Exhibit 10.2

EXECUTION COPY

 

MACK-CALI REALTY CORPORATION

2013 INCENTIVE STOCK PLAN

STOCK OPTION AGREEMENT

MAG PARTNERS 2.0 LLC

 

 

This Stock Option Agreement (this “Agreement”) between Mack-Cali Realty
Corporation (the “Company”) and MAG Partners 2.0 LLC (the “Optionee”) shall be
effective as of July 24, 2020 (the “Grant Date”) and is delivered under the
Mack-Cali Realty Corporation 2013 Incentive Stock Plan (as amended from time to
time, the “Plan”).

 

WITNESSETH:

 

1.                  Grant of this Option:

 

(a)               Grant: Pursuant to the provisions of the Plan, the Company
hereby grants to the Optionee, subject to the terms and conditions of the Plan
and subject further to the terms and conditions herein set forth, an option
(this “Option”) to purchase from the Company all or any part of:

 

(i)                 230,000 Shares at a purchase price per Share equal to
$14.39, subject to adjustment as provided herein and in the Plan (the “Regular
Options”); and

 

(ii)               100,000 Shares at a purchase price per Share equal to $20.00,
subject to adjustment as provided herein and in the Plan (the “Premium
Options”).

 

The Shares subject to this Option are collectively referred to as the “Option
Shares.”

 

(b)               Shareholder Approval Required for Certain Options.
Notwithstanding anything to the contrary in this Agreement, 57,505 of the
Regular Options and all of the Premium Options (together, the “Approval-Subject
Options”) are granted expressly subject to and conditioned upon (and may not be
exercised, in whole or in part, until) the approval by the Company’s
stockholders at or before the Company’s 2021 Annual Meeting of Stockholders of a
sufficient increase in the number of Shares available for issuance under the
Plan to cover the Approval-Subject Options. If such stockholder approval is not
obtained at or before the 2021 Annual Meeting of Stockholders, then
Approval-Subject Options shall be immediately forfeited for no consideration
immediately following such 2021 Annual Meeting. The Company acknowledges and
agrees that it will put forth such a shareholder proposal at or before such 2021
Annual Meeting and will recommend that its shareholders approve such proposal
(and will cause the Option Shares to be covered under an effective Form S-8
Registration Statement). In addition, if a Change in Control is consummated
prior to the date of such shareholder approval, and the Option has not otherwise
been forfeited as provided in Section 2(b), then upon the consummation of such
Change in Control, the Approval-Subject Options shall be canceled and in lieu
thereof Optionee shall be entitled to receive a cash payment equal to the sum of
(1) the product of (x) the number of Option Shares subject to the portion of the
Regular Option included in the Approval-Subject Options that is outstanding as
of immediately prior to such Change in Control, multiplied by (y) the excess, if
any, of the per share price of the consideration received by holders of the
Shares in such Change in Control over the per share exercise price of the
Regular Options described in Section 1(a)(i), and (2) the product of (x) the
number of Option Shares subject to the portion of the Premium Option that is
outstanding as of immediately prior to such Change in Control, multiplied by (y)
the excess, if any, of the per share price of the consideration received by
holders of the Shares in such Change in Control over the per share exercise
price of the Premium Options described in Section 1(a)(ii); provided, however,
that if either of clauses (1) or (2) above would be a negative number, such
clause that otherwise would be a negative number shall be deemed to equal $0.00
for purposes of determining the amount payable to Optionee.

 

 

 

 

2.                  Terms and Conditions: It is understood and agreed that this
Option evidenced hereby is not intended to qualify as an “incentive stock
option” under Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”). This Option may be exercised from time to time subject to the
following:

 

(a)               Expiration Date: This Option shall expire on the tenth (10th)
anniversary of the Grant Date, unless earlier terminated as provided in Section
1(b) or 2(b).

 

(b)               Vesting and Forfeiture of Option; Forfeiture of Shares;
Exercise: This Option is fully vested as of the Grant Date; provided, however,
that this Option and any Shares received upon exercise of this Option shall
immediately terminate and be forfeited for no consideration (other than a return
of cash actually used to pay the exercise price of the options, if applicable,
but not in an amount greater than the then Fair Market Value of the Shares so
forfeited) if (x) Optionee’s engagement with the Company ends because (i) the
Board has terminated such engagement or MaryAnne Gilmartin’s (“Principal”)
appointment as the Company’s interim Chief Executive Officer, in each case, for
Cause (as defined below), or (ii) Optionee terminates its engagement with the
Company (which shall be deemed to occur if Principal resigns her appointment as
interim Chief Executive Officer of the Company) prior to the date that is six
(6) months following the date of Principal’s appointment as interim Chief
Executive Officer of the Company (other than (A) due to a material breach of
such engagement by the Company or (B) as the result of Principal becoming the
permanent CEO of the Company), or (y) Optionee fails to satisfy the Insurance
Condition, as defined in Optionee’s letter agreement with the Company, dated as
of July 24, 2020. Any outstanding portion of this Option may be exercised by
Optionee from time to time (in the case of the Approval-Subject Options, subject
to shareholder approval being attained as described in Section 1(b)) by written
notice to the Company specifying the number of Option Shares as to which this
Option is being exercised (which may be in electronic form pursuant to
procedures established by the Company).

