Exhibit 10.2

Pennsylvania Real Estate Investment Trust (“PREIT”)

2012 Incentive Compensation Opportunity Award

for                             

 

 

2012 Base Salary     $   

2012 Incentive Opportunity

 

2012 Incentive Range - % of Base Salary

 

Threshold                 Target4                  Outperformance4

 

Performance Measurement Allocation

 

Corporate                         Individual

 

CORPORATE -

  

  

   

  

  

  

     

Corporate Measure

   Threshold8      Target8      Outperformance8     

FFO Per Share, 9

    (Primary)

   $         $         $          

TOTAL 2012

CORPORATE

OPPORTUNITY

   $         $         $           INDIVIDUAL -         

Individual Measure

   Threshold      Target      Outperformance      KPIs10      KPIs         KPIs
        KPIs        

TOTAL 2012

INDIVIDUAL

OPPORTUNITY

   $         $         $           

 

 

    

 

 

    

 

 

    

TOTAL 2012

INCENTIVE

OPPORTUNITY:*

   $         $         $     

 

* The amount payable under this award will be paid in cash during the period
January 1, 2013 through March 15, 2013. Except as may be otherwise provided in
your employment agreement or determined by the Executive Compensation and Human
Resources Committee of the Board of Trustees of PREIT (the “Committee”), the
payment of any 2012 incentive compensation to you is conditioned on your
continued employment by PREIT or one of its affiliates through the date that
2012 incentive compensation is paid to officers generally.

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ENDNOTES

 

1

“2012 Base Salary” means your regular, basic compensation from PREIT and/or a
PREIT affiliate for 2012, not including bonuses, contributions made by PREIT
and/or a PREIT affiliate (other than from an elective reduction in your salary
under a 401(k), cafeteria or transportation plan) to benefit or welfare plans,
or other additional compensation.

2

“2012 Incentive Opportunity” means the opportunity to earn incentive
compensation for 2012, up to    % of your Base Salary, in the event certain
business performance measures are achieved. PREIT’s FFO Per Share for 2012 will
be the primary business performance measure considered by the Committee, with
the Committee retaining the discretion to consider other business performance
factors. See note 8.

3 

“2012 Incentive Range” means, depending on the level of performance achieved
(i.e., Threshold, Target or Outperformance), the percentage of your Base Salary
that you may earn under this 2012 Incentive Compensation Opportunity Award. If
performance is between the Threshold level and the Target level or between the
Target level and the Outperformance level, the percentage will be interpolated
accordingly.

4 

“Threshold” signifies a solid achievement, which is expected to have a
reasonably high probability of achievement, but which may fall short of
expectations. Threshold performance represents the level of performance that has
to be achieved before any of your potential 2012 incentive compensation is
earned. If the Threshold performance level is achieved with respect to FFO Per
Share and the other business performance factors, if any, considered relevant
hereunder by the Committee (FFO and such other business performance factors
being, collectively, the “Relevant Factors”), you will earn at least     % of
your 2012 Base Salary as your 2012 incentive compensation. If the Threshold
performance level is not met for the Relevant Factors, you will not receive any
2012 incentive compensation. For purposes of determining the level of
performance achieved for purposes of this award, the Relevant Factors shall be
taken as a whole with such relative weighting as shall be determined by the
Committee.

“Target” generally signifies that the business objectives for the year, which
are expected to have a reasonable probability of achievement, have been met. For
purposes of FFO Per Share, Target shall be FFO Per Share at or between $        
and $         for 2012. If the Target performance level is achieved for the
Relevant Factors, you will earn at least     % of your 2012 Base Salary as your
2012 incentive compensation.

“Outperformance” signifies an outstanding achievement, an extraordinary
performance by business performance standards, and which is expected to have a
modest probability of achievement. If the Outperformance level is achieved for
the Relevant Factors, you will earn     % of your 2012 Base Salary as your 2012
incentive compensation. In no event will PREIT pay you 2012 incentive
compensation under this award in excess of     % of your 2012 Base Salary.

 

5 

The “Corporate Measure” consists of the Relevant Factor or Factors upon which
PREIT’s business performance is determined by the Committee for purposes of this
award, and the “Corporate Salary Portion” is the amount of your 2012 Base Salary
to which the Corporate Measure is applied. In your case, that amount is
$        , or 100% of your 2012 Base Salary. Accordingly, in your case, the
Corporate Salary Portion and your 2012 Base Salary are identical.

6 

“FFO Per Share” means, with respect to each diluted share of beneficial interest
in PREIT, “funds from operations” of PREIT for its fiscal year ending
December 31, 2012, as reported to the public by PREIT after the end of the
fiscal year.

7

The Committee shall have the authority, in its sole discretion, to adjust the
Threshold, Target and Outperformance levels for FFO Per Share set forth in this
award if and to the extent that, in the sole judgment of the Committee, the
reported FFO Per Share does not reflect the performance of PREIT for 2012 in a
manner consistent with the purposes of this award. The Committee shall not be
obligated to make any adjustment. If the Committee elects to make an adjustment,
it shall be free to take such factors into account in making the adjustment as
it deems appropriate under the circumstances in its sole discretion.

8

Although FFO Per Share is the primary business performance factor for
determining incentive compensation for 2012 relating to your Corporate Salary
Portion, it is not expected to be the sole Relevant Factor and its importance
may be impacted materially by the combined effect of other Relevant Factors. For
purposes of determining incentive compensation for 2012, in addition to FFO Per
Share, the Committee has selected (i) growth in same store net operating income,
(ii) the leverage ratio at the end of 2012 as computed under PREIT’s principal
credit facility, (iii) the ratio of general and administrative expenses to gross
revenues, and (iv) PREIT’s success in the disposition of non-core assets as
potential Relevant Factors in view of PREIT’s business objectives for 2012.
Other factors that the Committee may consider to be Relevant Factors include,
but are not limited to, (i) occupancy rates, (ii) new and renewal leasing
activity, (iii) balance sheet metrics deemed important by the Committee for
purposes of this award, and (iv) a comparison of PREIT’s business performance
metrics with the business performance metrics of companies in its peer group for
compensation purposes. The Committee has the

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  authority to base its final determination on the Relevant Factors in addition
to FFO that it shall choose and to give such weight to each of such Relevant
Factors as the Committee shall deem appropriate after considering PREIT’s
over-all business performance for 2012. Your incentive compensation based upon
the Corporate Measure shall be as so determined by the Committee. Determinations
made by the Committee under this note 8 and note 7 shall be applied consistently
to the Corporate Salary Portion of each officer of PREIT and its affiliates who
received a 2012 Incentive Compensation Opportunity Award. Determinations made by
the Committee under this note 8 and under note 7 shall not affect to any extent
determinations that the Committee may make for years after 2012. After the
Committee has made its determinations under this award, you will receive a
notice which shall (i) state whether Threshold has been achieved for purposes of
the Corporate Measure and, if so, the level from Threshold to Outperformance at
which incentive compensation based on the Corporate Measure will be paid, and
(ii) contain such other information as the Committee shall elect in its sole
discretion to include in the notice. Neither a failure to provide such notice
nor a deficiency in such notice shall affect any determination made under this
award.

9

In the event of a “Change in Control” of PREIT as defined in PREIT’s Second
Amended and Restated 2003 Equity Incentive Plan, as the same may be subsequently
amended, the Committee shall have the authority, in its sole discretion, to
accelerate the determination and payment to you of your 2012 incentive
compensation.

10

The Committee has the sole authority to interpret the terms and provisions of
this award and to decide any questions that may arise under this award. Its
determinations shall be conclusive and binding on all parties.