EDISON, NJ—Mitchell E. Hersh, who steps down in May 2015 as president and chief executive officer of Mack-Cali, will receive $8 million in cash as part of a severance package that includes accelerated vesting of stock options and paid medical benefits for his family for up to four years after he leaves the company, according to the company's Form 8-K, filed with the Securities and Exchange Commission late Tuesday.

Hersh will also receive $2.3 million from a deferred compensation agreement, according to the Mack-Cali public filing.

The 8-K includes the full text of Hersh's severance agreement, which is being disclosed to comply with securities laws. Mack-Cali is a publicly traded company.

Under the separation agreement, Hersh will receive a cash termination payment of $8 million. In addition, Mack-Cali will pay his full salary, health benefits, and incentive compensation bonuses through the end of 2014 and a pro-rated share of his compensation and bonuses for 2015 through his termination date, which is stated as May 11, 2015 in the agreement. The company can request that Hersh stay on until June 30, 2015 and if it asks him to stay on, would pay his salary and bonuses through that date.

The company will accelerate the vesting of 210,000 shares of common stock and will convert 675 “performance” shares awarded to Hersh under a separate compensation agreement into 48,811 additional shares of common stock when he leaves the firm.

For four years after his termination date, Hersh's family will be covered by health, medical, dental, and vision plans available to senior executives of the company on the same terms available to those executives. If their participation would jeopardize the tax status of those plans, the company agreed to pay Hersh to acquire substantially similar insurance for his family, and will also reimburse Hersh for any tax liability incurred because of those insurance payments.

Hersh also will be allowed to keep any company cell phones and computers issued to him if he deletes proprietary company information from them, the agreement says.

GlobeSt.com reported Tuesday that Mack-Cali announced Hersh's departure and said he will not stand for reelection to the Mack-Cali board of directors. Ilene Jablonski, Mack-Cali's vice president of marketing, tells GlobeSt.com exclusively that the company does not want to comment beyond the press release. “We think it says what we want to say,” she said in a telephone interview.

Through Jablonski, Hersh declined a GlobeSt.com request for an interview.

Mr. Hersh was recently named one of the top Mid-Atlantic Icons in commercial real estate for 2014 by Real Estate Forummagazine, GlobeSt.com's sister publication.

CORRECTION 11/6/2014: An earlier version of this story included a misspelling of Mr. Hersh's name as Hirsch in one reference.

Instant Insights /

Hersh's Severance from Mack-Cali Tops $8 Million

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