SCHEDULE 14A INFORMATION
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Section240.14a-12
CORPORATE OFFICE PROPERTIES TRUST
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[LOGO]
Corporate Office Properties Trust
401 City Avenue, Suite 615
Bala Cynwyd, PA 19004-1126
TELEPHONE 610-538-1800
FACSIMILE 610-538-1801
WEBSITE www.copt.com
To: Our Shareholders
From: Clay W. Hamlin, III
Subject: Invitation to the Corporate Office Properties Trust 2000
Annual Meeting
You are cordially invited to attend our Annual Meeting on May 16, 2000 to
find out more about your company and the significant progress we are making. You
will have the opportunity at this meeting to ask questions and make comments.
Enclosed with this Proxy Statement are your voting card and the 1999 Annual
Report.
I look forward to seeing you at the Annual Meeting.
/s/ Clay W. Hamlin, III
Clay W. Hamlin, III
Chief Executive Officer
[LOGO]
Corporate Office Properties Trust
8815 Centre Park Drive, Suite 400
Columbia, Maryland 21045-2272
TELEPHONE 410-730-9092
FACSIMILE 410-740-1174
WEBSITE www.copt.com
March 31, 2000
Notice of Annual Meeting of Shareholders
Date: Tuesday, May 16, 2000
Time: 10:00 a.m.
Place: The World Trade Center Baltimore
401 East Pratt Street, 21(st) Floor
Baltimore, MD
We will hold our Annual Meeting of Shareholders on May 16, 2000 at
10:00 a.m. at The World Trade Center Baltimore. During the Annual Meeting, we
will consider and take action on the following proposals:
1. Elect three Trustees, Steven D. Kesler, William H. Walton and Kenneth D.
Wethe, each for a term of three years;
2. To transact any other business properly before the Annual Meeting.
You may vote at the meeting if you were a shareholder as of March 22, 2000.
By order of the Board of Trustees
/s/ John H. Gurley
John H. Gurley
Vice President, General Counsel and Secretary
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are being mailed,
beginning on or about March 31, 2000, to owners of common shares of
beneficial interest of Corporate Office Properties Trust in connection with
the solicitation of proxies by the Board of Trustees for our 2000 Annual
Meeting of Shareholders. This proxy procedure is necessary to permit all
Corporate Office Properties Trust shareholders, many of whom are unable to
attend the Annual Meeting, to vote. The Board of Trustees encourages you to
read this document thoroughly and to take this opportunity to vote on the
matters to be decided at the Annual Meeting.
CONTENTS
General Information......................................... 2
Election of Trustees........................................ 5
Our Board of Trustees....................................... 6
Our Executive Officers...................................... 9
Report of the Compensation Committee........................ 11
Common Shares Performance Graph............................. 14
Share Ownership of our Trustees,
Executive Officers and 5% Beneficial Owners................. 15
Section 16(a) Beneficial Ownership Reporting Compliance..... 16
Summary Compensation Table.................................. 16
Employment Agreements....................................... 17
Option Grant Table.......................................... 18
Option Exercise Table....................................... 19
Certain Transactions........................................ 19
Requirements for Advance Notification of Nominations........ 20
Independent Auditors........................................ 21
Annual Report on Form 10-K.................................. 21
1
GENERAL INFORMATION
The questions and answers set forth below provide general information
regarding this proxy statement and our annual meeting of shareholders.
WHEN ARE OUR ANNUAL REPORT TO SHAREHOLDERS AND THIS PROXY STATEMENT FIRST BEING
SENT TO SHAREHOLDERS?
Our annual report to shareholders and this proxy statement are being sent to
shareholders beginning on or about March 31, 2000.
WHAT AM I VOTING ON?
1. The election of three Trustees, each for a three-year term.
2. Any other business that properly comes before the meeting for a vote.
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING AND HOW MANY VOTES DO THEY HAVE?
Common shareholders of record at the close of business on March 22, 2000 may
vote at the Annual Meeting. Each share has one vote. There were 18,536,091
common shares outstanding on March 22, 2000.
HOW DO I VOTE?
You must be present, or represented by proxy, at the Annual Meeting in order
to vote your shares. Since many of our shareholders are unable to attend the
Annual Meeting in person, we send proxy cards to all of our shareholders to
enable them to vote.
WHAT IS A PROXY?
