee”) is appointed by the Board to assist Board oversight of: 

|   | • | the integrity of our financial statements, |
|--------|---------|--------------------------------------------|

|   | • | our compliance with legal and regulatory requirements, |
|--------|---------|--------------------------------------------------------|

|   | • | the independent registered public accounting firm’s qualifications and independence, |
|--------|---------|--------------------------------------------------------------------------------------------|

|   | • | the performance of our internal audit function and of our independent registered public accounting firm, and |
|--------|---------|--------------------------------------------------------------------------------------------------------------|

|   | • | related party transactions (as defined in the trust governance guidelines). |
|--------|---------|-----------------------------------------------------------------------------|

The Audit Committee is comprised of Mr. Wren, as Chairman, Mr. Malter and Mr. Sarkisian. The Board has determined that Mr. Wren, Mr. Malter and Mr. Sarkisian meet the independence standards (the “Independence Standards”) set forth in RAIT’s Trust Governance Guidelines, including the independence standards for Audit Committee members set forth in the listing standards of the NYSE and those set forth in Rule 10A-3(b)(1) of the Exchange Act and that Mr. Wren qualifies as an “audit committee financial expert” as that term is defined in applicable rules and regulations under the Exchange Act. Our Board has continued to require the members of the Audit Committee to meet the independence standards of the NYSE after our delisting from the NYSE described above.

6

 

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|          |                        |
|----------|------------------------|
| ITEM 11. | EXECUTIVE COMPENSATION |

 

EXECUTIVE OFFICER AND TRUSTEE COMPENSATION

 

Executive Officer Compensation 

The following table provides summary information about compensation expensed or accrued by RAIT during the fiscal year ended December 31, 2018, for the following persons, who we refer to as the Named Executive Officers: 

|   | • | Mr. Reyle, our CEO, President and General Counsel; |
|--------|----------|---------------------------------------------------------|

|   | • | Mr. Davidson, our former CEO and former President who resigned February 28, 2018; |
|--------|----------|----------------------------------------------------------------------------------------|

|   | • | Mr. Dilmore, our CFO, Treasurer and Chief Accounting Officer; and |
|--------|----------|-------------------------------------------------------------------|

|   | • | Mr. Riis, our former Chief Credit Risk Officer (“CCRO”) who resigned March 15, 2018. |
|--------|----------|--------------------------------------------------------------------------------------------------|

Summary Compensation Table 

 

| Name and Principal Position      |   | Year   |   | Base Salary (1) |    |   | Bonus (2) |   |      | Stock Awards (3)(4) |   |   | Option Awards (3)(5) |   |   | Non-Equity Incentive Plan Compensation (6) |    |   | All Other Compensation (7) |   |    | Total  |   |
|----------------------------------|--------|--------|--------|-----------------|---------|--------|-----------|--------|-----------|---------------------|--------|--------|----------------------|--------|--------|--------------------------------------------|---------|--------|----------------------------|--------|---------|--------|--------|
| John J. Reyle (CEO)              |   | 2018   |   | $               | 471,644 |   |      | $      | 343,750   |                |   | $      | —              |   |   | $                                          | — |   |                       | $      | 203,813 |   |   | $ | 16,837 |   |   | $ | 1,036,044 |   |
|                             |   | 2017   |   | $               | 300,000 |   |      | $      | 262,500   |                |   | $      | 124,726              |   |   | $                                          | 28,500  |   |                       | $      | 187,500 |   |   | $ | 18,877 |   |   | $ | 922,104 |   |
|                             |   |   |   |            |    |   |      |   |      |                |   |   |                 |   |   |                                       |    |   |                       |   |    |   |   |   |   |   |   |   |   |   |
| Scott L.N. Davidson (Former CEO) |   | 2018   |   | $               | 141,667 |   |      | $      | —   |                |   | $      | —              |   |   | $                                          | — |   |                       | $      | — |   |   | $ | 1,647,192 |   |   | $ | 1,788,859 |   |
|                             |   | 2017   |   | $               | 240,657 |   |      | $      | 1,500,000 |                |   | $      | 1,530,652            |   |   | $                                          | — |   |                       | $      | 570,000 |   |   | $ | 81,938 |   |   | $ | 3,923,247 |   |
|                             |   |   |   |            |    |   |      |   |      |                |   |   |                 |   |   |                                       |    |   |                       |   |    |   |   |   |   |   |   |   |   |   |
| Alfred J. Dilmore (CFO)          |   | 2018   |   | $               | 325,000 |   |      | $      | 257,813   |                |   | $      | —              |   |   | $                                          | — |   |                       | $      | 152,859 |   |   | $ | 12,050 |   |   | $ | 747,722 |   |
|                             |   | 2017   |   | $               | 236,111 |   |      | $      | 240,000   |                |   | $      | 37,800               |   |   | $                                          | 19,000  |   |                       | $      | — |   |   | $ | 11,220 |   |   | $ | 544,131 |   |
|                             |   |   |   |            |    |   |      |   |      |                |   |   |                 |   |   |                                       |    |   |                       |   |    |   |   |   |   |   |   |   |   |   |
| Glenn Riis (Former CCRO)         |   | 2018   |   | $               | 57,292  |   |      | $      | —   |                |   | $      | —              |   |   | $                                          | — |   |                       | $      | — |   |   | $ | 540,933 |   |   | $ | 598,225 |   |
|                             |   | 2017   |   | $               | 97,500  |   |      | $      | 135,294   |                |   | $      | 268,357              |   |   | $                                          | 66,500  |   |                       | $      | 250,000 |   |   | $ | 25,410 |   |   | $ | 843,060 |   |
|                             |   |   |   |            |    |   |      |   |      |                |   |   |                 |   |   |                                       |    |   |                       |   |    |   |   |   |   |   |   |   |   |   |

|   | (1) | Each of the Named Executive Officers contributed a portion of their salary to the RAIT 401(k) plan. These contributions are included in the “Salary” column in the year earned. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | For 2018, for each of Messrs. Reyle and Dilmore, the amount represents the sum of the Retention Payments and discretionary bonuses made under the 2018 Incentive Plan for 2018 performance, part of which was paid in 2018 and part of which was paid in 2019.  See “Narrative Disclosure to Summary Compensation Table-2018 Compensation” below for further information and definitions of the capitalized terms used in the preceding sentence.   |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | We report all equity awards at their full grant date fair value in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718. For additional information, refer to Note 11 – Share-Based Compensation and Employee Benefits in RAIT’s audited financial statements contained in the Original Form 10-K (“Note 11”). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | No stock awards were made during 2018. |
|--------|-----|----------------------------------------|

|   | (5) | No option awards were made during 2018. |
|--------|-----|-----------------------------------------|

|   | (6) | For 2018, for each of Messrs. Reyle and Dilmore, the amount represents the PIP Milestone Payments made under the 2018 Incentive Plan, part of which was paid in 2018 and part of which was paid in 2019, based on performance against the PIP Milestones.  The amounts below show the maximum potential amount of annual incentive compensation that each of the 2018 Eligible Officers could have earned pursuant to each PIP Milestone for the 2018 Incentive Plan: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | John J. Reyle: $225,000 PIP Milestone 1; $28,125 PIP Milestone 2; $18,750 PIP Milestone 3; $28,125 PIP Milestone 4. |
|--------|----------|---------------------------------------------------------------------------------------------------------------------|

|   | • | Alfred J. Dilmore: $168,750 PIP Milestone 1; $21,094 PIP Milestone 2; $14,062 PIP Milestone 3; $21,094 PIP Milestone 4. |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------|

 

See “Narrative Disclosure to Summary Compensation Table-2018 Compensation” below for further information and definitions of the capitalized terms used in the preceding sentence.  

7

 

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(7)The following table describes the components of the amounts set forth in the “All Other Compensation” column in the Summary Compensation Table.

 

| Name and Principal Position      |   | Year   |   | Company Contributions to Retirement and 401(k) Plans (1) |   |   | Dividend Equivalents on Phantom Units and Dividends on Restricted Stock (2) |   |   | Other (3) |   |   | Total     |   |
|----------------------------------|--------|--------|--------|----------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| John J. Reyle (CEO)              |   | 2018   |   | $                                                        | 11,000 |   |                                                                        | $      | 5,837  |      |   |   |      |   |   | $ | 16,837 |   |
|                             |   | 2017   |   | $                                                        | 10,800 |   |                                                                        | $      | 8,077  |      |   |   |      |   |   | $ | 18,877 |   |
|                             |   |   |   |                                                     |   |   |                                                                        |   |   |      |   |   |      |   |   |   |   |   |
| Scott L.N. Davidson (Former CEO) |   | 2018   |   | $                                                        | 3,083  |   |                                                                        | $      | 39,109 |      |   | $      | 1,605,000 |   |   | $ | 1,647,192 |   |
|                             |   | 2017   |   | $                                                        | 10,800 |   |                                                                        | $      | 71,138 |      |   |   |      |   |   | $ | 81,938 |   |
|                             |   |   |   |                                                     |   |   |                                                                        |   |   |      |   |   |      |   |   |   |   |   |
| Alfred J. Dilmore (CFO)          |   | 2018   |   | $                                                        | 11,000 |   |                                                                        | $      | 1,050  |      |   |   |      |   |   | $ | 12,050 |   |
|                             |   | 2017   |   | $                                                        | 10,800 |   |                                                                        | $      | 420    |      |   |   |      |   |   | $ | 11,220 |   |
|                             |   |   |   |                                                     |   |   |                                                                        |   |   |      |   |   |      |   |   |   |   |   |
| Glenn Riis (Former CCRO)         |   | 2018   |   | $                                                        | 2,816  |   |                                                                        | $      | 13,117 |      |   | $      | 525,000   |   |   | $ | 540,933 |   |
|                             |   | 2017   |   | $                                                        | 4,500  |   |                                                                        | $      | 14,495 |      |   |   |      |   |   | $ | 18,995 |   |

 

|   | (1) | This column reports the total amount of matching contributions to the named executive’s RAIT 401(k) plan account, up to the limitations imposed under IRS rules. Under the RAIT 401(k) plan, RAIT provides a cash match of 4% of the employee contributions and may provide an additional cash match of 2% of eligible compensation as discretionary cash profit sharing payments. Any matching contribution made by RAIT pursuant to the RAIT 401(k) plan vests immediately. Under the RAIT 401(k) plan during 2018, RAIT matched 4% of employee’s eligible compensation, but did not provide a 2% discretionary profit sharing match. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Dividend equivalents will not be paid on the 50% of the Performance Share Unit Awards (“PSUs”) that have met the relevant 3 year performance based criteria and have vested, but dividend equivalents will be paid on the remaining 50% of the PSUs only for the year during which they time vest, subject to forfeiture prior to vesting. No dividend equivalents will be paid while the PSUs are subject to performance criteria. Dividend equivalents will accrue only on the portion of the PSUs which have met the performance criteria or remain subject only to time vesting.  No PSUs have met the relevant 3 year performance based criteria or have vested to date, so no dividend equivalents have been accrued or paid on PSUs.  Dividends are paid on restricted share awards in the same manner as on our other outstanding Common Shares. However, dividends declared on unvested restricted share awards remained subject to forfeiture and are held in restricted accounts and not paid to the recipient, or included in this column, until vesting, whereupon they are paid in a lump sum. This column reports the total amount of dividend equivalents and dividends paid to the Named Executive Officers on their equity compensation awards granted under the RAIT Financial Trust incentive award plan in effect at the relevant time (the “Incentive Award Plan”). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | These amounts represent amounts paid for employee severance and separation expenses.  See “Potential Payments on Termination or Change-In-Control” below for further detail. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

8

 

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|   |  |   |
|--------|--|--------|

Narrative Disclosure to Summary Compensation Table

We provide additional disclosure below of factors relating to the Summary Compensation Table. 

-Employment Agreements 

RAIT had entered into employment agreements with each of the Named Executive Officers. During 2018, RAIT also entered into the SD Separation Agreement and the SD Settlement Agreement with Mr. Davidson and the GR Separation Agreement with Mr. Riis. Because the employment of Mr. Davidson and Mr. Riis by RAIT terminated before RAIT’s 2018 fiscal year end, the terms of their respective employment agreements are not described. The post-termination and severance provisions of the SD Separation Agreement, the SD Settlement Agreement and the GR Separation Agreement are discussed, and these capitalized terms are defined in “Potential Payments on Termination or Change-In-Control” below. 

John J. Reyle 

In April 2017, RAIT entered into a previously reported employment agreement with Mr. Reyle (the “2017 JR Employment Agreement”) employing him as RAIT’s general counsel and providing for an annual base salary of $300,000.  In February 2018, effective upon Mr. Davidson’s resignation as CEO, the Board appointed Mr. Reyle to serve as Interim Chief Executive Officer and Interim President of RAIT. Mr. Reyle continued to serve as RAIT’s General Counsel.  In connection with Mr. Reyle’s appointment as Interim CEO and Interim President, RAIT and Mr. Reyle entered into a previously reported letter agreement (the “JR Letter Agreement”) in February 2018 pursuant to which Mr. Reyle received an increased annual base salary of $500,000 during the term of his appointment as Interim CEO and Interim President of RAIT.   In connection with Mr. Reyle’s appointment in June 2018 by RAIT to serve as RAIT’s CEO and President and to continue to serve as RAIT’s General Counsel, RAIT and Mr. Reyle entered into an amended and restated employment agreement (the “2018 JR Employment Agreement”) pursuant to which Mr. Reyle continued to receive an annual base salary of $500,000.  In addition to memorializing Mr. Reyle’s officer appointments, the 2018 JR Agreement also provided that Mr. Reyle would serve as a member of the Board, subject to shareholder election.  The 2018 JR Employment Agreement superseded the 2017 JR Employment Agreement and the JR Letter Agreement. 

The 2018 JR Employment Agreement provides for an employment term that continues for an initial period of three years and for two successive one year periods thereafter for a maximum term of five years, unless either party provides the other party with notice of non-renewal prior to three months before the expiration of the then-current term. It provides that Mr. Reyle will serve as RAIT’s CEO, President and General Counsel. The 2017 JR Employment Agreement provided for an initial base salary which was modified by the JR Letter Agreement and maintained by the 2018 JR Employment Agreement as described above and which provides that his base compensation must be reviewed annually for appropriate increases. The 2018 JR Employment Agreement provides that Mr. Reyle may be eligible for an annual bonus which will be awarded by the Compensation Committee in its discretion or under the terms of any annual incentive plan of RAIT maintained for other senior level executives. The 2018 JR Employment agreement further provides that Mr. Reyle is eligible to participate in any of RAIT’s incentive programs, including any equity compensation plan, and eligible to receive the same benefits to the same extent as other senior level executives of RAIT, and such other benefits as are commensurate with his position. Participation in employee benefit plans will be subject to the terms of those benefit plans as in effect from time to time. The 2018 JR Employment Agreement also provided for his compensation, grounds for termination and severance, non-competition, non-solicitation, intellectual property and confidentiality covenants and other customary provisions (as further described below).  The non-competition provisions do not apply at the expiration of the maximum employment term of five years or in the event RAIT elects not to renew the agreement. 

 

Alfred J. Dilmore

Effective August 2017, RAIT and Mr. Dilmore entered into a previously reported employment agreement (the “2017 AD Employment Agreement”) employing him as RAIT’s interim CFO, interim Treasurer and continuing as Chief Accounting Officer to and providing for an annual base salary of $300,000.  In connection with Mr. Dilmore’s appointment in June 2018 by RAIT to serve as RAIT’s CFO and Treasurer and to continue to serve as RAIT’s Chief Accounting Officer, RAIT and Mr. Dilmore entered into an amended and restated employment agreement (the “2018 AD Employment Agreement”) pursuant to which Mr. Dilmore received an annual base salary of $325,000.  The 2018 AD Employment Agreement superseded the 2017 AD Employment Agreement. 

The 2018 AD Employment Agreement provides for an employment term that continues for an initial period of three years and for two successive one year periods thereafter for a maximum term of five years, unless either party provides the other party with notice of non-renewal prior to three months before the expiration of the then-current term. It provides that Mr. Dilmore will serve as RAIT’s CFO, Treasurer and Chief Accounting Officer. The 2017 AD Employment Agreement provided for an initial base salary which was modified by the 2018 AD Employment Agreement as described above and which provides that his base compensation must be reviewed annually for appropriate increases. The 2018 AD Employment Agreement provides that Mr. Dilmore may be eligible for an annual bonus which will be awarded by the Compensation Committee in its discretion or under the terms of any annual incentive plan of RAIT maintained for other senior level executives. The 2018 AD Employment agreement further provides that Mr. Dilmore is eligible to participate in any of RAIT’s incentive programs, including any equity compensation plan, and eligible to receive the same benefits to the same extent as other senior level executives of RAIT, and such other benefits as are commensurate with his position. Participation in employee benefit plans will be subject to the terms of those benefit plans as in effect from time to time. The 2018 AD Employment Agreement also provided for his compensation, grounds for 

9

 

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termination and severance, non-competition, non-solicitation, intellectual property and confidentiality covenants and other customary provisions (as further described below).  The non-competition provisions do not apply at the expiration of the maximum employment term of five years or in the event RAIT elects not to renew the agreement. 

