8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): February 22, 2009

RAIT Financial Trust
__________________________________________
(Exact name of registrant as specified in its charter)

Maryland	1-14760	23-2919819
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
2929 Arch St., 17th Floor, Philadelphia, Pennsylvania		19104
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (215) 243-9000

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) Resignation of RAIT’s Chief Executive Officer. Effective February 22, 2009, Daniel G. Cohen resigned as chief executive officer of RAIT Financial Trust, or RAIT, in order to accept the position of chief executive officer of Alesco Financial Inc., or Alesco, in connection with the merger referenced below. Mr. Cohen will continue to serve as a trustee on the board of trustees of RAIT, or the board. Cohen Brothers, LLC d/b/a Cohen & Company, or Cohen & Company, and Alesco announced a plan to merge on February 20, 2009 and Mr. Cohen serves as the chairman of the board of Cohen & Company and Alesco. In connection with his resignation, Mr. Cohen and RAIT entered into a letter of separation dated as of February 22, 2009, or the letter of separation, which provides that Mr. Cohen shall receive his accrued, but unpaid, annual base salary through his resignation date and payment of any bonus that he earned under RAIT’s 2008 cash award program as determined by RAIT’s compensation committee and any of his accrued and vested benefits under RAIT’s benefit plans, other than severance benefits, and that, except as described above, he will not be entitled to receive any other compensation or benefits as a result of his resignation. The foregoing description of the letter of separation does not purport to be complete and is qualified in its entirety by reference to the full text of the letter of separation filed as Exhibit 10.1 hereto and incorporated herein by reference.

(c) Promotions of RAIT’s New Chief Executive Officer and Chief Operating Officer. Effective February 22, 2009, the board promoted Scott F. Schaeffer to serve as RAIT’s chief executive officer. Mr. Schaeffer will also continue to serve as RAIT’s president. Prior to this promotion, Mr. Schaeffer, age 46, had served as RAIT’s president and chief operating officer since February 2008, RAIT’s co-president and co-chief operating officer from December 2006 to February 2008 and served as RAIT’s president and chief operating officer from September 2000 to December 2006. Mr. Schaeffer served as the vice chairman of the board of directors of Resource America Inc., or Resource America, a specialized asset management company, from 1998 to 2000, the executive vice president of Resource America from 1997 to 1998, and a senior vice president of Resource America from 1995 to 1997. Mr. Schaeffer also served as President of Resource Properties, Inc. (a wholly owned subsidiary of Resource America) from 1992 to 2000. Mr. Schaeffer was, until October 2002, a director of Resource America.

In connection with Mr. Schaeffer’s promotion, on February 22, 2009, the compensation committee of the board approved an amendment to Mr. Schaeffer’s employment agreement, or the Schaeffer amendment, with RAIT and RAIT and Mr. Schaeffer entered into the Schaeffer amendment. The Schaeffer amendment amends Mr. Schaeffer’s employment agreement to reflect his new position and to increase his base salary to an annual rate of $550,000.

Effective February 22, 2009, the board promoted Raphael Licht to serve as RAIT’s chief operating officer. Mr. Licht will also continue to serve as RAIT’s secretary. Prior to this promotion, Mr. Licht, age 40, had served as RAIT’s chief legal officer, chief administrative officer and secretary since December 2006 in connection with RAIT’s merger with Taberna Realty Finance Trust, or Taberna. Mr. Licht has been Taberna’s chief legal officer and secretary since March 2005 and Taberna’s executive vice president and chief administrative officer since April 2006. Mr. Licht also served as the chief legal officer of Cohen & Company from 2001 until April 2006. From 2000 until 2001, Mr. Licht served as general counsel at iATM global.net Corporation, an ATM software joint venture between TRM Corporation (then affiliated with Mr. Cohen) and NCR Corporation. From 1997 until 2000, Mr. Licht was an associate with Morgan Lew is & Bockius LLP, a law firm, specializing in structured finance and securitizations. From 1996 until 1997, Mr. Licht was an associate at Ledgewood, P.C., a law firm, specializing in real estate and securities law.

In connection with Mr. Licht’s promotion, on February 22, 2009, the compensation committee of the board approved an amendment to Mr. Licht’s employment agreement, or the Licht amendment, with RAIT and RAIT and Mr. Licht entered into the Licht amendment. The Licht amendment amends Mr. Licht’s employment agreement to reflect his new position and to increase his base salary to an annual rate of $480,000.

The foregoing descriptions of the Schaeffer amendment and the Licht amendment do not purport to be complete and are qualified in their entirety by reference to the full text of these amendments filed as Exhibits 10.2 and 10.3 hereto and incorporated herein by reference.

