Exhibit 10.3

EMPLOYMENT AGREEMENT

(As Amended and Restated Effective as of the Date Below Executed)

This amended and restated EMPLOYMENT AGREEMENT (this “Agreement”), effective as
of the date it is executed below (the “Effective Date”), is between Pennsylvania
Real Estate Investment Trust, a Pennsylvania business trust (“Company”), and
Joseph F. Coradino (“Executive”).

BACKGROUND

Executive is currently the Executive Vice President-Retail of Company. Company
desires to continue to employ Executive, and Executive desires to continue to be
so employed, on the terms and conditions contained in this amended and restated
Agreement. Executive has been and will continue to be substantially involved
with Company’s operations and management and has and will continue to have trade
secrets and other confidential information relating to Company and its business
relationships; accordingly, the noncompetition agreement and other restrictive
covenants contained in Section 5 hereof constitute essential elements hereof.

Company and Executive desire to amend and restate Executive’s current Agreement
so that, among other things, its terms and conditions comply with (or are exempt
from) the deferred compensation rules set forth in section 409A of the Internal
Revenue Code of 1986, as amended (the “IRC”), and the final regulations issued
thereunder.

NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:

 

1. CAPACITY AND DUTIES

1.1 Employment; Acceptance of Employment. Company hereby employs Executive and
Executive hereby agrees to continue employment by Company for the period and
upon the terms and conditions hereinafter set forth.

1.2 Capacity and Duties

(a) Executive shall continue to serve as Executive Vice President-Retail of
Company and, subject to the supervision and control of the Chairman of Company,
shall have the duties and authority generally consistent with such office.
Subject to Section 4.4(b)(3) hereof, Executive shall also be a member of the
Office of the Chair so long as the Office of the Chair exists. As Executive Vice
President-Retail, Executive shall perform such other duties and shall have such
authority as may from time to time be specified by the Chairman of Company and
as shall be consistent with the status and authority of his current office.
Executive shall also serve as Executive Vice President-Retail of PREIT
Associates, L.P. (“PALP”), of which Company is the general partner.

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(b) Executive understands that substantially all of the assets of Company
consists of its general partner interest in PALP, and that the business
operations of PALP and its direct and indirect subsidiaries constitute all of
the business operations conducted by Company and its “Affiliates” (as defined in
subsection (c) below). Accordingly, Company and Executive understand that most
of Executive’s time and energy will be expended on behalf of PALP and its direct
and indirect subsidiaries in Executive’s capacity as an officer of PALP rather
than as an officer of Company.

(c) Except as permitted by subsection (d) below, Executive (i) shall devote his
full working time, energy, skill and best efforts to the performance of his
duties hereunder, in a manner that will comply with Company’s published rules
and policies in effect from time to time, and (ii) shall not be employed by or
participate or engage in or in any manner be a part of the management or
operation of any business enterprise other than Company and its Affiliates
without the prior written consent of Company, which consent may be granted or
withheld in the sole discretion of Company. “Affiliate” as used in this
Agreement means any person or entity controlling, controlled by, or under common
control with, Company. “Control,” as used in the definition of Affiliate, means
the power to direct the management and policies of a person or entity, directly
or indirectly, whether through the ownership of voting securities, by contract,
or otherwise; the terms “controlling” and “controlled” shall have correlative
meanings. Further, any person or entity that owns beneficially, either directly
or through one or more intermediaries, more than 20 percent of the ownership
interests in a specified entity shall be presumed to control such entity for
purposes of the definition of Affiliate.

(d) Notwithstanding the provisions of subsection (c) above, Executive may
(i) continue his investments in the properties listed on Schedule 1.2 hereto
and, subject to the provisions of Section 5.2 hereof, subsequent properties,
provided that Executive’s activities with respect to such subsequent properties
comply with any procedures adopted by the Board of Trustees of Company (the
“Board”) governing Executive’s non-Company related real estate activities, and
(ii) subject to Section 5.2 hereof, serve on the board of directors or similar
body of other organizations, including publicly owned corporations or other
entities, philanthropic organizations, and organizations in which Executive has
made an investment, provided that Executive’s activities with respect to all of
the foregoing do not, individually or in the aggregate, in any significant way,
interfere with, detract from, or affect the performance of his duties to Company
under this Agreement.

 

2. TERM OF EMPLOYMENT

2.1 Term. The initial term of Executive’s employment hereunder shall begin on
the Effective Date and last until December 31, 2009 (the “Expiration Date”),
unless sooner terminated in accordance with the other provisions hereof. Except
as hereinafter provided, on the Expiration Date and on each subsequent
anniversary thereof, the Term (as hereinafter defined) shall be automatically
extended for one year unless either party

 

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shall have given to the other party notice of non-renewal of this Agreement at
least 120 calendar days prior to the expiration of the Term. The initial term of
employment hereunder and each term as extended is a “Term.” If a non-renewal
notice is given as provided above, Executive’s employment under this Agreement
shall terminate (within the meaning of Section 4.8 hereof) on the last calendar
day of the Term. If the non-renewal notice is given by Company, such termination
of employment shall be a termination by Company without Cause, within the
meaning of Section 4.4 hereof.

