<PAGE> 1
=============================================================================
As filed with the Securities and Exchange Commission on June 1, 1995
Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 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
(State or other jurisdiction of incorporation or organization)
23-6216339
(I.R.S. Employer Identification Number)
455 Pennsylvania Avenue, Suite 135
Fort Washington, Pennsylvania 19034
(Address of principal executive offices)
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
AMENDED INCENTIVE AND NON QUALIFIED STOCK OPTION PLAN
(Full Title of the Plan)
Sylvan M. Cohen, Chairman, Chief Executive Officer and Trustee
455 Pennsylvania Avenue, Suite 135
Fort Washington, Pennsylvania 19034
(Name and address of agent for service)
(215) 542-9250
(Telephone number, including area code, of agent for service)
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Title of each class Amount to be Proposed maximum Proposed Amount of
of securities to be registered offering price per maximum registration
registered share aggregate offering fee
price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Incentive Stock Options; (1) (2) (2) $ 0
each option to purchase
not less than one share
of Beneficial Interest
- -------------------------------------------------------------------------------------------------------------------------
Shares of Beneficial 400,000 (2) $(2) $3,088.90
Interest, par value $1.00
=========================================================================================================================
</TABLE>
(1) There are outstanding options to purchase 278,000 shares of Beneficial
Interest. The amount being registered represents the maximum number of
shares of Beneficial Interest issuable upon exercise of options granted or
to be granted under the Registrant's Amended Incentive and Non Qualified
Stock Option Plan.
(2) Computed pursuant to Rule 457(h)(1) promulgated under the Securities Act of
1933. Solely for the purpose of determining the Registration Fee, (i) a
price equal to $22.0625, the average of the high and low prices of the
Registrant's Shares of Beneficial Interest on May 25, 1995 ("Market
Price"), as reported on the American Stock Exchange, was assigned to (a)
193,000 shares issuable upon exercise of outstanding options granted which
have an exercise price less than the Market Price and (b) 122,000 shares
issuable upon exercise of options available for grant under the Plan and
(ii) a price equal to $23.625, the per share exercise price of outstanding
options granted to purchase 85,000 shares issuable upon exercise of options
granted was assigned to such shares, which price is higher than the Market
Price.
==============================================================================
<PAGE> 2
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
AMENDED INCENTIVE AND NON QUALIFIED
----------------------
STOCK OPTION PLAN
PART I
Item 1. PLAN INFORMATION
An aggregate of Four Hundred Thousand (400,000) shares of beneficial
interest of the Registrant ("Shares"), par value $1.00 per share, were
authorized and reserved for issuance upon the exercise of options that may be
granted under the Amended Incentive and Non-Qualified Stock Option Plan (the
"Plan") attached as Exhibit 4 hereto and made a part hereof.
The Plan is administered by a Committee of the Board of Trustees of the
Registrant, whose composition is described in Section 3(a) of the Plan. This
Committee has plenary authority in its discretion to exercise the power and
authority necessary to carry out its functions as described in the Plan. Options
are granted by the Committee to grantees who are officers and/or key employees
of the Registrant as determined by the Committee. Two Hundred Seventy-Eight
thousand (278,000) options have been granted under the Plan. The Committee when
granting options under the Plan may state whether they are incentive or
non-qualified stock options. Each grantee enters into a written agreement with
the Registrant. The purpose of the Plan is to provide an incentive to selected
officers and key employees of the Registrant to acquire a proprietary interest
in the Registrant, to continue as its officers and employees and to increase the
efforts on behalf of the Registrant.
The purchase price of the Shares upon exercise of an option is no less
than the fair market value of the Shares of Registrant on the date of grant,
which is defined in Section 7 of the Plan, inter alia, as the closing price of
Shares on a national securities exchange on such date. The Committee determines
on the date the option is granted the rate at which Shares subject to option may
be acquired. Each option is exercisable for a term of up to 10 years from the
date it is granted, provided that incentive options granted to a 10% shareholder
in the Registrant are exercisable for a term of up to 5 years from the date of
grant. Options granted under the Plan are subject to earlier termination upon
retirement, disability, death, or a change of control as defined in the Plan,
all as more particularly set forth in Section 7 of the Plan, incorporated herein
by reference. Each option is exercisable only by its grantee during his or her
lifetime.
The Plan provides for adjustments to compensate for certain changes in
the Shares of the Registrant, as is set forth in Section 8 of the Plan,
incorporated herein by reference. The Plan is not subject to any provisions of
the Employment Income Security Act of 1974 ("ERISA"). Additional information
about the Plan may be obtained from the Registrant at the address and telephone
number provided on the first page of this Registration Statement.
2
<PAGE> 3
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The documents incorporated by reference in Item 3 of Part II of this
Registration Statement are available without charge, upon written or oral
request to the address and telephone number provided on the first page of this
Registration Statement.
PART II
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (c) below are hereby incorporated
by reference in this Registration Statement on Form S-8; and all documents
subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated herein by reference in this Registration Statement
on Form S-8, and shall be a part hereof from the date of the filing of such
documents.
