Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Appointment of Interim Chief Executive Officer
Effective as of July 25, 2020, the Board of Directors (the "Board") of Mack-Cali
Realty Corporation (the "Company"), the general partner of Mack-Cali Realty,
L.P., appointed MaryAnne Gilmartin, the Chair of the Board, as interim Chief
Executive Officer of the Company. Ms. Gilmartin will continue to serve as Chair
of the Board, but has resigned as a member of the Nominating & Corporate
Governance Committee of the Board. Tammy K. Jones, a director on the Board, has
been appointed to serve as the lead independent director on the Board.
In connection with Ms. Gilmartin's appointment, the Company has entered into a
letter agreement (the "Letter Agreement") with MAG Partners 2.0 LLC ("MAG
Partners"), an entity wholly owned by Ms. Gilmartin. Pursuant to the Letter
Agreement, MAG Partners has agreed to make Ms. Gilmartin's services available to
the Company to serve as its interim Chief Executive Officer. The term of this
arrangement and Ms. Gilmartin's appointment as interim Chief Executive Officer
(the "Term") will continue until the earliest to occur of (i) the commencement
of employment of a permanent Chief Executive Officer of the Company, (ii) a
period of six months has elapsed, or an earlier or later date selected by the
Board, and (iii) Ms. Gilmartin's death or disability, or the termination of the
arrangement by MAG Partners (including a resignation by Ms. Gilmartin of her
appointment as interim Chief Executive Officer).
Pursuant to the Letter Agreement, during the Term the Company will pay to MAG
Partners a monthly fee of $150,000, subject to proration for any partial month
(but continuing for a minimum of three months following commencement of the Term
if the Term is ended by the Board for any reason other than for "cause"). MAG
Partners is also eligible to receive a one-time cash sign-on bonus of $300,000
and, unless the Term is ended by the Board for "cause," a one-time completion
bonus of $200,000 at the end of the Term (but no later than March 12, 2021). In
addition, the Company has granted to MAG Partners a fully vested stock option to
purchase up to 230,000 shares of common stock with an exercise price of $14.39
per share, and up to 100,000 shares of common stock with an exercise price of
$20.00 per share, pursuant to a Stock Option Agreement by and between MAG
Partners and the Company (the "Option Agreement"). However, the options, and any
shares received upon exercise, will terminate and be forfeited if the Board ends
the Term for "cause" or MAG Partners terminates its arrangement with the Company
(including a resignation by Ms. Gilmartin of her appointment as interim Chief
Executive Officer, but excluding a termination because of a material breach of
the arrangement by the Company or because Ms. Gilmartin has been appointed as
the permanent Chief Executive Officer of the Company) before six months have
elapsed, or if MAG Partners fails to comply with certain covenants in the Letter
Agreement. 157,505 of the options have been granted subject to shareholder
approval at the Company's 2021 Annual Meeting of Stockholders; however, if a
"change in control" transaction occurs before the date of such 2021 Annual
Meeting, then such options would instead be canceled and cashed out upon such
transaction for a value equal to their "spread value," if any.
During the Term, Ms. Gilmartin will not receive any additional fees or other
compensation for her service (excluding equity previously granted) as a director
on the Board or on the Roseland Residential Trust board of directors. However,
the Company will reimburse MAG Partners for up to $10,000 in legal fees incurred
in connection with negotiating the arrangements described above.
Ms. Gilmartin's biographical information is incorporated by reference to the
information with respect to Ms. Gilmartin set forth in Proposal No. 1, Election
of Directors, set forth in the Company's definitive revised proxy statement
filed with the Securities and Exchange Commission on June 16, 2020, which
information is incorporated by reference herein. There is no arrangement or
understanding between Ms. Gilmartin and any other persons in connection with Ms.
Gilmartin's appointment as interim Chief Executive Officer (other than the
Letter Agreement and the Option Agreement), and Ms. Gilmartin has no family
relationship with any director or executive officer of the Company. Other than
the Letter Agreement and the Option Agreement, Ms. Gilmartin has no direct or
indirect material interest in any transaction with the Company that is
reportable under Item 404(a) of Regulation S-K promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The foregoing summary of the Letter Agreement and the Option Agreement do not
purport to be complete and are qualified in their entirety by the full text of
the Letter Agreement and the Option Agreement, which are attached to this
Current Report on Form 8-K as Exhibits 10.1 and 10.2, respectively, and
incorporated herein by this reference.
Departure of Chief Executive Officer
The employment of the Company's former Chief Executive Officer, Michael J.
DeMarco, ended on July 24, 2020.
Item 7.01 Regulation FD Disclosure.
On July 27, 2020, the Company issued a press release announcing the appointment
of MaryAnne Gilmartin as interim Chief Executive Officer and the departure of
Mr. DeMarco. A copy of the press release is filed as Exhibit 99.1 to this
Current Report on Form 8-K and is furnished herewith.
The press release furnished pursuant to Item 7.01 of this Form 8-K (Exhibit
99.1) shall not be deemed "filed" for purposes of Section 18 of the Exchange
Act, or otherwise subject to the liabilities under that Section. Furthermore,
the press release shall not be deemed to be incorporated by reference into any
Company filing under the Securities Act of 1933, as amended, or the Exchange
Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Exhibit Description
10.1 Letter Agreement, by and among the Company, MAG Partners, and
MaryAnne Gilmartin, dated as of July 24, 2020.
10.2 Stock Option Agreement, by and between the Company and MAG Partners,
dated as of July 24, 2020.
99.1 Press release, dated July 27, 2020.
104.1 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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