<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
RESOURCE ASSET INVESTMENT TRUST
-----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
RESOURCE ASSET INVESTMENT TRUST
1845 Walnut Street
10th Floor
Philadelphia, PA 19103
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 25, 2000
To the Shareholders of RESOURCE ASSET INVESTMENT TRUST:
Notice is hereby given that the annual meeting of shareholders of RESOURCE
ASSET INVESTMENT TRUST, a Maryland real estate investment trust (the
"Company"), will be held at 1521 Locust Street, 8th Floor, Philadelphia,
Pennsylvania, on Wednesday, September 13, 2000, at 10:00 A.M., Philadelphia
time for the following purposes:
1. To re-elect each of the trustees to serve until the next annual meeting
of shareholders in 2001.
2. To change the Company's name to RAIT Investment Trust.
3. To ratify the selection of Grant Thornton LLP as independent certified
public accountants for the Company for the fiscal year ending December
31, 2000.
4. To transact such other business as may properly be brought before the
meeting and any adjournments thereof.
Only shareholders of record on the books of the Company at the close of
business on August 15, 2000 will be entitled to notice of and to vote at the
meeting or any adjournments thereof. A list of shareholders entitled to vote at
the meeting will be available for inspection at the offices of the Company at
1845 Walnut Street, Philadelphia, Pennsylvania 19103. The stock transfer books
will not be closed.
SHAREHOLDERS CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ASSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. THE
ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND YOU MAY REVOKE YOUR PROXY
AT ANY TIME PRIOR TO ITS USE.
By order of the Board of Trustees
Jonathan Z. Cohen, Secretary
August 25, 2000
<PAGE>
RESOURCE ASSET INVESTMENT TRUST
1845 Walnut Street 10th Floor Philadelphia, PA 19103
---------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
---------------------
GENERAL
Introduction
The annual meeting of shareholders of Resource Asset Investment Trust (the
"Company") will be held on Wednesday, September 13, 2000, at 10:00 A.M.,
Philadelphia time, at 1521 Locust Street, 8th Floor, Philadelphia, Pennsylvania
19102 for the purposes set forth in the accompanying notice. Only shareholders
of record at the close of business on August 15, 2000 will be entitled to
notice of and to vote at such meeting.
This statement is furnished in connection with the solicitation by the
Board of Trustees of the Company (the "Board of Trustees") of proxies from
holders of the Company's common shares of beneficial interest ("Common Shares")
to be used at such meeting, and at any and all adjournments thereof. Proxies in
the accompanying form, properly executed and duly returned to the Company, and
not revoked, will be voted at the meeting and any and all adjournments thereof.
This proxy statement and the accompanying form of proxy will be sent on or
about August 25, 2000 to shareholders of record as of August 15, 2000.
Revocation of Proxy
If a proxy in the accompanying form is executed and returned, it may
nevertheless be revoked at any time prior to its exercise by giving written
notice of revocation to the Secretary of the Company at its Philadelphia
address stated herein, by submitting a later dated proxy or by attending the
meeting and voting in person.
Expenses and Manner of Solicitation
The cost of soliciting proxies, which is not expected to exceed $15,000,
will be borne by the Company. Proxies may be solicited by trustees, officers
and regular employees of the Company either personally, by letter or by
telephone. Such trustees, officers and employees will not be specifically
compensated for soliciting such proxies. The Company expects to reimburse
banks, brokers, and other persons for their reasonable out-of-pocket expenses
in handling proxy materials for beneficial owners of the Company's Common
Shares.
VOTING AT THE MEETING
The Company has an authorized capitalization of 225,000,000 shares of
beneficial interest, consisting of 200,000,000 Common Shares, par value $.01
per share, and 25,000,000 preferred shares of beneficial interest, par value
$1.00 per share ("Preferred Shares"). Of such authorized capitalization,
6,256,851 Common Shares were outstanding as of July 31, 2000. At the annual
meeting, only those holders of Common Shares at the close of business on the
record date will be entitled to vote. Each holder is entitled to one vote per
share on each matter of business properly brought before the meeting.
The presence in person or by proxy of holders of the Company's outstanding
Common Shares representing not less than a majority of the outstanding Common
Shares will constitute a quorum. The affirmative vote in person or by proxy of
a majority of the outstanding Common Shares will be necessary for the election
of trustees, the approval of the proposed name change, the ratification of
Grant Thornton LLP as independent certified public accountants and all other
business properly brought before the meeting.
1
<PAGE>
Abstentions may be specified on the election of each of the nominated
trustees and on any other properly presented business. Common Shares abstaining
from the election of any of the nominated trustees or any other proposal will
be considered present and entitled to vote for purposes of determining the
existence of a quorum.
