<PAGE>
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 CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Maryland 22-3305147
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. employer identification no.)
of incorporation or organization)
11 Commerce Drive, Cranford New Jersey 07016-3599
- --------------------------------------------------------------------------------
(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)
Common Stock, $0.01 par value New York Stock Exchange
Pacific Exchange
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 CORPORATION
AMENDMENT NO. 1
TO THE ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
Mack-Cali Realty Corporation (the "Registrant" or the "Company") 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
Set forth below is certain information as of April 15, 2000 for (i) the
members of the Board of Directors of the Company (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
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.
2
<PAGE>
(1) Certain executive officers and directors of the Company 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 Company has a 80.16% general partnership
interest and the aggregate limited partners' interest is 19.84%. 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.
(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 Company upon the resignation of Thomas
A. Rizk as a member of the Board of Directors of the Company on April
18, 1999.
(8) Member of the Audit Committee of the Board of Directors.
(9) Elected as a director of the Company at the Company'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 Company upon the resignation of Jeffrey
B. Lane as a member of the Board of Directors of the Company 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.
3
<PAGE>
(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.
(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 Company's charter 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, 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 Company
in 1997, and as a member of the Strategic Planning Committee of the Board of
Directors of the Company 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 Company's overall development strategies
and policies. Mr. Cali graduated from Indiana University.
4
<PAGE>
WILLIAM L. MACK has served as a member of the Board of Directors of the
Company since 1997. Mr. Mack serves as Chairman of the Company's Executive
Committee. Prior to joining the Company, 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.
MARTIN S. BERGER has served as a Director of the Company since 1998 and was
appointed as Chairman of the Strategic Planning Committee of the Board of
Directors of the Company in 2000. 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 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 Company in April 1999. Mr. Cali is responsible
for directing the property management, leasing and marketing departments of the
Company, 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 Company'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 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.
NATHAN GANTCHER has served as a member of the Board of Directors of the
Company since 1999 and as a member of the Audit Committee of the Board of
Directors of the Company 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
Company 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.
5
<PAGE>
MITCHELL E. HERSH serves as Chief Executive Officer and as a Director of
the Company. Mr. Hersh was appointed 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 in 1997, and as a member of the Strategic Planning Committee of
the Board of Directors of the Company in 2000. Mr. Hersh 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 markets strategy
and overall investment strategy. Previously, Mr. Hersh held the position of
President and Chief Operating Officer of the Company. Prior to joining the
Company 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 Company. He is responsible for
overseeing the portfolio management, development and operations areas of the
Company. Previously he served as Executive Vice President and Chief Investment
Officer. 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 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 Company. Mr. Lefkowitz oversees the firm's strategic financial
planning and forecasting, financial accounting and reporting, capital markets
activities and investor relations. Before joining the Company, 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
Company since 1997 and as a member of the Strategic Planning Committee of the
Board of Directors of the Company since 2000. Prior to joining the Company, 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 Company since 1997 and as a member of the Executive Compensation and
Option Committee of the Board of Directors of the Company 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 Company since 1994 and was
elected as Chairman of the Audit Committee of the Board of Directors of the
Company 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
Company since 1997 and as chairman of the Executive Compensation and Option
Committee of the Board of Directors of the Company since 1998. 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
6
<PAGE>
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 Company. Mr. Thomas' responsibilities include structuring and
implementing the Company'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 Company in
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.
ROY J. ZUCKERBERG has served as a member of the Board of Directors of
the Company 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 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 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 1999, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with.
7
<PAGE>
2. ITEM 11 IS HEREBY AMENDED AND RESTATED AS FOLLOWS:
EXECUTIVE COMPENSATION
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 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)
-----------------------------------------------
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)
- ----------
(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 $1,179 in tax
gross-up payments relating thereto.
(3) Thomas A. Rizk resigned from his position as Chief Executive Officer of
the Company, effective as of April 18, 1999.
8
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------------------
AWARDS PAYOUTS
------------------------------------- -------
RESTRICTED SECURITIES LTIP
NAME AND PRINCIPAL POSITION STOCK UNDERLYING PAYOUTS ALL OTHER
YEAR AWARD(S)($)(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
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. In July
1999, the Company 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
9
<PAGE>
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
Company 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 Company 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 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 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.
(9) 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 Executive Compensation and Option 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 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
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. 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 Company, effective as of
April 18, 1999. See "Employment Contracts; Termination of Employment -
Thomas A. Rizk Termination Agreement."