(a) The Registrant's annual report on Form 10-K for the fiscal year
ended August 31, 1994.
(b) All other reports filed by the Registrant pursuant to Sections
13(a) or 15(d) of the Exchange Act since August 31, 1994.
(c) The description of the Registrant's Certificates of Beneficial
Interest (the "Shares") contained in Registration Statements
filed under the Exchange Act, including any amendment or report
filed for the purpose of updating such description.
Item 4. DESCRIPTION OF SECURITIES
Each Share has equal dividend and liquidation rights. The limited
voting rights of the Shareholders are as follows: each Share has one
non-cumulative vote operative only on questions of (1) increasing the liability
of Shareholders, which requires the consent of the holders of two-thirds of the
outstanding Shares, and (2) electing successors or additions to the present
Trustees. The Shares are fully paid and not subject to further calls or
assessment by the Trust. The Trust Agreement provides that Shareholders will not
be liable for assessment by the Trust and that the Trustees will have no general
power to bind them personally. The Shares are not convertible or subject to
redemption, and Shareholders have no pre-emptive or other rights to subscribe to
additional Shares. The Shares are transferable on the books of the Trust upon
surrender endorsed in the same manner as corporate stock. The transfer agent for
the Shares is The American Stock Transfer & Trust Company, New York, NY. The
Shares are listed on the American Stock Exchange.
3
<PAGE> 4
The Trust may be terminated and the rights of the Shareholders may be
modified by an amendment to the Trust Agreement approved by a vote of two-thirds
(but not less than four) of the Trustees. However, no amendment is effective to
increase the liability of Shareholders without the consent of the holders of
two-thirds of the outstanding Shares, and in no event can there be an amendment
requiring additional contributions from or assessments against the Shareholders.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the securities being offered hereby is being passed
upon by Cohen, Shapiro, Polisher, Shiekman and Cohen, 12 South 12th Street, PSFS
Building, Philadelphia, PA 19107-3981, counsel to the Registrant. Sylvan M.
Cohen, Esquire, Chairman, Chief Executive Officer and a Trustee of the
Registrant, and Robert Freedman, a Trustee of the Registrant, are partners of
Cohen, Shapiro, Polisher, Shiekman and Cohen, and Messrs. Cohen, Freedman and
other attorneys of such firm own, beneficially or otherwise, Shares of the
Registrant. As of March 1, 1995, Mr. Cohen was the beneficial owner of
approximately 7.65% of the outstanding Shares. In addition, Mr. Cohen holds
options to purchase up to 91,250 Shares pursuant to the Registrant's Amended
Incentive and Non Qualified Stock Option Plan. Mr. Freedman holds options to
purchase up to 6,000 shares pursuant to the Registrant's Option Plan for
NonEmployee Trustees.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Trust Agreement
A. Right to Indemnification of Trustees and Officers
Every trustee and officer of the Registrant is entitled
pursuant to the Trust Agreement to be indemnified by the Registrant
against reasonable fees and expenses of counsel, and any liability paid
or incurred by such person in connection with any actual or threatened
claim, action, suit or proceeding, civil, criminal, administrative,
investigative or other, whether brought by or in the right of the
Registrant 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 Registrant or by reason of the fact that such person
is or was serving in any capacity at the request of the Registrant as a
trustee, director, officer, employee, agent, partner, fiduciary or
other representative of another real estate investment trust,
corporation, partnership, joint venture, trust, employee benefit plan
or other entity. Covered liabilities include amounts of expenses,
liability, loss, judgments, excise taxes, fines and penalties and
amounts paid in settlement. However, there is no such right of
indemnification with respect to an action brought by a trustee or
officer against the Registrant (other than a suit for indemnification).
This indemnification includes the right to have expenses, incurred in
connection with an action, paid by the Registrant prior to final
disposition of such action, subject to such conditions as may be
prescribed by law. The payment to a trustee or an officer of such
expenses in advance of the final disposition of an action is contingent
upon delivery to the Registrant of an undertaking by or on behalf of
such person, to repay all the amounts advanced, without interest, if
4
<PAGE> 5
it is ultimately determined that such person is not entitled to be
indemnified under the Trust Agreement or otherwise. A person who is not
a trustee or officer of the Registrant may be similarly indemnified in
respect of service to the Registrant or to another such entity at the
request of the Registrant, to the extent the Board of Trustees
determines that he or she is entitled to indemnification under the
Trust Agreement. The Trust Agreement does not provide for
indemnification where the underlying conduct of an officer or director
constituted willful misconduct or recklessness.
B. Right of Claimant to Bring Suit
If a claim under the indemnification provisions of the Trust
Agreement is not paid in full by the Registrant within 60 days after a
written claim has been received by the Registrant, the claimant may
bring suit against the Registrant to recover the unpaid amount of the
claim, and, if successful in whole or in part, the claimant is also
entitled to be paid the expense of prosecuting such a claim. If the
conduct of the claimant was such that under law the Registrant would be
prohibited from indemnifying the claimant for the amount claimed, this
will constitute a defense, which the Registrant will have the burden of
proving.
