UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) February 20, 2008
Pennsylvania Real Estate Investment Trust
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania | 1-6300 | 23-6216339 | ||
(State or Other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
||
The Bellevue, 200 S. Broad Street, Philadelphia, Pennsylvania | 19102 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (215) 875-0700
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 20, 2008, the Executive Compensation and Human Resources Committee (the Compensation Committee) of the Board of Trustees of Pennsylvania Real Estate Investment Trust (the Company) approved 2007 cash bonus awards and 2008 base salaries, restricted share awards, restricted share unit awards and cash bonus opportunity levels for the Companys Chief Executive Officer, the three other members of the Companys Office of the Chairman and the Chief Financial Officer (collectively, the Named Executive Officers).
2008 Base Salaries
The following table sets forth the annual base salaries for 2008 for each of the Named Executive Officers:
Name |
2008 Base Salary | ||
Ronald Rubin |
$ | 562,648 | |
George F. Rubin |
$ | 405,107 | |
Edward A. Glickman |
$ | 503,880 | |
Joseph F. Coradino |
$ | 405,107 | |
Robert F. McCadden |
$ | 387,601 |
2007 Cash Bonus Awards
The Compensation Committee approved the payment of discretionary cash bonus awards to each of the Named Executive Officers for the year ended December 31, 2007. The awards were based on the Committees assessment of the performance of the Named Executive Officers.
The following table sets forth the discretionary cash bonus amounts awarded for 2007 based on the performance of the Named Executive Officers:
Name |
2007 Discretionary
Cash Bonus |
||
Ronald Rubin |
$ | 96,533 | |
George F. Rubin |
$ | 59,575 | |
Edward A. Glickman |
$ | 74,100 | |
Joseph F. Coradino |
$ | 59,575 | |
Robert F. McCadden |
$ | 83,125 |
Additional cash bonus awards have been earned and will be paid in the following amounts to the Named Executive Officers based upon the achievement by the Company of predetermined performance levels of FFO per diluted share under the annual incentive plan:
Name |
2007 Cash Bonus | ||
Ronald Rubin |
$ | 422,712 | |
George F. Rubin |
$ | 260,874 | |
Edward A. Glickman |
$ | 324,480 | |
Joseph F. Coradino |
$ | 260,874 | |
Robert F. McCadden |
$ | 169,000 |
2008 Long Term Incentive Plan Awards
The Compensation Committee also approved long term incentive plan awards to each of the Named Executive Officers. The Committee made one half of these awards in the form of time-based restricted shares, and one half of these awards in the form of market based performance-contingent restricted share units, or RSUs, under the Companys 2008-2010 Restricted Share Unit Program. The RSU portion of the award represents the right to earn common shares in the future depending on the Companys relative total return to shareholders during the three year period beginning January 1, 2008 and ending on the earlier of December 31, 2010 or the date of a Change in Control, as defined in the Program (the Measurement Period).
Restricted Shares . With respect to the portion of the awards made in the form of time-based restricted shares, these shares generally will vest in four equal annual installments beginning on the first anniversary of the date of grant, subject to continued employment. During the period that the restricted shares have not vested, the recipient is entitled to vote the shares and to receive an amount equal to the dividends that would have been paid on the shares if they were vested.
The following table sets forth the number of restricted shares granted to the Named Executive Officers:
Name |
Number of Restricted
Shares (1) |
Dollar Value | |||
Ronald Rubin |
27,222 | $ | 703,310 | ||
George F. Rubin |
14,896 | $ | 384,852 | ||
Edward A. Glickman |
17,065 | $ | 440,895 | ||
Joseph F. Coradino |
14,896 | $ | 384,852 | ||
Robert F. McCadden |
13,127 | $ | 339,151 |
(1) | The number of shares shown is based on the 20-day average closing price of the Companys common shares through the day prior to the date of the awards. |
The grants of restricted shares were made pursuant to the terms of the 2003 Equity Incentive Plan, as amended. The 2003 Equity Incentive Plan was filed as Appendix D to the Companys Form S-4/A on October 1, 2003 and is incorporated herein by reference. The form of Restricted Share Award is filed as Exhibit 10.1 hereto.
Market Based Performance-Contingent Restricted Share Units (RSUs ). The RSUs represent the right to earn common shares in the future. The issuance of common shares, if any, by the
Company depends on the Companys performance in terms of total return to shareholders (TRS) for the Measurement Period relative to the TRS for the Measurement Period of real estate investment trusts comprising a leading index of real estate investment trusts (the Index REITs). If the Companys TRS performance over the Measurement Period is below the 25 th percentile of the Index REITs, then no shares will be earned. If the Companys TRS over the Measurement Period is above the 25 th , 50 th or 75 th percentiles of the Index REITs, then a percentage of the awards ranging from 50% to 150% will be earned. Dividends are deemed credited to the RSU accounts and are applied to acquire more RSUs for the account of the Named Executive Officer at the 20-day average closing price per common share ending on the dividend payment date. Awards will be paid in common shares in an amount equal to the number of RSUs earned at the end of the Measurement Period. Participants in the program may elect to defer receipt of common shares earned. A copy of the 2008-2010 Restricted Share Unit Program is filed as Exhibit 10.2 to this report. The form of 2008-2010 Restricted Share Unit and Dividend Equivalent Rights Award Agreement is filed as Exhibit 10.3 to this report.
The following table sets forth information regarding RSUs granted to the Named Executive Officers:
Name |
Number of RSUs (1) | Dollar Value | |||
Ronald Rubin |
27,221 | $ | 703,310 | ||
George F. Rubin |
14,895 | $ | 384,852 | ||
Edward A. Glickman |
17,064 | $ | 440,895 | ||
Joseph F. Coradino |
14,895 | $ | 384,852 | ||
Robert F. McCadden |
13,126 | $ | 339,151 |
(1) | The number of RSUs shown is based on the 20-day average closing price of the Companys common shares through the day prior to the date of the awards. |
2008 Annual Incentive Plan
The Compensation Committee also approved threshold (i.e., minimum), target and outperformance (i.e., maximum) cash bonus opportunity levels, expressed as a percentage of salary, that the Named Executive Officers are eligible to receive under the 2008 annual incentive plan. The level of the award that each of the Named Executive Officers is eligible to receive depends upon the Companys funds from operations (FFO) per share, and upon the achievement of individual goals. FFO is a commonly used measure of operating performance and profitability in the real estate industry. The Company computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts.
