Document:

Exhibit 10.6

 

 MACK-CALI REALTY CORPORATION

 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”).  This award agreement (this “Agreement”) evidences an award to the Recipient under the Performance Plan (the “Award”), which is subject to the terms and conditions set forth herein, 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”).

 

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

 

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:

 

“Absolute TSR Performance” means, for any Performance Period, a percentage calculated by dividing the Company TSR for such Performance Period by the Company Stock Price on the Trading Day immediately preceding January 1 of such Performance Period.

 

“Absolute TSR Threshold” means a percentage of the Equity Value of the Performance Shares that may be earned at various Absolute TSR Performance levels for a Performance Period as of a given Vesting Date as shall be

 

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established by the Committee each year, with the amounts to be earned at Absolute TSR Performance levels between amounts fixed by the Committee to 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 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.

 

“Excess TSR” means the amount by which the Company’s Absolute TSR Performance or Relative TSR Performance exceeds either the maximum Absolute TSR Threshold or Relative TSR Threshold, respectively, in any Performance Period.  If the Company’s Absolute TSR Performance and Relative TSR Performance both exceed their applicable maximum TSR Performance Targets for the same Performance Period, either or both of such Excess TSR amounts for such Performance Period may be applied to any prior or subsequent Performance Period in accordance with Section 3(b).

 

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

 

“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 each year by the Committee for purposes of determining the Relative TSR Performance.

 

“Performance Commencement Date” means January 1, 2013.

 

“Performance Period” means the period of January 1 through December 31 in each or any of 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 various Relative TSR Performance levels for a Performance Period as of a given Vesting Date, as shall be fixed by the Committee each year, with the amounts to be earned at Relative TSR Performance levels between amounts fixed by the Committee to 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 such Performance Period through and as of December 31 of such Performance Period, plus the aggregate amount of any dividends paid by such company during such Performance Period, all divided by the stock price of a company’s common equity on the Trading Day immediately preceding January 1 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 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 Six Hundred Sixty (660) 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 132 Performance Shares may vest in and become earned and payable to the Recipient on the Vesting Date of each year during the Performance Period, 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, in each case subject to upward adjustment in an amount equal to the unapplied Excess TSR, if any, for any other prior or subsequent Performance Period.  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 attained   for the Performance Period, in each case after adding any 
    

 

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applicable   Excess TSR to the Absolute TSR Performance or Relative TSR Performance, as   applicable.
    
	
 
    	
 
    
	
 
    	
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 2013 Performance Period are set forth on Schedule A attached hereto.  On or before the end of the first fiscal quarter of each year during the 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 year); 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 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 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 Agreement will either not be subject to Section 409A, or will comply with the requirements of said section.

 

9.             Miscellaneous.

 

(a)           Amendments.  This 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 Agreement is inconsistent with the Equity Plan, this 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 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 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 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 Agreement to continue to have the Recipient as an executive officer or to employ the Recipient and this 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 Agreement is located at:

 

Mack-Cali Realty Corporation

343 Thornall Street

Edison, New Jersey 08837-2206

Attn:       President and Chief Executive Officer

 

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

 

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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 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 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 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 Agreement, except as set forth in Section 4 of this Agreement, the terms and conditions of the Employment Agreement shall control.

 

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

 

[Signature Page Follows]

 

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In Witness Whereof, the parties hereto have executed this 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 2013 Performance Period

 

The 2013 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
    	
 
    
	
6.0
    	
%
    	
33.33
    	
%
    
	
7.5
    	
%
    	
66.67
    	
%
    
	
9.0
    	
%
    	
100.00
    	
%
    

 

Relative TSR Performance:

 

	
Relative TSR Performance
    	
 
    	
Relative TSR Performance Threshold
    	
 
    
	
40th Percentile
    	
 
    	
33.33
    	
%
    
	
50th Percentile
    	
 
    	
66.67
    	
%
    
	
60th Percentile
    	
 
    	
100.00
    	
%
    

 

2013 Peer Group REITs for purposes of determining the Relative TSR Performance:

 

To be determined by the Committee and communicated to the Recipient no later than December 31, 2012.

