Document:

Form of Restricted Share Units and Dividend Equivalent Rights Award Agreement

 Exhibit 10.3 
 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST 
 2003 EQUITY INCENTIVE PLAN 
 RESTRICTED SHARE UNIT AND DIVIDEND EQUIVALENT RIGHTS 
 AWARD AGREEMENT 
 ISSUED PURSUANT TO THE 
 2007-2009 RESTRICTED SHARE UNIT PROGRAM 
 This
RESTRICTED SHARE UNIT AND DIVIDEND EQUIVALENT RIGHTS AWARD AGREEMENT (the “Award Agreement”), dated as of the 21st day of February, 2007, is between Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust (the “Trust”), and
                                        
(the “Grantee”), a “Key Employee” under the Pennsylvania Real Estate Investment Trust 2003 Equity Incentive Plan (the “Plan”). 
 WHEREAS, the Trust’s Executive Compensation and Human Resources Committee (the “Committee”) established the Pennsylvania Real Estate Investment Trust 2007-2009 Restricted Share Unit Program (the
“Program”) under the Plan for specified Key Employees under the Plan; 
 WHEREAS, the Plan provides for the award of
“Performance Shares” (as defined in the Plan) (which award is referred to as a “Restricted Share Unit” or an “RSU” in the Program and herein) to participants following the attainment of a designated corporate
performance goal, and of dividend equivalent rights (“DERs,” as defined in the Plan) with respect to such Restricted Share Units; 
 WHEREAS, the Program designates a corporate performance goal that determines if and the extent to which Shares will become deliverable to a participant in the Program based on his or her Restricted Share Units; 
 WHEREAS, the Grantee may defer delivery of his or her Shares (if deliverable) until a later date and, if so deferred, the Grantee will be awarded
additional DERs with respect to such Shares; and 
 WHEREAS, DERs awarded with respect to Restricted Share Units and deferred Shares will be
expressed as a dollar amount, which will be applied to “purchase” additional Restricted Share Units and notional shares of the Trust, as applicable (on which DERs will also be awarded), and will be settled in actual shares of the Trust
(and in cash to the extent the Grantee’s account holds a fractional Restricted Share Unit or notional share); 
 NOW THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the legal sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 

1. Potential Award of Shares 
 (a)
The Grantee is hereby awarded a number of initial “Base Units” (as defined in the Program) equal to ______ Restricted Share Units. The Grantee’s Base Units will increase in number pursuant to the “purchase” of additional
Restricted Share Units with DERs, as described in subsections (b) and (e) below. 

 (b) The Grantee is hereby awarded a DER with respect to each of his or her Base Units, as such number of
units may be increased from time to time pursuant to subsection (e) below. If the Grantee makes a deferral election under Section 4(f) of the Program, the Grantee shall also be awarded DERs with respect to each deferred Share. 

(c) The Trust hereby promises to deliver to the Grantee the number of Shares that Grantee becomes entitled to under Section 4 of the Program (if
any). Unless the Grantee elects to make a deferral election pursuant to Section 4(f) of the Program, in which case Shares will be delivered in accordance with such election, the Shares shall be delivered on March 1, 2010 or, in the event
of a “Change in Control” (as defined in the Program) prior to January 1, 2010, on the fifth calendar day after the end of the “Measurement Period” (as defined in the Program) (the “Delivery Date”). This Award
Agreement is in all respects limited and conditioned as hereinafter provided, and is subject in all respects to the terms and conditions of the Program and the Plan now in effect and as they may be amended from time to time; provided, that no
amendment may adversely affect an issued Award Agreement without the written consent of the affected Grantee. The terms and conditions of the Program and the Plan are incorporated herein by reference, made a part hereof, and shall control in the
event of any conflict with any other terms of this Award Agreement. 
 (d) Pursuant to Section 4(c) of the Program, if the
Grantee’s employment with the “Employer” (as defined in the Program) terminates for any reason (including death, “Disability Termination” (as defined in the Program), termination for “Good Reason” (as defined in
the Program), or termination for reasons other than “Cause” (as defined in the Program)) prior to the last day of the Measurement Period, the Grantee, except as set forth in the following sentence, shall forfeit all of the Base Units (and
all of the Shares that may have become deliverable with respect to such Base Units) subject to the RSU the Participant was granted under the Program. However, (i) this subsection (d) may be amended by the Committee, in the Committee’s
sole discretion and subject to Section 4(c) of the Program, and (ii) if the Grantee terminates his or her employment with the Employer for Good Reason or if the Employer terminates the Grantee’s employment for reasons other than
Cause, in either case within the one-year period preceding a Change in Control (provided that, if the Change in Control arises from a Business Combination, the one-year period shall be measured from the date of the closing or effectiveness of the
Business Combination, as applicable), then the Grantee shall be eligible to receive Shares under the Program as though the Grantee had remained employed by the Employer through the end of the Measurement Period. 
 (e) DERs awarded with respect to Restricted Share Units will be expressed as a specific dollar amount equal in value to the amount of dividends paid on
an actual Share on a specific date (the “Dividend Date”) during the Measurement Period, multiplied by the Grantee’s Base Units as of the Dividend Date. The Committee will apply the dollar amount to “purchase” full and

