<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 1
/X/ ANNUAL REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1999
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. ____________
MACK-CALI REALTY, L.P.
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(Exact name of Registrant as specified in its charter)
Delaware 22-3315804
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
11 Commerce Drive, Cranford New Jersey 07016-3599
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(Address of principal executive offices) (Zip code)
(908) 272-8000
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(Title of Each Class) (Name of Each Exchange on Which Registered)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
<PAGE>
MACK-CALI REALTY, L.P.
AMENDMENT NO. 1
TO THE ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
Mack-Cali Realty, L.P. (together with its subsidiaries, the "Registrant" or
the "Operating Partnership") hereby amends and restates in its entirety the
following items of its Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, as set forth in the pages attached hereto:
1. ITEM 10 IS HEREBY AMENDED AND RESTATED AS FOLLOWS:
DIRECTORS AND EXECUTIVE OFFICERS
The Operating Partnership does not have any directors or executive
officers. Set forth below is certain information as of April 15, 2000 for (i)
the members of the Board of Directors of the Corporation (the "Board of
Directors"), (ii) the executive officers of the Corporation and (iii) the
directors and executive officers of the Corporation as a group. The Corporation
is the sole general partner of the Operating Partnership.
<TABLE>
<CAPTION>
PERCENT OF
SHARES
PERCENT OF OUTSTANDING
SHARES (CALCULATED ON A
FIRST TERM NUMBER OF OUTSTANDING FULLY-DILUTED
NAME AND POSITION (1) AGE ELECTED EXPIRES SHARES (2) (%)(3) BASIS)(%)(4)
--------------------- --- ------- ------- ---------- ------ ------------
<S> <C> <C> <C> <C> <C> <C>
John J. Cali, Chairman of the
Board(5)(6)....................... 81 1994 2000 517,342(12) * *
Mitchell E. Hersh, Chief Executive
Officer and Director (5)(6)....... 49 1997 2000 334,784(13) * *
Timothy M. Jones, President......... 45 -- -- 347,582(14) * *
Brant Cali, Chief Operating
Officer, Executive Vice
President-Operations, Leasing and
Marketing, Assistant Secretary
and Director (7).................. 46 1999 2000 596,749(15) 1.01 *
John R. Cali, Executive Vice
President-Development............. 52 -- -- 528,162(16) * *
Barry Lefkowitz, Executive Vice
President and Chief Financial
Officer........................... 38 -- -- 87,552(17) * *
Roger W. Thomas, Executive Vice
President, General Counsel and
Secretary......................... 43 -- -- 87,217(18) * *
Martin S. Berger, Director (6)...... 69 1998 2000 531,532(19) * *
Brendan T. Byrne, Director (8)...... 76 1994 2001 17,600(20) * *
Nathan Gantcher, Director (8)(9).... 59 1999 2002 15,000
Martin D. Gruss, Director (10)...... 57 1997 2001 50,000(21) * *
Earle I. Mack, Director (6)......... 61 1997 2002 2,681,917(22) 4.37 3.43
William L. Mack, Director (5)....... 60 1997 2002 4,465,701(23) 7.07 5.71
Alan G. Philibosian, Director (10).. 46 1997 2002 15,500(24) * *
Irvin D. Reid, Director (8)......... 59 1994 2000 10,000(25) * *
Vincent Tese, Director (10)......... 57 1997 2001 32,000(26) * *
Roy J. Zuckerberg, Director
(6)(8)(11)........................ 63 1999 2001 25,000
All directors and executive
officers as a group............... 10,366,138(27) 15.04 13.23
========== ===== =====
</TABLE>
- ----------
* Beneficial Ownership of less than 1.0% is omitted.
(1) Certain executive officers and directors of the Corporation and various
other persons and entities beneficially own in the aggregate, approximately
10.8% of the partnership interests in the Operating Partnership in which
the Corporation has a
2
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80.16% general partnership interest and the aggregate limited partners'
interest is 19.84%. The limited partners of the Operating Partnership share
with the Corporation, as general partner, in the net income or loss and any
distributions of the Operating Partnership. Pursuant to the partnership
agreement of the Operating Partnership, limited partnership interests are
redeemable into shares of Common Stock on a one-for-one basis.
(2) Except as otherwise noted below, all shares of Common Stock are owned
beneficially by the individual listed with sole voting and/or investment
power.
(3) Assumes redemption of only the limited partnership interests in the
Operating Partnership and Unit Warrants beneficially owned by such owner
into shares of Common Stock (disregarding any waiting periods before such
redemption is legally permitted) and the exercise of vested options and
warrants held only by such owner.
(4) Assumes the redemption of all outstanding limited partnership interests in
the Operating Partnership into shares of Common Stock and the exercise of
all vested options, warrants and Unit Warrants.
(5) Member of the Executive Committee of the Board of Directors.
(6) Member of the Strategic Planning Committee of the Board of Directors.
(7) Appointed as a director of the Corporation upon the resignation of Thomas
A. Rizk as a member of the Board of Directors of the Corporation on April
18, 1999.
(8) Member of the Audit Committee of the Board of Directors.
(9) Elected as a director of the Corporation at the Corporation's Annual
Meeting of Shareholders held on May 19, 1999.
(10) Member of the Executive Compensation and Option Committee of the Board of
Directors.
(11) Appointed as a director of the Corporation upon the resignation of Jeffrey
B. Lane as a member of the Board of Directors of the Corporation on May 19,
1999.
(12) Includes 290,561 shares of Common Stock that may be issued upon the
redemption of all of John J. Cali's limited partnership interests in the
Operating Partnership and 189,889 shares of Common Stock that may be issued
upon the redemption of all of the limited partnership interests in the
Operating Partnership held by members of John J. Cali's immediate family
and trusts of which he is a trustee. Also includes vested options to
purchase 35,741 shares of Common Stock.
(13) Includes 121,424 shares of Common Stock that may be issued upon the
redemption of all of Mitchell E. Hersh's limited partnership interests in
the Operating Partnership. Also includes vested warrants to purchase
203,985 shares of Common Stock.
(14) Includes vested warrants to purchase 170,000 shares of Common Stock and
vested options to purchase 69,177 shares of Common Stock. Also includes
102,280 shares of Common Stock that may be issued upon the redemption of
all of Timothy Jones' limited partnership interests in the Operating
Partnership.
(15) Includes 149,501 shares of Common Stock that may be issued upon the
redemption of all of Brant Cali's limited partnership interests in the
Operating Partnership. Also includes vested options to purchase 388,177
shares of Common Stock.
(16) Includes 164,225 shares of Common Stock that may be issued upon the
redemption of all of John R. Cali's limited partnership interests in the
Operating Partnership. Also includes vested options to purchase 304,077
shares of Common Stock.
(17) Includes vested options to purchase 58,282 shares of Common Stock.
(18) Includes vested options to purchase 58,282 shares of Common Stock.
(19) Includes 521,532 limited partnership interests in the Operating Partnership
and vested options to purchase 10,000 shares of Common Stock.
(20) Includes vested options to purchase 17,000 shares of Common Stock.
3
<PAGE>
(21) Includes 10,000 shares of Common Stock held by trusts of which Mr. Gruss is
a trustee, of which Mr. Gruss disclaims beneficial ownership. Also includes
vested options to purchase 10,000 shares of Common Stock.
(22) Includes 2,492,328 shares of Common Stock that may be issued upon the
redemption of all of Earle I. Mack's limited partnership interests in the
Operating Partnership (410,195 of which result from the exercise of Unit
Warrants), and 179,589 shares of Common Stock that may be issued upon the
redemption of all of the limited partnership interests in the Operating
Partnership held by members of Earle I. Mack's immediate family and trusts
of which he is a trustee. Also includes vested options to purchase 10,000
shares of Common Stock.
(23) Includes 2,879,305 shares of Common Stock that may be issued upon the
redemption of all of William L. Mack's limited partnership interests in the
Operating Partnership (465,886 of which result from the exercise of Unit
Warrants), 179,560 shares of Common Stock that may be issued upon the
redemption of all of the limited partnership interests in the Operating
Partnership held by members of William L. Mack's immediate family and
trusts of which he is a trustee, and vested options to purchase 10,000
shares of Common Stock. Also includes 983,699 shares of Common Stock that
may be issued upon the redemption of all of the limited partnership
interests in the Operating Partnership (149,930 of which result from the
exercise of Unit Warrants) held by trusts of which Mr. Mack or his wife is
a trustee, of which Mr. Mack disclaims beneficial ownership. Also includes
413,137 shares of Common Stock that may be issued upon the redemption of
all of the limited partnership interests in the Operating Partnership
(63,334 of which results from the exercise of Unit Warrants) held by a
partnership to which Mr. Mack possesses sole or shared dispositive or
voting power.