 

8Exhibit 10.7

 

DEFERRED RETIREMENT COMPENSATION AGREEMENT

 

This Deferred Retirement Compensation Agreement (the “Agreement”) is entered into as of the 12th day of September, 2012, by and between Mack-Cali Realty Corporation (the “Company”) and Mitchell E. Hersh (the “Executive”).

 

WHEREAS, the Executive has served the Company for many years as its President and Chief Executive Officer without any Company-provided retirement benefit; and

 

WHEREAS, the Company desires to reward the Executive for his past service to the Company and encourage and incentivize the Executive to contribute to the long-term success of the Company; and

 

WHEREAS, the Company has adopted the Mack-Cali Realty Corporation 2004 Incentive Stock Plan which authorizes the Company to issue phantom stock units, consisting of contractual rights to receive the value of shares of Stock in the future;

 

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive hereby agree as follows:

 

1.             Definitions.

 

“Change in Control” shall have the meaning set forth in the Employment Agreement.

 

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

 

“Committee” means the Executive Compensation and Option Committee of the Board of Directors of the Company.

 

“Contribution Date” means January 1 of each year from January 1, 2013, through and including January 1, 2017.

 

“Deferred Compensation Amount” means an amount equal to (x) the Stock Price on the Trigger Date, multiplied by (y) the number of Stock Units credited to the Account as of the Trigger Date that have vested in accordance with Section 3.

 

“Employment Agreement” means the Amended and Restated Employment Agreement, dated as of July 1, 1999, by and between the Company and the Executive, 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.

 

“Equity Plan” means the Mack-Cali Realty Corporation 2004 Incentive Stock Plan, or any plan subsequently adopted by the Company authorizing the issuance of Stock Units, or similar rights as contemplated herein.

 

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 “Fair Market Value” per share of Stock as of a particular date means (i) if shares of Stock are then listed on the New York Stock Exchange, the closing market price of the Stock as reported on the Consolidated Tape of the New York Stock Exchange for such date, (ii) if shares of Stock are then listed on any other national securities exchange, the closing sales price per share of Stock on the exchange for the last preceding date on which there was a sale of shares of Stock on such exchange, as determined by the Committee, (iii) if shares of Stock are not then listed on a national securities exchange but are then traded on an over-the-counter market, the average of the closing bid and asked prices for the shares of 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 shares of Stock are 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 Stock are so listed or traded, the Committee may make such discretionary determinations where the shares of Stock have not been traded for ten (10) trading days.

 

“Initial Contribution Date” means January 1, 2013.

 

“Stock Units” means the right to receive the value of one share of Stock in accordance with the terms of this Agreement.  The Stock Units shall be issued pursuant to the Equity Plan, and constitute “phantom stock units” as defined in the Equity Plan.  The terms of the Equity Plan are incorporated herein, provided that in the event of any conflict between the terms of the Equity Plan and this Agreement, the terms of this Agreement shall control to the maximum extent permitted by applicable law.

 

 “Stock” means the common stock of the Company, par value $.01 per share, or any other common stock of the Company, or any successor to the Company, into which such common stock shall be converted by merger, recapitalization, or similar transaction.

 

“Stock Price” means, as of a particular date, the Fair Market Value of one share of Stock on such date (or, if such date is not a trading day, the most recent trading day immediately preceding such date);  provided, however, that if such date is the date upon which a Change in Control that consists of a purchase of all or substantially all of the stock or assets of the Company or merger of the Company with an unaffiliated party, the Stock Price as of such date shall be equal to the fair market value in cash, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Change in Control for one share of Stock.  Notwithstanding the foregoing, the Stock Price on the Initial Contribution Date shall be equal to $30.00 per share.

 

 “Trigger Date” means the earliest of (a) the termination of the Executive’s employment with the Company for any reason, (b) the Executive’s death, and (c) the effective date of a Change in Control.