 

3. COMPENSATION

3.1 Base Compensation. As compensation for Executive’s services, Company shall
pay to Executive a salary at the initial annual rate of $408,777, payable in
periodic installments in accordance with Company’s regular payroll practices in
effect from time to time. Effective as of January 1, 2009 and as of any later
date, Executive’s salary may be increased pursuant to action taken or authorized
by the Executive Compensation and Human Resources Committee (the “Committee”) of
the Board. Executive’s annual salary cannot be decreased without the written
consent of Executive. Executive’s annual salary, as determined in accordance
with this Section, is hereinafter referred to as the “Base Salary.” No later
than April 10 during any fiscal year during the Term, Company shall provide
Executive with written notice of his Base Salary, bonus plan eligibility, and
equity incentive awards, if any, for the current fiscal year. Such notice shall
provide sufficient information regarding Executive’s bonus plan eligibility so
that Executive’s maximum potential bonus is readily ascertainable. Failure to
provide such notice on a timely basis (such failure, a “Compensation Notice
Delinquency”) shall not be deemed a breach by Company; however, Executive shall
then be permitted to exercise his termination right under Section 4.7 hereof.

3.2 Cash Incentives. Executive shall be entitled during his employment hereunder
to participate in such of Company’s cash incentive plans and programs as may
from time to time be provided by Company for its executive officers, in each
case as determined by the Committee or the Board, as appropriate.

3.3 Employee Benefits. In addition to the compensation provided for in Sections
3.1 and 3.2 hereof, Executive shall be entitled, during his employment
hereunder, to participate in such of Company’s employee benefit plans and
benefit programs, including medical benefit programs, as may from time to time
be provided by Company for its executive officers. Company shall use its
commercially reasonable efforts to provide Executive with health insurance
through a preferred provider, traditional indemnity or equivalent plan.

3.4 Vacation. During the Term, Executive shall be entitled to a paid vacation of
25 business days during each calendar year or such additional number of days as
is provided in the Employee Handbook published from time to time by Company (the
“Company Employee Handbook”). Executive’s right to carry forward unused vacation
days for a calendar year to any future calendar year shall be governed by the
Company Employee Handbook as in effect from time to time.

 

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3.5 Expense Reimbursement. Company shall reimburse Executive for all reasonable
expenses incurred by him in connection with the performance of his duties
hereunder in accordance with its regular reimbursement policies as in effect
from time to time and upon receipt of itemized vouchers and such other
supporting information with respect to such expenses as Company may reasonably
require.

3.6 Equity Plans. Executive shall be entitled, during his employment hereunder,
to participate in such of Company’s equity incentive plans and programs as may
from time to time be provided by Company for its executive officers at such
level as shall be determined by the Committee or the Board, as appropriate.

3.7 Nonqualified Retirement Plan. Company has previously entered into a
nonqualified supplemental executive retirement plan with Executive whereby
Company has credited a bookkeeping account maintained by Company for Executive
with a deemed contribution per fiscal year. Company acknowledges that Executive
is entitled to continue receiving benefits under and in accordance with the
terms of such plan; provided that, beginning as of the first calendar day of
each fiscal year of Company beginning with its 2004 fiscal year, the deemed
contribution credited to Executive shall be $35,000 per fiscal year, which
amount shall earn interest at the rate of 10 percent compounded annually.
Executive shall at all times be fully vested in such account and such account
shall be paid to Executive in the manner and at the time(s) specified in such
plan.

3.8 Existing Grants. Executive shall be entitled to the benefit of all stock
option, restricted share, and performance unit grants heretofore made in
accordance with the terms and conditions applicable to each thereof.

 

4. TERMINATION OF EMPLOYMENT

4.1 Death of Executive. If Executive dies during the Term, Company shall
thereafter be obligated to continue to pay the Base Salary to Executive’s estate
for the remainder of the Term or, if the remainder of the Term is less than one
year, for a period of 12 months, periodically in accordance with Company’s
regular payroll practices and, within 30 calendar days of the death of
Executive, shall pay any other amounts (including salary, bonuses, vacation pay,
expense reimbursement, etc.) that have been fully earned by, but not yet paid
to, Executive under this Agreement as of the date of Executive’s death. If, for
the year in which Executive dies, Company achieves the performance goals
established in accordance with any cash incentive plan in which Executive
participates, Company shall pay Executive’s estate, within the period in the
following year that begins January 1 and ends March 15, an amount equal to the
bonus that Executive would have received had he been employed by Company for the
full year, multiplied by a fraction, the numerator of which is the number of
calendar days Executive was employed in such year and the denominator of which
is 365. Upon Executive’s death, (i) each outstanding option granted to Executive
before, on or after the date hereof shall become vested and shall be immediately
exercisable in accordance with the terms thereof, (ii) each outstanding
nonqualified stock option (“NQSO”) granted to Executive before, on or after the
date hereof shall be exercisable until the earlier of (A) the later of 180
calendar days

 

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after the death of Executive or the period following the death of Executive that
is set forth in the relevant stock option agreement or (B) the scheduled
expiration date of such option, (iii) the exercise period of each incentive
stock option (“ISO”) granted to Executive before, on or after the date hereof
shall be governed by the terms of the relevant ISO agreement, (iv) anything to
the contrary in any other existing agreement or plan notwithstanding, all
outstanding restricted shares granted to Executive that (A) are subject to
vesting solely based on the passage of time and Executive’s continued employment
shall become immediately vested, and (B) are subject to vesting based upon the
performance of Company (however measured) shall remain restricted shares under
the terms of the applicable restricted share award agreement (the “Award”) and
shall vest or be forfeited in whole or in part under the terms of such Award as
if Executive’s employment had not terminated, and (v) Executive’s spouse and
dependents (if any) shall be entitled for the balance of the Term or, if the
balance of the Term is less than one year, for a period of 12 months, to
continue to receive medical benefits insurance coverage at Company’s expense if
and to the extent Company was paying for such benefits for Executive’s spouse
and dependents at the time of Executive’s death. Executive’s spouse and
dependents shall be entitled to such rights as they may have to continue
coverage at their sole expense as are then accorded under Part 6 of Subtitle B
of Title I of the Employee Retirement Income Security Act of 1974, as amended
(“COBRA”), for the COBRA coverage period following the expiration of the period,
if any, during which Company paid such expense.