C. Insurance and Funding for Payment of Expenses
The Registrant may purchase and maintain insurance, at its
expense, to protect itself and any person eligible to be indemnified
hereunder against any liability or expense incurred in connection with
any action, whether or not the Registrant would have the power to
provide indemnification of such liability or expense by law or under
the provisions of the Trust Agreement. The Registrant may create a
trust fund, grant a security interest, cause a letter of credit to be
issued or use other means to insure the payment of indemnification.
D. Non-Exclusivity of Rights
The limitation of the trustees' liability and the right to
indemnification and to the advancement of expenses provided in the
Trust Agreement are not exclusive of any other rights that any person
may have or hereafter acquire under any statute, provision of the Trust
Agreement, by-laws, other agreement, vote of shareholders or trustees
or otherwise.
E. Extent of Rights
The provisions in the Trust Agreement relating to the
limitation of trustees' liability, and relating to indemnification and
to the advancement of expenses create contractual rights in favor of
each of the trustees, officers and other persons entitled to
indemnification, which may be modified as to any trustee, officer or
other person only with his or her written consent. These contractual
rights survive when such a person ceases to have the status pursuant
5
<PAGE> 6
to which he or she was entitled or denominated as entitled to
indemnification under the Trust Agreement and enure to the benefit of
his or her heirs and legal representatives. These contractual rights
apply to actions, suits or proceedings commenced after the adoption of
the Trust Agreement, whether arising from acts or omissions occurring
before or after the adoption of the Trust Agreement.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
N/A
Item 8. EXHIBITS
4. Pennsylvania Real Estate Investment Trust Amended Incentive
and Non Qualified Stock Option Plan.
5. Opinion of Cohen, Shapiro, Polisher, Shiekman and Cohen as to
the legality of the securities being offered hereunder.
23.1 The consent of Cohen, Shapiro, Polisher, Shiekman and Cohen is
included in their opinion filed hereto as Exhibit 5 to the
Registration Statement.
23.2 Consent of Arthur Andersen LLP, independent public
accountants.
Item 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement, to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the 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.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Sections 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 the Registration Statement shall be deemed to be a new registration
6
<PAGE> 7
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.
(e) To deliver or cause to be delivered with the prospectus to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the Prospectus, to deliver or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
(h) 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; however, 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.
7
<PAGE> 8
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
of 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 Fort Washington, Commonwealth of Pennsylvania, on this 25th day
of May, 1995.
PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
By: /s/ Sylvan M. Cohen
----------------------------------
Sylvan M. Cohen
Chairman and Chief Executive Officer
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 date indicated.
<TABLE>
<CAPTION>
Name Capacity Date
------ --------- ----
<S> <C> <C>
/s/ Sylvan M. Cohen Chairman of the Board, May 25, 1995
- ------------------------- Chief Executive Officer,
Sylvan M. Cohen and Trustee
(Principal Executive Officer)
/s/ William R. Dimeling Trustee May 25, 1995
- -------------------------
William R. Dimeling
/s/ Jack Farber Trustee May 25, 1995
- ------------------------
Jack Farber
/s/ Robert Freedman Trustee May 25, 1995
- ------------------------
Robert Freedman
/s/ Lee H. Javitch Trustee May 25, 1995
- ------------------------
Lee H. Javitch
</TABLE>
(SIGNATURES CONTINUED ON NEXT PAGE)
8
<PAGE> 9
<TABLE>
<CAPTION>
Name Capacity Date
------ --------- ----
<S> <C> <C>
/s/ Samuel J. Korman Trustee May 25, 1995
- -------------------------
Samuel J. Korman
/s/ Jeffrey A. Linn Senior Vice President - May 25, 1995
- ------------------------- Acquisitions and Secretary
Jeffrey A. Linn
/s/ Dante J. Massimini Senior Vice President - May 25, 1995
- ------------------------- Finance and Treasurer
Dante J. Massimini
(Principal Financial and
Accounting Officer)
/s/ Jeffrey P. Orleans Trustee May 25, 1995
- ------------------------
Jeffrey P. Orleans
/s/ Robert G. Rogers Executive Vice President May 25, 1995
- ------------------------ and Trustee
Robert G. Rogers
/s/ Jonathan B. Weller President, Chief Operating May 25, 1995
- ------------------------ Officer and Trustee
Jonathan B. Weller
</TABLE>
9
<PAGE> 10
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
AMENDED INCENTIVE AND NON QUALIFIED STOCK OPTION PLAN
EXHIBITS
--------
10
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Name of Exhibit Page No.
- ----------- --------------- --------
<S> <C> <C>
4. Pennsylvania Real Estate Investment Trust 4-1
Option Plan for Non-Employee Trustees.
5. Opinion of Cohen, Shapiro, Polisher, Shiekman and Cohen 5-1
as to the legality of the securities being offered hereunder.
23.1 The consent of Cohen, Shapiro, Polisher, Shiekman and N/A
Cohen is included in their opinion filed hereto as Exhibit
5 to the Registration Statement.
23.2 Consent of Arthur Andersen LLP, independent public 23.2-1
accountants.