  

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fractional Restricted Share Units at “Share Value” (as defined in the Program), which will be subject to Section 4(a) of the Program, and on
which DERs thereafter will also be awarded. The Grantee’s additional Restricted Share Units will be replaced by issued Shares (and by cash, to the extent the Grantee holds a fractional Restricted Share Unit) and delivered to the Grantee (if at
all) in accordance with Section 4 of the Program. 
 DERs awarded with respect to deferred Shares will also be expressed as a specific
dollar amount equal in value to the amount of dividends paid on an actual Share on a Dividend Date during the deferral period, multiplied by the number of Shares still deferred by the Grantee as of the Dividend Date. The Committee will apply the
dollar amount to “purchase” full and fractional notional shares at the closing price on the Dividend Date, on which DERs thereafter will also be awarded. The Grantee’s notional shares will be recorded in a bookkeeping account, and
will be 100% vested. The Grantee’s notional shares will be replaced by issued Shares (and by cash, to the extent the Grantee holds a fractional notional share) and delivered to the Grantee (if at all) in accordance with Section 4 of the
Program. 
 2. Share Certificates. Certificates for Shares delivered pursuant to the Program shall be registered in the Grantee’s
name (or, if the Grantee so requests, in the name of the Grantee and the Grantee’s spouse, jointly with right of survivorship). 
 3.
Transferability. The Grantee may not, except by will or by the laws of descent and distribution, assign or transfer his or her Restricted Share Units or notional Shares. The Grantee may assign or transfer, in whole or in part, Shares
delivered hereunder pursuant to the Program. 
 4. Withholding of Taxes. The obligation of the Trust to deliver Shares shall be
subject to applicable federal, state and local tax withholding requirements. The Grantee, subject to the provisions of the Plan and any withholding rules adopted by the Committee (the “Withholding Rules”), may satisfy the withholding tax,
in whole or in part, by electing to have the Trust withhold Shares (or by returning Shares to the Trust). Such Shares shall be valued, for this purpose, at their “Fair Market Value” (as defined in the Plan) on the Delivery Date. Such
election must be made in compliance with and subject to the Withholding Rules, and the Trust may not withhold Shares in excess of that number necessary to satisfy the minimum federal, state and local income and Federal Insurance Contributions Act
(“FICA”) and Federal Unemployment Tax Act (“FUTA”) tax withholding requirements. The Grantee may elect to have the Trust withhold Shares for this purpose by checking the appropriate box below: 
 I  ̈ DO  ̈ DO NOT elect to have the Trust withhold the number of Shares necessary to satisfy the minimum federal, state and local income and FICA and FUTA tax withholding
requirements. [This election may be changed upon at least 10 business days’ written notice to the Committee before the Delivery Date.] 
 5. Share Retention Requirements. For purposes of the share retention requirements of the Trust’s governance guidelines, the Shares issued to the Grantee under the Program shall be treated as though they were restricted shares
that became vested upon issuance. However, any share retention requirement that results from this provision shall immediately lapse upon the Participant’s termination of employment with the Employer. 
  