(e) The information set forth in Item 5.02 (b) and Item 5.02 (c) above is incorporate d herein in its entirety.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


10.1 Letter of Separation dated as of February 22, 2009 between RAIT Financial Trust ("RAIT") and Daniel G. Cohen

10.2 Amendment dated as of February 22, 2009 to Employment Agreement between RAIT and Scott F. Schaeffer.

10.3 Amendment dated as of February 22, 2009 to Employment Agreement between RAIT and Raphael Licht.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RAIT Financial Trust
February 23, 2009	By:	/s/ Raphael Licht
		Name: Raphael Licht
		Title: Chief Operating Officer and Secretary

Exhibit Index

Exhibit No.	Description
10.1	Letter of Separation dated as of February 22, 2009 between RAIT Financial Trust (“RAIT”) and Daniel G. Cohen.
10.2	Amendment dated as of February 22, 2009 to Employment Agreement between RAIT and Scott F. Schaeffer.
10.3	Amendment dated as of February 22, 2009 to Employment Agreement between RAIT and Raphael Licht.

EX-10.1

RAIT Financial Trust
Cira Centre
2929 Arch Street, 17^th Floor
Philadelphia, PA 19104

VIA HAND DELIVERY

February 22, 2009

Daniel G. Cohen
c/o RAIT Financial Trust
Cira Centre
2929 Arch Street, 17^th Floor
Philadelphia, PA 19104

Re: Termination of Employment

Dear Daniel,

The purpose of this letter is to memorialize our mutual understanding relating to the termination of your employment with RAIT Financial Trust (“RAIT”). Specifically, effective as of February 22, 2009 (the “Termination Date”), you will resign from your position as RAIT’s Chief Executive Officer and terminate your employment with RAIT. You will, however, continue as a member of RAIT’s Board of Trustees.

Since your employment is terminating on account of your voluntary resignation, following your Termination Date you will receive:

• a single sum cash payment, less applicable tax withholdings, of your accrued, but unpaid, annual base salary through your Termination Date, which will be paid to you by RAIT’s next regularly scheduled pay date that occurs after your Termination Date.

• payment of any bonus, less applicable tax withholdings, that you earned under RAIT’s 2008 Cash Award Program, which will be paid to you at the same time that any bonuses are paid to other participants in the program, which will be no later than March 15, 2009. The amount of any bonus will be determined by RAIT’s Compensation Committee in accordance with the terms and conditions of the program, and based on the attainment of the relevant performance goals.

• any accrued and vested benefits under RAIT’s benefit plans in which you participated prior to your Termination Date, other than severance benefits, in accordance with the terms and conditions of such plans.

RAIT confirms its indemnification obligations to you under the Indemnification Agreement among yourself and RAIT, RAIT Limited, Inc., RAIT General, Inc. and RAIT Partnership, L.P. dated as of December 11, 2006. Your Employment Agreement, dated as of June 8, 2006, as amended pursuant to Amendment 2008-1, dated as of December 15, 2008, (collectively, the “Employment Agreement”), will terminate as of your Termination Date, and RAIT will have no further obligations to you under the Employment Agreement and you will have no further obligations to RAIT under the Employment Agreement, except that your covenant to keep confidential Confidential Company Information (as defined in the Employment Agreement) as provided in Section 6 of your Employment Agreement, as well as RAIT’s rights to enforce such covenant, will continue to apply following your Termination Date. RAIT waives the requirement in Section 5.1(b) of the Employment Agreement that you give 30 days’ written notice of your termination of employment. In accordance with the terms of the Restricted Share Award Agreement dated as of June 29, 2006 between you and Taberna Realty Finance Trust, the restrictions on the remaining 50,545 RAIT common shares still subject to restriction thereunder shall continue to lapse. To compensate you for your continued service to RAIT as a trustee, you shall receive compensation set by RAIT’s Compensation Committee from time to time. Except as described in this letter, you will not be entitled to receive any other compensation or benefits as a result of your termination of employment with RAIT.

Please sign below and return an original executed copy of this letter to me indicating your agreement to the terms set forth herein relating to your termination of employment with RAIT.

Sincerely,

/s/ Raphael Licht
Raphael Licht

I herby acknowledge and agree that this letter fully and accurately describes my agreement with RAIT as to my termination of employment with RAIT, and agree that, except as described in this letter, I am not entitled to receive any other amounts from RAIT as a result of the termination of employment with RAIT. I also agree that following the termination of my employment with RAIT I will continue to be bound by, and comply with, the confidentiality covenants set forth in Section 6 of the Employment Agreement.