The following table sets forth the incentive award opportunities for the Named Executive Officers under the 2008 annual incentive plan, expressed as a percentage of base salary:
Incentive Award Opportunity as a Percentage of Base Salary | |||||||||
Title |
Threshold | Target | Outperformance | ||||||
CEO |
35 | % | 75 | % | 150 | % | |||
Office of the Chair |
30 | % | 65 | % | 130 | % | |||
CFO |
25 | % | 60 | % | 120 | % |
Employment Agreement Amendments
On or about February 26, 2008, the Company entered into an amendment to the employment agreement that it has with each of its Named Executive Officers. Capitalized terms used but not defined in this report have the meanings ascribed to them in the employment agreements of such Named Executive Officers. Under the amendments, the date by which the Company will notify each Named Executive Officer (other than Mr. Glickman, whose employment agreement does not specifically provide for such notice) of his Base Salary, bonus plan eligibility and equity incentive awards for any fiscal year will be not later than April 10 th . As amended, each Named Executive Officer (other than Mr. Glickman) has the right to terminate his employment within 10 days after April 10 th or the date on which he receives notice of his Base Salary and bonus plan eligibility without being subject to the non-competition covenant contained in his employment agreement. Prior to the amendments, the Named Executive Officers had 30 days within which to exercise the termination right. Also, upon the death or disability of the Named Executive Officer (including Mr. Glickman), all outstanding time-based restricted shares will become immediately vested, and all outstanding performance-based restricted shares will remain outstanding under the terms of the applicable award document and will vest or be forfeited in whole or in part under the terms of the award as if the Executives employment had not terminated. A copy of the form of amendment for Ronald Rubin, George F. Rubin, Joseph F. Coradino and Robert F. McCadden is filed as Exhibit 10.4 to this report. A copy of the amendment to Edward A. Glickmans employment agreement is filed as Exhibit 10.5 to this report.
Item 9.01 Financial Statements and Exhibits
(d)
10.1 Form of Restricted Share Award Agreement.
10.2 2008-2010 Restricted Share Unit Program.
10.3 Form of 2008- 2010 Restricted Share Unit and Dividend Equivalent Rights Award Agreement.
10.4 Form of Amendment to Employment Agreement dated February 26, 2008 by and between the Company and each of the executive officers with an employment agreement.
10.5 Amendment to Employment Agreement dated February 26, 2008 by and between the Company and Edward A. Glickman
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST | ||||
Date: February 26, 2008 | By: |
/s/ Edward A. Glickman |
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Edward A. Glickman | ||||
President and Chief Operating Officer |
EXHIBIT INDEX
10.1 Form of Restricted Share Award Agreement.
10.2 2008-2010 Restricted Share Unit Program.
10.3 Form of 2008- 2010 Restricted Share Unit and Dividend Equivalent Rights Award Agreement.
10.4 Form of Amendment to Employment Agreement dated February 26, 2008 by and between the Company and each of the executive officers with an employment agreement.
10.5 Amendment to Employment Agreement dated February 26, 2008 by and between the Company and Edward A. Glickman
Exhibit 10.1
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
2003 EQUITY INCENTIVE PLAN
RESTRICTED SHARE AWARD AGREEMENT
[2008 Template for Awards to EVPs and Members of Office of the Chair]
This RESTRICTED SHARE AWARD AGREEMENT (the Award Agreement), dated as of the 20 th day of February, 2008 (the Award Date), is between Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust (the Trust), and (the Grantee), a Key Employee, as defined in the Pennsylvania Real Estate Investment Trust 2003 Equity Incentive Plan (the Plan).
WHEREAS, the Trust desires to award the Grantee shares of beneficial interest in the Trust (Shares) subject to certain restrictions as hereinafter provided, in accordance with the provisions of the Plan, a copy of which is attached hereto (if not previously provided to the Grantee);
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. Award of Restricted Shares . The Trust hereby awards to the Grantee as of the Award Date Shares subject to the restrictions set forth in Paragraph 2 (Restricted Shares). This grant is in all respects limited and conditioned as hereinafter provided, and is subject in all respects to the terms and conditions of the Plan now in effect and as it may be amended from time to time (but only to the extent that such amendments apply to outstanding grants of Restricted Shares). Such terms and conditions 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.
2. Vesting . The grantee shall vest in ( i.e. , have the right to sell, assign, transfer, pledge or otherwise encumber or dispose of) the Restricted Shares granted under the Award Agreement as indicated in the schedule below. The Committee (as defined in the Plan) may at any time accelerate the time at which the restrictions on all or any part of the Restricted Shares will lapse.
Date Restricted Shares
|
Number of Restricted Shares |
|
February 17, 2009 | Restricted Shares [25% of the total number of Shares granted under this Award Agreement] | |
February 16, 2010 | an additional Restricted Shares [25% of the total number of Shares granted under this Award Agreement] | |
February 15, 2011 | an additional Restricted Shares [25% of the total number of Shares granted under this Award Agreement] | |
February 15, 2012 | an additional Restricted Shares [25% of the total number of Shares granted under this Award Agreement] |
Notwithstanding the foregoing, all unvested Restricted Shares awarded to the Grantee shall become fully vested at any earlier time set forth in the Grantees Employment Agreement with the Trust.
3. Restriction Provisions; Share Certificates . The Trusts transfer agent shall register the Grantees Restricted Shares in a book entry in the Grantees name, and shall include provisions in its records noting the restrictions on transfer on such Restricted Shares that are set forth in this Award Agreement. The Restricted Shares shall remain subject to such restrictions until the Grantee becomes vested in the Restricted Shares. The Grantee, by executing this Agreement, irrevocably grants to the Trust a power of attorney to direct the Trusts transfer agent to transfer to the Trust any Restricted Shares that are forfeited pursuant to Paragraph 5 and any Shares used to satisfy the withholding requirements set forth in Paragraph 8. The Grantee also agrees to execute any documents requested by the Trust in connection with such transfer to the Trust. As soon as practicable after the Restricted Shares become vested under Paragraph 2, such restriction provisions shall be removed, and the Shares (net of any Shares used to satisfy the withholding requirements of Paragraph 8) shall be delivered to the Grantee in the form of certificates or in any other form permitted by the Trust.
4. Voting and Dividend Rights . The Grantee shall have voting rights on non-vested Restricted Shares and receive as compensation (subject to the withholding of applicable taxes, except to the extent the Grantee has made the election described in Paragraph 6) an amount equal to the dividends that otherwise would have been payable to the Grantee had the Grantee been vested in such Restricted Shares on the date of their original issuance.
5. Termination of Service . If the Grantees service with the Trust and all of its Subsidiary Entities (as defined in the Plan) is terminated for any reason (including death or Disability (as defined in the Plan)), all unvested Restricted Shares held by the Grantee at the time of termination of service shall either (i) be transferred to the Trust pursuant to the power of attorney described in Paragraph 3 without any further action by the Grantee, or (ii) become fully vested, whichever is provided in the Grantees Employment Agreement with the Trust.
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6. Notice of Tax Election . If the Grantee makes an election under section 83(b) of the Internal Revenue Code of 1986, as amended (the Code), for the immediate recognition of income attributable to the award of Restricted Shares, the Grantee shall inform the Trust in writing of such election within 10 days of the filing of such election. The amount includible in the Grantees income as a result of an election under section 83(b) of the Code shall be subject to applicable federal, state and local tax withholding requirements and to such additional withholding rules (the Withholding Rules) as may be applicable. Dividends paid on Restricted Shares for which the Grantee has made such an election shall not be treated as compensation subject to withholding, but rather as dividends on shares of a real estate investment trust.
