Exhibit 10.5


 


Mack-Cali Realty Corporation

343 Thornall Street

Edison, NJ 08837-2206


 


December 9, 2008


 


Mr. Barry Lefkowitz

c/o Mack-Cali Realty Corporation

343 Thornall Street

Edison, NJ 08837-2206


 


Re:                               Section 409A
Amendments


 


Dear Barry:


 


As you know, Section 409A of the Internal Revenue Code of 1986, as
amended, and Final Regulations under that Section (together referenced
herein as “Section 409A”) require that all agreements providing for
severance payments and other forms of deferred compensation be amended by the
end of this year to the extent the agreements are not in compliance with Section 409A.


 


A.                                   In order to
ensure such compliance, you agree that your Second Amended and Restated
Employment Agreement dated as of July 1, 1999 (the “Employment Agreement”)
is hereby amended, effective as of such dates as are set forth in Section C
hereof, as follows:


 


1.                                       Subparagraph
4(c) shall be amended in the penultimate sentence (relating to the timing
of gross up payments for Restricted Share Awards) to read as follows:


 


“In the event vesting occurs with respect to
any Restricted Shares as a result of the achievement of the required
performance goals, such payment shall be made as soon as practicable after a
determination that the performance goals have been achieved but in no event
later than 30 days after such determination.”  [New language underlined; deleted language
not shown.]


 


2.                                       Paragraph 7
shall be amended so that the last sentence of the first subparagraph (relating
to the Medical Continuation) shall read as follows:


 


“Executive (and Executive’s dependents) shall
also receive continuation of health coverage through the end of the Unexpired
Employment Period on the same basis as health coverage is provided by the
Company for active employees and as may be amended from time to time (“Medical


 

















 


Mr. Barry Lefkowitz


December 9, 2008


Page 2


 


Continuation”), and any reimbursements
under such plan will be made no later than the last day of the year after the
year in which the expense was incurred.” 
[New language underlined.]


 


3.                                       Paragraph 8
shall be amended so that the first sentence of the first subparagraph (relating
to payments of certain amounts upon termination) shall read as follows:


 


“In the event the Company terminates
Executive’s employment for any reason other than Cause or Executive terminates
his employment for Good Reason, the Company shall pay to Executive and
Executive shall be entitled to receive the aggregate of (i) the Fixed
Amount and (ii) Vested Incentive Compensation, Total Vested Options and
the Vested Option Exercise Election, the Vested Tax Gross-Up Payment, Expense
Reimbursement and Medical Continuation at such time as provided in
subparagraph 4(c) and Paragraph 7 above.”  [New language underlined.]


 


4.                                       A new Section 27
shall be added to the end of the Employment Agreement, to read as follows:


 


“27.                           Section 409A
Requirements.  Notwithstanding
anything to the contrary in this Agreement, the following provisions shall
apply to any payments and benefits otherwise payable to or provided to
Executive under this Agreement:


 


(a)           For purposes
of Section 409A, (i) each “payment” (as defined by Section 409A)
made under this Agreement shall be considered a “separate payment,” and (ii) payments
shall be deemed exempt from the definition of deferred compensation under Section 409A
to the fullest extent possible under the “short-term deferral” exemption of
Treasury Regulation § 1.409A-1(b)(4), which exemption is hereby
incorporated by reference.


 


(b)           If Executive
is a “specified employee” as determined by the Compensation Committee of the
Board consistent with Section 409A as of his separation from service, to
the extent any payment under this Agreement constitutes deferred compensation
subject to Section 409A, and to the extent required by Section 409A,
no payments due under this Agreement may be made until the earlier of:  (i) the first day of the seventh month
following Executive’s separation from service, or (ii) Executive’s date of
death; provided, however, that any payments delayed during this
six-month period shall be paid in a lump sum on the first day of the seventh
month following Executive’s separation from service.  Such lump sum payments shall include interest
from the scheduled payment date to the date of actual payment at an annual rate
equal to the prime rate as set forth in the Eastern edition of The Wall Street
Journal on the business day immediately preceding Executive’s date of
separation from service.  Any payment due
under this Agreement upon termination of employment that is subject to Section 409A
shall only be


 

















 


Mr. Barry Lefkowitz


December 9, 2008


Page 3


 


made upon a “separation from service” as that
term is defined under Section 409A.