</TABLE>
11
<PAGE> 12
EXHIBIT 4
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
AMENDED INCENTIVE AND NON QUALIFIED STOCK OPTION PLAN
1. Purpose. The purpose of the Amended Incentive and Non Qualified Stock
Option Plan (the "Plan") is to provide an incentive to selected officers and key
employees of Pennsylvania Real Estate Investment Trust (the "Trust") to acquire
a proprietary interest in the Trust, to continue as its officers and employees
and to increase their efforts on behalf of the Trust.
2. The Plan. The Plan shall consist of options to acquire shares of
beneficial interest, par value $1.00 per share, of the Trust (the "Shares"). An
option intended to qualify as incentive stock option and identified as an
Incentive Stock Option in the Agreement by which it is evidenced shall be an
Incentive Option ("Incentive Option") within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code"). An option or a portion
thereof that does not qualify under Section 422 or any other section of the Code
shall be a non qualified option ("NQSO") and may be identified in the Agreement
by which it is evidenced as a NQSO. Incentive Options and NQSO's are
collectively referred to herein as "Options".
3. Administration.
(a) The Plan shall be administered by a Committee (the
"Committee") of the Board of Trustees of the Trust (the "Board"). The Committee
shall consist of three (3) or more members of the Board who are not eligible to
participate in the Plan while serving on the Committee and shall not have been,
at any time within one (1) year prior to appointment to the Committee, eligible
for selection as a person to whom an option under the Plan may be granted
pursuant to the Plan or any other Plan of the Trust and shall be a
"disinterested person" within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 or any successor rule or regulation.
(b) The Committee may exercise such power and authority as may
be necessary for the Committee to carry out its functions as described in the
Plan. It shall have plenary authority in its discretion, subject only to the
express provisions of the Plan and of Code section 422A:
(i) to determine which of the eligible persons shall
be granted options ("Grantees") and the number and terms of the Options to
be granted to each. In making any determination, the Committee shall
consider the position and responsibilities of the proposed Grantee being
considered, the nature and value to the Trust of his services and
accomplishments, his present and potential contribution to the success of
the Trust and such other factors as the Committee may deem relevant;
(ii) to determine the dates of grant of Options;
(iii) to prescribe the form of the instruments
evidencing any Options granted under the Plan;
4-1
<PAGE> 13
(iv) to determine whether the Option is an Incentive
Option or an NQSO;
(v) to interpret the Plan and determine the terms and
provisions of the agreements evidencing the Options and to make all other
determinations necessary for Plan administration;
(vi) to adopt, amend and rescind rules and
regulations for the administration of the Plan and for its own acts and
proceedings;
(vii) to decide all questions and settle all
controversies and disputes of general applicability which may arise in
connection with the Plan; and
(viii) to amend the terms of the Plan as provided in
Section 9.
All decisions, determinations and interpretations with respect to the
foregoing matters shall be made by the Committee and shall be final and binding
upon all persons. Acts of a majority of the members of the Committee present at
any meeting at which a quorum is present or acts approved in writing by a
majority of the Committee shall be deemed to be acts of the Committee.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith by the Board or the Committee with respect to
the Plan or any grant of an Option under it.
4. Effectiveness and Termination of Plan. This Plan shall become effective
as of the date of adoption thereof by the Board, subject to approval of this
Plan by the shareholders of the Trust. Any Option outstanding under this Plan at
the time of termination of the Plan shall remain in effect in accordance with
its terms and conditions and those of the Plan. This Plan shall terminate on the
earliest of:
(a) the tenth anniversary of the effective date as determined
under this Section 4; or
(b) the date when all Shares reserved for issuance under the
Plan shall have been acquired through exercise of Options granted under the
Plan; or
(c) such earlier date as the Board may determine.
5. Shares Subject to the Plan. The aggregate number of Shares which may be
subject to Options granted under the Plan shall be four hundred thousand
(400,000) or the number and kinds of Shares or other securities which shall be
substituted for the Shares or to which such Shares shall be changed as provided
in Section 8. The Shares deliverable upon the exercise of an Option under the
Plan may be made available from unissued Shares not reserved for any other
purpose or Shares reacquired by the Trust. All or any Shares subjected under
this Plan to an Option which, for any reason, terminates unexercised as to such
Shares, may again be subjected to an Option under the Plan.
4-2
<PAGE> 14
6. Option Agreement. Each Grantee shall enter into a written agreement with
the Trust, which shall contain such provisions, consistent with the Plan, as may
be established at any time or from time to time by the Committee. No Grantee
shall have the right in any Option unless, and until, a written option agreement
is entered into with the Corporation.
7. Grant, Terms and Conditions of Options. Options may be granted by the
Committee at any time and from time to time prior to the termination of the
Plan. Except as hereinafter provided, Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) Grantees. The Grantees shall be such officers or key
employees of the Trust as determined by the Committee. No person shall be
eligible for the grant of an Incentive Option who owns, or would own immediately
before the grant of such Incentive Option, directly or indirectly, Shares
possessing more than ten percent (10%) of the total combined voting power of all
classes of Shares of the Trust ("10% Shareholder"). This sentence of Section
7(a) shall not apply if, at the time such Incentive Option is granted, the
Incentive Option price is at least one hundred ten percent (110%) of fair market
value and the Incentive Option is not, by its terms, exercisable after the
expiration of five (5) years from the date of grant.
