RAIT FINANCIAL TRUST Share Award Grant Agreement for the Chairman of the Board of Trustees
Exhibit 10.18
2017 INCENTIVE AWARD PLAN
Share Award Grant Agreement for the Chairman of the Board of Trustees
This is a Share Award dated as of June 28, 2017 (the “Date of Grant”) from RAIT Financial Trust, a Maryland real estate investment trust (the “Company”), to Xxxxxxx X. Xxxxxx (“Participant”) a Non-Employee Trustee serving as the Chairman of the Board, (together with the Company, the “Parties”), under the terms of the RAIT Financial Trust 2017 Incentive Award Plan (the “Plan”).
1.Defined Terms. Except as set forth below, all capitalized terms shall have their respective meanings as set forth in Section 1.2 of the Plan.
(a)“Disability” shall mean the inability of a Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, as provided in Code section 409A(a)(2)(C) and Treas. Reg. § 1.409A-3(i)(4).
(b)“Restriction Period” means, with respect to each Common Share which is the subject of this Share Award, the period beginning on the Date of Grant and ending on the applicable Vesting Date.
(c)“Share Award” means the 70,093 (Seventy Thousand Ninety Three) Common Shares which are the subject of this Grant.
(d)“Vesting Date” means the relevant date on which the restrictions set forth in Section 3 lapse with respect to the Common Shares and related dividends subject to this Share Award.
2.Grant of Share Award. Subject to the terms and conditions set forth herein, the Company hereby grants to Participant the Share Award, and Participant hereby acknowledges the restrictions on the Share Award. The Share Award is subject to the terms and conditions of the Plan now in effect and as they may be amended from time to time in accordance with the Plan. The terms and conditions of the Plan are, and automatically shall be, incorporated herein by reference and made a part hereof.
3.Restrictions on Share Award and Related Dividends. Subject to the terms and conditions set forth in the Plan and herein, and notwithstanding any other agreement to which the Participant is a party, during the Restriction Period, Participant shall not be permitted to sell, transfer, pledge, hypothecate, assign or otherwise dispose of the Common Shares and related dividends subject to this Share Award. The Company or its transfer agent, American Stock Transfer & Trust Company, LLC, or any successor thereto (“Transfer Agent”), shall maintain a record of uncertificated Common Shares and related dividends subject to this Share Award during the Restriction Period. Any attempted sale, transfer, pledge, hypothecation, assignment or other disposition (each, a “Disposition”) of any Common Shares and related dividends subject to this Share Award in violation of this Share Award shall be void and of no effect, and the Company (or Transfer Agent, as appropriate) shall have the right to disregard any such Disposition on its books and records, to issue (or execute) “stop transfer” instructions and/or take such other action as the Company deems necessary or advisable to enforce the restrictions in this Share Award.
4.Vesting. Subject to Section 5, the restrictions set forth in Section 3 on the Share Award shall lapse with respect to the following portion of Common Shares and related dividends subject to the Share Award as follows: (i) one half (1/2) on the Date of Xxxxx; (ii) one sixth (1/6) on the first anniversary of the Date of Xxxxx; (iii) one sixth (1/6) on the second anniversary of the Date of Xxxxx and (iv) one sixth (1/6) on the third anniversary of the Date of Grant. Notwithstanding the foregoing, (a) if Participant resigns from service as a Non-Employee Trustee of the Company during the Restriction Period following a Change of Control, the restrictions on the unvested Share Award shall lapse as of the date of such resignation and (b) if Participant’s service
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relationship with the Company and all Subsidiaries terminates during the Restriction Period as a result of death or Disability, the restrictions on the unvested Share Award shall lapse as of the date of such termination. The date on which the restrictions lapse for a particular portion of the Share Award and related dividends shall be the Vesting Date for such portion. If the foregoing vesting schedule would produce fractional Common Shares, the number of Common Shares that are vested shall be rounded down to the nearest whole Common Share; provided, however, that on the final vesting date, the number of Common Shares vesting shall be adjusted to the extent necessary so that one hundred percent (100%) of the Share Award shall have vested. On or before the thirtieth (30th) day following each Vesting Date, the Company will direct the Transfer Agent to note that the restrictions on the applicable Common Shares subject to this Share Award arising out of this Share Award have lapsed.
5.No Forfeiture of Share Award. Unvested Common Shares and related dividends subject to this Share Award are not subject to forfeiture.
