Document:

EX-10.3

AMENDMENT 2008-1

TO THE

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT, dated as of December 15, 2008, between RAIT Financial Trust, a Maryland real
estate investment trust, (the “Company”) and Betsy Z. Cohen (“Executive”).

RECITALS

WHEREAS, the Company and Executive previously entered into that certain Amended and Restated
Employment Agreement, dated as of December 11, 2006, (the “Employment Agreement”), which
sets forth the terms and conditions of Executive’s employment with the Company;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to comply with the
requirements of section 409A of the Internal Revenue Code of 1986, as amended and the final
regulations issued thereunder; and

WHEREAS, Section 11.1 of the Employment Agreement provides that the Employment Agreement may
be amended pursuant to a written amendment approved by the Board of Trustees of the Company and
executed by the Company and the Executive.

NOW, THEREFORE, the Company and the Executive hereby agree that, effective December 15, 2008,
the Employment Agreement shall be amended as follows:

1. Section 1.6(b) of the Employment Agreement is hereby amended in its entirety to read as
follows:

“Executive shall continue to be entitled to receive a benefit under the RAIT
Financial Trust Executive Pension Plan (the “Executive Pension Plan”) in accordance
with the terms of the Executive Pension Plan, the terms and conditions of which are
described in such plan document and any amendments thereto.”

2. The first sentence of Section 2.1(a) of the Employment Agreement is hereby amended in its
entirety to read as follows:

“The Company may remove Executive at any time without Cause (as defined in
Section 4) from the position in which Executive is employed hereunder upon not less
than sixty (60) days’ prior written notice to Executive.”

3. The last sentence of Section 2.1(c)(i) of the Employment Agreement is hereby amended in its
entirety to read as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, the
payment described above shall be made within sixty (60) days following Executive’s
last day of employment with the Company, provided Executive executes the Release
during the sixty (60) day period and the revocation period for the Release has
expired without revocation by Executive.”

4. Section 2.1(c)(ii) of the Employment Agreement is hereby amended in its entirety to read as
follows:

“For a period of 18 months following the date of termination, Executive shall
continue to receive the medical coverage in effect at the date of her termination
(or generally comparable coverage) for herself and, where applicable, her spouse and
dependents, at the same premium rates as may be charged from time to time for
employees of the Company generally, as if Executive had continued in employment with
the Company during such period. The COBRA health care continuation coverage period
under section 4980B of the Internal Revenue Code of 1986, as amended (the
“Code”), shall run concurrently with the foregoing 18-month benefit period.”

5. Section 2.1(c)(iii) of the Employment Agreement is hereby amended in its entirety to read
as follows:

“Executive shall also receive any other amounts earned, accrued and owing but not
yet paid under Section 1 above, including a pro rata portion of Executive’s Cash
Bonus. The pro rated Cash Bonus shall be determined by multiplying the Cash Bonus
by a fraction, the numerator of which is the number of days which Executive was
employed by the Company in the fiscal year of her termination of employment pursuant
to Section 2.1(a) and the denominator of which is three hundred and sixty-five
(365). Unless the payment is required to be delayed pursuant to Section 18(b)
below, the payment described above shall be made within sixty (60) days following
Executive’s last day of employment with the Company, provided Executive executes the
Release during the sixty (60) day period and the revocation period for the Release
has expired without revocation by Executive.”

6. The third sentence and subsections (a) and (b) of Section 2.3 of the Employment Agreement
are hereby deleted in their entirety and replaced with the following:

“If the Company terminates Executive’s employment for Disability, Executive shall be
entitled to receive the following: (a) any other amounts earned, accrued and owing
but not yet paid under Section 1 above and any benefits accrued and earned in
accordance with the terms of any applicable benefit plans and programs of the
Company, including, the Company’s long-term disability plan, and (b) a pro rated
Cash Bonus for the year in which Executive’s Disability occurs. The pro rated Cash
Bonus shall be determined as provided in Section 2.1(c)(iii) above and, unless the
payment is required to be delayed pursuant to Section 18(b) below, shall be paid in
a lump sum cash payment to Executive within sixty (60) days following Executive’s
last day of employment with the Company on account of Disability.”

