MACK-CALI REALTY CORPORATION (NYSE:CLI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
On April 4, 2017, the board of directors (the Board of Directors)
of Mack-Cali Realty Corporation (the Company or the General
Partner), the general partner of Mack-Cali Realty, L.P. (the
Operating Partnership), approved the recommendations and ratified
the determinations of the Executive Compensation and Option
Committee of the Board of Directors (the Compensation Committee)
and authorized the General Partner to grant Long-Term Incentive
Plan (LTIP) awards to the executive officers of the Company
specified below in this Current Report on Form 8-K (the 2017 LTIP
Awards). All of the 2017 LTIP Awards will be in the form of units
in the Operating Partnership (LTIP Units) and shall constitute
awards under Companys stockholder approved 2013 Stock Incentive
Plan. For Messrs. DeMarco, Tycher and Rudin, approximately
twenty-five percent (25%) of the 2017 LTIP Award will be in the
form of a time-based award that will vest after three years on
April 4, 2020 (the 2017 TBV LTIP Units), and the remaining
approximately seventy-five percent (75%) of the 2017 LTIP Award
will be in the form of a performance-based award under the
Companys Outperformance Plan (the 2017 OPP) adopted by the Board
of Directors, consisting of a multi-year, performance-based
equity compensation plan and related forms of award agreement
(the 2017 PBV LTIP Units). For all other executive officers,
approximately forty percent (40%) of the 2017 LTIP Award will be
in the form of 2017 TBV LTIP Units and the remaining
approximately sixty percent (60%) of the 2017 LTIP Award will be
in the form of 2017 PBV LTIP Units.
The 2017 OPP is designed to align the interests of senior
management to relative and absolute performance of the Company
over a three-year performance period from April 4, 2017 through
April 3, 2020. Participants in the 2017 OPP will only earn the
full awards if, over the three-year performance period, the
Company achieves a thirty-six percent (36%) absolute total
stockholder return (TSR) and if the Company is in the 75th
percentile of performance as compared to the NAREIT office index.
The Board of Directors designed the 2017 OPP to conform to the
highest form of best compensation practices in the industry.
Under the 2017 OPP, executive officers have the opportunity to
vest in 2017 PBV LTIP Units that ultimately may be settled in
common stock of the Company according to the following schedules,
with linear interpolation for performance between levels:
|
|
AbsoluteTSR(50%oftotal2017PBVLTIP Units) |
|
RelativeTSR(50%oftotal2017PBVLTIP Units) |
|
|||||
|
PerformanceLevel |
|
CompanyAbsolute 3-YearTSR |
|
Payoutas%of LTIPUnits |
|
CLI3-YearTSR PercentileRank |
|
Payoutas%of LTIPUnits |
|
|
Threshold |
18% |
0% |
35th Percentile |
0% |
|||||
|
Threshold |
18% |
25% |
35th Percentile |
25% |
|||||
|
Target |
27% |
62.5% |
55th Percentile |
62.5% |
|||||
|
Maximum |
36% |
50% |
75th Percentile |
50% |
If the designated performance objectives are achieved, 2017 PBV
LTIP Units are also subject to time-based vesting requirements,
with 50% of vested 2017 PBV LTIP Units vesting at the end of the
performance period on April 3, 2020, and the remaining 50% of
vested 2017 PBV LTIP Units vesting 25% each on April 3, 2021 and
April 3, 2022.
The executive officers of the Company received the following 2017
LTIP Awards:
|
ExecutiveOfficer |
|
2017TBVLTIPUnits(1) |
|
2017PBVLTIP Units(2) |
|
|
Michael J. DeMarco |
32,443 |
196,482 |
|||
|
Marshall B. Tycher |
20,393 |
123,503 |
|||
|
Mitchell E. Rudin |
9,270 |
56,138 |
|||
|
Anthony Krug |
5,933 |
17,964 |
|||
|
Christopher DeLorenzo |
5,933 |
17,964 |
|||
|
Robert Andrew Marshall |
4,449 |
13,473 |
|||
|
Ricardo Cardoso |
4,449 |
13,473 |
|||
|
Gary T. Wagner |
4,449 |
13,473 |
(1) 2017 TBV LTIP Units have a grant date fair value of $26.97
per LTIP Unit calculated in accordance with Accounting Standards
Codification Topic 718 (ASC 718) based on the closing price of
the Companys common stock as reported on the New York Stock
Exchange on April 3, 2017.