10
<PAGE>
OPTION PLANS
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
------------------------------------------- ----------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS GRANTED EMPLOYEES OR BASE GRANT DATE
(#)(2) IN FISCAL PRICE EXPIRATION PRESENT
NAME 1999(%) ($/SH) DATE VALUE($)
- ---- --------------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Mitchell E. Hersh..................... 0 -- -- -- --
Chief Executive Officer
Timothy M. Jones...................... 0 -- -- -- --
President
Barry Lefkowitz....................... 0 -- -- -- --
Executive Vice President and Chief
Financial Officer
Brant Cali............................ 0 -- -- -- --
Chief Operating Officer, Executive
Vice President-Operations, Leasing
and Marketing and Assistant Secretary
John R. Cali.......................... 0 -- -- -- --
Executive Vice President-Development
Thomas A. Rizk (3).................... 0 -- -- -- --
</TABLE>
- ----------
(1) The Company has not, to date, granted any stock appreciation rights
under the Employee Stock Option Plan.
(2) The Company has established the Director and Employee Stock Option
Plans for the purpose of attracting and retaining officers, directors
and employees. Options granted under the Director and Employee Stock
Option Plans are exercisable for shares of Common Stock.
(3) Thomas A. Rizk resigned from his position as Chief Executive Officer of
the Company, effective as of April 18, 1999.
11
<PAGE>
AGGREGATED OPTION/WARRANT/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/WARRANTS/SARS AT OPTIONS/WARRANTS/SARS AT
FISCAL YEAR-END (#) FISCAL YEAR END ($)
--------------------------- ----------------------------------
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 Company 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 Company's fiscal year immediately preceding such vesting
date: (A) the Company 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 Company 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 Company, effective as of April 18, 1999.
12
<PAGE>
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 Company 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 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 Company, 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
Company 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 Company'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 Company 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 Company. 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 Company
must be approved by the holders of the majority of issued and outstanding shares
of Common Stock of the Company 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 Company on
April 18, 1999, the Company and Mr. Hersh amended and restated Mr. Hersh's
employment agreement with the Company (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 Company
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 Company 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 Company 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 Company to repurchase his vested options, (iv) receive continuation
of health coverage through the end of his unexpired employment
13
<PAGE>
period should his employment be terminated by the Company 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 Company on April 18, 1999,
the Company and Mr. 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 Amended and Restated Hersh Agreement, except that (i) Mr. Jones'
initial base salary is $515,000, with annual increases 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 Company and
Barry Lefkowitz amended and restated Mr. Lefkowitz's employment agreement with
the Company (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 Company and
Brant Cali amended and restated Mr. Cali's employment agreement with the Company
(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 Company and John R.
Cali amended and restated Mr. Cali's employment agreement with the Company (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
Company and Thomas A. Rizk entered into an agreement (the "Rizk Termination
Agreement") to, among other things, terminate Mr. Rizk's employment with the
Company as Chief Executive Officer and his position as a member of the Board of
Directors of the Company 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 Company 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 Company 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 Company,
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 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, 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.
14
<PAGE>
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 Company'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 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 Executive Compensation and Option 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 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 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 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
Company 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 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 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 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 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 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 and other stock based 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, awards 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 award.
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/Retirement Plan" ("401(k) Plan"). Employees who have
attained age 21 and completed one-half 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 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 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
15
<PAGE>
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. Mitchell E. Hersh, the Chief
Executive Officer of the Company, 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 Company 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
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.
Hersh's total compensation appropriate in light of Mr. Hersh's substantial
contribution to the Company's growth and success in 1999.
EXECUTIVE COMPENSATION AND OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
VINCENT TESE
MARTIN D. GRUSS
ALAN G. PHILIBOSIAN
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 Company'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 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
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
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3. ITEM 12 IS HEREBY AMENDED AND RESTATED AS FOLLOWS:
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth information as of April 15, 2000 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
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
Company conducts its real estate activities, 2,000,000 shares reserved
for issuance upon exercise of outstanding warrants to purchase Units
("Unit Warrants") or 5,504,231 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 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 Company 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 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, 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
17
<PAGE>
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 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:
o 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 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 1999, the Company 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 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.
o In March 1999, the Company 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 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. The 478,783
common Units issued to Apollo were redeemed by Apollo and converted
into 478,783 shares of the Company's Common Stock on June 8, 1999.
o On May 4, 1999, the Company acquired from an entity whose principals
include Timothy M. Jones, Martin S. Berger and Robert F. Weinberg,
each of whom are affiliated with the Company as the President of the
Company, a current member of the Board of Directors and a former
member of the Board of Directors of the Company, respectively,
approximately 2.5 acres of vacant land in the Stamford Executive Park,
located in Stamford, Fairfield County, Connecticut. The Company
acquired the land for approximately $2,181,000. $1,681,000 of the
purchase price was funded from the Company'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.
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<PAGE>
o On August 31, 1999, the Company acquired from an entity whose
principals include Brant Cali, Executive Vice President and Chief
Operating Officer of the Company and a member of the Board of
Directors of the Company and certain members of the immediate family
of John J. Cali, Chairman of the Board of Directors of the Company,
approximately 28.1 acres of developable land adjacent to two of the
Company'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.
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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 CORPORATION
----------------------------
(Registrant)
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
Date: April 28, 2000 /s/ Martin D. Gruss
-----------------------------------
Martin D. Gruss
Director
20
<PAGE>
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
21