(24) Includes 250 shares of Common Stock owned by Mr. Philibosian's family of
which Mr. Philibosian disclaims beneficial ownership. Also includes vested
options to purchase 15,000 shares of Common Stock.
(25) Includes vested options to purchase 10,000 shares of Common Stock.
(26) Includes vested options to purchase 10,000 shares of Common Stock.
(27) Includes 5,845,075 shares of Common Stock that may be issued upon the
redemption of all of the executive officers' and directors' limited
partnership interests in the Operating Partnership. Includes 1,732,610
shares of the Common Stock that may be issued upon the redemption of all of
the limited partnership interests in the Operating Partnership held by
members of the directors' and executive officers' immediate families,
trusts of which they are trustees or entities over which they possess sole
or shared dispositive or voting power. Also includes vested options to
purchase 1,005,736 shares of Common Stock, vested warrants to purchase
373,985 shares of Common Stock and vested Unit Warrants to purchase
1,089,345 shares of Common Stock.
The Corporation's charter divides the Corporation 's Board of Directors
into three classes, with the members of each such class serving staggered
three-year terms. The Board of Directors presently consists of thirteen members
as follows: Class I directors, Brendan T. Byrne, Martin D. Gruss, Vincent Tese
and Roy J. Zuckerberg, whose terms expire in 2001; Class II directors, Nathan
Gantcher, Earle I. Mack, William L. Mack and Alan G. Philibosian, whose terms
expire in 2002; and Class III directors, Martin Berger, Brant Cali, John J.
Cali, Mitchell E. Hersh and Irvin D. Reid, whose terms expire in 2000.
Biographical information concerning the directors and executive officers is
set forth below.
JOHN J. CALI was appointed as Chairman of the Board of Directors in 1994,
as a member of the Executive Committee of the Board of Directors of the
Corporation in 1997, and as a member of the Strategic Planning Committee of the
Board of Directors of the Corporation in 2000. In addition, Mr. Cali was a
principal of Cali Associates and a member of its Executive and Long Range
Planning Committees from 1949 to 1994. Mr. Cali co-founded Cali Associates in
1949 and since such date has been responsible for its and the Corporation's
overall development strategies and policies. Mr. Cali graduated from Indiana
University.
WILLIAM L. MACK has served as a member of the Board of Directors of the
Corporation since 1997. Mr. Mack serves as Chairman of the Corporation's
Executive Committee. Prior to joining the Corporation, Mr. Mack served as
Managing Partner of the Mack organization, where he pioneered the development
of large, Class A office properties and helped to increase the Mack
organization's portfolio to approximately 20 million square feet. In
addition, Mr. Mack is a managing partner of Apollo Real Estate Advisors, L.P.
whose investment funds have invested in greater than $10 billion of various
diversified real estate ventures. Mr. Mack also currently serves as a member
of the board of directors of Koger Equity, Inc., The Bear Stearns Companies,
Inc., Metropolis Realty Trust, Inc., Wyndham International, Inc. and Vail
Resorts, Inc. Mr. Mack is a trustee of the North Shore-Long Island Jewish
Health System and the University of Pennsylvania, a member of the Board of
Overseers of The Wharton School and serves on the Executive Committee for the
Real Estate Center of The Wharton School. Mr. Mack attended the Wharton
School of Business and Finance at the University of Pennsylvania and has a
B.S. degree in business administration, finance and real estate from New York
University.
4
<PAGE>
MARTIN S. BERGER has served as a Director of the Corporation since 1998 and
was appointed as Chairman of the Strategic Planning Committee of the Board of
Directors of the Corporation in 2000. Prior to joining the Corporation, Mr.
Berger served as Co-Chairman and General Partner of The Robert Martin Company
since its founding in 1957. Mr. Berger is Chairman of the Board and Chief
Executive Officer of City & Suburban Federal Savings Bank, President of the
Construction Industry Foundation, and a Board Member of The White Plains
Hospital Medical Center. Mr. Berger holds a B.S. degree in finance from New York
University.
BRENDAN T. BYRNE has served as a member of the Board of Directors of the
Corporation since 1994 and as a member of the Audit Committee of the Board of
Directors since 1999. Mr. Byrne served two consecutive terms as Governor of the
State of New Jersey prior to 1982 and has been a senior partner with Carella,
Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein, a Roseland, New Jersey law
firm, since 1982. Governor Byrne graduated from Princeton University's School of
Public Affairs and received his LL.B from Harvard Law School.
BRANT CALI serves as Chief Operating Officer, Executive
Vice-President-Operations, Leasing and Marketing, Assistant Secretary, and was
appointed as a Director of the Corporation in April 1999. Mr. Cali is
responsible for directing the property management, leasing and marketing
departments of the Corporation, as well as general administrative oversight at
its headquarters in Cranford, N.J. In addition, as part of Mack-Cali's senior
management team, he is responsible for the Corporation's overall strategic
direction. Mr. Cali also served as principal with Cali Associates and a member
of its Executive and Long Range Planning committees from 1981 to 1994. His
responsibilities at Cali Associates included directing the approvals and
construction of several development projects in addition to overseeing
operations and property management. Mr. Cali holds a Ph.D. in plant pathology
from North Carolina State University and has been active on committees analyzing
New Jersey environmental issues. In addition, Mr. Cali is an active member of
several real estate, business and charitable organizations, including the
Regional Plan Association (RPA), the National Association of Corporate Real
Estate Executives (NACORE), the National Association of Industrial and Office
Properties (NAIOP), the Union County Alliance (UCA), and the Boys and Girls Club
of Hudson County.
JOHN R. CALI serves as Executive Vice President-Development of the
Corporation. Mr. Cali served as Chief Administrative Officer of the Corporation
until December 1997. In addition, Mr. Cali was a principal of Cali Associates
and served as a member of its Long Range Planning Committee from 1981 to 1994
and its Executive Committee from 1987 to 1994 and was responsible for the
development of Cali Associates' office system and the management of its office
personnel. Mr. Cali also developed and organized the leasing and property
management departments of Cali Associates and he is now responsible for
directing the development functions of the Corporation. Mr. Cali has an M.Ed.
degree in counseling, organizational development and personnel from the
University of Missouri.
NATHAN GANTCHER has served as a member of the Board of Directors of the
Corporation since 1999 and as a member of the Audit Committee of the Board of
Directors of the Corporation since 1999. Mr. Gantcher serves as Vice Chairman of
CIBC Oppenheimer Corp. Prior to becoming Vice Chairman of CIBC Oppenheimer
Corp., Mr. Gantcher served as co-Chief Executive Officer of Oppenheimer & Co.,
Inc. Mr. Gantcher currently serves as Chairman of the Board of Trustees of Tufts
University, a Director of Datron, Inc. and as a member of the Council of Foreign
Relations. Mr. Gantcher received his A.B. in Economics and Biology from Tufts
University and his M.B.A. from the Columbia University Graduate School of
Business.
MARTIN D. GRUSS has served as a member of the Board of Directors of the
Corporation since 1997 and as a member of the Executive Compensation and Option
Committee of the Board of Directors since 1999. Mr. Gruss is the Senior Partner
of Gruss & Co., a private investment firm. From 1989-1993 Mr. Gruss served as a
Director of Acme Metals Incorporated. Mr. Gruss currently serves as a member of
the Board of Overseers of the Wharton School and as a Trustee of the
Lawrenceville School. Mr. Gruss has a B.S. degree in Economics from the Wharton
School of the University of Pennsylvania and a J.D. degree from New York
University School of Law.
MITCHELL E. HERSH serves as Chief Executive Officer and as a Director of
the Corporation. Mr. Hersh was appointed as a member of the Board of Directors
of the Corporation and as a member of the Executive Committee of the Board of
Directors of the Corporation in 1997, and as a member of the Strategic Planning
Committee of the Board of Directors of the Corporation in 2000. Mr. Hersh is
responsible for the strategic direction and long-term planning for the
Corporation. He is also responsible for creating and implementing the
Corporation's capital markets strategy and overall investment strategy.
Previously, Mr. Hersh held the position of President and Chief Operating Officer
of the Corporation. Prior to joining the Corporation in December 1997, Mr. Hersh
served as a Partner of the Mack organization since 1982 and as Chief Operating
Officer of the Mack organization since 1990, where he was responsible for
overseeing the development, operations, leasing and acquisitions of the Mack
organization's office and industrial portfolio. Mr. Hersh has a B.A. degree in
Architecture from Ohio University.