 

-2018 Compensation

 

2018 Incentive Plan 

 

In March 2018, the Special Committee of the Board (the “Special Committee”) approved a 2018 Retention and Performance Incentive Plan (the “2018 Incentive Plan”) for RAIT’s two current executive officers (the “2018 Eligible Officers”): Mr. Reyle and Mr. Dilmore.  The Special Committee adopted the 2018 Incentive Plan pursuant to RAIT’s previously adopted 2015 Annual Incentive Compensation Plan (the “Annual Cash Bonus Plan”), as a sub-plan of the Incentive Award Plan, which was previously approved by the shareholders of RAIT. Below is a summary of the key terms of the 2018 Incentive Plan.  After the Special Committee was terminated after the Annual Meeting, the Compensation Committee assumed its duties regarding the 2018 Incentive Plan.

|                   |                                             |                                                                                                                     |                                                                                                                                                                                  |                                                                                                                                |                                                                                                                                                                                              |        |  |  |  |  |
|-------------------|---------------------------------------------|---------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|--|--|--|
| Executive Officer | Title                                       | Retention                                                                                                           | Achievement of PIP Milestones                                                                                                                                                    | Discretionary                                                                                                                  | Total Proposed Target 2019 Bonus                                                                                                                                                             |
| John J. Reyle     | CEO, President and General Counsel          |                $250,000                       |                            $187,500            |                   $62,500            |                             $500,000             |
| Alfred J. Dilmore | CFO, Treasurer and Chief Accounting Officer |                   187,500 |                              140,625 |                     46,875 |                                375,000 |
| Total             |                                        | $437,500                                      | $328,125                             |                $109,375                                  |                          $875,000                                    |
|              |                                        |                                                                                                                |                                                                                                                                                                             |                                                                                                                           |                                                                                                                                                                                         |   |

 

 

 

 

 

 

 

 

Plan Terms:

|   | • | Total proposed target payments of $875,000 comprised of: |
|--------|----------|----------------------------------------------------------|

|   | 1. | $437,500 retention component; |
|--------|----|-------------------------------|

|   | 2. | $328,125 achievement of Performance Incentive Plan (“PIP”) milestones; and |
|--------|----|----------------------------------------------------------------------------------------|

|   | 3. | $109,375 discretionary component. |
|--------|----|-----------------------------------|

|   | • | PIP milestone amounts (“PIP Milestone Payments”) were based on (i) expected contribution to the achievement of the specific milestones and (ii) historical total compensation. |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Retention bonus payments (“Retention Payments”) was scheduled to be paid on the following schedule: |
|--------|----------|-----------------------------------------------------------------------------------------------------------------|

|   | 1. | 10% of the amount of the retention bonus was scheduled to be paid within 30 days of completion of RAIT’s Annual Meeting of Shareholders (the “Annual Meeting”) held on July 19, 2018; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | 10% of the amount of the retention bonus was scheduled to be paid on September 30, 2018; and |
|--------|----|----------------------------------------------------------------------------------------------|

|   | 3. | 80% of the amount of the retention bonus was scheduled to be paid in the first quarter of 2019. |
|--------|----|-------------------------------------------------------------------------------------------------|

|   | • | PIP Milestone Payments for Milestone 1 and 2 (which are set forth below) were scheduled to be paid on the following schedule: |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | 40% of the amount earned for the specific milestone achievement was scheduled to be paid in the first pay period post completion and agreement of the Compensation Committee that the milestone has been achieved. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | The remaining 60% was scheduled to be earned at that time but paid when the final Retention payment is made for each participant. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------|

|   | ▪ | If the employee was terminated for cause or voluntarily resigned, unpaid amounts would have been forfeited. |
|--------|---------|-------------------------------------------------------------------------------------------------------------|

|   | • | At monetization levels greater than 90% recovery on net book value and/or in excess of 90% of the projected cash recovery levels with respect to identified loans and assets of RAIT, the plan participants were eligible to earn up to 200% of the Milestone 1 target amount. |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | PIP Milestone Payments for Milestones 3 and 4 (which are set forth below) were scheduled to be made when the final Retention payment was to be made for each participant. |
|--------|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The discretionary component was to be administered consistent with historical practice as determined and approved by the Compensation Committee.   |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Milestones:

|   | 1. | Milestone 1 (“PIP Milestone 1”) – Achievement of specified projected recoveries of identified loans and assets of RAIT. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | i. | Milestone = 60% of PIP milestone bonus. |
|--------|----|-----------------------------------------|

|   | ii. | Awards were scheduled to be earned on a sliding scale based on achievement of the defined monetization plan with respect to identified loans and assets of RAIT. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

10

 

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|   | iii. | If assets other than those initially identified to be monetized at the time of adoption of the 2018 Incentive Plan were monetized, similar net recoveries levels must be achieved, Special Committee or, after the termination of the Special Committee, Compensation Committee, approval, was required to qualify as part of this calculation. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The payout matrix for PIP Milestone #1 was as follows:

 

 

|   | 2. | Milestone 2 (“PIP Milestone 2”)– Resolution of the Series D Preferred Shares. |
|--------|----|-------------------------------------------------------------------------------------------------|

|   | i. | Milestone = 15% of PIP milestone bonus |
|--------|----|----------------------------------------|

 

|   | 3. | Milestone 3 (“PIP Milestone 3”) – Elimination of at least $4.5 million of RAIT’s general and administrative expenses (excluding any financial advisory, restructuring and deal related expenses).   |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | i. | Milestone = 10% of PIP milestone bonus |
|--------|----|----------------------------------------|

 

|   | 4. | Milestone 4 (“PIP Milestone 4”) - Development, and approval by the Special Committee or, after the termination of the Special Committee, the Compensation Committee, of an updated portfolio review process to monitor the defined monetization plan. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | i. | Milestone = 15% of PIP milestone bonus |
|--------|----|----------------------------------------|

-2018 Incentive Plan Payments, Performance Metrics and Discretionary Bonus

 

During 2018 the Compensation Committee certified payments under the 2018 Incentive Plan Awards to each of the 2018 Eligible Officers as milestones were achieved. Also, at the end of 2018, the Compensation Committee certified payments under the 2018 Incentive Plan Awards to each of the 2018 Eligible Officers as it relates to the discretionary component.  The calculation of each of these payments related to the objective performance metrics utilized with respect to the PIP Milestones is set forth below. 

The range of values that could be achieved, the actual performance level achieved and the resulting payout percentage for each PIP Milestone for the quantitative bonus award portion of the 2018 Incentive Plan were as follows (dollars in thousands):

 

|                                 | Minimum         |   | Maximum                                            |   | Result | Payout % |   |
|--------------------------------------|-----------------|--------|----------------------------------------------------|--------|--------|----------|--------|
| Payout Percentage                    | 0%              |   | 200%                                               |   |   |     |   |   |
| PIP Milestone #1: Monetization level | See table above |   | 80%-85% Monetization Level;

95%-100% NBV Recovery | 114.5% |   |

 

|                                                            | Minimum          |   | Maximum             |   | Result   |   | Payout % |   |
|-----------------------------------------------------------------|------------------|--------|---------------------|--------|----------|--------|----------|--------|
| Payout Percentage                                               | 0%               |   | 100%                |   |     |   |     |   |   |   |
| PIP Milestone #2: Resolution of Series D Preferred Shares       | Not Achieved     |   | Achieved            |   | Achieved |   | 100%     |   |
| PIP Milestone #3: General and administrative expenses reduction | Less than $4,500 |   | Greater than $4,500 |   | $        | 4,920  |     | 100%   |   |
| PIP Milestone #4: Establish portfolio review process            | Not Achieved     |   | Achieved            |   | Achieved |   | 100%     |   |

 

 

The Compensation Committee set the qualitative bonus earned under the 2018 Incentive Plan at the payout percentages set forth below for each of Messrs. Reyle and Dilmore.  In determining the appropriate level of the qualitative bonuses, the Compensation Committee used its 

11

 

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discretion to identify and analyze the factors to consider.  The retention bonus components were earned under the 2018 Incentive Plan as described above.

 

|                  |             |   | Target Bonus |    |   | Payout % |   |   | Bonus  |   |
|-----------------------|------------------|--------|--------------|---------|--------|----------|--------|--------|--------|--------|
| John J. Reyle

  |             |   |         |    |   |     |   |   |   |   |   |   |
|                  | PIP Milestone #1 |   | $            | 112,500 |   |     |   | 114.5  | %      |   | $ | 128,813 |   |
|                  | PIP Milestone #2 |   |         | 28,125  |   |     |   | 100    | %      |   |   | 28,125 |   |
|                  | PIP Milestone #3 |   |         | 18,750  |   |     |   | 100    | %      |   |   | 18,750 |   |
|                  | PIP Milestone #4 |   |         | 28,125  |   |     |   | 100    | %      |   |   | 28,125 |   |
|                  | Qualitative      |   |         | 62,500  |   |     |   | 150    | %      |   |   | 93,750 |   |
|                  | Retention        |   |         | 250,000 |   |     |   | 100    | %      |   |   | 250,000 |   |
|                  | Total            |   | $            | 500,000 |   |     |   |   |   |   | $ | 547,563 |   |
|                  |             |   |         |    |   |     |   |   |   |   |   |   |   |
| Alfred J. Dilmore     |             |   |         |    |   |     |   |   |   |   |   |
|                  | PIP Milestone #1 |   | $            | 84,375  |   |     |   | 114.5  | %      |   | $ | 96,609 |   |
|                  | PIP Milestone #2 |   |         | 21,094  |   |     |   | 100    | %      |   |   | 21,094 |   |
|                  | PIP Milestone #3 |   |         | 14,062  |   |     |   | 100    | %      |   |   | 14,062 |   |
|                  | PIP Milestone #4 |   |         | 21,094  |   |     |   | 100    | %      |   |   | 21,094 |   |
|                  | Qualitative      |   |         | 46,875  |   |     |   | 150    | %      |   |   | 70,313 |   |
|                  | Retention        |   |         | 187,500 |   |     |   | 100    | %      |   |   | 187,500 |   |
|                  | Total            |   | $            | 375,000 |   |     |   |   |   |   | $ | 410,672 |   |

 

 

 

-Reverse Stock Split

 

Effective after the close of trading on August 13, 2018, we completed a one for fifty reverse stock split (the “Reverse Stock Split”) as previously authorized by the Board, and approved by RAIT’s common shareholders. The par value of Common Shares changed to $1.50 per share after the reverse stock split from $0.03 per share prior to the reverse stock split and every fifty shares issued and outstanding prior to the reverse stock split were combined into one common share after the reverse stock split. The reverse stock split did not change the number of authorized Common Shares. All of RAIT’s outstanding equity awards had corresponding adjustments to the number of Common Shares they related to and any exercise price included as a term of the award. RAIT does not consider the impact of the Reverse Stock Split on outstanding awards to be a repricing or modification of any equity awards.

12

 

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Outstanding Equity Awards at 2018 Fiscal Year-End 

 

The following table provides information on the holdings of outstanding equity awards by the Named Executive Officers at December 31, 2018. These awards are comprised of SARs, restricted Common Share awards, and PSUs.  Each award is shown separately for each named executive. The following table gives effect to the Reverse Stock Split and all share amounts and exercise prices have been adjusted accordingly.

 

|                |   | Option Awards                                                       |   | Stock Awards |   |
|---------------------|--------|---------------------------------------------------------------------|--------|--------------|--------|
| Name                |   | Number of Securities Underlying Unexercised Options (#) Exercisable |   |         |   |   | Number of Securities Underlying Unexercised Options (#) Unexercisable |   |   |   |   | Option Exercise Price ($) |   |   | Option Expiration Date |   | Number of Shares or Units of Stock That Have Not Vested (#) |   |   |   |   | Market Value of  Shares or Units of Stock That Have Not Vested ($) (1) |   |   | Equity Incentive Plan Awards Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |   |   |   |   | Equity Incentive Plan Awards, Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) |   |
| John J. Reyle       |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                | 420    |         |   | (2 | ) |   | - |   |   |   |   |   | 414.50 |   |   | 1/28/2019 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                | 420    |         |   | (2 | ) |   | - |   |   |   |   |   | 361.50 |   |   | 2/10/2020 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                | 500    |         |   | (2 | ) |   | 250 |   |   | (3 | ) |   | 119.00 |   |   | 2/22/2021 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                | 250    |         |   | (2 | ) |   | 500 |   |   | (4 | ) |   | 189.00 |   |   | 2/14/2022 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 100 |   |   | (5 | ) |   | 56 |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 200 |   |   | (6 | ) |   | 112 |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 171 |   |   | (7 | ) |   | 96 |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 211 |   |   | (8 | ) |   | 118 |   |
| Scott L.N. Davidson |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,451 |   |   | (9 | ) |   | 813 |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,950 |   |   | (9 | ) |   | 1,092 |   |   |   |   |   |   |   |   |   |   |   |
| Alfred J. Dilmore   |   |                                                                | 116    |         |   | (2 | ) |   | 59 |   |   | (3 | ) |   | 119.00 |   |   | 2/22/2021 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                | 166    |         |   | (2 | ) |   | 334 |   |   | (4 | ) |   | 189.00 |   |   | 2/14/2022 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 24 |   |   | (5 | ) |   | 13 |   |   |   |   |   |   |   |   |   |   |   |
|                |   |                                                                |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 134 |   |   | (6 | ) |   | 75 |   |   |   |   |   |   |   |   |   |   |   |

 

| (1) | The market or payout value is computed by multiplying the closing market price of a Common Share on December 31, 2018 on the OTCQB of $0.56 by the number of shares or units of stock or the amount of equity incentive plan awards, respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | These Share Appreciation Rights (“SARs”) are fully vested. |
|-----|------------------------------------------------------------------------|

| (3) | These SARs vested on February 22, 2019.   |
|-----|----------------------------------------------------------|

| (4) | These SARS vest in two equal annual installments on February 14, 2019, which are now vested, and February 14, 2020. |
|-----|------------------------------------------------------------------------------------------------------------------------------------|

| (5) | These restricted Common Share awards vest on February 22, 2019, which are now vested. |
|-----|--------------------------------------------------------------------------------------------|

| (6) | These restricted Common Share awards vest in two equal annual installments on February 14, 2019, which are now vested, and February 14, 2020. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | These restricted Common Share awards vest in three equal annual installments on April 26, 2019, which are now vested, April 26, 2020 and April 26, 2021.   |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | These PSUs are earned over a three year performance period ending December 31, 2019, with 50% of the awards vesting at the end of that three year period and the remaining 50% vesting over an additional one year time vesting period. The unvested number of awards assumes performance at the threshold level. The actual number of units earned based on actual performance ranges from 0% to 150% of target. These PSUs were performing below threshold at December 31, 2018 and no awards will vest if that continues through December 31, 2019. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | These restricted Common Share awards vest on December 20, 2019. The continued employment by, or other relationship with, RAIT of Mr. Davidson is not a condition to the vesting of these awards and so the vesting primarily relates to the lifting of restrictions on Mr. Davidson’s ability to sell, transfer, pledge, hypothecate, assign or otherwise dispose of these Common Shares. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Potential Payments on Termination or Change-In-Control 

As noted under “Executive Compensation—Narrative to Summary Compensation Table—Employment Agreements,” we have entered into employment agreements with our Named Executive Officers and supplemental agreements with our Named Executive Officers whose employment with RAIT has terminated. These agreements provide for payments and other benefits if a named executive’s employment with us is terminated under circumstances specified in his respective agreement. A Named Executive Officer’s rights upon the termination of his employment will depend upon the circumstances of the termination. The tables below summarize these rights and the amount of any payments and benefits due under the circumstances specified for the named executive indicated. 

13

 

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John J. Reyle 

As described above, RAIT and Mr. Reyle have entered into the 2018 JR Employment Agreement, provisions of which relating to potential payments on termination or change-in-controlare described below.

