Exhibit 10.1

Pennsylvania Real Estate Investment Trust (“PREIT”)

2012 Incentive Compensation Opportunity Award

for                             

 

    

2012 Incentive Opportunity2

 

2012 Incentive Range3 - % of Base Salary

  

  

  2012 Base Salary1                 $    Threshold4                     Target4
                    Outperformance4            

Corporate Measure5, 8

   Threshold7      Target7      Outperformance7     

FFO Per Share

    (Primary)6

   $         $         $            

 

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.

The Grantee has read and understands this award, including the endnotes which
describe the terms of the award, and agrees to be bound by such terms. Further,
the Grantee agrees that any amount awarded and paid to the Grantee under this
award shall be subject to PREIT’s “Recoupment Policy” as in effect on the date
the Committee granted this award, and as such policy may be subsequently
amended, even if such amendment is adopted after payment is made under this
award.

IN WITNESS WHEREOF, PREIT has caused this 2012 Incentive Compensation
Opportunity Award to be duly executed by its duly authorized officer and the
Grantee has signed this award on             , 2012.

 

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST By:  

 

 

Grantee

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The Grantee has read and understands this award, including the Endnotes which
describe the terms of the award, and agrees to be bound by such terms. Further,
the Grantee agrees that any amount awarded and paid to the Grantee under this
award shall be subject to PREIT’s “Recoupment Policy” as in effect on the date
the Committee granted this award, and as such policy may be subsequently
amended, even if such amendment is adopted after payment is made under this
award.

IN WITNESS WHEREOF, PREIT has caused this 2012 Incentive Compensation
Opportunity Award to be duly executed by its duly authorized officer and the
Grantee has signed this award on             , 2012.

 

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST By:  

 

 

Grantee

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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 and individual performance goals 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 9. Individual performance
relates to your performance within the scope of your responsibilities as an
employee of PREIT and/or a PREIT affiliate.

3 

“2012 Incentive Range” means, depending on the level of business and individual
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 business performance is at or between the Threshold level
and the Target level or between the Target level and the Outperformance level,
the percentage based on business performance will be interpolated accordingly.
Similarly, if individual performance is at or between the Threshold level and
the Target level, or at or between the Target level and the Outperformance
level, the percentage will be interpolated accordingly.

4 

With respect to business performance, “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. The Committee (after considering the
recommendations of the senior management of PREIT) will decide whether you have
met what the Committee determines to be the “Threshold” level for purposes of
your individual performance. If the Threshold performance level is achieved with
respect to both individual performance and 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 factors being, collectively, the
“Relevant Factors”), you will earn at least     % of your 2012 Base Salary as
your 2012 incentive compensation allocated to such performances (see note 5). If
the Threshold performance level is not met for the Relevant Factors or your
individual performance, you will not receive any 2012 incentive compensation
allocated to business performance or individual performance, as applicable. For
purposes of determining the level of business 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.

With respect to corporate performance, “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. The
Committee (after considering the recommendation of the senior management of
PREIT) will decide whether you have met what the Committee determines to be the
“Target” level for purposes of your individual performance. If the Target
performance level is achieved for both the Relevant Factors and individual
performance, you will earn at least     % of your 2012 Base Salary as your 2012
incentive compensation allocated to such performances (see note 5).

With respect to business performance, “Outperformance” signifies an outstanding
achievement, an extraordinary performance by business performance standards, and
which is expected to have a modest probability of achievement. The Committee
(after considering the recommendations of the senior management of PREIT) will
decide whether you have met what the Committee determines to be the
“Outperformance” level for purposes of your individual performance. If the
Outperformance level is achieved for both the Relevant Factors and individual
performance, you will earn     % of your 2012 Base Salary as your 2012 incentive
compensation allocated to such performances (see note 5). In no event will PREIT
pay you 2012 incentive compensation under this award in excess of     % of your
2012 Base Salary.

 

5 

“Performance Measurement Allocation” means the percent by which your 2012
incentive compensation is allocated between business performance and your
individual performance. For example, if your base salary is $100,000, and 50% of
your 2012 incentive compensation is allocated to business performance and 50% is
allocated to your individual performance, you will earn $         (50% of     %
of $100,000) of your 2012 incentive compensation if the Outperformance level of
business performance is achieved and $         (50% of     % of $100,000) of
your 2012 Incentive Compensation if the Outperformance level of your individual
performance is achieved.

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6 

The “Corporate Measure” consists of the Relevant Factor or Factors upon which
PREIT’s business performance is determined 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     %
of your 2012 Base Salary.

7 

“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.

8

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 2011 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.

9 

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 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 9 and note 8 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 9 and under note 8 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.

10 

The Committee has the sole discretion to determine the level of individual
performance you have achieved in 2012. However, regardless of your individual
performance, no 2012 incentive compensation based on your individual performance
will be paid if FFO Per Share is less than $         (subject to adjustment by
the Committee in connection with an adjustment made under note 8) unless
incentive compensation shall be paid based upon the Corporate Measure.

11 

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.

12 

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.