TIMOTHY M. JONES serves as President of the Corporation. He is responsible
for overseeing the portfolio management, development and operations areas of the
Corporation. Previously he served as Executive Vice President and Chief
Investment Officer. Prior to joining the Corporation, Mr. Jones served as
Executive Vice President and Chief Operating Officer of The Robert Martin
Company, where he was responsible for the daily corporate operations and
management of the firm's six-million square foot portfolio in New York and
Connecticut.
5
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Prior to joining the Robert Martin Company, Mr. Jones served as a Vice President
in Chemical Bank's Real Estate Division, as President of Clifton Companies in
Stamford, Connecticut and President of Federated National Company in State
College, Pennsylvania. Mr. Jones has a B.A. degree in economics from Yale
University and a Masters degree in business from Columbia University.
BARRY LEFKOWITZ serves as Executive Vice President and Chief Financial
Officer of the Corporation. Mr. Lefkowitz oversees the firm's strategic
financial planning and forecasting, financial accounting and reporting, capital
markets activities and investor relations. Before joining the Corporation, Mr.
Lefkowitz served as Senior Manager of Deloitte & Touche LLP, specializing in
real estate, with emphasis on mergers and acquisitions. In addition to serving
as Co-Chairman of the National Association of Real Estate Investment Trust
(NAREIT) Accounting Committee, he is a member of the American Institute of
Certified Public Accountants (AICPA) and the New York State Society of Certified
Public Accountants (NYSSCPA). Mr. Lefkowitz holds a B.S. degree in accounting
from Brooklyn College.
EARLE I. MACK, has served as a member of the Board of Directors of the
Corporation since 1997 and serves as a member of the Strategic Planning
Committee of the Board of Directors of the Corporation since 2000. Prior to
joining the Corporation, Mr. Mack served as Senior Partner, Chief Financial
Officer and a director of the Mack organization since 1964 where he pioneered
the development of large, Class A office properties and helped to increase the
Mack organization's portfolio to approximately 20 million square feet. Mr. Mack
has a B.S. degree in Business Administration from Drexel University and also
attended Fordham Law School.
ALAN G. PHILIBOSIAN has served as a member of the Board of Directors of the
Corporation since 1997 and as a member of the Executive Compensation and Option
Committee of the Board of Directors of the Corporation since 1997. Mr.
Philibosian is an attorney practicing in Englewood, New Jersey. Mr. Philibosian
is currently a Commissioner on The Port Authority of New York and New Jersey,
and also serves on the Board of Directors of NorCrown Bank, the Armenian
Missionary Association of America, Paramus, New Jersey and John Harms Center for
the Arts, Englewood, New Jersey. Mr. Philibosian graduated from Rutgers College,
and received his J.D. degree from Boston College Law School and his LL.M. degree
in taxation from New York University.
IRVIN D. REID has served as a Director of the Corporation since 1994 and
was elected as Chairman of the Audit Committee of the Board of Directors of the
Corporation in 1998. Dr. Reid also serves as President of Wayne State University
in Michigan. Prior to becoming the President of Wayne State University, Dr. Reid
served as President of Montclair State University (formerly Montclair State
College) in New Jersey from 1989 to 1997, and held positions of Dean, School of
Business Administration, and John Stagmaier Professor of Economics and Business
Administration at the University of Tennessee at Chattanooga. Dr. Reid is also a
member of the board of directors of Fleet Bank, N.A. Dr. Reid received his B.S.
degree and M.S. degree in general and experimental psychology from Howard
University. He earned his M.A. and Ph.D. degrees in business and applied
economics from The Wharton School of the University of Pennsylvania.
VINCENT TESE has served as a member of the Board of Directors of the
Corporation since 1997 and as chairman of the Executive Compensation and Option
Committee of the Board of Directors of the Corporation since 1998. Prior to
joining the Corporation, Mr. Tese served as New York State Superintendent of
Banks from 1983-1985, Chairman and Chief Executive Officer of the Urban
Development Corporation from 1985-1994, Director of Economic Development for New
York State from 1987-1994 and Commissioner and Vice Chairman of the Port
Authority of New York and New Jersey from 1991-1995. Mr. Tese also served as a
partner in the law firm of Tese & Tese, a partner in the Sinclair Group, a
commodities trading and investment management company, and a co-founder of Cross
Country Cable TV. Mr. Tese currently serves as Chairman of Wireless Cable
International Inc. and as a member of the Board of Directors of The Bear Stearns
Companies, Inc., Allied Waste Industries, Inc., Bowne & Company, Inc.,
Cablevision, Inc., Key Span Energy, and as a Trustee of New York University
School of Law and New York Presbyterian Hospital. Mr. Tese has a B.A. degree in
accounting from Pace University, a J.D. degree from Brooklyn Law School and an
LL.M. degree in taxation from New York University School of Law.
ROGER W. THOMAS serves as Executive Vice President, General Counsel and
Secretary of the Corporation. Mr. Thomas' responsibilities include structuring
and implementing the Corporation's acquisitions and mergers, corporate
governance, supervising outside legal counsel, insuring legal compliance and the
preparation of required disclosure documents. Mr. Thomas also assists the
Corporation in investment strategies, financial activities and acquisitions.
Prior to joining the Corporation, Mr. Thomas was a partner at the law firm of
Dreyer & Traub in New York, specializing in real estate and commercial
transactions. Mr. Thomas holds a BSBA in Finance and a J.D. degree from the
University of Denver.
ROY J. ZUCKERBERG has served as a member of the Board of Directors of the
Corporation since 1999. Mr. Zuckerberg is currently an Advisory Director of the
Goldman Sachs Group, Inc. Mr. Zuckerberg served as Vice Chairman of Goldman,
Sachs & Co., a member of its Executive Committee, and head of its Equities
Division. Mr. Zuckerberg joined Goldman, Sachs & Co. in 1967 in Securities Sales
and in 1972 assumed responsibility for developing the private client business.
Mr. Zuckerberg was made a partner of Goldman, Sachs & Co. in 1977 and served as
co-head and then head of its Securities Sales division. Mr. Zuckerberg remains
Chairman of the Executive Committee of the Goldman Sachs Bank in Zurich. Mr.
Zuckerberg served as Chairman of the Securities Industry Association and was a
member of the Senior Advisors Group to the President's Council on Year 2000
Conversion. Mr. Zuckerberg is Chairman-elect and a member of the Executive
Committee of North Shore-Long Island Jewish Health System, Inc. and a trustee of
the American Red Cross in Greater New York and a
6
<PAGE>
Director of the Brookdale Foundation. He has had a long involvement with the
UJA-Federation and served as Chairman of the Wall Street Division. He also
serves as Chair of the Investment Committee of the University of
Massachusetts Foundation. Mr. Zuckerberg received a B.S. from Lowell
Technological Institute in 1958 and served in the United States Army.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Corporation's officers,
directors and persons who beneficially own more than 10% of the Corporation's
Common Stock to file initial reports of ownership and reports of changes of
ownership (Forms 3, 4 and 5) of the Common Stock with the SEC and the New York
Stock Exchange. Officers, directors and greater than 10% holders are required by
SEC regulations to furnish the Corporation with copies of such forms that they
file.
To the Corporation's knowledge, based solely on the Corporation's review of
the copies of such reports received by the Corporation, the Corporation believes
that for the fiscal year 1999, all Section 16(a) filing requirements applicable
to its officers, directors and greater than 10% beneficial owners were complied
with.
2. ITEM 11 IS HEREBY AMENDED AND RESTATED AS FOLLOWS:
EXECUTIVE COMPENSATION
The Operating Partnership does not have any executive officers. The
following table sets forth certain information concerning the compensation of
the chief executive officer and the four most highly compensated executive
officers of the Corporation other than the chief executive officer
(collectively, the "Named Executive Officers") for each of the Corporation's
last three fiscal years. The Corporation is the sole general partner of the
Operating Partnership.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
-----------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(2)
- --------------------------- ---- --------- -------- ------------------
<S> <C> <C> <C> <C>
Mitchell E. Hersh...................................... 1999 1,050,000 440,000 0
Chief Executive Officer 1998 1,090,385 440,000 2,179
1997 28,269 0 0
Timothy M. Jones....................................... 1999 421,462 275,000 0
President 1998 337,500 170,000 2,179
1997 202,885 1,575,000 0
Barry Lefkowitz........................................ 1999 360,385 225,000 0
Executive Vice President and Chief Financial Officer 1998 311,538 205,000 2,179
1997 155,769 1,125,222 0
Brant Cali............................................. 1999 335,154 185,000 0
Chief Operating Officer, Executive Vice 1998 337,500 170,000 2,179
President-Operations, Leasing and 1997 228,846 175,000 0
Marketing and Assistant Secretary
John R. Cali........................................... 1999 325,000 185,000 0
Executive Vice President-Development 1998 337,500 170,000 2,179
1997 228,846 175,000 0
Thomas A. Rizk (3)..................................... 1999 302,885 0 0
1998 1,090,385 440,000 2,179
1997 473,077 1,950,000 0
</TABLE>
(TABLE CONTINUED ON FOLLOWING PAGE)
7
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- ----------
(1) The annual compensation portion of this table includes the dollar value of
regular annual payments of base salary, bonus & any other annual
compensation earned by each Named Executive Officer during the stated
fiscal year. Certain base salaries appear slightly higher than the
contractual amounts due to when pay periods accrued during fiscal year
1999.