 

For purposes of this Agreement, “Cause” means that Optionee or Principal has
committed any of the following acts or omissions: (i) willful and continued
failure to use best efforts to perform duties to the Company (other than any
such failure resulting from Principal’s incapacity due to physical or mental
illness) for a period of thirty (30) days after written demand for substantial
performance is delivered by the Company specifically identifying the manner in
which the Company believes Optionee or Principal have not performed such duties,
(ii) material and continued failure to comply with Optionee’s or Principal’s
obligations under any written policy of the Company applicable to Optionee or
Principal for a period of thirty (30) days after written demand for substantial
compliance is delivered by the Company specifically identifying the manner in
which the Company believes Optionee or Principal have not substantially
complied, (iii) any act of fraud, embezzlement, misappropriation, or misuse for
personal benefit of the assets or property of the Company, or (iv) a conviction
or plea of “guilty” or “no contest” to a felony under the laws of the United
States or any state thereof. For purposes of this definition of “Cause,” no act
or failure to act shall be considered “willful” unless done, or omitted to be
done, in good faith and without reasonable belief that such action or omission
was in furtherance of, or not opposed to, the interests of the Company. Any
determination of Cause by the Company will be made by the Board at a duly held
meeting of the Board (held after reasonable notice to Optionee and Principal and
reasonable opportunity for Optionee and Principal, together with counsel, to be
heard before the Board at such meeting) and pursuant to resolutions duly adopted
by the affirmative vote of the majority of the Board present and voting at such
meeting finding that in the good faith opinion of the Board after reasonable
investigation that Optionee or Principal has engaged in acts or omissions
constituting Cause, provided that no such determination may be made until
Optionee or Principal has been given written notice detailing the specific Cause
event and, where applicable, the lapsing of any cure period.

 

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(c)               Payment of Purchase Price Upon Exercise: At the time of any
exercise, the purchase price of the Option Shares as to which this Option is
being exercised shall be paid by Optionee to the Company (i) in cash, (ii) at
the option of the Optionee, in Shares (including Option Shares), valued at the
mean of the high and low sale prices of such stock on the New York Stock
Exchange on the day of exercise (or via a broker-assisted “cashless exercise”
procedure made available by the Company), or (iii) at the option of Optionee, a
combination thereof.

 

(d)               Non-transferability: This Option shall not be transferable and
may not be sold, assigned, transferred, pledged, hypothecated, or otherwise
disposed by Optionee other than by will or by the laws of descent and
distribution (in which case, such transferee shall succeed to the rights and
obligations of Optionee hereunder). During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. If Optionee or anyone claiming under or
through Optionee attempts to violate this Section, such attempted violation
shall be null and void and without effect. Notwithstanding the foregoing,
Optionee may transfer the Option to Principal, and in such case, Principal (and
her heirs, estate or beneficiaries, as applicable), shall be permitted to
exercise the Option.

 

(e)               No Rights as Stockholder: Optionee shall have no rights as a
stockholder with respect to any Shares subject to this Option prior to the date
of issuance to Optionee of a certificate or certificates for such shares (or
evidence of book entry shares being recorded in the Company’s books and
records).

 

(f)                No Rights to Continued Engagement: This Option shall not
confer upon Optionee or Principal any right to continued engagement with the
Company or any subsidiary of the Company, or limit in any respect the right of
the Company, the Board, or any subsidiary to terminate such engagement or
service at any time.

 

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(g)               Compliance With Laws and Regulations: This Option and the
obligation of the Company to sell and deliver shares hereunder, shall be subject
to all applicable federal and state laws, rules, and regulations and to such
approvals by any governmental or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for Shares
prior to (i) the listing of such shares on any stock exchange on which the
Shares may then be listed and (ii) the completion of any registration or
qualification of such shares under any federal or state law, or any rule or
regulation of any government body which the Board or the Committee shall, in its
sole discretion, determine to be necessary or advisable. Moreover, this Option
may not be exercised if its exercise, or the receipt of Shares pursuant thereto,
would be contrary to applicable law.

 

Optionee hereby acknowledges that the Shares which Optionee may acquire by
exercising this Option shall not be sold, transferred, assigned, pledged, or
hypothecated in the absence of an effective registration statement for the
Shares under the Securities Act of 1933, as amended (the “Securities Act”) and
applicable state securities laws or an applicable exemption from the
registration requirements of the Securities Act and any applicable state
securities laws. Optionee also agrees that the Shares which Optionee may acquire
by exercising this Option shall not be sold or otherwise disposed of in any
manner which would constitute a violation of any applicable securities laws,
whether federal or state.