 


(c)           In the event
there is a 6-month delay in payments under subparagraph 27(b) above, the
Company shall establish and fund an irrevocable “rabbi” trust, in form and
substance reasonable satisfactory to Executive, effective as of the beginning
of the 6-month period and ending upon the close of such period, to secure the
payment of all such delayed amounts to Executive.


 


B.                                     In addition,
in order to ensure compliance with Section 409A, your Tax Gross-Up
Agreement effective as of September 12, 2007 will be amended to revise
Sections 1 and 2 thereof, and to add new sections 9 and 10 at the end thereof,
as follows:


 


“1.           Employee shall be
entitled to receive a tax gross-up payment (the “Tax Gross-Up Payment”) from
the Company with respect to each tax year in which the Restricted Shares
granted pursuant to the Restricted Share Award Agreement cease to be subject
to a substantial risk of forfeiture within the meaning of Section 83 of
the Internal Revenue Code of 1986, as amended (the “date of vesting”).  Each Tax Gross-Up Payment shall be a dollar
amount equal to forty-three percent (43%) of the fair market value of the
Restricted Shares on the date of vesting, exclusive of dividends.”  [New language underlined; deleted language
not shown.]


 


“2.           The Tax Gross-Up
Payment shall be made as soon as practicable following the date of vesting, but
in no event later than March 15 of the calendar year following the
calendar year in which the date of vesting occurs.”  [New language underlined.]


 


“9.           Notwithstanding
anything in this agreement to the contrary, all payments herein shall be deemed
exempt from the definition of deferred compensation under Section 409A and
the regulations thereunder to the fullest extent possible under the “short-term
deferral” exemption of Treasury Regulation § 1.409A-1(b)(4), which
exemption is hereby incorporated by reference.”


 


“10.         If
Employee is a “specified employee” as defined in section 409A as of his
separation from service, to the extent any payment under this Agreement
constitutes deferred compensation under Section 409A, and to the extent
required by Section 409A, no payments due under this Agreement as a result
of separation from service may be made until the earlier of:  (i) the first day of the seventh month
following Employee’s separation from service, or (ii) Employee’s date of
death; provided, however, that any payments delayed during this
six-month period shall be paid in a lump sum on the first day of the seventh
month following Employee’s separation from service.  Such lump sum payments shall include interest
from the scheduled payment date to the date of actual payment at an annual rate
equal to the prime rate as set forth in the Eastern edition of The Wall Street
Journal on the business day immediately preceding Employee’s date of separation
from service.  In the event


 

















 


Mr. Barry Lefkowitz


December 9, 2008


Page 4


 


there is a 6-month delay in payments under this paragraph, the Company
shall establish and fund an irrevocable “rabbi” trust, in form and substance
reasonably satisfactory to Executive, effective as of the beginning of the
6-month period and ending upon the close of such period, to secure the payment
of all such delayed amounts to Executive.”


 


C.                                     The
effective date for the above amendments shall be December 31, 2008,
provided, that provisions required to be effective as of an earlier date in
order to comply with Section 409A shall be effective as of such earlier
date.


 


If the above changes are acceptable to you, please sign in the space
provided below.


 


	
   

  	
  Sincerely
  yours,

  
	
   

  	
   

  
	
   

  	
  Mack-Cali
  Realty Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mitchell
  E. Hersh

  
	
   

  	
   

  	
  Mitchell E. Hersh

  
	
   

  	
   

  	
  President and

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  Accepted and Agreed as of the date

  	
   

  
	
  of this Letter of Amendment:

  	
   

  
	
   

  	
   

  
	
  /s/ Barry Lefkowitz

  	
   

  	
   

  
	
  Barry Lefkowitz