(2) 2017 PBV LTIP Units have a grant date fair value of $13.36
per LTIP Unit calculated in accordance with ASC 718 using the
Monte Carlo Method.
LTIP Units were issued on April 4, 2017, but will remain
subject to forfeiture depending on the extent that the 2017
LTIP Awards vest. The number of LTIP Units to be issued
initially to recipients of the 2017 PBV LTIP Awards is the
maximum number of LTIP Units that may be earned under the
awards. The number of 2017 PBV LTIP Units that actually vest
for each award recipient will be determined at the end of the
performance measurement period. TSR for the Company and for the
Index over the three-year measurement period and other
circumstances will determine how many 2017 PBV LTIP Units vest
for each recipient; if they are fewer than the number issued
initially, the balance will be forfeited as of the performance
measurement date.
Prior to vesting, recipients of LTIP Units will be entitled to
receive per unit distributions equal to one-tenth (10%) of the
regular quarterly distributions payable on a common unit of
limited partnership interest in the Operating Partnership (a
Common Unit), but will not be entitled to receive any special
distributions. Distributions with respect to the other
nine-tenths (90%) of regular quarterly distributions payable on
a Common Unit will accrue but shall only become payable upon
vesting of the LTIP Unit. After vesting of the 2017 TBV LTIP
Units or the end of the measurement period for the 2017 PBV
LTIP Units, the number of LTIP Units, both vested and unvested,
will be entitled to receive distributions in an amount per unit
equal to distributions, both regular and special, payable on a
Common Unit.
LTIP Units are designed to qualify as profits interests in the
Operating Partnership for federal income tax purposes. As a
general matter, the profits interests characteristics of the
LTIP Units mean that initially they will not be economically
equivalent in value to a Common Unit. If and when events
specified by applicable tax regulations occur, LTIP Units can
over time increase in value up to the point where they are
equivalent to Common Units on a one-for-one basis. After LTIP
Units are fully vested, and to the extent the special tax rules
applicable to profits interests have allowed them to become
equivalent in value to Common Units, LTIP Units may be
converted on a one-for-one basis into Common Units. Common
Units in turn have a one-for-one relationship in value with
shares of the Companys common stock, and are redeemable on a
one-for-one basis for cash or, at the election of the Company,
shares of the Companys common stock.
On April 4, 2017, the General Partner in its capacity as sole
general partner of the Operating Partnership, adopted the Fifth
Amendment (the Amendment) to the Second Amended and Restated
Agreement of Limited Partnership of the Operating Partnership,
dated as of December 11, 1997, as amended (the Partnership
Agreement), to create new classes of LTIP Units under the
Partnership Agreement in connection with the 2017 LTIP Awards.
The forms of award agreements for the 2017 TBV LTIP Units and
2017 PBV LTIP Units are included as exhibits to the Amendment
filed herewith as Exhibit 3.1 and are incorporated herein by
reference. The 2017 LTIP Awards to Messrs. Rudin and DeMarco
are in lieu of and shall supersede and replace the
discretionary long-term incentive plan awards for calendar year
2017 contemplated by paragraph 4(b) of each of their employment
agreements with the Company dated June 3, 2015, as amended.
Item 5.03 Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal Year.
See Item 5.02 above, which is incorporated herein by reference.
A copy of the Amendment is filed herewith as Exhibit 3.1 and is
incorporated herein by reference.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
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ExhibitNo. |
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Description |
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3.1 |
Fifth Amendment dated as of April 4, 2017 to Second |
About MACK-CALI REALTY CORPORATION (NYSE:CLI)
Mack-Cali Realty Corporation is a self-administered and self-managed real estate investment trust (REIT). The Company owns and operates a real estate portfolio of Class A office and office/flex properties. It operates in three segments: commercial and other real estate, multi-family real estate and multi-family services. Its commercial and other real estate provides leasing, property management, acquisition, development, construction and tenant-related services for its commercial and other real estate, and multi-family real estate portfolio. Its multi-family services business also provides similar services for third parties. It owned or had interests in approximately 248 properties, consisting of approximately 119 office and approximately 110 flex properties, totaling approximately 26.6 million square feet, leased to approximately 1,600 commercial tenants and approximately 19 multi-family rental properties containing approximately 5,614 residential units, plus developable land. MACK-CALI REALTY CORPORATION (NYSE:CLI) Recent Trading Information
MACK-CALI REALTY CORPORATION (NYSE:CLI) closed its last trading session up +0.18 at 27.21 with 898,214 shares trading hands.
