Exhibit 10.65
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
RESTRICTED SHARE PLAN
FOR NON-EMPLOYEE TRUSTEES
1. Purpose.................................................................................................1
2. Definitions.............................................................................................1
3. Administration..........................................................................................2
4. Effective Date..........................................................................................2
5. Shares Subject to the Plan..............................................................................2
6. Eligibility.............................................................................................3
7. Grants..................................................................................................3
8. Events Affecting Outstanding Restricted Shares..........................................................4
8.1 Termination of Board Membership (Other Than by Death or Disability)............................4
8.2 Death or Disability............................................................................4
8.3 Capital Adjustments............................................................................4
8.4 Certain Corporate Transactions.................................................................4
8.5 Exercise Upon Change in Control................................................................5
9. Amendment or Termination of the Plan; Amendment of Restricted Share Agreements.................6
10. Miscellaneous..................................................................................6
10.1 Documentation of Grants........................................................................6
10.2 Rights as a Shareholder........................................................................6
10.3 Conditions on Delivery of Shares...............................................................6
10.4 Investment Purpose.............................................................................7
10.5 Registration and Listing of Shares.............................................................7
10.6 Compliance with Rule 16b-3.....................................................................7
10.7 Nontransferability of Grants...................................................................7
10.8 Registration...................................................................................7
10.9 Indemnification of Board and Committee.........................................................7
10.10 Governing Law..................................................................................8
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PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
RESTRICTED SHARE PLAN
FOR NON-EMPLOYEE TRUSTEES
WHEREAS, the Pennsylvania Real Estate Investment Trust (the "Trust")
desires to grant restricted shares automatically to the non-employee trustees of
the Trust on an annual basis;
NOW, THEREFORE, the Pennsylvania Real Estate Investment Trust
Restricted Share Plan for Non-Employee Trustees is hereby adopted under the
following terms and conditions:
1. Purpose. The Plan is intended to provide a means whereby the Trust
automatically grants Restricted Shares each year to Non-Employee Trustees of the
Trust. Thereby, the Trust will (i) increase the ownership interest in the Trust
of Non-Employee Trustees whose services are considered essential to the Trust's
continued progress and (ii) provide a further incentive to serve as a Trustee of
the Trust.
2. Definitions
(a) "Board" shall mean the Board of Trustees of the Trust.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Trust's Executive Compensation and Human
Resources Committee, which shall consist solely of not fewer than two trustees
of the Trust who shall be appointed by, and serve at the pleasure of, the Board
(taking into consideration the rules under section 16(b) of the Exchange Act and
the requirements of section 162(m) of the Code).
(d) "Disability" shall mean termination of service as a Trustee as a
result of "permanent and total disability," as defined in section 22(e)(3) of
the Code.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(f) "Non-Employee Trustee" shall mean a member of the Board who is not an
employee of the Trust or any Related Corporation.
(g) "Participant" shall mean a Non-Employee Trustee who has been granted
Restricted Shares under the Plan.
(h) "Plan" shall mean the Pennsylvania Real Estate Investment Trust
Restricted Share Plan for Non-Employee Trustees, as set forth herein and as it
may be amended from time to time.
(i) "Related Corporation" shall mean either a "subsidiary corporation" of
the Trust, as defined in section 424(f) of the Code, or the "parent corporation"
of the Trust (if any), as defined in section 424(e) of the Code.
(j) "Restricted Shares" shall mean Shares granted by the Trust to the
Participant, subject to whatever restrictions are determined by the Board.
(k) "Restricted Share Agreement" shall mean a written document evidencing
the grant of Restricted Shares, as described in Section 10.1.
(l) "Securities Act" shall mean the Securities Act of 1933, as amended.
(m) "Shares" shall mean shares of beneficial interest in the Trust, par
value $1.00 per share.
(n) "Trust" shall mean the Pennsylvania Real Estate Investment Trust, a
Pennsylvania business trust.
3. Administration
(a) The Plan shall be administered by the Committee. Each member of the
Committee, while serving as such, shall be deemed to be acting in his capacity
as a trustee of the Trust. Acts approved by a majority of the members of the
Committee at which a quorum is present, or acts without a meeting reduced to or
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee. Any and all authority of the Committee (except for
the authority described in subsections (b)(i) and (b)(ii) below) may be
delegated to a Plan administrator.