(b) Purchase Price. The purchase price of Shares upon exercise
of an Option shall be no less than the fair market value of the Shares, without
regard to any restriction, on the date of grant of an Option; provided, however,
if an Incentive Option is granted to a person owning Shares of the Trust
possessing more than 10% of the total combined voting power of all classes of
Shares of the Trust as defined in Code Section 422A the purchase price shall be
no less than 110% of the fair market value of the Shares, without regard to any
restriction, on the date of grant of an Incentive Option to such individual. The
fair market value of the Shares on the date of grant shall be: (i) if the Shares
are listed on a national securities exchange, the closing price of the Shares on
such date; provided, however, if on such date the Shares were traded on more
than one national securities exchange, then the closing price on the exchange on
which the greatest volume of Shares were traded on such day; (ii) if the Shares
are not listed on a national securities exchange and are traded
over-the-counter, the last sale price of the Shares on such date as reported by
NASDAQ or, if not reported by NASDAQ, the average of the closing bid and asked
prices for the Shares on such date; and (iii) if the Shares are neither listed
on a national securities exchange nor traded in the over-the-counter market,
such value as the Committee shall in good faith determine. If the Shares are
listed on a national securities exchange or are traded over-the-counter but are
not traded on the date of grant, then the price shall be determined by the
Committee by applying the principles contained in Proposed Treasury Regulation
section 1.422A-2(e) and treasury Regulation section 20.2031-2 or successor
provisions thereto. The fair market value of the Shares shall be determined by,
and in accordance with, procedures to be established by the Committee, whose
determination shall be final.
(c) Payment for Shares. The purchase price for Shares upon
exercise of an Option shall be paid in full in United States dollars in cash or
by check at the time of purchase; provided, however, that at the discretion of
the Committee, the purchase price may be paid with (i) Shares of the Trust
already owned by, and in possession of, the Grantee or (ii) any combination of
United States dollars or Shares of the Trust. Shares of the Trust used to
satisfy the exercise price of an Option shall be valued as of the date of
exercise at their fair market value determined in accordance with the rules
4-3
<PAGE> 15
set forth in Section 7(b) hereof. The purchase price shall not be subject to
adjustment, except as provided in Section 8 hereof.
(d) Limitation. Notwithstanding any provision contained herein
to the contrary, the aggregate fair market value (determined at the time an
Option is granted) of Shares for which Incentive Options are exercisable for the
first time under the terms of the Plan by a Grantee during any calendar year
(under all plans of the Trust defined in Code Section 425) is limited to
$100,000. In the event that the aggregate fair market value of Shares with
respect to such Incentive Option exceeds $100,000, the Incentive Options granted
hereunder to such Grantee shall, to the extent and in the order required by
regulations promulgated under the Code, automatically be deemed to be NQSO, but
all other terms and provisions of such Incentive Options shall remain unchanged.
Moreover, the Committee may grant an Option that provides that the aggregate
fair market value of Shares for which Options are exercisable for the first time
in a given year exceeds $100,000, by specifically providing in the grant the
portion of the Option that is an Incentive Option and the portion of the Option
that is a NQSO.
(e) Duration and Exercise of Options. Options may be
exercisable for terms of up to but not exceeding ten years from the date the
particular Option is granted; provided, however, the Incentive Options granted
to a 10% Shareholder may be exercisable for a term of up to but not exceeding
five years from the date the particular Incentive Option is granted. Subject to
the foregoing, Options shall be exercisable at such time and in such amounts (up
to the full amount thereof) as may be determined separately in each instance by
the Committee at the time of the grant. If an Option granted under the Plan is
exercisable in installments, the Committee shall determine what events, if any,
will make it subject to acceleration. During his or her lifetime, only the
Grantee may exercise an Option.
(f) Termination of Employment. Upon the termination of
Grantee's employment, his rights to exercise an Option held by such Grantee
shall be only as follows:
(i) Retirement or Disability. If the Grantee's
employment is terminated because he or she has attained the age which the Trust
may from time to time establish as the retirement age for any class of its
employees or, with the approval of the Committee, because of permanent
disability as defined in Code Section 22(e)(3), he or she may, within nine
months following such termination, exercise the Option with respect to all or
any part of the Shares subject thereto. The Option shall become fully vested and
immediately exercisable to the extent not previously exercised for the full
amount or any part thereof, including a partial exercise from time to time
within the nine-month period. However, if he or she dies before the end of the
nine-month period after the termination of his or her employment due to
retirement or disability, his or her estate (as defined below in Section
7(f)(ii) hereof) shall have the right, subject to the procedures set forth
below, to exercise such Option within one year following such termination.
