Item
5.02 Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
(e)
On December 26, 2007, David Bloom, Resource Capital Corp.'s (the
"Registrant") Senior Vice President - Real Estate Investments and one
of its named executive officers, entered into a compensatory agreement with
Resource America, Inc. (the "Agreement"). The Agreement provides Mr. Bloom with
a base annual salary, payable by Resource America, of $350,000 plus a cash bonus
that is determined by Resource America at the end of each calendar year. The
Agreement also provides for awards to Mr. Bloom of 120,000 shares of the
Registrant's restricted common stock and 66,000 shares of Resource America's
restricted common stock. One-half of each award of restricted stock is subject
to vesting over time and one-half is earned based on the achievement of
predetermined, objective performance goals over a multi-year performance period.
With respect to the shares that vest over time, 15% vested on June 30, 2008, 15%
vest on June 30, 2009 and 70% vest on December 31, 2010, provided that Mr. Bloom
is employed by Resource America at each vesting date. With respect to the
performance-based shares, they will be earned on achievement of performance
goals over the performance period beginning July 1, 2007 and ending June 30,
2010, with one-third of the units being earned at the end of each 12-month
period measurement period. The performance measures are as follows:
-
Loan
Origination. For each measurement period, the loan origination
volume generated by Mr. Bloom and his colleagues in Resource America’s Los
Angeles office, which we refer to as Mr. Bloom’s team, must be equal to or
greater than 90% of the loan origination volume generated by Mr. Bloom’s
team for the previous 12-month period. Resource America may waive the loan
origination performance criteria, if in its reasonable discretion, reaching
such levels could not be reasonably achieved notwithstanding Mr. Bloom’s
team’s best efforts. The Registrant's Compensation Committee along with
Resource America’s Compensation Committee will exercise this
discretion.
-
Portfolio
Diversity. The loans generated
by Mr. Bloom’s team during the measurement period must conform to the
diversity and loan type standards set forth in the investment parameters of
the commercial real estate CDOs managed on Resource America's behalf.
-
Pricing.
The gross weighted average spread on
loans generated by Mr. Bloom’s team during the measurement period must be not
less than 250 bps over the applicable index. Resource America may exclude
certain loans from this calculation and/or may waive the pricing provision for
the measurement period in its entirety.
-
Credit
Quality. There shall have
been no principal losses during the measurement period on any loan originated
by Mr. Bloom’s team and no greater than 10% of the loans originated by Mr.
Bloom’s team (measured by principal balance) shall have been in default during
such measurement period.
If
the performance criteria for a given measurement period are largely, but not
entirely, met, each of the Registrant's and Resource America's Compensation
Committees will reasonably take such substantial performance into account in
determining an equitable partial earning of the award for such measurement
period. Once earned, the shares of restricted stock vest over the following two
years, at the rate of one-eighth (1/8) per quarter, as long as Mr. Bloom is
employed by Resource America on the
last day of such quarter.
The
Agreement contains a 'garden leave
clause' which stipulates that at any time after Mr. Bloom or Resource America
has given notice to the other to terminate Mr. Bloom's employment, Resource
America may require that for a period of nine months Mr. Bloom will continue to
be employed by Resource America but will not enter or attend the premises of
Resource America, and during such leave Mr. Bloom will not: (a) undertake any
work for any third party whether paid or unpaid and whether as an employee or
otherwise; (b) have any contact or communication with any client, customer or
supplier of Resource America; or (c) have any contact or communication with any
employee, officer, director or agent of Resource America. Mr. Bloom will
continue to be paid his base salary and be provided with employee benefits
during any such leave in the usual way.
A
copy of the Agreement is attached
hereto as Exhibit 10.1.