(2) The $2,179 in 1998 represents the value of 10 shares of preferred stock of
Mack-Cali Property Trust issued in January 1998 and $1,179 in tax gross-up
payments relating thereto.
(3) Thomas A. Rizk resigned from his position as Chief Executive Officer of the
Corporation, effective as of April 18, 1999.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------------------
AWARDS PAYOUTS
-------------------------------------- -------
RESTRICTED SECURITIES LTIP
STOCK UNDERLYING PAYOUTS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR AWARD(S)($)(4) OPTIONS/WARRANTS(#) ($)(8) COMPENSATION($)
- --------------------------- ---- -------------- ------------------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Mitchell E. Hersh........... 1999 0 0 0 0
Chief Executive Officer 1998 0 0 0 0
1997 0 339,976(5) 0 0
Timothy M. Jones............ 1999 0 0 0 0
President 1998 0 15,000(6) 0 0
1997 0 290,295(7) 0 0
Barry Lefkowitz............. 1999 0 0 0 0
Executive Vice President 1998 0 0 0 0
and Chief Financial Officer 1997 505,596 97,137(5) 739,542 0
Brant Cali.................. 1999 0 0 0 0
Chief Operating Officer, 1998 0 0 0 0
Executive Vice 1997 3,033,303 105,295(5) 0 5,681,635(9)
President-Operations,
Leasing and Marketing and
Assistant Secretary
John R. Cali................ 1999 0 0 0 0
Executive Vice 1998 0 0 0 0
President-Development 1997 3,033,303 105,295(5) 0 5,681,635(9)
Thomas A. Rizk(3)........... 1999 0 0 0 14,490,000(10)
1998 0 0 0 0
1997 3,033,303 339,976(5) 4,437,247 9,103,269(9)
</TABLE>
- ----------
(4) On August 31, 1994, in connection with the consummation of the
Corporation's initial public offering, the Corporation entered into
employment agreements with each of Thomas A. Rizk, John R. Cali and Brant
Cali. On January 21, 1997, the Corporation entered into amended and
restated employment agreements with each of Messrs. Rizk, John R. Cali and
Brant Cali, and an employment agreement with Barry Lefkowitz. Pursuant to
each such employment agreement, Messrs. Rizk, John R. Cali, Brant Cali and
Lefkowitz were issued 55,555, 55,555, 55,555 and 9,260 restricted shares of
Common Stock, respectively (the "Restricted Stock"). On the date of any
vesting of the Restricted Stock, each of Messrs. Rizk, John R. Cali, Brant
Cali and Lefkowitz were entitled to receive tax gross-up payments as
compensation for the additional income taxes which would be required to be
paid. The employment agreements provided that the vesting of the Restricted
Stock would be accelerated upon a change in control or, in the case of Mr.
Rizk, John R. Cali and Brant Cali, also upon termination of employment by
the Corporation other than for cause or upon such individual's termination
of his employment for good reason. Upon the closing of the Mack Transaction
in December 1997, certain conditions in the employment agreements of each
of the aforementioned senior executives were triggered, thereby resulting
in, among other things, the acceleration of the vesting of the Restricted
Stock, including the payment of the tax gross-up amounts relating thereto.
The value of accelerated vesting in Restricted Stock and the tax gross-up
payments relating thereto under such employment agreement for each
8
<PAGE>
executive upon consummation of the Mack Transaction, based on a $39.00
stock price, which price approximated the market price of the Corporation's
Common Stock at the close of business on or about the date of closing of
the Mack Transaction, is reflected in the table for 1997. In July 1999, the
Corporation entered into amended and restated employment agreements with
each of Mitchell E. Hersh, Timothy M. Jones, Barry Lefkowitz, Brant Cali
and John R. Cali, pursuant to which, Mr. Hersh, Mr. Jones, Mr. Lefkowitz,
Mr. Brant Cali and Mr. John R. Cali were issued 62,500, 37,500, 26,094,
23,437 and 22,031 shares of Restricted Stock, respectively, the vesting of
which are contingent upon the satisfaction of certain performance
requirements, together with tax gross-up payments relating thereto upon
such vesting. Since the vesting of the Restricted Stock granted is
performance based commencing January 1, 2000, the Corporation has elected
to report such awards as Long-Term Incentive Plan Awards. See "Long-Term
Incentive Plans - Awards in Last Fiscal Year." The 1999 amended and
restated employment agreements superceded, amended and restated the
employment agreements between the Corporation and each of the
aforementioned executives entered into in December 1997.
(5) Represents an option to purchase shares of Common Stock at an exercise
price of $38.75 per share.
(6) Represents an option to purchase shares of Common Stock at an exercise
price of $37.3125.
(7) Represents an option to purchase 15,000 shares of Common Stock at an
exercise price of $30.25, an option to purchase 105,295 shares of Common
Stock at an exercise price of $38.75 and warrants to purchase 170,000
shares of Common Stock at an exercise price of $33.00.
(8) In connection with their respective January 21, 1997 employment agreements,
the Corporation made non-recourse stock acquisition loans (the "Stock
Acquisition Loans") to Mr. Rizk and Mr. Lefkowitz in the amounts of
$3,000,000 and $500,000, respectively, the proceeds of which were
simultaneously used by each of Mr. Rizk and Mr. Lefkowitz to purchase
96,000 and 16,000 shares of Common Stock, respectively, from the
Corporation, pursuant to the terms of each loan. The Stock Acquisition
Loans (and the interest thereon) were to be forgiven under certain terms
and conditions. On the date of such forgiveness of the Stock Acquisition
Loans, each of Messrs. Rizk and Lefkowitz were entitled to receive tax
gross-up payments as compensation for the additional income taxes which
would be required to be paid. Such employment agreements provided that the
forgiveness of the Stock Acquisition Loans would be accelerated upon a
change in control or, in the case of Mr. Rizk, also upon termination of his
employment by the Corporation other than for cause or upon his termination
of his employment for good reason. Upon the closing of the Mack Transaction
in December 1997, certain conditions in the employment agreements of each
of the aforementioned senior executives were triggered, thereby resulting
in, among other things, the acceleration of the forgiveness of the Stock
Acquisition Loans, including interest thereon and the payment of the tax
gross-up amounts relating thereto. The value of the accelerated Stock
Acquisition Loan forgiveness and the interest and tax gross-up payments
relating thereto determined to be payable for each executive upon
consummation of the Mack Transaction is reflected in the table for 1997.
(9) Under each of Messrs. Rizk's, Brant Cali's and John R. Cali's January 1997
employment agreements with the Corporation, each executive was entitled
under certain circumstances to resign for good reason and to receive
payment under the employment agreements of certain severance payments.
Furthermore, upon a resignation for good reason, each such executive could
immediately compete directly with the Corporation. In view of the
significant changes in the overall authority, duties and responsibilities
of these individuals resulting from the Mack Transaction, the Executive
Compensation and Option Committee determined and the Board of Directors of
the Corporation concurred that consummation of the Mack Transaction would
have entitled each of these senior executives to terminate his employment
for good reason, receive such payments and thereafter not be subject to the
non-competition provisions of his employment agreement. However, the
Executive Compensation and Option Committee and the Board of Directors
concluded that the continued employment of and lack of competition by these
senior executives is essential to the continued success of the
Corporation's business and in the best interests of the Corporation and its
stockholders. Therefore, the Board of Directors, in its discretion,
authorized the Corporation to enter into new employment agreements with
these senior executives, effective upon the consummation of the Mack
Transaction, pursuant to which, among other things, the senior executives
were paid the amounts referenced in the table in cancellation of their
January 21, 1997 employment agreements and for the re-affirmation of their
agreements not to compete directly with the Corporation. Each of these
senior executives on December 11, 1997 entered into a new employment
agreement with the Corporation pursuant to which each of the senior
executives waived any right he may have had to sever employment and to
compete with the Corporation as a result of the Mack Transaction. These
agreements were superceded in the case of Messrs. John R. Cali and Brant
Cali by new employment agreements dated July 1, 1999. For a description of
such existing employment agreements see "Employment Contracts; Termination
of Employment."