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 6. Governing Law. This Award Agreement shall be construed in accordance with, and its
interpretation shall be governed by, applicable federal law and otherwise by the laws of the Commonwealth of Pennsylvania (without reference to the principles of conflicts of laws). 
 IN WITNESS WHEREOF, the Trust has caused this Award Agreement to be duly executed by its duly authorized officer and the Grantee has hereunto set his or
her hand all as of the day and year first above written. 
  

			
	PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
		
	By:	 	  

	
	  

	Grantee

  

 - 4 -Copy of the Annual Cash Incentive Plan

 Exhibit 10.1 
 Cape Fear Bank Corporation 
 Annual Cash Incentive Plan 
 1. Purpose 
 The purpose of the Cape
Fear Bank Corporation Annual Cash Incentive Plan (the “Plan”) is to provide key employees of Cape Fear Bank Corporation (the “Bank”) with the opportunity to receive payments of additional compensation based upon the earnings of
the Bank, and on the achievement of individual and/or team objectives (the “Objectives”). The Plan provides an incentive to participating employees to enhance the profitability of the Bank, within the constraints of safe and sound banking
practices. 
 It must be emphasized that the Plan in no way contravenes the importance of either long-term goal achievement or the proper
exercise of appropriate management accountability. These goals and areas of accountability include, but are not limited to, the following items: 
  

	1.	Collection, recovery, charge-off, and bankruptcy activity. 

  

	2.	Maintenance and increase in market share through salesmanship and customer service. 

  

	3.	Continued salesmanship (call programs) and improved customer service. 

  

	4.	Employee management and development (staff supervision, tracking and cross-training, employee turnover, etc.) 

  

	5.	Development of new and better ways of doing business. 

  

	6.	Appropriate audit and documentation procedures. 

  

	7.	Responsible management of fixed assets/resources. 

  

	8.	Adherence to all Bank policy and philosophy. 

  

	9.	Maintenance of the highest ethical standards. 

 It is
anticipated that the limited amount of incentive potential available through the Plan, as compared to the size of salaries paid for performance of these long term management accountabilities, in conjunction with the controls built into the Plan
objectives, will create the appropriate focus. The Board of Directors, through the Compensation Committee, administers the plan. 
 At
management’s discretion and with the approval of the Compensation Committee, funds may be used to pay discretionary bonuses. As an example an employee with outstanding overall performance could receive a discretionary bonus in recognition of
performance unaccounted for through the Incentive Program. It is understood that discretionary bonuses will be an exception as opposed to the rule. 
 2. Definitions 
 “Objective” – A critical measurement of the effectiveness of a team or individual
role, expressed as a goal, with a range of specific, measurable and valuable outcomes, ranging from a “Base,” or threshold below which no weight is earned, to an “Objective,” or goal with stretch, at which all weight assigned to
the Objective is earned.  

 “Participant” – A bona-fide employee of the Bank who is employed during at least
the final six months of the Plan Year, still employed on the day any incentives earned under the Plan are paid out, and is also selected for participation by the Compensation Committee of the Board during the first six months of the Plan year.

 “Potential Award” – initially means with respect to each Participant for the Plan Year a dollar amount determined by
multiplying the mid-point of the base salary range for the individual’s job by a percentage designated by the Compensation Committee. The Potential Award represents the Incentive Award payable to the Participant if the Bank fully achieves its
Pre-Tax, Pre-Incentive Net Income objective for the Plan Year. If the Bank fails to achieve 100% of its Pre-Tax, Pre-Incentive Net Income objective for the Plan Year, but does achieve more than a Base amount of Pre-Tax, Pre-Incentive Net Income
objective for the Plan Year, the Potential Award is prorated by the percent of the Bank’s achievement of its Pre-Tax, Pre-Incentive Net Income objective range for the Plan Year. After adjusting for the Bank’s achievement of its Pre-Tax,
Pre-Incentive Net Income objective for the Plan Year, the adjusted Potential Award represents the Incentive Award payable to the Participant in the event that all of the Participant’s personal and/or team objectives are fully achieved for the
Plan Year. 
 “Pre-Tax, Pre-Incentive Net Income” – Audited net income for a Plan Year after adding back to reportable
Net Income any accruals for taxes and incentives paid from this Annual Cash Incentive Plan. 
 “Base” – The base of a
range of performance in an objective below which no points are awarded. 
 “Objective” – The top performance in a range
of performance in an objective at which 100% of the weight points for that objective is awarded. 
 3. Effective Date and Plan Year

 The Effective Date of the Plan shall be January 1, 2007. The Plan Year shall be the calendar year. 
 4. Eligibility 
 An individual shall
be eligible to become a Participant in the Plan who satisfies the following requirements: 
  

	 	a.	The individual is an employee of the Bank. For this purpose, an individual shall be considered to be an “employee” if there exists between the individual and the Bank the
legal and bona fide relationship of employer and employee. 