 

3.                  Withholding and Taxes: If required under applicable law, in
connection with the exercise of this Option, the Optionee will pay to the
Company any United States federal, state, or local or foreign taxes of any kind
required by law to be withheld with respect to such amount (the “Withholding
Amount”). Payment of the Withholding Amount shall be made by the Optionee at
Optionee’s election either (x) in cash, or (y) by transferring to the Company
such number of Shares (including by withholding Option Shares) with a value
equal to the Withholding Amount (or via a broker-assisted “cashless exercise”
procedure made available by the Company). The obligations of the Company under
this 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 Optionee. The
Option is intended to comply with Proposed Treasury Regulation
1.409A-1(b)(5)(iii)(E) and will be interpreted accordingly.

 

4.                  Adjustment Provisions: In the event of (i) changes in the
Shares by reason of stock dividends, spin-offs, split-ups, or combination of
shares, reclassifications, recapitalizations, mergers, consolidation,
reorganizations, or liquidations or (ii) any spin-off, extraordinary dividend,
or distribution of assets, then in either case, appropriate adjustments shall be
made by the Committee in (a) the number and class of shares thereafter subject
to this Option and (b) the purchase price for the Option Shares as set forth
above, in each case to prevent dilution or enlargement of the Optionee’s rights
hereunder. Whether any adjustment or modification is required, and the amount
thereof, shall be determined by the Committee, which determination shall be
final and binding on all interested parties.

 

5.                  Corporate Action by the Company: Existence of this Option
shall not impair the right of the Company or its shareholders to make
adjustments, recapitalizations, reorganizations, or other changes in its capital
structure or business, to consummate any merger or consolidation of the Company,
to issue bonds, debentures, preferred, or prior preference stocks ahead of or
affecting the Shares or the rights thereof, to dissolve or liquidate the
Company, to sell or transfer all or any part of its assets or business, or to do
or take any other corporate act or proceeding it or they might have done or
taken if this Option was not in existence.

 

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6.                  Interpretation: As a condition of granting of this Option,
Optionee, and each person who succeeds to Optionee’s rights hereunder, agrees
that any dispute or disagreement which shall arise out of or by reason of this
Option shall be determined by the Committee in its sole discretion and such
determination shall be final and binding on all interested parties. If no
Committee is acting, its functions shall be performed by the Board, and each
reference herein to the Committee shall, in that event, be deemed to refer to
the Board. By accepting this grant or other benefit under the Plan, Optionee and
each person claiming under or through Optionee shall be conclusively deemed to
have indicated acceptance and ratification of, and consent to, the terms of the
Plan.

 

7.                  Optionee Bound by Plan. The Plan is incorporated herein by
reference and made a part hereof. The Plan shall govern in all aspects of this
Agreement except as otherwise specifically stated herein. Optionee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof. Unless otherwise defined, capitalized terms used
in this Agreement without definition shall have the respective meanings given to
them in the Plan. The Plan should be carefully examined before any decision is
made to exercise this Option.

 

8.                  Notices: Any notice hereunder to the Company shall be
addressed to it at its principal office, and any notice hereunder to Optionee
shall be addressed to Optionee at the residence address of Optionee as noted in
the Company’s files, subject to the right of either party to designate at any
time hereafter in writing some other address.

 

9.                  Binding Effect: This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under the Optionee.

 

10.              Entire Agreement. This Agreement and the Plan contains the
entire understanding of the Company and Optionee with respect to the subject
matter hereof. For the avoidance of doubt, the grant of this Option is in
complete satisfaction of the equity grant described in Optionee’s letter
agreement with the Company, dated as of July 24, 2020.

 

11.              Governing Law: This Agreement and the rights and obligations of
the parties hereto shall be governed by the laws of the State of Maryland.

 

OPTIONEE ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
PLAN, WHICH IS INCORPORATED HEREIN BY REFERENCE, EXPRESS OR IMPLIED, SHALL
CONFER UPON OPTIONEE OR PRINCIPAL ANY RIGHT WITH RESPECT TO CONTINUATION OF
ENGAGEMENT WITH THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S
RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S OR PRINCIPAL’S ENGAGEMENT
AT ANY TIME, WITH OR WITHOUT CAUSE.

 

[signature page follows]

 

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IN WITNESS WHEREOF, Mack-Cali Realty Corporation has caused this Agreement to be
executed by its duly authorized officer, and Optionee has executed this
Agreement, both as of the date and year first above written.

 

OPTIONEE: MACK-CALI REALTY CORPORATION MAG PARTNERS 2.0 LLC           By: /s/
MaryAnne Gilmartin By: /s/ Gary T. Wagner Name: MaryAnne Gilmartin Name: Gary T.
Wagner Title:   Title: General Counsel and Secretary

 

[Signature Page to Option Agreement]