4.2 Disability of Executive. If Executive is or has been materially unable for
any reason to perform his duties hereunder for 120 calendar days during any
period of 150 consecutive calendar days, Company shall have the right to
terminate Executive’s employment (within the meaning of Section 4.8 hereof) upon
30 calendar days’ prior written notice to Executive at any time during the
continuation of such inability, in which event Company shall thereafter be
obligated to pay to Executive, within the 30-calendar-day period following his
termination of employment, a lump sum equal to (i) the greater of the amount of
his Base Salary computed through the remainder of the Term or his Base Salary,
in either case minus (ii) any disability payments reasonably projected to be
received by Executive from disability insurance policies paid for by Company
during the longer of the remainder of the Term or 12 months following his
termination of employment. Both the portion of the calculation in (i) of the
preceding sentence and the portion of the calculation in (ii) of the preceding
sentence shall be discounted from the dates that the Base Salary or disability
payments (as applicable) would have been payable during the relevant period
following termination in accordance with Company’s regular payroll practices or
in accordance with such disability insurance policies (as applicable) to present
value on the date of payment. The discount rate shall be equal to 200 basis
points plus the London Interbank Offered Rate for a one-month period set forth
in The Wall Street Journal (the “WSJ”) on the date of termination of employment
or, if the WSJ is not published on such date, the first day following such
termination on which the WSJ is published. Company shall also, within 30
calendar days of such termination, pay any other amounts (including salary,
bonuses, vacation pay, expense reimbursement, etc.) that have been fully earned
by, but not yet paid to, Executive under this Agreement as of the date of such
termination. If, for the year in which Executive’s employment is terminated
pursuant to this Section, Company achieves the performance goals established in

 

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accordance with any cash incentive plan in which Executive participates, Company
shall pay Executive, within the period in the following year that begins
January 1 and ends March 15, an amount equal to the bonus that Executive would
have received had he been employed by Company for the full year, multiplied by a
fraction, the numerator of which is the number of calendar days Executive was
employed in the year in which his employment is terminated and the denominator
of which is 365. Upon termination of Executive’s employment pursuant to this
Section, (i) each outstanding option granted to Executive before, on or after
the date hereof shall become vested and shall be immediately exercisable in
accordance with the terms thereof, (ii) each outstanding NQSO granted to
Executive before, on or after the date hereof shall be exercisable until the
earlier of (A) the later of 180 calendar days after the termination of
Executive’s employment pursuant to this Section or the period following the
termination of Executive’s employment for disability as is set forth in the
relevant stock option agreement, or (B) the scheduled expiration date of such
option, (iii) the exercise period of each ISO granted to Executive before, on or
after the date hereof shall be governed by the terms of the relevant ISO
agreement, (iv) anything to the contrary in any other existing agreement or plan
notwithstanding, all outstanding restricted shares granted to Executive that
(A) are subject to vesting solely based on the passage of time and Executive’s
continued employment shall become immediately vested, and (B) are subject to
vesting based upon the performance of Company (however measured) shall remain
restricted shares under the terms of the applicable Award and shall vest or be
forfeited in whole or in part under the terms of such Award as if Executive’s
employment had not terminated, and (v) Executive shall be entitled for the
balance of the scheduled Term or, if the balance of the Term is less than one
year, for a period of 12 months, to continue to receive at Company’s expense
medical benefits coverage for Executive and his spouse and dependents (if any)
if and to the extent Company was paying for such benefits to Executive and his
spouse and dependents at the time of such termination. Executive and his spouse
and dependents shall be entitled to such rights as they may have to continue
coverage at his or their sole expense as are then accorded under COBRA for the
COBRA coverage period following the expiration of the period, if any, during
which Company paid such expense.

4.3 Termination for Cause. Executive’s employment hereunder shall terminate
(within the meaning of Section 4.8 hereof) immediately upon notice that Company
is terminating Executive for Cause, in which event Company shall not thereafter
be obligated to make any further payments hereunder other than amounts
(including salary, bonus, vacation pay, expense reimbursement, etc.) that have
been fully earned by, but not yet paid to, Executive under this Agreement as of
the date of such termination, and which shall be paid within 30 calendar days of
such termination. Upon termination of Executive’s employment pursuant to this
Section, (i) each outstanding NQSO granted to Executive before, on, or after the
date hereof that is vested and currently exercisable as of the date Executive’s
employment is terminated pursuant to this Section shall remain exercisable until
the earlier of 30 calendar days following Executive’s termination or the
scheduled expiration date of such option, (ii) the exercise period of each ISO
granted to Executive before, on or after the date hereof shall be governed by
the terms of the relevant ISO agreement, (iii) all vested restricted shares
granted to Executive shall be delivered to Executive free and clear of any
restrictions,

 

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other than pursuant to applicable securities laws, and (iv) Executive and his
spouse and dependents shall have such rights (if any) to continue medical
benefits coverage at his or their sole expense following termination for Cause
as are then accorded under COBRA for the COBRA coverage period. “Cause” shall
mean the following:

(a) (i) fraud in connection with Executive’s employment, (ii) theft,
misappropriation or embezzlement of funds of Company or any of its Affiliates,
or (iii) an act resulting in termination pursuant to the provisions of the
“Code” (as defined in Section 6.4 hereof);

(b) indictment of Executive for a crime involving moral turpitude;

(c) breach of Executive’s obligations under Section 5.1 hereof or Section 5.2
hereof;

(d) failure of Executive to perform his duties to Company (other than on account
of illness, accident, vacation or leave of absence) that persists for more than
30 calendar days after written demand for substantial performance which
specifically identifies the manner in which Executive has failed to perform; or

(e) Executive’s repeated abuse of alcohol or drugs.