Since the affirmative vote of holders of Common Shares entitled to cast a
majority of all the votes entitled to be cast is necessary for the election of
trustees, the approval of the proposed name change and the approval of the
appointment of independent certified public accountants, abstentions with
respect to any proposal, including broker non-votes, will have the same effect
as a vote "against" the proposal. Any proxy not specifying to the contrary will
be voted FOR: (1) the election of the specified trustees, (2) change of the
Company's name to RAIT Investment Trust and (3) the ratification of the
selection of Grant Thornton LLP as independent certified public accountants for
the Company for the fiscal year ending December 31, 2000.
A failure by brokers to vote shares held by them in nominee name will mean
that such shares will not be counted for the purposes of establishing a quorum
and will not be voted. If a broker does not receive voting instructions from
the beneficial owner of shares on a particular matter and indicates on the
proxy delivered with respect to such shares that it does not have discretionary
authority to vote on that matter, those shares will be considered as present
and entitled to vote with respect to that matter, but will not be counted in
the number of votes cast "for" or "against" the matter.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of Common Shares
owned, as of July 31, 2000, by (a) each person who, to the knowledge of the
Company, is the beneficial owner of 5% or more of the outstanding Common
Shares, (b) each of the Company's present trustees, (c) each of the Company's
present executive officers, and (d) all of the Company's present executive
officers and trustees as a group. This information is reported in accordance
with the beneficial ownership rules of the Securities and Exchange Commission
under which a person is deemed to be the beneficial owner of a security if that
person has or shares voting power or investment power with respect to such
security or has the right to acquire such ownership within 60 days. Common
Shares issuable pursuant to options or warrants are deemed to be outstanding
for purposes of computing the percentage of the person or group holding such
options or warrants but are not deemed to be outstanding for purposes of
computing the percentage of any other person. Unless otherwise indicated in
footnotes to the table, each person listed has sole voting and dispositive
power with respect to the securities owned by such person.
<TABLE>
<CAPTION>
Common Shares
----------------------
Amount and Nature of Percent
Beneficial Ownership of Class
Beneficial Owner ---------------------- ---------
<S> <C> <C>
Trustees: (1)
Betsy Z. Cohen ..................................................... 205,937(2) 3.3%
Jonathan Z. Cohen .................................................. 12,261(3)(4) *
Joel R. Mesznik .................................................... 3,500(3) *
Daniel Promislo .................................................... 1,500(3) *
Edward S. Brown .................................................... -- --
Peter Albert ....................................................... -- --
Executive Officers: (1)
Jay R. Cohen ....................................................... 54,778(5) *
Ellen J. DiStefano ................................................. 21,584(6) *
All trustees and executive officers as a group (7 persons) ......... 299,559 4.8%
Other owners of 5% or more of outstanding Common Shares: (7)
Resource America, Inc. ("RAI") ..................................... 835,937 13.4%
Cobalt Capital Management, Inc. .................................... 475,565(8) 7.6%
FBR Asset Investment Corporation ................................... 344,575(9) 5.5%
</TABLE>
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*Less than 1%
2
<PAGE>
(1) The address for each trustee and executive officer is 1845 Walnut Street,
10th floor, Philadelphia, Pennsylvania 19103
(2) Includes 100 shares directly held by Mrs. Cohen; 893 shares held in the
Company's Cash and Deferred Savings Plan (the "401(k) Plan") for the
benefit of Mrs. Cohen; 17,852 shares held by an individual retirement
account ("IRA") for the benefit of Mrs. Cohen; 41,801 shares held as
trustee of a charitable foundation; 23,659 shares held in an IRA account
for the benefit of Mrs. Cohen's spouse, Edward E. Cohen; and 121,632
shares issuable upon exercise of options granted under the 1997 Stock
Option Plan. Excludes shares held by Resource America, Inc., of which
Edward E. Cohen is Chairman and Chief Executive Officer.
(3) Includes 500 shares issuable upon exercise of options granted under the
1997 Stock Option Plan.
(4) Includes 10,750 shares held directly by Mr. Cohen and 511 shares held in a
401(k) account for his benefit.
(5) Includes 2,208 shares held in an IRA account for the benefit of Mr. Cohen;
17,000 shares held jointly by Mr. Cohen and his spouse; 6,441 shares held
in an IRA account for the benefit of Mr. Cohen's spouse; 2,100 shares held
in Mr. Cohen's 401(k) account; and 27,029 shares issuable upon exercise of
options granted under the 1997 Stock Option Plan.
(6) Includes 1,000 shares held by Mrs. DiStefano jointly with her spouse; 1663
shares held in a 401(k) account for the benefit of Mrs. DiStefano; and
18,921 shares issuable upon exercise of options granted under the 1997
Stock Option Plan.
