[ RAIT FINANCIAL TRUST LETTERHEAD
]
As of December15, 2008
To All Holders of RAIT Officer
Restricted Units:
As you are aware, the phantom
units that have been awarded to you as Restricted Units under the
RAIT Financial Trust 2008 Incentive Award Plan (previously known as
the RAIT Investment Trust 2005 Equity Compensation Plan) (the
“ Plan ”) are subject to the requirements of
section 409A of the Internal Revenue Code of 1986, as amended (the
“ Code ”) because they constitute deferred
compensation. As a consequence, in order to comply with the
requirements of section 409A of the Code and its corresponding
regulations, the terms of the Unit Award Agreements (collectively,
the “ Agreements ”) covering your currently
outstanding Restricted Units (collectively, the “
Grants ”) must be amended by December 31, 2008 to
be in documentary compliance with such requirements. As a result,
the purpose of this letter is to amend the Agreements covering
these outstanding Grants so that they will be in compliance with
such requirements.
Specifically, as of the date of
this letter, each Agreement is hereby amended as follows, except to
the extent already provided in your Agreement for such Grant (all
capitalized terms not defined in this letter, shall have the
meaning set forth in the Agreements):
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The conversion
of Redeemed Units to an equivalent number of Common Shares shall
occur within thirty (30) days following the designated
Redemption Date or Deferred Date, as applicable.
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You may elect
to make an one-time irrevocable election to further defer the
Redemption Date of any of the Redeemed Units that are redeemable on
the Vesting Date, provided that (i) the election shall not
take effect until at least twelve (12) months after the date
on which the election is made, (ii) the new Redemption Date
must be at least five (5) years later than the first anniversary of
the Vesting Date ( i.e. , no sooner than the sixth
anniversary of the Vesting Date), and (iii) the election must
be made at least twelve (12) months prior to the first
anniversary of the Vesting Date. Notwithstanding your election,
your Redemption Date will be the date of your death or becoming
disabled (within the meaning of section 409A(a)(2)(C) of the Code)
if such event occurs prior to your Deferred Date.
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If your
Agreement provides that dividend equivalents will be credited to a
Dividend Equivalent Account until the corresponding Restricted
Units vest, the cash payment that will be paid to you for such
amounts if the Restricted Units vest will be paid to you within
thirty (30) days following the applicable Vesting
Date.
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If your
Agreement provides that dividend equivalents will be paid to you
when dividends are declared with respect to the Common Shares, the
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