Exhibit 10.1

Pennsylvania Real Estate Investment Trust (“PREIT”)

2011 Incentive Compensation Opportunity Award

for                                          
                                     ,

 

               

2011 Incentive Opportunity2

2011 Incentive Range3 - % of Base Salary

                  Threshold4      Target4      Outperformance4                 
   Performance Measurement Allocation4        2011 Base Salary1              $
        Corporate      Individual                     CORPORATE -              

Corporate Measure6

   Threshold8      Target8      Outperformance8           FFO Per Share7, 9   
                TOTAL 2011 CORPORATE OPPORTUNITY    $                    $
                   $                                   INDIVIDUAL -           
  

Individual Measure

   Threshold      Target      Outperformance           KPIs10      KPIs        
KPIs         KPIs              TOTAL 2011 INDIVIDUAL OPPORTUNITY    $
                   $                    $                           

 

 

          TOTAL 2011 INCENTIVE OPPORTUNITY:*    $                    $
                   $                

 

* The amount payable under this award will be paid in cash during the period
January 1, 2012 through March 15, 2012. 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 2011 Incentive Compensation to you is conditioned on your
continued employment by PREIT or one of its affiliates through the date that
2011 Incentive Compensation is paid to officers generally.

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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 is subsequently amended.

IN WITNESS WHEREOF, PREIT has caused this 2011 Incentive Compensation
Opportunity Award to be duly executed by its duly authorized officer and the
Grantee has hereunto set his hand on                     , 2011.

 

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST By:  

 

 

 

Grantee

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ENDNOTES

 

1 

“2011 Base Salary” means your regular, basic compensation from PREIT and/or a
PREIT affiliate for 2011, not including bonuses or other additional
compensation, but including contributions made by PREIT and/or a PREIT affiliate
on your behalf, by salary reduction pursuant to your election, (i) to an
arrangement described in section 401(k) of the Internal Revenue Code of 1986, as
amended (the “Code”), (ii) to a “cafeteria plan” (as defined in section 125(d)
of the Code), and (iii) for a “qualified transportation fringe” (as defined in
section 132(f) of the Code).

2 

“2011 Incentive Opportunity” means the opportunity to earn incentive
compensation for 2011, up to     % of your Base Salary, in the event certain
corporate and individual performance goals are achieved. Subject to Notes 8 and
9, corporate performance relates to PREIT’s cumulative performance with respect
to one measure of its financial results for 2011, while individual performance
relates to your performance within the scope of your responsibilities as an
employee of PREIT and/or a PREIT affiliate.

3

“2011 Incentive Range” means, depending on the level of corporate and individual
performance achieved (i.e., Threshold, Target or Outperformance), the percentage
of your Base Salary that you may earn under this 2011 Incentive Compensation
Opportunity Award. If the corporate or individual 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 

With respect to corporate 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 2011 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 corporate and individual performance, you will
earn at least     % of your 2011 Base Salary as your 2011 Incentive Compensation
allocated to such performances (see note 5). If the Threshold performance level
is not met with respect to corporate performance or your individual performance,
you will not receive any 2011 Incentive Compensation allocated to such corporate
performance or individual performance, as applicable.

     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 this award, this
represents approximately the mid-range of the estimate for FFO Per Share
publicly announced by PREIT on February 23, 2011. 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 with respect to both corporate and individual performance, you will
earn at least     % of your 2011 Base Salary as your 2011 Incentive Compensation
allocated to such performances (see note 5).

     With respect to corporate performance, “Outperformance” signifies an
outstanding achievement, an extraordinary performance by industry 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 with respect to both corporate and individual
performance, you will earn     % of your 2011 Base Salary as your 2011 Incentive
Compensation allocated to such performances (see note 5). In no event will PREIT
pay you 2011 Incentive Compensation under this award in excess of     % of your
2011 Base Salary.

     If the Committee exercises the authority under note 9, “Threshold”,
“Target” and ‘Outperformance” will apply, as appropriate, separately to FFO Per
Share and to the Supplemental Factor or Factors (see note 9).

5 

“Performance Measurement Allocation” means the percent by which your 2011
Incentive Compensation is allocated between corporate performance and your
individual performance. For example, if your base salary is $100,000, and 50% of
your 2011 Incentive Compensation is allocated to corporate performance and 50%
is allocated to your individual performance, you will earn $             (50% of
    % of $100,000) of your 2011 Incentive Compensation if the Outperformance
level of the corporate performance is achieved and $             (50% of     %
of $100,000) of your 2011 Incentive Compensation if the Outperformance level of
your individual performance is achieved.

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6 

The “Corporate Measure” is the business performance factor (or factors, if the
Committee exercises its authority under note 9) on which corporate performance
is based, and the “Corporate Salary Portion” is the amount of your 2011 Base
Salary to which the Corporate Measure is applied. In your case, that amount is $
, or % of your 2011 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, 2011, 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 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 due to the effect of any unusual or nonrecurring
transaction or occurrence on the reported FFO Per Share. Any such adjustment
shall be made to the 2011 Incentive Compensation Opportunity Awards granted to
all officers [and directors] of PREIT and PREIT affiliates. The Committee shall
not be obligated to make any adjustment(s). If the Committee elects to make an
adjustment, it shall be free to take such factors into account as it deems
appropriate under the circumstances in its sole discretion. Further, in the case
of a transaction or occurrence that also constitutes a “Change of Control” of
PREIT (as defined in PREIT's 2003 Equity Incentive Plan, as amended), the
Committee shall have the authority, in its sole discretion, to accelerate the
determination payment of your 2011 Incentive Compensation.

 

9 

The Committee shall have the authority, in its sole discretion, to determine
that up to 20% of the Corporate Salary Portion shall be based upon one or more
business performance factors other than FFO Per Share (such other factors, the
“Supplemental Factors”). If the Committee exercises this authority, the
Committee shall determine on or prior to March 15, 2012 (i) the percentage of
the Corporate Salary Portion, but not in excess of 20% thereof, to be based upon
the Supplemental Factor or Factors; (ii) the Supplemental Factor or Factors for
2011; and (iii) the percentage of the Corporate Salary Portion (from the
Threshold to the Outperformance percentage) to be awarded in respect of the
Supplemental Factor or Factors. Each of the determinations referred to in the
preceding sentence shall be applied uniformly to the Corporate Salary Portion of
all officers of PREIT or any of its affiliates. The Committee shall be free to
select in its sole discretion the Supplemental Factor or Factors for 2011 and
the weight to be accorded to each Supplemental Factor. The Committee shall be
under no obligation to exercise its authority under this Note 9, and, if it does
not exercise such authority, your 2011 Incentive Compensation based upon the
Corporate Measure shall be determined, subject to note 8, solely by FFO Per
Share. Determinations by the Committee under this note 9 and note 8 shall not
affect to any extent determinations that the Committee may make for future
years. The Committee will provide notice to each officer affected by a
determination made under this note 9, which shall disclose the Supplemental
Factor or Factors and such other information as the Committee shall elect to
include in the notice. A failure to provide such notice shall not affect any
determination hereunder.

 

10 

The Committee has the sole discretion to set the measure for your individual
performance for 2011 and to determine the level of individual performance you
have achieved. However, regardless of your individual performance, no 2011
Incentive Compensation based on your individual performance will be paid if FFO
Per Share (see note 7) is less than $             (subject to adjustment by the
Committee in connection with an adjustment made under note 8).

 

11. 

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