(ii) Death. If a Grantee's employment is terminated
by death, the Option shall become fully vested and immediately exercisable to
the extent not previously exercised for the full amount or any part thereof and
his or her estate shall have the right for a period of one year following the
date of such death to exercise the Option including a partial exercise from time
to time within the twelve-month period. A Grantee's "estate" shall mean his or
her legal representative upon his or her death or any person who acquires the
4-4
<PAGE> 16
right to exercise an Option by reason of the Grantee's death. The Committee
may in its discretion require the estate of a Grantee to supply the
Committee with written notice of the Grantee's death and a copy of the will
or such other evidences as the Committee deems necessary to establish the
validity of the transfer of an Option. The Committee may also require that
the estate of a Grantee agrees to be bound by all of the terms and
conditions of the Plan.
(iii) Change of Control. Notwithstanding any
provision in this Plan to the contrary, upon the occurrence of a "Change of
Control" (as defined below), each Option granted under the Plan and outstanding
at such time shall become fully vested and immediately exercisable to the extent
not previously exercised and shall remain exercisable until its expiration,
termination or cancellation pursuant to the terms of the Plan. "Change of
Control shall mean:
I. The acquisition by an individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d)-3 promulgated under the
Exchange Act) of 30% 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 for
purposes of this subsection (a), 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 corporation
controlled by the Trust, (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (III)
below, or (v) any acquisition by any Person entitled to file Form 13G under the
Exchange Act with respect to such acquisition; or
II. 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 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 shall be considered
as though such individual whose initial assumption of office occurs as a result
to the election or removal of trustees or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
III. 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% of, respectively, the
then outstanding shares of stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
trustees, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation 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 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 corporation resulting from
4-5
<PAGE> 17
such Business Combination) beneficially owns, directly or indirectly, 30% or
more of, respectively, the then outstanding shares of stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation 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
IV. approval by the shareholders of the
Trust of a complete liquidation or dissolution of the Trust.
(iv) Cause and Competition. If the employment of a
Grantee is terminated for "Cause" (as defined below) or the Grantee
terminates his or her employment and commences working for a "Competitor"
(as defined below), his or her right under any then outstanding Option shall
terminate at the time of such termination of employment. In addition, any
Shares issued upon exercise of Options may be subject to forfeiture pursuant
to Section 7(f)(v) if the Grantee becomes employed or otherwise associated
with a Competitor within two months of exercise. As used in this subsection
(iv) of this Section 7(f), in the case of any Grantee not subject to a
written employment agreement, "Cause" shall mean any willful or intentional
act having the effect of injuring the reputation, business or business
relationships of the Trust or any repeated or continuous failure, neglect or
refusal to perform in a satisfactory manner duties assigned to such Grantee.
In the case of a Grantee subject to a written employment agreement, "Cause"
shall mean any action giving the Trust the right to terminate such person's
employment agreement for Cause. "Competitor" shall mean any person or entity
other than the Trust engaged in a business competitive (in good faith
judgment of the Committee) with that of the Trust.
(v) Other Reasons. In the case of a Grantee whose
employment is terminated for any reason other than those provided above
under "Retirement or Disability," "Death," "Change of Control" or "Cause and
Competition," the Grantee may, within the three-month period following such
termination, exercise the Option to the extent that the right to exercise
had accrued prior to such termination. However, if he or she dies prior to
the end of the three-month period after termination of his or her
employment, his or her estate (as defined above in Section 7(f)(ii) hereof)
shall have the right, subject to the procedures set forth above, to exercise
such Option within one year following such termination; provided, however,
that the Trust by which the Grantee is employed, may retain the Shares
issuable upon exercise of such Option pursuant to this subsection (v) for a
period of two months from exercise and, if the Grantee becomes employed or
otherwise associated with, or enters into an agreement to become employed or
otherwise associated with, a Competitor prior to or during such two-month
period, either as a director, trustee, officer, employee, agent,
representative or otherwise, then the Trust may retain and cancel such
shares, refund any purchase price paid by the Grantee to the Trust, and
thereafter all rights of such Grantee in the Option and the Shares issuable
upon exercise of the Option shall immediately cease.
(g) Transferability of Option. No Options shall be
transferable unless transferred by will or the laws of descent and distribution.
4-6
<PAGE> 18
(h) Modification, Extension and Renewal of Options. Subject to
the terms and conditions and within the limitations of the Plan, the Committee
may modify, extend or renew outstanding Options granted under the Plan,
including amending the terms of an Option at any time to include provisions that
have the effect of changing an Incentive Option to a NQSO, or accept the
surrender of outstanding Options (to the extent not theretofore exercised) and
authorize the granting of new Options in substitution therefor (to the extent
not theretofore exercised). Notwithstanding the foregoing, however, no
modification of an Option shall, without the consent of the Grantee, impair any
rights or alter any obligations under any Option theretofore granted under the
Plan nor shall any modification be made which shall adversely affect the status
of an Incentive Option under Code section 422A.
(i) Other Terms and Conditions. Options may contain such other
provisions not inconsistent with any of the foregoing terms as the Committee
shall deem appropriate.
