-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DCTNej7VUTEhXrDagc/aNEejRsWU7H/Qbuil2BcVgth7IpmgpT6wSltCvzLFuK7l JHHvZKUBVyvipaIF1nHBig== 0000950116-98-002528.txt : 19981231 0000950116-98-002528.hdr.sgml : 19981231 ACCESSION NUMBER: 0000950116-98-002528 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19981230 EFFECTIVENESS DATE: 19981230 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENNSYLVANIA REAL ESTATE INVESTMENT TRUST CENTRAL INDEX KEY: 0000077281 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 236216339 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-69877 FILM NUMBER: 98778006 BUSINESS ADDRESS: STREET 1: 455 PENNSYLVANIA AVE STREET 2: STE 135 CITY: FORT WASHINGTON STATE: PA ZIP: 19034 BUSINESS PHONE: 2155429250 MAIL ADDRESS: STREET 1: 455 PENNSYLVANIA AVE STREET 2: STE 135 CITY: FORT WASHINGTON STATE: PA ZIP: 19034 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on December 30, 1998 Registration Statement No. 333-___________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST ---------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Pennsylvania 23-6216339 ------------------------------ ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) The Bellevue, 200 S. Broad Street Philadelphia, Pennsylvania 19102 (215) 875-0700 ---------------------------------------------------------------- (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) PENNSYLVANIA REAL ESTATE INVESTMENT TRUST Qualified Employee Share Purchase Plan -------------------------------------- (Full title of the plan) Jeffrey A. Linn Senior Vice President & Secretary Pennsylvania Real Estate Investment Trust The Bellevue, 200 S. Broad Street Philadelphia, Pennsylvania 19102 -------------------------------- (Name and address of agent for service) (215) 875-0700 ----------------------------------------------------------- (Telephone number, including area code, of agent for service) Please send copies of all communications to: Howard A. Blum, Esquire Drinker Biddle & Reath LLP 1345 Chestnut Street Philadelphia, Pennsylvania 19107-3496 CALCULATION OF REGISTRATION FEE
============================================================================================================= Proposed maximum aggregate Title of Securities to Offering Amount of be registered Amount to be registered (1)(2) Price (2) registration fee - ------------------------------------------------------------------------------------------------------------- Shares of Beneficial Interests ($1.00 par value) 82,000 shares $1,624,625.00 $451.65 - -------------------------------------------------------------------------------------------------------------
(1) Pursuant to Rule 416(a), this Registration Statement also registers such indeterminate number of additional shares as may become issuable under the Plan in connection with share splits, share dividends or similar transactions. (2) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the registration fee based on the average of the highest and lowest selling prices of the Company's shares of beneficial interest on December 28, 1998 as reported on the New York Stock Exchange Composite Transactions Tape. -2- PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS (Not required to be filed as part of this Registration Statement) PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The documents listed below have been filed by the Company under the Exchange Act with the Commission and are incorporated herein by reference: 1. The Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, filed on November 28, 1997, as amended by Form 10-K/A-1 filed on December 15, 1997. 2. The description of the Company's Shares of Beneficial Interest contained in the Registration Statement on Form 8-A/12(b)/A-1 dated November 13, 1997 filed on November 13, 1997 (amended December 17, 1997). 3. The Company's definitive proxy statement for the Annual Meeting of Shareholders on December 16, 1997, filed on November 18, 1997. 4. The Company's definitive proxy statement for its Special Meeting of Shareholders on September 29, 1997, filed on August 28, 1997. 5. The Company's Reports on Form 10-Q for the four month period ending December 31, 1997, dated February 17, 1998, filed February 17, 1998; for the three month period ending December 31, 1997, dated February 17, 1998, filed February 17, 1998 (amended February 19, 1998); for the three month period ending March 31, 1998, dated March 31, 1998, filed May 15, 1998; for the three month period ending June 30, 1998, dated June 30, 1998, filed August 14, 1998; and for the three month period ending September 30, 1998, dated September 30, 1998, filed November 13, 1998. 6. The Company's Reports on Form 8-K dated October 14, 1997 filed on October 14, 1997; December 16, 1997 filed on December 17, 1997; dated December 17, 1997 filed on December 22, 1997; dated December 2, 1997 filed on January 6, 1998; dated December 31, 1997 filed on November 9, 1998; dated August 7, 1998 filed on August 13, 1998 (amended September 29, 1998); dated September 17, 1998 filed on October 2, 1998 (amended November 9, 1998); and dated August 27, 1998 filed on October 9, 1998 (amended November 9, 1998). All documents filed subsequent to the date of this Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to termination of the offering of all Shares to which this Prospectus relates shall be deemed to be incorporated by reference in this Prospectus and shall be part hereof from the date of filing of such document. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. -3- Sylvan M. Cohen, Chairman of the Board of Trustees of the Trust, is counsel to Drinker Biddle & Reath LLP, which is counsel to the Company. As of the date of this Registration Statement, Mr. Cohen is the beneficial owner of 679,336 shares of beneficial interest in the Company. Item 6. Indemnification of Directors and Officers. The Company's Trust Agreement, as amended, provides that (a) no Trustee shall be personally liable for monetary damages for any action, or any failure to take action, except that a Trustee shall remain personally liable for monetary damages to the same extent that a director of a Pennsylvania business corporation remains liable under the provisions of 15 Pa. C.S. Section 1713, and (b) no officer who performs his duties in good faith, in a manner reasonably believed to be in the best interests of the Company and with such care, skill and diligence as a person of ordinary diligence would use will not be liable by reason of having been an officer of the Company. The Company's Trust Agreement provides that every Trustee and officer shall be entitled as of right to be indemnified by the Company against reasonable expense (including attorney's fees) and any liability, loss, judgment, excise tax, fine, penalties, and settlements paid or incurred by such person in connection with an actual (whether pending or completed) or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Company or otherwise, in which he or she may be involved, as a party or otherwise, by reason of such person's being or having been a Trustee or officer of the Company or by reason of the fact that such person is or was serving in any capacity at the request of the Company as a trustee, director, officer, employee, agent, partner, fiduciary or other representative or another real estate investment trust, corporation, partnership, joint venture, trust, employee benefit plan or other entity; provided, however, that no such right of indemnification shall exist with respect to an action brought by a Trustee or officer against the Company and further provided that no indemnification shall be made in any case where the act or failure to act giving rise to the claim for indemnification is determined by the final judgment of a court of competent jurisdiction to have constituted willful misconduct or recklessness. The Trust Agreement further provides that such right to indemnification shall be contractual in nature and shall include the right to be paid in advance the expenses incurred in connection with such proceedings; provided, however, that such advance payments must be made in accordance with applicable law and must be accompanied by an undertaking by or on behalf of such Trustee or officer to repay all amounts so advanced if it is ultimately determined that such Trustee or officer is not entitled to be indemnified under the Trust Agreement. The Company's By-laws require the Company to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or proceeding, including actions by or in the right of the Company, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Company, or is or was serving while a director or officer of the Company at the request of the Company as a director, officer, employee, agent, fiduciary or other representative or another corporation for profit or not-for-profit, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines, excise taxes and amounts paid in settlement actually and reasonably incurred by such person in connection with such action or proceeding unless the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness. The Company's By-laws also provide that such right to indemnification shall be contractual in nature and shall include the right to be paid the expenses (including attorneys fees) incurred in defending any action or proceeding in advance of the final disposition of such action or proceeding upon receipt by the Company of an undertaking by or on behalf of such person to repay such amount if it is ultimately determined that the person is not entitled to indemnification. In addition, the Trust Agreement and Pennsylvania law permit the Company to provide similar indemnification to employees, agents and other persons who are not Trustees or officers. Pennsylvania law also permits indemnification in connection with a proceeding brought by or in the right of the Company to procure a judgment in its favor and requires indemnification in certain cases where the Trustee or officer is the prevailing party. Certain of the employment agreements the Company has entered into with its officers provide for indemnification for such officer. Generally, these contracts require the Company to indemnify the officer to the fullest extent permitted under the Trust Agreement. The Operating Partnership Agreement also provides for indemnification of the Company, the Trustees and the Company's officers for any and all actions with respect to the Operating Partnership; provided, however, that the Operating Partnership will not indemnify such parties for (i) willful misconduct or knowing violation of the law; (ii) any action where the covered person received an improper personal benefit in violation or breach of the Operating Partnership Agreement; (iii) any violation of the Operating Partnership Agreement or (iv) any liability such person may have to the Operating Partnership under certain -4- documents delivered in the TRO Transaction. The Company currently maintains insurance for its Trustees and officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to Trustees, officers, or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that Act and is therefore unenforceable. Reference is made to Item 9 of this Registration Statement for additional information regarding indemnification of directors and officers. Item 7. Exemption from Registration Claimed. No restricted securities are being reoffered or resold pursuant to this Registration Statement. Item 8. Exhibits. 4 Qualified Employee Share Purchase Plan 5 Opinion of Drinker Biddle & Reath LLP. 23.1 Consent of Arthur Andersen LLP (Independent Public Accountant of the Company). 23.2 Consent of Ernst & Young LLP (Independent Auditors of Lehigh Valley Associates) 23.3 Consent of Zelenkofske Axelrod and Co., Ltd. (Independent Auditors of Oxford Valley Road Associates) 23.4 Consent of Drinker Biddle & Reath LLP (Included in Exhibit 5). 25 Powers of Attorney (See Signature Page). Item 9. Undertakings 1. Undertakings Required by Regulation S-K Item 512(a) The undersigned Registrant hereby undertakes as follows: (1) To file, during any period in which offers or sales are being made pursuant to this Registration Statement, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in aggregate, represent a fundamental change in the information set forth in this Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in the volume of the securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high -5- end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the change in volume and price represents no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table on the registration statement; provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 2. Undertakings Required by Regulation S-K Item 512(b). The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. Undertakings Required by Regulation S-K Item 512(h). Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. -6- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania, on December 22, 1998. PENNSYLVANIA REAL ESTATE INVESTMENT TRUST By: /s/ Jonathan B. Weller ------------------------------------------- Jonathan B. Weller, President and Chief Operating Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below, does hereby constitute and appoint RONALD RUBIN, SYLVAN M. COHEN and JONATHAN B. WELLER, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution, resubstitution and revocation, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Name Capacity Date - ------------------------------- ------------------------------------------------ ----------------- /s/ Sylvan M. Cohen Chairman of the Board and Trustee December 22, 1998 - ------------------------ Sylvan M. Cohen /s/ Ronald Rubin Chief Executive Officer and Trustee December 22, 1998 - ------------------------ Ronald Rubin /s/ Jonathan B. Weller President, Chief Operating Officer and Trustee December 22, 1998 - ------------------------ Jonathan B. Weller /s/ William R. Dimeling Trustee December 22, 1998 - ------------------------ William R. Dimeling - -------------------------- Rosemarie B. Greco Trustee December __, 1998 /s/ Lee H. Javitch Trustee December 22, 1998 - ----------------------------- Lee H. Javitch /s/ Leonard I. Korman Trustee December 22, 1998 - ------------------------ Leonard I. Korman /s/ Jeffrey P. Orleans Trustee December 22, 1998 - ------------------------ Jeffrey P. Orleans /s/ George F. Rubin Trustee December 22, 1998 - ------------------------ George F. Rubin /s/ Edward A. Glickman Executive Vice President and Chief Financial Officer December 22, 1998 - -------------------------- Edward A. Glickman /s/ Dante J. Massimini Senior Vice President - Finance and Treasurer (Chief December 22, 1998 - ------------------------- Accounting Officer) Dante J. Massimini
-7- EXHIBIT INDEX Exhibit Number Description - ------ ----------- 4 Qualified Employee Share Purchase Plan 5 Opinion of Drinker Biddle & Reath LLP 23.1 Consent of Arthur Andersen LLP (Independent Public Accountants of the Company) 23.2 Consent of Ernst & Young LLP (Independent Auditors of Lehigh Valley Associates) 23.3 Consent of Zelenkofske Axelrod and Co., Ltd (Independent Auditors of Oxford Valley Road Associates) 23.4 Consent of Drinker Biddle & Reath LLP (included in Exhibit 5) 24 Powers of Attorney - Included on signature page. -8- EX-4 2 EXHIBIT 4 EXHIBIT 4 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST QUALIFIED EMPLOYEE SHARE PURCHASE PLAN (Effective as of January 1, 1999) TABLE OF CONTENTS ----------------- Page ---- 1. PURPOSE................................................................1 2. ADMINISTRATION.........................................................1 3. ELIGIBILITY............................................................1 4. SHARES.................................................................2 5. GRANT OF OPTION........................................................2 6. PARTICIPATION..........................................................3 7. EXERCISE OF OPTION.....................................................4 8. EMPLOYEE'S RIGHT TO SURRENDER OPTION...................................4 9. TERMS AND CONDITIONS OF OPTIONS........................................4 10. COMPLIANCE WITH RULE 16B-3.............................................8 11. INDEMNIFICATION OF COMMITTEE...........................................8 12. AMENDMENT OF PLAN......................................................8 13. EFFECTIVE DATE OF PLAN.................................................9 14. ABSENCE OF RIGHTS......................................................9 15. APPLICATION OF FUNDS...................................................9 16. MISCELLANEOUS..........................................................9 -i- PENNSYLVANIA REAL ESTATE INVESTMENT TRUST QUALIFIED EMPLOYEE SHARE PURCHASE PLAN (Effective as of January 1, 1999) 1. PURPOSE The Pennsylvania Real Estate Investment Trust (the "Trust") has adopted this Qualified Employee Share Purchase Plan (the "Plan") in order to encourage share ownership by all eligible employees of the Trust by providing them the opportunity to acquire a proprietary interest (or increase their proprietary interest) in the Trust. It is intended that options issued pursuant to this Plan shall constitute options issued pursuant to an "employee stock purchase plan," within the meaning of ss.423 of the Internal Revenue Code of 1986, as amended (the "Code"). The Trust's Board of Trustees (the "Board") may, from time to time, approve participation in the Plan by employees of any "subsidiary corporation" of the Trust (as defined in ss.424(f) of the Code) and/or of any "parent corporation" of the Trust (as defined in ss.424(e) of the Code). 2. ADMINISTRATION The Plan shall be administered by the Executive Compensation and Human Resources Committee (the "Committee") of the Board. Acts approved by a majority 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. Each member of the Committee, while serving as such, shall be deemed to be acting in his or her capacity as a trustee of the Trust. The Committee shall have full and final authority, in its discretion but subject to the express provisions of the Plan: (i) to interpret the Plan; (ii) to make, amend, and rescind rules and regulations relating to the Plan; (iii) to determine the terms and provisions of the instruments by which options shall be evidenced; and (iv) to make all other determinations necessary or advisable for the administration of the Plan. No member of the Board or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder. Any and all authority of the Committee may be delegated by the Committee to a plan administrator. 