 

2.             Deferred Compensation Account. The Company shall establish and maintain an individual bookkeeping account (the “Account”) to record all amounts credited to the Executive pursuant to this Agreement.  On the Initial Contribution Date and on each subsequent Contribution Date that occurs on or before the Trigger Date, the Company shall credit to the Account a number of Stock Units, calculated to the nearest one-thousandth of a Stock Unit, 

 

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determined by dividing the amount of $500,000 (the “Annual Contribution Amount”) by the Stock Price on the Contribution Date.  After the occurrence of the Trigger Date, no additional amounts shall be credited to the Account, except as otherwise provided in Sections 3 and 5.

 

3.             Vesting of Stock Units. The Executive shall become fully vested with respect to Stock Units credited to the Account on December 31 of the year in which such Stock Units are credited, subject in each case to the Executive’s continued employment through each applicable vesting date.  In the event that, during a year that includes a Contribution Date, the Executive’s employment is terminated by reason of death or Disability, without Cause or for Good Reason, as all such terms are defined in the Employment Agreement, or that a Change in Control occurs and the Executive is employed through the date of the Change in Control (in either case, an “Accelerated Vesting Event”), the Stock Units contributed during such year shall fully vest.  In addition, if an Accelerated Vesting Event occurs prior to the last Contribution Date, the Executive shall be paid an amount (the “Cash Amount”) equal to the Annual Contribution Amount multiplied by the number of remaining Contribution Dates.  The Cash Amount shall be paid to the Executive, in cash, on the Payment Date resulting from the Accelerated Vesting Event; provided that if the Payment Date is deferred pursuant to Section 4(i) or (ii), then, in lieu of payment of the Cash Amount, a number of additional Stock Units equal to the Cash Amount divided by the Stock Price on the date of the Accelerated Vesting Event shall be credited to the Account, which additional Stock Units shall be fully vested and paid in accordance with Section 4.  Upon the termination of the Executive’s employment with the Company for any reason other than an Accelerated Vesting Event, all Stock Units that have not vested shall thereupon, and with no further action, be forfeited by the Executive.

 

4.             Payment of Deferred Compensation Amount. The Company shall pay the Executive (or if applicable, the Executive’s beneficiary) the Deferred Compensation Amount in a lump-sum in cash on a date (the “Payment Date”) that is no later than 30 days following the Trigger Date; provided, however, that (i) if the Trigger Date is the Executive’s termination of employment and such termination of employment is not a “separation from service” within the meaning of Section 409A of the Code, determined in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h), or if the Trigger Date is the effective date of a Change in Control and the Change in Control is not a “change in control event” with respect to the Executive within the meaning of Section 409A of the Code, then in either such case the Account shall vest to the extent provided herein, but the Payment Date shall be deferred until not more than 30 days following the first to occur of (A) the Executive’s separation from service or a change in control event, as so defined, or (B) the Executive’s death, which shall constitute the new Trigger Date for purposes of Section 5 and (ii) if on a Trigger Date that results from the Executive’s separation from service (including a Trigger Date deferred pursuant to (i) above), the Executive is a “specified employee” within the meaning of Section 409A of the Code, the Payment Date shall be deferred until not more than 30 days after the earlier of the first day of the seventh month following the month that includes the separation from service, or the Executive’s death, which shall constitute the new Trigger Date for purposes of Section 5.

 

5.             Dividend Equivalent Rights. If the Company pays a cash dividend on the Stock and the record date for such cash dividend occurs on or after the Initial Contribution Date and on or prior to the Trigger Date, then the Executive’s Account shall be credited with a number of additional Stock Units, calculated to the nearest thousandth of a Stock Unit, determined by (i) 

 

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multiplying (A) the number of Stock Units in the Account immediately prior to the record date by (B) the cash dividend per share declared by the Company, and (ii) dividing the product by the Stock Price on the date of payment of the dividend.  Any stock dividends declared by the Company on the Stock shall result in a proportionate increase in Units in the Executive’s Account as if the Executive held shares of Stock equal to the number of Stock Units in the Account.  To the extent that a portion of the Stock Units in the Executive’s Account are vested on the record date, the same percentage of additional Stock Units credited pursuant to this Section 5 shall be vested when credited, and the remaining additional Stock Units shall vest when the remaining Stock Units in the Account vest pursuant to Section 3.

 

6.             Termination. This Agreement shall automatically terminate and be of no further force and effect immediately following the payment of the Deferred Compensation Amount.