8. Adjustment for Changes in the Shares.
(a) In the event the Shares, as presently constituted, shall
be changed into or exchanged for a different number or kind or shares of stock
or other securities of the Trust or of another trust or corporation (whether by
reason of merger, consolidation, recapitalization, reclassification, split,
reverse split, combination of shares or otherwise), then there shall be
substituted for or added to each Share theretofore appropriated or thereafter
subject or which may become subject to an Option under this Plan, the number and
kind of Shares or other securities into which each outstanding Share shall be so
changed, or for which each such Share shall be exchanged, or to which each such
Share shall be entitled, as the case may be. Outstanding Options shall also be
appropriately amended as to price and other terms as may be necessary to reflect
the foregoing events. In the event there shall be any other change in the number
or kind of the outstanding Shares, or of any share or other securities into
which such Shares shall have been changed, or for which it shall have been
exchanged, then, if the Committee or Board shall, in its sole discretion,
determine that such change equitably requires an adjustment in any Option
theretofore granted or which may be granted under the Plan, such adjustments
shall be made in accordance with such determination.
(b) Fractional Shares resulting from any adjustment in Options
pursuant to this Section 8 may be settled in cash or otherwise as the Committee
or Board shall determine. Notice of any adjustment shall be given by the Trust
to each holder of an Option which shall have been so adjusted and such
adjustment (whether or not such notice is given) shall be effective and binding
for all purposes of the Plan.
(c) Notwithstanding Section 8(a) hereof, the Committee or
Board shall have the power, in the event of the disposition of all or
substantially all of the assets of the Trust, or the dissolution of the Trust,
or the merger or consolidation of the Trust with or into any other real estate
investment trust, corporation, or the merger or consolidation of any other real
estate investment trust or corporation into the Trust, or the making of a tender
offer to purchase all or a substantial portion of the Shares of the Trust, to
amend all outstanding Options (upon such conditions as it shall deem
appropriate) to (i) permit the exercise of all such Options prior to the
effectiveness of any such transaction and to terminate such Options as of such
effectiveness, or (ii) require the forfeiture of all Options, provided the Trust
pays to the Grantee the excess of the fair market value of the Shares in
4-7
<PAGE> 19
which the Grantee's rights have not become vested at such date over the purchase
price, as provided for in Section 7(b) hereof, or (iv) make such other
provisions as the Committee or Board shall deem equitable.
9. Amendment of the Plan. The Committee may amend the Plan, may correct any
defect or supply any omissions or reconcile any inconsistency in the Plan or in
any Option in the manner and to the extent it shall deem desirable to carry the
Plan into effect without action on the part of the shareholders of the Trust;
provided, however that, except as provided in Section 8 hereof and this Section
9, without prior approval by the shareholders of the Trust: (i) the total number
of Shares subject to the Plan shall not be increased; (ii) no Option shall be
exercisable more than ten years after the date it is granted; (iii) the
expiration date of the Plan shall not be extended; (iv) transfer the
administration of the Plan to any person who is not a "disinterested person" as
defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended, and as amended from time to time; and (v) no amendment shall be of any
force and effect which shall decrease the price at which Options may be granted,
permit the grant of any Option to purchase Shares subject to such Option,
increase the number of Shares to be received on exercise of an Option, or
materially modify the requirements as to eligibility for participation in the
Plan.
10. Interpretation and Construction. The interpretation and construction of
any provisions of the Plan by the Committee shall be final, binding and
conclusive for all purposes.
11. Application of Funds. The proceeds received by the Trust from the sale
of Shares pursuant to this Plan will be used for general Trust purposes.
12. No Obligation to Exercise Option. The granting of an Option shall impose
no obligation upon the Grantee to exercise the Option.
13. Plan Not a Contract of Employment. The Plan is not a contract of
employment, and the terms of employment of any Grantee shall not be affected in
any way by the Plan or related instruments except as specifically provided
herein. The establishment of the Plan shall not be construed as conferring any
legal rights upon any Grantee for a continuance of employment, nor shall it
interfere with the right of the Trust to discharge any Grantee and to treat him
without regard to the effect which such treatment might have upon him as a
Grantee.
14. Expenses of the Plan. All of the expenses of administering the Plan
shall be paid by the Trust.
15. Compliance with Applicable Law. Notwithstanding anything herein to the
contrary, the Trust shall not be obligated to cause to be issued or delivered
any certificates for Shares to be delivered pursuant to the exercise of an
Option unless and until the Trust is advised by its counsel that the issuance
and delivery of such certificates is in compliance with all applicable laws,
regulations or governmental authority and the requirements of any exchange upon
which Shares are traded. The Trust shall in no event be obligated to register
any securities pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) or to take any other action in order to cause the issuance
and delivery of such certificates to comply with any such law, regulations or
requirement. The Committee may require, as a condition of the issuance and
4-8
<PAGE> 20
delivery of such certificates and in order to ensure compliance with such laws,
regulations and requirements, such representations as the Committee, in its sole
discretion, deems necessary or desirable. Each Option shall be subject to the
further requirement that if at any time the Board shall determine in its
discretion that the listing or qualification of the Shares subject to such
Option, under any securities exchange or association requirements or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary as a condition of, or in connection with, the granting of such
Option or the issue of Shares thereunder, such Option may not be exercised in
whole or in part unless such listing, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Board.