3. ELIGIBILITY (a) General Rule. Except as provided in paragraph (b) below and subject to ss.9(e), each employee of the Trust or of a designated subsidiary corporation who has been employed by the Trust or a designated subsidiary corporation for at least six months shall be eligible for option grants described in ss.5. (b) Exceptions. An employee will not be eligible to participate in the Plan if he or she is customarily employed by the Trust or a designated subsidiary corporation for 20 hours or less per week or if he or she is customarily employed by the Trust or a designated subsidiary corporation for not more than five months in any calendar year. In addition, in no event may an employee be granted an option if such employee, immediately after the option is granted, would own shares possessing five percent or more of the total combined voting power or value of all classes of shares of the Trust or of its parent corporation (if any) or of a subsidiary corporation (if any) then outstanding. For purposes of determining share ownership under this paragraph (b), the rules of ss.424(d) of the Code (relating to attribution of share ownership) shall apply, -1- and shares which the employee may purchase under outstanding options shall be treated as shares owned by the employee. 4. SHARES The shares subject to the options as provided herein shall be shares of beneficial interest in the Trust, par value $1.00 per share ("Shares"). The aggregate number of Shares that may be issued under options shall not exceed 82,000; provided that such number shall be adjusted if required by ss.9(i). Shares issuable 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. 5. GRANT OF OPTION (a) Grant of Option. Employees shall have the right to purchase Shares under options granted as of January 1, 1999 (or, in the Committee's discretion, as soon as administratively practicable thereafter) and as of each subsequent January 1 (the "Grant Dates"). Each employee who meets the eligibility requirements of ss.3 shall be granted an option on the first Grant Date coinciding with or immediately following the date he or she becomes an eligible employee, and on each succeeding Grant Date, provided he or she continues to meet the eligibility requirements of ss.3. The term of the options (the "Option Term") shall be 12 calendar months (from January 1 to December 31). (b) Purchase Periods. Each Option Term shall contain four three-month Purchase Periods (January-March, April-June, July-September, and October-December). (c) Number of Shares Purchasable Under Option. Subject to the limitation in paragraph (d) below, at the beginning of each Option Term each eligible employee shall be granted an option, exercisable in installments at the end of each Purchase Period during such Option Term, to purchase up to a number of Shares equal to the total of the number of Shares purchasable by the employee for each Purchase Period in the Option Term. The number of Shares purchasable for a Purchase Period shall be determined by dividing the employee's accumulated payroll deductions (as described inss.6) for the Purchase Period by the per-share exercise price (determined in accordance with ss.9(b)) of the option installment for such Purchase Period. For example, if an employee makes payroll deductions of $6,000 for a 12-month Option Term ($1,500 for each Purchase Period in the Option Term) and the per-share exercise price for each Purchase Period is $19.55, $20.40, $21.25, and $22.10, respectively, then the number of Shares purchasable by the employee for the Option Term is 286, determined as follows: $1,500 $1,500 $1,500 $1,500 ------ ------ ------ ------ $19.55 + $20.40 + $21.25 + $22.10 = 76 + 73 + 70 + 67 = 286 Full and fractional Shares shall be purchasable under the Plan. However, in accordance with ss.9(m), no fractional Share certificates shall be issued. (d) Limitation on Aggregate Number of Shares Purchasable Under Option. Subject to the limitations described in ss.9(e) and ss.9(l), the aggregate number of full Shares purchasable under an option for an Option Term shall not exceed the lesser of (i) 1,000 (subject to adjustment under ss.9(i)), or (ii) the number determined by dividing $25,000 by the fair market value of a Share (as described in ss.9(b)) on the most recent business day before the Grant Date for such Option Term. Further, if the total number of Shares -2- to be purchased on any date in accordance with ss.7(a) exceeds the Shares then available under the Plan (after deduction of all Shares that have been purchased under ss.7(a)), the Committee shall make a pro rata allocation of the Shares remaining available in as nearly a uniform manner as shall be practical and as it shall determine to be equitable. 6. PARTICIPATION (a) Payroll Deductions. Subject to rules established by the Committee from time to time, an eligible employee may elect to participate in the Plan by making payroll deductions (as a whole percentage of the employee's basic rate of compensation each pay, subject to the limits set forth in paragraph (b) below) for each Option Term in which the employee is eligible to participate. For purposes of this Plan, "basic rate of compensation" shall mean an employee's basic hourly rate or salary, excluding any commissions, bonuses, overtime, or other extra or incentive pay. (b) Maximum Payroll Deduction. The maximum total payroll deductions for any employee for an Option Term may not exceed 10 percent of the employee's basic rate of compensation for the Option Term. (c) General Assets; Taxes; No Interest. All payroll deductions made for an employee shall be credited to his or her account as of the payday as of which the deduction is made. All payroll deductions shall be held by the Trust (or by a designated subsidiary corporation as agent for the Trust). All such contributions shall be held as part of the general assets of the Trust , and shall not be held in trust or otherwise segregated from the Trust's general assets. No interest shall be paid or accrued on any such contributions. Each employee's right to the contributions credited to his or her account shall be that of a general and unsecured creditor of the Trust. The Trust and each designated subsidiary corporation shall have the right to make such provisions as it deems necessary or appropriate to satisfy any tax laws with respect to purchases of Shares made under this Plan. (d) Automatic Refund. The balance credited to the account of an employee automatically shall be refunded in full (without interest) if his or her status as an employee of the Trust and all designated subsidiary corporations terminates for any reason whatsoever during a Purchase Period. Such refunds shall be made as soon as practicable after the Committee has actual notice of any such termination. (e) Participation after Surrender. Each employee who has satisfied the eligibility requirements of ss.3 but who has elected to surrender all or a portion of his or her option in accordance