  

	 	b.	The individual employee’s position is classified as a full time or part time position that is normally scheduled. 

  

	 	c.	The individual is approved by the Compensation Committee as a Participant in the Plan. 

  

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 5. Participation 
 Prior to the beginning of each Plan Year, the Chief Executive Officer shall recommend to the
Compensation Committee each individual or position eligible to become a Participant in the Plan (a “Participant”) with respect to such Plan Year. Participants shall be approved by the Compensation Committee in its discretion. In the event
of the promotion of an employee or the hiring of a new employee during the Plan Year, the Compensation Committee, upon the recommendation of the Chief Executive Officer, may approve the entry of a Participant into the Plan Year. However, if the
position has been previously approved, no such approval shall be required. In such case, the Incentive Award determined under Section 6 with respect to such Participant shall be the percentage as determined by the Compensation Committee for the
position multiplied by the individual’s actual base salary as of January 1st of the Plan Year. However, in
no event shall an employee be a Participant for less than the full final six months of the Plan Year. Participation in the Plan shall be subject to the provisions of the Plan and such other terms and conditions, as the Compensation Committee shall
provide. 
 6. Incentive Award 
  

	6.1	Subject to Section 6.2, each Participant for a Plan Year shall receive an Incentive Award to the extent it is earned as determined by: 

  

	 	a.	Multiplying the Potential Award by the Bank’s percent achievement of the range of its Plan Year objective for Pre-Tax, Pre-Incentive Net Income, and then

  

	 	b.	Multiplying by the sum of the weights derived (if applicable) by multiplying the individual’s percentage achievement of each personal and/or team objectives’ performance
ranges (if applicable) by a weighting factor for each objective (positive or negative). If no individual objectives were established for a position, then the Incentive Award will be equal to the Participant’s Potential Award as adjusted by the
Bank’s achievement of its Pre-Tax, Pre-Incentive Net Income objective range. 

  

	6.2	Notwithstanding any other provision of this Plan, the Compensation Committee shall review and approve the payment of the Incentive Award as determined under Section 6.1 and in
its discretion may adjust the amount of the payment as it deems necessary to meet the purpose of this Plan and the best interest of the Bank. In no event shall an Incentive Award be paid to a Participant who in the sole determination of the
Compensation Committee has violated established policies and practices of the Bank as reflected in the minutes of the Board. Where interpretations of achievement of objectives is inconsistent, the judgment of the Compensation Committee will prevail.

 Individual objectives are not to be achieved at the expense of the overall Bank objectives or long term objectives of any
individual. For example, if an employee achieves individual objectives, but in so doing clearly creates unnecessary strife among peers or subordinates, violates policy, avoids behaviors that develop business in the long term, or in any way ignores
the best interest of the Bank, then no Incentive Award will be paid. 
  

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 7. Termination of Employment during Plan Year 
 The Participant shall not receive an Incentive Award with respect to a Plan Year if, for reasons other than a Termination Event as defined in this
Section 7, the employment of the Participant by the Bank is terminated during the Plan Year or the duties of the position of the Participant are changed during the Plan Year so that he/she is no longer in a position as described in
Section 4, including being selected by the Committee as a Participant. The following shall each constitute a “Termination Event”: 
  

	 	a.	Death of the Participant while employed by the Bank. 

  

	 	b.	Retirement of the Participant from the Bank with the approval of the Board. 

  

	 	c.	Disability of the Participant while employed by the Bank. For this purpose, the term “disability” shall mean the inability of a Participant, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or to be of long continued or of indefinite duration, to perform his duties for the Bank. The determination of disability shall be made by the Compensation Committee
based on medical evidence from an independent physician selected by the Participant with the approval of the Compensation Committee; and, shall date from the original cessation of work. 