16. Governing Law. Except to the extent preempted by federal law, this Plan
shall be construed and enforced in accordance with, and governed by, the laws of
the Commonwealth of Pennsylvania.
Date of Adoption
By the Board: September 17, 1990.
Date of Approval
By the Shareholders: December 19, 1990.
Date of Adoption of Amended Plan
By the Board: December 14, 1993.
Date of Approval of the Amended Plan
By the Shareholders: December 15, 1994.
4-9
<PAGE> 21
EXHIBIT 5
June 1, 1995
Pennsylvania Real Estate Investment Trust
455 Pennsylvania Avenue
Suite 135
Fort Washington, PA 19034
RE: Pennsylvania Real Estate Investment Trust - Registration Statement
on Form S-8
-------------------------------------------------------------------
Gentlemen:
Our opinion has been requested in connection with the Registration Statement
("Registration Statement") and the Prospectus included therein (the
"Prospectus") of Pennsylvania Real Estate Investment Trust, an unincorporated
association in business trust form, formed in Pennsylvania pursuant to a trust
agreement dated December 27, 1960, as amended and restated on December 16, 1987
(the "Trust"). The Registration Statement, which was filed by EDGAR transmission
on the date hereof with the Securities and Exchange Commission on Form S-8 under
the Securities Act of 1933, as amended, relates to the issuance of up to 400,000
shares of beneficial interest, par value $1.00 (the "Shares") of the Trust in
connection with the Trust's Amended Incentive and Non Qualified Stock Option
Plan (the "Plan").
We are rendering this Opinion to you pursuant to Item 601(b)(5) of
Regulation S-K.
We are generally familiar with the affairs of the Trust, with
the preparation of the Registration Statement, and with the conduct of trust
proceedings related to the Plan. In order to render this opinion, we have
reviewed originals or copies (certified to our satisfaction to be true and
correct) of the following documents:
a. The Trust Agreement, as Amended and Restated December 16, 1987;
b. Resolutions duly adopted at the December 14, 1993 meeting of the Board
of Trustees of the Trust;
5-1
<PAGE> 22
Pennsylvania Real Estate Investment Trust
June 1, 1995
Page 2
c. Minutes of the Annual Meeting of Holders of Certificates of Beneficial
Interest of the Trust, held on December 15, 1994;
d. Resolutions duly adopted at the September 17, 1990 meeting of the Board
of Trustees of the Trust;
e. Minutes of the Annual Meeting of Holders of Certificates of Beneficial
Interest of the Trust, held on December 19, 1990;
f. The Trust's Proxy Materials in connection with the 1994 Annual Meeting
of Holders of Certificates of Beneficial Interest;
g. The Trust's Additional Listing Applications with the American Stock
Exchange respecting the Shares, approved on September 30, 1991 and March
6, 1995; and
h. The Plan.
Based upon the foregoing, it is our opinion that:
1. The Trust validly exists under the laws of the Commonwealth of
Pennsylvania, has duly recorded its Trust Agreement and has all requisite
authority to conduct the business in which it is engaged.
2. The Shares, which are issuable upon the exercise of options granted
pursuant to the terms of the Plan and are included in the Registration
Statement, have been duly and validly authorized and reserved for issuance
by all necessary action of the Trust and, when delivered against payment of
the exercise price therefor as provided in the Plan, will be legally issued,
fully paid and non-assessable.
As described in the Registration Statement under the caption
"Legal Opinion", Sylvan M. Cohen, Esquire, Chairman, Chief Executive Officer and
a Trustee of the Trust, and Robert Freedman, Esquire, a Trustee of the Trust,
are partners of this firm, and Messrs. Cohen, Freedman and other attorneys in
this firm own, beneficially or otherwise, Shares of the Trust. In addition, Mr.
Cohen holds options to purchase up to 91,250 Shares pursuant to the Trust's
Amended Incentive and Nonqualified Stock Option Plan. Mr. Freedman holds options
to purchase up to 6,000 Shares pursuant to the Trust's Option Plan for
Non-Employee Trustees.
5-2
<PAGE> 23
Pennsylvania Real Estate Investment Trust
June 1, 1995
Page 3
We hereby consent to the reference to our firm contained in
the Registration Statement filed with the Commission of which the Prospectus is
part and to the use of this Opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ COHEN, SHAPIRO, POLISHER,
SHIEKMAN AND COHEN
COHEN, SHAPIRO, POLISHER,
SHIEKMAN AND COHEN
5-3
<PAGE> 24
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Pennsylvania Real Estate Investment Trust:
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 24, 1994, which appears on page 20 of the 1994 annual report to
shareholders of Pennsylvania Real Estate Investment Trust (the "Trust"), which
annual report is incorporated by reference in the Trust's annual report on Form
10-K for the fiscal year ended August 31, 1994, and to all references to our
Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
May 26, 1995
23.2-1