7. Transferability . The Grantee may not assign or transfer, in whole or in part, Restricted Shares subject to the Award Agreement in which the Grantee is not vested.
8. Withholding of Taxes . The obligation of the Trust to deliver Shares upon the vesting of Restricted Shares shall be subject to applicable federal, state and local tax withholding requirements. If the amount includible in the Grantees income as a result of the vesting of Restricted Shares is subject to the withholding requirements of applicable tax law, the Grantee, subject to the provisions of the Plan and 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) pursuant to the Withholding Rules. Such Shares shall be valued, for this purpose, at their Fair Market Value (as defined in the Plan) on the date the amount attributable to the vesting of the Restricted Shares is includible in income by the Grantee under section 83 of the Code. 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 tax and Social Security (FICA) withholding requirements. Notwithstanding the foregoing, the Trust may limit the number of Shares withheld to the extent necessary to avoid adverse accounting consequences.
9. Recoupment Policy . The Grantee hereby agrees that any Shares delivered under this Award Agreement shall be subject to the Trusts Recoupment Policy as in effect on the date the Restricted Shares are granted under this Award Agreement, and as subsequently amended.
10. 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 the conflict 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 and seal, all as of the day and year first above written.
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST |
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By: |
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|
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Exhibit 10.2
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
2008-2010 RESTRICTED SHARE UNIT PROGRAM
(Established under the Pennsylvania Real Estate
Investment Trust 2003 Equity Incentive Plan)
TABLE OF CONTENTS
Page | ||||
1. PURPOSES |
1 | |||
2. DEFINITIONS |
1 | |||
3. AWARD AGREEMENT |
4 | |||
4. PERFORMANCE GOAL; DELIVERY OF SHARES |
4 | |||
5. BENEFICIARY DESIGNATION |
7 | |||
6. DELIVERY TO GUARDIAN |
7 | |||
7. SOURCE OF SHARES |
7 | |||
8. CAPITAL ADJUSTMENTS |
8 | |||
9. TAX WITHHOLDING |
8 | |||
10. ADMINISTRATION |
8 | |||
11. AMENDMENT AND TERMINATION |
8 | |||
12. HEADINGS |
8 | |||
13. INCORPORATION OF PLAN BY REFERENCE |
8 | |||
APPENDIX A |
1 | |||
APPENDIX B |
1 | |||
APPENDIX C |
1 |
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
2008-2010 RESTRICTED SHARE UNIT PROGRAM
(Established under the Pennsylvania Real Estate
Investment Trust 2003 Equity Incentive Plan)
PREAMBLE
WHEREAS, Pennsylvania Real Estate Investment Trust (the Trust) established, and its shareholders approved, the Pennsylvania Real Estate Investment Trust 2003 Equity Incentive Plan (the Plan), primarily in order to award equity-based benefits to certain officers and other key employees of the Trust and its Related Corporations and Subsidiary Entities (both as defined in the Plan);
WHEREAS, one kind of an equity-based benefit that can be awarded under the Plan is a Performance Share, defined in the Plan as an Award that entitles the recipient to receive Shares, without payment, following the attainment of designated individual or Corporate Performance Goals;
WHEREAS, the Trusts Executive Compensation and Human Resources Committee (the Committee) is responsible for the administration of the Plan and may, pursuant to the powers granted to it thereunder, adopt rules and regulations for the administration of the Plan and determine the terms and conditions of each award granted thereunder;
WHEREAS, the Committee desires to establish a program for the 2008 through 2010 period under the Plan for the benefit of certain officers of the Trust and PREIT Services, LLC (one of the Trusts Subsidiary Entities) whereby such officers would receive Performance Shares under the Plan, based on the extent to which the Trust attains the corporate goal set forth in the program; and
WHEREAS, the Committee established in writing the objective performance goals for use under the program, within the meaning of Treas. Reg. §1.162-27(e)(2)(i), in its February 20, 2008 meeting;
NOW, THEREFORE, effective as of January 1, 2008, the Pennsylvania Real Estate Investment Trust 2008-2010 Restricted Share Unit Program is hereby adopted (under the Plan) by the Committee, with the following terms and conditions:
1. Purposes . The purposes of the Program are to motivate certain officers of the Employer to reach and exceed challenging goals for the Trust of profitability and growth, and to focus the attention of the eligible officers on a critical financial indicator used to measure the success of the Trust and of other companies in the same business as the Trust.
2. Definitions
(a) Award means an award of Restricted Share Units to a Participant.
(b) Award Agreement means a written document evidencing the grant to a Participant of an Award, as described in Section 10.1 of the Plan.
(c) Base Units means the number of Restricted Share Units set forth in the Award Agreement (increased by any additional Restricted Share Units purchased pursuant to Section 4(e) hereof) by which the number of Shares that may be delivered to a Participant is measured.
(d) Board means the Board of Trustees of the Trust.
(e) Business Combination means Business Combination as such term is defined in the definition of Change in Control.
(f) Cause means Cause as such term is defined in a Participants Employment Agreement or, if the Participant is not a party to an Employment Agreement, then (solely for purposes of this Program) as set forth below
(1) Fraud in connection with the Participants employment; theft, misappropriation or embezzlement of funds of the Trust or its affiliates; or a willful violation of the provisions of the Trusts Code of Business Conduct with respect to the purchase or sale of securities of the Trust;
(2) Indictment of the Participant for a crime involving moral turpitude;
(3) Failure of the Participant to perform his or her duties to the Employer (other than on account of illness, accident, vacation or leave of absence) that persists after written demand for substantial performance which specifically identifies the manner in which the Participant has failed to perform for more than 30 calendar days after such notice to him or her; or
(4) The Participants repeated abuse of alcohol or drugs.
(g) Change in Control means Change in Control as such term is defined in a Participants Employment Agreement or, if the Participant is not a party to an Employment Agreement, then as defined in the Plan.
(h) Code means the Internal Revenue Code of 1986, as amended.
(i) Committee means the Executive Compensation and Human Resources Committee of the Board, which Committee has developed the Program and has the responsibility to administer the Program under Section 3 of the Plan and Section 10 hereof.
(j) Corporate Goal means the specific performance goal, set forth in Section 4(a) hereof, which must be achieved in order for a Participant to receive Shares under an Award.
(k) DER means DER (dividend equivalent right) as such term is defined in the Plan.
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(l) Disability Termination means the termination of a Participants employment under the disability provisions of the Participants Employment Agreement or, if the Participant is not a party to an Employment Agreement, then as a result of a Disability as defined in the Plan.
(m) Effective Date means January 1, 2008.
(n) Employer means, collectively and individually (as applicable), the Trust and Services, and any other Related Corporation or Subsidiary Entity (both as defined in the Plan) that becomes an Employer under the Plan with the consent of the Trust.
(o) Employment Agreement means the written agreement entered into by a Participant and an Employer (if any) setting forth the terms and conditions of the Participants employment, as amended at any applicable time.
