Exhibit 10.1

 

MACK-CALI REALTY CORPORATION

AMENDED AND RESTATED TSR-BASED PERFORMANCE AWARD AGREEMENT

MITCHELL E. HERSH

 

AGREEMENT EVIDENCING THE GRANT

OF A TSR-BASED PERFORMANCE AWARD PURSUANT

TO THE 2004 INCENTIVE STOCK PLAN

OF MACK-CALI REALTY CORPORATION

 

Name of Recipient:

Mitchell E. Hersh

No. of Performance Shares:

3,375

Maximum Award Dollar Amount:

$3,375,000

Grant Date:

January 1, 2013

 

RECITALS

 

A.            Mitchell E. Hersh (the “Recipient”) is the President and Chief
Executive Officer of Mack-Cali Realty Corporation (the “Company”).

 

B.            The Company has adopted the TSR-Based Long-Term Performance Plan
(the “Performance Plan”) to provide the Company’s employees with incentive
compensation.  The Performance Plan was adopted by the Executive Compensation
and Option Committee (the “Committee”) of the Board of Directors of the Company
(the “Board”) and ratified by the Board pursuant to its authority to make grants
of phantom stock units in the form of performance shares (the “Performance
Shares”) which shall, subject to certain conditions, become earned and
convertible into shares of the Company’s common stock, par value $.01 per share
(the “Common Stock”), that have been or shall be reserved for issuance under the
Company’s 2004 Incentive Stock Plan or any successor equity compensation plan
providing for similar awards (collectively, the “Equity Plan”).

 

C.            The Company and the Recipient previously entered into an award
agreement (the “Original Agreement”) evidencing an award to the Recipient under
the Performance Plan (the “Award”), which was subject to the terms and
conditions set forth therein, the Equity Plan and the Amended and Restated
Employment Agreement dated as of July 1, 1999 by and between the Company and
Recipient, as amended by the letter agreement dated December 9, 2008, and as
such agreement may be subsequently, amended from time to time, or any new
employment agreement entered into by the parties in substitution for such
agreement (the “Employment Agreement”).

 

D.            The Recipient was selected by the Committee to receive the Award
and as of January 1, 2013 the Company issued to the Recipient the number of
Performance Shares (as defined hereinafter) set forth above.

 

E.            The Committee has adopted certain amendments to the Performance
Plan and the Company and the Recipient desire to enter into this agreement (the
“Amended and Restated Agreement”) to amend and restate the Original Agreement in
its entirety to reflect the terms and conditions of the amended Performance
Plan.

 

NOW, THEREFORE, the Company and the Recipient agree as follows:

 

1.             Administration.  The Performance Plan and all awards thereunder,
including this Award, shall be administered by the Committee, which in the
administration of the Performance Plan shall have all the powers and authority
it has in the administration of the Equity Plan as set forth in the Equity Plan.

 

2.             Definitions.  Capitalized terms used herein without definitions
shall have the meanings given to those terms in the Equity Plan. In addition, as
used herein:

 

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“Absolute TSR Performance” means, for any Performance Period, the Company TSR
calculated in respect of such Performance Period.

 

“Absolute TSR Threshold” means a percentage of the Equity Value of the
Performance Shares that may be earned at one or more Absolute TSR Performance
levels for a Performance Period as of a given Vesting Date as shall be
established by the Committee each year; provided, however, that if the Committee
establishes more than one Absolute TSR Performance level for a Performance
Period, then the amounts to be earned at Absolute TSR Performance levels between
amounts fixed by the Committee shall be determined linearly based on a straight
line interpolation between such Absolute TSR Performance levels.

 

“Cause” has the meaning given to that term in the Employment Agreement.

 

“Change in Control” has the meaning given to that term in the Employment
Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock” has the meaning set forth in the Recitals to this Amended and
Restated Agreement.