(b) The Committee shall have the authority:
(i) to adopt, amend, and rescind rules and regulations for the
administration of the Plan; and
(ii) to interpret the Plan and decide any questions and settle any
controversies that may arise in connection with it.
Such determinations and actions of the Committee, and all other determinations
and actions of the Committee made or taken under authority granted by any
provision of the Plan, shall be conclusive and shall bind all parties. Nothing
in this subsection (b) shall be construed as limiting the power of the Board or
the Committee to make the adjustments described in Sections 8.3 and 8.4.
4. Effective Date. The Plan is effective as of January 1, 2002.
5. Shares Subject to the Plan. The aggregate number of Shares that may be
delivered under the Plan is 50,000 Shares. However, the limit in the preceding
sentence shall be subject to the adjustment described in Section 8.3. Shares
delivered under the Plan may be authorized but unissued Shares or reacquired
Shares, and the Trust may purchase Shares required for this purpose, from time
to time, if it deems such purchase to be advisable. If any Restricted Shares are
forfeited before they become fully vested, the number of Shares as to which such
Restricted Shares are forfeited shall continue to be available for future
Restricted Shares granted under the Plan.
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6. Eligibility. The class of trustees who shall receive Restricted Shares
under the Plan shall be the Non-Employee Trustees.
7. Grants
(a) Automatic Grant of General Requirements Restricted Shares. As of
January 31, 2002, and as of each January 31 thereafter (or, if Shares do not
trade on such January 31, then as of the last trading day before such January
31), 1,000 Restricted Shares shall be issued automatically to each Non-Employee
Trustee for no consideration.
(b) Rights as a Stockholder. Unless the Board determines otherwise, a
Participant who receives Restricted Shares shall have certain rights of a
stockholder with respect to the Restricted Shares, including voting and dividend
rights, subject to the restrictions described in subsection (c) below and any
other conditions imposed by the Board at the time of grant. Unless the Board
determines otherwise, certificates evidencing Restricted Shares will remain in
the possession of the Trust until such Shares are free of all restrictions under
the Plan.
(c) Restrictions. Except as otherwise specifically provided by the Plan,
Restricted Shares may not be sold, assigned, transferred, pledged, or otherwise
encumbered or disposed of, and if the Participant ceases to be a member of the
Board for any reason, must be forfeited to the Trust. These restrictions will
lapse over the three-year period after their January 31 (or other) grant date,
one-third on each anniversary of such grant date, as specified in the Restricted
Share Agreement. Upon the lapse of all restrictions, Shares will cease to be
Restricted Shares for purposes of the Plan. The Board may at any time accelerate
the time at which the restrictions on all or any part of the Shares will lapse.
(d) Notice of Tax Election. Any Participant making an election under
section 83(b) of the Code for the immediate recognition of income attributable
to a grant of Restricted Shares must provide a copy thereof to the Trust within
10 days of the filing of such election with the Internal Revenue Service.
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8. Events Affecting Outstanding Restricted Shares
8.1 Termination of Board Membership (Other Than by Death or Disability). If a
Participant ceases to be a Non-Employee Trustee for any reason other than death
or Disability, as the case may be, except as otherwise determined by the Board,
all Restricted Shares held by the Participant at the time of the termination of
board membership must be transferred to the Trust (and, in the event the
certificates representing such Restricted Shares are held by the Trust, such
Restricted Shares shall be so transferred without any further action by the
Participant), in accordance with Section 7(c).
8.2 Death or Disability. If a Participant dies or incurs a Disability, except
as otherwise determined by the Board, all Restricted Shares held by the
Participant at the date of death or Disability, as the case may be, must be
transferred to the Trust (and, in the event the certificates representing such
Restricted Shares are held by the Trust, such Restricted Shares shall be so
transferred without any further action by the Participant), in accordance with
Section 7(c).
8.3 Capital Adjustments. The number of Shares that may be delivered under the
Plan, as stated in Section 5, and the number of Shares issuable upon the vesting
of outstanding Restricted Shares under the Plan shall be proportionately
adjusted, as may be deemed appropriate by the Committee, to reflect any increase
or decrease in the number of issued Shares resulting from a subdivision
(share-split), consolidation (reverse split), stock dividend, or similar change
in the capitalization of the Trust.