Under the 2018 JR Employment Agreement, if Mr. Reyle’s employment ends for any reason, RAIT will pay accrued salary, bonuses and incentive payments already earned but not paid (including any pro rata bonus awarded for the year of termination), and other existing obligations. The JR Employment Agreement does not provide for any payment to Mr. Reyle upon any change in control of RAIT without a termination of employment.  

If Mr. Reyle’s employment is terminated without “cause” or he resigns for “good reason” during the term of the employment agreement, and he executes and does not revoke a mutual release, he will receive: (a) a lump sum cash payment equal to 1.5 times the sum of (x) Mr. Reyle’s base salary, as in effect immediately prior to his termination of employment and (y) the average annual cash bonus Mr. Reyle received for and applicable to RAIT’s three completed fiscal years immediately prior to Mr. Reyle’s last day of employment (or, if he was not employed for the entire period covered by such fiscal years, the average annual cash bonus Mr. Reyle received for and applicable to those completed fiscal years of RAIT for which he was employed for the entire fiscal year); (b) a lump sum cash payment equal to a pro rata portion of Mr. Reyle’s target annual cash bonus (the “JR Cash Bonus”) for and applicable to the fiscal year of his termination (or, in the absence of a target bonus opportunity for and applicable to the fiscal year of his termination, the lump sum cash payment will be equal to a pro rata portion of the average annual cash bonus Mr. Reyle received for RAIT’s three completed fiscal years immediately prior to Mr. Reyle’s last day of employment or, in the event that Mr. Reyle was not employed for the entire period covered by the three completed fiscal years of RAIT immediately prior to his termination, the cash bonus will be calculated on the basis of the annual cash bonus received for and applicable to those completed fiscal years of RAIT for which he was employed for the entire fiscal year), and (c) for a period of 18 months following the date of termination, Mr. Reyle will continue to receive the medical coverage in effect at the date of his termination (or generally comparable coverage) for himself and, where applicable, his spouse and dependents, at the same premium rate as may be charged from time to time for employees generally, as if Mr. Reyle had continued in employment with RAIT during such period. For the avoidance of doubt, neither non-renewal of the JR Employment Agreement by either party nor the expiration of the term of the JR Employment Agreement will entitle Mr. Reyle to the foregoing payments and benefits set forth in this paragraph. Upon (1) a termination without cause by RAIT, (2) RAIT elects not to renew Mr. Reyle’s Employment Term, or (3) a resignation for good reason by Mr. Reyle, all outstanding equity-based compensation awards that are not intended to qualify as “performance-based compensation” under Section 162(m)(4)(C) of the IRC will become fully vested, immediately exercisable and any restrictions thereon will lapse, as the case may be; provided, that any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Section 409A of the IRC will remain in effect, and all outstanding equity-based compensation awards that are intended to constitute “performance-based compensation” under Section 162(m)(4)(C) of the IRC will remain outstanding and will vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied. 

If Mr. Reyle does not provide a release, he is entitled to receive only the amount due to him under the RAIT’s then current severance pay plan for employees, if any. RAIT does not currently have a severance plan applicable to its executive officers that does not require the execution of a release and any payment under such plan would be less than the payment provided upon delivery of a release under the JR Employment Agreement.  As a result, only the payments provided by the JR Employment Agreement in these circumstances are reflected in the chart below. No other payments or benefits are due to Mr. Reyle under the JR Agreement, although he is entitled to any benefits accrued and earned in accordance with the terms of any applicable benefit plans and programs of RAIT. 

RAIT may terminate Mr. Reyle’s employment, to the extent permitted by applicable law, if Mr. Reyle has been unable to perform the material duties of his employment and has been formally determined to be eligible for disability benefits under RAIT’s long-term disability plan (“Disability”). RAIT will continue to pay Mr. Reyle’s base salary until RAIT acts to terminate Mr. Reyle’s employment. If RAIT terminates Mr. Reyle’s employment for Disability, Mr. Reyle will be entitled to receive the following: (a) a lump sum cash payment equal to a pro rata portion of the JR Cash Bonus equivalent to the portion of the year he was employed prior to his termination. 

If Mr. Reyle dies while employed by RAIT, RAIT will pay to Mr. Reyle’s executor, legal representative, administrator or designated beneficiary, as applicable, a lump sum cash payment equal to a pro rata portion of the JR Cash Bonus equivalent to the portion of the year he was employed prior to his death. 

RAIT may terminate Mr. Reyle’s employment at any time for “cause” upon written notice to Mr. Reyle, in which event all payments under this Agreement will cease, except for base salary to the extent already accrued. Mr. Reyle will be entitled to any benefits accrued and earned before his termination in accordance with the terms and conditions of any applicable benefit plans and programs of RAIT in which Mr. Reyle participated prior to his termination of employment. 

“Cause” is defined as (a) Mr. Reyle’s commission of, or indictment for, or formal admission to a felony, or any crime of moral turpitude, dishonesty, or breach of RAIT’s code of ethics and other referenced policies of RAIT, or any crime involving RAIT; (b) Mr. Reyle’s engagement in fraud, misappropriation or embezzlement; (c) Mr. Reyle’s continual failure to substantially perform his reasonably assigned material duties to RAIT (other than a failure resulting from Mr. Reyle’s incapacity due to physical or mental illness), and such failure has continued for a period of at least 30 days after a written notice of demand, signed by a duly authorized officer of RAIT, has been delivered to Mr. Reyle specifying the manner in which Mr. Reyle has failed to substantially perform; or (d) Mr. Reyle’s breach of the non-competition, non-solicitation, intellectual property or confidentiality restrictions of his employment agreement. 

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“Good reason” is defined as (a) the material reduction of Mr. Reyle’s title, authority, duties and responsibilities or the assignment to Mr. Reyle of duties materially inconsistent with Mr. Reyle’s position or positions with RAIT; (b) a reduction in Mr. Reyle’s base salary; (c) a relocation of Mr. Reyle’s regular office location at Two Logan Square, 100 N. 18th Street, 23rd Floor, Philadelphia, PA 19103 for the performance of his duties to a location more than thirty (30) miles from such office; or (d) RAIT’s material and willful breach of the JR Employment Agreement. 

The JR Employment Agreement provides that during his employment with RAIT and, with respect to clause (a) below, for a period of nine months after the termination of Mr. Reyle’s employment under any circumstances (other than at the expiration of the maximum employment term of five (5) years or in the event that RAIT elects not to renew Mr. Reyle’s employment term, in which case clause (a) will not be applicable) and, with respect to clauses (b) and (c) below, for a period of nine months after the termination of Mr. Reyle’s employment under any circumstances, Mr. Reyle (without regard to the state in which Mr. Reyle lives or works) will not, unless acting pursuant to his employment agreement or with the prior written consent of the Board: (a) directly or indirectly, own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Mr. Reyle’s name to be used, or perform work in connection with or on behalf of any competing business with respect to the activities of a competing business within any state in which RAIT, and/or its affiliates, then currently engages in any substantial business activity or with respect to any state in which RAIT, and/or its affiliates, engaged in any substantial business activity during the 12 month period preceding Mr. Reyle’s last day of employment with RAIT; provided, however, that notwithstanding the foregoing, this provision will not be construed to prohibit the passive ownership by Mr. Reyle of not more than five percent of the capital stock of any entity which is engaged in any competing business having a class of securities registered pursuant to the Exchange Act; or (b) solicit or divert, or attempt to solicit or divert, to any competing business, any individual or entity which is an active or prospective customer, agent, mortgage broker, loan originator or borrower of, with or from RAIT, and/or its affiliates, or was such an active or prospective customer, agent, mortgage broker, loan originator or borrower at any time during the twelve (12) month period immediately preceding Mr. Reyle’s termination of employment; or (c) employ, attempt to employ, solicit or assist any competing business in employing (or engaging as a consultant) any individual who is a current employee of or consultant to RAIT, and/or its affiliates, or who was an employee or consultant to RAIT and/or its affiliates during the 12 month period immediately preceding Mr. Reyle’s termination of employment; provided, that this restriction will not prohibit Mr. Reyle from (i) making general employment solicitations, such as through advertisements in publicly available media, so long as such advertisements are not specifically targeted at employees of RAIT or any of its affiliates and/or (ii) engaging lawyers or law firms that then currently represent or previously represented RAIT to represent Mr. Reyle and/or any new employer of Mr. Reyle, subject to there being no conflicts of interest as to RAIT that may arise as a result of such representation. 

The phrase “competing business” is defined as any entity or enterprise actively engaged or planning to engage in any business or businesses RAIT and/or its affiliates are actively engaged in (or are expected to be actively engaged in within 12 months) at the time of Mr. Reyle’s termination of employment (the “Company Business”). Without limiting the scope of the preceding sentence, the phrase “competing business” includes the solicitation, origination, aggregation, pricing, negotiation and/or sale of (1) loans secured by mortgages on commercial real estate, and/or (2) loans to entities engaged in the real estate business, whether to hold these assets for investment or for sale individually or by combining them in one or more entities for sale as an investment (the process referred to as “securitization”). The securitizations, depending upon the make-up of the assets, are often referred to by their acronyms such as “CMBS”, “CDO, “CLO” or other current or future similar acronyms. Notwithstanding the foregoing, an entity or enterprise shall be deemed not to be a competing business if Mr. Reyle recuses himself from participating in the management by such entity or enterprise of any business substantially similar to the Company Business and provides reasonable assurances to the Company of the same, upon request by the Company. 

The phrase “substantial business activity” means that RAIT, and/or its affiliates: (i) has, has had, or is taking action to establish a business office; (ii) solicits, has solicited, makes or has made, loans secured by real estate, or is or has reviewed applications by borrowers or brokers to engage in these activities; (iii) solicits, has solicited, makes or has made, loans to real estate developers and/or owners, or is or has reviewed applications by borrowers or brokers to engage in these activities; (iv) owns, services or manages real estate, or has owned, serviced or managed real estate; and/or (v) has or has had a recorded and unsatisfied mortgage or other lien upon real estate or personal property. The agreement also contains restrictions regarding RAIT’s intellectual property and a requirement to maintain the confidentiality of RAIT’s confidential information. 

The table below summarizes these rights and the amount of any payments and benefits that would have been due under the indicated circumstances for Mr. Reyle assuming the circumstances occurred as of December 31, 2018: 

 

|                        |   | Resignation without Good Reason (1) |    |   | Termination with Cause (1) |   |    | Termination without Cause (1) |   |   | Resignation for Good Reason (1) |   |   | Disability (1)(2) |      |   | Death (1)(2) |   |
|-----------------------------|--------|-------------------------------------|---------|--------|----------------------------|--------|---------|-------------------------------|--------|--------|---------------------------------|--------|--------|-------------------|-----------|--------|--------------|--------|
| Bonus for Prior Periods (3) |   | $                                   | 547,563 |   |                       | $      | — |                          |   | $      | 547,563                         |   |   | $                 | 547,563   |   |         | $      | 547,563 |   |   | $ | 547,563 |   |
| Severance Payment (4)       |   | $                                   | — |   |                       | $      | — |                          |   | $      | 1,373,782                       |   |   | $                 | 1,373,782 |   |         | $      | — |   |   | $ | — |   |
| Stock Vesting (5)           |   | $                                   | — |   |                       | $      | — |                          |   | $      | 148                             |   |   | $                 | 148       |   |         | $      | 148 |   |   | $ | 148 |   |
| Medical Coverage (6)        |   | $                                   | — |   |                       | $      | — |                          |   | $      | 35,301                          |   |   | $                 | 35,301    |   |         | $      | — |   |   | $ | — |   |
| Total                       |   | $                                   | 547,563 |   |                       | $      | — |                          |   | $      | 1,956,793                       |   |   | $                 | 1,956,793 |   |         | $      | 547,711 |   |   | $ | 547,711 |   |

|   | (1) | We have assumed no unpaid salary at December 31, 2018. In any instance of his employment being terminated, Mr. Reyle would be entitled to any base salary that was accrued and unpaid as of the date of his termination. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (2) | Assumes Mr. Reyle executes and does not revoke a written mutual release with RAIT acceptable to RAIT. Without this release, Mr. Reyle would only be entitled to amounts due under RAIT’s severance pay plan, if any. As of December 31, 2018 RAIT, did not have a severance pay plan applicable to any executive officerthat does not require the execution of a release and which would result in a lower payment than that reflected in the chart. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | For purposes of this table, we have assumed that the three year period immediately prior to a termination of employment at December 31, 2018 related to the years 2016, 2017 and 2018 and that Mr. Reyle received the bonuses earned for such period prior to termination. Mr. Reyle would be entitled to a pro rata bonus earned through the date of termination, calculated based on the bonus earned in the prior year, pro-rated for the number of days he was employed by RAIT in the year of his termination. For purposes of this table, the termination date is assumed to be the last day of the year, so the pro-ration is 100%. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Equal to 1.5 times the sum of (x) Mr. Reyle’s base salary as in effect immediately prior to the assumed date of his termination of employment and (y) the average annual cash bonus Mr. Reyle received for the three year period immediately prior to the assumed date of his termination of employment. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Upon (1) a termination without cause by RAIT, (2) RAIT elects not to renew Mr. Reyle’s employment term, or (3) a resignation for good reason by Mr. Reyle, all outstanding equity-based compensation awards that are not intended to operate in a manner substantially similar to “performance-based compensation” under Section 162(m)(4)(C) of the IRC (whether or not meeting timing and other requirements thereof) shall become fully vested, immediately exercisable and any restrictions thereon shall lapse, as the case may be; provided, that any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Section 409A of the IRC shall remain in effect, and all outstanding equity-based compensation awards that are intended to operate in a manner substantially similar to “performance-based compensation” under Section 162(m)(4)(C) of the IRC (whether or not meeting timing and other requirements thereof) under Section 162(m)(4)(C) of the IRC shall remain outstanding and shall vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied. Mr. Reyle would immediately vest in 264 shares of restricted stock that were unvested at December 31, 2018. The stock priced used in valuing these awards was our closing stock price of $0.56 on December 31, 2018. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Mr. Reyle would be entitled to continuation of his medical coverage for a period of 18 months following the date of termination. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------|

Additionally, upon termination, Mr. Reyle would have vested in certain ancillary benefits provided to all employees, including the vested portion of our matching contributions to his 401(k) account. 

Scott L.N. Davidson 

 

As previously reported, on February 21, 2018, Mr. Davidson, pursuant to his employment agreement with RAIT (the “SD Employment Agreement”), provided 60 days prior written notice to the Board of his intent to resign from his employment with RAIT for “Good Reason” (as defined in the SD Employment Agreement). RAIT and Mr. Davidson each reserved their respective rights under the SD Employment Agreement as to whether Mr. Davidson had “Good Reason” to resign his employment,  and agreed to waive the 60 day notice period pursuant to a Separation Agreement entered into between Mr. Davidson and RAIT as of February 27, 2018 (the “SD Separation Agreement”). Under the SD Separation Agreement, Mr. Davidson’s employment with RAIT terminated effective February 28, 2018, at which time he also resigned as a member of the Board. Pursuant to the SD Separation Agreement, Mr. Davidson was paid $720,000, which was the estimated amount of the 2017 annual cash bonus to which he would have been entitled had he remained employed during the 60 day notice period.  The SD Separation Agreement terminated the SD Employment Agreement, except for such covenants that survive such termination, subject to RAIT and Mr. Davidson having each reserved their respective rights under the SD Employment Agreement as to whether Mr. Davidson had “Good Reason” to resign his employment. On May 16, 2018, Mr. Davidson filed a demand for arbitration claiming that RAIT breached the SD Employment Agreement and violated the Pennsylvania Wage Payment and Collection Law by refusing and failing to pay him the severance and other benefits provided for under the SD Employment Agreement.  Mr. Davidson alleged that the value of his claim was $8,443,807.59.  As previously reported, on December 21, 2018, Mr. Davidson, as claimant, and RAIT and certain current and former Trustees of RAIT, as respondents, entered into a Settlement Agreement and General Release (the “SD Settlement Agreement”), which was intended by the parties thereto to resolve any and all claims arising out of Mr. Davidson’s employment with RAIT and separation therefrom.  The SD Settlement Agreement includes the following terms and conditions, among others: 

  

|   | • |   | A general release by Mr. Davidson of respondents for any claims, including, without limitation any and all claims arising from, involving, or relating to the subject matter of the arbitration, and a release, subject to defined exceptions, by respondents of Mr. Davidson for any claims actually known as of the signing date by any of the individuals currently serving as RAIT officers listed in the SD Settlement Agreement. |
|--------|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

  

|   | • |   | RAIT delivered to Mr. Davidson and counsel for Mr. Davidson payment totaling $1,825,000 (the “Settlement Amount”) allocated as follows: (a) $1,605,000.00, less applicable withholdings, payable to Mr. Davidson, and (b) $220,000 payable to Mr. Davidson’s counsel. |
|--------|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Alfred J. Dilmore

Under the 2018 AD Employment Agreement, if Mr. Dilmore’s employment ends for any reason, RAIT will pay accrued salary, bonuses and incentive payments already earned but not paid (including any pro rata bonus awarded for the year of termination), and other existing obligations.  The 2018 AD Employment Agreement does not provide for any payment to Mr. Dilmore upon any change in control of RAIT without a termination of employment.  