(10) Includes payments made to Thomas A. Rizk in connection with his resignation
as Chief Executive Officer of the Corporation, effective as of April 18,
1999. See "Employment Contracts; Termination of Employment - Thomas A. Rizk
Termination Agreement."
9
<PAGE>
OPTION PLANS
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
------------------------------------------- ----------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES OR BASE GRANT DATE
OPTIONS GRANTED IN FISCAL PRICE EXPIRATION PRESENT
NAME (#)(2) 1999(%) ($/SH) DATE VALUE($)
- ---- --------------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Mitchell E. Hersh..................... 0 -- -- -- --
Chief Executive Officer
Timothy M. Jones...................... 0 -- -- -- --
President
Barry Lefkowitz....................... 0 -- -- -- --
Executive Vice President and Chief
Financial Officer
Brant Cali............................ 0 -- -- -- --
Chief Operating Officer, Executive
Vice President-Operations, Leasing
and Marketing and Assistant Secretary
John R. Cali.......................... 0 -- -- -- --
Executive Vice President-Development
Thomas A. Rizk (3).................... 0 -- -- -- --
</TABLE>
- ----------
(1) The Corporation has not, to date, granted any stock appreciation rights
under the Employee Stock Option Plan.
(2) The Corporation has established the Director and Employee Stock Option
Plans for the purpose of attracting and retaining officers, directors and
employees. Options granted under the Director and Employee Stock Option
Plans are exercisable for shares of Common Stock.
(3) Thomas A. Rizk resigned from his position as Chief Executive Officer of the
Corporation, effective as of April 18, 1999.
10
<PAGE>
AGGREGATED OPTION/WARRANT/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/WARRANTS/SARS AT OPTIONS/WARRANTS/SARS AT
FISCAL YEAR-END (#) FISCAL YEAR END ($)
--------------------------- ----------------------------------
SHARES
ACQUIRED
ON VALUE
NAME EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE ($) UNEXERCISABLE($)
- ---- ----------- ------------ ----------- ------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Mitchell E. Hersh..... 0 0 203,985 135,991 0 0
Timothy M. Jones...... 0 0 239,177 51,118 0 0
Barry Lefkowitz....... 0 0 58,282 38,855 0 0
Brant Cali............ 0 0 388,177 42,118 1,762,500 0
John R. Cali.......... 1,300 13,204 304,077 42,118 1,021,369 0
Thomas A. Rizk........ 0 0 0 0 0 0
</TABLE>
LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
PRICE-BASED PLANS
NUMBER OF
SHARES, PERFORMANCE
NAME UNITS OR OR OTHER PERIOD
- ---- OTHER UNTIL MATURATION THRESHOLD TARGET MAXIMUM
RIGHTS(#) OR PAYOUT (1) ($ OR #) ($ OR #) ($ OR #)
--------- ---------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Mitchell E. Hersh..... 62,500 January 1, 2006 __ __ __
Timothy M. Jones...... 37,500 January 1, 2006 __ __ __
Barry Lefkowitz....... 26,094 January 1, 2006 __ __ __
Brant Cali............ 23,437 January 1, 2006 __ __ __
John R. Cali.......... 22,031 January 1, 2006 __ __ __
Thomas A. Rizk(2)..... 0 __ __ __ __
</TABLE>
- ----------
(1) In July 1999, the Corporation entered into amended and restated employment
agreements with each of Mitchell E. Hersh, Timothy M. Jones, Barry
Lefkowitz, Brant Cali and John R. Cali, pursuant to which, Mr. Hersh, Mr.
Jones, Mr. Lefkowitz, Mr. Brant Cali and Mr. John R. Cali were issued
62,500, 37,500, 26,094, 23,437 and 22,031 shares of Restricted Stock,
respectively, the vesting of which are contingent upon the satisfaction of
certain performance requirements, together with tax gross-up payments
relating thereto upon such vesting. With certain exceptions, the shares of
Restricted Stock shall vest on an annual basis commencing January 1, 2000,
provided one of the following financial tests is met for the measurement
period ending on the last day of the Corporation's fiscal year immediately
preceding such vesting date: (A) the Corporation achieves an eight percent
(8%) funds from operations per common share increase or (B) shareholders
receive a twelve and three quarters percent (12.75%) total return
(dividends, assuming reinvestment upon applicable payment date, plus stock
appreciation per share of Common Stock). The Corporation has met such
financial test for the measurement period ended December 31, 1999.
(2) Thomas A. Rizk resigned from his position as Chief Executive Officer of the
Corporation, effective as of April 18, 1999.
COMPENSATION OF DIRECTORS
DIRECTORS' FEES. Each non-employee director was paid an annual fee of
$15,000, plus $1,000 per board meeting attended, $500 per committee meeting
attended and $250 per telephonic meeting participation. The Corporation does not
pay director fees to employee directors, who in fiscal 1999 consisted of
Mitchell E. Hersh, Brant Cali and, prior to his resignation, Thomas A. Rizk.
Each director also was reimbursed
11
<PAGE>
for expenses incurred in attending director and committee meetings. For fiscal
1999, John J. Cali, Martin S. Berger, Brendan T. Byrne, Nathan Gantcher, Martin
D. Gruss, Earle I. Mack, William L. Mack, Alan G. Philibosian, Irvin D. Reid,
Vincent Tese and Roy J. Zuckerberg received directors' fees or fee equivalents
(see Directors' Deferred Compensation Plan below) in the amounts of $17,250,
$17,250, $17,750, $11,771.98, $21,500, $16,750, $21,000, $19,125, $21,000,
$19,000 and $11,521.98, respectively. In addition, Jeffrey B. Lane and Paul A.
Nussbaum, who resigned or declined renomination to serve as a director of the
Corporation, as the case may be, on May 19, 1999 and May 19, 1999, respectively,
received directors' fees in the amounts of $9,269.23 and $9,769.23,
respectively, while serving as a director of the Corporation during fiscal 1999.
DIRECTORS' DEFERRED COMPENSATION PLAN. Pursuant to the Directors' Deferred
Compensation Plan, effective as of January 1, 1999, each non-employee director
is entitled to defer all or a specified portion of the annual retainer to be
paid to such director. The account of a director who elects to defer such
compensation under the Directors' Deferred Compensation Plan is credited with
the hypothetical number of stock 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 the Corporation's Common Stock as
reported on the Consolidated Tape of New York Stock Exchange listed shares on
the deferral date. Any stock dividend declared by the Corporation on its Common
Stock results in a proportionate increase in units in the director's account as
if such director held shares of Common Stock equal to the number of units in
such director's account. Payment of a director's account may only be made in a
lump sum in shares of Common Stock equal to the number of units in a director's
account after either the director's service on the Board of Directors has
terminated or there has been a change in control of the Corporation. As of
December 31, 1999, the director accounts of Nathan Gantcher, Martin Gruss,
William L. Mack, Alan G. Philibosian, Irvin D. Reid, Vincent Tese and Roy J.
Zuckerberg were credited with 362.501, 576.472, 576.472, 288.236, 576.472,
576.472 and 362.501 units, respectively.
DIRECTORS' STOCK OPTION PLAN. Pursuant to the Director Stock Option Plan,
each non-employee director is automatically granted a non-statutory option to
purchase 5,000 shares of Common Stock in connection with the director's initial
election or appointment to the Board of Directors. These grants under the
Director Stock Option Plan are made at an exercise price equal to the "fair
market value" (as defined under the Director Stock Option Plan) at the time of
the grant of the shares of Common Stock subject to such option. The Executive
Compensation and Option Committee may make additional discretionary option
grants to eligible directors, consistent with the terms of the Director Stock
Option Plan. In 1999, 27,000 discretionary options were granted to members of
the Board of Directors. The Board of Directors may amend, suspend or discontinue
the Director Stock Option Plan at any time except that any amendments that would
materially increase the cost of the Director Stock Option Plan to the
Corporation must be approved by the holders of the majority of issued and
outstanding shares of Common Stock of the Corporation entitled to vote.
EMPLOYMENT CONTRACTS; TERMINATION OF EMPLOYMENT
MITCHELL E. HERSH EMPLOYMENT AGREEMENT. On July 1, 1999, following the
appointment of Mitchell E. Hersh as Chief Executive Officer of the Corporation
on April 18, 1999, the Corporation and Mr. Hersh amended and restated Mr.