6.Lapse of Restrictions. Upon the lapse of the Restriction Period with respect to the applicable Common Shares and related dividends subject to this Share Award, the Participant’s ability to hold, sell, transfer, pledge, assign or otherwise encumber the stock and dividends shall be unrestricted. Notwithstanding the foregoing, Participant agrees to be bound by RAIT’s policy regarding the transfer of interests in the Company and acknowledges that such policy may limit the timing and manner in which Participant may sell or otherwise transfer any Common Shares issued by the Company pursuant to this Agreement. The RAIT Xxxxxxx Xxxxxxx Policy is attached to this Agreement.
7.Dividends, Voting and Recapitalization.
(a)Dividends. Pursuant to Section 5.6 of the Plan, Participant shall be entitled to dividends attributable to Common Shares subject to this Share Award as follows:
i.Dividends on Vested Common Shares. With respect to Common Shares subject to this Share Award that have vested under Section 4, if any dividends are paid with respect to the Common Shares, Participant shall have the right to receive such dividends paid on such vested Common Shares in such amount and at such times as received by all other shareholders of the Company.
ii.Dividends on Unvested Common Shares. With respect to Common Shares subject to this Share Award that have not vested under Section 4, if any dividends are paid with respect to the Common Shares, the Participant shall receive a credit to the Participant’s Share Award dividend account equal to the value of the cash dividends that would have been distributed if the unvested Common Shares at the time of the payment date of the relevant cash dividend were vested Common Shares. Within thirty (30) days following the Vesting Date of any unvested Common Shares, a cash payment will be paid to the Participant by the Company equal to the value of the aggregate amount of cash credited to the Participant’s Share Award dividend account for the corresponding unvested Common Shares that vested as of the Vesting Date. No interest shall accrue with respect to any cash amounts credited to the Participant’s Share Award dividend account. If any unvested Common Shares are forfeited for any reason prior to the Vesting Date, the aggregate amount credited to the Participant’s Share Award dividend account with respect to such unvested Common Shares shall terminate, and the Participant shall not have any rights with respect to any such amounts.
(b)Voting. Participant shall have the right to vote all Common Shares under this Share Award while such Common Shares remain outstanding and the Participant otherwise retains such voting rights.
(c)Recapitalization. In the event of any changes in the capital stock of the Company by reason of any stock dividends, split-ups or combinations of shares, reclassifications, mergers, consolidations, reorganizations or liquidations while any Common Shares comprising the Share Award shall be subject to restrictions on transfer and forfeiture hereunder, any and all new, substituted or additional securities to which Participant is entitled shall be subject immediately to the terms, conditions and restrictions of this Award.
8.Notices. Any notice to the Company relating to this Share Award shall be addressed to the Company in care of the Chief Financial Officer of the Company at the principal office of the Company, and any
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notice to the Participant shall be addressed to such Participant at the current address shown on the records of the Company, or to such other address as the Participant may designate to the Company in writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.
9.Applicable Laws. The Company may from time to time impose any conditions on the Share Award as it deems necessary or advisable to ensure that the Share Award satisfies the conditions of applicable laws.
10.Tax Matters.
(a)The Common Shares and related dividends subject to this Share Award are intended to constitute property that is subject to a substantial risk of forfeiture during the Restriction Period, and subject to federal income tax in accordance with Section 83 of the Code. Section 83 of the Code generally provides that Participant will recognize compensation income with respect to each installment of the Share Award on such installment’s Vesting Date in an amount equal to the then fair market value of the shares for which restrictions have lapsed. Alternatively, Participant may elect, pursuant to Section 83(b) of the Code, to recognize compensation income for all or any part of the Share Award at the Date of Grant in an amount equal to the fair market value of the Share Award subject to the election on the Date of Grant. Such election must be made within thirty (30) days of the Date of Grant, and Participant shall immediately notify the Company if such an election is made. Participant should consult his or her tax advisors to determine whether a Section 83(b) election is appropriate. If Participant (after consulting with his or her tax advisors) decides to file an 83(b) election, then instructions and an election form are attached hereto as Appendix A.
(b)The grant of this Share Award is intended to be exempt from the requirements of Section 409A of the Code, and, to the extent that further guidance is issued under Section 409A of the Code after the date of this Award, the Company may make any changes to this Award as are necessary to bring this award into compliance with the applicable exemptions under Section 409A of the Code and the Treasury regulations issued thereunder.
11.Share Award Not to Affect Service Relationship. The Share Award granted hereunder shall not confer upon Participant any right to continue as a Non-Employee Trustee or in any other service relationship of the Company or any Subsidiary or affiliate of the Company. For the avoidance of doubt, continued service as a Non-Employee Trustee or in any other service relationship of the Company or any Subsidiary or affiliate of the Company is not a condition to the vesting set forth in Section 4.