4.4 Termination Without Cause or for Good Reason.

(a) If at any time during the Term (i) Executive’s employment is terminated
(within the meaning of Section 4.8 hereof) by Company for any reason other than
Cause or the death or disability of Executive or (ii) Executive’s employment is
terminated (within the meaning of Section 4.8 hereof) by Executive for “Good
Reason” (as hereinafter defined):

(1) Company shall, on or before Executive’s last day of full-time employment
hereunder, pay Executive all amounts (including salary, bonuses, vacation pay,
expense reimbursement, etc.) that have been fully earned by, but not yet paid
to, Executive under this Agreement as of the date of such termination. In
addition, subject to subsection (c) below, Company shall pay Executive a
lump-sum cash payment equal to three times (x) Executive’s then current Base
Salary plus (y) an amount equal to the average of the percentages of Base Salary
that were paid to Executive as cash bonuses in each of the last three full
calendar years multiplied by Executive’s then current Base Salary (the “Average
Bonus”). The portion of the lump-sum cash payment contemplated by the preceding
sentence that represents Executive’s Base Salary or a multiple thereof shall be
discounted from the dates that the Base Salary would have been payable – at the
time of termination during the relevant period following termination in
accordance with Company’s regular payroll practices – to present value on the
date of payment at a discount rate equal to 200 basis points plus the London
Interbank Offered Rate for a one month period set forth in the WSJ on the date
of termination of employment or, if the WSJ is not published on such date, the
first day following such termination on which the WSJ is published.

 

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(2) Executive shall be entitled to continue, for two years, to receive at
Company’s expense medical benefits coverage for Executive and his spouse and
dependents (if any) if and to the extent Company was paying for such benefits to
Executive and his spouse and dependents at the time of such termination.
Executive and his spouse and dependents shall be entitled to such rights as he
or they may have to continue coverage at his or their sole expense as are then
accorded under COBRA for the COBRA coverage period following the expiration of
the period, if any, during which Company paid such expense.

(3) Anything to the contrary in any other existing agreement or document
notwithstanding, each outstanding stock grant and stock option granted to
Executive before, on or after the date hereof shall become immediately vested
and exercisable on the date of such termination, and, with respect to each
outstanding NQSO granted to Executive before, on or after the date hereof, such
NQSO shall remain exercisable until the earlier of 180 calendar days following
such termination or the scheduled expiration date of such option. The exercise
period of each ISO granted to Executive before, on or after the date hereof
shall be governed by the terms of the relevant ISO agreement.

(b) “Good Reason” shall mean the following:

(1) any action or inaction that constitutes a material breach of Company’s
obligations to Executive hereunder;

(2) a material change in the geographic location at which Executive provides
services; or

(3) a material diminution in Executive’s authority, duties or responsibilities;
provided, however, that Executive’s removal from the Office of the Chair shall
not be a basis for “Good Reason” termination (or otherwise be a breach by
Company hereunder) if there is only one officer in the Office of the Chair;

provided, in each case, that Executive shall have given written notice thereof
to Company within a period not to exceed 90 calendar days from the initial
existence of the condition, and Company shall have failed to remedy the
condition within 30 calendar days after its receipt of such notice. Further, for
Executive’s termination of employment (within the meaning of Section 4.8 hereof)
to be for Good Reason, Executive must give Company irrevocable written notice of
termination and such termination must occur before the end of the 120 calendar
days following the end of the 30-calendar-day remedy period described above.

(c) Notwithstanding the foregoing, Company shall not be obligated to make the
lump-sum cash payment under subsection (a)(1) above unless Executive has
executed and delivered to Company a further agreement, to be presented to
Executive by Company on or before the 10th calendar day after such termination,
that shall provide (i) an unconditional release by Executive of all claims,
charges, complaints and grievances, whether known or unknown to Executive,
against Company and any Affiliate (including,

 

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with respect to matters relating to his employment hereunder, any trustee,
officer, employee or agent of Company or any Affiliate) through the date of
Executive’s termination of employment; (ii) an undertaking to maintain the
confidentiality of such agreement; and (iii) an undertaking to indemnify Company
if Executive breaches such agreement.

Executive must sign and return the release to Company before the lump-sum
payment is made to him; provided that, if the release is not timely presented to
Executive, the requirement that Executive sign the release shall be waived. If
the release is timely presented to Executive, but Executive does not sign and
return the release to Company by the end of the applicable consideration period
under the federal Age Discrimination in Employment Act (currently, either 21 or
45 calendar days), then Executive shall forfeit the lump-sum payment. If the
release is timely signed and returned to Company and not thereafter revoked,
such lump-sum payment shall be made to Executive on the first business day on or
after the 75th calendar day after such termination.

(d) If Executive’s employment is terminated by Executive for Good Reason within
six months before or 12 months after a “Change of Control” of Company (as
defined in Section 4.5(d) hereof), Section 4.5 hereof shall govern the rights
and obligations of the parties and this Section shall be of no effect.