Hersh's employment agreement with the Corporation (the "Amended and Restated
Hersh Agreement"), providing for a constant 4 year term. Mr. Hersh's initial
annual base salary is $1,050,000, with annual increases within the discretion of
the Executive Compensation and Option Committee. Mr. Hersh also is eligible to
receive an annual bonus, restricted share awards and options within the
discretion of the Board or the Executive Compensation and Option Committee, as
the case may be. Pursuant to the Employee Stock Option Plan, Mr. Hersh was
awarded a restricted share award of 62,500 shares of Common Stock, as of July 1,
1999, and with respect to each tax year in which such restricted shares vest and
are distributed to him, Mr. Hersh shall be entitled to receive from the
Corporation a tax gross-up payment, equal to forty-three percent (43%) of the
fair market value of such restricted shares at time of vesting, exclusive of
dividends (the "Tax Gross-Up Payments"). Mr. Hersh is required to devote
substantially all of his business time to the affairs of the Corporation and,
subject to certain excluded activities, is generally restricted, during the term
of his employment and in the event his employment is terminated by the
Corporation for cause (as defined in the Amended and Restated Hersh Agreement)
or by him without good reason (as defined in the Amended and Restated Hersh
Agreement), for a period of one year thereafter, from conducting any
office-service, flex or office property development, acquisition or management
activities within the continental United States. Mr. Hersh is entitled to (i)
receive the aggregate of a cash payment of $8,000,000 (the "Fixed Amount"),
reimbursement of expenses incurred prior to the date of termination, and the
Tax-Gross-Up Payments applicable to any vested restricted shares, (ii) immediate
vesting of all options and incentive compensation payments or programs otherwise
subject to a vesting schedule, (iii) require the Corporation to repurchase his
vested options, (iv) receive continuation of health coverage through the end of
his unexpired employment period should his employment be terminated by the
Corporation without cause, by him for good reason or on account of his
disability (as defined in the Amended and Restated Hersh Agreement) or death.
Should Mr. Hersh terminate his employment on or within six months following a
change in control (as defined in the Amended and Restated Hersh Agreement), Mr.
Hersh's termination shall be treated as a termination for good reason. In
addition, upon a change in control, the vesting of all options and other
incentive compensation shall be accelerated and Mr. Hersh would be entitled to
receive a tax gross-up payment to cover any excise taxes payable due to the
change in control.
TIMOTHY M. JONES EMPLOYMENT AGREEMENT. On July 1, 1999, following the
appointment of Timothy M. Jones as President of the Corporation on April 18,
1999, the Corporation and Mr. Jones amended and restated Mr. Jones' employment
agreement with the Corporation (the "Amended and Restated Jones Agreement"). The
terms and conditions of the Amended and Restated Jones Agreement are generally
similar to those of the Amended and Restated Hersh Agreement, except that (i)
Mr. Jones' initial base salary is $515,000, with annual increases
12
<PAGE>
within the sole discretion of the Chief Executive Officer, (ii) Mr. Jones was
awarded a restricted share award of 37,500 shares of Common Stock, and (iii) the
Fixed Amount Mr. Jones will receive is $2,700,000.
BARRY LEFKOWITZ EMPLOYMENT AGREEMENT. On July 1, 1999, the Corporation and
Barry Lefkowitz amended and restated Mr. Lefkowitz's employment agreement with
the Corporation (the "Amended and Restated Lefkowitz Agreement"). The terms and
conditions of the Amended and Restated Lefkowitz Agreement are generally similar
to those of the Amended and Restated Jones Agreement, except that (i) Mr.
Lefkowitz's initial base salary is $385,000, (ii) Mr. Lefkowitz was awarded a
restricted share award of 26,094 shares of Common Stock and (iii) the Fixed
Amount Mr. Lefkowitz will receive is $2,500,000.
BRANT CALI EMPLOYMENT AGREEMENT. On July 1, 1999, following the appointment
of Brant Cali as Chief Operating Officer on April 18, 1999, the Corporation and
Brant Cali amended and restated Mr. Cali's employment agreement with the
Corporation (the "Amended and Restated B. Cali Agreement"). The other terms and
conditions of the Amended and Restated B. Cali Agreement are generally similar
to those of the Amended and Restated Jones Agreement, except that (i) Mr. Cali's
initial annual base salary is $345,000, (ii) Mr. Cali was awarded a restricted
share award of 23,437 shares of Common Stock, and (iii) the Fixed Amount Mr.
Cali will receive is $2,500,000.
JOHN R. CALI EMPLOYMENT AGREEMENT. On July 1, 1999, the Corporation and
John R. Cali amended and restated Mr. Cali's employment agreement with the
Corporation (the "Amended and Restated J.R. Cali Agreement"). The terms and
conditions of the Amended and Restated Cali Agreement are generally similar to
those of the Amended and Restated Jones Agreement, except that (i) Mr. Cali's
initial annual base salary is $325,000, (ii) Mr. Cali was awarded a restricted
share award of 22,031 shares of Common Stock, and (iii) the Fixed Amount Mr.
Cali will receive is $2,500,000.
THOMAS A. RIZK TERMINATION OF EMPLOYMENT AGREEMENT. On April 18, 1999, the
Corporation and Thomas A. Rizk entered into an agreement (the "Rizk Termination
Agreement") to, among other things, terminate Mr. Rizk's employment with the
Corporation as Chief Executive Officer and his position as a member of the Board
of Directors of the Corporation and a member of the Executive Committee of the
Board of Directors. Pursuant to the terms and conditions of the Rizk Termination
Agreement, all of Mr. Rizk's options were canceled, and the Corporation agreed
to pay Mr. Rizk $18,525,000, reduced by $2,535,000 as required by a settlement
agreement entered in the Circuit Court for Baltimore City, of which $14,490,000,
less applicable taxes, was paid upon execution of the Rizk Termination Agreement
and the remainder of which was placed in a "Rabbi Trust" so that on each of
April 20, 2000, 2001 and 2002, the trustee shall make payments from the Rabbi
Trust to Mr. Rizk in the amount of $500,000, less applicable taxes. In addition,
in accordance with the terms and conditions of the Rizk Termination Agreement,
the Corporation converted Mr. Rizk's 141,383 limited partnership units of
Mack-Cali Realty, L.P. into 141,383 shares of Common Stock. At the date of the
Rizk Termination Agreement, Mr. Rizk held 151,555 vested restricted stock
awards. In April 1999, subsequent to the termination of his employment with the
Corporation, Mr. Rizk sold all 292,938 shares to an individual purchaser in a
privately-negotiated transaction at a price of $29.25 per share.
EXECUTIVE COMPENSATION AND OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no interlocking relationships involving the Corporation's Board
which require disclosure under the executive compensation rules of the SEC.
BOARD EXECUTIVE COMPENSATION AND OPTION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
CORPORATION'S PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE
FILINGS, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND THE PERFORMANCE GRAPH
WHICH FOLLOWS SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY SUCH
FILINGS.
EXECUTIVE COMPENSATION PHILOSOPHY. The Executive Compensation and Option
Committee will annually consider the appropriate combination of cash and
option-based compensation and weigh the competitiveness of the Corporation's
overall compensation arrangements in relation to comparable real estate
investment trusts. From time to time the Executive Compensation and Option
Committee may retain compensation and other management consultants to assist
with, among other things, structuring the Corporation's various compensation
programs and determining appropriate levels of salary, bonus and other
compensatory awards payable to the Corporation's executive officers and key
employees, as well as to guide the Corporation in the development of near-term
and long-term individual performance objectives necessary to achieve long-term
profitability.
The Executive Compensation and Option Committee believes that a fundamental
goal of the Corporation's executive compensation program should be to provide
incentives to create value for the Corporation's stockholders.
13
<PAGE>
BASE SALARIES. The base compensation levels for the Corporation's executive
officers in 1999 were set to compensate the executive officers for the functions
they will perform as well as to be consideration for certain non-competition
provisions in the agreements, and were based on the employment agreements
entered into in December 1997, as amended and restated in July 1999. The
Corporation believes that the base salaries generally are appropriate as base
compensation to compensate the Corporation's executive officers for the
functions they perform and other considerations. Base salaries will be reviewed
annually and may be increased by the Executive Compensation and Option Committee
or the Chief Executive Officer, as the case may be, in accordance with certain
criteria determined primarily on the basis of growth of revenues and funds from
operations per share of Common Stock and on the basis of certain other factors,
which include (i) individual performance, (ii) the functions performed by the
executive officer, and (iii) changes in the compensation peer group in which the
Corporation competes for executive talent. The weight given such factors by the
Executive Compensation and Option Committee may vary from individual to
individual.