(p) Good Reason means Good Reason as such term is defined in a Participants Employment Agreement or, if the Participant is not a party to an Employment Agreement, then the relocation of the Participants principal business office outside the metropolitan Philadelphia area without the consent of the Participant.
(q) Measurement Period means the period beginning on the Effective Date and ending on the earlier of December 31, 2010 or the date of a Change in Control (provided that, if the Change in Control arises from a Business Combination, the Measurement Period shall end on the date of the closing or effectiveness of the Business Combination, as applicable).
(r) Participant means each individual who has received an Award under the Program.
(s) Plan means the Pennsylvania Real Estate Investment Trust 2003 Equity Incentive Plan, as it may be amended from time to time.
(t) Program means the Pennsylvania Real Estate Investment Trust 2008-2010 Restricted Share Unit Program (established under the Plan), as it may be amended from time to time.
(u) Restricted Share Unit or RSU means an Award of a Performance Share, as such term is defined in the Plan.
(v) Services means PREIT Services, LLC, a Delaware limited liability company.
(w) Shares means Shares as such term is defined in the Plan.
(x) Subsidiary Entity means Subsidiary Entity as defined in the Plan.
(y) Trust means Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust.
(z) Trustee means a member of the Board.
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3. Award Agreement . Each Participant shall be issued an Award Agreement setting forth the initial number of Base Units awarded to the Participant and entitling the Participant to receive the number of Shares determined under Section 4 hereof based on the extent to which the Corporate Goal is achieved. Such Base Units shall be subject to the adjustments described in Section 8 hereof. Each Award Agreement and the Shares which may be delivered thereunder are subject to the terms of this Program and the terms of the Plan.
4. Performance Goal; Delivery of Shares
(a) If, for the Measurement Period, the Trusts performance, based on its TRS (as defined below), equals or exceeds the Threshold (as defined below), then the Trust shall deliver to each Participant the number of Shares (rounded down to the nearest whole number of Shares) determined by first multiplying the whole percentile (expressed as a percentage equal to the percentile rounded up for fractions of one-half or greater) at which the Trusts TRS for the Measurement Period places the Trust among the component members of the MSCI US REIT Index (as defined below) for the Measurement Period, each ranked pursuant to such TRS, by two, and then multiplying that product by the Participants Base Units; provided, however, that the number of Shares that may be delivered shall not exceed 150% of the Participants Base Units. Shares will be delivered under the Program to the extent that Shares remain available under the Plan. If the total number of Shares to be delivered exceeds the number of Shares available under the Plan, then the number of Shares for each Participant will be reduced on a pro rata basis based on each individual Participants Base Units as compared to the total of all Participants Base Units. If, for the Measurement Period, the Trusts performance, based on its TRS, does not equal or exceed the Threshold, the Trust shall not deliver any Shares to the Participants. Also, except as provided in subsection (c) below, a Participant must be employed by an Employer on the last day of the Measurement Period in order to receive any Shares under this Program. See Appendix A attached hereto for examples illustrating the operation of this Section.
(b) Definitions for this Section . The following terms shall be defined as set forth below:
(1) MSCI US REIT Index means the MSCI US REIT Indexs gross index (as it may be renamed from time to time) or, in the event such index shall cease to be published, such other index as the Committee shall determine to be comparable thereto.
(2) Share Value means, as applicable and except as provided in the following sentence, the average of the closing prices of one Share on the New York Stock Exchange (the NYSE) (or, if not then listed on the NYSE, on the principal market or quotation system on which then traded) for (i) the 20 days on which Shares were traded prior to the Effective Date (for the value of a Share on the Effective Date); (ii) the 20 days on which Shares were traded prior to and including the last day of the Measurement Period (for the value of a Share on the last day of the Measurement Period); or (iii) the 20 days on which the Shares were traded prior to and including the applicable dividend payment date (for the purchase of additional RSUs under subsection (e) below). In the event of a Business Combination approved by the shareholders of the Trust on or prior to December 31, 2010, Share Value shall mean the final price per Share agreed upon by the parties to the Business Combination.
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(3) Threshold means that, for the Measurement Period, the Trusts TRS places the Trust at least at the 25 th percentile among the component members (including the Trust) of the MSCI US REIT Index at the end of the Measurement Period (ranked based upon each such members TRS for the Measurement Period).
(4) TRS means total return to shareholders for the Measurement Period for the Trust and for the other component members of the MSCI US REIT Index (i.e., those component members used for purposes of compiling the MSCI US REIT Index as of the first day of the Measurement Period and that remain publicly held companies as of the last day of the Measurement Period, whether or not they are still included in the MSCI US REIT Index on such last day).
(c) Termination of Employment . Upon a Participants termination of employment on or prior to the last day of the Measurement Period, the following shall occur:
(1) Termination without Cause, for Good Reason, or on Account of Disability or Death . If, on or prior to the last day of the Measurement Period, (i) the Participant terminates his or her employment with the Employer for Good Reason, (ii) the Employer terminates the Participants employment for reasons other than for Cause, (iii) the Participant incurs a Disability Termination, or (iv) the Participant dies, the Participant (or the Participants beneficiary(ies), if applicable) shall be eligible to receive Shares under the Program (or not) as though the Participant had remained employed by the Employer through the end of the Measurement Period.
(2) Termination for Any Other Reason . If, on or prior to the last day of the Measurement Period, the Participants employment with the Employer terminates for any reason other than a reason described in paragraph (1) above, the Participant 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 RSUs the Participant was granted under the Program.
(d) Determination of Performance; Share Delivery . Within 30 days after the end of the Measurement Period, the Committee shall provide each Participant with a written determination of whether the Trust did or did not attain the Corporate Goal for the Measurement Period (and, if applicable, the extent to which the Corporate Goal was attained) and the calculations used to make such determination. If Shares are to be delivered under the Program, they shall be delivered to Participants on March 1, 2011 (unless a Participant elects otherwise pursuant to subsection (f) below) or, if a Change in Control occurs before January 1, 2011, on the fifth day after the last day of the Measurement Period ending on (or, if applicable, after) the Change in Control.
(e) DERs . Participants shall be awarded DERs with respect to their initial number of Base Units. Each DER will be expressed as a specific dollar amount (the Dollar Amount) equal to the dollar amount of the dividend paid on an actual Share on a specific date (the Dividend Date) multiplied by the Participants initial number of Base Units. Until the end of the Measurement Period, the Committee will apply the Dollar Amount to purchase a number of additional RSUs equal to the Dollar Amount divided by the Share Value. The delivery of Shares under such additional RSUs shall also be subject to the attainment of the Corporate Goal set forth in subsection (a) above. DERs shall also be awarded on such additional
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RSUs and applied in the same manner (thereby increasing the Participants Base Units on a cumulative basis). RSUs deemed purchased with DERs hereunder may be whole or fractional units.