(7) Includes shares held by entities managed by the named persons. The address
for Resource America, Inc. is 1521 Locust Street, Philadelphia,
Pennsylvania 19102; the address for FBR Asset Investment Corporation is
1001 19th Street, North, Arlington, Virginia 22209; and the address for
Cobalt Capital Management, Inc. is 237 Park Avenue, Suite 801, New York,
New York 10012.
(8) Information based on Schedule 13G of Cobalt Capital Management, Inc. filed
February 15, 2000.
(9) Information based on Schedule 13G of FBR Asset Investment Corporation filed
February 15, 2000.
3
<PAGE>
PROPOSAL 1. ELECTION OF TRUSTEES
Trustees
The By-Laws of the Company provide that the number of trustees shall be
fixed by resolution of the Board of Trustees, provided that there shall be a
minimum of three and a maximum of nine trustees. During fiscal 1998, the Board
of Trustees fixed the number of trustees at six. All trustees are elected for a
term of one year or until their successors are elected and qualified. The
Nominating Committee of the Board of Trustees has renominated Mrs. Cohen and
Messrs. Albert, Brown, Cohen, Mesznik and Promislo for re-election at the 2000
annual meeting for a term to expire at the 2001 annual meeting or until their
successors are elected or appointed. Each Trustee began his or her service in
1997 except Mr. Brown who began in 1999 and Mr. Albert who began in 2000.
It is the intention of the persons named in the enclosed proxy, in the
absence of a contrary direction, to vote for the re-election of all of the
current trustees. Should any of the nominees become unable or refuse to accept
nomination or election as a trustee, it is intended that the persons named as
proxies will vote for the election of such other person as the Nominating
Committee of the Board of Trustees may recommend. The Board of Trustees knows
of no reason why any of the nominees might be unable or refuse to accept
nomination or election.
Information is set forth below regarding the principal occupation of each
nominee. There are no family relationships among the nominees except that
Jonathan Z. Cohen, who is currently a trustee and Secretary of the Company, is
the son of Betsy Z. Cohen, Chairman of the Board of Trustees, Chief Executive
Officer, Chief Operating Officer and President of the Company. Additionally,
Jay R. Cohen, Executive Vice President of the Company, is a cousin of Mrs.
Cohen.
Names of Trustees, Principal
Occupations and Other Information
Betsy Z. Cohen, 58, Chairman, Chief Executive Officer, Chief Operating
Officer, President and trustee of the Company. Mrs. Cohen has also served as a
Director of Hudson United Bancorp (bank holding company) the successor to
JeffBanks, Inc. Prior to the merger of JeffBanks, Inc. with Hudson United
Bancorp in December 1999, Mrs. Cohen had been Chairman and Chief Executive
Officer of JeffBanks, Inc. since its inception in 1981 and also as Chairman and
Chief Executive Officer of its subsidiaries, Jefferson Bank, which she founded
in 1974, and Jefferson Bank New Jersey, which she founded in 1987. From 1985
until 1993, Mrs. Cohen was a director of First Union Corp. of Virginia (bank
holding company) and its predecessor, Dominion Bankshares, Inc. In 1969, Mrs.
Cohen co-founded a commercial law firm and served as a Senior Partner until
1984. Mrs. Cohen is also a director of Aetna, Inc. (an insurance company), The
Maine Merchant Bank, LLC and is a trustee of Corporate Office Properties Trust.
Jonathan Z. Cohen, 30, Secretary and trustee of the Company. Mr. Cohen has
been a Vice President of Resource America, Inc. (the sponsor of the Company)
since December 1997 and Vice Chairman of its subsidiary, Atlas America, Inc.,
since 1998. See "Certain Relationships and Related Party Transactions."
Previously, from 1994, he was the Chief Executive Officer of Blue Guitar Films
(a feature film production company which he founded).
Joel R. Mesznik, 54, a trustee of the Company. Mr. Mesznik has been
President of Mesco Ltd. (a corporate financial advisory firm) since 1990. From
1976 to 1990, Mr. Mesznik was affiliated with Drexel Burnham Lambert, Inc.
including, from 1976 to 1987, serving as head of its Public Finance Department.
Mr. Mesznik is the general partner of several private real estate limited
partnerships.
Daniel Promislo, 67, a trustee of the Company. Mr. Promislo has been
Managing Director (from 1996 to date) and past partner (from 1977 to 1994) of
Wolf, Block, Schorr and Solis-Cohen (a Philadelphia law firm). Since 1991, he
also has been President and a director of Historical Documents Co. and Historic
Souvenir Co. (souvenir manufacturers). From 1994 to date, he has served as a
director, and from 1996 to October 1997 was the Chairman of the Board of
Directors, of WHYY, Inc. (the principal public television station in the
Philadelphia metropolitan area).