 

“Company Stock Price” means as of a particular date means (i) if the Common
Stock is then listed on the New York Stock Exchange, the closing market price of
the Common Stock as reported on the Consolidated Tape of the New York Stock
Exchange for such date, (ii) if the Common Stock is then listed on any other
national securities exchange, the closing sales price per share of Common Stock
on the exchange for the last preceding date on which there was a sale of shares
of Common Stock on such exchange, as determined by the Committee, (iii) if the
Common Stock is not then listed on a national securities exchange but is then
traded on an over-the-counter market, the average of the closing bid and asked
prices for the shares of Common Stock in such over-the-counter market for the
last preceding date on which there was a sale of such shares in such market, as
determined by the Committee, or (iv) if the Common Stock is not then listed on a
national securities exchange or traded on an over-the-counter market, such value
as the Committee in its discretion may in good faith determine; provided that,
where the shares of Common Stock are so listed or traded, the Committee may make
such discretionary determinations where the shares of Common Stock have not been
traded for 10 Trading Days.

 

“Company TSR” means, for any Performance Period, the Company’s TSR for such
Performance Period.

 

“Conversion Shares” shall mean that number of shares of Common Stock issuable
upon conversion of Performance Shares that have been vested and earned as of a
Vesting Date.

 

“Disability” has the meaning given to that term in the Employment Agreement.

 

“Equity Value” means, with respect to the Performance Shares, $1,000 per
Performance Share.

 

“Good Reason” has the meaning given to that term in the Employment Agreement.

 

“Initial Performance Period” means the initial two year Performance Period
established by the Committee under the Performance Plan commencing January 1,
2013 and ending December 31, 2014.

 

“Minimum Price Condition” means the minimum closing price of the Company’s
Common Stock on a possible Vesting Date as of December 31 of a Performance
Period that must be achieved for Performance Shares to be earned, as shall be
fixed by the Committee each year.

 

“Peer Group REITs” means a group of publicly trade REITs that shall be selected
for each Performance Period by the Committee for purposes of determining the
Relative TSR Performance.

 

“Performance Commencement Date” means January 1, 2013.

 

“Performance Period” means any performance period or periods as may be
established by the Committee during the term of the Performance Plan for the
Company’s fiscal years 2013 through 2017.

 

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“Relative TSR Performance” means, for any Performance Period, the Company TSR
for such Performance Period relative to the TSR of the Peer Group REITs, for the
same Performance Period expressed as a percentile calculated by dividing the
number of such Peer Group REITs with a TSR less than the Company TSR by the sum
of the total number of such Peer Group REITs plus the Company.

 

“Relative TSR Threshold” means a percentage of the Equity Value of the
Performance Shares that may be earned at one or more Relative TSR Performance
levels for a Performance Period as of a given Vesting Date, as shall be fixed by
the Committee each year, provided, however, that if the Committee establishes
more than one Relative TSR Performance level for a Performance Period, then the
amounts to be earned at Relative TSR Performance levels between amounts fixed by
the Committee shall be determined linearly based on a straight line
interpolation between such Relative TSR Performance levels.

 

“Trading Day” means any date on which means any day on which the Common Stock is
traded on the New York Stock Exchange; provided that “Trading Day” shall not
include any day on which the Common Stock is scheduled to trade on the New York
Stock Exchange for less than 4.5 hours or any day that the Common Stock is
suspended from trading during the final hour of trading on the New York Stock
Exchange.

 

“Total Stockholder Return” or “TSR” means, for any Performance Period, the
appreciation in the stock price of a company’s common equity measured from the
Trading Day immediately preceding January 1 of the first year of such
Performance Period through and as of December 31 of the last year of such
Performance Period divided by the stock price of a company’s common equity on
the Trading Day immediately preceding January 1 of the first year of such
Performance Period.

 

“TSR Performance Target” means either of the Absolute TSR Thresholds and
Relative TSR Thresholds for each Performance Period.