4.5 Change of Control

(a) If, during a Term, there should be a Change of Control (as defined herein),
and within six months before such Change of Control or 12 months thereafter
either (i) Executive’s employment shall be terminated (within the meaning of
Section 4.8 hereof) by Company for any reason other than for death, disability
or Cause or (ii) Executive’s employment is terminated (within the meaning of
Section 4.8 hereof) by Executive for Good Reason:

(1) Company shall, on or before Executive’s last day of full-time employment
hereunder, pay to Executive all amounts (including salary, bonuses, vacation
pay, expense reimbursement, etc.), that have been fully earned by, but not yet
paid to, Executive under this Agreement as of such termination plus a lump-sum
cash payment equal to three times (x) Executive’s then current annual Base
Salary plus (y) the Average Bonus. If Executive’s employment is terminated
during the six-month period before such Change of Control, the portion of the
lump-sum cash payment contemplated by the preceding sentence that represents
Executive’s Base Salary or a multiple thereof shall be discounted from the dates
that the Base Salary would have been payable during the relevant period
following termination in accordance with Company’s regular payroll practices to
present value on the date of payment. The discount rate shall be equal to 200
basis points plus the London Interbank Offered Rate for a one-month period set
forth in the WSJ on the date of termination of employment or, if the WSJ is not
published on such date, the first day following such termination on which the
WSJ is published.

 

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(2) Executive shall be entitled to continue, for two years, to receive medical
benefits coverage for Executive and his spouse and dependents (if any), to the
extent Executive was so entitled prior to such termination, at Company’s expense
if and to the extent Company was paying for such benefits to Executive and his
spouse and dependents at the time of such termination. Executive and his spouse
and dependents shall be entitled to such rights as he or they may have to
continue coverage at his sole expense as are then accorded under COBRA for the
COBRA coverage period following the expiration of the period during which
Company paid such expense.

(b) Anything to the contrary in any other agreement or document now or hereafter
existing notwithstanding, upon a Change of Control and without regard to whether
Executive’s employment is thereafter terminated, Executive shall become fully
vested as of the time immediately before such Change of Control in all then
existing stock grants, each stock option previously issued to him thereupon
shall become immediately vested and exercisable, without regard to continued
employment or performance-based vesting standards, and each NQSO shall remain
exercisable until the earlier of (i) the later of 180 calendar days after the
Change of Control or the period following a Change of Control that is set forth
in the relevant stock option agreement, or (ii) the scheduled expiration date of
such option. The exercise period of any ISO granted to Executive before, on or
after the date hereof shall be governed by the terms of the relevant ISO
agreement.

(c) In the event Executive is required to pay any excise tax imposed by section
4999 of the IRC (the “Excise Tax”), Company shall pay to Executive an additional
payment in an amount equal to the full amount of the Excise Tax (the “Tax
Reimbursement”); provided that Executive delivers acceptable evidence to Company
regarding the calculation and payment of the Excise Tax within the
30-calendar-day period after the Excise Tax is paid. The Tax Reimbursement then
shall be paid to Executive on the later of (i) the first business day after the
60th calendar day after the Excise Tax is paid or (ii) the first business day of
the seventh calendar month after the calendar month of his termination of
employment (within the meaning of Section 4.8 hereof). The amount payable under
this subsection (c) shall not be grossed-up to cover any excise, income or
employment taxes assessed upon the Tax Reimbursement. Notwithstanding anything
to the contrary in this subsection (c), if the amounts otherwise payable to
Executive would, in the opinion of Company’s regularly engaged independent
certified public accountants, constitute “excess parachute payments” within the
meaning of section 280G of the IRC and, if the net after-tax payment to
Executive (after giving effect to the Excise Tax and Tax Reimbursement) would be
increased by reducing the total compensation payable pursuant to this Section to
the maximum amount that may be paid to Executive without such payment
constituting an “excess parachute payment,” then the compensation payable under
this Section shall be so reduced. In the event Company determines such a
reduction is necessary, it shall promptly notify Executive of the amount of the
required reduction. To the fullest extent possible, such reduction shall first
be effected through a reduction in the number of restricted shares that would
otherwise vest and thereafter by a reduction in cash payments to the extent of
the balance.

 

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(d) A “Change of Control” of Company shall mean:

(1) The acquisition by an individual, entity, or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 30 percent or more of the
combined voting power of the then outstanding voting securities of Company
entitled to vote generally in the election of trustees (the “Outstanding
Shares”); provided, however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from Company
unless, in connection therewith, a majority of the individuals who constitute
the Board as of the date immediately preceding such transaction cease to
constitute at least a majority of the Board, (ii) any acquisition by Company,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by Company or any entity controlled by Company, (iv) any
acquisition by any individual, entity, or group in connection with a Business
Combination (as defined below) that fails to qualify as a Change of Control
pursuant to paragraphs (3) or (4) below, or (v) any acquisition by any Person
entitled to file Form 13G under the Exchange Act with respect to such
acquisition; or

(2) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a trustee subsequent to the date
hereof whose appointment, election, or nomination for election by Company’s
shareholders was approved by a vote of at least a majority of the trustees then
comprising the Incumbent Board or by a majority of the members of a committee
authorized by the Incumbent Board to approve such appointment, election, or
nomination (other than an appointment, election, or nomination of an individual
whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the trustees of Company) shall be,
for purposes of this Agreement, considered as though such person were a member
of the Incumbent Board; or