7. Clause (ii) of Section 2.4 of the Employment Agreement is hereby amended in its entirety to
read as follows:

“(ii) a pro rated Cash Bonus for the fiscal year in which Executive’s death occurs,
which pro rated Cash Bonus shall be determined as provided in Section 2.1(c)(iii)
above and, unless the payment is required to be delayed pursuant to Section 18(b)
below, shall be paid in a lump sum cash payment within sixty (60) days following
Executive’s death.”

8. The first sentence of Section 3.2 of the Employment Agreement is hereby amended in its
entirety to as follows:

“Upon or after a Change of Control, the Company (by action of the Board) may remove
Executive at any time without Cause from the position in which Executive is employed
hereunder or Executive may initiate termination of employment by resigning under
this Section 3 for Good Reason (as defined in Section 4) (in either case the
Employment Term shall be deemed to have ended) upon not less than 60 days’ prior
written notice to Executive (or in the case of resignation for Good Reason,
Executive shall give the Company not less than 60 days’ prior written notice of such
resignation).”

9. A new sentence is hereby added to the end of Section 3.3 of the Employment Agreement to
read in its entirety as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, any
additional payment payable to the Executive pursuant to this Section shall be paid
by the Company to the Executive within five (5) days of receipt of the Company’s
accountants’ determination, which such determination shall be made to the Company
within 30 days of any event requiring payment to the Executive hereunder.”

10. Section 18 of the Employment Agreement is hereby amended in its entirety to read as
follows:

“18. Section 409A.

(a) Interpretation. Notwithstanding the other provisions hereof, this
Agreement is intended to comply with the requirements of section 409A of the Code,
to the extent applicable, and this Agreement shall be interpreted to avoid any
penalty sanctions under section 409A of the Code. Accordingly, all provisions
herein, or incorporated by reference, shall be construed and interpreted to comply
with section 409A and, if necessary, any such provision shall be deemed amended to
comply with section 409A of the Code and regulations thereunder. If any payment or
benefit cannot be provided or made at the time specified herein without incurring
sanctions under section 409A of the Code, then such benefit or payment shall be
provided in full at the earliest time thereafter when such sanctions will not be
imposed. For purposes of section 409A of the Code, each payment made under this
Agreement shall be treated as a separate payment. In no event may the Executive,
directly or indirectly, designate the calendar year of payment.

(b) Payment Delay. Notwithstanding any provision to the contrary in
this Agreement, if on the date of the Executive’s termination of employment, the
Executive is a “specified employee” (as such term is defined in section
409A(a)(2)(B)(i) of the Code and its corresponding regulations) as determined by the
Board (or its delegate) in its sole discretion in accordance with its “specified
employee” determination policy, then all cash severance payments payable to the
Executive under this Agreement that are deemed as deferred compensation subject to
the requirements of section 409A of the Code shall be postponed for a period of six
months following the Executive’s “separation from service” with the Company (or any
successor thereto). The postponed amounts shall be paid to the Executive in a lump
sum within thirty (30) days after the date that is six (6) months following the
Executive’s “separation from service” with the Company (or any successor thereto).
If the Executive dies during such six-month period and prior to payment of the
postponed cash amounts hereunder, the amounts delayed on account of section 409A of
the Code shall be paid to the personal representative of the Executive’s estate
within sixty (60) days after Executive’s death. If any of the cash payments payable
pursuant to this Agreement are delayed due to the requirements of section 409A of
the Code, there shall be added to such payments interest during the deferral period
at an annualized rate of interest equal to 5%.

(c) Reimbursements. All reimbursements provided under this Agreement
shall be made or provided in accordance with the requirements of section 409A,
including, where applicable, the requirement that (i) any reimbursement is for
expenses incurred during the Executive’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the taxable year following the
year in which the expense is incurred, and (iv) the right to reimbursement is not
subject to liquidation or exchange for another benefit. Any tax gross up payments
to be made hereunder shall be made not later than the end of the Executive’s taxable
year next following the Executive’s taxable year in which the related taxes are
remitted to the taxing authority.”

11. Exhibit A to the Employment Agreement is hereby deleted in its entirety.

12. In all respects not modified by this Amendment 2008-1, the Employment Agreement is hereby
ratified and confirmed.

[SIGNATURE PAGE FOLLOWS]

1

IN WITNESS WHEREOF, the Company and the Executive agree to the terms of the foregoing
Amendment 2008-1, effective as of the date set forth above.