If Mr. Dilmore’s employment is terminated without “cause” or he resigns for “good reason” during the term of the employment agreement, and he executes and does not revoke a mutual release, he will receive: (a) a lump sum cash payment equal to 1.5 times the sum of 

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(x) Mr. Dilmore’s base salary, as in effect immediately prior to his termination of employment and (y) the average annual cash bonus Mr. Dilmore received for and applicable to RAIT’s three completed fiscal years immediately prior to Mr. Dilmore’s last day of employment (or, if he was not employed for the entire period covered by such fiscal years, the average annual cash bonus Mr. Dilmore received for and applicable to those completed fiscal years of RAIT for which he was employed for the entire fiscal year); (b) a lump sum cash payment equal to a pro rata portion of Mr. Dilmore’s target annual cash bonus (the “AD Cash Bonus”)for and applicable to the fiscal year of his termination (or, in the absence of a target bonus opportunity for and applicable to the fiscal year of his termination, the lump sum cash payment will be equal to a pro rata portion of the average annual cash bonus Mr. Dilmore received for RAIT’s three completed fiscal years immediately prior to Mr. Dilmore’s last day of employment or, in the event that Mr. Dilmore was not employed for the entire period covered by the three completed fiscal years of RAIT immediately prior to his termination, the cash bonus will be calculated on the basis of the annual cash bonus received for and applicable to those completed fiscal years of RAIT for which he was employed for the entire fiscal year), and (c) for a period of 18 months following the date of termination, Mr. Dilmore will continue to receive the medical coverage in effect at the date of his termination (or generally comparable coverage) for himself and, where applicable, his spouse and dependents, at the same premium rate as may be charged from time to time for employees generally, as if Mr. Dilmore had continued in employment with RAIT during such period. For the avoidance of doubt, neither non-renewal of the AD Employment Agreement by either party nor the expiration of the term of the AD Employment Agreement will entitle Mr. Dilmore to the foregoing payments and benefits set forth in this paragraph. Upon (1) a termination without cause by RAIT, (2) RAIT elects not to renew Mr. Dilmore’s employment term, or (3) a resignation for good reason by Mr. Dilmore, all outstanding equity-based compensation awards that are not intended to qualify as “performance-based compensation” under Section 162(m)(4)(C) of the IRC will become fully vested, immediately exercisable and any restrictions thereon will lapse, as the case may be; provided, that any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Section 409A of the IRC will remain in effect, and all outstanding equity-based compensation awards that are intended to constitute “performance-based compensation” under Section 162(m)(4)(C) of the IRC will remain outstanding and will vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied. 

If Mr. Dilmore does not provide a release, he is entitled to receive only the amount due to him under the RAIT’s then current severance pay plan for employees, if any. RAIT does not currently have a severance plan applicable to its executive officers that does not require the execution of a release and any payment under such plan would be less than the payment provided upon delivery of a release under the ADEmployment Agreement.  As a result, only the payments provided by the ADEmployment Agreement in these circumstances are reflected in the chart below. No other payments or benefits are due to Mr. Dilmore under the AD Agreement, although he is entitled to any benefits accrued and earned in accordance with the terms of any applicable benefit plans and programs of RAIT. 

RAIT may terminate Mr. Dilmore’s employment, to the extent permitted by applicable law, if Mr. Dilmore has been unable to perform the material duties of his employment and has been formally determined to be eligible for disability benefits under RAIT’s long-term disability plan (“Disability”). RAIT will continue to pay Mr. Dilmore’s base salary until RAIT acts to terminate Mr. Dilmore’s employment. If RAIT terminates Mr. Dilmore’s employment for Disability, Mr. Dilmore will be entitled to receive the following: (a) a lump sum cash payment equal to a pro rata portion of the AD Cash Bonus equivalent to the portion of the year he was employed prior to his termination. 

If Mr. Dilmore dies while employed by RAIT, RAIT will pay to Mr. Dilmore’s executor, legal representative, administrator or designated beneficiary, as applicable, a lump sum cash payment equal to a pro rata portion of the AD Cash Bonus equivalent to the portion of the year he was employed prior to his death. 

RAIT may terminate Mr. Dilmore’s employment at any time for “cause” upon written notice to Mr. Dilmore, in which event all payments under this Agreement will cease, except for base salary to the extent already accrued. Mr. Dilmore will be entitled to any benefits accrued and earned before his termination in accordance with the terms and conditions of any applicable benefit plans and programs of RAIT in which Mr. Dilmore participated prior to his termination of employment. 

“Cause” and “Good Reason” are each defined in the 2018 AD Employment Agreement in the corresponding manner as in the 2018 JR Employment Agreement.  The 2018 AD Employment Agreement has provisions restricting Mr. Dilmore regarding non-competition, non-solicitation, protection of RAIT’s intellectual property, maintaining confidentiality corresponding to those in the 2018 JR Employment Agreement.

The table below summarizes these rights and the amount of any payments and benefits that would have been due under the indicated circumstances for Mr. Dilmore assuming the circumstances occurred as of December 31, 2018:

 

|                        |   | Resignation without Good Reason (1) |    |   | Termination with Cause (1) |   |    | Termination without Cause (1) |   |   | Resignation for Good Reason (1)(2) |   |   | Disability (1)(2) |      |   | Death (1)(2) |   |
|-----------------------------|--------|-------------------------------------|---------|--------|----------------------------|--------|---------|-------------------------------|--------|--------|------------------------------------|--------|--------|-------------------|-----------|--------|--------------|--------|
| Bonus for Prior Periods (3) |   | $                                   | 410,672 |   |                       | $      | — |                          |   | $      | 410,672                            |   |   | $                 | 410,672   |   |         | $      | 410,672 |   |   | $ | 410,672 |   |
| Severance Payment (4)       |   | $                                   | — |   |                       | $      | — |                          |   | $      | 862,836                            |   |   | $                 | 862,836   |   |         | $      | — |   |   | $ | — |   |
| Stock Vesting (5)           |   | $                                   | — |   |                       | $      | — |                          |   | $      | 88                                 |   |   | $                 | 88        |   |         | $      | 88 |   |   | $ | 88 |   |
| Medical Coverage (6)        |   | $                                   | — |   |                       | $      | — |                          |   | $      | 35,301                             |   |   | $                 | 35,301    |   |         | $      | — |   |   | $ | — |   |
| Total                       |   | $                                   | 410,672 |   |                       | $      | — |                          |   | $      | 1,308,897                          |   |   | $                 | 1,308,897 |   |         | $      | 410,760 |   |   | $ | 410,760 |   |

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| (1) | We have assumed no unpaid salary at December 31, 2018. In any instance of his employment being terminated, Mr. Dilmore would be entitled to any base salary that was accrued and unpaid as of the date of his termination. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Assumes Mr. Dilmore executes and does not revoke a written mutual release with RAIT acceptable to RAIT. Without this release, Mr. Dilmore would only be entitled to amounts due under RAIT’s severance pay plan, if any. As of December 31, 2018 RAIT, did not have a severance pay plan applicable to any executive officer that does not require the execution of a release and which would result in a lower payment than that reflected in the chart. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | For purposes of this table, we have assumed that the three year period immediately prior to a termination of employment at December 31, 2018 related to the years 2016, 2017 and 2018 and that Mr. Dilmore received the bonuses earned for such period prior to termination. Mr. Dilmore would be entitled to a pro rata bonus earned through the date of termination, which calculated based on the bonus earned in the prior year, pro-rated for the number of days he was employed by RAIT in the year of his termination. For purposes of this table, the termination date is assumed to be the last day of the year, so the pro-ration is 100%. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Equal to 1.5 times the sum of (x) Mr. Dilmore’s base salary as in effect immediately prior to the assumed date of his termination of employment and (y) the average annual cash bonus Mr. Dilmore received for the three year period immediately prior to the assumed date of his termination of employment. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Upon (1) a termination without cause by RAIT, (2) RAIT elects not to renew Mr. Dilmore’s employment term, or (3) a resignation for good reason by Mr. Dilmore, all outstanding equity-based compensation awards that are not intended to operate in a manner substantially similar to “performance-based compensation” under Section 162(m)(4)(C) of the IRC (whether or not meeting timing and other requirements thereof) shall become fully vested, immediately exercisable and any restrictions thereon shall lapse, as the case may be; provided, that any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Section 409A of the IRC shall remain in effect, and all outstanding equity-based compensation awards that are intended to operate in a manner substantially similar to “performance-based compensation” under Section 162(m)(4)(C) of the IRC (whether or not meeting timing and other requirements thereof) under Section 162(m)(4)(C) of the IRC shall remain outstanding and shall vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied. Mr. Dilmore would immediately have vested in 158 shares of restricted stock that were unvested at December 31, 2018.  The stock priced used in valuing these awards was our closing stock price of $0.56 on December 31, 2018. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Mr. Dilmore would be entitled to continuation of his medical coverage for a period of 18 months following the date of termination. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

Additionally, upon termination, Mr. Dilmore would have vested in certain ancillary benefits provided to all employees, including the vested portion of our matching contributions to his 401(k) account. 

 

Glenn Riis

 

On March 13, 2018, Mr. Riis and RAIT entered into a separation agreement (the “GR Separation Agreement”) terminating Mr. Riis’ employment as CCRO of RAIT.  Pursuant to the GR Separation Agreement, RAIT made a $525,000 severance payment to Mr. Riis.  The GR Separation Agreement also provided that RAIT released Mr. Riis from the non-competition covenants in the GR Employment Agreement that would otherwise survive the termination of his employment, while the remaining provisions relating to non-solicitation of RAIT customers, employees and consultants, intellectual property, confidentiality, and equitable relief would remain in full force and effect.  The GR Separation Agreement terminated Mr. Riis employment agreement with RAIT, except for such covenants that survived such termination.

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Trustee Compensation 

In carrying out the 2018 strategic steps described in the Original Form 10-K, the Board, upon the recommendation of the Nominating Committee, determined to reduce the size of the Board from ten to five by nominating RAIT’s five current Trustees, Michael J. Malter, Justin P. Klein, John J. Reyle, Jon C. Sarkisian and Thomas D. Wren, for election to the Board at the Annual Meeting.  RAIT’s shareholders elected Messrs. Malter, Klein, Reyle, Sarkisian and Wren to serve on the Board at the Annual Meeting. Prior to the Annual Meeting, the Compensation Committee of the Board (the “Compensation Committee”) also determined to transition Trustee compensation from an annual basis to an annual meeting to annual meeting basis. For the period from January 1, 2018 through the Annual Meeting, the Compensation Committee approved the following cash compensation for each non-employee Trustee of RAIT: 

 

 

|   | • | An annual cash retainer of $50,000 payable in four quarterly installments of $12,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | With respect to the members of the Audit Committee, an additional annual cash fee of $20,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $10,000 for each other member of the Audit Committee payable in four quarterly installments. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | • | With respect to the members of the Compensation Committee, an additional annual cash fee of $20,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $10,000 for each other member of the Compensation Committee payable in four quarterly installments. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | • | With respect to the members of the Nominating Committee, an additional annual cash fee of $6,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $3,000 for each other member of the Nominating Committee payable in four quarterly installments. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | With respect to the members of the Risk Management Committee, an additional annual cash fee of $12,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $6,000 for each other member of the Risk Management Committee payable in four quarterly installments. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | • | With respect to the members of the Special Committee, an additional monthly cash fee of $10,000 for the chairman and an additional monthly cash fee of $8,750 for each other member of the Special Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | • | With respect to the independent Chairman of the Board, Mr. Malter (the “Chairman”), the Chairman was paid an additional amount based on an annual cash retainer of $150,000 payable in quarterly installments until February 26, 2018. On February 26, 2018 in connection with approving the 2018 strategic steps, RAIT entered into a previously disclosed Non-Executive Chairman Agreement (the “Prior Chairman Agreement”) with the Chairman. Under the Prior Chairman Agreement, Mr. Malter assumed additional responsibilities as the independent, non-executive Chairman of the Board in connection with RAIT’s on-going assessment of its financial performance and financial needs. As compensation for his performance of these additional responsibilities, Mr. Malter received an additional monthly fee in the amount of $62,500. Mr. Malter also received a cash payment in the amount of $75,000 for the pro-rated portions of accrued but unpaid compensation due to him for his service as Chairman prior to the effective date of the Prior Chairman Agreement. The Board approved entering into the Chairman Agreement upon the joint recommendation of the Compensation Committee and the Nominating Committee. |
|   | • | The Compensation Committee determined not to make awards to non-management Trustees under the Incentive Award Plan for 2018.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

|   |  |     |
|--------|--|--------------------|

After the Annual Meeting, the Compensation Committee approved the following cash compensation for each non-employee Trustee of RAIT for the period from the Annual Meeting through the 2019 Annual Meeting of RAIT’s Shareholders: 

|   | • | An annual cash retainer of $50,000 payable in four quarterly installments of $12,500. 

                                                                                                                                                                                                  |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | With respect to the members of the Audit Committee, an additional annual cash fee of $20,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $10,000 for each other member of the Audit Committee payable in four quarterly installments.

  |

19

 

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|   | • | With respect to the members of the Compensation Committee, an additional annual cash fee of $20,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $10,000 for each other member of the Compensation Committee payable in four quarterly installments. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | With respect to the members of the Nominating Committee, an additional annual cash fee of $6,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $3,000 for each other member of the Nominating Committee payable in four quarterly installments. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | • | With respect to the members of the Risk Management Committee, an additional annual cash fee of $6,000 for the chairman payable in four quarterly installments and an additional annual cash fee of $3,000 for each other member of the Risk Management Committee payable in four quarterly installments. 