(3) Approval by the shareholders of Company of a reorganization, merger, or
consolidation, or sale or other disposition of all or substantially all of the
assets of Company (a “Business Combination”), in each case, if, following such
Business Combination all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Shares immediately prior to
such Business Combination beneficially own, directly or indirectly, less than 40
percent of, respectively, the then outstanding shares of equity securities and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of trustees or directors, as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity which, as a result of such transaction, owns Company or
all or substantially all of Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as such beneficial
owners held their ownership, immediately prior to such Business Combination, of
the Outstanding Shares; or

 

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(4) Approval by the shareholders of Company of a Business Combination, if,
following such Business Combination all or substantially all of the individuals
and entities who were the beneficial owners of the Outstanding Shares
immediately prior to such Business Combination beneficially own, directly or
indirectly, 40 percent or more but less than 60 percent of, respectively, the
then outstanding shares of equity securities and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of trustees or directors, as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an entity which,
as a result of such transaction, owns Company or all or substantially all of
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as such beneficial owners held their
ownership, immediately prior to such Business Combination, of the Outstanding
Shares, and (i) any Person (excluding any employee benefit plan (or related
trust) of Company or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 30 percent or more of, respectively,
the then outstanding shares of equity securities of the entity resulting from
such Business Combination or the combined voting power of the then outstanding
voting securities of such entity except to the extent that such ownership
existed prior to the Business Combination, or (ii) at least a majority of the
members of the board of trustees or directors of the entity resulting from such
Business Combination were not members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing for
such Business Combination, or (iii) the Chief Executive Officer of Company at
the time of the execution of the initial agreement providing for such Business
Combination is not appointed or elected to a comparable or higher position with
the entity resulting from such Business Combination, or (iv) the executive
officers of Company holding the title of Executive Vice President or higher at
the time of the execution of the initial agreement for such Business Combination
constitute less than a majority of the executive officers holding comparable or
higher titles of the entity resulting from such Business Combination; or

(5) Approval by the shareholders of Company of a complete liquidation or
dissolution of Company.

Approval by the shareholders of Company of a Business Combination following
which all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Shares immediately prior to such Business
Combination beneficially own, directly or indirectly, 60 percent or more of,
respectively, the then outstanding shares of equity securities and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of trustees or directors, as the case may be, of the
entity resulting from such Business Combination (including, without limitation,
an entity which, as a result of such transaction, owns Company or all or
substantially all of Company’s assets either directly or through one or more
subsidiaries) shall not constitute a “Change of Control” unless following such
transaction the provisions of paragraphs (1) or (2) above are independently
satisfied.

 

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4.6 Voluntary Termination. In the event Executive’s employment is voluntarily
terminated (within the meaning of Section 4.8 hereof) by Executive without Good
Reason, Company shall not be obligated to make any further payments to Executive
under this Agreement other than amounts (including salary, bonuses, vacation
pay, expense reimbursement, etc.) that have been fully earned by, but not yet
paid to, Executive as of the date of Executive’s termination, which amounts
shall be paid within 30 calendar days of such termination. Executive shall also
have such rights to continue medical coverage at his sole expense following such
voluntary termination as are then accorded under COBRA.

4.7 Special Termination Right. Executive shall have the right to terminate his
employment (within the meaning of Section 4.8 hereof) hereunder upon 90 calendar
days prior written notice to Company given at any time within 10 calendar days
after (i) the occurrence of a Compensation Notice Delinquency or (ii) the date
on which he is notified pursuant to Section 3.1 hereof of his Base Salary and
bonus plan eligibility with respect to any fiscal year of Company. Upon
termination of Executive’s employment pursuant to this Section, Company shall
not be obligated to make any further payments to Executive under this Agreement
other than as provided in Section 4.6 hereof.

4.8 Termination of Employment for Purposes of Compliance with (or Exemption
from) Section 409A of IRC. Executive shall only have incurred a termination of
employment from Company if Executive has separated from service with all
entities in the group of entities under common control with Company, within the
meaning of sections 414(b) and 414(c) of the IRC (using the phrase “at least 50
percent” rather than the phrase “at least 80 percent,” where applicable). The
determination of whether Executive has had a termination of employment from
Company shall be made by the Committee, applying the rules set forth in Treas.
Reg. §1.409A-1(h) and any amendment thereof or successor thereto.

4.9 Section 409A Compliance. Except for (i) the first sentence of Section 4.1
hereof and (ii) Section 4.5(c) hereof, this Agreement is intended to be exempt
from the requirements of section 409A of the IRC and the final regulations
issued thereunder, primarily because of the short-term deferral exception to
such coverage provided by Treas. Reg. §1.409A-1(b)(4), and this Agreement shall
be construed and interpreted in accordance with such exception (and any other
applicable exception) in order to avoid such coverage.

 

5. RESTRICTIVE COVENANTS

5.1 Confidentiality. Executive acknowledges a duty of confidentiality owed to
Company and shall comply with the confidentiality section of the Company
Employee Handbook as in effect from time to time.

5.2 Noncompetition. During the term of Executive’s employment and for one year
after termination of Executive’s employment by Company for Cause or by Executive
for other than either Good Reason or pursuant to his special termination right
under Section 4.7 hereof, Executive shall not directly or indirectly (i) engage,
anywhere within 25 miles of any property in which Company or an Affiliate has a
direct or indirect ownership interest, in any activity which competes in whole
or in part with the activities

 

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of Company or any Affiliate at the time of such termination (a “Proximate
Competitive Activity”) or (ii) be or become a stockholder, partner, owner,
officer, director, employee or agent of, a consultant to, or give financial or
other assistance to, any person or entity considering engaging in any Proximate
Competitive Activity or so engaged; provided, however, that nothing herein shall
prohibit Executive and his affiliates from (A) owning, as passive investors, in
the aggregate not more than two percent of the outstanding publicly traded stock
of any corporation engaged in a Proximate Competitive Activity; or
(B) acquiring, developing, managing, or leasing any properties which do not
involve a Proximate Competitive Activity, subject, however, to Sections 1.2(b)
and 1.2(c) hereof. The duration of Executive’s covenants set forth in this
Section shall be extended by a period of time equal to the number of calendar
days, if any, during which Executive is finally determined to be in violation of
the provisions hereof.