 

“Vesting Date” means either (a) December 31 of the last year of a Performance
Period on which Performance Shares may be earned subject to the satisfaction of
the Minimum Price Condition and upon the attainment of applicable Absolute TSR
Thresholds or Relative TSR Thresholds, or (b) the date during a Performance
Period on which all Performance Shares vest pursuant to Sections 4(a), (b) or
(c).

 

3.             Performance Award.

 

(a)           General Terms.  The Recipient is hereby granted an Award
consisting of Three Thousand Three Hundred Seventy-Five (3,375) Performance
Shares.  The Performance Shares shall not vest in the Recipient and shall remain
subject to forfeiture until the conditions of Sections 3(b) and Section 4 are
fully satisfied.

 

(b)           Vesting.  An aggregate of 675 Performance Shares may vest in and
become earned and payable to the Recipient in respect of each fiscal year on the
Vesting Date of the applicable Performance Period (which may not be in the same
fiscal year), but only to the extent that: (i) the Minimum Price Condition has
been met for such Performance Period, and (ii) the Company’s TSR exceeds either
(x) the minimum Absolute TSR Threshold, or (y) the minimum Relative TSR
Threshold.  If the Minimum Price Condition and either of the TSR Performance
Targets are satisfied as of a Vesting Date, the Performance Shares shall be
earned and immediately converted into that number of Conversion Shares
determined in accordance with the following formula:

 

 

Z = (A x Y)/B

where:

 

 

Z = the number of shares of Common Stock (rounded to the next whole share) to be
issued to the Recipient.

 

 

 

A = the Equity Value of the Performance Shares subject to vesting on the Vesting
Date.

 

 

 

Y = the higher of (i) the maximum Absolute TSR Threshold attained for the
Performance Period, or (ii) the maximum Relative TSR Threshold

 

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attained for the Performance Period.

 

 

 

B = the Company Stock Price as of the Vesting Date.

 

(c)           Annual Targets.  The Minimum Stock Price, TSR Performance Targets
and Peer Group REITs for the Initial Performance Period are set forth on
Schedule A attached hereto.  On or before the end of the first fiscal quarter of
the first year of any Performance Period subsequent to the Initial Performance
Period, the Committee shall communicate to the Recipient the Minimum Price
Condition, Absolute TSR Thresholds, Relative TSR Thresholds and Peer Group REITs
(if changed from the prior Performance Period); provided that any changes to the
Peer Group REITs for a Performance Period must be approved by the Committee
prior to January 1 of such Performance Period.  If not so communicated to the
Recipient by March 31 of such Performance Period, the prior year targets shall
apply.

 

4.             Termination of Recipient’s Employment; Change of Control; Death
and Disability.

 

(a)           Except as provided in Sections 4(b) and 4(c) below, if at any time
the Recipient shall cease to be an employee of the Company for any reason, then
all Performance Shares that remain unvested at such time shall automatically and
immediately be forfeited by the Recipient.

 

(b)           If at any time the Recipient shall cease to be an employee of the
Company as a result of his death or Disability or due to (A) a termination
without Cause by the Company or (B) a termination by the Recipient with Good
Reason (each, a “Separation Event”), then all unvested Performance Shares that
would otherwise be eligible to vest at the end of such Performance Period in
which the Separation Event occurs shall vest and be earned immediately and the
Conversion Shares issuable in respect of such Performance Shares shall be issued
at 100% of the Equity Value of such Performance Shares based on the Company
Stock Price on the Trading Day immediately preceding the date of such Separation
Event.