8.4 Certain Corporate Transactions
(a) In the event of a corporate transaction (as, for example, a merger,
consolidation, acquisition of property or stock, separation, reorganization, or
liquidation), each outstanding Restricted Share Agreement shall be assumed by
the surviving or successor entity; provided, however, that in the event of a
proposed corporate transaction, the Board may terminate all or a portion of any
outstanding Restricted Shares if it determines that such termination is in the
best interests of the Trust. Alternatively, the Board, in its discretion, in
such event may remove the restrictions from the outstanding Restricted Shares.
The Board also may, in its discretion, change the terms of any outstanding
Restricted Share Agreement to reflect any such corporate transaction.
(b) With respect to an outstanding Restricted Share Agreement held by a
Participant who, following the corporate transaction, will be employed by or
otherwise providing services to an entity which is a surviving or acquiring
entity in such transaction or an affiliate of such an entity, the Board may, in
lieu of the action described in subsection (a) above, arrange to have such
surviving or acquiring entity or affiliate grant to the Participant a
replacement award which, in the judgment of the Board, is substantially
equivalent to the Restricted Share Agreement.
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8.5 Exercise Upon Change in Control
(a) Notwithstanding any other provision of this Plan the restrictions
described in Section 7(c) on the Restricted Shares shall lapse upon a Change in
Control (as defined in subsection (b) below).
(b) "Change in Control" shall mean:
(1) The acquisition by an individual, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30 percent or more of the combined voting power of
the then outstanding voting securities of the Trust entitled to vote generally
in the election of trustees (the "Outstanding Shares"); provided, however, that
the following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Trust, (ii) any acquisition by the Trust, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Trust or any entity controlled by the Trust, (iv) any
acquisition by any entity pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of paragraph (3) below, or (v) any acquisition by any Person
entitled to file Schedule 13G under the Exchange Act with respect to such
acquisition; or
(2) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a trustee
subsequent to the date hereof whose appointment, election, or nomination for
election by the Trust's shareholders was approved by a vote of at least a
majority of the trustees then comprising the Incumbent Board (other than an
appointment, election, or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the trustees of the Trust, as such terms are used in
Rule 14a-1 promulgated under the Exchange Act) shall be, for purposes of this
Plan, considered as though such person were a member of the Incumbent Board; or
(3) Approval by the shareholders of the Trust of a
reorganization, merger, or consolidation, or sale or other disposition of all or
substantially all of the assets of the Trust (a "Business Combination"), in each
case, unless, following such Business Combination, (i) all or substantially all
of the individuals and entities who were the beneficial owners of the
Outstanding Shares immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 60 percent of, respectively, the then
outstanding shares of equity securities and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
trustees or directors, as the case may be, of the entity resulting from such
Business Combination (including, without limitation, an entity which, as a
result of such transaction, owns the Trust or all or substantially all of the
Trust's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Shares, (ii) no Person (excluding any
employee benefit plan (or related trust) of the Trust or such entity resulting
from such Business Combination) beneficially owns, directly or indirectly, 30
percent or more of, respectively, the then outstanding shares of entity
securities of the entity resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such entity
except to the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board of
trustees or directors of the entity resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
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(4) Approval by the shareholders of the Trust of a complete
liquidation or dissolution of the Trust.
9. Amendment or Termination of the Plan; Amendment of Restricted Share
Agreements.
(a) Action of Board. The Board, pursuant to a written resolution, may from
time to time suspend, terminate or amend the Plan and amend any outstanding
Restricted Share Agreement in any respect whatsoever. Notwithstanding the
foregoing, no such suspension, discontinuance, or amendment shall materially
impair the rights of any Participant holding Restricted Share Agreement without
the consent of such Participant.
(b) Automatic Suspension. The Plan shall be suspended automatically,
without action of the Board, as of a grant date described in Section 7(a) if
there is not a sufficient number of Shares remaining under Section 5 for
issuance under the Plan to grant the Restricted Shares described in Section 7(a)
to each of the Non-Employee Trustees on such date. If this occurs, no Restricted
Shares shall be granted on such date unless and until the Board authorizes
enough additional Shares under the Plan so that the full grant described in
Section 7(a) can be made to each of the Non-Employee Trustees.
10. Miscellaneous
10.1 Documentation of Grants. Grants shall be evidenced by such written
Restricted Share Agreements, if any, as may be prescribed by the Committee from
time to time. Such instruments may be in the form of agreements to be executed
by both the Participant and the Trust, or certificates, letters, or similar
instruments, which need not be executed by the Participant but acceptance of
which will evidence agreement to the terms thereof.
