Form of Annual Incentive Compensation Award for Officers



 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
Allocation5

	 2011 Base Salary1         
       $
	  		  		  		  	
	 	  	
Corporate                    
                    Individual

			
		  		  	CORPORATE -
	  	  	 Corporate Measure6
	  	Threshold8	  	Target8	  	Outperformance8
		  	 FFO Per Share 7, 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. 








 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









 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 2010 Base Salary as your 2010 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 $35,000 (50% of 70% of $100,000) of your 2010 Incentive Compensation if the Outperformance level of your individual
performance is achieved. 










	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.