Grant Date:

February 28, 2017

Target Cash Bonus Amount:

[Dollar amount]

Cash Award Opportunity:

Subject to the terms and conditions set forth in this Grant Agreement and the Plan, the Company hereby notifies you that you have the opportunity to receive a Target Cash Bonus Award in an amount calculated with respect to your Target Cash Bonus Amount in the manner set forth in the Annual Cash Bonus Plan.  The actual amount of the Target Cash Bonus Award shall be determined according to the achievement or non-achievement of performance targets (the “Performance Targets”) established by the Committee on February 28, 2017 and set forth in in the Annual Cash Bonus Plan.  The Participant shall not be entitled to receive any portion of the 2017 Target Cash Bonus Award that does not become payable because of the failure to fully satisfy the Performance Targets.

Tax Liability and Payment of Taxes:

You acknowledge and agree that any income or other taxes due from you with respect to the Target Cash Bonus Award issued pursuant to this Grant Agreement shall be your responsibility.  Upon payment of the Target Cash Bonus Award, the Company will withhold a portion of such Target Cash Bonus Award in order to satisfy your tax obligations.

Delivery:

The actual payment of the Target Cash Bonus Award, as adjusted pursuant to this Grant Agreement or the Plan, will be made as soon as practicable following the Committee’s determination of the achievement or nonachievement of the Performance Targets; provided, however, that, in order to comply with certain rules concerning the regulation of deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, in no event will any such payment be made later than March 15, 2018.

Transferability:

You may not transfer or assign the Target Cash Bonus Award for any reason, other than under your will or as required by intestate laws.  Any attempted transfer or assignment will be null and void.

Savings:

Any amounts paid pursuant to this Target Cash Bonus Award are intended to be considered “qualified performance-based compensation” under section 162(m) of the Code and Article IX of the Plan   If any provision of this Grant Agreement with respect to such portion is determined to be inconsistent with the requirements of Internal Revenue Code Section 162(m)(4)(C) or such Article, such portion shall be deemed to be a Target Cash Bonus Award made solely under Article X of the Plan.

Clawback:

In addition to, and not in limitation of, the forfeiture of the Target Cash Bonus Award (or any portion thereof) as provided in this Grant Agreement or the Plan, the Company may recover amounts paid to you pursuant to this Target Cash Bonus Award to the extent that the Committee, following an appropriate investigation and consideration of all relevant circumstances, determines that you have engaged in fraud or willful misconduct that caused the requirement for a material accounting restatement of the Company’s financial statements due to material noncompliance with any financial reporting requirement (excluding any restatement due solely to a change in accounting rules).

Miscellaneous:

As a condition of the granting of this Target Cash Bonus Award, you agree, for yourself and your legal representatives and/or guardians, that this Grant Agreement shall be interpreted by the Committee and that any such interpretation of the terms of this Grant Agreement and any determination made by the Committee pursuant to this Grant Agreement shall be final, binding and conclusive.  This Grant Agreement may be executed in counterparts.  This Grant Agreement and the Target Cash Bonus Award granted hereunder shall be governed by Maryland Law.

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“Objective/Formulaic Component” — the objective/formulaic component of the Annual Cash Bonus Award that may be earned by each Eligible Officer will be determined by IRT’s performance relative to specified objective performance criteria established by the Compensation Committee as described below.  

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“Subjective Component” – the subjective component of the Annual Cash Bonus Award may be determined based on the Compensation Committee’s subjective evaluation of such participant’s performance.  

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Allocation of Components and Calculation of the Annual Cash Bonus Award. For 2017, the 2017 Cash Bonus Awards are allocated 75% to the objective/formulaic component and 25% to the subjective component.   The amount of the 2017 Cash Bonus Award of any Eligible Officer will be calculated by: (a) determining the sum of the results of multiplying the 2017 weighting for each metric (described below) by the Relevant Percentage (described below) achieved with respect to each metric, (b) multiplying such sum by the objective criteria allocation of 75% to obtain a percentage referred to as the “Objective Criteria Bonus Earned”, (c) determining the result of multiplying the subjective criteria Relevant Percentage by the subjective criteria allocation of 25% to obtain to obtain a percentage referred to as the “Subjective Criteria Bonus Earned”, (d) multiplying the 2017 base salary of the relevant Eligible Officer by the sum the Objective Criteria Bonus Earned and the Subjective Criteria Bonus Earned.   The actual 2017 Annual Cash Bonus Award earned by a participant may range from 0% to each Eligible Officer’s maximum Relevant Percentage of base salary based on actual performance for the year.

2017 Cash Bonus Award Ranges

Executive

2017 Base
Salary

Threshold

Target

Maximum

Scott F. Schaeffer

$618,600

100%

164%

250%

Farrell M. Ender

$308,600

57%

117%

177%

James J. Sebra

$398,600

50%

100%

150%

2017 Cash Bonus Award

Executive

Threshold

Target

Maximum

Scott F. Schaeffer

$618,600

$1,015,000

$1,546,500

Farrell M. Ender

$176,000

$      361,000

$   546,000

James J. Sebra

$199,300

$   398,600

$   597,900

Objective Performance Criteria

2017 Weighting

CORE FFO per share

40%

The increase in same store property net operating income as compared to the previous year

20%

Property net operating income margin

15%

General and Administrative expenses (excluding stock based compensation) as a percentage of revenues

15%

IRT’s ratio of net debt to Adjusted EBITDA

10%

oBroaden Company’s institutional shareholder base.

oPursue financial transactions to lower cost of capital, extend debt maturities and enhance liquidity profile

oIncrease analyst coverage of the Company

oComplete systems separation from RAIT Financial Trust (“RAIT”), including staffing and back office requirements in 2017.  

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All Cash Bonus Award payments will be made in the year following the completion of the annual performance period to which the Cash Bonus Award payment relates.  The actual payment to each Eligible Officer will be made as soon as practical after final certification of the underlying performance results and approval of such payment by the Compensation Committee; provided, however, that, in order to comply with certain rules concerning the regulation of deferred compensation under the Internal Revenue Code of 1986, as amended, in no event will any such payment be made later than March 15 of such year.

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An Eligible Officer who terminates employment with IRT prior to the conclusion of any applicable performance period with respect to which an applicable Cash Bonus Award payment relates will not receive a Cash Bonus Award payment, except that:

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In the event of such participant’s death or disability (as defined in the relevant Eligible Employee’s employment agreement, or, if not so defined, determined in accordance with the 2016 Plan) (“Disability”) prior to the end of the annual performance period, an otherwise eligible participant may receive a Cash Bonus Award payment in the amount of such participant’s full Cash Bonus Award, as determined by the Compensation Committee, provided a Cash Bonus Award was approved for such participant for the applicable performance period.

o

In the event of the termination of such participant’s employment, other than voluntarily or for Cause (as defined in the relevant employment agreement for each Eligible Officer), following a Change of Control (as defined in the relevant Eligible Employee’s employment agreement, or, if not so defined, in the 2016 Plan) but prior to end of the annual performance period, an otherwise eligible participant may receive an Cash Bonus Award payment in the amount of such participant’s full Cash Bonus Award, as determined by the Compensation Committee, provided a Cash Bonus Award was approved for such participant for the applicable annual performance period.