10.2 Rights as a Shareholder. Except as specifically provided by the Plan or
a Restricted Share Agreement, the receipt of Restricted Shares shall not give a
Participant rights as a shareholder; instead, the Participant shall obtain such
rights, subject to any limitations imposed by the Plan or the Restricted Share
Agreement, upon the actual receipt of Shares.
10.3 Conditions on Delivery of Shares. The Trust shall not deliver any Shares
pursuant to the Plan or remove restrictions from Shares previously delivered
under the Plan (i) until all conditions of the Restricted Share Agreement have
been satisfied or removed, (ii) until all applicable Federal and state laws and
regulations have been complied with, and (iii) if the outstanding Shares are at
the time of such delivery listed on any stock exchange, until the Shares to be
delivered have been listed or authorized to be listed on such exchange.
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10.4 Investment Purpose. All Restricted Shares shall be granted on the
condition that the grant of Shares hereunder shall be for investment purposes
and not with a view to resale or distribution, except that in the event the
Shares subject to the Restricted Share Agreement are registered under the
Securities Act, or in the event a resale of such Shares without such
registration would otherwise be permissible, such condition shall be inoperative
if in the opinion of counsel for the Trust such condition is not required under
the Securities Act or any other applicable law, regulation, or rule of any
governmental agency.
10.5 Registration and Listing of Shares. If the Trust shall deem it necessary
to register under the Securities Act or any other applicable statute any Shares
purchased or granted under this Plan, or to qualify any such Shares for an
exemption from any such statutes, the Trust shall take such action at its own
expense. If Shares are listed on any national securities exchange at the time
any Shares are purchased or granted hereunder, the Trust shall make prompt
application for the listing on such national securities exchange of such Shares,
at its own expense. Purchases and grants of Shares hereunder shall be postponed
as necessary pending any such action.
10.6 Compliance with Rule 16b-3. All transactions under this Plan by persons
subject to Rule 16b-3, promulgated under section 16(b) of the Exchange Act, or
any successor to such Rule, are intended to comply with at least one of the
exemptive conditions under such Rule. The Committee shall establish such
administrative guidelines to facilitate compliance with at least one such
exemptive condition under Rule 16b-3 as the Committee may deem necessary or
appropriate.
10.7 Nontransferability of Grants. No grant of Restricted Shares may be
transferred other than by will or by the laws of descent and distribution.
10.8 Registration. If the Participant is married at the time Shares are
delivered and if the Participant so requests at such time, the certificate or
certificates for such Shares shall be registered in the name of the Participant
and the Participant's spouse, jointly, with right of survivorship.
10.9 Indemnification of Board and Committee. Without limiting any other
rights of indemnification that they may have from the Trust, the members of the
Board and the members of the Committee shall be indemnified by the Trust against
all costs and expenses reasonably incurred by them in connection with any claim,
action, suit, or proceeding to which they or any of them may be a party by
reason of any action taken or failure to act under, or in connection with, the
Plan or any Restricted Shares granted thereunder, and against all amounts paid
by them in settlement thereof (provided such settlement is approved by legal
counsel selected by the Trust) or paid by them in satisfaction of a judgment in
any such action, suit, or proceeding, except a judgment based upon a finding of
willful misconduct or recklessness on their part. Upon the making or institution
of any such claim, action, suit, or proceeding, the Board or Committee member
shall notify the Trust in writing, giving the Trust an opportunity, at its own
expense, to handle and defend the same before such Board or Committee member
undertakes to handle it on his own behalf. The provisions of this Section shall
not give members of the Board or the Committee greater rights than they would
have under the Trust's by-laws or Pennsylvania law.
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10.10 Governing Law. The Plan shall be governed by the applicable Code
provisions to the maximum extent possible. Otherwise, the laws of the
Commonwealth of Pennsylvania (without reference to principles of conflicts of
laws) shall govern the operation of, and the rights of, Non-Employee Trustees
under the Plan and Restricted Shares granted hereunder.
IN WITNESS WHEREOF, and by authority of the Board of Trustees of the
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, Jonathan Weller hereby approves this
Plan on this 13th day of February, 2002.
By: /s/ Jonathan Weller
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Jonathan Weller, President and
Chief Operating Officer
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