with ss.8 (or, as described in paragraph (g) below, is deemed to have surrendered his or her option) for an Option Term, shall be granted an option in accordance with ss.5 in subsequent Option Terms, provided the employee continues to meet the eligibility requirements of ss.3. However, such employee must submit a new payroll deduction agreement under paragraph (a) above in order to begin payroll deductions for a subsequent Option Term. (f) No Contract to Purchase. Electing to make payroll deductions for any Option Term will not constitute a contract to purchase any of the Shares purchasable under an option. (g) Waiver of Rights. An employee who fails to elect to participate in the Plan for an Option Term in the manner and within the time provided under paragraph (a) above shall be deemed to have surrendered the option granted to the employee for such Option Term and shall have no further rights under the Plan with respect to such surrendered option. -3- 7. EXERCISE OF OPTION (a) Method of Exercise. Unless the employee has surrendered his or her option in accordance with ss.8(a) (or is deemed to have surrendered his or her option under ss.6(g)) before the end of a Purchase Period, as of the last business day of the Purchase Period (the "Exercise Date"), the employee will be credited for such number of whole Shares and any fraction of a whole share (computed to the number of decimal places set by the Committee) as his or her accumulated payroll deductions shall be sufficient to pay for, subject to the limitations of ss.5(d). (b) Return of Excess Payroll Deductions. Any payroll deductions remaining after the employee exercises an option for an Option Term shall be refunded to the employee. 8. EMPLOYEE'S RIGHT TO SURRENDER OPTION (a) Surrender of Option. An employee may elect to surrender his or her option during any Purchase Period of an Option Term and withdraw any payroll deductions already made for such Purchase Period under the Plan by giving written notice to the Trust. However, in order for such surrender to be effective for the Purchase Period, the employee's written notice must be received by the Trust on or before the 30th calendar day prior to the end of the Purchase Period. All of such employee's payroll deductions will be refunded to him or her as soon as practicable after the Trust receives the employee's notice of withdrawal, and no further payroll deductions will be made from the employee's pay until the employee completes a new payroll deduction agreement in accordance withss.6(a) for a subsequent Option Term. As to any option so surrendered, the employee shall have no further right of any nature at any subsequent time. (b) Effect on Later Participation. An election to surrender an option during a Purchase Period of an Option Term shall preclude the employee from participating in any remaining Purchase Periods of such Option Term, but will not have any effect upon his or her eligibility to participate in the Plan for subsequent Option Terms. 9. TERMS AND CONDITIONS OF OPTIONS Options granted pursuant to the Plan shall be evidenced by agreements in such form as the Committee shall prescribe, provided that all employees granted such options shall have the same rights and privileges (except as otherwise required by ss.5), and provided further that such options and option agreements shall comply with and be subject to the terms and conditions set forth below. (a) Employee Notification and Agreement. Employees shall be notified (i) of the requirements they must meet to be granted options under the Plan, (ii) about the terms and conditions of such options, and (iii) that any employee eligible to be granted options under the Plan may request a copy of the Plan. An employee's agreement to the terms of an option will be evidenced by his or her payroll deduction agreement with the Trust or a subsidiary corporation for an Option Term. (b) Option Price. The per-share exercise price of an option for each Purchase Period of an Option Term shall be the lesser of (i) 85% of the fair market value of a Share as of the most recent business day before the Grant Date for such Option Term, or (ii) 85% of the fair market value of a Share as of the applicable Exercise Date. In making such determination for a Purchase Period, during such time as the Shares are listed upon an established stock exchange or exchanges, the per share "fair market value" shall be -4- deemed to be the mean between the highest and lowest quoted selling prices on the relevant date. During such time as the Shares are not listed upon an established stock exchange, the per-share fair market value shall be determined by the Committee by a method sanctioned by the Code, or rules and regulations thereunder. The fair market value per share is to be determined in accordance with Treas. Reg. ss.ss.1.421-7(e) and 20.2031-2. Subject to the foregoing, the Committee in fixing the exercise price shall have full authority and be fully protected in doing so. (c) Medium and Time of Payment. The exercise price of an option for a Purchase Period shall be payable in United States dollars upon the exercise of the option for such Purchase Period, and shall be payable only by accumulated payroll deductions made in accordance with ss.6. (d) Term of Option. No option may be exercised after the end of the Option Term in which the option was granted. (e) Accrual Limitation. No option shall permit the rights of an employee to purchase shares under all employee stock purchase plans, which are intended to qualify under ss.423 of the Code, of the Trust and its parent corporation (if any) and subsidiary corporations (if any) to accrue at a rate which exceeds $25,000 in fair market value of such shares (determined at the time options are granted) for each calendar year in which the option is outstanding at any time. Thus, the maximum number of Shares an employee may purchase under an option under this Plan for a calendar year for which the employee receives an option is determined by dividing (i) $25,000 by (ii) the per share fair market value of Shares on the Grant Date of the Option Term occurring in such calendar year. For purposes of this paragraph (e) -- (i) the right to purchase Shares under an option accrues when the option (or any portion thereof) first becomes exercisable during the calendar year; (ii) the right to purchase Shares under an option accrues at the rate provided in the