RAIT FINANCIAL TRUST

By: _/s/ Jack E. Salmon      

Name: Jack E. Salmon

Title: Chief Financial Officer & Treasurer

EXECUTIVE

/s/      Betsy Z. Cohen     

Betsy Z. Cohen

2EX-10.4

AMENDMENT 2008-1

TO THE

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT, dated as of December 15, 2008, between RAIT Financial Trust, a Maryland real
estate investment trust, (the “Company”) and Scott F. Schaeffer (“Executive”).

RECITALS

WHEREAS, the Company and Executive previously entered into that certain Second Amended and
Restated Employment Agreement, dated as of December 11, 2006, (the “Employment Agreement”),
which sets forth the terms and conditions of Executive’s employment with the Company;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to comply with the
requirements of section 409A of the Internal Revenue Code of 1986, as amended and the final
regulations issued thereunder; and

WHEREAS, Section 11.1 of the Employment Agreement provides that the Employment Agreement may
be amended pursuant to a written amendment approved by the Board of Trustees of the Company and
executed by the Company and the Executive.

NOW, THEREFORE, the Company and the Executive hereby agree that, effective December 15, 2008,
the Employment Agreement shall be amended as follows:

1. The first sentence of Section 2.1(a) of the Employment Agreement is hereby amended in its
entirety to read as follows:

“The Company may remove Executive at any time without Cause (as defined in
Section 4) from the position in which Executive is employed hereunder upon not less
than sixty (60) days’ prior written notice to Executive.”

2. The last sentence of Section 2.1(c)(i) of the Employment Agreement is hereby amended in its
entirety to read as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, the
payment described above shall be made within sixty (60) days following Executive’s
last day of employment with the Company, provided Executive executes the Release
during the sixty (60) day period and the revocation period for the Release has
expired without revocation by Executive.”

3. Section 2.1(c)(ii) of the Employment Agreement is hereby amended in its entirety to read as
follows:

“For a period of 18 months following the date of termination, Executive shall
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 rates as may be charged from time to time for
employees of the Company generally, as if Executive had continued in employment with
the Company during such period. The COBRA health care continuation coverage period
under section 4980B of the Internal Revenue Code of 1986, as amended (the
“Code”), shall run concurrently with the foregoing 18-month benefit period.”

4. Section 2.1(c)(iii) of the Employment Agreement is hereby amended in its entirety to read
as follows:

“Executive shall also receive any other amounts earned, accrued and owing but not
yet paid under Section 1 above, including a pro rata portion of Executive’s target
annual cash bonus for the fiscal year of his termination (or, in the absence of a
target bonus opportunity for the fiscal year, 100% of Executive’s Base Salary) (the
“Cash Bonus”). The pro rated Cash Bonus shall be determined by multiplying
the Cash Bonus by a fraction, the numerator of which is the number of days during
which Executive was employed by the Company in the fiscal year of his termination
and the denominator of which is three hundred and sixty-five (365). Unless the
payment is required to be delayed pursuant to Section 18(b) below, the payment
described above shall be made within sixty (60) days following Executive’s last day
of employment with the Company, provided Executive executes the Release during the
sixty (60) day period and the revocation period for the Release has expired without
revocation by Executive.”

5. The last sentence of Section 2.3(a) of the Employment Agreement is hereby amended in its
entirety to read as follows:

“The pro rated Cash Bonus shall be determined as provided in Section 2.1(c)(iii)
above and, unless the payment is required to be delayed pursuant to Section 18(b)
below, shall be paid in a lump sum cash payment to Executive within sixty (60) days
following Executive’s last day of employment with the Company on account of
Disability.”

6. Clause (ii) of Section 2.4 of the Employment Agreement is hereby amended in its entirety to
read as follows:

“(ii) a pro rated Cash Bonus for the fiscal year in which Executive’s death occurs,
which pro rated Cash Bonus shall be determined as provided in Section 2.1(c)(iii)
above and, unless the payment is required to be delayed pursuant to Section 18(b)
below, shall be paid in a lump sum cash payment within sixty (60) days following
Executive’s death.”