4
<PAGE>
Edward S. Brown, 59, a trustee of the Company. Mr. Brown has been
President of The Edward S. Brown Group (a real estate development company)
since 1985.
S. Peter Albert, 60, a trustee of the Company. Mr. Albert was named a
Senior Vice President of Hudson United Bancorp and the Vice-Chairman of the
Jefferson Bank Division of Hudson United Bank in 1999 following the acquisition
by Hudson United Bancorp of JeffBanks, Inc., of which Mr. Albert was the
Vice-Chairman since 1996. Mr. Albert was an Executive Vice President of NFL
Films (a film production company) from 1991 to 1994.
Non-Trustee Executive Officers
Jay R. Cohen, 59, was elected in October 1997 to serve as Executive Vice
President of the Company. From 1995 through September 1997, Mr. Cohen was
Executive Vice President and treasurer of CRIIMI MAE, Inc., Rockville,
Maryland, a REIT investing in mortgage loans. Prior thereto, from 1983, Mr.
Cohen served in various executive capacities with predecessor REITs to CRIIMI
MAE, including service as Executive Vice President and Treasurer of CRI Insured
Mortgage Association, Inc., CRI Liquidating REIT, Inc. and Capital Housing and
Mortgage Partners, Inc. During such period, Mr. Cohen also served as President
of Crico Mortgage Company, Inc., a manager of REITs and master limited
partnerships. Subsequent to Mr. Cohen becoming Executive Vice President of the
Company, CRIIMI MAE filed a petition for reorganization under Chapter 11 of the
U.S. Bankruptcy Code on October 5, 1998.
Ellen J. DiStefano, 35, a certified public accountant, was elected in
October 1997 to serve as Chief Financial Officer of the Company and also has
served as Vice President of the Company since December 1998. From 1992 to
August 1997, Ms. DiStefano was Chief Financial Officer of Brandywine
Construction & Management, Inc., a Philadelphia, Pennsylvania based national
manager and developer of commercial, multifamily residential, office and hotel
properties. See "Certain Relationships and Related Party Transactions."
Trustee Compensation
Each independent trustee of the Company was paid a retainer of $10,000
during fiscal 1999. Each independent trustee was also paid $1,000 for each
meeting of the Board of Trustees that he attended in person and $500 for each
committee meeting attended in person. Independent trustees were also paid an
additional $500 for each meeting of a committee that they attended in person
and for which they presided as chairman. Mr. Jonathan Z. Cohen was also paid
$25,000 for his services as Secretary of the Company. A total of $61,000 was
paid to the independent trustees during fiscal 1999 or attendance at Board and
committee meetings. During 1999, each independent trustee was awarded options
to acquire 10,000 Common Shares at a price of $10.75 per Common Share.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, trustees, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and to furnish the Company with copies of all such reports.
Based solely on its review of the reports received by it, or
representations from certain reporting persons that no filings were required
for those persons, the Company believes that, during fiscal 1999, its officers,
trustees and greater than ten percent shareholders complied with all applicable
filing requirements.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Trustees (the "Compensation
Committee"), consisting of Mrs. Cohen and Messrs. Promislo, Brown and Mesznik,
makes determinations regarding the compensation of the Company's executive
officers. None of the Committee members besides Mrs. Cohen is an employee or
former employee, of the Company. No executive officer of the Company was a
director or compensation committee member of an entity, any of whose executive
officers served on the Company's Board or Compensation Committee.
5
<PAGE>
Information Concerning the Board of Trustees and Certain Committees
The Board of Trustees held a total of four meetings during fiscal 1999.
Each of the trustees attended all meetings of the Board and all meetings of
committees on which they served during fiscal 1999. Standing committees of the
Board of Trustees are the Audit Committee, Compensation Committee, Investment
Committee and Nominating Committee.
The Audit Committee reviews the scope and effectiveness of audits by the
independent accountants, selects and recommends to the Board of Trustees the
engagement of independent accountants and reviews the adequacy of the Company's
internal controls. The Committee met twice during fiscal 1999. Members of the
Committee are Messrs. Brown, Promislo and Mesznik.
The Compensation Committee establishes and monitors compensation levels
for officers of the Company and administers the 1997 Stock Option Plan. The
Committee held one meeting during fiscal 1999. Members of the committee are
Mrs. Cohen and Messrs. Brown, Mesznik and Promislo. Mrs. Cohen abstains from
voting on, and is not present during Committee discussions of, her
compensation.