                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | • | With respect to the members of the Special Committee of the Board (the “Special Committee”), as the Special Committee has been terminated by the Board, compensation for the members of the Special Committee ceased as of the Annual Meeting.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | • | After the Annual Meeting, the Board, upon the recommendation of the Nominating Committee and with the approval of the Compensation Committee, re-elected Mr. Malter to continue to serve as the independent, non-executive Chairman of the Board for a term continuing until the adjournment of RAIT’s 2019 Annual Meeting of Shareholders and approved amending and restating the Prior Chairman Agreement (the “A&R Chairman Agreement”) to update Mr. Malter’s additional responsibilities and reduce his annualized compensation from the $750,000 provided under the Prior Chairman Agreement to $500,000, payable semi-monthly. On July 19, 2018, RAIT and Mr. Malter entered into the A&R Chairman Agreement.  

  |
|   | • | The Compensation Committee has deferred consideration of whether, and, if so, when, to make awards to non-management Trustees under the Incentive Award Plan for 2019.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |

 

Mr. Reyle, RAIT’s CEO, President and General Counsel, receives no additional compensation from RAIT for his service on the Board.  The following table sets forth information regarding the compensation paid or accrued by RAIT during 2018 to each of our non-employee Trustees:

Trustee Compensation in 2018

 

| Name                      |   | Fees Earned or Paid in Cash ($) |      |   | Total ($) |   |
|---------------------------|--------|---------------------------------|-----------|--------|-----------|--------|
| Andrew Batinovich (1)     |   |                            | 26,168    |   |      |   | 26,168 |   |
| Frank A. Farnesi (2)      |   |                            | 30,405    |   |      |   | 30,405 |   |
| S. Kristin Kim (2)        |   |                            | 35,369    |   |      |   | 35,369 |   |
| Justin P. Klein           |   |                            | 122,432   |   |      |   | 122,432 |   |
| Nancy Jo Kuenstner (2)    |   |                            | 39,227    |   |      |   | 39,227 |   |
| Michael J. Malter         |   |                            | 713,213   |   |      |   | 713,213 |   |
| Jon C. Sarkisian          |   |                            | 82,997    |   |      |   | 82,997 |   |
| Andrew M. Silberstein (1) |   |                            | 26,168    |   |      |   | 26,168 |   |
| Murray Stempel III (2)    |   |                            | 37,576    |   |      |   | 37,576 |   |
| Thomas D. Wren            |   |                            | 138,170   |   |      |   | 138,170 |   |
|                      |   |                            | 1,251,724 |   |      |   | 1,251,724 |   |

 

|   | (1) | As previously reported, this Trustee resigned from the Board effective June 27, 2018. |
|--------|-----|---------------------------------------------------------------------------------------|

|   | (2) | As previously reported, the term of this Trustee on the Board ended at the Annual Meeting. |
|--------|-----|--------------------------------------------------------------------------------------------|

 

  

 

 

20

 

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

EQUITY COMPENSATION PLAN INFORMATION 

The following table sets forth certain information regarding RAIT’s equity compensation plans as of December 31, 2018. The table reflects the Reverse Stock Split.

| Plan Category                                              |   | (a)

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights |   |   |   |   | (b)

Weighted Average Exercise Price of Outstanding Options Warrants, and Rights |   |   | (c)

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) |   |   |   |   |
|------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|--------|--------|--------|----------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Equity compensation plans approved by security holders     |   |                                                                                              | 635    |   |   | (1     | )                                                                                | $      | 274.90 |                                                                                                                                            |   |   | 77,681 |   |   | (2 | ) |
| Equity compensation plans not approved by security holders |   |                                                                                              | -      |   |   |   |                                                                             | n/a    |   |                                                                                                                                            |   | -      |   |   |   |   |
| Total                                                      |   |                                                                                              | 635    |   |   |   |                                                                             |   |   |                                                                                                                                            |   |   | 77,681 |   |   |   |   |

| (1) | Includes 635 PSUs issued in 2017, which remained subject to forfeiture at December 31, 2018. The terms of the PSUs are described above under “Outstanding Equity Awards at 2018 Fiscal Year-End.” The weighted average exercise price in column (b) reflects the SARs described below in this footnote and does not take the PSUs into account. The number of PSUs reflects the maximum number of Common Shares to be awarded if the maximum criteria is achieved. All outstanding SARs have been excluded since the exercise price of all outstanding SARs is above the OTCQB closing price on December 31, 2018 of $0.56 per Common Share. The excluded outstanding SARs are comprised of (a) 6,102 SARs awarded January 29, 2014 with an exercise price of $414.50; (b) 8,732 SARs awarded February 10, 2015 with an exercise price of $361.50; (c) 6,293 SARs awarded February 22, 2016 with an exercise price of $119.00; (d) 7,300 SARs awarded February 14, 2017 with an exercise price of $189.00. The Compensation Committee has elected to settle vested outstanding SARs in Common Shares to the extent Common Shares are available under the Incentive Award Plan and not reserved for issuance under other grants under the Incentive Award Plan and evaluates whether to settle any SARs that are vesting in cash or Common Shares as needed. The Compensation Committee will settle SARs in cash to the extent Common Shares are not available under the Incentive Award Plan and so the maximum number of Common Shares issuable under these SARs will not exceed the number of Common Shares then available for issuance under the Incentive Award Plan and not reserved for issuance under other grants under the Incentive Award Plan. Excludes 6,861 restricted Common Share awards that remained subject to forfeiture or other restrictions at December 31, 2018 because they are neither to be issued upon exercise of outstanding options, warrants and rights nor available for future issuance. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Assumes the reduction of the number of Common Shares remaining issuable under the Incentive Award Plan at December 31, 2018 by a number of the Common Shares reported in column (a). The Compensation Committee periodically establishes a reserve for the number of Common Shares issuable with respect to the vested outstanding SARs based on the number of vested SARs at the relevant time and estimated market prices and the number of Common Shares issuable under the Incentive Award Plan is reduced only by the reserves established by the Compensation Committee.  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

21

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth the number and percentage owned by each person who, to the knowledge of RAIT as of the date of the report referenced in the footnotes to the table, is the beneficial owner of more than 5% of the outstanding voting securities of RAIT.  RAIT believes only its Common Shares are voting securities.  RAIT’s preferred shares of beneficial interest, par value $0.01 per share (the “Preferred Shares”) have limited voting rights in limited circumstances set forth in their respective articles supplementary, none of which are currently met, and no Preferred Shares are convertible into Common Shares.  As a result, RAIT is not reporting any person who, to the knowledge of RAIT, is the beneficial owner of more than 5% of any series of RAIT’s outstanding Preferred Shares.  This information is reported in accordance with the beneficial ownership rules of the SEC under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days. Common Shares issuable pursuant to warrants or convertible notes are deemed to be outstanding for purposes of computing the percentage ownership of the person or group holding such options or warrants but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated in footnotes to the table, each person listed has sole voting and dispositive power with respect to the securities owned by such person. 

| Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class |   |
|----------------|--------------------------------------|-------------------------------------------|------------------|--------|
| Common Shares  | Charles Frischer                     | 288,100 (1)                               | 15.6%            |   |
| Common Shares  | Tiptree Financial Inc.               | 133,127 (2)                               | 7.2%             |   |

 

| (1) | Information obtained from the Schedule 13D/A filed by Charles L. Frischer and the Libby Frischer Family Partnership (“LFFP”), an entity that Mr. Frischer is the general partner of, with the SEC on December 31, 2018. Charles L. Frischer reports having sole voting power and sole dispositive power with respect to 288,100 Common Shares.  LFFP reports having sole voting power and sole dispositive power with respect to 133,408 Common Shares. The principal business address of Charles L. Frischer and LFFP is 4404 52nd Avenue NE, Seattle, WA 98105. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Information obtained from the Schedule 13D/A filed by Tiptree Financial Inc. (“Tiptree”) with the SEC on August 16, 2018. Tiptree reports having sole voting power and sole dispositive power with respect to 133,127 Common Shares. The principal business address of Tiptree is 780 Third Avenue, 21st Floor, New York, NY 10017. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The following tables set forth the number and percentage owned as of April 22, 2019, to the best of our knowledge (which, as to Named Executive Officers who have departed from RAIT, is based on their responses to our inquiries made in April 2019 prior to the filing of this Amendment), by each of our present Trustees, each of our present Named Executive Officers, as defined in “Executive Officer Compensation” below, and all of our present executive officers (whether or not deemed to be Named Executive Officers) and Trustees as a group of: 

|   | • | Common Shares; |
|--------|---------|----------------|

|   | • | 7.75% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share (“Series A Preferred Shares”); |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | 8.375% Series B cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share (“Series B Preferred Shares”); or |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | 8.875% Series C cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share (“Series C Preferred Shares”); |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

This information is reported in accordance with the beneficial ownership rules of the SEC under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days. Common Shares issuable pursuant to vested options, warrants or share appreciation rights, or SARs, are deemed to be outstanding for purposes of computing the percentage ownership of the person or group holding such options or warrants but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person. With respect to vested SARs, the number of net Common Shares issuable is based on the closing price of our Common Shares on April 22, 2019 of $1.28. Unless otherwise indicated in footnotes to the table, each person listed has sole voting and dispositive power with respect to the securities owned by such person.  

 

22

 

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| Title of Class |   | Name of Beneficial Owner                                            |   | Amount and Nature of Beneficial Ownership |   |   |   |   | Percent of Class |   |
|----------------|--------|---------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|--------|--------|------------------|--------|
| Common Shares  |   | Trustees:                                                           |   |                                      |   |   |   |   |             |   |   |   |
|           |   | Michael J. Malter                                                   |   |                                      | 2,690  |   |   |   |             | *      |   |
|           |   | Justin P. Klein                                                     |   |                                      | 245    |   |   |   |             | *      |   |
|           |   | Jon C. Sarkisian                                                    |   |                                      | 1,664  |   |   |   |             | *      |   |
|           |   | Thomas D. Wren                                                      |   |                                      | 1,367  |   |   |   |             | *      |   |
|           |   |                                                                |   |                                      |   |   |   |   |             |   |   |   |
|           |   | Named Executive Officers:                                           |   |                                      |   |   |   |   |             |   |   |   |
|           |   | John J. Reyle                                                       |   |                                      | 792    |   |   | (3     | )                | *      |   |
|           |   | Scott L.N. Davidson (Former CEO)                                    |   |                                      | 3,401  |   |   | (1     | )                | *      |   |
|           |   | Alfred J. Dilmore                                                   |   |                                      | 172    |   |   | (2     | )                | *      |   |
|           |   | Glenn Riis (Former CCRO)                                            |   |                                      | 644    |   |   | (4     | )                | *      |   |
|           |   |                                                                |   |                                      |   |   |   |   |             |   |   |   |
|           |   | All trustees and executive officers as a group: |   |                                      |   |   |   |   |             |   |   |   |
|           |   | (8 persons)                                                         |   |                                      | 10,975 |   |   |   |             | 0.6%   |   |

| * | Does not exceed 1% |
|---|--------------------|

| (1) | Includes 3,401 of Mr. Davidson’s unvested restricted common shares. |
|-----|---------------------------------------------------------------------------|

| (2) | Includes 65 common shares directly held by Mr. Dilmore and 107 unvested restricted common shares. Excludes vested SARs and SARs that may vest within 60 days of April 22, 2019 since the exercise price of such SARs is above the closing price of our common shares on April 22, 2019  of $1.28. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes 521 common shares directly held by Mr. Reyle, and 271 unvested restricted common shares.  Excludes vested SARs and SARs that may vest within 60 days of April 22, 2019 since the exercise price of such SARs is above the closing price of our common shares on April 22, 2019 of $1.28. Excludes 635 unvested 2017 PSUs. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes 644 common shares directly held by Mr. Riis. |
|-----|-------------------------------------------------------|

 

 

| Title of Class            |   | Name of Beneficial Owner                                            |   | Amount and Nature of Beneficial Ownership |   |   | Percent of Class |   |
|---------------------------|--------|---------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|------------------|--------|
| Series A Preferred Shares |   | Trustees:                                                           |   |                                      |   |   |             |   |   |   |
|                      |   | Michael J. Malter                                                   |   |                                      | 3,100  |   |             | *      |   |
|                      |   | Justin P. Klein                                                     |   |                                      | -      |   |             |   | - |   |
|                      |   | Jon C. Sarkisian                                                    |   |                                      | -      |   |             |   | - |   |
|                      |   | Thomas D. Wren                                                      |   |                                      | -      |   |             |   | - |   |
|                      |   |                                                                |   |                                      |   |   |             |   |   |   |
|                      |   | Named Executive Officers:                                           |   |                                      |   |   |             |   |   |   |
|                      |   | John J. Reyle                                                       |   |                                      | -      |   |             |   | - |   |
|                      |   | Scott L.N. Davidson (Former CEO)                                    |   |                                      | -      |   |             | *      |   |
|                      |   | Alfred J. Dilmore                                                   |   |                                      |   |   |             | *      |   |
|                      |   | Glenn Riis (Former CCRO)                                            |   |                                      |   |   |             |   |   |   |
|                      |   |                                                                |   |                                      |   |   |             |   |   |   |
|                      |   | All trustees and executive officers as a group: |   |                                      |   |   |             |   |   |   |
|                      |   | (8 persons)                                                         |   |                                      | 3,100  |   |             | *      |   |

| * | Does not exceed 1% |
|---|--------------------|

23

 

----

 

 

| Title of Class            |   | Name of Beneficial Owner                                            |   | Amount and Nature of Beneficial Ownership |   |   | Percent of Class |   |
|---------------------------|--------|---------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|------------------|--------|
| Series B Preferred Shares |   | Trustees:                                                           |   |                                      |   |   |             |   |   |   |
|                      |   | Michael J. Malter                                                   |   |                                      | 3,400  |   |             | *      |   |
|                      |   | Justin P. Klein                                                     |   |                                      | -      |   |             |   | - |   |
|                      |   | Jon C. Sarkisian                                                    |   |                                      | -      |   |             |   | - |   |
|                      |   | Thomas D. Wren                                                      |   |                                      | -      |   |             |   | - |   |
|                      |   |                                                                |   |                                      |   |   |             |   |   |   |
|                      |   | Named Executive Officers:                                           |   |                                      |   |   |             |   |   |   |
|                      |   | John J. Reyle                                                       |   |                                      | -      |   |             |   | - |   |
|                      |   | Scott L.N. Davidson (Former CEO)                                    |   |                                      | -      |   |             |   | - |   |
|                      |   | Alfred J. Dilmore                                                   |   |                                      | -      |   |             |   | - |   |
|                      |   | Glenn Riis (Former CCRO)                                            |   |                                      | -      |   |             |   | - |   |
|                      |   |                                                                |   |                                      |   |   |             |   |   |   |
|                      |   | All trustees and executive officers as a group: |   |                                      |   |   |             |   |   |   |
|                      |   | (8 persons)                                                         |   |                                      | -      |   |             | *      |   |

| * | Does not exceed 1% |
|---|--------------------|

 

| Title of Class            |   | Name of Beneficial Owner                                            |   | Amount and Nature of Beneficial Ownership |   |   | Percent of Class |   |
|---------------------------|--------|---------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|------------------|--------|
| Series C Preferred Shares |   | Trustees:                                                           |   |                                      |   |   |             |   |   |   |
|                      |   | Michael J. Malter                                                   |   |                                      | -      |   |             |   | - |   |
|                      |   | Justin P. Klein                                                     |   |                                      | -      |   |             |   | - |   |
|                      |   | Jon C. Sarkisian                                                    |   |                                      | -      |   |             |   | - |   |
|                      |   | Thomas D. Wren                                                      |   |                                      | -      |   |             |   | - |   |
|                      |   |                                                                |   |                                      | -      |   |             |   | - |   |
|                      |   | Named Executive Officers:                                           |   |                                      | -      |   |             |   | - |   |
|                      |   | John J. Reyle                                                       |   |                                      | -      |   |             |   | - |   |
|                      |   | Scott L.N. Davidson (Former CEO)                                    |   |                                      | -      |   |             |   | - |   |
|                      |   | Alfred J. Dilmore                                                   |   |                                      | -      |   |             |   | - |   |
|                      |   | Glenn Riis (Former CCRO)                                            |   |                                      | -      |   |             |   | - |   |
|                      |   |                                                                |   |                                      |   |   |             |   |   |   |
|                      |   | All trustees and executive officers as a group: |   |                                      |   |   |             |   |   |   |
|                      |   | (8 persons)                                                         |   |                                      | -      |   |             |   | - |   |

 

24

 

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND TRUSTEE INDEPENDENCE 

Relationships and Related Party Transactions

In the ordinary course of our business operations, we have ongoing relationships and have engaged in transactions with the related entities described below. We describe in this section relationships or transactions since January 1, 2017 in which the amount involved exceeds the lesser of $120,000 or one percent of the average of RAIT’s total assets at December 31, 2018 for its last two completed fiscal years, which equals approximately $12.6 million.  All of the amounts below under this caption are in thousands, except share and per share amounts.

 

Almanac Realty

 

On June 27, 2018, the purchase agreement that previously provided for Andrew M. Silberstein to serve as a trustee on our board was terminated as part of the Redemption and Exchange Agreement that was entered into with ARS VI Investor I, LP (f/k/a ARS VI Investor I, LLC (the “Investor”) on June 27, 2018.  As part of the Redemption and Exchange Agreement, Mr. Silberstein resigned as a trustee.  While Mr. Silberstein was a trustee, his trustee fees were paid to the Investor.  Mr. Silberstein is an equity owner of Almanac and an officer of the Investor and holds indirect equity interests in the Investor. The transactions completed pursuant to the purchase agreement are described in Note 9-Series D Preferred Shares in RAIT’s audited financial statements contained in the Original Form 10-K.  Subsequent to June 27, 2018, Almanac is not considered a related party.

Ballard Spahr LLP

As of June 27, 2017, Justin P. Klein has been appointed as a trustee on our board of trustees.  Mr. Klein is a partner at Ballard Spahr. RAIT has paid Ballard Spahr $134 during the year ended December 31, 2017 and $88 during the year ended December 31, 2018 for legal counsel related to various matters. The approximate dollar value of Mr. Klein’s interest in these fees was less than $1 for the year ended December 31, 2017 and less than $1 for the year ended December 31, 2018, based on Mr. Klein’s Ballard Spahr partnership interest.

Charles Frischer and the Libby Frischer Family Partnership

 

On March 30, 2018, the Libby Frischer Family Partnership, or LFFP, Charles F. Frischer, or Mr. Frischer, and RAIT signed a letter which provided that RAIT would exempt LFFP from RAIT’s common share ownership limit up to an amount equal to 12.5%. Mr. Frischer is the general partner of LFFP.