Participants who make a deferral election under subsection (f) below shall also be awarded DERs under the Plan with respect to their deferred Shares. Each such DER will be expressed as a Dollar Amount equal to the dollar amount of the dividend paid on an actual Share on a Dividend Date during the deferral period multiplied by the number of Shares still deferred by the Participant as of the Dividend Date. The Committee will apply the Dollar Amount to purchase notional shares (on which DERs thereafter will also be awarded and applied in the same manner) at the closing price of a Share on the Dividend Date. Notional shares deemed purchased with DERs hereunder may be whole or fractional shares. DERs expressed as a Dollar Amount will continue to be applied to purchase notional shares on Dividend Dates until all of the Participants deferred Shares are delivered to the Participant (or to his or her beneficiary(ies), if applicable), as elected in his or her deferral election agreement. A Participants notional shares purchased with DERs awarded with respect to his or her deferred Shares shall be 100% vested at all times.
The Trust shall establish a bookkeeping account (the DER Account) for each such Participant and credit to such account the number of whole and fractional additional RSUs and notional shares deemed purchased with the Dollar Amounts. The Participants additional RSUs and notional shares shall be subject to the adjustments described in Section 8 hereof. All whole additional RSUs (for which Shares become deliverable under this Section) and whole notional shares credited to a Participants DER Account shall be replaced by issued Shares on a one-to-one basis on the delivery date referred to in subsection (d) above, and the fractional additional RSUs (for which Shares become deliverable under this Section) and fractional notional shares credited to a Participants DER Account shall be aggregated and replaced by issued Shares (and with cash in lieu of a fractional Share) based on the closing price of a Share on the replacement date, and delivered to the Participant (or to his or her beneficiary(ies), if applicable) on the date the associated Shares are delivered to the Participant.
(f) Elective Deferrals . Except in the event of delivery on account of a Change in Control, if Shares are to be delivered under the Program, a Participant may elect to defer delivery (and the Trust shall defer issuance) of all or a portion of the Shares until, as specified in the Participants deferral election agreement, (i) the Participants separation from service from the Trusts controlled group of entities and/or (ii) a date chosen by the Participant. The Participant may also elect in the deferral election agreement to receive Shares upon the occurrence of an unforeseeable emergency, as defined in section 409A(a)(2)(B)(ii) of the Code, to the extent not prohibited by that section of the Code and regulations issued thereunder. If a Change in Control or the Participants death occurs during the deferral period, the Participants Shares (and cash attributable to DERs) shall be delivered in a single sum to the Participant or to the Participants beneficiary(ies) (as applicable) on the 30 th day after the Change in Control (provided that, if the Change in Control arises from a Business Combination, the Change in Control shall be deemed to occur on the date of the closing or effectiveness of the Business Combination, as applicable) or the Participants death (as applicable).
A Participants deferral election agreement must be submitted to the Committee no later than June 30, 2010 in order to be effective; otherwise, Shares (and cash attributable to DERs)
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deliverable to the Participant, if any, will be delivered on March 1, 2011. Unless the delivery of deferred Shares is occasioned by either of the events described in the last sentence of the preceding paragraph, if deferred Shares are to be delivered to a Participant who is a specified employee, as defined in section 409A(a)(2)(B)(i) of the Code, upon his or her separation from service from the Trusts controlled group of entities, the Trust shall issue and deliver such deferred Shares (and cash attributable to DERs) on the date that is six months after the date of his or her separation from service. A deferral election agreement shall be substantially in the form set forth in Appendix B attached hereto.
The Committee shall administer the delivery of Shares (and cash attributable to DERs) under an election made pursuant to this subsection (f) and the underlying deferral election agreement in accordance with section 409A of the Code and regulations and other guidance issued thereunder.
5. Beneficiary Designation
(a) Each Participant shall designate the person(s) as the beneficiary(ies) to whom the Participants Shares shall be delivered in the event of the Participants death prior to the delivery of the Shares to him or her. Each beneficiary designation shall be substantially in the form set forth in Appendix C attached hereto and shall be effective only when filed with the Committee during the Participants lifetime.
(b) Any beneficiary designation may be changed by a Participant without the consent of any previously designated beneficiary or any other person by the filing of a new beneficiary designation with the Committee. The filing of a new beneficiary designation shall cancel all beneficiary designations previously filed.
(c) If any Participant fails to designate a beneficiary in the manner provided above, or if the beneficiary designated by a Participant predeceases the Participant, the Committee shall direct such Participants Shares to be delivered to the Participants surviving spouse or, if the Participant has no surviving spouse, then to the Participants estate.
6. Delivery to Guardian . If Shares are issuable under this Program to a minor, a person declared incompetent, or a person incapable of handling the disposition of property, the Committee may direct the delivery of the Shares to the guardian, legal representative, or person having the care and custody of the minor, incompetent or incapable person. The Committee may require proof of incompetence, minority, incapacity or guardianship as the Committee may deem appropriate prior to the delivery. The delivery shall completely discharge the Committee, the Trustees and the Employer from all liability with respect to the Shares delivered.
7. Source of Shares . This Program shall be unfunded, and the delivery of Shares shall be pursuant to the Plan. Each Participant and beneficiary shall be a general and unsecured creditor of the Employer to the extent of the Shares determined hereunder, and the Participant shall have no right, title or interest in any specific asset that the Employer may set aside, earmark or identify as reserved for the delivery of Shares under the Program. The Employers obligation under the Program shall be merely that of an unfunded and unsecured promise to deliver Shares in the future, provided the Corporate Goal is met.
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8. Capital Adjustments . Calculations required under the Program, the number of Base Units awarded under the Program, and the number of Shares that may be delivered under the Program shall be adjusted to reflect any increase or decrease in the number of issued Shares resulting from a subdivision (share-split), consolidation (reverse split), share dividend, or other change in the capitalization of the Trust during the Measurement Period.
9. Tax Withholding . The delivery of Shares (and cash, if applicable) to a Participant or beneficiary under this Program shall be subject to applicable tax withholding pursuant to Section 10.6 of the Plan.
10. Administration. This Program shall be administered by the Committee pursuant to the powers granted to it in Section 3 of the Plan.
11. Amendment and Termination . The Committee reserves the right to amend the Program, by written resolution, at any time and from time to time in any fashion, provided any such amendment does not conflict with the terms of the Plan, and to terminate it at will. However, no amendment or termination of the Program shall adversely affect any Award Agreement already issued under the Program without the written consent of the affected Participant(s).
12. Headings . The headings of the Sections and subsections of the Program are for reference only. In the event of a conflict between a heading and the content of a Section or subsection, the content of the Section or subsection shall control.
13. Incorporation of Plan by Reference . Because the Program is established under the Plan in order to provide for, and determine the terms and conditions of, the granting of certain Awards thereunder, the terms and conditions of the Plan are hereby incorporated by reference and made a part of this Program. If any terms of the Program conflict with the terms of the Plan, the terms of the Plan shall control.
