RAIT Financial Trust (NASDAQ:RAS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02.
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Departure of Directors or Certain Officers; Election of |
In its Current Report on Form 8-K filed on September 27, 2016,
RAIT Financial Trust (RAIT) reported entering into that certain
Securities and Asset Purchase Agreement, dated September 27,
2016, by and among RAIT, RAIT TRS, LLC, Jupiter Communities, LLC,
the RAIT Selling Stockholders (as defined therein), Independence
Realty Trust, Inc. (IRT) and Independence Realty Operating
Partnership, LP (the Purchase Agreement), to which IRT will
complete a management internalization and separation from RAIT
and certain of its affliates (the Internalization). In connection
with the Internalization and the anticipated resignation of Scott
F. Schaeffer as Chief Executive Officer (CEO) of RAIT, and his
subsequent service to RAIT as a consultant, on December 14, 2016,
RAIT and Mr. Schaeffer entered into a separation agreementwhich
provides for his resignation from RAIT, his compensation upon his
resignation and other customary matters (the Schaeffer Separation
Agreement), as well as a consulting agreement which provides the
terms of Mr. Schaeffers service as a consultant to RAIT (the
Schaeffer Consulting Agreement). Each of the Schaeffer Separation
Agreement and the Schaeffer Consulting Agreement becomes
effective as of the Second Closing Date (as defined in the
Purchase Agreement).
The Schaeffer Separation Agreement provides that Mr. Schaeffer
will resign as an employee of RAIT on the Second Closing Date,
and shall cease to be a director, officer, or manager of RAIT and
its subsidiaries and affiliates, as applicable, on such date. to
the Binding Memorandum of Understanding dated September 26, 2016
between Mr. Schaeffer and RAIT, which was reported on RAITs
Current Report on Form 8-K filed on September 27, 2016, all
equity awards granted to Mr. Schaeffer shall continue to vest in
accordance with the applicable vesting schedule, and Mr.
Schaeffer shall remain entitled to dividends and dividend
equivalents on such equity awards. In addition, options and share
appreciation rights may be exercised through the expiration of
their original terms, and performance share unit awards granted
to Mr. Schaeffer in 2015 and 2016 shall continue to time vest and
remain subject to the achievement of relevant performance
metrics. Mr. Schaeffer will continue to be bound by Section 5 of
the Third Amended and Restated Employment Agreement, entered into
as of August 4, 2011 by and between RAIT and Mr. Schaeffer, as
amended (the Schaeffer Employment Agreement), which contains
provisions relating to non-competition, non-solicitation,
intellectual property, developments and confidentiality, except
that RAIT will waive certain restrictions relating to
non-competition and non-solicitation, solely with respect to Mr.
Schaeffers employment with IRT. Mr. Schaeffer will also sign a
general release of RAIT on the Second Closing Date.
The Schaeffer Consulting Agreement provides that Mr. Schaeffer
will provide advisory and consulting services to RAIT and its
subsidiaries as are reasonably requested for a one-year period
beginning on the Second Closing Date. In respect of such
services, Mr. Schaeffer will be paid a fixed sum of $375,000 for
the one year term, and will be reimbursed for all reasonable
out-of-pocket expenses in accordance with RAITs reimbursement
policies. Mr. Schaeffer will continue to be bound by the
intellectual property, development and confidentiality terms of
the Schaeffer Employment Agreement during and after the
consulting term.
On December 14, 2016, in connection with the anticipated
termination of James J. Sebra as Chief Financial Officer (CFO) of
RAIT, RAIT and Mr. Sebra entered into a separation agreement
which provides for Mr. Sebras resignation from RAIT, his
compensation upon his resignation and other customary matters
(the Sebra Separation Agreement).
The Sebra Separation Agreement provides that Mr. Sebra will
remain CFO of RAIT until the later to occur of March 31, 2017, or
the filing of RAITs Annual Report on Form 10-K for the fiscal
year ending December 31, 2016 with the U.S. Securities and
Exchange Commission (the Resignation Date), at which time Mr.
Sebra shall resign as CFO and from any other positions held by
him. If RAIT hires a new CFO prior to the Resignation Date, Mr.
Sebra may resign at any time following such hire in the sole
discretion of RAIT. to the Binding Memorandum of Understanding
dated September 26, 2016 between Mr. Sebra and RAIT, which was
reported on RAITs Current Report on Form 8-K filed on September
27, 2016, in the event that Mr. Sebra remains employed by RAIT
after December 31, 2016, he will receive a fixed cash bonus equal
to a portion of his 2016 cash bonus, which will be prorated for
the period of 2017 that Mr. Sebra is employed by RAIT. In
addition, all equity awards granted to Mr. Sebra shall continue
to vest in accordance with the applicable vesting schedule, and
Mr. Sebra shall remain entitled to dividends and dividend
equivalents on such equity awards. Options and share appreciation
rights may be exercised through the expiration of their original
terms, and performance share unit awards granted to Mr. Sebra in
2015 and 2016 shall continue to time vest and remain subject to
the achievement of relevant performance metrics. Mr. Sebra will
continue to be bound by Section 5 of the Employment Agreement,
entered into as of August 2, 2012 by and between RAIT and Mr.
Sebra, which contains provisions relating to non-competition,
non-solicitation, intellectual property, developments and
confidentiality, except that RAIT will waive certain restrictions
relating to non-competition and non-solicitation, solely with
respect to Mr. Sebras employment with IRT. Mr. Sebra will also
sign a general release of RAIT on the Resignation Date.
The foregoing descriptions of the Schaeffer Separation Agreement,
the Schaeffer Consulting Agreement and the Sebra Separation
Agreement do not purport to be complete and are qualified in
their entirety by reference to the full text of the Schaeffer
Separation Agreement, the Schaeffer Consulting Agreement and the
Sebra Separation Agreement, filed as Exhibit 10.1, Exhibit 10.2
and Exhibit 10.3 hereto, respectively, and each incorporated
herein by reference.
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) |
Exhibits. |
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The exhibits filed as part of this Current Report on Form |
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