On April 6, 2018, RAIT, LFFP and Mr. Frischer entered into a cooperation agreement which sets forth certain transfer restrictions and standstill provisions, among other things, for a period of time. Subsequent to entering into the cooperation agreement, on April 6, 2018, LFFP, and Mr. Frischer and RAIT signed a letter agreement which provided that RAIT would exempt LFFP from RAIT’s common share and preferred share ownership limits up to an amount equal to 15.0% with respect to each class of shares.  

On May 11, 2018, RAIT, LFFP and Mr. Frischer entered into a letter agreement which provided that RAIT would exempt LFFP from RAIT’s common share and preferred share ownership limits up to an amount equal to 20.0% with respect to each class of shares.

Highland Capital Management, L.P. 

  

On May 26, 2017, RAIT entered into a previously disclosed cooperation agreement with Highland Capital Management, L.P. and its affiliates (“Highland”), which remains in effect. 

IRT 

  

During 2017, RAIT engaged in transactions with a former related party, Independence Realty Trust, or IRT. RAIT ended its last arrangement with IRT as of December 20, 2017 and does not consider IRT to be a related party after that date. The following are the transactions with IRT for the year ended December 31, 2017: 

  

Pursuant to a shared services agreement, IRT reimbursed RAIT $727 for general and administrative services for the year ended December 31, 2017.  In addition, during the year ended December 31, 2017, IRT reimbursed RAIT for $155 of general and administrative items that were paid on IRT’s behalf. 

  

Pursuant to property management agreements with IRT with respect to RAIT’s multifamily properties, RAIT paid IRT $261 of property management fees for the year ended December 31, 2017.  This is reflected within real estate operating expense in our consolidated statements of operations. 

  

Other 

  

On December 20, 2016, Scott F. Schaeffer resigned from his position as CEO of RAIT and became the full-time CEO of IRT.  On the same date, Mr. Schaeffer entered into a one year consulting agreement with RAIT for which he received compensation of $375.  For the year ended December 31, 2017, $375 was earned and paid related to this consulting agreement, which is reflected in general and administrative 

25

 

----

expenses in our consolidated statements of operations. In accordance with the Memorandum of Understanding dated September 26, 2016, which memorialized the terms of Mr. Schaeffer’s resignation, RAIT granted Mr. Schaeffer 150,000 unvested shares of common stock on December 23, 2016, and made a $500 cash payment in January 2017.  The shares vested 50% on the six month anniversary and 50% on the one year anniversary of the grant date. 

  

Effective March 31, 2017, James J. Sebra resigned from his position as CFO and Treasurer of RAIT and became the full-time CFO of IRT. In accordance with the Memorandum of Understanding dated September 26, 2016, which memorialized the terms of Mr. Sebra’s resignation, he was owed a cash bonus, payable in 2017, equal to 25% of his cash bonus for the year ended December 31, 2016.  During the year ended December 31, 2017, this bonus of $110 was paid. 

 

Trustee Independence

RAIT’s trust governance guidelines (the “Trust Governance Guidelines”) provide that, at all times, a majority of the Board must be comprised of persons who shall be independent within the meaning of the Independence Standards (the “Independence Standards”) set forth in the Trust Governance Guidelines.  The Trust Governance Guidelines are available on our website at http://www.rait.com.  Among the requirements in our Independence Standards is the requirement that the Trustee must meet all applicable requirements for independence under the listing standards of the primary exchange on which the Common Shares trade and that the Trustee must be an independent Trustee as that term is defined in our declaration of trust.   While RAIT’s securities are not currently listed on any national securities exchange since RAIT’s securities were delisted from the NYSE in December 2018, the Board, upon the recommendation of the Nominating Committee, has determined to continue to require Trustees to meet the NYSE definition of independence for the Board to consider them to be an independent Trustee and to require Trustees serving on any committee of the Board to meet any NYSE independence standards relevant to service on such committee of the Board. 

SEC disclosure rules require disclosure of each independent Trustee nominee as well as any independent Trustee who served on the Board during any part of 2018.  The Board has determined that Mr. Malter, Mr. Klein, Mr. Sarkisian and Mr. Wren each satisfy the Independence Standards, including the requirements for independence set out in Section 303A.02 of the rules of the NYSE, and that each of these Trustees has no material relationships with RAIT (other than being a Trustee and/or a shareholder of RAIT).  Also, the Board determined that each of Frank A. Farnesi, S. Kristin Kim, Nancy Jo Kuenstner and Murray Stempel, III, former Trustees on the Board whose terms of service on the Board ended at the Annual Meeting, satisfied these Independence Standards when they served on the Board.  At all times during the periods referenced in this Amendment, the Board has had a majority of Trustees who satisfied these Independence Standards and each member of our Board’s Audit Committee, Compensation Committee and Nominating Committee was determined to satisfy these Independence Standards (including the relevant NYSE independence standards) during their period of service on the relevant committee.  

As set forth in our Trust Governance Guidelines and in accordance with NYSE listing standards, the non-employee Trustees meet in executive session quarterly without management and the independent Trustees meet in executive session at least annually. The Chairman of the Board, Mr. Malter, presides at these executive sessions. 

 

26

 

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

Audit Fees 

The following table presents the aggregate fees billed by KPMG for each of the services listed below for each of our last two fiscal years. 

 

|                   | 2018   |      |   | 2017   |   |
|------------------------|--------|-----------|--------|--------|--------|
| Audit Fees (1)         | $      | 1,200,000 |   |   | $      | 1,530,000 |   |
| Audit-Related Fees (2) |   | 50,000    |   |   |   | 300,205 |   |
| Tax Fees (3)           |   | 161,500   |   |   |   | 215,000 |   |
| All Other Fees (4)     |   | 3,560     |   |   |   | 3,560 |   |
|   Total      | $      | 1,415,060 |   |   | $      | 2,048,765 |   |

|   | (1) | Audit fees consist of the aggregate fees billed for professional services rendered by KPMG in connection with its audit of our consolidated financial statements, audit of internal controls relating to Section 404 of the Sarbanes-Oxley Act, and reviews of the unaudited consolidated interim financial statements that are normally provided in connection with statutory and regulatory filings or engagements for these fiscal years. Audit fees for 2017 include fees of $50,000 associated with the registration and/or issuance of our securities during that year.  Audit fees for 2018 do not include any fees for the audit of internal controls relating to Section 404 of the Sarbanes-Oxley Act because such an audit was no longer required because of RAIT’s status as a non-accelerated filer as of December 31, 2018. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Audit-related fees consist of the aggregate fees billed for assurance and related services rendered by KPMG that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not disclosed under “Audit Fees” above. These services consisted primarily of carrying out securitization agreed upon procedures. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Tax fees consist of the aggregate fees billed for professional services rendered by KPMG for tax, compliance, tax advice, and planning. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | All other fees consist of the aggregate fees billed for products and services provided by KPMG other than the services described under audit fees, audit-related fees and tax fees, which includes two subscriptions to KPMG's Accounting Research Online in 2018. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Exchange Act rules generally require any engagement by a public company of an accountant to provide audit or non-audit services to be pre-approved by the Audit Committee of that public company. This pre-approval requirement is waived with respect to the provision of services other than audit, review or attest services if certain conditions set forth in Rule 2-01(c)(7)(i)(C) under the Exchange Act are met. All of the audit and audit- related services described above were pre-approved by the Audit Committee and, as a consequence, such services were not provided pursuant to a waiver of the pre-approval requirement set forth in this Rule. The Audit Committee has adopted the following audit and non-audit services pre-approval guidelines: 

GUIDELINES OF RAIT FINANCIAL TRUST AUDIT COMMITTEE 

FOR PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES 

The Audit Committee (the “Committee”) of RAIT Financial Trust (“RAIT”) has adopted the following guidelines regarding the engagement of RAIT’s independent auditor to perform services for RAIT: 

For audit services, the independent auditor will provide the Committee with an engagement letter with respect to any fiscal year sufficiently in advance of the fourth quarterly meeting of the Committee immediately preceding the end of that fiscal year, if practicable, and otherwise by the first quarterly meeting of the Committee in the following fiscal year outlining the scope of the audit services proposed to be performed relating to the fiscal year to be audited, together with a fee proposal which may include a range of fees. If agreed to by the Committee, this engagement letter and associated fee(s) will be formally accepted by the Committee at or before either its fourth or first quarterly Committee meeting. 

For non-audit services, RAIT management will submit to the Committee for approval any non-audit services that it recommends the Committee engage the independent auditor to provide for any fiscal year. RAIT management and the independent auditor will each confirm to the Committee that any non-audit service so submitted is permissible under all applicable legal requirements. In addition to these planned non-audit services, a budget estimating the expense of any such non-audit service for that fiscal year will be provided. The Committee will approve both the permissible non-audit services and the budget for such services. The Committee will be informed routinely as to the non-audit services actually provided by the independent auditor pursuant to this pre-approval process. 

To ensure prompt handling of unexpected matters, the Committee delegates to its Chairman or, if the Chairman is not reasonably available, any other member of the Committee, the authority to amend or modify the list of approved permissible non-audit services and fees. The Chairman or such other member, as the case may be, will report action taken to the Committee at the next Committee meeting. 

The independent auditor must ensure that all audit and non-audit services provided to RAIT have been approved by the Committee. The Chief Financial Officer will be responsible for tracking all independent auditor fees against the budget for such services and report at least quarterly to the Audit Committee. 

27

 

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PART IV

 

 

| Item 15. | Exhibits, Financial Statement Schedules |
|---------------|-----------------------------------------|

|   | (a) | The following documents are filed as part of this report. |
|--------|-----|-----------------------------------------------------------|

 

|                                                                                                                       |                                                                                                                                     |        |  |  |  |
|-----------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|--------|--|--|--|
|      (1)                                                                                     | FinancialStatements

See Index to the Consolidated Financial Statements and Supplementary Data in Item 8 of the Original Form 10-K. |        |  |
|   

Supplemental Schedules:                                                                                 |                                                                                                                                |   |
| Schedule II: Valuation and Qualifying Accounts. Previously filed with Original Form 10-K                              |                                                                                                                                |   |
| Schedule III: Real Estate and Accumulated Depreciation. Previously filed with Original Form 10-K                      |                                                                                                                                |   |
| Schedule IV: Mortgage Loans on Real Estate and Mortgage Related Receivables. Previously filed with Original Form 10-K |                                                                                                                                |   |

 

All other schedules are not applicable or are omitted since either (i) the required information is not material or (ii) the information required is included in the consolidated financial statements and notes thereto in the Original Form 10-K.

(2) Exhibits

The Exhibits filed as part of this Amendment are identified below.

28

 

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|                   |              |                                                                                                                                                                                                                                                                                                                                                    |
|-------------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |              |                                                                                                                                                                                                                                                                                                                                                    |
| Exhibit

Number   |         | Description of Documents                                                                                                                                                                                                                                                                                                                           |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.1             |    | Amended and Restated Declaration of Trust of RAIT Financial Trust (“RAIT”). Incorporated by reference to Exhibit 3.1(b) to RAIT’s Registration Statement on Form S-11 as filed with the Securities and Exchange Commission (“SEC”) on September 8, 1997 (Registration No. 333-35077).                           |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.2             |    | Articles of Amendment to Amended and Restated Declaration of Trust of RAIT. Incorporated by reference to Exhibit 3.3.1 to RAIT’s Registration Statement on Form S-11/A as filed with the SEC on June 8, 1998 (Registration No. 333-53067).                                                                                                   |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.3             |    | Articles of Amendment to Amended and Restated Declaration of Trust of RAIT. Incorporated by reference to Exhibit 4(iii) to RAIT’s Registration Statement on Form S-2 as filed with the SEC on February 13, 2001 (Registration No. 333-55518).                                                                                                |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.4             |    | Certificate of Correction to the Amended and Restated Declaration of Trust of RAIT. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2002 (File No. 1-14760).                                                                                                                                          |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.5             |    | Articles of Amendment to Amended and Restated Declaration of Trust of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 15, 2006 (File No. 1-14760).                                                                                                                                                      |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.6             |    | Articles of Amendment to Amended and Restated Declaration of Trust of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on July 1, 2011 (File No. 1-14760).                                                                                                                                                           |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.7   |    | Articles Supplementary (the “Series A Articles Supplementary”) relating to the 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest (the “Series A Preferred Shares”) of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on March 18, 2004 (File No. 1-14760). |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.8             |    | Certificate of Correction to the Series A Articles Supplementary. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on March 18, 2004 (File No. 1-14760).                                                                                                                                                                   |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.9             |    | Articles Supplementary relating to the 8.375% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest, (the “Series B Preferred Shares”) of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 1, 2004 (File No. 1-14760).                                                       |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.10            |    | Articles Supplementary relating to the 8.875% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest, (the “Series C Preferred Shares”) of RAIT. Incorporated by reference to RAIT’s Form 8-A as filed with the SEC on June 29, 2007 (File No. 1-14760).                                                         |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.11            |    | Articles Supplementary relating to Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on May 25, 2012 (File No. 1-14760).                                                                                                                |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.12            |    | Certificate of Correction relating to Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended June 30, 2012 (File No. 1-14760).                                                                                                     |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.13            |    | Articles Supplementary (the “Series D Articles Supplementary”) relating to the Series D Cumulative Redeemable Preferred Shares of Beneficial Interest (the “Series D Preferred Shares”) of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 4, 2012 (File No. 1-14760). |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.14            |    | Articles Supplementary relating to the Series E Cumulative Redeemable Preferred Shares of Beneficial Interest (the “Series E Preferred Shares”) of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 4, 2012 (File No.1-14760).                                                               |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.15            |    | Amendment dated November 30, 2012 to the Series D Articles Supplementary. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 4, 2012 (File No.1-14760).                                                                                                                                                          |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.16            |    | Articles Supplementary relating to the Series A Preferred Shares. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 13, 2014 (File No. 1-14760).                                                                                                                                                     |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.17            |         | Articles Supplementary dated June 27, 2018. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 28, 2018 (File No. 1-14760).                                                                                                                                                                                |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.1.18            |         | Articles of Amendment to Amended and Restated Declaration of Trust of RAIT dated August 6, 2018. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended June 30, 2018. (File No. 1-14760).                                                                                                                             |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.2.1             |         | Amended and Restated Bylaws of RAIT, as adopted on November 16, 2016. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 17, 2016 (File No. 1-14760).                                                                                                                                                            |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.2.2             |         | First Amendment to the Amended and Restated Bylaws of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 28, 2017 (File No. 1-14760).                                                                                                                                                                          |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 3.2.3             |         | Second Amendment to the Amended and Restated Bylaws of RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on August 8, 2017 (File No. 1-14760).                                                                                                                                                                        |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.1.1             |    | Form of Certificate for Common Shares of Beneficial Interest. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on July 1, 2011 (File No. 1-14760).                                                                                                                                                                         |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.1.2             |    | Form of Certificate for the Series A Preferred Shares. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on March 22, 2004 (File No. 1-14760).                                                                                                                                                                              |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.1.3             |    | Form of Certificate for the Series B Preferred Shares. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 1, 2004 (File No. 1-14760).                                                                                                                                                                             |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.1.4             |    | Form of Certificate for the Series C Preferred Shares. Incorporated by reference to RAIT’s Form 8-A as filed with the SEC on June 29, 2007 (File No. 1-14760).                                                                                                                                                                               |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.1.5             |    | Form of Certificate for the Series D Preferred Shares. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 23, 2012 (File No. 1-14760).                                                                                                                                                             |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.1.6             |    | Form of Certificate for the Series E Preferred Shares. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 23, 2012 (File No. 1-14760).                                                                                                                                                                            |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.1.7             |         | Form of Certificate for Common Shares of Beneficial Interest. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on August 13, 2018 (File No. 1-14760).                                                                                                                                                                      |
|              |         |                                                                                                                                                                                                                                                                                                                                               |
| 4.2.1             |    | Base Indenture dated as of December 10, 2013 between RAIT, as issuer, and Wells Fargo Bank, National Association., as trustee. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 13, 2013 (File No. 1-14760).                                                                                              |
|              |         |                                                                                                                                                                                                                                                                                                                                               |

29

 

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|                 |              |                                                                                                                                                                                                                                                                                                                                                                    |
|-----------------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |              |                                                                                                                                                                                                                                                                                                                                                                    |
| Exhibit