 

(c)           Upon the occurrence of a Change in Control of the Company, all
unvested Performance Shares that would otherwise be eligible to vest at the end
of such Performance Period in which the Change in Control occurs shall vest and
be earned immediately and the Conversion Shares issuable in respect of such
Performance Shares shall be issued at 100% of the Equity Value of such
Performance Shares based on the Company Stock Price on the Trading Day
immediately preceding the effective date of such Change in Control; provided
that if the Change in Control consists of a sale or merger of the Company in
which shareholders will receive cash or other consideration, then in lieu of the
issuance of Conversion Shares, the Committee may provide for the Recipient to
receive the amount of consideration the Recipient would have received had the
applicable number of Conversion Shares been issued immediately prior to the
Change in Control, which consideration shall be paid at the same time, and
subject to the same post-closing conditions, if any, at which payment is made to
the shareholders of the Company pursuant to the terms of the Change in Control.

 

5.             Payments by Award Recipients.  No amount shall be payable to the
Company by the Recipient at any time in respect of this Award or any Performance
Shares.

 

6.             Dividends.  All of the Performance Shares granted pursuant to
this Amended and Restated Agreement shall be deemed to have been issued as part
of the same Award on the Performance Commencement Date.  On any applicable
Vesting Date, the Recipient shall be entitled to receive additional shares of
Common Stock in an amount equal to (x) the accrued dividends the Recipient would
have received on the Conversion Shares from the Performance Commencement Date
through the Vesting Date as if such Conversion Shares had been issued to the
Recipient on the Performance Commencement Date, divided by (y) the Company Stock
Price on the Vesting Date.  The Recipient’s right to receive the dividend
equivalent shares of Common Stock on Conversion Shares shall be subject to and
conditioned and issued to the Recipient only upon the vesting of such Conversion
Shares. Subject to applicable withholding requirements, the dividend equivalent
shares of Common Stock from the Performance Commencement Date on a tranche of
Conversion Shares shall be issued to the Recipient concurrently with the
Conversion Shares.

 

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7.             Restrictions on Transfer.  None of the Performance Shares granted
hereunder shall be sold, assigned, transferred, pledged, hypothecated, given
away or in any other manner disposed of or encumbered, whether voluntarily or by
operation of law.

 

8.             409A.  This Amended and Restated Agreement is not intended to
provide for a deferral of compensation that would be subject to Section 409A of
the Code, and if necessary the parties will negotiate in good faith to adopt
such amendments as may be required to ensure that, if possible, the amounts
payable under this Amended and Restated Agreement will either not be subject to
Section 409A, or will comply with the requirements of said section.

 

9.             Miscellaneous.

 

(a)           Amendments.  This Amended and Restated Agreement may be amended or
modified only with the consent of the Company upon the recommendation or
determination of the Board or the Committee; provided that any such amendment or
modification adversely affecting the rights of the Recipient hereunder must be
consented to by the Recipient to be effective as against him.

 

(b)           Incorporation of Equity Plan.  The provisions of the Equity Plan
are hereby incorporated by reference as if set forth herein.  If and to the
extent that any provision contained in this Amended and Restated Agreement is
inconsistent with the Equity Plan, this Amended and Restated Agreement shall
govern.

 

(c)           Status of Performance Shares under the Equity Plan.  The
Performance Shares are being granted as phantom stock units under the Equity
Plan.

 

(d)           Issuance of Conversion Shares; Compliance With Law.  All
Conversion Shares shall be issued as of the applicable Vesting Date, and shall
be deemed for all purposes to be issued and outstanding as of the applicable
Vesting Date.  The Company shall cause its transfer agent to issue the
Conversion Shares as soon as practical after the applicable Vesting Date,
subject to all applicable securities laws and exchange requirements.  The
Company and the Recipient will make reasonable efforts to comply with all
applicable securities laws.  In addition, notwithstanding any provision of this
Amended and Restated Agreement to the contrary, no Performance Shares will
become vested or be converted into Conversion Shares at a time that such vesting
or payment would result in a violation of any such law.

 

(e)           Severability.  In the event that one or more of the provisions of
this Amended and Restated Agreement may be invalidated for any reason by a
court, any provision so invalidated will be deemed to be separable from the
other provisions hereof, and the remaining provisions hereof will continue to be
valid and fully enforceable.