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APPENDIX A
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
2008-2010 RESTRICTED SHARE UNIT PROGRAM
(Established under the Pennsylvania Real Estate
Investment Trust 2003 Equity Incentive Plan)
EXAMPLES *
Example 1. Full Measurement Period
A is a participant in the Pennsylvania Real Estate Investment Trust 2008-2010 Restricted Share Unit Program (the Program). The price of a beneficial interest (a Share) in the Trust (as defined in the Program) on January 1, 2008 is $30, and the price of a Share on December 31, 2010 is $50. For the three-year period beginning January 1, 2008 and ending December 31, 2010 (the Measurement Period), dividends total $9 per Share (and are paid in an equal amount on a quarterly basis i.e., $.75 dividend per Share per quarter).
Total return to shareholders (TRS) on one Share (expressed as a percentage) for the Trust over the Measurement Period, as calculated by the Trust or by a third party selected by the Committee (as defined in the Program), is the following:
12/31/10 Value of One Share |
$50 | ||
+ Dividends over Measurement Period on One Share |
+9 | ||
$59 | |||
Divided by 1/1/08 Value of One Share |
/30 | ||
1.967 | |||
TRS |
96.7 | % |
Participant A receives a Restricted Share Unit award for 250 Base Units (as defined in the Program). Participant A also receives DERs (as defined in the Program) on his Base Units, such that his total number of Base Units on December 31, 2010 is 315.9, calculated as follows:
* | The examples set forth in this Appendix A are illustrative only and are not intended to be precise or definitive. For example, they do not show the full calculation of TRS (as defined below) because, for ease of explanation, the calculation does not reflect that each cash dividend paid during the Measurement Period (as defined below) is deemed to be reinvested in a fractional notional share of the Trust (as defined below). When actually calculating TRS, each cash dividend will generally be deemed to be reinvested in a fractional notional share. There may be other immaterial differences between the way calculations are performed in these examples and the way the Trust or a third party engaged by the Committee (as defined below) would perform the calculations. |
Date |
Aggregate
Base Units |
Deemed
Dividend |
20- Day Average
Share Price |
Additional
RSUs Purchased |
||||||
1/1/08 |
250 | | | | ||||||
3/15/08 |
250 | $ | 187.50 | $ | 32 | 5.9 | ||||
6/15/08 |
255.9 | $ | 191.93 | $ | 34 | 5.6 | ||||
9/15/08 |
261.5 | $ | 196.13 | $ | 34 | 5.8 | ||||
12/15/08 |
267.3 | $ | 200.48 | $ | 36 | 5.6 | ||||
3/15/09 |
272.9 | $ | 204.68 | $ | 38 | 5.4 | ||||
6/15/09 |
278.3 | $ | 208.73 | $ | 38 | 5.5 | ||||
9/15/09 |
283.8 | $ | 212.85 | $ | 36 | 5.9 | ||||
12/15/09 |
289.7 | $ | 217.28 | $ | 40 | 5.4 | ||||
3/15/10 |
295.1 | $ | 221.33 | $ | 42 | 5.3 | ||||
6/15/10 |
300.4 | $ | 225.30 | $ | 44 | 5.1 | ||||
9/15/10 |
305.5 | $ | 229.13 | $ | 44 | 5.2 | ||||
12/15/10 |
310.7 | $ | 233.03 | $ | 45 | 5.2 | ||||
12/31/10 |
315.9 | | | |
If, as of December 31, 2010, the Trusts TRS places the Trust at the percentiles listed below among the component members of the MSCI US REIT Index (as defined in the Program) (the Index), ranked pursuant to each members TRS over the Measurement Period, as calculated by the Trust or by a third party selected by the Committee, Participant A would receive the following number of Shares (with fractional Shares settled in cash):
Percentile |
Percent of Base Units Deliverable in Shares |
Shares |
||
Below 25 th |
0% | 0 | ||
25 th |
50% | 157 (plus cash for 1.0 Share) | ||
40 th |
80% | 252 (plus cash for .7 Share) | ||
50 th |
100% | 315 (plus cash for .9 Share) | ||
65 th |
130% | 410 (plus cash for .7 Share) | ||
75 th or above |
150% | 473 (plus cash for .9 Share) |
Example 2. Change in Control
Assume the same facts as in Example 1, except that a Change in Control (as defined in the Program) occurs when the Trusts shareholders approve a Business Combination (as defined in the Program), which becomes effective on October 15, 2009. From the period between January 1, 2008 and October 15, 2009 inclusive, total dividends of $5.25 per Share have been
A-2
paid. Because of the Change in Control, the Measurement Period ends on October 15, 2009, rather than December 31, 2010. The final price per Share agreed upon by the parties to the Change in Control is $40.
TRS on one Share (expressed as a percentage) over the Measurement Period (ending October 15, 2009), as calculated by the Trust or by a third party selected by the Committee, is the following:
10/15/09 Value of One Share |
$40.00 | ||
+ Dividends over Measurement Period on One Share |
+$5.25 | ||
$45.25 | |||
/30 | |||
Divided by 1/1/08 Value of One Share |
1.508 | ||
TRS |
50.8 | % |
As of October 15, 2009, Participant A has 283.8 Base Units (see Example 1). If, as of October 15, 2009, the Trusts TRS places the Trust at the percentiles listed below among the component members of the Index (ranked pursuant to each members TRS over the Measurement Period, as calculated by the Trust or by a third party selected by the Committee), Participant A would receive the following number of Shares (with fractional Shares settled in cash):
Percentile |
Percent of Base Units Deliverable in Shares |
Shares |
||
Below 25 th |
0% | 0 | ||
25 th |
50% | 141 (plus cash for .9 Share) | ||
40 th |
80% | 227 | ||
50 th |
100% | 283 (plus cash for .8 Share) | ||
65 th |
130% | 368 (plus cash for .9 Share) | ||
75 th or above |
150% | 425 (plus cash for .7 Share) |
Example 3. Termination During Measurement Period
Assume the same facts as in Example 1, except that Participant A incurs a Disability Termination (as defined in the Program) on May 5, 2009. From the period between January 1, 2008 and May 5, 2009 inclusive, total dividends of $3.75 per Share have been paid. Thus, as of his date of termination, Participant A has 272.9 Base Units (see Example 1). Nevertheless, because of the kind of termination that occurred, Participant A is treated as though he is still employed by the Trust through the end of the Measurement Period. Thus, his total number of Base Units on December 31, 2010 is 315.9 (see Example 1) and he would receive the same number of Shares (with fractional Shares settled in cash) as described in Example 1.
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APPENDIX B
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
2008-2010 RESTRICTED SHARE UNIT PROGRAM
(Established under the Pennsylvania Real Estate
Investment Trust 2003 Equity Incentive Plan)
DEFERRAL ELECTION AGREEMENT *
The Pennsylvania Real Estate Investment Trust 2008-2010 Restricted Share Unit Program effective as of January 1, 2008 (the Program), provides a select group of management or highly compensated employees with the ability to defer a portion of their compensation earned under the Program. The purpose of this Deferral Election Agreement is to allow you to defer the delivery of all or a portion of the Shares (and Shares deliverable with respect to dividend equivalent rights (DERs) awarded thereon) that are otherwise deliverable to you under the Program until one of the events selected below occurs.