Number |         | Description of Documents                                                                                                                                                                                                                                                                                                                                           |
| 4.2.2           |    | Supplemental Indenture dated as of December 10, 2013 between RAIT, as issuer, and Wells Fargo Bank, National Association., as trustee. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 13, 2013 (File No. 1-14760).                                                                                                           |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.2.3           |    | Form of RAIT 4.00% Convertible Senior Note due 2033 (included in Exhibit 4.2.2). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 13, 2013 (File No. 1-14760).                                                                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.3.1           |    | Base Indenture dated as of March 21, 2011 between RAIT, as issuer, and Wells Fargo Bank, National Association., as trustee. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on March 22, 2011 (File No. 1-14760).                                                                                                                         |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.3.2           |    | Supplemental Indenture dated as of March 21, 2011 between RAIT, as issuer, and Wells Fargo Bank, National Association., as trustee. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on March 22, 2011 (File No. 1-14760).                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.4             |    | Indenture dated as of October 5, 2011 between RAIT and Wilmington Trust, National Association, as trustee. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No. 1-14760).                                                                                                                          |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.1           |    | Registration Rights Agreement dated as of October 1, 2012 by and among RAIT and ARS VI Investor I, LP, formerly known as ARS VI Investor I, LLC (“ARS VI”). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 4, 2012 (File No. 1-14760).                                                                       |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.2           |    | Amendment No. 1 to Registration Rights Agreement dated as of April 25, 2014 by and among RAIT and ARS VI. Incorporated by reference to RAIT’s Registration Statement on Form S-3 as filed with the SEC on April 28, 2014 (Registration No. 333-195547).                                                                                            |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.3           |    | Common Share Purchase Warrant No.1 dated October 17, 2012 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 23, 2012 (File No. 1-14760).                                                                                                                                                |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.4           |    | Common Share Appreciation Right No.1 dated October 17, 2012 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 23, 2012 (File No. 1-14760).                                                                                                                                                   |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.5           |    | Common Share Purchase Warrant No. 2 dated November 15, 2012 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 21, 2012 (File No.1-14760).                                                                                                                                                        |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.6           |    | Common Share Appreciation Right No. 2 dated November 15, 2012 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 21, 2012 (File No.1-14760).                                                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.7           |    | Common Share Purchase Warrant No. 3 dated December 18, 2012 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 18, 2012 (File No.1-14760).                                                                                                                                                        |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.8           |    | Common Share Appreciation Right No. 3 dated December 18, 2012 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 18, 2012 (File No.1-14760).                                                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.9           |    | Common Share Purchase Warrant No. 4 dated March 27, 2014 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on March 27, 2014 (File No. 1-14760).                                                                                                                                                   |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.10          |    | Common Share Appreciation Right No. 4 dated March 27, 2014 issued by RAIT to ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on March 27, 2014 (File No. 1-14760).                                                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.11          |         | Put Right Notice dated October 10, 2017 from ARS VI to RAIT. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 17, 2017 (File No. 1-14760).

                                                                                                                                                                               |
| 4.5.12          |         | Extension Agreement dated as of March 12, 2018 by and among ARS VI, RAIT, RAIT Partnership, L.P. (“RAIT Partnership”), Taberna Realty Finance Trust, (“TRFT”) and RAIT Asset Holdings IV, LLC (“RAIT IV”). Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2017 (File No. 1-14760). |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.13          |         | Letter Agreement dated as of June 8, 2018 by and among ARS VI, RAIT, RAIT Partnership, TRFT, and RAIT IV. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 8, 2018 (File No. 1-14760).

                                                                                                                            |
| 4.5.14          |         | Consent and Acknowledgment dated as of June 12, 2018 by and among ARS VI, RAIT, RAIT Partnership, TRFT and RAIT IV. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 13, 2018 (File No. 1-14760).                                                                                                                   |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.15          |         | Redemption and Exchange Agreement dated as of June 27, 2018 among RAIT, RAIT IV and ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 28, 2018 (File No. 1-14760).                                                                                                                                                |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.5.16          |         | Termination Agreement dated as of June 27, 2018 among RAIT, RAIT Partnership, TRFT, RAIT IV and ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 28, 2018 (File No. 1-14760).                                                                                                                                    |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.6.1           |         | Base Indenture dated as of December 10, 2013 between RAIT, as issuer, and Wells Fargo Bank, National Association., as trustee. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 13, 2013 (File No. 1-14760).                                                                                                              |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.6.2           |    | Supplemental Indenture dated as of December 10, 2013 between RAIT, as issuer, and Wells Fargo Bank, National Association., as trustee. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 13, 2013 (File No. 1-14760).                                                                                                      |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.6.3           |    | Form of RAIT 4.00% Convertible Senior Note due 2033 (included in Exhibit 4.6.2). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 13, 2013 (File No. 1-14760).                                                                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.6.4           |    | Second Supplemental Indenture, dated as of April 14, 2014, between RAIT, as issuer, and Wells Fargo Bank, National Association, as trustee. Incorporated by reference to RAIT’s Form 8-A as filed with the SEC on April 14, 2014. (File No. 1-14760).                                                                                              |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |
| 4.6.5           |    | Form of 7.625% Senior Notes due 2024 (included as Exhibit A to Exhibit 4.6.4 hereto).                                                                                                                                                                                                                                                                              |
|            |         |                                                                                                                                                                                                                                                                                                                                                               |

30

 

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|                 |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Exhibit

Number |         | Description of Documents                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.6.6           |    | Third Supplemental Indenture, dated as of August 14, 2014, between RAIT, as Issuer, and Wells Fargo Bank, National Association, as trustee. Incorporated by reference to RAIT’s Form 8-A as filed with the SEC on August 14, 2014.                                                                                                                                                                                                          |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.6.7           |    | Form of 7.125% Senior Notes due 2019 (included as Exhibit A to Exhibit 4.6.6 hereto). 

                                                                                                                                                                                                                                                                                                                                                                         |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.7             |         | Indenture, dated as of June 23,  2017 among RAIT 2017-FL7 Trust, as issuer, RAIT Partnership, as advancing agent, and Wells Fargo Bank, National Association, as trustee, paying agent, calculation agent, transfer agent, custodian, backup advancing agent and note registrar. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2018 (File No. 1-14760).                                                        |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.8             |         | Indenture, dated as of November 29, 2017 among RAIT 2017-FL8 Trust, as issuer, RAIT Partnership, as advancing agent, and Wells Fargo Bank, National Association, as trustee, paying agent, calculation agent, transfer agent, custodian, backup advancing agent and note registrar.  Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2018 (File No. 1-14760).                                                    |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|            |         | Certain Instruments defining the rights of holders of long-term debt securities of the Registrant and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Registrant hereby undertakes to furnish to the SEC, upon request, copies of any such instruments.                                                                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.1          |         | Form of Indemnification Agreement. Incorporated by reference to RAIT’s Registration Statement on Form S-11 (Registration No. 333-35077).                                                                                                                                                                                                                                                                                                                   |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.2          |         | Indemnification Agreement dated as of October 17, 2012 by and among RAIT, RAIT General, Inc. RAIT Limited, Inc. and RAIT Partnership, as the indemnitors, and Andrew M. Silberstein, as the indemnitee. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 23, 2012 (File No. 1-14760).                                                                                                                                              |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.1          |         | Employment Agreement dated April 21, 2017 between RAIT and John J. Reyle. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on April 21, 2017. (File No. 1-14760).                                                                                                                                                                                                                                                                             |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.2          |         | Letter Agreement dated February 27, 2018 between RAIT and John J. Reyle. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                          |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.3          |         | Amended and Restated Employment Agreement dated as of July 19, 2018 between RAIT and John J. Reyle. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on July 20, 2018 (File No. 1-14760).                                                                                                                                                                                                                                 |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3.1          |         | Employment Agreement dated as of November 6, 2017 between RAIT and Alfred J. Dilmore. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended September 30, 2017 as filed with the SEC on November 13, 2017. (File No. 1-14760).                                                                                                                                                                                                           |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3.2          |         | Amended and Restated Employment Agreement dated as of July 19, 2018 between RAIT and Alfred J. Dilmore. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on July 20, 2018 (File No. 1-14760).                                                                                                                                                                                                                                  |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4.1          |         | Employment Agreement dated as of January 29, 2014 between RAIT and Scott L.N. Davidson. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on February 4, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                    |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4.2          |         | Binding Memorandum of Understanding, dated September 26, 2016, by and between RAIT and Scott L. N. Davidson.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on September 27, 2016 (File No. 1-14760).                                                                                                                                                                                                                                      |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4.3          |         | Employment Agreement dated November 1, 2016 between RAIT and Scott L. N. Davidson.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 7, 2016 (File No. 1-14760).                                                                                                                                                                                                                                                        |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4.4          |         | Separation Agreement dated as of February 27, 2018 between RAIT and Scott L.N. Davidson. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                          |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4.5          |         | Settlement Agreement and General Release signed December  21, 2018 by and between claimant Scott Davidson and respondents RAIT Financial Trust, Michael Malter, Frank A. Farnesi, Justin P. Klein, Jon C. Sarkisian, Murray Stempel  III, Andrew M. Batinovich, S. Kristin Kim, Nancy Jo Kuenstner, Andrew M. Silberstein and Thomas Wren Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 28, 2018 (File No. 1-14760). |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5.1          |         | Offer Letter dated February 17, 2017 between RAIT and Paul W. Kopsky, Jr.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on February 21, 2017. (File No. 1-14760).                                                                                                                                                                                                                                                               |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5.2          |         | Employment Agreement dated February 17, 2017 between RAIT and Paul W. Kopsky, Jr. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on February 21, 2017. (File No. 1-14760).                                                                                                                                                                                                                                                                  |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5.3          |         | Settlement Agreement and General Release by and between Paul W. Kopsky, Jr. and RAIT dated September 27, 2017. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on September 27, 2017 (File No. 1-14760).                                                                                                                                                                                                                                     |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6.1          |         | RAIT Phantom Share Plan (As Amended and Restated, Effective July 20, 2004) (the “PSP”). Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended June 30, 2004 (File No. 1-14760).                                                                                                                                                                                                                                    |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6.2          |         | RAIT 2008 Incentive Award Plan, as Amended and Restated May 20, 2008 Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on May 27, 2008 (File No. 1-14760).                                                                                                                                                                                                                                                                      |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6.3          |         | RAIT 2012 Incentive Award Plan, as Amended and Restated May 22, 2012, (as subsequently amended, the “IAP”). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on May 25, 2012 (File No. 1-14760).                                                                                                                                                                                                                        |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6.4          |         | IAP Form of Share Appreciation Rights Award Agreement adopted January 24, 2012. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on January 26, 2012 (File No.1-14760).                                                                                                                                                                                                                                                                       |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6.5          |         | IAP Form of Share Appreciation Rights Award Agreement adopted January 29, 2013. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on February 1, 2013. (File No. 1-14760).                                                                                                                                                                                                                                                                     |
|            |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

31

 

----

|                 |        |                                                                                                                                                                                                                                                                                                                                        |
|-----------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |        |                                                                                                                                                                                                                                                                                                                                        |
| Exhibit

Number |   | Description of Documents                                                                                                                                                                                                                                                                                                               |
| 10.6.6          |   | IAP Form of Share Award Grant Agreement for participants other than non-management trustees adopted January 29, 2013. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on February 1, 2013. (File No. 1-14760).                                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.7          |   | IAP Form of Share Award Grant Agreement for non-management trustees adopted January 29, 2013.Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2012 (File No. 1-14760).                                                                                                                       |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.8          |   | IAP Form of Share Award Grant Agreement for non-management trustees adopted January 29, 2014. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2013 (File No. 1-14760).                                                                                                       |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.9          |   | RAIT 2015 Annual Incentive Compensation Plan Form of Target Cash Bonus Award Grant Agreement adopted under the IAP. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2015 (File No. 1-14760).                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.10         |   | RAIT 2015 Long Term Incentive Plan Form of Performance Share Unit Award Grant Agreement adopted under the IAP. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2015 (File No. 1-14760).                                                                                                   |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.11         |   | Terms of 2015 Annual Incentive Compensation Plan (the “2015 AICP”) and the 2015 Long Term Incentive Plan (the “2015 LTIP”) and the 2015 awards made thereunder adopted under the IAP.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on April 6, 2016 (File No. 1-14760). |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.12         |   | Terms of the 2015 AICP and the 2015 LTIP and the 2016 LTIP and the 2016 awards made thereunder adopted under the IAP.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on April 28, 2016 (File No. 1-14760).                                                                                        |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.13         |   | RAIT 2016 Annual Incentive Compensation Plan Form of Target Cash Bonus Award Grant Agreement adopted under the IAP.  Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended June 30, 2016 (File No. 1-14760).                                                                                    |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.14         |   | RAIT 2016 Long Term Incentive Plan Form of Performance Share Unit Award Grant Agreement adopted under the IAP.  Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended June 30, 2016 (File No. 1-14760).                                                                                         |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.15         |   | Amendment 2016-1 to RAIT 2015 Long Term Incentive Plan Form of Performance Share Unit Award Grant Agreement adopted under the IAP.  Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended June 30, 2016 (File No. 1-14760).                                                                     |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.16         |   | Share Award Grant Agreement dated as of May 23, 2016 from RAIT to Scott L. N. Davidson under the terms of the RAIT 2012 Incentive Award Plan.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on May 25, 2016 (File No. 1-14760).                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.17         |   | Share Award Grant Agreement, dated December 23, 2016, by and between RAIT and Scott L. N. Davidson.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 30, 2016 (File No. 1-14760).                                                                                                       |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.18         |   | Share Award Grant Agreement, dated December 23, 2016, by and between RAIT and Scott F. Schaeffer.  Incorporated by reference to RAIT’s Form 8-K as filed with the Sec on December 30, 2016 (File No. 1-14760).                                                                                                         |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.19         |   | Share Award Grant Agreement, dated January 9, 2017, by and between RAIT and Scott L. N. Davidson. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2016 (File No. 1-14760).                                                                                                        |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.20         |   | Form of Share Appreciation Rights Award Agreement adopted under the IAP on February 14, 2017. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on February 21, 2017. (File No. 1-14760).                                                                                                                       |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.21         |   | Form of Share Award Grant Agreement for participants other than non-management trustees adopted under the IAP on February 14, 2017. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on February 21, 2017. (File No. 1-14760).                                                                                 |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.22         |   | RAIT 2017 Incentive Award Plan, as Amended and Restated June 22, 2017. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 28, 2017 (File No. 1-14760).                                                                                                                                                   |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.23         |   | RAIT 2017 Long Term Incentive Plan Form of Performance Share Unit Award Grant Agreement adopted April 26, 2017 under the IAP. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended June 30, 2017 as filed with the SEC on August 9, 2017 (File No. 1-14760).                                             |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.24         |   | Form of Share Award Grant Agreement for executive officers adopted under the IAP on April 26, 2017. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended June 30, 2017 as filed with the SEC on August 9, 2017 (File No. 1-14760).                                                                       |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.25         |   | RAIT 2017 Annual Incentive Compensation Plan Form of Target Cash Bonus Award Grant Agreement adopted under the IAP on April 26, 2017. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended June 30, 2017 as filed with the SEC on August 9, 2017 (File No. 1-14760).                                     |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.26         |   | IAP Form of Share Award Grant Agreement for non-management trustees adopted June 28, 2017. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended June 30, 2017 as filed with the SEC on August 9, 2017 (File No. 1-14760).                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.27         |   | IAP Form of Share Award Grant Agreement for Chairman of the Board of Trustees adopted June 28, 2017. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended June 30, 2017 as filed with the SEC on August 9, 2017 (File No. 1-14760).                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.6.28         |   | IAP Notice of Amendment of Outstanding Grants under the IAP adopted June 28, 2017. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended June 30, 2017 as filed with the SEC on August 9, 2017 (File No. 1-14760).                                                                                        |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.7.1          |   | Securities and Asset Purchase Agreement among RAIT, Jupiter Communities, LLC, RAIT TRS, LLC, the RAIT selling stockholders named therein, IRT and IROP dated September 27, 2016.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on September 27, 2016 (File No. 1-14760).                         |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.7.2          |   | Shared Services Agreement, dated December 20, 2016, by and among Independence Realty Trust, Inc. and RAIT.  Incorporated by reference to RAIT’s Form 8-K as filed with the Sec on December 20, 2016 (File No. 1-14760).                                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                   |
| 10.8.1          |   | Exchange Agreement dated as of October 5, 2011 by and among RAIT and Taberna Preferred Funding VIII, Ltd. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No.1-14760).                                                                                                     |
|            |   |                                                                                                                                                                                                                                                                                                                                   |

32

 

----

|                 |        |                                                                                                                                                                                                                                                                                                                                                                                             |
|-----------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |        |                                                                                                                                                                                                                                                                                                                                                                                             |
| Exhibit