 

(f)            Governing Law.  This Amended and Restated Agreement is made
under, and will be construed in accordance with, the laws of the State of New
York, without giving effect to the principle of conflict of laws of such State.

 

(g)           No Obligation to Continue Position as an Officer or to Employ. 
Neither the Company nor any affiliate is obligated by or as a result of this
Amended and Restated Agreement to continue to have the Recipient as an executive
officer or to employ the Recipient and this Amended and Restated Agreement shall
not interfere in any way with the right of the Company or any affiliate to
terminate the Recipient’s employment as an executive officer or employee at any
time.

 

(h)           Notices.  Any notice to the Company hereunder shall be in writing
addressed to the Company at its principal business office, which on the date of
this Amended and Restated Agreement is located at:

 

Mack-Cali Realty Corporation

 

343 Thornall Street

 

Edison, New Jersey 08837-2206

 

Attn:

General Counsel

 

 

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Any notice to the Recipient hereunder shall be in writing addressed to the
Recipient at his address as set forth in the Company records or such other
address as the Recipient shall notify the Company of in writing.

 

(i)            Withholding and Taxes.  No later than the date as of which an
amount first becomes includible in the gross income of the Recipient for income
tax purposes or subject to the Federal Insurance Contributions Act withholding
with respect to the Award, the Recipient will pay to the Company any minimum
United States federal, state or local or foreign taxes of any kind required by
law to be withheld with respect to such amount (the “Minimum Withholding
Amount”).  Payment of the Minimum Withholding Amount shall be made by the
Recipient either (x) in cash, or (y) by forfeiting to the Company such number of
Conversion Shares with a tax value equal to the Minimum Withholding Amount. The
obligations of the Company under this Amended and Restated Agreement will be
conditional on such payment or arrangements, and the Company and its affiliates
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the Recipient.

 

(j)            Entire Agreement; Effect of Employment Agreement.  This Amended
and Restated Agreement contains the entire understanding of the parties and
shall not be modified or amended except in writing and duly signed by each of
the parties hereto. No waiver by either party of any default under this Amended
and Restated Agreement shall be deemed a waiver of any later default hereunder.
In the event the Employment Agreement with the Company contains additional
rights, duties and/or obligations with respect to the Recipient, such terms and
conditions shall govern this Performance Award as if such terms and conditions
had been set forth herein; and in the event of any conflict or inconsistency
between the terms of the Employment Agreement or this Amended and Restated
Agreement, except as set forth in Section 4 of this Amended and Restated
Agreement, the terms and conditions of the Employment Agreement shall control.

 

(k)           Successors and Assigns.  This Amended and Restated Agreement shall
be binding upon the Company’s successors and assigns, whether or not this
Amended and Restated Agreement is expressly assumed.

 

[Signature Page Follows]

 

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In Witness Whereof, the parties hereto have executed this Amended and Restated
Agreement to be effective on the date first above written.

 

 

MACK-CALI REALTY CORPORATION

 

 

 

By:

/s/ Barry Lefkowitz

 

 

Barry Lefkowitz

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

 

RECIPIENT

 

 

 

 

 

 

 

 

/s/ Mitchell E. Hersh

 

 

Mitchell E. Hersh

 

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SCHEDULE A

 

Vesting Provisions of Performance Shares

for the

Initial Performance Period January 1, 2013 through December 31, 2014

 

The Initial Performance Shares are subject to the following Vesting Criteria
established by the Committee:

 

Minimum Price Condition:             $30.00

 

Absolute TSR Performance:

 

Absolute TSR Performance

 

Absolute TSR Performance Threshold

 

17.5

%

100.00

%

 

Relative TSR Performance:

 

Relative TSR Performance

 

Relative TSR Performance Threshold

 

50th Percentile

 

100.00

%

 

Peer Group REITs for purposes of determining the Relative TSR Performance:

 

The SNL U.S.REIT Equity Index.

 

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