 In the event of a Termination Event, the Participant or his Beneficiary shall receive an Incentive Award with respect to such Plan Year equal to the
amount determined under Section 5 multiplied by a fraction, the numerator of which is the number of full calendar months during the Plan Year in which he was a Participant prior to the Termination Event and the denominator of which is twelve.
Participants in multiple selected positions, each determined to be a participant position shall receive an amount reflecting the time-weighted service in each position. Participants departing a selected position for a non-selected position, provided
that such departure is not pursuant to poor performance, shall receive an award reflecting the period of the year in which they served. 
 8. Leaves of Absence 
 In general, the determination of an award for an individual who has taken a leave of absence during
the year shall mirror the pro-rata pay-out provisions of termination. However, the Compensation Committee, acting on behalf of the Board of Directors, shall in its sole discretion determine the amount of award in each case so as to preserve the
intent of the Plan. 
 9. Payment of Incentive Awards 
 Unless otherwise determined by the Compensation Committee, the Incentive Award for a Plan Year shall be paid by the Bank in cash to the Participant or his Beneficiary by the later of (i) March 15 following the
end of the Plan Year, or (ii) thirty days following the determination of the final audited financial results for the Plan Year and the final achievement of the Participant’s individual objectives (if applicable.) A participant must be an
employee on the day of payment in order to be eligible. 
  

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 10. Nonassignability of Incentive Awards 
 The right to receive payment of the Incentive Award shall not be assignable or transferable (including by pledge or hypothecation) other than by will or
the laws of intestate succession. 
 11. No Trust Fund: Unsecured Interest 
 A Participant shall have no interest in any fund or specified asset of the Bank. No trust fund shall be created in connection with the Plan or any
Incentive Award, and there shall be no required funding of amounts which may become payable under this Plan. Any amounts which are or may be set aside under the provisions of this Plan shall continue for all purposes to be a part of the general
assets of the Bank, and no person other than the Bank shall, by virtue of the provisions of this Plan, have any interest in such assets. No right to receive payment from the Bank pursuant to the Plan shall be greater than the right of any unsecured
creditor of the Bank. 
 12. No Right or Obligation of Continued Employment 
 Nothing contained in the Plan shall require the Bank to continue to employ the Participant, nor shall the Participant be required to remain in the
employment of the Bank. 
 13. Withholding 
 There shall be deducted from the payment of the Incentive Award the amount of any tax or other amount required by any governmental authority to be withheld and paid over by the Bank to such authority for the account
of the person entitled to such payment. 
 14. Retirement Plans 
 In no event shall any amounts accrued or payable under this Plan be treated as compensation for the purpose of determining the amount of contributions or
benefits to which a Participant shall be entitled under any retirement plan to which the Bank may be a party. Actual payments (as opposed to accruals) will be treated as compensation for accruing benefits under all retirement/pension plans.

 15. Dilution or Other Adjustments 
 If there is any change in the Bank because of a merger, consolidation or reorganization involving the Bank, the Compensation Committee shall make such adjustments to any provisions of this Plan, as the Compensation
Committee deems desirable to prevent the dilution or enlargement of rights granted hereunder. 
 16. Administration of the Plan

 The Plan shall be administered by the Chief Executive Officer with the consent and approval of the Board; provided, that all matters
pertaining to the Incentive Award of the Chief Executive Officer shall be determined by the Compensation Committee. Subject to the 

  

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provisions of the Plan, the Compensation Committee shall have plenary authority in its discretion, among other things, to designate the Participants to
receive Incentive Awards, to determine the Potential Award of each Participant, to interpret the Plan and to prescribe, amend and rescind rules and regulations relating to the Plan, provided that no member of the Board shall take part in any action
with respect to the decisions to pay an Incentive Award to such member, or with respect to the terms or conditions of any Incentive Award awarded to such member. 
 17. Amendment and Termination of the Plans 
 The Plan may be amended or terminated at any time by the
Board. 
 18. Binding on Successors 
 The obligations of Bank under the Plan shall be binding upon any organization which shall succeed to all or substantially all of the assets of the Bank, and the term “Bank,” whenever used in the Plan, shall
mean and include any such organization after the succession. 
 19. Applicable Law 
 The Plan shall be governed by and construed in accordance with the laws of the State of North Carolina. 
  

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