/s/ Daniel G. Cohen	February 22, 2009
Daniel G. Cohen	Date

AMENDMENT 2009-1
TO THE
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT, dated as of February 22, 2009, is 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, and as amended pursuant to Amendment 2008-1, dated as of December 15, 2008, (collectively, the “Employment Agreement”), which sets forth the terms and conditions of Executive’s employment with the Company;

WHEREAS, Executive currently serves as the Company’s President and Chief Operating Officer;

WHEREAS, the Company desires to promote Executive so that he will become the Company’s Chief Executive Officer as well as continue with his current position as President of the Company;

WHEREAS, Executive desires to accept such promotion; and

WHEREAS, the Company and Executive desire to amend Executive’s Employment Agreement to reflect the change in Executive’s position with the Company.

NOW, THEREFORE, the Company and Executive agree that, effective as of February 22, 2009, the Employment Agreement shall be amended as follows:

1. Section 1.2 of the Employment Agreement is hereby amended in its entirety to read as follows:

“1.2. Duties and Responsibilities. Executive shall serve as the Chief Executive Officer and President of the Company. Executive shall perform all duties and accept all responsibilities incident to such positions as may be reasonably assigned to him by the Board of Trustees of the Company (the “Board”).”

2. Section 1.4 of the Employment Agreement is hereby amended by deleting the figure “$500,000” therein and substituting for such figure the figure “$550,000.”

3. Section 1.8 of the Employment Agreement is hereby amended in its entirety to read as follows:

“1.8 Incentive Compensation. Executive shall continue to be entitled to participate in any short-term and long-term incentive programs (including without limitation any stock option plans) established by the Company for its senior level executives generally, at levels commensurate with the benefits provided to other senior executives and with adjustments appropriate for his positions as Chief Executive Officer and President.”

4. Section 4.2 of the Employment Agreement is hereby amended in its entirety to read as follows:

“4.2 “Good Reason” shall mean the Company ceases to be publicly owned.”

5. In all respects not modified by this Amendment 2009-1, the Employment Agreement is hereby ratified and confirmed.

IN WITNESS WHEREOF, the Company and Executive agree to the terms of the foregoing Amendment 2009-1, effective as of the date set forth above.

RAIT FINANCIAL TRUST

By: /s/ Betsy Z. Cohen
Name: Betsy Z. Cohen
Title: Chairman of the Board

EXECUTIVE

/s/ Scott F. Schaeffer

Scott F. Schaeffer

AMENDMENT 2009-1
TO THE
EMPLOYMENT AGREEMENT

THIS AMENDMENT, dated as of February 22, 2009, is between RAIT Financial Trust, a Maryland real estate investment trust, (the “Company”) and Raphael Licht (“Executive”).

RECITALS

WHEREAS, the Company and Executive previously entered into that certain Employment Agreement, dated as of June 8, 2006, and as amended pursuant to Amendment 2008-1, dated as of December 15, 2008, (collectively, the “Employment Agreement”), which sets forth the terms and conditions of Executive’s employment with the Company;

WHEREAS, Executive currently serves as the Company’s Chief Legal Officer, Chief Administrative Officer and Secretary;

WHEREAS, the Company desires to promote Executive so that he will become the Company’s Chief Operating Officer, as well as continue with his current position as Secretary of the Company;

WHEREAS, Executive desires to accept such promotion; and

WHEREAS, the Company and Executive desire to amend Executive’s Employment Agreement to reflect the change in Executive’s position with the Company.

NOW, THEREFORE, the Company and Executive agree that, effective as of February 22, 2009, the Employment Agreement shall be amended as follows:

1. Section 2 of the Employment Agreement is hereby amended in its entirety to read as follows:

“2. Duties. During the Term, the Executive shall be employed by the Company as Chief Operating Officer and Secretary of the Company, reporting directly to the Chief Executive Officer of the Company, and, as such, the Executive shall faithfully perform for the Company the duties of said offices and shall perform such other comparable duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the board of directors of the Company (the “Board”). The Executive shall devote substantially all of his business time and effort to the performance of his duties hereunder.”

2. Section 3.1 of the Employment Agreement is hereby amended by deleting the figure “$350,000” therein and substituting for such figure the figure “$480,000.”

3. In all respects not modified by this Amendment 2009-1, the Employment Agreement is hereby ratified and confirmed.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company and Executive agree to the terms of the foregoing Amendment 2009-1, effective as of the date set forth above.

RAIT FINANCIAL TRUST

By: /s/ Betsy Z. Cohen
Name: Betsy Z. Cohen
Title: Chairman of the Board

EXECUTIVE

/s/ Raphael Licht

Name: Raphael Licht