option but in no case may such rate exceed $25,000 of fair market value of such Shares (determined on the Grant Date of such option) for any one calendar year; and (iii) a right to purchase Shares which has accrued under one option granted pursuant to the Plan may not be carried over to any other option. (f) Termination of Employment; Change in Status. In the event that an employee ceases to be employed by the Trust and all designated subsidiary corporations as an eligible employee for any reason during the employee's participation in an Option Term, his or her accumulated payroll deductions shall be refunded in accordance with ss.6(d). Whether an authorized leave of absence for military or governmental service shall constitute termination of employment for the purposes of the Plan shall be determined by the Committee in accordance with applicable law, which determination, unless modified by the Board (in accordance with applicable law), shall be final and conclusive. (g) Designation of Beneficiary. An eligible employee may designate a beneficiary (i) who shall receive the balance credited to his or her account if the employee dies before the end of a Purchase Period and (ii) who shall receive the Shares, if any, purchased for the employee under this Plan if the employee dies after the end of a Purchase Period but before either the certificate representing such Shares has been delivered to the employee or before such Shares have been credited to a brokerage account maintained for the employee. Such designation may be revised in writing at any time by the employee by filing an amended designation, and his or her revised designation shall be effective at such time as the Committee receives such amended designation. If a deceased employee failed to designate a beneficiary or, if no person -5- so designated survives an employee or, if after checking his or her last known mailing address, the whereabouts of the person so designated are unknown, then the employee's estate shall be treated as his or her designated beneficiary under this paragraph (g). (h) Nontransferability. Except as provided in paragraph (g) above, neither payroll deductions made by an employee, nor any rights with regard to the exercise of an option or to receive Shares, nor any rights to a return of payroll deductions under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the employee or by his or her beneficiary. Any such attempted assignment, transfer, pledge, or other disposition shall be without effect. An option may be exercised only by the employee. (i) Changes In Capital Structure. Subject to any required action by the shareholders, the number of Shares designated in ss.4 and ss.5(d)(i), the number of Shares covered by each outstanding option, and the price per share of each such option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares of the Trust resulting from a subdivision (share-split) or consolidation (reverse-split) of shares or the payment of a share dividend (but only on the Shares) or any other similar change in the capitalization of the Trust, without receipt of consideration by the Trust. Subject to any required action by the shareholders, if the Trust is not the surviving entity in any merger or consolidation, the Committee, in its discretion may either (i) cause each outstanding option to apply to the securities to which a holder of the number of Shares subject to the option would have been entitled or (ii) cause each outstanding option to terminate, provided that each employee granted an option under this Plan shall, in such event, have the right immediately prior to such merger or consolidation, to exercise his or her option to the extent of his or her accumulated payroll deductions. In the event of the dissolution or liquidation of the Trust, the Committee shall cause each outstanding option to terminate, provided that each employee granted an option under this Plan shall, in such event, have the right immediately prior to such dissolution or liquidation, to exercise his or her option to the extent of his or her accumulated payroll deductions. In the event of a change in the Shares of the Trust as presently constituted which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be Shares within the meaning of the Plan. To the extent that the foregoing adjustments relate to shares or securities of the Trust, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive provided that each option granted pursuant to this Plan shall not be adjusted in a manner that causes the option to fail to continue to qualify as an option issued pursuant to an "employee stock purchase plan" within the meaning of ss.423 of the Code. Except as expressly provided in this paragraph (i), an employee shall have no rights by reason of any subdivision or consolidation of shares of any class, the payment of any share dividend, any other increase or decrease in the number of shares of any class, or any dissolution, liquidation, merger, or consolidation or spin-off of assets or shares of another corporation; and any issue by the Trust of shares of any class, or securities convertible into shares of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to the option. -6- The grant of an option pursuant to the Plan shall not affect in any way the right or power of the Trust to make adjustments, reclassification, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets. (j) Rights as a Shareholder. An employee shall have no rights as a shareholder with respect to any Shares covered by his or her option until the date the option is exercised in accordance with the terms of the Plan. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions or other rights for which the record date is prior to the date such share certificate is issued, except as provided in paragraph (i) above. (k) Investment Purpose. Each option under the Plan shall be granted on the condition that the purchases of Shares thereunder shall be for investment purposes and not with a view to resale or distribution, except that in the event the Shares subject to such option are registered under the Securities Act of 1933, as amended (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. (l) Adjustment in Number of Shares Exercisable. If the aggregate number of Shares to be purchased under options granted under the Plan exceeds the aggregate number of Shares specified in ss.4, the Trust shall make a pro rata allocation of the Shares available for distribution so that the limit of ss.4 is not exceeded, and the balance of payroll deductions made by each participating employee shall be returned to him or her as promptly as possible. (m) Delivery. A book-entry record of the Shares purchased by each employee shall be maintained by the Trust's Share transfer agent and no certificates shall be issued for such Shares except to the extent that an employee specifically so requests. Notwithstanding the foregoing, when a refund is made to an employee pursuant to ss.6(d), certificates shall be delivered to him or her for all Shares then held for the employee under the Plan. A Share certificate delivered to an employee shall be registered in his or her name or, if the employee so elects and if permissible under applicable law, in the names of the employee and one such other person as may be designated by the employee, as joint tenants with rights of survivorship. However, (i) no Share certificate representing a fractional Share shall be delivered to an employee or to an employee and any other person, (ii) cash equal to the fair market value of an employee's fractional share shall be distributed (when an employee requests a distribution of certificates for all of the Shares held for him or her) in lieu of such fractional share unless an employee in light of Rule 16b-3 (as described in ss.10) waives his or her right to such cash payment, and (iii) the Committee shall have the right to charge an employee for registering Shares in the name of the employee and any other person. No employee (or any person who makes a claim for, on behalf of, or in place of an employee) shall have any interest in any Shares under this Plan until they have been reflected in the book-entry record maintained by the Share transfer agent or the certificate for such Shares has been delivered to such person. (n) Registration and Listing of Shares. If the Trust shall deem it necessary to register under the Securities Act or any other applicable statutes any Shares purchased 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 hereunder, the -7- Trust shall make prompt application for the listing on such national share exchange of such Shares, at its own expense. Purchases of Shares hereunder shall be postponed as necessary pending any such action. (o) Other Provisions. The option agreements authorized under the Plan shall contain such other provisions as the Committee shall deem advisable, provided that no such provision may in any way be in conflict with the terms of the Plan. 10. COMPLIANCE WITH RULE 16B-3 All elections and transactions under this Plan by persons subject to Rule 16b-3, promulgated under ss.16(b) of the Securities Exchange Act of 1934, as amended, 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. If any provision of this Plan, any administrative guideline, or any act or omission with respect to this Plan (including any act or omission by an employee) fails to satisfy such exemptive condition under Rule 16b-3 or otherwise is inconsistent with such condition, such provision, guideline, or act or omission shall be deemed null and void. 11. INDEMNIFICATION OF COMMITTEE In addition to such other rights of indemnification as they may have as trustees or as members of the Committee, the members of the Committee shall be indemnified by the Trust against the reasonable expenses, including attorneys' fees actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, 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 option granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Trust) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within 60 days after institution of any such action, suit or proceeding a Committee member shall in writing offer the Trust the opportunity, at its own expense, to handle and defend the same. 12. AMENDMENT OF PLAN The Committee may, to the extent permitted by law, from time to time, with respect to any Shares other than those Shares subject to options that may be exercised in the Purchase Period in which the action occurs, suspend, discontinue, revise, or amend the Plan in any respect whatsoever except that no such revision or amendment may permit the granting of options under this Plan to persons other than employees of the Trust, its parent corporation (if any), or a subsidiary corporation, or otherwise cause options issued under it to fail to meet the requirements of ss.423 of the Code. Furthermore, the Plan may not, without the approval of a majority of the votes cast at a duly held shareholders' meeting at which a quorum representing a majority of all outstanding shares is, either in person or by proxy, present and voting on the Plan, be amended in any manner that will change the number of shares subject to the Plan or change the employees (or class of employees) eligible to receive options under the Plan. -8- 13. EFFECTIVE DATE OF PLAN In the discretion of the Committee, the Plan will become effective as of January 1, 1999, or as soon as administratively practicable thereafter, subject, however, to approval by the holders of at least a majority of the Shares present or represented, and entitled to vote, at a special or annual meeting of the shareholders at which a quorum is present held within 12 months before or after the date the Plan is approved by the Board. If the Plan is not so approved, the Plan shall not become effective. 14. ABSENCE OF RIGHTS The granting of an option to a person shall not entitle that person to continued employment by the Trust or a subsidiary corporation or affect the terms and conditions of such employment. The Trust or any subsidiary corporation shall have the absolute right, in its discretion, to terminate an employee's employment, whether or not such termination may result in a partial or total termination of his or her option under this Plan. 15. APPLICATION OF FUNDS The proceeds received by the Trust from the sale of Shares pursuant to options will be used for general corporate purposes. 