The Investment Committee reviews all current management investment
practices and evaluates and monitors all existing and proposed Company
investments. The Committee held eight meetings during fiscal 1999. All of the
trustees are members of the Investment Committee.
The Nominating Committee recommends persons for nomination as trustees of
the Company. The Committee met once during fiscal 1999. The Committee will
consider nominees recommended by security holders for the 2001 annual meeting
if submitted in writing to the Secretary of the Company prior to April 27,
2001. Members of the committee are Mrs. Cohen and Messrs. Brown and Mesznik.
Executive Officer Compensation
The following tables set forth certain information concerning the
compensation paid or accrued by the Company during each of the last three
fiscal years since its formation in 1997, to the Company's Chief Executive
Officer and each of the Company's other most highly compensated executive
officers whose aggregate salary and bonus exceeded $100,000.
<TABLE>
<CAPTION>
Long-Term Compensation(1)
Annual Compensation Awards
----------------------------------- --------------------------
Securities All
Underlying Other
Year Salary ($) Bonus ($) Options (#)(2) ($)(3)
------ ------------ ----------- ---------------- -------
<S> <C> <C> <C> <C> <C>
Betsy Z. Cohen ...................................... 1999 300,000 100,000 50,000 500
Chairman, Chief Executive Officer, 1998 262,500 50,000 261,526 433
President & Chief Operating Officer 1997 0 0 0 0
Jay J. Eisner(4) .................................... 1999 200,000 100,000 40,000 2,500
President and COO 1998 162,500 50,000 87,175 2,500
1997 0 0 0 0
Jay R. Cohen ........................................ 1999 204,200 35,000 20,000 2,500
Executive Vice President 1998 200,000 25,000 58,117 2,500
1997 0 0 0 0
Ellen J. DiStefano .................................. 1999 154,300 25,000 20,000 2,500
Vice President and Chief Financial Officer ......... 1998 127,500 20,000 40,682 2,500
1997 0 0 0 0
</TABLE>
------------
(1) Except for the 1997 Stock Option Plan and 401(k) Plan reported elsewhere in
this table, the Company does not have long-term incentive plans or pension
or profit sharing plans.
6
<PAGE>
(2) Reflects shares awarded under the 1997 Stock Option Plan, none of which
have been exercised to date.
(3) All amounts are matching payments made by the Company under the 401(k)
Plan.
(4) Jay J. Eisner resigned on April 7, 2000.
Option Grants and Exercises in Last Fiscal Year and Year-end Option Values
The following table sets forth the number of options granted during fiscal
1999 to the executive officers listed in the Summary Compensation Table.
<TABLE>
<CAPTION>
Individual Grants Grant Date Value
-------------------------------------------------------------- -----------------
Number of % of Total
Securities Options Granted Exercise
Underlying to Employees or Base Expiration Grant Date
Name Options Granted In 1999 Price Date(1) Present Value(2)
---------------------------- ----------------- ----------------- ---------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Betsy Z. Cohen ............. 50,000 38.5% $ 10.75 11/9/09 $ 168,500
Jay J. Eisner(3) ........... 40,000 30.7% 10.75 11/9/09 134,800
Jay R. Cohen ............... 20,000 15.4% 10.75 11/9/09 67,400
Ellen J. DiStefano ......... 20,000 15.4% 10.75 11/9/09 67,400
</TABLE>
------------
(1) All options are 50% exercisable on the first anniversary of the date of
grant, with an additional 50% becoming exercisable on the following
anniversary date. The options all terminate upon the earlier to occur of
ten years from the date of grant or termination of employment, except
termination due to death, permanent disability or retirement.
(2) Grant date present value has been calculated using the Black-Scholes option
pricing model.
(3) Jay J. Eisner resigned on April 7, 2000.
There were no option exercises by Trustees or executive officers during
fiscal 1999. The following table sets forth the number of unexercised options,
and the value thereof on December 31, 1999, held by the executive officers
listed in the Summary Compensation Table.
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexcercised
Unexercised In-the-Money
Options at Options at
Shares FY-End (#) FY-End ($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---------------------------- -------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Betsy Z. Cohen ............. 0 0 65,382/246,149 16,551/52,777
Jay J. Eisner(2) ........... 0 0 21,794/105,381 5,517/19,050
Jay R. Cohen ............... 0 0 14,529/63,588 3,678/12,284
Ellen J. DiStefano ......... 0 0 10,171/50,511 2,575/8,974
</TABLE>
------------
(1) Value is calculated by subtracting the total exercise price from the fair
market value of the securities underlying the options at December 31, 1999
($10.8125 per share).
(2) Jay J. Eisner resigned on April 7, 2000.