AFTER YOU SIGN THIS DEFERRAL ELECTION AGREEMENT AND IT IS ACCEPTED BY PENNSYLVANIA REAL ESTATE INVESTMENT TRUST (THE TRUST), YOU MAY NOT REVOKE IT AFTER JUNE 30, 2010. IF YOU DECIDE SUBSEQUENTLY TO CHOOSE A LATER DELIVERY DATE, YOU MUST SUBMIT A NEW DEFERRAL ELECTION AGREEMENT AT LEAST 12 MONTHS PRIOR TO YOUR ORIGINAL DELIVERY DATE AND YOUR NEW DELIVERY DATE MUST BE AT LEAST FIVE YEARS AFTER YOUR ORIGINAL DELIVERY DATE. YOU MAY NOT, UNDER ANY CIRCUMSTANCES, ACCELERATE THE DELIVERY OF YOUR PERFORMANCE SHARES (OR THE SHARES DELIVERABLE WITH RESPECT TO ANY DERS AWARDED THEREON) AFTER THIS DEFERRAL ELECTION AGREEMENT HAS BECOME EFFECTIVE (OTHER THAN AS A RESULT OF AN UNFORESEEABLE EMERGENCY, IF ELECTED BELOW).
You need only complete this Deferral Election Agreement if you wish to defer the delivery of Shares (and Shares deliverable with respect to DERs awarded thereon) that become deliverable to you under the Program. Capitalized terms in this Deferral Election Agreement are defined in the Program.
1. Participation Election
¨ I hereby elect to defer under the terms of the Program the delivery of % [insert any whole percentage from one to 100 percent, inclusive] of the Shares that may become deliverable to me under the Program.
* | Because of the complexities involved in the application of federal, state and local tax laws to specific circumstances and the uncertainties as to possible future changes in the tax laws, you should consult your personal tax advisor regarding your own situation before completing this Deferral Election Agreement. |
2. Delivery Date Election
I hereby elect to have the Trust deliver the percentage set forth above of the Shares (and the Shares deliverable with respect to DERs awarded thereon) that may become deliverable to me under the Program upon the following event [check only one box] :
¨ (A) On the 10th calendar day after my separation from service from the Trusts controlled group of entities (the date which is six months after such separation from service if I am a specified employee at that time see Section 4(f) of the Program).
¨ (B) On the following date: , 20 [must be after March 1, 2011] .
¨ (C) Upon the earlier of the 10th calendar day after my separation from service (as described in event (A) above) or the following date: , 20 [must be after March 1, 2011] .
3. Acceleration in the Event of an Unforeseeable Emergency
In addition to the election I made in 2 above, if I check the following box, I also elect to have the Trust deliver Shares (and Shares deliverable with respect to DERs awarded thereon), to the extent permitted by applicable law, to me:
¨ Upon an Unforeseeable Emergency, as defined in Section 4(f) of the Program. (This term is defined quite restrictively in the Internal Revenue Code. See the footnote on the previous page regarding consulting with your own tax advisor before completing this Deferral Election Agreement.)
4. Change in Control or Death
¨ If a Change in Control or my death occurs before all of the Shares (and Shares deliverable with respect to DERs awarded thereon) are delivered to me, such Shares shall be delivered in a single sum to me or to my beneficiary(ies) designated in my Beneficiary Designation Form (as applicable) on the 30th day after such Change in Control (provided that, if the Change in Control arises from a Business Combination, the Change in Control shall be deemed to occur on the date of the closing or effectiveness of the Business Combination, as applicable) or death (as applicable).
5. Insufficient Share Possibility
Because of the finite number of Shares available under the Pennsylvania Real Estate Investment Trust 2003 Equity Incentive Plan, I understand that it is possible that not enough Shares will still be available under the Plan to deliver all of the Shares otherwise required to be delivered to me (or to my beneficiary(ies)) on the deferral date(s) chosen in 2 and 3 above.
* * * * *
B-2
By signing this Deferral Election Agreement, I agree to the terms and conditions of the Program as the Program now exists, and as it may be amended from time to time (provided that no amendment of the Program will adversely affect my rights under the Program without my written consent).
|
|
|||||
Signature of Participant | Date | |||||
ACCEPTED:
Executive Compensation and Human Resources Committee of Pennsylvania Real Estate Investment Trust |
||||||
By: | ||||||
Date: |
|
B-3
APPENDIX C
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
2008-2010 RESTRICTED SHARE UNIT PROGRAM
(Established under the Pennsylvania Real Estate
Investment Trust 2003 Equity Incentive Plan)
BENEFICIARY DESIGNATION FORM
This Form is for your use under the Pennsylvania Real Estate Investment Trust 2008-2010 Restricted Share Unit Program (the Program) to name a beneficiary for the Shares that may be deliverable to you from the Program. You should complete the Form, sign it, have it signed by your Employer, and date it.
* * * *
I understand that in the event of my death before I receive Shares that may be deliverable to me under the Program, the Shares will be delivered to the beneficiary designated by me below or, if none or if my designated beneficiary predeceases me, to my surviving spouse or, if none, to my estate. I further understand that the last beneficiary designation filed by me during my lifetime and accepted by my Employer cancels all prior beneficiary designations previously filed by me under the Program.
I hereby state that [insert name] , residing at [insert address] , whose Social Security number is , is designated as my beneficiary.
|
|
|||||
Signature of Participant | Date | |||||
ACCEPTED: | ||||||
|
||||||
[insert name of Employer] | ||||||
By: |
|
|||||
Date: |
|
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
2008-2010 RESTRICTED SHARE UNIT PROGRAM
This RESTRICTED SHARE UNIT AND DIVIDEND EQUIVALENT RIGHTS AWARD AGREEMENT (the Award Agreement), dated as of the 20th day of February, 2008, 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 Trusts Executive Compensation and Human Resources Committee (the Committee) established the Pennsylvania Real Estate Investment Trust 2008-2010 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 Grantees 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 Grantees 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, 2011 or, in the event of a Change in Control (as defined in the Program) prior to January 1, 2011, 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 the Award Agreement.
(d) Pursuant to Section 4(c) of the Program, if the Grantees employment with the Employer (as defined in the Program) (i) is terminated by the Employer for reasons other than for Cause (as defined in the Program), (ii) is terminated by the Grantee for Good Reason (as defined in the Program), (iii) terminates on account of the Grantees death, or (iv) terminates as a Disability Termination (as defined in the Program), in each case on or before the last day of the Measurement Period, the Grantee shall nevertheless be eligible to receive Shares under the Program (or not) as though the Grantee had remained employed by the Employer through the end of the Measurement Period. If the Grantees employment with the Employer terminates for any other reason, the Grantee 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 RSUs the Participant was granted under the Program.
(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 Grantees Base Units as of the Dividend Date. The Committee will apply the dollar amount to purchase full and 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 Grantees 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.
