Exhibit 10.3

 

MACK-CALI REALTY CORPORATION

AMENDED AND RESTATED TSR-BASED PERFORMANCE AWARD AGREEMENT

ROGER W. THOMAS

 

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:

 

Roger W. Thomas

No. of Performance Shares:

 

660

Maximum Award Dollar Amount:

 

$660,000

Grant Date:

 

January 1, 2013

 

RECITALS

 

A.                                    Roger W. Thomas (the “Recipient”) is the
Executive Vice President, General Counsel and Secretary 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:                    President and Chief Executive Officer

 

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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/ Mitchell E. Hersh

 

 

Mitchell E. Hersh

 

 

President and

 

 

Chief Executive Officer

 

 

 

RECIPIENT

 

 

 

 

 

 

/s/ Roger W. Thomas

 

 

Roger W. Thomas

 

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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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