Employment Agreements
The Company has an employment agreement with Betsy Z. Cohen, its Chairman,
Chief Executive Officer, President and Chief Operating Officer. The agreement
with Mrs. Cohen provides that she will devote only such time to the Company as
is reasonably required to fulfill her duties. Under the agreement, Mrs. Cohen
receives base compensation of $250,000 per year (increased to $300,000
effective October 1, 1998) which may be increased by the Compensation Committee
based upon its evaluation of Mrs. Cohen's performance. Mrs. Cohen is also
eligible for bonuses as determined by the Compensation Committee. The agreement
has a term of one
7
<PAGE>
year that is automatically extended so that, on any day that the agreement is
in effect, it will have a then current term of one year. The automatic
extensions cease upon notice by the Company of its election to terminate the
agreement at the end of the one-year period then in effect or upon 90 days
notice by Mrs. Cohen after the initial one year term. The agreement terminates
upon Mrs. Cohen's death and may be terminated by the Company for cause
(material and willful misconduct, conduct that would result in material injury
to the reputation of the Company or continued deliberate negligent performance
or non-performance of duties) or disability of Mrs. Cohen for more than an
aggregate of 180 days during any 365-day period. The agreement may be
terminated by Mrs. Cohen upon 45 days notice for "good reason" (generally,
relocation of the Company out of the Philadelphia area, a change in control of
the Company, a substantial change in Mrs. Cohen's duties, the Company's failure
to continue coverage under benefit plans or a material breach of the agreement
by the Company), subject to a 30-day cure period. In the event of a termination
other than for cause, Mrs. Cohen (or her estate) will receive a lump sum
benefit equal to her "average compensation." As used in the agreement, "average
compensation" means the average of Mrs. Cohen's compensation (including the
annualized current year's compensation) in the three most highly compensated
years during the previous five years, except that if she has been employed for
less than three years, it means the highest annual compensation received during
the period. In addition, upon termination, all options to acquire Common Shares
held by Mrs. Cohen vest on the later of the effective date of termination or
six months after the options were granted.
Mr. Eisner, who resigned April 7, 200, was employed under an agreement
providing for base compensation of $150,000 and, except for the requirement
that Mr. Eisner devote his full business time to the Company, was substantially
similar to that of Mrs. Cohen.
Certain Relationships and Related Party Transactions
In the ordinary course of its business operations, the Company has ongoing
relationships with several related entities, primarily Resource America and
Brandywine Construction & Management Inc. ("Brandywine"). Resource America,
which was the sponsor of the Company, currently owns 13.4% of the outstanding
Common Shares. Resource America has the right to nominate one person for
election to the Board of Trustees until such time as its ownership of
outstanding Common Shares is less than 5%. Currently, Jonathan Z. Cohen is
serving as Resource America's nominee. Mr. Cohen is an officer of Resource
America and the son of Betsy Z. Cohen, the Chairman and Chief Executive Officer
of the Company. Edward E. Cohen, who is the Chairman and Chief Executive
Officer, a director and principal shareholder of Resource America, is the
husband of Betsy Z. Cohen and the father of Jonathan Z. Cohen.
During 1999 the Company engaged in the following transactions with
Resource America:
The Company and Resource America jointly acquired a loan at a purchase
price of $14.6 million, $10.0 million (balance of $10.0 million at December 31,
1999) of which was contributed by the Company. The Company's interest is
subordinate to the $58.6 million (at December 31, 1999) interest of an
unaffiliated party, but senior to Resource America's interest.
The Company repurchased a $4.0 million junior lien interest from Resource
America for $4,135,000. This loan was converted to a property interest as of
December 31, 1999.
The Company sold a first mortgage to Resource America for $2.5 million and
recognized a gain on the sale of $131,000.
Brandywine, an affiliate of Resource America, provides real estate
management services to two properties owned by the Company and twelve
properties underlying the Company's loans at December 31, 1999. Management fees
in the amount of $ 422,000 were paid to Brandywine for the year ended December
31, 1999 relating to the properties owned by the Company.
The Company places its temporary excess cash in short-term money market
instruments with Hudson United Bancorp, as successor in interest to JeffBanks,
Inc. Until July 17, 2000, Mrs. Cohen was a director of Hudson United Bancorp
and the Chairman of the Jefferson Bank Division of Hudson United Bank (Hudson
United Bancorp's banking subsidiary). As of December 31, 1999 the Company had
$10.4 million ($5.0 million at December 31, 1998) in deposits at Hudson United
Bancorp, of which approximately $10.3 million ($4.9 million at December 31,
1998) was over the FDIC insurance limit.
In 1999, the Company originated a non-recourse loan in the amount of
$950,000 to Daniel G. Cohen, the son of Mrs. Cohen, who is also the President
and Chief Operating Officer of Resource America, in connection with his
acquisition, through a partnership, of two residential properties located in
Philadelphia, Pennsylvania. The loan yields 15.0% per year and is secured by a
pledge of all of the partnership interests in the partnership.