Number |   | Description of Documents                                                                                                                                                                                                                                                                                                                                                                    |
| 10.8.2          |   | 6.75% Senior Secured Note No. 1 due 2017 dated as of October 5, 2011 made by RAIT, as payor, to Hare & Co., as nominee payee. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No.1-14760).                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.8.3          |   | 6.85% Senior Secured Note No. 2 due 2017 dated as of October 5, 2011 made by RAIT, as payor, to Hare & Co., as nominee payee. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No.1-14760).                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.8.4          |   | 7.15% Senior Secured Note No. 3 due 2018 dated as of October 5, 2011 made by RAIT, as payor, to Hare & Co., as nominee payee. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No.1-14760).                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.8.5          |   | 7.25% Senior Secured Note No. 4 due 2019 dated as of October 5, 2011 made by RAIT, as payor, to Hare & Co., as nominee payee. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No.1-14760).                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.1          |   | Master Repurchase Agreement (the “Citi MRA”) dated as of October 27, 2011, by and among RAIT CMBS Conduit I, LLC (“Seller I”) and Citibank, N.A. (“Citibank”) Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No.1-14760).                                                             |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.2          |   | Guaranty dated October 27, 2011 by RAIT, as guarantor, for the benefit of Citibank. Incorporated by reference to RAIT’s Form 10-Q for the quarterly period ended September 30, 2011 (File No.1-14760).                                                                                                                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.3          |   | First Amendment to Master Repurchase Agreement and other transaction documents dated as of June 30, 2013 among Seller, Citibank and RAIT. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2014 (File No. 1-14760).                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.4          |   | Second Amendment dated as of October 11, 2013 among Citibank, Seller I and RAIT to Master Repurchase Agreement dated as of October 27, 2011.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 18, 2013. (File No. 1-14760).                                                                                                                   |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.5          |   | Third Amendment to Master Repurchase Agreement dated as of December 9, 2013 among Seller I, Citibank and RAIT. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2014 (File No. 1-14760).                                                                                                                                         |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.6          |   | Amended and Restated Master Repurchase Agreement dated as of July 28, 2014 by and among Seller I, RAIT CRE Conduit III, LLC (“Seller III”), collectively as seller, and Citibank, as buyer. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on August 1, 2014 (File No. 1-14760).                                                       |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.7          |   | Guaranty dated July 28, 2014 by RAIT, as guarantor, for the benefit of Citibank. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on August 1, 2014 (File No. 1-14760).                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.8          |   | First Amendment dated December 12, 2014 to the Amended and Restated Guaranty dated as of July 28, 2014 made by RAIT, as guarantor, in favor of Citibank. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 18, 2014 (File No.1-14760).                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.9          |   | First Amendment dated as of September 28, 2015 among Seller I and Seller III, RAIT (to reaffirm its guaranty of the Citi MRA) and Citibank to the Amended and Restated Master Repurchase Agreement, dated as of July 28, 2014 among Seller I, Seller III and Citibank. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 2, 2015 (File No. 1-14760).      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.10         |   | Second Amendment dated as of July 28, 2016 among Seller I and Seller III, RAIT (to reaffirm its guaranty of the Citi MRA) and Citibank to the Amended and Restated Master Repurchase Agreement, dated as of July 28, 2014 among Seller I, Seller III and Citibank.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on July 29, 2016 (File No. 1-14760). |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.9.11         |   | Second Amendment dated as of June 29, 2017 to the Amended and Restated Guaranty dated as of July 28, 2014 made by RAIT, as guarantor, in favor of Citibank, acknowledged and agreed to by Seller I and Seller III. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 30, 2017 (File No. 1-14760).                                                            |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.1         |   | Master Repurchase Agreement, dated as of November 23, 2011, among RAIT CMBS Conduit II, LLC (“Seller II”) and Barclays Bank PLC (“Barclays”). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 25, 2011 (File No.1-14760).                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.2         |   | Guaranty Agreement, dated as of November 23, 2011, of RAIT in favor of Barclays. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 25, 2011 (File No.1-14760).                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.3         |   | Notice dated November 28, 2012 from Seller II to Barclays. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 4, 2012 (File No.1-14760).                                                                                                                                                                                                             |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.4         |   | First Amendment to Master Repurchase Agreement dated as of December 27, 2011 between Barclays and Seller II. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2014 (File No. 1-14760).                                                                                                                                           |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.5         |   | Second Amendment to Master Repurchase Agreement dated as of February 16, 2012 between Barclays and Seller II. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2014 (File No. 1-14760).                                                                                                                                     |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.6         |   | First Omnibus Amendment dated as of June 30, 2013 to Master Repurchase Agreement dated as of December 27, 2011 and other transaction documents among Seller II, Barclays and RAIT.  Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2014 (File No. 1-14760).                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.7         |   | Third Amendment dated December 12, 2014 but effective as of November 19, 2014 to Master Repurchase Agreement dated as of November 23, 2011, as amended, between Barclays, as purchaser, and Seller II, as seller. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 18, 2014 (File No.1-14760).                                                          |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.8         |   | Second Amendment dated December 12, 2014 but effective as of November 19, 2014 to the Guaranty dated as of November 23, 2011, as amended, made by RAIT, as guarantor, in favor of Barclays. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 18, 2014 (File No.1-14760).                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.9         |   | Second Omnibus Amendment to Master Repurchase Agreement and Other Transaction Documents dated December 28, 2016 but effective as of November 16, 2016 among Seller II, as seller, Barclays, as purchaser, and RAIT, as guarantor.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 30, 2016 (File No. 1-14760).                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.10.10        |   | Third Amendment to Guaranty dated June 26, 2017 among Barclays, as purchaser, and RAIT, as guarantor.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 30, 2017 (File No. 1-14760).                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                        |

33

 

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|                 |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Exhibit

Number |   | Description of Documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.11.1         |   | Non-Executive Chairman Agreement dated as of February 27, 2018 between RAIT and Michael J. Malter. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.11.2         |   | Amended and Restated Non-Executive Chairman Agreement dated as of July 19, 2018 between RAIT and Michael J. Malter. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on July 20, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                 |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.1         |   | Master Repurchase Agreement dated as of January 24, 2014 among RAIT CRE Conduit II, LLC (“Seller CRE II”), as seller, RAIT, as guarantor, and UBS Real Estate Securities Inc. (“UBS”), as buyer. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on January 31, 2014 (File No. 1-14760).                                                                                                                                                                                                                             |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.2         |   | Guaranty Agreement, dated as of January 24, 2014, of RAIT in favor of UBS. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on January 31, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.3         |   | Amendment No. 1 to Master Repurchase Agreement dated as of March 17, 2014 among UBS, Seller CRE II and RAIT. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                     |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.4         |   | Amendment No. 2 to Master Repurchase Agreement dated as of March 27, 2014 among UBS, Seller CRE II and RAIT. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                     |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.5         |   | Amendment No. 3, dated as of September 28, 2015 among Seller CRE II, RAIT (as guarantor under the UBS MRA ) and UBS to the Master Repurchase Agreement dated as of January 24, 2014 among Seller CRE II, RAIT and UBS (the “UBS MRA”). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 2, 2015 (File No. 1-14760).                                                                                                                                                                                                    |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.6         |   | Amendment No. 4, dated as of November 13, 2015 among Seller CRE II, RAIT (as guarantor under the UBS MRA) and UBS, as buyer, under the Master Repurchase Agreement dated as of January 24, 2014 among Seller CRE II, RAIT and UBS (the “UBS MRA”). Incorporatedby referencetoRAIT’s Form8-K as filedwiththeSECon November 16, 2015 (FileNo. 1-14760).                                                                                                                                                                                               |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.7         |   | Amendment No. 5 dated as of December 23, 2015 among Seller CRE II under the UBS MRA ), RAIT, as guarantor under the UBS MRA) and UBS as buyer under the Master Repurchase Agreement dated as of January 24, 2014 among Seller CRE II, RAIT and UBS (the “UBS MRA”). Incorporatedby referencetoRAIT’s Form8-K as filedwiththeSECon December 23, 2015 (FileNo. 1-14760).                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.8         |   | Assignment and Amendment No. 6 to Master Repurchase Agreement and Assignment and Amendment No. 4 to Pricing Letter, dated October 20, 2016 among Seller CRE II, as seller, UBS, as assignor, UBS AG, as assignee, and RAIT, as guarantor.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 24, 2016 (File No. 1-14760).                                                                                                                                                                                                 |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.9         |   | Assignment and Reaffirmation of Guaranty, dated October 20, 2016 among UBS, as assignor, UBS AG, as assignee, and RAIT, as guarantor.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 24, 2016 (File No. 1-14760).                                                                                                                                                                                                                                                                                                     |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12.10        |   | Amendment No. 7 to Master Repurchase Agreement dated as of January 19, 2018 among Seller CRE II, as seller, UBS AG, as buyer, and RAIT, as guarantor. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on January 24, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.13.1         |   | Master Repurchase Agreement dated as of December 23, 2014 between Barclays, as purchaser, and RAIT CRE Conduit IV, LLC. (“Seller IV”), as seller. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 30, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.13.2         |   | Guaranty dated as of December 23, 2014, made by RAIT for the benefit of Barclays. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 30, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                   |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.13.3         |   | First Amendment to Guaranty dated June 26, 2017 among Barclays, as purchaser, and RAIT, as guarantor. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 30, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                   |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.13.4         |   | Omnibus Amendment to Master Repurchase Agreement and Other Transaction Documents dated December 28, 2016 but effective as of December 20, 2016 among Seller IV, as seller, Barclays, as purchaser, and RAIT, as guarantor.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 30, 2016 (File No. 1-14760).                                                                                                                                                                                                               |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.13.5         |   | Second Amendment to Master Repurchase Agreement dated December 18, 2017 among Seller IV , as seller, Barclays, as purchaser, and RAIT, as guarantor. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on December 20, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.14.1         |   | Securities Purchase Agreement dated as of October 1, 2012 by and among RAIT, RAIT Partnership, TRFT, RAIT IV and ARS VI. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 4, 2012 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.14.2         |   | Amendment dated September 30, 2015 effective September 28, 2015 among RAIT, RAIT Partnership, TRFT, and RAIT IV and together with RAIT, RAIT Partnership and TRFT, the “Issuer Parties”) and ARS VI, formerly known as ARS VI Investor I, LLC to the Securities Purchase Agreement dated as of October 1, 2012 by and among the Issuer Parties and the Investor. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 2, 2015 (File No. 1-14760).                                                                          |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.14.3         |   | Securities Repurchase Agreement dated as of November 23, 2016 by and among ARS VI, RAIT, RAIT Partnership, TRFT and RAIT IV.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 30, 2016 (File No. 1-14760).                                                                                                                                                                                                                                                                                                             |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.14.4         |   | Securities Repurchase Agreement dated as of June 22, 2017 by and among ARS VI, RAIT, RAIT Partnership, TRFT, and RAIT IV. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 28, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                               |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.14.5         |   | Extension Agreement dated as of March 12, 2018 by and among ARS VI, RAIT, RAIT Partnership, TRFT, and RAIT IV. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                    |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.15           |   | Purchase and Sale Agreement dated as of June 14, 2018 by and between RAIT IV, as seller, and Melody RE  II, LLC, as purchaser, and, solely as to designated provisions, Land Services USA, Inc., Melody Capital Partners Onshore Credit Fund L.P., Melody Capital Partners FDB Credit Fund LLC, Melody Special Situations Offshore Credit Mini-Master Fund, L.P. and Melody Capital Partners Offshore Credit Mini-Master Fund, L.P. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 15, 2018 (File No. 1-14760). |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.16.1         |   | Employment Agreement dated April 21, 2017 between RAIT and Glenn Riis. Incorporated by reference to RAIT’s Form 10-Q for the Quarterly Period ended March 31, 2017 as filed with the SEC on May 5, 2017. (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                    |

34

 

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|                 |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit

Number |   | Description of Documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.16.2         |   | Separation Agreement dated as of March 13, 2018 and accepted March 14, 2018 between RAIT and Glenn Riis. Incorporated by reference to RAIT’s Form 10-K for the fiscal year ended December 31, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.17           |   | At the Market Issuance Sales Agreement, dated June 13, 2014, by and between RAIT and MLV & Co. LLC. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on June 13, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.18.1         |   | Capital on Demand Sales Agreement dated as of November 21, 2012 between RAIT, RAIT Partnership, L.P. and JonesTrading Institutional Services LLC. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 21, 2012. (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.18.2         |   | Amendment No. 1 dated November 26, 2014 to the Capital on Demand Sales Agreement dated as of November 21, 2012 between RAIT, RAIT Partnership, L.P. and JonesTrading Institutional Services LLC. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on November 26, 2014 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.19           |   | Cooperation Agreement dated May 25, 2017 by and among RAIT and Highland Capital Management, L.P. and each of the other persons set forth on the signature page of the Cooperation Agreement.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on May 26, 2017 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.20.1         |   | Letter dated as of March 30, 2018 from Libby Frischer Family Partnership (“LFFP”) to RAIT and Ledgewood, P.C.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on April 2, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                         |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.20.2         |   | Cooperation Agreement dated as of April 6, 2018 by and among RAIT, LFFP and Charles Frischer (“Mr.  Frischer”).  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on April 9, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.20.3         |   | Letter dated as of April 6, 2018 from LFFP and Mr. Frischer to RAIT and Ledgewood, P.C.  Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on April 9, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.20.4         |   | Letter dated as of May 11, 2018 from the Libby Frischer Family Partnership and Charles Frischer to RAIT and Ledgewood, P.C. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on May 11, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.21.1         |   | Cooperation Agreement dated as of August 13, 2018 by and among RAIT, Pleasant Lake Apartments Limited Partnership, Laughlin Holdings LLC, Ramat Securities Ltd (collectively the “Investors”) and Howard Amster (“Mr. Amster”). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on August 14, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.21.2         |   | Letter Agreement dated as of August 13, 2018 from the Investors and Mr. Amster to RAIT and Ledgewood, P.C. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on August 14, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.22.1         |   | Cooperation Agreement dated as of October 5, 2018 by and among RAIT, Steven D. Lebowitz, Deborah Lebowitz, Paul Lebowitz, Kathryn Lebowitz Silverberg, Lauren Lebowitz Salem, David L. Lebowitz, Andrew S. Lebowitz, Robert Lebowitz, the Lebowitz Family Trust, Lebowitz Family Stock, LLC, Lebowitz RCT, LP and The Steven and Deborah Lebowitz Foundation (collectively the “Investors”). Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 11, 2018 (File No. 1-14760).                                                                                                                                                                 |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.22.2         |   | Letter Agreement dated as of October 5, 2018 from the Investors to RAIT and Ledgewood, P.C. Incorporated by reference to RAIT’s Form 8-K as filed with the SEC on October 11, 2018 (File No. 1-14760).                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 21.1            |   | List of Subsidiaries. Previously filed with Original Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 23.1            |   | Consent of KPMG LLP. Previously filed with Original Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.1            |   | Rule 13a-14(a) Certification by the Chief Executive Officer of RAIT. Previously filed with Original Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.2            |   | Rule 13a-14(a) Certification by the Chief Financial Officer of RAIT. Previously filed with Original Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.3            |   | Chief Executive Officer Section 302 Certification. Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.4            |   | Chief Financial Officer Section 302 Certification. Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 32.1            |   | Section 1350 Certification by the Chief Executive Officer of RAIT. Previously filed with Original Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 32.2            |   | Section 1350 Certification by the Chief Financial Officer of RAIT. Previously filed with Original Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 99.1            |   | Material U.S. Federal Income Tax Considerations. Previously filed with Original Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 101             |   | Pursuant to Rule 405 of Regulation S-T, the following financial information from RAIT’s Annual Report on Form 10-K for the period ended December 31, 2018 is formatted in XBRL interactive data files: (i) Consolidated Statements of Operations for the two years ended December 31, 2018; (ii) Consolidated Balance Sheets as of December 31, 2018 and 2017; (iii) Consolidated Statements of Comprehensive Income (Loss) for the two years ended December 31, 2018; (iv) Consolidated Statements of Cash Flows for the two years ended December 31, 2018; and (v) Notes to Consolidated Financial Statements. Previously filed with Original Form 10-K. |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

 

| Item 16. | Form 10-K Summary |
|---------------|-------------------|

 

|  | Not applicable. |
|--|-----------------|

 

35

 

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

 

|   |   | RAIT FINANCIAL TRUST |
|--------|--------|----------------------|
|   |   |                 |
|   | By:    |                 | /s/   John J. Reyle |
|   |   |                 | John J. Reyle Chief Executive Officer, President and General Counsel
  

  |

 

April 30, 2019

 

 

 

 

 

 

 

 

36