RAIT Financial Trust (NYSE:RAS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02.
(b)On February21, 2018, Scott L.N. Davidson, the Chief Executive Officer and President of RAIT Financial Trust, a Maryland real estate investment trust (“RAIT”), to his previously disclosed Employment Agreement with RAIT, dated November1, 2016 (the “SD Employment Agreement”), provided 60 days prior written notice to the Board of Trustees of RAIT (the “Board”) of his intent to resign from his employment with RAIT for “Good Reason” (as defined in the SD Employment Agreement). While RAIT and Mr.Davidson have each reserved their respective rights as to whether “Good Reason” exists, they have agreed to waive the 60 day notice period, to a Separation Agreement entered into between Mr.Davidson and RAIT as of February27, 2018 (the “Separation Agreement”). Under the Separation Agreement, Mr.Davidson’s employment with RAIT will terminate effective February28, 2018, at which time he also will resign as a member of the Board. to the Separation Agreement, Mr.Davidson affirmed that his resignation as a trustee was not because of any disagreement with RAIT relating to RAIT’s operations, policies or practices. The Separation Agreement provides that, prior to Mr.Davidson’s resignation, he will also be paid $720,000, which is 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.
(c)Effective upon Mr.Davidson’s resignation, the Board has appointed John J. Reyle to serve as Interim Chief Executive Officer and Interim President of RAIT. Mr.Reyle will also continue to serve as RAIT’s General Counsel, a role in which he has served since February 2017. Prior to becoming RAIT’s General Counsel, Mr.Reyle served as RAIT’s senior managing director—chief legal officer from January 2015 to February 2017, as RAIT’s senior vice president—corporate counsel from January 2014 to December 2014, as RAIT’s vice president—corporate counsel from May2012 to December 2013 and as RAIT’s 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.
RAIT and Mr.Reyle are parties to a previously disclosed Employment Agreement, dated April21, 2017 (the “JR Employment Agreement”). In connection with Mr.Reyle’s appointment as Interim Chief Executive Officer and Interim President, RAIT and Mr.Reyle entered into a letter agreement (“Letter Agreement”) to which Mr.Reyle will receive an increased annual base salary of $500,000 during the term of his appointment as Interim Chief Executive Officer and Interim President of RAIT. Upon the termination of Mr.Reyle’s appointment as Interim Chief Executive Officer and Interim President by the Board, his salary will be reduced to $390,000. Except for the increase to his salary, Mr.Reyle will continue to be employed to the terms of the JR Employment Agreement. There are no arrangements or understandings between Mr.Reyle and any other person to which Mr.Reyle was appointed to serve as RAIT’s Interim Chief Executive Officer and Interim President. Mr.Reyle does not have any family relationship with any trustee or other executive officer of RAIT or any person nominated or chosen by RAIT to become a trustee or executive officer. Since the beginning of RAIT’s last fiscal year to the effective date of Mr.Reyle’s appointment as RAIT’s Interim Chief Executive Officer and Interim President, neither Mr.Reyle nor any member of his immediate family has been a participant, nor has Mr.Reyle or any member of his immediate family had any direct or indirect material interest, in any transaction in which RAIT was or is to be a participant and the amount involved exceeded or exceeds $120,000.
In addition, on February26, 2018, RAIT entered into a Non-Executive Chairman Agreement (the “Chairman Agreement”) with Michael J. Malter, Chairman of the Board. Under the Chairman Agreement, Mr.Malter will assume 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 such additional responsibilities, Mr.Malter will receive a monthly fee in the amount of $62,500. Mr.Malter will also receive 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 of the Board prior to the effective date of the Chairman Agreement.
(e)The disclosures included in clauses (b)and (c) above with respect to changes to Mr.Davidson’s and Mr.Reyle’s compensatory arrangement, respectively, are incorporated herein by reference.
| Item 5.02. | Regulation FD Disclosure |
RAIT has engaged a financial advisor, M-III Advisory Partners, LP, to advise and assist RAIT in its on-going assessment of its financial performance and financial needs.
The information included in this Current Report on Form 8-K under Item 5.02 is being furnished and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
About RAIT Financial Trust (NYSE:RAS)
RAIT Financial Trust (RAIT) is a self-managed and self-advised real estate investment trust (REIT). RAIT uses its vertically integrated platform and relationships to originate commercial real estate loans, acquire commercial real estate properties and invest in, manage and service commercial real estate assets. The Company’s segments are real estate lending, owning and managing segment, Independence Realty Trust, Inc. (IRT) segment and Taberna Securitization segment. The Company’s real estate lending, owning and managing segment concentrates on lending, owning and managing commercial real estate assets throughout the United States. The Company’s IRT segment concentrates on the ownership of apartment properties in opportunistic markets throughout the United States. The Company’s Taberna Securitization segment includes the ownership and management of approximately three real estate trust preferred securitizations.