[TEMPLATE USED FOR MEMBERS OF OFFICE OF CHAIR AND CHIEF FINANCIAL OFFICER] Pennsylvania RealEstate Investment Trust 2008 Incentive Compensation Opportunity Award for [Insert Name of Executive], [Insert Executives Position]
Exhibit 10.7
[TEMPLATE USED FOR MEMBERS OF OFFICE OF CHAIR AND CHIEF FINANCIAL OFFICER]
Pennsylvania Real Estate Investment Trust
2008 Incentive Compensation Opportunity Award
for [Insert Name of Executive],
[Insert Executive’s Position]
| 2008 Incentive Opportunity2 | ||||||||||||
| 2008 Incentive Range3 - % of Salary | ||||||||||||
| Threshold4 | Target4 | Outperformance4 | ||||||||||
| 2008 Base Salary1 | $ | % | % | % | ||||||||
| Measure5 | Threshold7 | Target7 | Outperformance7 | |||||||||
| FFO Per Share6 | $ | $ | $ | |||||||||
| 2008 INCENTIVE OPPORTUNITY* | $ | $ | $ | |||||||||
| * | The amount payable under this award will be paid in cash during the period January 1, 2009 through March 15, 2009. |
The Grantee has read and understands this award, including the endnotes which describe the terms of the award, and agrees to be bound by such terms. Further, the Grantee agrees that any amount awarded and paid to the Grantee under this award shall be subject to PREIT’s “Recoupment Policy” as in effect on the date the Committee granted this award, and as such policy is subsequently amended.
IN WITNESS WHEREOF, PREIT has caused this 2008 Incentive Compensation Opportunity Award to be duly executed by its duly authorized officer and the Grantee has hereunto set his hand on , 2008.
| PENNSYLVANIA REAL ESTATE INVESTMENT TRUST | ||
| By: |
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| Grantee | ||
ENDNOTES
1 “2008 Base Salary” means your regular, basic compensation from Pennsylvania Real Estate Investment Trust (“PREIT”) and/or a PREIT affiliate for 2008, not including bonuses or other additional compensation, but including contributions made by PREIT and/or a PREIT affiliate on your behalf, by salary reduction pursuant to your election, (i) to an arrangement described in section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) to a “cafeteria plan” (as defined in section 125(d) of the Code), and (iii) for a “qualified transportation fringe” (as defined in section 132(f) of the Code).
2 “2008 Incentive Opportunity” means the opportunity to earn incentive compensation for 2008, up to % of your Base Salary, in the event certain performances are achieved. Performance relates to PREIT’s cumulative performance with respect to one measure of its financial results for 2008.
3 “2008 Incentive Range” means, depending on the level of performance achieved (i.e., Threshold, Target or Outperformance), the percentage of your Base Salary that you may earn under this 2008 Incentive Compensation Opportunity Award. If the performance is between the Threshold level and the Target level, or between the Target level and the Outperformance level, the percentage will be interpolated accordingly.
4 “Threshold” signifies a solid achievement, which is expected to have a reasonably high probability of achievement, but which may fall short of expectations. Threshold performance represents the level of performance that has to be achieved before any of your potential 2008 Incentive Compensation is earned. If the Threshold performance level is achieved, you will earn at least % of your 2008 Base Salary as your 2008 Incentive Compensation. If the Threshold performance level is not met, you will not receive any 2008 Incentive Compensation.
“Target” generally signifies that the business objectives for the year, which are expected to have a reasonable probability of achievement, have been met. In many situations, this represents approximately the mid-range of the estimate for FFO Per Share publicly announced by PREIT at approximately the time that the earnings for the prior fiscal year are publicly released by PREIT. If the Target performance level is achieved, you will earn at least % of your 2008 Base Salary as your 2008 Incentive Compensation.
“Outperformance” signifies an outstanding achievement, an extraordinary performance by industry standards, and which is expected to have a modest probability of achievement. If the Outperformance level is achieved, you will earn % of your 2008 Base Salary as your 2008 Incentive Compensation.
5 The “Measure” is the business criterion on which performance is based.
6 “FFO Per Share” means, with respect to each diluted share of beneficial interest in PREIT, “funds from operations” of PREIT, as reported to the public by PREIT for 2008.
7 In the event of a Major Transaction, the Executive Compensation and Human Resources Committee (the “Committee”) shall have the authority to adjust the Threshold, Target and Outperformance levels set forth in this award in such manner as it deems appropriate in its sole discretion, subject to the requirement that the same adjustment shall be made to the 2008 Incentive Compensation Opportunity Awards granted to all officers of PREIT and PREIT affiliates. A Major Transaction shall include a sale or purchase of one or more properties by PREIT or a direct or indirect subsidiary of PREIT, the issuance or repurchase of equity by PREIT or a direct or indirect subsidiary of PREIT, or a business combination involving PREIT or a direct or indirect subsidiary of PREIT. The Committee shall not be obligated to make any adjustment. If the Committee elects to make an adjustment, it shall be free to take such factors into account as it deems appropriate under the circumstances in its sole discretion. Further, in the case of a Major Transaction that also constitutes a “Change of Control” of PREIT (as defined in your employment agreement), the Committee shall have the authority, in its sole discretion, to accelerate the payment of your 2008 Incentive Compensation.
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