5.3 Injunctive and Other Relief

(a) Executive acknowledges that the covenants contained in Sections 5.1, 5.2 and
6.3 hereof are fair and reasonable in light of the consideration paid hereunder,
and that damages alone shall not be an adequate remedy for any breach by
Executive of his covenants contained herein. Accordingly, in addition to any
other remedies that Company may have, Company shall be entitled to injunctive
relief in any court of competent jurisdiction for any breach or threatened
breach of any such covenants by Executive. Nothing contained herein shall
prevent or delay Company from seeking, in any court of competent jurisdiction,
specific performance or other equitable remedies in the event of any breach or
intended breach by Executive of any of his obligations hereunder.

(b) In addition to such equitable relief with respect to Sections 5.1, 5.2 and
6.3 hereof, Company shall be entitled to monetary damages for any breach in an
amount deemed reasonable to cover all actual and consequential losses, plus all
monies received by Executive as a result of said breach and all costs and
attorneys’ fees incurred by Company in enforcing this Agreement, provided,
however, that Company shall have no right to set off any such monetary damages
against amounts owed by Company to Executive under this Agreement or any other
agreement between the parties. Any action initiated by Company for monetary
damages related to any such breach shall be subject to Section 6.1 hereof.

 

6. MISCELLANEOUS

6.1 Arbitration

(a) All disputes arising out of or relating to this Agreement that cannot be
settled by the parties shall be settled by arbitration in Philadelphia,
Pennsylvania, pursuant to the rules and regulations then obtaining of the
American Arbitration Association; provided, that nothing herein shall preclude
Company from seeking, in any court of competent jurisdiction, specific
performance or other equitable remedies in the case of any breach or threatened
breach by Executive of Section 5.1 hereof, Section 5.2 hereof or Section 6.3
hereof. The decision of the arbitrators shall be final and binding upon the
parties, and judgment upon such decision may be entered in any court of
competent jurisdiction.

 

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(b) Discovery shall be allowed pursuant to the intendment of the United States
Federal Rules of Civil Procedure and as the arbitrators determine appropriate
under the circumstances.

(c) The arbitration tribunal shall be formed of three arbitrators, one to be
appointed by each party and the third to be appointed by the first two
arbitrators. Such arbitrators shall be instructed to apply the contractual
provisions hereof in deciding any matter submitted to them.

(d) The cost of any arbitration proceeding hereunder shall be borne equally by
the parties. Each party shall be responsible for his or its own legal fees and
expenses associated with any such arbitration.

6.2 Prior Employment. Executive represents and warrants that he is not a party
to any other employment, non-competition, joint venture, partnership, or other
agreement or restriction that could interfere with his employment with Company
in accordance with this Agreement or his or Company’s rights and obligations
hereunder; and that his acceptance of continued employment with Company and the
performance of his duties hereunder will not breach the provisions of any
contract, agreement, or understanding to which he is party or any duty owed by
him to any other person. Executive warrants and covenants that, while an
employee of Company, he will not hereafter become a party to or be bound by any
such conflicting agreement.

6.3 Solicitation of Employees. During the term of Executive’s employment and for
two years thereafter, Executive shall not directly or indirectly solicit or
contact any person who is employed by Company or any Affiliate with a view to
the engagement or employment of such person by any person or entity or otherwise
interfere with the employment relationship of Company or of any Affiliate with
any of its employees.

6.4 Code of Business Conduct. Executive acknowledges that he is and shall be
subject to the provisions of Company’s Code of Business Conduct and Ethics for
Employees and Officers (as modified, amended or supplemented from time to time,
the “Code”), including, without limitation, the enforcement provisions set forth
in the Code. Executive agrees to comply with the provisions of the Code.

6.5 Indemnification/Litigation Assistance. Company shall indemnify and defend
Executive against all claims arising out of Executive’s activities as an officer
or employee of Company or its Affiliates to the fullest extent permitted by law
and under Company’s Trust Agreement. In addition to the foregoing, Executive
shall, upon reasonable notice, furnish such information and proper assistance to
Company as may reasonably be required by Company in connection with any
litigation in which it or its Affiliates are, or may become, parties. After
termination of Executive’s employment, Executive shall be fairly compensated for
providing assistance to Company that is more than incidental; provided, however,
that the failure of Company and Executive to agree on such compensation shall
not be the basis on which Executive withholds any information or assistance.

 

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6.6 Severability. The invalidity or unenforceability of any particular provision
or part of any provision of this Agreement shall not affect the other provisions
or parts hereof. If any provision hereof is determined to be invalid or
unenforceable by a court of competent jurisdiction by reason of the duration or
geographical scope of the covenants contained therein, such duration or
geographical scope, or both, shall be considered to be reduced to a duration or
geographical scope to the extent necessary to cure such invalidity.

6.7 Assignment. This Agreement shall not be assignable by Executive, and shall
be assignable by Company only to an Affiliate or to any person or entity that
becomes a successor in interest (by purchase of assets or shares, or by merger,
or otherwise) to Company in the business or a portion of the business presently
operated by Company. Subject to the foregoing, this Agreement and the rights and
obligations set forth herein shall inure to the benefit of, and be binding upon,
the parties hereto and each of their respective permitted successors, assigns,
heirs, executors and administrators. An assignment by Company permitted under
this Section shall not itself constitute a termination of Executive’s employment
hereunder.