7. The first sentence of Section 3.2 of the Employment Agreement is hereby amended in its
entirety to read as follows:

“Upon or after a Change of Control, the Company (by action of the Board) may remove
Executive at any time without Cause from the position in which Executive is employed
hereunder or Executive may initiate termination of employment by resigning under
this Section 3 for Good Reason (as defined in Section 4) (in either case the
Employment Term shall be deemed to have ended) upon not less than sixty (60) days’
prior written notice to Executive (or in the case of resignation for Good Reason,
Executive shall give the Company not less than sixty (60) days’ prior written notice
of such resignation).”

8. A new sentence is hereby added to the end of Section 3.3 of the Employment Agreement to
read in its entirety as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, any
additional payment payable to the Executive pursuant to this Section shall be paid
by the Company to the Executive within five (5) days of receipt of the Company’s
accountants’ determination, which such determination shall be made to the Company
within 30 days of any event requiring payment to the Executive hereunder.”

9. Section 18 of the Employment Agreement is hereby amended in its entirety to read as
follows:

“18. Section 409A.

(a) Interpretation. Notwithstanding the other provisions hereof, this
Agreement is intended to comply with the requirements of section 409A of the Code,
to the extent applicable, and this Agreement shall be interpreted to avoid any
penalty sanctions under section 409A of the Code. Accordingly, all provisions
herein, or incorporated by reference, shall be construed and interpreted to comply
with section 409A and, if necessary, any such provision shall be deemed amended to
comply with section 409A of the Code and regulations thereunder. If any payment or
benefit cannot be provided or made at the time specified herein without incurring
sanctions under section 409A of the Code, then such benefit or payment shall be
provided in full at the earliest time thereafter when such sanctions will not be
imposed. For purposes of section 409A of the Code, each payment made under this
Agreement shall be treated as a separate payment. In no event may the Executive,
directly or indirectly, designate the calendar year of payment.

(b) Payment Delay. Notwithstanding any provision to the contrary in
this Agreement, if on the date of the Executive’s termination of employment, the
Executive is a “specified employee” (as such term is defined in section
409A(a)(2)(B)(i) of the Code and its corresponding regulations) as determined by the
Board (or its delegate) in its sole discretion in accordance with its “specified
employee” determination policy, then all cash severance payments payable to the
Executive under this Agreement that are deemed as deferred compensation subject to
the requirements of section 409A of the Code shall be postponed for a period of six
months following the Executive’s “separation from service” with the Company (or any
successor thereto). The postponed amounts shall be paid to the Executive in a lump
sum within thirty (30) days after the date that is six (6) months following the
Executive’s “separation from service” with the Company (or any successor thereto).
If the Executive dies during such six-month period and prior to payment of the
postponed cash amounts hereunder, the amounts delayed on account of section 409A of
the Code shall be paid to the personal representative of the Executive’s estate
within sixty (60) days after Executive’s death. If any of the cash payments payable
pursuant to this Agreement are delayed due to the requirements of section 409A of
the Code, there shall be added to such payments interest during the deferral period
at an annualized rate of interest equal to 5%.

(c) Reimbursements. All reimbursements provided under this Agreement
shall be made or provided in accordance with the requirements of section 409A,
including, where applicable, the requirement that (i) any reimbursement is for
expenses incurred during the Executive’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the taxable year following the
year in which the expense is incurred, and (iv) the right to reimbursement is not
subject to liquidation or exchange for another benefit. Any tax gross up payments
to be made hereunder shall be made not later than the end of the Executive’s taxable
year next following the Executive’s taxable year in which the related taxes are
remitted to the taxing authority.”

10. In all respects not modified by this Amendment 2008-1, the Employment Agreement is hereby
ratified and confirmed.

[SIGNATURE PAGE FOLLOWS]

1

IN WITNESS WHEREOF, the Company and the Executive agree to the terms of the foregoing
Amendment 2008-1, effective as of the date set forth above.

RAIT FINANCIAL TRUST

By: _/s/ Jack E. Salmon      

Name: Jack E. Salmon

Title: Chief Financial Officer & Treasurer

EXECUTIVE

/s/ Scott F. Schaeffer     

Scott F. Schaeffer

2

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