 

7.             Transferability. This Agreement is personal to the Executive, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.

 

8.             Tax Withholding. All payments to the Executive hereunder shall be net of any minimum required Federal, state, and local tax withholding.  To the extent the balance in the Account is subject to tax prior to the Payment Date under the Federal Insurance Contributions Act or any tax withholding law, to the extent such minimum tax is not paid from other sources, the Company may reduce the balance in the Account by the number of Stock Units determined by dividing the amount of such minimum unpaid tax by the Stock Price on the date of payment.

 

9.             Section 409A. The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party. The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

10.           Source of Payments/Unfunded Status. The Agreement is intended to constitute an unfunded plan. Any amount due and payable to the Executive in respect of the Stock Units pursuant to the terms of this Agreement shall be paid solely from the general assets of the Company. The Executive (and his beneficiary, if applicable) shall not have any interest in any specific asset as a result of this Agreement or any right to payment under the Agreement. The Company shall not have any obligation to set aside any funds or shares of Stock for the purpose of making any benefit payments under this Agreement. Nothing contained herein shall give the Executive (or his beneficiary, if applicable) any rights that are greater than those of a general unsecured creditor of the Company. No action taken pursuant to the terms of this Agreement shall be construed to create a funded arrangement, a plan asset, or a fiduciary relationship between the Company and the Executive (or his beneficiary, if applicable).

 

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11.           Status under ERISA.  This agreement, and the comparable agreements being entered into by the Company with other senior executives, constitutes an employee pension benefit plan as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”), and is intended by the parties to be an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management and highly compensated employees as defined in Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA and Department of Labor Regulations Section 2520.104-23.  To the extent required by ERISA, the Committee shall be the “administrator” of such plan as defined in Section 3(16)(A) of ERISA, and shall have all authority and responsibility of an administrator as so defined in the administration of the plan, including all the powers and authority it has in the administration of the Equity Plan as set forth in the Equity Plan.  In the event that any dispute arises between the Executive and the Company with respect to the Executive’s right to a benefit pursuant to this agreement, the Executive may submit a claim for such benefit, and the Committee shall process such claim, and any appeal by the Executive of a denial of such claim, in accordance with the requirements of Section 503 of ERISA and Department of Labor Regulations Section 2560.503-1.

 

12.           No Obligation to Continue Employment. The Company is not obligated by or as a result of this Agreement to continue the employment of Executive and this Agreement shall not interfere in any way with the right of the Company to terminate the employment of the Executive at any time.

 

13.           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 Agreement is located at:

 

Mack-Cali Realty Corporation

343 Thornall Street

Edison, New Jersey 08837-2206

Attn:       General Counsel

 

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

 

14.           Changes in Stock. If (i) the Company or its subsidiaries shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or its subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization or other similar change in the capital structure of the Company or its subsidiaries, or any distribution to holders of Stock other than cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Committee necessitates action by way of adjusting the terms of this Agreement, then the Committee shall take any such action as shall be necessary to maintain the Executive’s rights hereunder so that they are substantially proportionate to the rights existing prior to such event, including, without limitation, adjustments in (A) the number of Stock Units credited to the Account and (B) the Deferred Compensation Amount.

 

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15.           Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

16.           Entire Agreement; Effect of Employment Agreement.  This 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 Agreement shall be deemed a waiver of any later default hereunder.  In the event the Employment Agreement contains additional rights, duties and/or obligations with respect to the Executive, such terms and conditions shall govern the Executive’s Account  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 Agreement, the terms and conditions of the Employment Agreement shall control.

 

17.           Construction.  The various provisions of this Agreement are severable in their entirety. Any determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

 

18.           Governing Law.  This Agreement shall be governed by the laws of the State of New Jersey applicable to contracts made, and to be enforced, within the State of New Jersey, to the extent such laws are not pre-empted by ERISA.

 

19.           Successors.  This Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties.

 

[Signature Page Follows]

 

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In Witness Whereof, the parties hereto have executed this 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
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Mitchell E. Hersh
    
	
 
    	
 
    	
Mitchell   E. Hersh
    

 

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