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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 Grantees notional shares will be recorded in a bookkeeping account, and will be 100% vested. The Grantees 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 Grantees name (or, if the Grantee so requests, in the name of the Grantee and the Grantees 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. If the amount includible in the Grantees income as a result of the delivery of Shares is subject to the withholding requirements of applicable tax law, the Grantee, subject to the provisions of the Plan and such withholding rules as may be applicable (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) pursuant to the Withholding Rules. 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 tax and Social Security (FICA) withholding requirements. Notwithstanding the foregoing, the Trust may limit the number of Shares withheld to the extent necessary to avoid adverse accounting consequences.
5. Share Retention Requirements . For purposes of the share retention requirements of the Trusts 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 Participants termination of employment with the Employer.
6. Recoupment Policy . The Grantee hereby agrees that any Shares delivered under this Award Agreement shall be subject to the Trusts Recoupment Policy as in effect on the date the Restricted Share Units are granted under this Award Agreement, and as subsequently amended.
7. 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 the conflict of laws).
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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 -
Exhibit 10.4
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this Amendment) is entered into between Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust (Company), and [ Insert name ] (Executive), effective as of , .
BACKGROUND
Executive and Company are party to an [ Amended and Restated ] Employment Agreement, dated as of (as amended from time to time, the Employment Agreement), which sets forth the terms and conditions of Executives employment with Company. Executive and Company wish to amend the terms of the Employment Agreement as set forth herein, and, hereafter, references to the Employment Agreement, Agreement, herein, or words of like import in the Employment Agreement shall refer to the Employment Agreement as amended hereby or by any written subsequent amendment thereto.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and intending to be legally bound hereby, the parties hereto agree as follows:
1. All capitalized terms used herein and not defined herein shall have the respective meanings assigned to them in the Employment Agreement.
2. The fifth sentence of Section 3.1 of the Employment Agreement is amended to read, in its entirety, as follows:
No later than April 10 during any fiscal year during the Term, Company shall provide Executive with written notice of his Base Salary, bonus plan eligibility and equity incentive awards, if any, for the current fiscal year.
3. Section 4.1(d) of the Employment Agreement is amended to read, in its entirety, as follows:
(d) anything to the contrary in any other existing agreement or plan notwithstanding, all outstanding restricted shares granted to Executive that (i) are subject to vesting solely based on the passage of time and Executives continued employment shall become immediately vested, and (ii) are subject to vesting based upon the performance of the Company (however measured) shall remain restricted shares under the terms of the applicable restricted share award document (the Award) and shall vest or be forfeited in whole or in part under the terms of such Award as if Employees employment had not terminated.
4. Section 4.2(d) of the Employment Agreement is amended to read, in its entirety, as follows:
(d) anything to the contrary in any other existing agreement or plan notwithstanding, all outstanding restricted shares granted to Executive that (i) are subject to vesting solely based on the passage of time and Executives continued employment shall become immediately vested, and (ii) are subject to vesting based upon the performance of the Company (however measured) shall remain restricted shares under the terms of the applicable Award and shall vest or be forfeited in whole or in part under the terms of such Award as if Employees employment had not terminated.
5. The reference to 30 days in the first sentence of Section 4.7 of the Employment Agreement shall be replaced with 10 days.
6. Except as amended hereby, all terms and conditions as set forth in the Employment Agreement shall remain in full force and effect.
7. Company agrees to pay all reasonable legal fees and expenses that Executive has incurred in the preparation and negotiation of this Amendment.
8. This Amendment may be executed in a number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, Executive and Company have caused this Amendment to be executed as of the date first above written on this 26 th day of February, 2008.
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST | ||
By: |
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Name: | ||
Title: | ||
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[Insert name of Executive] |
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Exhibit 10.5
EXECUTION COPY
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this Amendment) is entered into between Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust (the Trust), and Edward Glickman (Executive), effective as of February 26, 2008 .
BACKGROUND
Executive and the Trust are party to an Employment Agreement, amended and restated effective as of January 1, 1999 (as amended from time to time, the Employment Agreement), which sets forth the terms and conditions of Executives employment with the Trust. Executive and the Trust wish to amend the terms of the Employment Agreement as set forth herein, and, hereafter, references to the Employment Agreement, Agreement, herein, or words of like import in the Employment Agreement shall refer to the Employment Agreement as amended hereby or by any written subsequent amendment thereto.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and intending to be legally bound hereby, the parties hereto agree as follows:
1. All capitalized terms used herein and not defined herein shall have the respective meanings assigned to them in the Employment Agreement.
2. Section 5.1(f) of the Employment Agreement is amended to read, in its entirety, as follows:
(f) anything to the contrary in any other existing agreement or plan notwithstanding, all restricted Shares granted to Executive that (i) are subject to vesting solely based on the passage of time and Executives continued employment shall become immediately vested, and (ii) are subject to vesting based upon the performance of the Trust (however measured) shall remain restricted shares under the terms of the applicable restricted share award document (the Award) and shall vest or be forfeited in whole or in part under the terms of such Award as if Employees employment had not terminated; and
3. Section 5.2(f) of the Employment Agreement is amended to read, in its entirety, as follows:
(f) anything to the contrary in any other existing agreement or document notwithstanding, all restricted Shares granted to Executive that (i) are subject to vesting solely based on the passage of time and Executives continued employment shall become immediately vested, and (ii) are subject to vesting based upon the performance of the Trust (however measured) shall remain restricted shares under the terms of the applicable Award and shall vest or be forfeited in whole or in part under the terms of such Award as if Employees employment had not terminated; and
4. Section 5.3(e) of the Employment Agreement is amended to read, in its entirety, as follows:
(e) all vested restricted shares granted to Executive shall be issued to Executive free and clear of any restriction, other than pursuant to applicable securities laws; and
5. Section 5.4(f) of the Employment Agreement is amended to read, in its entirety, as follows:
(f) all restricted Shares granted to Executive shall become vested and all restrictions on such Shares (other than pursuant to applicable securities laws) shall end; and
6. Section 5.5(e) of the Employment Agreement is amended to read, in its entirety, as follows:
(e) all vested restricted Shares granted to Executive shall be issued to Executive free and clear of any restriction, other than pursuant to applicable securities laws; and
7. Section 5.6(a)(6) of the Employment Agreement is amended to read, in its entirety, as follows:
(6) all restricted Shares granted to Executive shall become vested and all restrictions on such Shares (other than pursuant to applicable securities laws) shall end; and
8. Section 5.7(a)(3) of the Employment Agreement is amended to read, in its entirety, as follows:
(3) all restricted Shares granted to Executive shall become vested.
9. Except as amended hereby, all terms and conditions as set forth in the Employment Agreement shall remain in full force and effect.
10. The Trust agrees to pay all reasonable legal fees and expenses that Executive has incurred in the preparation and negotiation of this Amendment.
11. This Amendment may be executed in a number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.
[Signature page follows]
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IN WITNESS WHEREOF, Executive and the Trust have caused this Amendment to be executed as of the date first above written on this 26th day of February, 2008.
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST |
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By: |
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Name: | ||
Title: | ||
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Edward Glickman |