12.Restrictions on Issuance or Transfer of Common Shares.
(a)The obligation of the Company to issue, or remove the restrictions on, Common Shares shall be subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the Common Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, such issuance or removal, the Common Shares may not be issued or such restrictions removed in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The issuance of Common Shares and the payment of cash to the Participant pursuant to this Agreement are subject to any applicable taxes and other laws or regulations of the United States or of any state having jurisdiction thereof.
(b)The Participant agrees to be bound by the Company’s policies regarding the transfer of the Common Shares subject to this Share Award and understands that there may be certain times during the year in which the Participant will be prohibited from selling, transferring, pledging, donating, assigning, mortgaging, or encumbering Common Shares.
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13. |
Miscellaneous. |
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(a)Binding Effect. Subject to the limitations set forth herein, this Share Award shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, legal representatives, successors and assigns.
(b)Entire Agreement; Amendments. This Share Award and the Plan constitute the entire agreement between the parties with respect to the Share Award and cannot be changed or terminated orally. No modification or waiver of any of the provisions hereof shall be effective unless in writing and signed by the party against whom it is sought to be enforced.
(c)Counterparts. This Share Award may be executed in one or more counterparts, both of which taken together shall constitute one and the same agreement.
(d)Governing Law. This Share Award shall be governed and construed and the legal relationships of the parties determined in accordance with the internal laws of the State of Maryland.
(e)Severability. In the event that any provision in this Share Award shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Share Award.
(f)Section Headings. The captions and section headings of this Share Award are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.
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By: |
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Name: |
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Title: |
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The Participant acknowledges receipt of the Share Award, a copy of which is attached hereto; represents that he or she has read and is familiar with the terms and provisions thereof; hereby accepts this Share Award subject to all of the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising hereunder.
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Date: |
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Signature of Participant |
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Name of Participant: Xxxxxxx X. Xxxxxx
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SECTION 83(b) ELECTIONS
INSTRUCTIONS REGARDING SECTION 83(b) ELECTIONS:
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1. |
An 83(b) Election is Irrevocable. |
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2. |
If you choose to make an 83(b) Election, an 83(b) Election Form must be filed with the Internal Revenue Service within 30 days after the date the Share Award is made to you. No exceptions to this rule are made. |
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You must provide a copy of the 83(b) Election Form to the General Counsel or other designated officer of the Company. This copy should be provided to the Company at the same time that you file your 83(b) Election Form with the Internal Revenue Service. |
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In addition to making the filing under Item 2 above, you must attach a copy of your 83(b) Election Form to your tax return for the taxable year in which you received the restricted stock. |
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If you make an 83(b) Election and later forfeit the Common Shares, you will not be entitled to a deduction with respect to the gross income you recognized under the 83(b) Election. |
You are urged to consult your personal tax advisor before making an 83(b) Election to discuss the consequences thereof and consider whether such an election is advisable under the circumstances (and to complete the election form).
Election Pursuant to Section 83(b) of the Internal Revenue Code
to Include Property in Gross Income in Year of Transfer
The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the Share Award described below and supplies the following information in accordance with the regulations promulgated thereunder:
1.The name, address, and taxpayer identification number of the undersigned are:
______________________________
______________________________
______________________________
___-__-____
2.Description of the Share Award with respect to which the election is being made: 70,093 (Seventy Thousand Ninety Three) Common Shares of Beneficial Interest, par value of $0.03, of RAIT Financial Trust awards pursuant to the attached Share Award and the RAIT Financial Trust 2017 Incentive Award Plan.
3.Date on which the Share Award is made: June 28, 2017.
4.The taxable year of the taxpayer is 2017.
5.Nature of restrictions to which the Share Award is subject: The Share Award consists of Common Shares which are not subject to potential forfeiture.
6.The fair market value of a Common Share on the Date of Grant (determined without regard to any restrictions other than restrictions which by their terms will never lapse) of the property with respect to which this election is being made is: $2.14, the NYSE per Common Share closing price on the Date of Grant. The cumulative fair market value of Common Shares subject to this Grant Award is $149,999.02 (2. multiplied by 6.).
7.The taxpayer did not pay any amount for these shares.
8.A copy of this statement was furnished to RAIT Financial Trust, for whom taxpayer rendered the services underlying the transfer of such property.
Date: ___________________________________________
Name:
