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[LOGO]
MACK-CALI REALTY CORPORATION
11 COMMERCE DRIVE
CRANFORD, NEW JERSEY 07016
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1999
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To Our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Mack-Cali Realty Corporation (the "Company") will be held at The
Pleasantdale Chateau, West Orange, New Jersey on Wednesday, May 19, 1999, at
3:00 p.m. for the following purposes:
1. The election of four persons to the Board of Directors of the Company,
each to serve a three-year term or until their respective successors are
elected and qualified.
2. Ratification of the appointment of PricewaterhouseCoopers LLP,
independent accountants, as the Company's independent accountants for the
ensuing year.
The enclosed Proxy Statement includes information relating to these
proposals. Additional purposes of the Annual Meeting are to receive reports of
officers (without taking action thereon) and to transact such other business as
may properly come before the Annual Meeting.
All stockholders of record as of the close of business on March 25, 1999 are
entitled to notice of and to vote at the Annual Meeting. At least a majority of
the outstanding shares of common stock of the Company present in person or by
proxy is required for a quorum.
By Order of the Board of Directors
/s/ Roger W. Thomas
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ROGER W. THOMAS
SECRETARY
March 31, 1999
Cranford, New Jersey
THE BOARD OF DIRECTORS APPRECIATES AND ENCOURAGES YOUR PARTICIPATION IN THE
COMPANY'S ANNUAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. ACCORDINGLY, PLEASE SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY, IF YOU WISH, AND
VOTE IN PERSON. YOUR PROXY IS REVOCABLE IN ACCORDANCE WITH THE PROCEDURES SET
FORTH IN THE PROXY STATEMENT.
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MAILED TO STOCKHOLDERS
ON OR ABOUT MARCH 31, 1999
MACK-CALI REALTY CORPORATION
11 COMMERCE DRIVE
CRANFORD, NEW JERSEY 07016
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished to stockholders of Mack-Cali Realty
Corporation, a Maryland corporation (the "Company"), in connection with the
solicitation by the Board of Directors of the Company (the "Board of Directors")
of proxies in the accompanying form for use in voting at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held on Wednesday, May
19, 1999, at 3:00 p.m., local time, at The Pleasantdale Chateau, West Orange,
New Jersey, and any adjournment or postponement thereof.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company (to
the attention of Roger W. Thomas, the Company's Secretary) a written notice of
revocation or a properly executed proxy bearing a later date, or by attending
the Annual Meeting and voting in person.
SOLICITATION AND VOTING PROCEDURES
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy materials for the Annual Meeting and reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's common stock, par value $.01 per share (the "Common Stock"). The
Company may use the services of MacKenzie Partners, Inc., 156 Fifth Avenue,
Suite 110, New York, New York 10010, in soliciting proxies and, in such event,
the Company expects to pay an amount not to exceed $7,500, plus out-of-pocket
expenses, for such services. The Company may conduct further solicitation
personally, telephonically or by facsimile through its officers, directors and
regular employees, none of whom would receive additional compensation for
assisting with the solicitation.
The presence at the Annual Meeting of a majority of the outstanding shares
of Common Stock of the Company, represented either in person or by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting. The
close of business at March 25, 1999 has been fixed as the record date (the
"Record Date") for determining the holders of shares of Common Stock entitled to
notice of and to vote at the Annual Meeting. Each share of Common Stock
outstanding on the Record Date is entitled to one vote on all matters. As of the
Record Date, there were 58,288,701 shares of Common Stock outstanding.
Stockholder votes will be tabulated by the persons appointed by the Board of
Directors to act as inspectors of election for the Annual Meeting. The New York
Stock Exchange permits member organizations to give proxies, whether or not
instructions have been received from beneficial owners, to vote as to the
election of directors and also on matters of the type contained in Proposal No.
2. Shares represented by a properly executed and delivered proxy will be voted
at the Annual Meeting and, when instructions have been given by the stockholder,
will be voted in accordance with those instructions. If no instructions are
given, the shares will be voted FOR the election of each of the four nominees
for director named below and FOR Proposal No. 2. Abstentions and broker
non-votes will each be counted as present for purposes of determining the
presence of a quorum. Abstentions and broker non-votes will have no effect on
the outcome of the election of directors or Proposal No. 2.
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VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth information as of March 15, 1999 with respect
to each person or group who is known by the Company, in reliance on Schedules
13D and 13G filed with the Securities and Exchange Commission (the "SEC"), to
own beneficially more than 5% of the Company'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
NAME OF OF BENEFICIAL PERCENT OF SHARES
BENEFICIAL OWNER OWNERSHIP OUTSTANDING (%)(1)
- -------------------------------------------------------------------------- ------------------ -------------------
<S> <C> <C>
The Mack Group (2)........................................................ 10,278,498 15.22
Cohen & Steers Capital Management, Inc.(3)................................ 8,302,500 14.52
FMR Corp.(4).............................................................. 4,392,950 7.68
The Cali Group(5)......................................................... 3,372,859 5.60
The Prudential Insurance Company of America (6)........................... 2,937,295 5.14
LaSalle Advisors Capital Management, Inc. and ABKB/LaSalle Securities
Limited Partnership (7)................................................. 2,919,700 5.10
</TABLE>
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(1) The total number of shares outstanding used in calculating this percentage
does not include 17,577,823 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 Company conducts its real estate activities,
2,000,000 shares reserved for issuance upon exercise of outstanding warrants
to purchase Units ("Unit Warrants") or 5,549,061 shares reserved for
issuance upon the exercise of stock options or warrants granted or reserved
for possible grant to certain employees and directors of the Company, except
in all cases where such Units, warrants or options are owned by the
reporting person or group. Of the 17,577,823 shares reserved for issuance
upon redemption of outstanding Units, 8,174,697 shares, or 10.0% 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, 1,098,440 shares, or 1.4% 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
5,549,061 shares reserved for issuance upon the exercise of vested stock
options or warrants, 1,368,869 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 March 15, 1999.
(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 Company and their immediate families and related trusts and other
persons. Share information is furnished in reliance on the Schedule 13G
dated February 16, 1999 of The Mack Group filed with the SEC, which
represents holdings as of December 31, 1998. This number represents shares
for which The Mack Group has shared dispositive and voting power, and
includes 9,445,860 common and converted preferred limited partnership Units
redeemable for shares of Common Stock, 676,648 vested Unit Warrants
redeemable for shares of Common Stock and 155,990 vested 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 Company by Cohen & Steers Capital Management, Inc. ("Cohen &
Steers"), the Company 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, 1999 of Cohen & Steers filed with the SEC, which
represents holdings as of December 31,
2
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1998. This number represents shares for which Cohen & Steers has sole
dispositive power, and includes 7,217,300 shares for which Cohen & Steers
has sole voting power.
(4) Address: 82 Devonshire Street, Boston, Massachusetts, 02109. FMR Corp.
manages certain mutual funds and is an affiliate of the Fidelity family of
mutual funds, certain of which mutual funds the Company believes
collectively own more than 5% of the Company's outstanding Common Stock. FMR
Corp. takes the position, however, that since the mutual funds have only an
investment manager in common, they do not constitute a "group" under the
applicable rules of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and accordingly, FMR Corp. is not required to file a
Schedule 13G or Schedule 13D with respect to the Company's Common Stock. As
such, the Company is unable to disclose the aggregate number of shares
collectively owned by mutual funds managed by FMR Corp. and the
corresponding percent of ownership of shares outstanding. Fidelity
Management & Research Company, a wholly-owned subsidiary of FMR Corp. and an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940, is the beneficial owner of 3,304,150 shares or 5.78% of the
Company's outstanding common stock as a result of acting as investment
adviser to various investment companies registered under Section 8 of the
Investment Company Act of 1940. Fidelity Management Trust Company, a
wholly-owned subsidiary of FMR Corp. and a bank as defined in Section
3(a)(6) of the Exchange Act, is the beneficial owner of 1,088,800 shares or
1.90% of the Company's outstanding Common Stock as a result of its serving
as an investment manager of the institutional account. Share information is
furnished in reliance on the Schedule 13G dated February 1, 1999 of FMR
Corp. filed with the SEC, which represents holdings as of December 31, 1998.
Members of the Edward C. Johnson 3d family and trusts for their benefit are
the predominant owners of Class B shares of common stock of FMR Corp.,
representing approximately 49% of the voting power of FMR Corp. Mr. Johnson
3d owns 12.0% and Abigail Johnson owns 24.5% of the aggregate outstanding
voting stock of FMR Corp. Mr. Johnson 3d is Chairman of FMR Corp. and
Abigail Johnson is Director of FMR Corp. The Johnson family group and all
other Class B shareholders have entered into a shareholders' voting
agreement under which all Class B shares will be voted in accordance with
the majority vote of Class B shares. Accordingly, through their ownership of
voting common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the Investment Company
Act of 1940, to form a controlling group with respect to FMR Corp. Share
information is furnished in reliance on the Schedule 13G dated February 1,
1999 of FMR Corp. filed with the SEC, which represents holdings as of
December 31, 1998.
(5) Address: 11 Commerce Drive, Cranford, New Jersey 07016. The Cali Group (not
a legal entity) is composed of certain directors and executive officers of
the Company and their immediate families and related trusts and other
persons. Share information is furnished in reliance on the Schedule 13G
dated February 16, 1999 of The Cali Group filed with the SEC, which
represents holdings as of December 31, 1998. This number represents shares
for which The Cali Group has shared dispositive and voting power, and
includes 1,956,396 limited partnership Units redeemable for shares of Common
Stock and 1,046,351 vested options to purchase shares of Common Stock.
(6) Address: 751 Broad Street, Newark, New Jersey 07102-3777. The Prudential
Insurance Company of America ("Prudential") (i) holds 300,091 shares of the
Company's common stock for the benefit of its general account and (ii) may
have direct or indirect voting and/or investment discretion over 2,637,204
shares which are held for its own benefit or for the benefit of its clients
by its separate accounts, externally managed accounts, registered investment
companies, subsidiaries and/or other affiliates. Prudential indicated that
it reported the combined holdings of these entities for the purpose of
administrative convenience. Share information is furnished in reliance on
the Schedule 13G of Prudential dated February 1, 1999 filed with the SEC,
which represents holdings as of December 31, 1998.
3
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(7) Address: 200 East Randolph Drive, Chicago, IL 60601. LaSalle Advisors
Capital Management, Inc. ("LaSalle") and ABKB/LaSalle Securities Limited
Partnership ("ABKB"), as members of a group, filed with the SEC, which
represents holdings as of December 31, 1998. ABKB is a Maryland limited
partnership, the limited partner of which is LaSalle and the general partner
of which is ABKB/LaSalle Securities, Inc., a Maryland corporation, the sole
stockholder of which is LaSalle. Each of LaSalle and ABKB are investment
advisers registered under Section 203 of the Investment Advisers Act of 1940
and have different advisory clients. LaSalle beneficially owns 865,500
shares, 394,500 shares for which it has sole voting and dispositive power,
51,000 shares for which it has shared voting power and 471,000 shares for
which it has shared dispositive power. ABKB beneficially owns 2,054,200
shares, 459,300 shares for which it has sole voting and dispositive power,
1,466,605 for which it has shared voting power and 1,639,900 shares for
which it has shared dispositive power. Share information is furnished in
reliance on the Schedule 13G dated February 12, 1999 of LaSalle and ABKB
filed with the SEC.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Articles of Incorporation divides the
Company'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, Jeffrey B. Lane and Vincent Tese, whose terms expire in 2001;
Class II directors, Earle I. Mack, William L. Mack, Paul A. Nussbaum and Alan G.
Philibosian, whose terms expire in 1999 (and if re-elected at the Annual
Meeting, in 2002); and Class III directors, Martin Berger, John J. Cali,
Mitchell E. Hersh, Irvin D. Reid and Thomas A. Rizk, whose terms expire in 2000.
At the Annual Meeting, the stockholders will elect four directors to serve
as Class II directors. The Class II directors who are elected at the Annual
Meeting will serve until the Annual Meeting of Stockholders to be held in 2002
and until such directors' respective successors are elected or appointed and
qualify or until any such director's earlier resignation or removal. The Board
of Directors believes that nominees Nathan Gantcher, Earle I. Mack, William L.
Mack and Alan G. Philibosian will stand for election and will, if elected, serve
as such Class II directors. Paul A. Nussbaum, a current Class II director, has
declined renomination for another term as a member of the Board of Directors.
However, in the event any nominee is unable or unwilling to serve as a Class II
director at the time of the Annual Meeting, the proxies may be voted for the
balance of those nominees named and for any substitute nominee designated by the
present Board of Directors or the proxy holders to fill such vacancy or for the
balance of those nominees named without nomination of a substitute, or the Board
of Directors may be reduced in accordance with the By-laws of the Company.
The affirmative vote of a plurality of all the votes cast at the Annual
Meeting, assuming a quorum is present, is necessary for the election of a
director. For purposes of the election of directors, abstentions will not be
counted as votes cast and will have no effect on the result of the vote.
NATHAN GANTCHER, director nominee, is being nominated to serve as a director
of the Company beginning in 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.
4
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EARLE I. MACK, director nominee, was appointed as a director of the Company
in 1997 in connection with the acquisition by the Company of certain properties
of The Mack Company and Patriot American Office Group (the "Mack Transaction").
Prior to joining the Company in connection with the Mack Transaction, 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.
WILLIAM L. MACK, director nominee, was appointed as a director of the
Company in 1997 in connection with the Mack Transaction. Mr. Mack serves as
Chairman of the Company's Executive Committee. Prior to joining Mack-Cali in
connection with the Mack Transaction, 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. Mr. Mack also served as chairman of
Patriot American Office Group. 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.,
Metropolitan Regional Advisory Board 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.
ALAN G. PHILIBOSIAN, director nominee, was appointed as a director of the
Company in 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 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES
NAMED ABOVE.
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DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information as of March 15, 1999 for (i) the
members of the Board of Directors, (ii) the executive officers of the Company
and (iii) the directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
PERCENT OF
SHARES
OUTSTANDING
PERCENT OF (CALCULATED ON A
SHARES FULLY-
FIRST TERM NUMBER OF OUTSTANDING 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)...... 80 1994 2000 475,908(9) * *
Thomas A. Rizk, Chief Executive Officer and
Director (5).............................. 41 1994 2000 428,928(10) * *
Mitchell E. Hersh, President, Chief
Operating Officer and Director (5)........ 48 1997 2000 257,414(11) * *
Brant Cali, Executive Vice President--
Operations, Leasing and Marketing, and
Assistant Secretary....................... 45 -- -- 572,174(12) * *
John R. Cali, Executive Vice President--
Development............................... 51 -- -- 423,824(13) * *
Timothy M. Jones, Executive Vice President
and Chief Investment Officer.............. 43 -- -- 317,398(14) * *
Barry Lefkowitz, Executive Vice President
and Chief Financial Officer............... 36 -- -- 64,210(15) * *
Roger W. Thomas, Executive Vice President,
General Counsel and Secretary............. 41 -- -- 64,484(16) * *
Martin S. Berger, Director (6).............. 68 1998 2000 531,532(17) * *
Brendan T. Byrne, Director (8).............. 74 1994 2001 17,100(18) * *
Martin D. Gruss, Director (8)............... 56 1997 2001 35,000(19) * *
Jeffrey B. Lane, Director (7)............... 56 1997 2001 15,000(20) * *
Earle I. Mack, Director..................... 60 1997 1999 2,681,917(21) 4.40 3.42
William L. Mack, Director (5)............... 59 1997 1999 4,465,701(22) 7.12 5.70
Paul A. Nussbaum, Director (8).............. 51 1997 1999 64,785(23) * *
Alan G. Philibosian, Director (7)........... 45 1997 1999 15,500(24) * *
Irvin D. Reid, Director (8)................. 58 1994 2000 10,000(25) * *
Vincent Tese, Director (7).................. 56 1997 2001 12,000(26) * *
Robert F. Weinberg (27)..................... 68 1997 (27) 536,532(28) * *
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All directors and executive officers as a
group..................................... 10,989,407(29) 15.94 14.02
------------- ----- -----
------------- ----- -----
</TABLE>
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* Beneficial Ownership of less than 1.0% is omitted.
(1) Certain executive officers and directors of the Company and various other
persons and entities beneficially own in the aggregate, approximately 11.4%
of the partnership interests in the Operating Partnership in which the
Company has a 79.2% general partnership interest and the aggregate limited
partners' interest is 20.8%. The limited partners of the Operating
Partnership share with the Company, 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.
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(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 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 and warrants.
(5) Member of Executive Committee of the Board of Directors.
(6) Appointed as director of the Company upon resignation of Robert F. Weinberg
as member of the Board of Directors of the Company on December 1, 1998.
(7) Member of Option and Executive Compensation Committee of the Board of
Directors.
(8) Member of Audit Committee.
(9) 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 158,569 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
25,627 shares of Common Stock.
(10) Includes 141,383 shares of Common Stock that may be issued upon the
redemption of all of Thomas A. Rizk's limited partnership interests in the
Operating Partnership. Also includes vested options to purchase 135,990
shares of Common Stock.
(11) 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 135,990
shares of Common Stock.
(12) 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 367,118
shares of Common Stock.
(13) Includes 83,951 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 284,318
shares of Common Stock.
(14) Includes vested warrants to purchase 170,000 shares of Common Stock and
vested options to purchase 45,118 shares of Common Stock. Also includes
102,280 limited partnership interests in the Operating Partnership.
(15) Includes vested options to purchase 38,854 shares of Common Stock.
(16) Includes vested options to purchase 38,854 shares of Common Stock.
(17) Includes 521,532 limited partnership interests in the Operating Partnership
and vested options to purchase 10,000 shares of Common Stock.
(18) Includes vested options to purchase 17,000 shares of Common Stock.
(19) Includes 5,000 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.
(20) Includes vested options to purchase 10,000 shares of Common Stock.
7
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(21) Includes 2,671,917 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 (67,441 of which result from the redemption of
contingent Units and 410,195 of which result from the exercise of Unit
Warrants). Also includes vested options to purchase 10,000 shares of Common
Stock.
(22) Includes 3,058,865 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 (68,168 of which result from the redemption of
contingent Units and 465,886 of which result from the exercise of Unit
Warrants) 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 (1,500 of which result from the redemption of contingent Units
and 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.
(23) Includes 54,785 shares of Common Stock that may be issued upon the
redemption of all of Paul A. Nussbaum's limited partnership interests in the
Operating Partnership (1,336 of which result from the redemption of
contingent Units and 9,095 of which result from the exercise of Unit
Warrants). Also includes vested options to purchase 10,000 shares of Common
Stock.
(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) Resigned from the Board of Directors of the Company on December 1, 1998.
Presently serves as a member of the Advisory Board.
(28) Includes 521,532 limited partnership interests in the Operating Partnership
and vested options to purchase 15,000 shares of Common Stock. Does not
include 1,000 shares of Common Stock owned by Mr. Weinberg's wife, of which
Mr. Weinberg disclaims beneficial ownership.
(29) Includes 6,473,407 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 1,701,290
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 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. Includes 1,098,440 shares of Common Stock
reserved for issuance upon the exercise of Unit Warrants that are owned by
executive officers, directors, their immediate family members and related
trusts. Also includes vested options to purchase 1,062,879 shares of Common
Stock and vested warrants to purchase 305,990 shares of Common Stock.
Biographical information concerning the director nominees is set forth above
under the caption "Proposal No. 1--Election of Directors." Biographical
information concerning the remaining directors and
executive officers is set forth below.
JOHN J. CALI has served as Chairman of the Board of Directors since 1994 and
as a member of the Executive Committee of the Board of Directors of the Company
since 1997. 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
8
<PAGE>
and the Company's overall development strategies and policies. Mr. Cali
graduated from Indiana University.
THOMAS A. RIZK has served as Chief Executive Officer since January 1996, as
a member of the Board of Directors of the Company since 1994 and a member of the
Executive Committee of the Board of Directors of the Company since 1997. In
addition, Mr. Rizk was a principal of Cali Associates and served as its General
Counsel and as a member of its Executive Committee from 1989 to 1994, as its
Chief Financial Officer from 1991 to 1994 and as the Company's President from
1994 through December 1997. Mr. Rizk was responsible for coordinating all
financial activities for Cali Associates and for developing its strategic
direction and investment strategies. Mr. Rizk is responsible for the strategic
direction and long-term planning for the Company. He is also responsible for
creating and implementing the Company's capital market strategies. Mr. Rizk also
serves on the Board of Governors of the National Association of Real Estate
Investment Trusts (NAREIT) and the New York University REIT Center Board of
Advisors. Prior to joining Cali Associates, Mr. Rizk was vice president and
general counsel of Dubnoff & Koch, a New Jersey-based real estate development
firm. He received his J.D. degree from Rutgers School of Law and his LL.M.
degree in taxation from New York University School of Law.
MITCHELL E. HERSH has served as President and Chief Operating Officer and as
a member of the Board of Directors of the Company and as a member of the
Executive Committee of the Board of Directors of the Company since 1997. Prior
to joining the Company in connection with the Mack Transaction, 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 is responsible for the strategic
direction and long-term planning for the Company, with particular emphasis on
the operations and acquisitions departments. Mr. Hersh has a B.A. degree in
architecture from Ohio University.
BRANT CALI serves as Executive Vice President-Operations, Leasing and
Marketing, as Assistant Secretary of the Company and as a member of the Advisory
Board of the Company. In addition, Mr. Cali was a principal of Cali Associates
and served as a member of its Executive and Long Range Planning Committees from
1981 to 1994, and as the Company's Chief Operating Officer from 1994 through
December 1997. Mr. Cali is responsible for directing the Company's property
management, leasing and marketing departments as well as general administrative
oversight at the Company's headquarters in Cranford, New Jersey. In addition, as
part of the Company's senior management team, Mr. Cali is responsible for the
Company's overall strategic direction. Mr. Cali holds a Ph.D. degree in plant
pathology from North Carolina State University.
JOHN R. CALI serves as Executive Vice President-Development of the Company.
Mr. Cali served as Chief Administrative Officer of the Company 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 Company. Mr. Cali has an M.Ed. degree in counseling,
organizational development and personnel from the University of Missouri.
TIMOTHY M. JONES serves as Executive Vice President and Chief Investment
Officer of the Company. Prior to joining the Company, 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. 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 Federated National Company in State
College, Pennsylvania. Mr. Jones is responsible for directing the acquisition
and disposition functions
9
<PAGE>
of the Company. Mr. Jones has a B.A. degree in economics from Yale University
and an M.S. degree in business from Columbia University.
BARRY LEFKOWITZ serves as Executive Vice President and Chief Financial
Officer of the Company. Mr. Lefkowitz is responsible for development and
implementation of the Company's strategic financial plan, long-term forecasting,
investor relations, management of capital markets activities, and financial
reporting matters. Mr. Lefkowitz also assists the Company with the structuring
of mergers and acquisitions, disclosure requirements and strategic planning
matters. Before joining the Company, Mr. Lefkowitz was a Senior Manager
specializing in real estate with the accounting firm of Deloitte & Touche LLP.
Mr. Lefkowitz is a certified public accountant and a graduate of Brooklyn
College.
ROGER W. THOMAS serves as Executive Vice President, General Counsel and
Secretary of the Company. Mr. Thomas is responsible for structuring and
implementing the Company's acquisitions and mergers, corporate governance,
supervising outside legal counsel, insuring legal compliance and preparation of
required disclosure documents. Mr. Thomas also assists the Company in investor
relations and in implementing the Company's investment strategies, financial
activities and acquisitions. Prior to joining the Company, 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.
MARTIN S. BERGER has served as a member of the Board of Directors of the
Company since 1998. Prior to joining the Company, 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
Company since 1994. 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.
MARTIN D. GRUSS has served as a member of the Board of Directors of the
Company since 1997. 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.
JEFFREY B. LANE has served as a member of the Board of Directors of the
Company since 1997. Mr. Lane is Principal and Chief Administrative Officer of
Neuberger Berman, which he joined in 1998. Prior to joining Neuberger Berman,
Mr. Lane was Vice Chairman of Travelers Group. Mr. Lane was affiliated with
Shearson Lehman Brothers from 1969 to 1990 as President, Chief Operating
Officer, Chief Financial Officer and a member of its board of directors. Mr.
Lane currently serves as a Director of the North Shore/ Long Island Jewish
Health System and the National Academy of Finance and as Chairman of the New
York City Academy of Finance. Mr. Lane has a B.A. degree from New York
University and an M.B.A. degree from the Columbia University Graduate School of
Business.
PAUL A. NUSSBAUM, has served as a member of the Board of Directors of the
Company since 1997. Prior to joining the Company, Mr. Nussbaum founded the
Patriot American group of companies and currently serves as Chairman Emeritus of
Patriot American Hospitality, Inc. Prior to his association with Patriot
American, Mr. Nussbaum practiced real estate and corporate law in New York for
20 years, the last twelve of which he served as chairman of the real estate
department of Schulte Roth & Zabel. Mr. Nussbaum
10
<PAGE>
currently serves as an overseer of Colby College, a member of the Board of
Visitors of the Georgetown University Law Center, a trustee of the Dallas
Symphony and a National Trustee of the National Jewish Medical Research Center
in Denver. Mr. Nussbaum is a member of the Urban Land Institute, the American
College of Real Estate Lawyers and the Advisory Board of the Real Estate Center
of the Wharton School of Business. Mr. Nussbaum has a B.A. degree from the State
University of New York at Buffalo and a J.D. degree from the Georgetown
University Law Center. Mr. Nussbaum has declined renomination to stand for
election to the Board of Directors in 1999.
IRVIN D. REID has served as a member of the Board of Directors of the
Company since 1994. Dr. Reid 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 Company
since 1997. Prior to joining the Company, 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.
ROBERT F. WEINBERG has served as a member of the Advisory Board of the
Company since 1998. Mr. Weinberg served as a member of the Board of Directors of
the Company from 1997 until his resignation on December 1, 1998. Prior to
joining the Company, Mr. Weinberg served as Co-Chairman and General Partner of
The Robert Martin Company since its founding in 1957. Mr. Weinberg is presently
the Chairman of the Outreach Committee on Orderly Growth in Westchester, a
Director of City & Suburban Federal Savings Bank and a Director of the
Westchester County Association. Mr. Weinberg earned a B.S. degree in Mechanical
Engineering from New York University, an M.S. degree in Building Engineering &
Construction from M.I.T. and a J.D. degree from Brooklyn Law School.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain directors and executive officers of the Company (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 Company or the
Operating Partnership in the last fiscal year as follows:
- 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
11
<PAGE>
Company 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 1998, the Company redeemed
1,731,386 contingent common Units and 19,694 contingent preferred Units
and issued an equivalent number of common and preferred Units. There were
no contingent preferred Units outstanding and 275,046 contingent common
Units outstanding as of December 31, 1998. In addition, in connection with
the Mack Transaction, the Company 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.
- In March 1998, the Company acquired ten office properties (the "Pacifica I
Acquisition") located in suburban Denver and Colorado Springs, Colorado
from Pacifica Holding Company ("Pacifica"), a private real estate owner
and operator in Denver, Colorado, for a cost of approximately $74,966,000.
Such funds were made available from drawing on one of the Company's credit
facilities and the issuance of common Units. The Pacifica I Acquisition
comprises an aggregate of 620,017 square feet of Pacifica's entire 1.2
million square-foot office portfolio, which consists of 18 office
buildings and related operations. In June 1998, the Company acquired six
of the remaining office buildings and vacant land located in the Denver
Tech Center, as part of the second phase of the Pacifica acquisition (the
"Pacifica II Acquisition"). The Pacifica II Acquisition is comprised of an
aggregate of approximately 514,427 square feet, as well as 2.5 acres of
developable land, and was acquired for a total cost of approximately
$87,916,000. Such funds also were made available from drawing on one of
the Company's credit facilities and the issuance of common Units. In March
1999, the Company acquired the remaining two office buildings from
Pacifica as part of the third phase of the Pacifica acquisition (the
"Pacifica III Acquisition"). The Pacifica III Acquisition is comprised of
an aggregate of approximately 94,737 square feet and was acquired for a
total cost of approximately $7.8 million. Such funds were made available
from drawing on one of the Company's credit facilities. William L. Mack, a
director and equity holder of the Company, 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.
- On December 31, 1998, the Company issued 132,710 shares of Common Stock at
a price of $29.6882 per share to Apollo for an aggregate purchase price of
approximately $3,939,915 pursuant to a Stock Purchase Agreement dated as
of December 31, 1998, by and between the Company and Apollo. In order to
purchase such shares of Common Stock, Apollo utilized funds acquired from
the Company from a deferred contingent obligation (which contingency was
satisfied) arising out of the Company's acquisition of the Pacifica
portfolio in March and June of 1998, as described above. William L. Mack,
a director and equity holder of the Company, is a managing partner of
Apollo.
- On September 15, 1998, the Company acquired 7 Skyline Drive, a 109,000
square-foot office building, located in Hawthorne, Westchester County, New
York. The Company acquired such property through the exercise of purchase
options obtained in connection with the Company's acquisition of 65
properties from the Robert Martin Company, L.L.C. and affiliates in
January 1997. The acquisition of the property, with a total cost of
approximately $13,379,000, was funded from the Company's cash reserves. In
addition, in December 1998, the Company acquired 12 Skyline Drive, a
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<PAGE>
2.68 acre tract of developable land located in Hawthorne, Westchester
County, New York from the Robert Martin--Eastview North Company, L.P. The
Company acquired the property for a total cost of approximately
$1,540,000, which was funded primarily from the Company's cash reserves.
Robert Weinberg, a former director of the Company, and Martin Berger, a
current director of the Company, are the principals and majority owners of
Robert Martin-Eastview North Company, L.P. and Robert Martin Company,
L.L.C.
- On July 20, 1998, in connection with the contractual expansion of 5551
West Talavi Boulevard, initially a 130,000 square-foot office building,
located in Glendale, Maricopa County, Arizona, one of the properties the
Company acquired in connection with the Mack Transaction, the Company
issued 52,245 common Units, valued at approximately $1,632,000. Of the
52,245 Units, 14,201 Units were issued to William L. Mack, 5,736 Units
were issued to trusts of which Mr. Mack's wife is a trustee and 1,652
Units were issued to Mitchell E. Hersh.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers, directors
and persons who beneficially own more than 10% of the Company'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 Company with copies of such forms that they file.
To the Company's knowledge, based solely on the Company's review of the
copies of such reports received by the Company, the Company believes that for
the fiscal year 1998, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with.
MEETINGS OF COMMITTEES AND THE BOARD OF DIRECTORS
During 1998, the entire Board of Directors met 11 times. With the exception
of Paul A. Nussbaum, no director attended fewer than 75% of the aggregate of (1)
the total number of meetings of the Board of Directors and (2) the total number
of meetings held by all committees of the Board of Directors on which he served.
The Board of Directors has three committees: the Executive Committee, the
Audit Committee and the Executive Compensation and Option Committee. With the
exception of Paul A. Nussbaum, upon appointment to a committee, no member of a
committee attended fewer then 100% of all the meetings of the Committee of which
he was a member. The Board of Directors does not have a nominating committee or
a committee performing the functions of a nominating committee. Although there
are no formal procedures for stockholders to make recommendations for committee
appointments or recommendations for nominees to the Board of Directors, the
Board of Directors will consider recommendations from stockholders, which should
be addressed to Roger W. Thomas, the Company's Secretary, at the Company's
address set forth on the first page of this Proxy Statement.
The Audit Committee consists of Irvin D. Reid, Brendan T. Byrne, Martin D.
Gruss and Paul A. Nussbaum. The Audit Committee makes recommendations concerning
the engagement of independent accountants, reviews with the independent
accountants the scope and results of the audit engagement, approves professional
services provided by the independent accountants, reviews the independence of
the independent accountants, considers the range of audit and non-audit fees and
reviews the adequacy of the Company's internal accounting controls. The Audit
Committee met once during 1998.
The Executive Compensation and Option Committee (the "Compensation
Committee") consists of Jeffrey B. Lane, Alan G. Philibosian and Vincent Tese.
The Executive Compensation and Option
13
<PAGE>
Committee establishes remuneration levels for executive officers of the Company
and implements incentive programs, including the Employee Stock Option Plan and
the Director Stock Option Plan. The Executive Compensation and Option Committee
met three times during 1998.
The Executive Committee consists of William L. Mack, chairman, John J. Cali,
Thomas A. Rizk and Mitchell E. Hersh. The Executive Committee acts for the Board
of Directors in between regularly scheduled meetings of the Board within certain
parameters prescribed by the Board of Directors.
COMPENSATION OF DIRECTORS
DIRECTORS' FEES. Each director was paid an annual fee of $10,000, plus
$1,000 per board meeting attended, $500 per committee meeting attended and $250
per telephonic meeting participation. Each director also was reimbursed for
expenses incurred in attending director and committee meetings. For fiscal 1998,
John J. Cali, Thomas A. Rizk, Mitchell E. Hersh, Martin S. Berger, Brendan T.
Byrne, Martin D. Gruss, Jeffrey B. Lane, Earle I. Mack, William L. Mack, Paul A.
Nussbaum, Alan G. Philibosian, Irvin D. Reid, Vincent Tese and Robert F.
Weinberg received directors' fees in the amounts of $18,250, $18,250, $18,250,
$250, $18,750, $17,000, $17,500, $17,250, $18,000, $16,250, $19,750, $17,250,
$18,500 and $18,000, respectively.
DIRECTORS' STOCK OPTION PLAN. Pursuant to the Director Stock Option Plan,
each non-employee director is granted a non-statutory option to purchase 5,000
shares of Common Stock in connection with the director's initial election or
appointment to the Board of Directors. These grants under the Director Stock
Option Plan are made at an exercise price equal to the "fair market value" (as
defined under the Director Stock Option Plan) at the time of the grant of the
shares of Common Stock subject to such option. The Executive Compensation and
Option Committee may make additional discretionary option grants to eligible
directors, consistent with the terms of the Plan. In 1998, no options were
granted to members of the Board of Directors. The Board of Directors may amend,
suspend or discontinue the Director Plan at any time except that certain
specified amendments must be approved (at a meeting held within 12 months before
or after the date of such amendment) by the holders of the majority of issued
and outstanding shares of Common Stock of the Company entitled to vote.
14
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation of the chief executive officer and the five most highly compensated
executive officers of the Company other than the chief executive officer
(collectively, the "Named Executive Officers") for each of the Company's last
three fiscal years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(1)
------------------------------------------
<S> <C> <C> <C> <C>
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(2)
- -------------------------------------------------------------------- --------- ---------- ---------- ------------------
Thomas A. Rizk...................................................... 1998 1,090,385 440,000 2,179
Chief Executive Officer 1997 473,077 1,950,000 0
1996 300,000 750,000 0
Mitchell E. Hersh................................................... 1998 1,090,385 440,000 2,179
President and Chief Operating Officer 1997 28,269 0 0
1996 0 0 0
Barry Lefkowitz..................................................... 1998 311,538 205,000 2,179
Executive Vice President and Chief Financial Officer 1997 155,769 1,125,222 0
1996 123,077 60,000 0
Brant Cali.......................................................... 1998 337,500 170,000 2,179
Executive Vice President--Operations, Leasing and 1997 228,846 175,000 0
Marketing and Assistant Secretary 1996 175,000 125,000 0
John R. Cali........................................................ 1998 337,500 170,000 2,179
Executive Vice President--Development 1997 228,846 175,000 0
1996 175,000 125,000 0
Timothy M. Jones.................................................... 1998 337,500 170,000 2,179
Executive Vice President and Chief Investment Officer 1997 202,885 1,575,000 0
1996 0 0 0
</TABLE>
(TABLE CONTINUED ON FOLLOWING PAGE)
- ------------------------
(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 1998.
(2) The $2,179.00 in 1998 represents the value of 10 shares of preferred stock
of Mack-Cali Property Trust issued in January 1998 and $1,179 in tax
gross-up payments relating thereto.
15
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------------
<S> <C> <C> <C> <C> <C>
AWARDS PAYOUTS
---------------------------------- ----------
RESTRICTED SECURITIES LTIP
STOCK UNDERLYING PAYOUTS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR AWARD(S)($)(3) OPTIONS/WARRANTS(#) ($)(7) COMPENSATION($)(8)
- --------------------------------------------- --------- ------------- ------------------- ---------- ------------------
Thomas A. Rizk............................... 1998 0 0 0 0
Chief Executive Officer 1997 3,033,303 339,976(4) 4,437,247 9,103,269
1996 0 125,000(6) 0 0
Mitchell E. Hersh............................ 1998 0 0 0 0
President and Chief Operating 1997 0 339,976(4) 0 0
1996 0 0 0 0
Barry Lefkowitz.............................. 1998 0 0 0 0
Executive Vice President 1997 505,596 97,137(4) 739,542 0
and Chief Financial Officer 1996 0 35,000(5) 0 0
Brant Cali................................... 1998 0 0 0 0
Executive Vice President 1997 3,033,303 105,295(4) 0 5,681,635
- --Operations, Leasing and Marketing 1996 0 125,000(6) 0 0
and Assistant Secretary
John R. Cali................................. 1998 0 0 0 0
Executive Vice President--Development 1997 3,033,303 105,295(4) 0 5,681,635
1996 0 125,000(6) 0 0
Timothy M. Jones............................. 1998 0 15,000(9) 0 0
Executive Vice President 1997 0 290,295(10) 0 0
and Chief Investment Officer 1996 0 0 0 0
</TABLE>
- ------------------------
(3) On August 31, 1994, in connection with the consummation of the Company's
initial public offering, the Company entered into employment agreements with
each of Thomas A. Rizk, John R. Cali and Brant Cali. On January 21, 1997,
the Company 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 Company 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 executive upon consummation of the
Mack Transaction, based on a $39.00 stock price, which price approximated
the market price of the Company'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.
(4) Represents an option to purchase shares of Common Stock at an exercise price
of $38.75 per share.
(5) Represents an option to purchase shares of Common Stock at an exercise price
of $21.50 per share.
(6) Represents an option to purchase shares of Common Stock at an exercise price
of $26.25 per share.
(7) In connection with their respective January 21, 1997 employment agreements,
the Company 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
16
<PAGE>
used by each of Mr. Rizk and Mr. Lefkowitz to purchase 96,000 and 16,000
shares of Common Stock, respectively, from the Company, 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 Company 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.
(8) Under each of Messrs. Rizk's, Brant Cali's and John R. Cali's January 1997
employment agreements with the Company, 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 Company. In view of the significant changes in the overall
authority, duties and responsibilities of these individuals resulting from
the Mack Transaction, the Compensation Committee determined and the Board of
Directors of the Company 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 Compensation 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 Company's business
and in the best interests of the Company and its stockholders. Therefore,
the Board of Directors, in its discretion, authorized the Company 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 Company.
Each of these senior executives on December 11, 1997 entered into a new
employment agreement with the Company pursuant to which each of the senior
executives waived any right he may have had to sever employment and to
compete with the Company as a result of the Mack Transaction. For a
description of such existing employment agreements see "Employment
Contracts; Termination of Employment."
(9) Represents an option to purchase shares of Common Stock at an exercise price
of $37.3125.
(10) 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 $33.00.
17
<PAGE>
OPTION PLANS
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------
PERCENT OF
NUMBER OF TOTAL GRANT DATE
SECURITIES OPTIONS EXERCISE VALUE
UNDERLYING GRANTED TO OR BASE ------------------------
OPTIONS EMPLOYEES PRICE GRANT DATE
GRANTED IN FISCAL ($/SH) EXPIRATION PRESENT
NAME (#)(2) 1998(%) (3) DATE(4) VALUE($)(5)
- ------------------------------------------------------------- ----------- --------------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Thomas A. Rizk............................................... 0 -- -- -- --
Chief Executive Officer
Mitchell E. Hersh............................................ 0 -- -- -- --
President and Chief Operating Officer
Barry Lefkowitz.............................................. 0 -- -- -- --
Executive Vice President and Chief Financial Officer
Brant Cali................................................... 0 -- -- -- --
Executive Vice President--Operations, Leasing and Marketing,
and Assistant Secretary
John R. Cali................................................. 0 -- -- -- --
Executive Vice President--Development
Timothy M. Jones............................................. 15,000 1.4 37.3125 3/17/08 92,100
Executive Vice President and Chief Investment Officer
</TABLE>
- ------------------------
(1) The Company has not, to date, granted any stock appreciation rights under
the Employee Stock Option Plan.
(2) The Company 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) The exercise price of all options is equal to the market price of the
underlying Common Stock at the close of business on the date immediately
preceding the date of grant. As of the Record Date, the closing stock price
was $27.6875 per share, as opposed to the exercise price of $37.3125 per
share.
(4) Each option granted in 1998 has a ten-year term, vests one-fifth each year
beginning on the first day following the last day of the year in which
options were granted, and becomes 100% vested on the first day following the
fourth anniversary of the last day of the year in which the options were
granted.
(5) The Black-Scholes option pricing model was chosen to estimate the grant date
present value of the options set forth in this table. The Company's use of
this model should not be construed as an endorsement of its accuracy at
valuing options. All stock option valuation models, including the Black-
Scholes model, require a prediction about the future movement of the stock
price. All options referenced in the table were granted on March 17, 1998.
The following assumptions were made for purposes of calculating the Grant
Date Present Value: an option term of six years, volatility of 23.25%, a
dividend yield of 5.36% and an interest rate of 5.55%. The real value of the
options in this table depends upon the actual performance of the Company's
Common Stock during the applicable period.
18
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS/SARS AT VALUE OF UNEXERCISED
FISCAL YEAR-END (#) IN-THE-MONEY
----------------------- OPTIONS/SARS AT
SHARES FISCAL YEAR END ($)
ACQUIRED VALUE --------------------------------------------
ON REALIZED EXERCISABLE
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE ($) UNEXERCISABLE($)
- --------------------------------- ----------- ---------- ----------- --------------- -------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas A. Rizk................... 0 0 135,990 203,986 0 0
Mitchell E. Hersh................ 0 0 135,990 203,986 0 0
Barry Lefkowitz.................. 37,666 687,152 38,854 58,283 0 0
Brant Cali....................... 0 0 367,118 63,177 3,303,125 0
John R. Cali..................... 72,800 1,653,927 284,318 63,177 2,174,975 0
Timothy M. Jones................. 15,000 145,325 215,118 75,177 0 0
</TABLE>
EMPLOYMENT CONTRACTS; TERMINATION OF EMPLOYMENT
THOMAS A. RIZK EMPLOYMENT AGREEMENT. On December 11, 1997, Thomas A. Rizk
entered into a new employment agreement with the Company (the "Rizk Agreement")
providing for a constant five year term. Mr. Rizk's initial annual base salary
is $1,050,000, with annual increases within the discretion of the Compensation
Committee. Mr. Rizk also is eligible to receive an annual bonus and options
within the discretion of the Board or the Compensation Committee, as the case
may be. Mr. Rizk is required to devote substantially all of his business time to
the affairs of the Company and is generally restricted, during the term of his
employment and in the event his employment is terminated by the Company for
cause (as defined in the Rizk Agreement) or by him without good reason (as
defined in the Rizk Agreement), for a period of one year thereafter, from
conducting any competing office or office/flex business activity within the
continental United States. Mr. Rizk is entitled to receive his annual base
salary (the "Annual Base Salary Payment") and a pro-rata portion of all other
compensation based upon the average of the last two calendar years (the
"Pro-Rata Portion of Other Compensation") through the end of his unexpired
employment period (as defined in the Rizk Agreement) should the Company
terminate his employment on account of Disability or in the event of his death.
Mr. Rizk is entitled to the greater of a fixed amount in the sum of $10,000,000
or the sum total of (a) the Annual Base Salary Payment and (b) the Pro-Rata
Portion of Other Compensation should the Company terminate his employment
without cause or should he terminate his employment for good reason. Should Mr.
Rizk terminate his employment on or within six months following a change in
control (as defined in the Rizk Agreement), Mr. Rizk's termination shall be
treated as a termination for good reason. Alternatively, Mr. Rizk may elect,
prior to such change in control, to receive as a retention payment the rights
and benefits he would have received had he terminated his employment at such
time in exchange for remaining in the employ of the successor. In addition, the
vesting of all options and other incentive compensation shall be accelerated
should the Company terminate Mr. Rizk's employment other than for cause or
should he terminate his employment for good reason or upon a change in control.
MITCHELL E. HERSH EMPLOYMENT AGREEMENT. On December 11, 1997, in connection
with the Mack Transaction, Mitchell E. Hersh entered into an employment
agreement with the Company (the "Hersh Agreement"). Mr. Hersh's initial annual
base salary is $1,050,000. The other terms and conditions of the Hersh Agreement
are generally similar to those of the Rizk Agreement.
BARRY LEFKOWITZ EMPLOYMENT AGREEMENT. On December 11, 1997, the Company and
Barry Lefkowitz amended and restated Mr. Lefkowitz's employment agreement with
the Company (the "Amended and Restated Lefkowitz Agreement"). Mr. Lefkowitz's
initial annual base salary was $300,000, with annual increases within the
discretion of the Chief Executive Officer and the President. The terms and
conditions
19
<PAGE>
of the Amended and Restated Lefkowitz Agreement are generally similar to those
of the Rizk Agreement, except that the fixed amount Mr. Lefkowitz could receive
should the Company terminate his employment without cause or should he terminate
his employment for good reason is $3,000,000.
BRANT CALI EMPLOYMENT AGREEMENT. On December 11, 1997, Brant Cali entered
into a new employment agreement with the Company (the "B. Cali Agreement"). Mr.
Cali's initial annual base salary is $325,000. The other terms and conditions of
the B. Cali Agreement are generally similar to those of the Amended and Restated
Lefkowitz Agreement, except that the fixed amount Mr. Cali could receive should
the Company terminate his employment without cause or should he terminate his
employment for good reason is $3,200,000.
JOHN R. CALI EMPLOYMENT AGREEMENT. On December 11, 1997, John R. Cali
entered into a new employment agreement with the Company (the "J.R. Cali
Agreement"). The terms and conditions of the J.R. Cali Agreement are generally
similar to those of the B. Cali Agreement.
TIMOTHY M. JONES EMPLOYMENT AGREEMENT. On December 11, 1997, the Company
and Timothy M. Jones amended and restated Mr. Jones' employment agreement with
the Company (the "Amended and Restated Jones Agreement"). The terms and
conditions of the Amended and Restated Jones Agreement are generally similar to
those of the B. Cali Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no interlocking relationships involving the Company'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 COMPANY'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,
INCLUDING THIS PROXY STATEMENT, 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 Compensation Committee will annually
consider the appropriate combination of cash and option-based compensation and
weigh the competitiveness of the Company's overall compensation arrangements in
relation to comparable real estate investment trusts. From time to time the
Compensation Committee may retain compensation and other management consultants
to assist with, among other things, structuring the Company's various
compensation programs and determining appropriate levels of salary, bonus and
other compensatory awards payable to the Company's executive officers and key
employees, as well as to guide the Company in the development of near-term and
long-term individual performance objectives necessary to achieve long-term
profitability.
The Compensation Committee believes that a fundamental goal of the Company's
executive compensation program should be to provide incentives to create value
for the Company's stockholders.
BASE SALARIES. The base compensation levels for the Company's executive
officers in 1998 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. The Company believes that the base salaries
generally are appropriate as base compensation to compensate the Company's
executive officers for the functions they perform and other considerations. Base
salaries will be reviewed annually and may be increased by the Compensation
Committee 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 Company competes for executive talent. The
weight given such factors by the Compensation Committee may vary from individual
to individual.
20
<PAGE>
ANNUAL BONUS COMPENSATION. The Company's policy of awarding annual cash
bonuses is designed to specifically relate executive pay to Company and
individual performance. As a pay-for-performance program, cash bonuses provide
financial rewards for the achievement of substantive Company and personal
objectives. Actual awards paid are based primarily on actual Company
performance. During 1998, discretionary incentive and merit cash bonuses in
recognition of services performed during fiscal 1998 were awarded as follows:
$440,000 to Thomas A. Rizk, $440,000 to Mitchell E. Hersh, $170,000 to Brant
Cali, $170,000 to John R. Cali, $170,000 to Timothy M. Jones, $205,000 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 Company, (ii) his or her performance and
responsibilities, (iii) the extent to which he or she already holds an equity
stake in the Company, (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 Company'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 Compensation Committee's evaluation of the past as well as the future
anticipated performance and responsibilities of the individual in question.
During 1998, 15,000 options were granted to Timothy M. Jones. No other options
were granted to executive officers of the Company.
The Company'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 grants is to aid the Company in attracting and
retaining quality employees, all advancing the interest of the Company's
stockholders by offering employees an incentive to maximize their efforts to
promote the Company's economic performance. In addition, to assist the Company
in retaining employees and encouraging them to seek long-term appreciation in
the value of the Company's stock, options generally are not exercisable
immediately upon grant, but instead vest over a period of years. Accordingly, an
employee must remain with the Company for a period of years to enjoy the full
economic benefit of an option.
401(K) SAVINGS PLAN. The Company also maintains a tax-qualified 401(k)
savings plan for its eligible employees known as the "Mack-Cali Realty
Corporation 401(k) Savings and Retirement Plan" ("401(k) Plan"). Employees who
have attained age 21 and completed one year of service with the Company 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 Company may make discretionary matching
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 become vested in any matching contributions made on their behalf after two
years of service with the Company at a rate of 20% per year becoming 100% vested
after a total of six years of service with the Company. 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 Company.
CHIEF EXECUTIVE OFFICER COMPENSATION. Thomas A. Rizk, the Chief Executive
Officer of the Company, received a base salary during 1998 of $1,090,385
pursuant to the employment agreement entered into with him in December 1997. Mr.
Rizk also received fees in the amount of $18,250 for his service as a Director
of the Company. In 1998, Mr. Rizk also was paid a cash bonus of $440,000 in
recognition of services performed during fiscal 1998. The Compensation Committee
recognizes Mr. Rizk's contributions to the Company'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. Rizk's total compensation appropriate in
light of Mr. Rizk's substantial contribution to the Company's growth and success
in 1998.
PRESIDENT AND CHIEF OPERATING OFFICER COMPENSATION. Mitchell E. Hersh, the
President and Chief Operating Officer of the Company, received a base salary
during 1998 of $1,090,385 pursuant to the
21
<PAGE>
employment agreement entered into with him in December 1997. Mr. Hersh also
received fees in the amount of $18,250 for his service as a Director of the
Company. In 1998, Mr. Hersh also was paid a cash bonus of $440,000 in
recognition of services performed during fiscal 1998. The Compensation Committee
recognizes Mr. Hersh's contributions to the Company's operations and attempts to
ensure that the President and Chief Operating Officer's compensation is
commensurate with the compensation of presidents and chief operating officers of
comparable corporations. The Board of Directors deemed Mr. Hersh's total
compensation appropriate in light of Mr. Hersh's substantial contribution to the
Company's growth and success in 1998.
EXECUTIVE COMPENSATION AND OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
JEFFREY B. LANE
ALAN G. PHILIBOSIAN
VINCENT TESE
PERFORMANCE GRAPH
Trading of the Company's Common Stock commenced on August 25, 1994, on a
when issued basis. The following graph compares total stockholder returns from
August 31, 1994 through December 31, 1998 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 Company's
Common Stock and in the S&P 500 and NAREIT indices was $100 at August 31, 1994
and that all dividends were reinvested. The Common Stock's price on August 31,
1994 (on which the graph is based) and the initial public offering price of the
Common Stock was $17.25.
The stockholder return shown on the following graph is not necessarily
indicative of future performance. The Company 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
<TABLE>
<CAPTION>
MACK-CALI REALTY CORPORATION S&P NAREIT
<S> <C> <C> <C>
08/31/94 100.00 100.00 100.00
12/31/94 93.55 97.57 98.30
12/31/95 140.07 127.01 113.31
12/31/96 212.62 164.91 153.05
12/31/97 298.60 219.95 184.05
12/31/98 238.40 282.71 151.83
</TABLE>
22
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP served as the Company's independent accountants
for the fiscal year ended December 31, 1998 and has been appointed by the Board
of Directors to continue as the Company's independent accountants for the fiscal
year ending December 31, 1999. In the event that ratification of this
appointment of auditors is not approved by the affirmative vote of a majority of
votes cast on the matter, then the appointment of independent accountants will
be reconsidered by the Board of Directors. Unless marked to the contrary,
proxies received will be voted for RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1999.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the annual meeting. The representative will have an opportunity to make a
statement and will be able to respond to appropriate questions.
Your ratification of the appointment of PricewaterhouseCoopers LLP as the
independent accountants for the fiscal year ending December 31, 1999 does not
preclude the Board of Directors of the Company from terminating its engagement
of PricewaterhouseCoopers and retaining a new independent accountant, if it
determines that such an action would be in the best interests of the Company. If
the Company elects to retain a new independent accountant, such accountant will
be another "Big 5" accounting firm.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE
YEAR ENDING DECEMBER 31, 1999.
STOCKHOLDERS PROPOSALS
To be considered for presentation at the annual meeting of the Company's
stockholders to be held in 2000, a stockholder proposal must be received by
Roger W. Thomas, Secretary, Mack-Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016, no later than January 20, 2000.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
respect thereof and accordance with the judgments of the persons voting the
proxies.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ Roger W. Thomas
------------------------------------------------------------------
ROGER W. THOMAS
SECRETARY
Date: March 31, 1999
Cranford, New Jersey
23