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Performance Graph
The following graph compares the change in the cumulative total return on
the Common Shares of the Company for the year ended December 31, 1999, with the
performance of the S&P 500 Index and the National Association of Real Estate
Investment Trusts (NAREIT) Mortgage REIT Index. The Company's shares are traded
on the American Stock Exchange under the symbol "RAS."
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG RESOURCE ASSET INVESTMENT TRUST,
THE S&P 500 INDEX AND THE NAREIT MORTGAGE REIT INDEX*
[GRAPHIC OMITTED]
* Assumes $100 was invested on January 1, 1999 in the Company's Common Shares
or in the indicated index and that cash dividends were reinvested as
received.
Compensation Committee Report on Executive Compensation
The Company's compensation policies are established to compensate and
reward executives for their contribution to the success of the Company and to
provide appropriate compensation packages to attract, motivate and retain
talented executives.
The executive compensation program is designed to reward performance that
is directly relevant to the Company's short-term and long-term success and
goals and, as such, is structured with three components: base salary, annual
bonuses and long-term incentives.
Base Salary
Base salaries for executive officers are determined in part relative to
pay practices in other real estate asset management businesses and REIT's, as
well as by the Committee's assessment of individual performance relative to
responsibilities and objectives for each executive. Base salaries are not
intended to compensate individuals for extraordinary performance or for above
average Company performance.
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Bonus Plan
Executives are eligible to receive annual bonuses, which are generally
based on the overall Company performance during the preceding year and the
individual's specific contribution to that performance. The Company does not
have a defined bonus pool and allocation of the amount available for annual
bonus payments is at the discretion of the Committee. No formula performance
measures have been established for determining the amount of bonus awards;
however, the Committee considers individual contribution to the overall
performance of the Company and performance relative to expectations. During
1999, the Committee awarded $260,000 in bonuses.
Long-Term Incentives
General. Long-term incentives are designed to focus executives on the
long-term goals and performance of the Company and to provide a reward directly
tied to shareholder return; the performance of the Common Shares. The
particular plans are intended to encourage the participants to strive to
achieve the long-term success of the Company and to remain with the Company in
order to fully benefit from the plans.
Stock Options. Stock options are issued periodically to key employees at
an exercise price of no less than the then current market price of the Common
Shares, have a ten-year life and vest over a period of two to four years.
Allocation of available options is at the discretion of the Committee and is
determined by potential contribution to, or impact upon, the overall
performance of the Company by the executive. Stock options are also issued
periodically to trustees. These options may have similar terms as those issued
to officers or may vest immediately.
Savings Plan. The 401(k) Plan offers eligible employees the opportunity to
make long-term investments on a regular basis through salary contributions,
which are supplemented by matching Company contributions in the form of Common
Shares. During fiscal 1999, the Company matched employee contributions 25% in
Common Shares. While participation in this plan is at the discretion of the
qualified employee, the intent was, and remains, to reward all employees,
including executives, based on the long-term success of the Company as measured
by the return to shareholders.
Chief Executive Officer Compensation
In evaluating the performance and setting the total compensation package
for Betsy Z. Cohen, the Committee met without Mrs. Cohen being present. The
Committee noted that Mrs. Cohen is employed pursuant to the agreement described
in "Employment Agreements" contained elsewhere in the proxy statement of which
this report is a part. Such agreement provides for a base salary of $250,000,
which was increased to $300,000 effective October 1, 1998. In 1999, the
Committee determined to not increase Mrs. Cohen's base salary but to award Mrs.
Cohen a bonus of $100,000. In making such determination, the Committee viewed
the Company's upward trend in dividends and funds from operations ("FFO"), as
well as the successful negotiation of a senior secured line of credit in the
amount of $20 million, as significantly adding to shareholder value. The
Committee believes that the efforts of Mrs. Cohen were a principal reason that
the dividends and FFO have increased and that the Company was able to obtain an
additional source of financing.
This report has been provided by the Compensation Committee of the Board
of Trustees of Resource Asset Investment Trust. Mrs. Cohen did not participate
in the preparation of the paragraph of this Compensation Committee Report
entitled "Chief Executive Officer Compensation."
Betsy Z. Cohen Daniel Promislo
Edward S. Brown Joel R. Mesznik
PROPOSAL 2. APPROVAL OF NAME CHANGE
The Board of Trustees has unanimously approved and recommends that the
shareholders consider and approve an amendment to the Company's Declaration of
Trust to change the Company's name from Resource Asset Investment Trust to RAIT
Investment Trust. The Board of Trustees believes that borrowers and others in
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the marketplace generally refer to the Company by its current acronym "RAIT"
and notes that the Company's operating partnership, which conducts the business
of the Company, is called RAIT Partnership, L.P. The Company wishes to conform
its legal name to its commonly used name and to that of its operating
partnership.