ANNUAL BONUS COMPENSATION. The Corporation's policy of awarding annual cash
bonuses is designed to specifically relate executive pay to Corporation and
individual performance. As a pay-for-performance program, cash bonuses provide
financial rewards for the achievement of substantive Corporation and personal
objectives. Actual awards paid are based primarily on actual Corporation
performance. During 1999, discretionary incentive and merit cash bonuses in
recognition of services performed during fiscal 1999 were awarded as follows:
$440,000 to Mitchell E. Hersh, $275,000 to Timothy M. Jones, $185,000 to Brant
Cali, $185,000 to John R. Cali, $225,000 to Barry Lefkowitz and $185,000 to
Roger W. Thomas.
EMPLOYEE STOCK OPTION PLAN. Awards are granted under the Employee Stock
Option Plan based on a number of factors, including (i) the executive officer's
or key employee's position in the Corporation, (ii) his or her performance and
responsibilities, (iii) the extent to which he or she already holds an equity
stake in the Corporation, (iv) equity participation levels of comparable
executives and key employees at other companies in the compensation peer group
and (v) individual contribution to the success of the Corporation's financial
performance. However, the Employee Stock Option Plan does not provide any
formulated method for weighing these factors, and a decision to grant an award
is based primarily upon the Executive Compensation and Option Committee's
evaluation of the past as well as the future anticipated performance and
responsibilities of the individual in question. During 1999, performance based
restricted share awards were granted to Mitchell E. Hersh (62,500), Timothy M.
Jones (37,500), Barry Lefkowitz (26,094), Brant Cali (23,437), John R. Cali
(22,031) and Roger W. Thomas (22,031), subject to a multi-year vesting schedule.
No options or other stock based awards were granted to executive officers of the
Corporation.
The Corporation's Employee Stock Option Plan relates closely to traditional
forms of equity oriented compensation in the commercial real estate industry.
The purpose of the option and other stock based grants is to aid the Corporation
in attracting and retaining quality employees, all advancing the interest of the
Corporation's stockholders by offering employees an incentive to maximize their
efforts to promote the Corporation's economic performance. In addition, to
assist the Corporation in retaining employees and encouraging them to seek
long-term appreciation in the value of the Corporation's stock, awards generally
are not exercisable immediately upon grant, but instead vest over a period of
years. Accordingly, an employee must remain with the Corporation for a period of
years to enjoy the full economic benefit of an award.
401(k) SAVINGS PLAN. The Corporation also maintains a tax-qualified 401(k)
savings plan for its eligible employees known as the "Mack-Cali Realty
Corporation 401(k) Savings/Retirement Plan" ("401(k) Plan"). Employees who have
attained age 21 and completed one-half year of service with the Corporation are
eligible to participate and may elect to defer up to 15% of their base pay on a
pre-tax basis to the 401(k) Plan. The Corporation may make discretionary
matching or profit sharing contributions to the 401(k) Plan on behalf of
eligible participants in any plan year. Participants are always 100% vested in
their pre-tax contributions and will begin vesting in any matching or profit
sharing contributions made on their behalf after two years of service with the
Corporation at a rate of 20% per year becoming 100% vested after a total of six
years of service with the Corporation. The assets of the 401(k) Plan are held in
trust and a separate account is established for each participant. A participant
may receive a distribution of his vested account balance in the 401(k) Plan in a
single sum or installment payment or in the form of an annuity upon his
termination of service with the Corporation.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mitchell E. Hersh, the Chief
Executive Officer of the Corporation, received a base salary during 1999 of
$1,050,000 pursuant to the employment agreement entered into in December 1997,
as amended and restated in July 1999. Mr. Hersh also was paid a cash bonus of
$440,000 in recognition of services performed during fiscal 1999. Mr. Hersh
received no fees for his service as a Director of the Corporation during fiscal
1999. During 1999, Mr. Hersh was granted 62,500 performance based restricted
share awards, subject to a multi-year vesting schedule. The Executive
Compensation and Option Committee recognizes Mr. Hersh's contributions to the
Corporation's operations and attempts to ensure that the Chief Executive
Officer's compensation is commensurate with the compensation of chief executive
officers of comparable corporations. The Board of Directors deemed such bonus
and Mr. Hersh's total compensation appropriate in light of Mr. Hersh's
substantial contribution to the Corporation's growth and success in 1999.
EXECUTIVE COMPENSATION AND OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
VINCENT TESE
MARTIN D. GRUSS
ALAN G. PHILIBOSIAN
14
<PAGE>
PERFORMANCE GRAPH
The following graph compares total stockholder returns from Decmeber 31,
1994 through December 31, 1999 to the Standard & Poor's 500 Stock Index ("S&P
500") and to the National Association of Real Estate Investment Trusts, Inc.'s
Equity REIT (excluding Health Care REITs) Total Return Index ("NAREIT"). The
graph assumes that the value of the investment in the Corporation's Common Stock
and in the S&P 500 and NAREIT indices was $100 at December 31, 1994 and that all
dividends were reinvested. The Common Stock's price on December 31, 1994 (on
which the graph is based) was $16.00.
The stockholder return shown on the following graph is not necessarily
indicative of future performance. The Corporation does not believe that the
graph is particularly meaningful in that it covers a short period of time.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG MACK-CALI REALTY CORPORATION,
THE S&P 500 INDEX AND THE NAREIT EQUITY REIT INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MACK-CALI REALTY CORPORATION S&P NAREIT
12/31/94 100.00 100.00 100.00
12/31/95 149.73 137.43 115.27
12/31/96 227.49 168.98 155.92
12/37/97 319.15 225.37 187.51
12/31/98 254.90 289.78 154.69
12/31/99 232.66 350.71 147.55
3. ITEM 12 IS HEREBY AMENDED AND RESTATED AS FOLLOWS:
VOTING SECURITIES AND PRINCIPAL HOLDERS
As of April 15, 2000, the Corporation owned an 80.16% general
partnership interest in the Operating Partnership, assuming conversion of all
preferred limited partnership units of the Operating Partnership into Units.
Without giving effect to the preferred limited partnership units, the
Corporation would own an 87.89% general partnership interest in the Operating
Partnership as of such date.
The following table sets forth information as of April 15, 2000 with
respect to each person or group who is known by the Corporation, in reliance on
Schedules 13D and 13G filed with the Securities and Exchange Commission (the
"SEC"), to own beneficially more than 5% of the Corporation's outstanding shares
of Common Stock. Except as otherwise noted below, all shares of Common Stock are
owned beneficially by the individual or group listed with sole voting and/or
investment power.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF SHARES
NAME OF BENEFICIAL OWNER OWNERSHIP OUTSTANDING (%)(1)
------------------------ ------------------ ------------------
<S> <C> <C>
The Mack Group (2).................................................... 11,413,713 16.34
Cohen & Steers Capital Management, Inc.(3)............................ 7,615,700 13.32
LaSalle Investment Management, Inc. and LaSalle Investment
Management (Securities), L.P. (4)..................................... 2,951,934 5.10
</TABLE>
- ----------
(1) The total number of shares outstanding used in calculating this percentage
does not include 14,524,629 shares reserved for issuance upon redemption or
conversion of outstanding units of limited partnership interest ("Units")
in Mack-Cali Realty, L.P., a Delaware limited partnership (the "Operating
Partnership") through which the Corporation conducts its real estate
activities, 2,000,000 shares reserved for issuance upon exercise of
outstanding warrants to purchase Units ("Unit Warrants") or 5,504,231
shares reserved for issuance upon the
15
<PAGE>
exercise of stock options or warrants granted or reserved for possible
grant to certain employees and directors of the Corporation, except in all
cases where such Units, warrants or options are owned by the reporting
person or group. Of the 14,524,629 shares reserved for issuance upon
redemption of outstanding Units, 7,577,685 shares, or 9.4% of the total
number of shares outstanding or reserved for issuance, are reserved for
issuance upon redemption or conversion of outstanding Units that are owned
by executive officers, directors, their immediate family members and
related trusts. Of the 2,000,000 shares reserved for issuance upon the
exercise of Unit Warrants, 1,089,345 shares, or 1.3% of the total number of
shares outstanding or reserved for issuance, are reserved for issuance upon
the exercise of Unit Warrants that are owned by executive officers,
directors, their immediate family members and related trusts. Of the
5,504,231 shares reserved for issuance upon the exercise of stock options
or warrants, 1,379,721 shares, or 1.7% of the total number of shares
outstanding or reserved for issuance, are reserved for the exercise of
vested stock options or warrants held by executive officers and directors.
This information is as of April 15, 2000.