6.8 Notices. All notices hereunder shall be in writing and shall be sufficiently
given if hand-delivered, sent by documented overnight delivery service or
registered or certified mail, postage prepaid, return receipt requested, or by
telegram or telecopy (confirmed by U.S. mail), receipt acknowledged, addressed
as set forth below or to such other person and/or at such other address as may
be furnished in writing by any party hereto to the other. Any such notice shall
be deemed to have been given as of the date received, in the case of personal
delivery, or on the date shown on the receipt or confirmation therefor, in all
other cases. Any and all service of process and any other notice in any action,
suit, or proceeding shall be effective against any party if given as provided in
this Agreement; provided that nothing herein shall be deemed to affect the right
of any party to serve process in any other manner permitted by law.

 

  (a) If to Company:

Pennsylvania Real Estate Investment Trust

200 South Broad Street, Third Floor

Philadelphia, PA 19102

Tel: (215) 875-0700

Fax: (215) 547-7311

Attention:  Chairman, Executive Compensation and Human

                  Resources Committee of the Board of Trustees

 

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With a copy to:

Drinker Biddle & Reath LLP

One Logan Square

18th & Cherry Streets

Philadelphia, PA 19103

Tel: (215) 988-2794

Fax: (215) 988-2757

Attention: Howard A. Blum, Esquire

 

  (b) If to Executive:

Joseph F. Coradino

2470 White Horse Road

Berwyn, PA 19312

With a copy to:

Cozen O’Connor

1900 Market Street

Philadelphia, PA 19103

Tel: (215) 665-4159

Fax: (215) 665-2013

Attention: E. Gerald Riesenbach, Esquire

6.9 Entire Agreement and Modification. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters contemplated
herein and supersedes and replaces all prior agreements and understandings with
respect thereto, including but not limited to, any currently existing employment
agreement between Executive and Company and any Affiliate. Neither the failure
nor any delay on the part of any party to exercise any right, remedy, power, or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude any other or
further exercise of the same or of any other right, remedy, power, or privilege
with respect to any occurrence or be construed as a waiver of any right, remedy,
power, or privilege with respect to any other occurrence.

6.10 Governing Law. This Agreement is made pursuant to, and shall be construed
and enforced in accordance with, the internal laws of the Commonwealth of
Pennsylvania (and United States federal law, to the extent applicable), without
giving effect to otherwise applicable principles of conflicts of law.

6.11 Headings; Counterparts. The headings of Sections and subsections in this
Agreement are for convenience only and shall not affect its interpretation. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which, when taken together, shall be deemed
to constitute but one and the same Agreement.

 

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6.12 Delegation. Any action hereunder that may be taken or directed by the Board
or by the Committee may be delegated by (i) the Board to a committee of the
Board or to an individual trustee or officer, or (ii) the Committee to one or
more members of the Committee or officers, and the determination of any such
delegee or delegees shall have the same effect hereunder as a determination of
the Board or the Committee, as applicable.

6.13 Company Assets. Executive acknowledges that no trustee, officer, director
or shareholder of Company or any Affiliate is liable to Executive in respect of
the payments or other matters set forth herein.

6.14 Amendment. No provision of this Agreement may be amended, modified, or
waived except in a writing signed by Executive and such officer as may be
specifically designated by Company to sign on its behalf.

6.15 No Mitigation. In no event shall Executive be required to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under this Agreement, and such amounts shall not be reduced whether
or not Executive obtains other employment after termination of his employment
hereunder.

6.16 Amendment of Trust Agreement or By-Laws

(a) Company shall not amend, modify or repeal Paragraph 14 of its Trust
Agreement or Article 5 of its By-Laws, each as currently in effect, if the
effect of such amendment, modification or repeal would be to alter, to the
detriment of Executive, the rights of Executive to indemnification or advance of
expenses based on an act or failure to act that took place during Executive’s
employment hereunder.

(b) It is agreed that Executive shall not have any equitable remedies of any
nature (including, but not limited to, injunctive relief and specific
performance) with respect to this Section, and that his sole remedy shall be as
set forth in Section 4.4 hereof, Section 4.5 hereof or Section 4.6 hereof,
whichever shall be applicable.

6.17 Legal Fees. Company agrees to pay all reasonable legal fees and expenses
that Executive has incurred in the preparation and negotiation of this
Agreement.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on this 30th day of
December, 2008.

 

PENNSYLVANIA REAL ESTATE

INVESTMENT TRUST

By:   /s/ Bruce Goldman   Name: Bruce Goldman  

Title: Executive Vice President and

          General Counsel

/s/ Joseph F. Coradino Joseph F. Coradino

 

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Schedule 1.2

Permitted Activities

 

1. TRO Liquidating LLC (TROL)

2. Concord Pike (TROL)

3. Strouse-Greenberg Realty Investments, Inc. (TRO Liquidating LLC) - TROL

4. Metromarket Management LLC (TRO Liquidating LLC)

5. Phonlynx Partnership (TRO Liquidating LLC)

6. Sports World/Stadium Complex (TRO Liquidating LLC)

7. Personal Property (Artwork) (TROL)

8. Cherry Hill (Rubin-Oxford, LP) ROVA

9. Six Penn Center (Broker Associates)

10. Delaware Avenue (Riverboat Associates)

11. 40 South Monument Road (City Line Associates)

 

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