PROPOSAL 3. RATIFICATION OF ACCOUNTANTS
The Board of Trustees recommends that the shareholders ratify the
selection of Grant Thornton LLP, independent certified public accountants, to
audit the financial statements of the Company for the fiscal year ending
December 31, 2000. Grant Thornton LLP will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
OTHER MATTERS
As of the date of this proxy statement, the Board of Trustees does not
intend to present and has not been informed that any other person intends to
present any other matters for action at the annual meeting. However, if other
matters do properly come before the meeting, it is the intention of the persons
named as proxies to vote upon them in accordance with their best judgment.
Except as hereinabove stated, all shares represented by valid proxies
received will be voted in accordance with the provisions of the proxy.
ANNUAL REPORT AND REPORT ON FORM 10-K
The Company's 1999 Annual Report to Shareholders, including the financial
statements and management's discussion and analysis of financial condition and
results of operations for the year ended December 31, 1999, will be sent to
shareholders of record as of August 15, 2000 with this proxy statement.
Shareholders of record as of August 15, 2000, and beneficial owners of the
Common Shares on that date, may obtain from the Company, without charge, a copy
of the Company's most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission, exclusive of the exhibits thereto, by a
request therefor in writing. Such requests should be directed to the Company,
at its Philadelphia address stated herein, and to the attention of the
Secretary. Beneficial owners shall include in their written requests a good
faith representation that they were beneficial owners of the Common Shares on
August 15, 2000.
SHAREHOLDER PROPOSALS
Under rules promulgated by the Securities and Exchange Commission, holders
of Common Shares who desire to submit proposals for inclusion in the proxy
statement of the Company to be utilized in connection with the 2001 annual
meeting of shareholders, subject to compliance with the eligibility standards
specified in such rules, must submit such proposals to the Secretary of the
Company no later than April 27, 2001. In addition, the proxy for the 2001
annual meeting of shareholders may confer discretionary authority to vote on
any matters brought before that meeting where the Company has not received
notice of the matter on or before April 27, 2001.
By order of the Board of Trustees
Jonathan Z. Cohen
August 25, 2000
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RESOURCE ASSET INVESTMENT TRUST
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF TRUSTEES OF RESOURCE ASSET INVESTMENT TRUST
The undersigned hereby appoints Betsy Z. Cohen and Ellen J. DiStefano, and
each of them, as and for his proxies, each with the power to appoint such
proxy's substitute, and hereby authorizes them, or any of them, to vote all of
the shares of Common Shares of Beneficial Interest of Resource Asset Investment
Trust held of record by the undersigned on August 15, 2000 at the Annual
Meeting of Shareholders of Resource Asset Investment Trust, to be held
Wednesday, September 13, 2000 and at any and all adjournments, postponements or
continuations thereof as set forth on the reverse side hereof.
(continued and to be signed on reverse side)
<PAGE>
I plan to attend the meeting
Yes / / No / /
1. ELECTION OF TRUSTEES
The nominees for election are Betsy Z. Cohen, Jonathan Z. Cohen, Edward S.
Brown, Joel R. Mesznik, Daniel Promislo and S. Peter Albert.
/ / FOR all the nominees / / Withhold Authority To withhold
listed above to vote for all authority to vote
(except as marked nominees listed above for any individual
to the contrary nominee, write that
at the right) nominee's name in
the space provided below.
------------------------
------------------------
2. PROPOSAL TO RATIFY THE SELECTION OF GRANT THORNTON LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR 2000 FISCAL YEAR
/ / FOR Approval / / AGAINST Approval / / ABSTAIN
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3. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S DECLARATION OF TRUST
CHANGING THE COMPANY'S NAME FROM RESOURCE ASSET INVESTMENT TRUST TO RAIT
INVESTMENT TRUST.
/ / FOR Approval / / AGAINST Approval / / ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
This proxy, when properly executed, will be voted in the manner described herein
by the undersigned. If no direction is made, this proxy will be voted FOR all
nominees listed and FOR ratification of Grant Thornton LLP as independent public
auditors for the Company for fiscal 2000.
------------------------
Signature of Shareholder
-------------------------
Signature if held jointly
Dated:_____________, 2000
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
NOTE: Please sign exactly as your name appears on this proxy card. When shares
are held by joint tenants, both should sign. When signing as an attorney,
executor, administrator, trustee, or guardian, please give full title as such.
If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
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