Document:

Exhibit 10.3

 

DEFERRED
COMPENSATION PLAN FOR DIRECTORS

(Amended and Restated Effective As Of January 1, 2009)

 

A.            INTRODUCTION

 

The Deferred Compensation
Plan for Directors (the “Plan”) will permit non-employee members (“Directors”)
of the Board of Directors (the “Board”) of Mack-Cali Realty Corporation
(“Mack-Cali”), on an individual election basis, to defer all of part of the
annual retainer compensation they are entitled to as an outside Director of
Mack-Cali until such time as the Director incurs a Separation from Service from
the Board, or a Change in Control occurs, as described below.

 

B.            PURPOSE

 

To provide Directors with
maximum opportunity and flexibility in the planning of their personal financial
resources and to further align Directors’ interests with those of shareholders.

 

C.            MANNER OF DEFERRAL OF
COMPENSATION

 

Within 30 days of the
time of election to the Board, and prior to the right to receive any Board
compensation for the initial elected term, a Director may elect to defer all or
a specified portion of the annual retainer to be paid each year for services
performed in the future.

 

An election to defer will
be irrevocable for the duration of each calendar year that the Director serves
on the Board of Directors.  The Director
may modify the existing deferral election or initially make a deferral election
(in case of a Director who upon his election chose not to defer) for any future
year by written notice to Mack-Cali prior to January 1st of
that future year.  In the absence of a
modification, the same percentage of compensation shall be deferred for the
next year.

 

 

The compensation deferred
will be credited to the Director’s deferred compensation account 25% each
quarter on the related dividend record date for that quarter (the “Deferral Date”).  Such deferred compensation will be prorated
for any Director not serving an entire year.

 

Deferral of compensation
shall have no effect on any other compensation-related benefits received by a
Director or on any fees for attending meeting.

 

D.            INVESTMENT IN UNITS
BASED ON MACK-CALI STOCK VALUE

 

All compensation deferred
pursuant to the Plan shall be accounted for in the manner set forth below until
fully paid to the Director.

 

The Director’s account
will be credited with the hypothetical number of stock units (“Units”),
calculated to the nearest thousandths of a Unit, determined by dividing the
amount of compensation deferred on the Deferral Date by the closing market
price of Mack-Cali Common Stock (par value $.01) as reported on the
Consolidated Tape of the New York Stock Exchange listed shares for the Deferral
Date.  The Director’s account will also
be credited with the number of Units determined by multiplying the number of
Units in the Director’s account by any cash dividends declared by the Company
on its Common Stock and dividing the product by the closing market price of the
Company’s common stock as reported on the Consolidated Tape of the New York
Stock Exchange listed shares on the related dividend record date.  Any stock dividends declared by Mack-Cali on
its Common Stock shall result in a proportionate increase in Units in the
Director’s account as if said Director held shares of Common Stock equal to the
number of Units in the Director’s account.

 

E.             RECAPITALIZATION

 

If, as a result of recapitalization
of Mack-Cali (including stock splits), the Company’s outstanding shares of
Common Stock shall be changed into a greater or smaller number of 

 

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shares, the number of
Units credited to a Director’s account shall be appropriately adjusted on the
same basis.

 

F.             PAYMENT OF DEFERRED
COMPENSATION

 

Payment of a Director’s
deferred compensation account may only be made after either (i) the
Director has incurred a Separation from Service or (ii) there has been a
Change in Control of Mack-Cali.  A
Director has incurred a Separation from Service when he dies, retires, or
otherwise terminates service on the Board, provided, however,
that in the case of any Director who becomes a member of the Advisory Council
following such separation from the Board, a Separation from Service will be
deemed to occur consistent with Treas. Reg. § 409A-1(h)(2).  A Change in Control will be deemed to have
occurred on the date that:

 

(a)           any one person, or more than one person
acting as a group, directly or indirectly, acquires ownership of stock of
Mack-Cali that, together with stock held by such person or group, constitutes
more than 50% of the total fair market value or total voting power of the stock
of Mack-Cali;

 

(b)           any one person, or more than one person
acting as a group, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person or group), directly
or indirectly, ownership of Mack-Cali stock possessing 30% or more of the total
voting power of Mack-Cali stock;

 

(c)           the following individuals cease for any
reason to constitute a majority of the number of directors then serving during
any 12-month period: individuals who, at the beginning of the 12-month period,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the
Board or nomination for 

 

3

 

election by
the Company’s stockholders was approved or recommended by a vote of at least a
majority of the directors before the date of such appointment or election or
whose appointment, election or nomination for election was previously so
approved or recommended; or

 

(d)           any one person or more than one person
acting as a group, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person or persons) assets
from Mack-Cali that have a total gross fair market value equal to or more than
40% of the total gross fair market value of all of the assets of Mack-Cali
immediately before such acquisition or acquisitions, other than a sale or
disposition by Mack-Cali of such assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by Mack-Cali
or by the stockholders of Mack-Cali in substantially the same proportions as
the ownership of Mack-Cali immediately prior to such sale.

 

(e)           The provisions of this paragraph F shall be
interpreted to be consistent with the definition of change in ownership or
effective control and of change in the ownership of a substantial portion of
assets, contained in Treas. Reg. §1.409A-3(i)(5).

 

Payment will
be made in a single lump sum payment in shares of Common Stock in an amount
equal to the number of Units in the Director’s account on Separation from
Service or a Change in Control but in no event later than the end of the
taxable year of the Director or, if later, the 15th day of the third
month following Separation from Service or the Change in Control.  With regard to any Director who is a
“specified employee,” as defined in Treas. Reg. § 1.409A-1(i), payment
will not be made before the first day of the seventh month following the date
the Director incurs the Separation from Service.

 

4

 

G.            SURVIVOR PAYOUT

 

In the event of a
Director’s death prior to receiving payment, the value of the Director’s
account on the date of the Director’s death shall be determined and paid to the
beneficiary(s) designated by the Director (or, failing such designation,
to the Director’s estate) in a single lump sum of shares of Common Stock, as
soon as practicable after the Director’s death, but in no event later than the
end of the taxable year of the Director, or if later, the 15th day
of the third month following death.

 

H.            ASSIGNABILITY

 

No right to receive
payment of deferred compensation shall be transferable or assignable by a
participant except by will, by laws of descent and distribution, or to a
designated beneficiary, as described in Section G.

 

I.              AMENDMENT OF THE
PLAN

 

This Plan may be amended,
suspended or terminated at any time by the Board of Directors of
Mack-Cali.  However, no amendment,
suspension or termination of the Plan may, without the consent of a
participant, alter or impair any of the rights previously granted under the
Plan.

 

5Exhibit 10.4

 

Mack-Cali Realty Corporation

343 Thornall Street

Edison, NJ 08837-2206

 

December 9, 2008

 

Mr. Mitchell E. Hersh

c/o Mack-Cali Realty Corporation

343 Thornall Street

Edison, NJ 08837-2206

 

Re:                               Section 409A
Amendments

 

Dear Mitchell:

 

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 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. Mitchell E. Hersh

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. Mitchell E. Hersh

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. Mitchell E. Hersh

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/ Barry
  Lefkowitz

  
	
   

  	
   

  	
  Barry Lefkowitz

  
	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
  Accepted and Agreed as of the date

  	
   

  
	
  of this Letter of Amendment:

  	
   

  
	
   

  	
   

  
	
  /s/ Mitchell E. Hersh

  	
   

  	
   

  
	
  Mitchell E. Hersh

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