(2) Address: 11 Commerce Drive, Cranford, New Jersey 07016. The Mack Group (not
a legal entity) is composed of certain directors and executive officers of
the Corporation and their immediate families and related trusts and other
persons. Share information is furnished in reliance on the Schedule 13G
dated February 14, 2000 of The Mack Group filed with the SEC, which
represents holdings as of December 31, 1999. This number represents shares
for which The Mack Group has shared dispositive and voting power, and
includes 9,445,860 common and preferred (calculated on an as-converted
basis) limited partnership Units redeemable for shares of Common Stock,
1,681,368 vested Unit Warrants redeemable for shares of Common Stock and
223,985 vested stock options and warrants to purchase shares of Common
Stock.
(3) Address: 757 Third Avenue, New York, New York 10017. Based upon information
provided to the Corporation by Cohen & Steers Capital Management, Inc.
("Cohen & Steers"), the Corporation believes that such shares are held for
investment advisory clients and that Cohen & Steers disclaims beneficial
ownership of those shares. Share information is furnished in reliance on
the Schedule 13G dated February 8, 2000 of Cohen & Steers filed with the
SEC, which represents holdings as of December 31, 1999. This number
represents shares for which Cohen & Steers has sole dispositive power, and
includes 6,449,000 shares for which Cohen & Steers has sole voting power.
(4) Address: 200 East Randolph Drive, Chicago, IL 60601. LaSalle Investment
Management, Inc. ("LaSalle") and LaSalle Investment Management
(Securities), L.P. ("LISM"), as members of a group, filed with the SEC,
which represents holdings as of December 31, 1999. LISM is a Maryland
limited partnership, the limited partner of which is LaSalle and the
general partner of which is LaSalle Investment Management (Securities),
Inc., a Maryland corporation, the sole stockholder of which is LaSalle.
Each of LaSalle and LISM are investment advisers registered under Section
203 of the Investment Advisers Act of 1940 and have different advisory
clients. LaSalle beneficially owns 734,300 shares, 314,300 shares for which
it has sole voting and dispositive power, and 420,000 shares for which it
has shared dispositive power. LISM beneficially owns 2,217,634 shares,
238,134 shares for which it has sole voting power, 193,134 shares for which
it has sole dispositive power, 1,852,605 shares for which it has shared
voting power and 2,024,500 shares for which it has shared dispositive
power. Share information is furnished in reliance on the Schedule 13G dated
February 9, 2000 of LaSalle and LISM filed with the SEC.
4. ITEM 13 IS HEREBY AMENDED AND RESTATED AS FOLLOWS:
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain directors and executive officers of the Corporation (or members of
their immediate families or related trusts) and persons who hold more than 5% of
the outstanding shares of Common Stock (or Units in the Operating Partnership)
had direct or indirect interests in certain transactions of the Corporation or
the Operating Partnership in the last fiscal year as follows:
16
<PAGE>
In connection with the completion of the Mack Transaction, 2,006,432
contingent common Units, 11,895 Series A contingent preferred Units and 7,799
Series B contingent preferred Units were issued as contingent non-participating
Units. Such contingent Units have no voting, distribution or other rights until
such time as they are redeemed into common Units, Series A preferred Units and
Series B preferred Units, respectively. Redemption of such contingent Units
shall occur upon the achievement of certain performance goals relating to
certain of the properties acquired by the Corporation in connection with the
Mack Transaction (collectively, the "Mack Properties"), specifically the
achievement of certain leasing activity. When contingent Units are redeemed for
common and preferred Units, an adjustment to the purchase price of certain of
the Mack Properties is recorded, based on the value of the Units issued. Since
certain of the performance goals were achieved during 1999, the Corporation
redeemed 275,046 contingent common Units and issued an equivalent number of
common Units. There were no contingent preferred Units or contingent common
Units outstanding as of December 31, 1999. In addition, in connection with the
Mack Transaction, the Corporation contractually agreed for a specified period of
time not to sell or otherwise transfer the properties acquired thereby in a
manner that would adversely affect the tax deferral of certain principals of the
Mack organization, subject to certain exceptions set forth in the relevant
acquisition agreements.
o In March 1999, the Corporation acquired two office buildings from
Pacifica Holding Company ("Pacifica") as part of the third phase of
the portfolio acquisition of Pacifica (the "Pacifica III
Acquisition"), the first two phases of which (the "Pacifica I
Acquisition" and the "Pacifica II Acquisition," respectively) occurred
in 1998. The Pacifica III Acquisition is comprised of an aggregate of
approximately 94,737 square feet and was acquired for a total cost of
approximately $5.7 million. Such funds were made available from
drawing on one of the Corporation's credit facilities. William L.
Mack, a director and equity holder of the Corporation, was an indirect
owner of an interest in certain of the buildings contained in the
Pacifica portfolio, through his position as a managing partner of
Apollo Real Estate Investment Fund II, L.P. ("Apollo"), one of the
sellers in the Pacifica transaction. 478,783 common Units were issued
and approximately $13,126,798 in cash was paid in the aggregate to
Apollo in the Pacifica I, II and III Acquisitions, approximately
$5,094,957 of which cash was paid upon the achievement of certain
performance goals relating to certain of the properties acquired from
Pacifica, specifically the achievement of certain leasing activity.
The 478,783 common Units issued to Apollo were redeemed by Apollo and
converted into 478,783 shares of the Corporation's Common Stock on
June 8, 1999.
o On May 4, 1999, the Corporation acquired from an entity whose
principals include Timothy M. Jones, Martin S. Berger and Robert F.
Weinberg, each of whom are affiliated with the Corporation as the
President of the Corporation, a current member of the Board of
Directors and a former member of the Board of Directors of the
Corporation, respectively, approximately 2.5 acres of vacant land in
the Stamford Executive Park, located in Stamford, Fairfield County,
Connecticut. The Corporation acquired the land for approximately
$2,181,000. $1,681,000 of the purchase price was funded from the
Corporation's cash reserves with an additional $500,000 due three
years from the closing date contingent upon certain conditions
contained in the acquisition contract and subject to interest over the
term.
o On August 31, 1999, the Corporation acquired from an entity whose
principals include Brant Cali, Executive Vice President and Chief
Operating Officer of the Corporation and a member of the Board of
Directors of the Corporation and certain members of the immediate
family of John J. Cali, Chairman of the Board of Directors of the
Corporation, approximately 28.1 acres of developable land adjacent to
two of the Corporation's operating properties located in Roseland,
Essex County, New Jersey for approximately $6,097,000. The acquisition
was funded with cash and the issuance of 121,624 common Units to the
seller.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MACK-CALI REALTY, L.P
---------------------
(Registrant)
By: Mack-Cali Realty Corporation, its
General Partner
Date: April 28, 2000 /s/ Barry Lefkowitz
------------------------------------
Barry Lefkowitz
Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Date: April 28, 2000 /s/ John J. Cali
-----------------------------------
John J. Cali
Chairman of the Board
Date: April , 2000
-----------------------------------
William L. Mack
Director
Date: April , 2000
-----------------------------------
Martin S. Berger
Director
Date: April , 2000
-----------------------------------
Brendan T. Byrne
Director
Date: April 28, 2000 /s/ Brant Cali
-----------------------------------
Brant Cali,
Chief Operating Officer, Executive
Vice President-Operations, Leasing,
Marketing, Assistant Secretary and
Director
Date: April 28, 2000 /s/ John R. Cali
-----------------------------------
John R. Cali,
Executive Vice President-Development
Date: April 28, 2000 /s/ Nathan Gantcher
-----------------------------------
Nathan Gantcher
Director
18
<PAGE>
Date: April 28, 2000 /s/ Martin D. Gruss
-----------------------------------
Martin D. Gruss
Director
Date: April 28, 2000 /s/ Mitchell E. Hersh
-----------------------------------
Mitchell E. Hersh
Chief Executive Officer and Director
Date: April 28, 2000 /s/ Timothy M. Jones
-----------------------------------
Timothy M. Jones
President
Date: April 28, 2000 /s/ Barry Lefkowitz
-----------------------------------
Barry Lefkowitz
Executive Vice President
and Chief Financial Officer
Date: April , 2000
-----------------------------------
Earle I. Mack
Director
Date: April 28, 2000 /s/ Alan G. Philibosian
-----------------------------------
Alan G. Philibosian
Director
Date: April , 2000
-----------------------------------
Dr. Irvin D. Reid
Director
Date: April 28, 2000 /s/ Vincent Tese
-----------------------------------
Vincent Tese
Director
Date: April 28, 2000 /s/ Roger W. Thomas
-----------------------------------
Roger W. Thomas,
Executive Vice President, General
Counsel and Secretary
Date: April 28, 2000 /s/ Roy J. Zuckerberg
-----------------------------------
Roy J. Zuckerberg
Director
19