16. MISCELLANEOUS (a) Provisions of Plan Binding. The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each employee participating in the Plan, including, without limitation, such employee's estate and the executors, administrator or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such employee. (b) Consistent Treatment. All rules and determinations of the Committee in the administration of the Plan shall be uniformly and consistently applied to all persons in similar circumstances. (c) Employment. The right to participate in this Plan shall not constitute an offer of employment and no election to participate in this Plan shall constitute an employment agreement for an employee. Any such right or election shall have no bearing whatsoever on the employment relationship between an employee and any other person. Finally, no employee shall be induced to participate in this Plan, or shall participate in this Plan, with the expectation that such participation will lead to continued employment. (d) Applicable Law. Pennsylvania law shall govern all matters relating to this Plan except to the extent it is superseded by federal law. -9- EX-5 3 EXHIBIT 5 EXHIBIT 5 December 30, 1998 Pennsylvania Real Estate Investment Trust The Bellevue, 200 S. Broad St. Philadelphia, Pennsylvania 19102 Ladies and Gentlemen: We have acted as counsel to Pennsylvania Real Estate Investment Trust (the "Trust") in connection with the preparation and filing with the Securities and Exchange Commission of the Trust's Registration Statement on Form S-8 under the Securities Act of 1933, as amended (the "Registration Statement"), relating to 82,000 shares of beneficial interest of the Trust, par value $1.00 per share (the "Shares"), issuable upon the exercise of options granted under the Trust's Qualified Employee Share Purchase Plan, as amended (the "Plan"). For purposes of this opinion, we have examined the originals or copies, certified or otherwise identified to our satisfaction, of the Trust Agreement and Bylaws of the Trust, each as amended to date, resolutions adopted by the Trust's Board of Trustees, the Plan and such other agreements, instruments, documents and records relating to the Trust and the issuance of the Shares as we have deemed appropriate. In all such examinations, we have assumed the genuineness of signatures, the authenticity of documents submitted to us as originals, the conformity to authentic original documents of documents submitted to us as copies and the accuracy and completeness of all records and other information made available to us by the Trust. As to various questions of fact material to our opinion, we have relied on representations of officers of the Trust. We express no opinion concerning the laws of any jurisdiction other than the federal law of the United States and the law of the Commonwealth of Pennsylvania. Based upon the foregoing and consideration of such questions of law as we have deemed relevant, we are of the opinion that the issuance of the Shares by the Trust upon the exercise of options properly granted under the Plan has been duly authorized by the necessary corporate action of the Board of Trustees, and such Shares, upon exercise of such options and payment therefor in accordance with the terms of the Plan, will be validly issued, fully paid and nonassessable by the Trust. We hereby consent to the use of this opinion as an exhibit to the Registration Statement. In giving this consent we do not admit that we come within the categories of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended. Sylvan M. Cohen, founder, Chairman of the Board, and a principal shareholder of the Trust, is "of counsel" to this firm. Very truly yours, /s/ DRINKER BIDDLE & REATH LLP ------------------------------ DRINKER BIDDLE & REATH LLP EX-23.1 4 EXHIBIT 23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- As independent public accountants, we hereby consent to the incorporation by reference in this registration statement on Form S-8 of our report dated October 17, 1997 on the consolidated financial statements of Pennsylvania Real Estate Investment Trust (the "Company"), included in the Company's Annual Report of Form 10-K for the year ended August 31, 1997; our report dated June 16, 1997 on the statement of revenue and certain expenses of Magnolia Mall, incorporated by reference in the Company's Current Report on Form 8-K dated October 14, 1997; our report dated June 20, 1997 on the statement of revenue and certain expenses of North Dartmouth Mall, incorporated by reference in the Company's Current Report on Form 8-K dated October 14, 1997; our report dated June 23, 1997 on the consolidated financial statement of The Rubin Organization, Inc., incorporated by reference in the Company's Current Report on Form 8-K dated October 14, 1997; our report dated June 22, 1998 on the statement of revenue and certain expenses of the Woods Apartments, incorporated by reference in the Company's Current Report on Form 8-K dated August 13, 1998; our report dated July 15, 1998 on the statement of revenue and certain expenses of Prince Georges Plaza, incorporated by reference in the Company's Current Report on Form 8-K dated November 9, 1998; our report dated August 28, 1998 on the combined statement of revenue and certain expenses of Festival at Oaklands Shopping Center, incorporated by reference in the Company's Current Report on Form 8-K dated November 9, 1998 and to all references to our Firm included in this registration statement. /s/ Arthur Andersen, LLP ------------------------ Arthur Andersen, LLP Philadelphia, Pennsylvania December 28, 1998 EX-23.2 5 EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference of our report dated October 18, 1996 with respect to the financial statements of Lehigh Valley Associates included in Pennsylvania Real Estate Investment Trust's Annual Report on Form 10-K for the fiscal year ended August 31, 1997 (as amended by Form 10-K/A-1 filed on December 15, 1997) in this Registration Statement Form S-8 of Pennsylvania Real Estate Investment Trust for the registration of 82,000 of its shares of beneficial interest. /s/ Ernst & Young LLP --------------------- Ernst & Young LLP Philadelphia, Pennsylvania December 22, 1998 EX-23.3 6 EXHIBIT 23.3 EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS We hereby consent to the reference to our firm under the caption "Experts" in this Registration Statement on Form S-8 of Pennsylvania Real Estate Investment Rust (the "Company") pertaining to the Employee Share Purchase Plan of the Company and to the incorporation by reference therein of our report dated June 30, 1997. /s/ Zelenkofske Axelrod & Co., Ltd. ----------------------------------- Zelenkofske Axelrod & Co., Ltd. Jenkintown, Pennsylvania December 28, 1998 -----END PRIVACY-ENHANCED MESSAGE-----