A proxy is a person you appoint to vote on your behalf. We are soliciting
your appointment of proxies so that your common shares may be voted at the
Annual Meeting without your attendance. If you complete and return the enclosed
proxy card, your shares will be voted by proxy.
BY COMPLETING AND RETURNING THIS PROXY CARD, WHO AM I DESIGNATING AS MY PROXY?
You will be designating Clay W. Hamlin, III, our Chief Executive Officer,
and Randall M. Griffin, our President and Chief Operating Officer, as your
proxies. They may act on your behalf together or individually and will have the
authority to appoint a substitute to act as proxy.
HOW WILL MY PROXY VOTE MY SHARES?
Your proxy will vote according to the instructions on your proxy card. IF
YOU COMPLETE AND RETURN YOUR PROXY CARD BUT DO NOT INDICATE YOUR VOTE ON
BUSINESS MATTERS, YOUR PROXY WILL VOTE "FOR" THE ELECTION OF STEVEN D. KESLER,
WILLIAM H. WALTON AND KENNETH D. WETHE. We do not intend to bring any other
matter for a vote at the Annual Meeting, and we do not know of anyone else who
intends to do so. However, your proxies are authorized to vote on your behalf,
using their best judgment, on any other business that properly comes before the
Annual Meeting.
2
HOW DO I VOTE USING MY PROXY CARD?
Other than attending the Annual Meeting and voting in person, you must vote
by mail. To vote by mail, simply mark, sign and date the enclosed proxy card and
return it in the postage-paid envelope provided. If you hold your shares through
a broker, bank or other nominee, you will receive separate instructions from the
nominee describing how to vote your shares.
HOW DO I REVOKE MY PROXY?
You may revoke your proxy at any time before your shares are voted at the
Annual Meeting by:
- Notifying our Corporate Secretary, John H. Gurley, in writing at 8815
Centre Park Drive, Suite 400, Columbia, Maryland 21045, that you are
revoking your proxy;
- Executing a later dated proxy card; or
- Attending and voting by ballot at the Annual Meeting.
IS MY VOTE CONFIDENTIAL?
Yes, only certain of our employees will have access to your card.
WHO WILL COUNT THE VOTES?
An officer of Corporate Office Properties Trust will act as the inspector of
election and will count the votes.
WHAT CONSTITUTES A QUORUM?
As of March 22, 2000, 18,536,091 of our common shares were issued and
outstanding. A majority of the outstanding shares, present or represented by
proxy, constitutes a quorum. If you sign and return your proxy card, you will be
considered part of the quorum, even if you withhold your vote. If a quorum is
not present at the Annual Meeting, the shareholders present in person or by
proxy may adjourn the meeting to a date not more than 120 days after March 22,
2000 until a quorum is present.
HOW WILL MY VOTE BE COUNTED?
With respect to the election of Trustees, votes may be cast in favor of or
withheld from one or all nominees. Votes that are withheld will not be included
in the vote.
WHAT PERCENTAGE OF OUR COMMON SHARES DO THE TRUSTEES AND EXECUTIVE OFFICERS OWN?
Our Trustees and executive officers owned approximately 6.4% of our common
shares as of March 14, 2000. (See the discussion under the heading "Share
Ownership of our Trustees, Executive Officers and 5% Beneficial Owners" for more
details.)
WHO IS SOLICITING MY PROXY, HOW IS IT BEING SOLICITED AND WHO PAYS THE COST?
Corporate Office Properties Trust is soliciting your proxy. The solicitation
process is being conducted primarily by mail. However, proxies may also be
solicited in person, by telephone or facsimile.
3
Norwest Bank, our transfer agent, will be assisting us for a fee of
approximately $1,000, plus out-of-pocket expenses. Corporate Office Properties
Trust pays the cost of soliciting proxies. We will also reimburse stockbrokers
and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation material to the
owners of common shares.
WHO IS OUR LARGEST PRINCIPAL SHAREHOLDER?
As of March 14, 2000, Constellation Real Estate, Inc., 111 Market Place,
Baltimore, Maryland 21202, owned 7,030,793, or approximately 39.8%, of our
common shares and 984,308, or 100%, of our Series A convertible preferred
shares. Constellation Real Estate, Inc. is a wholly-owned indirect subsidiary of
Constellation Energy Group, Inc. ("Constellation Energy").
WHEN ARE SHAREHOLDER PROPOSALS FOR THE YEAR 2001 ANNUAL MEETING DUE?
Shareholder proposals to be presented at the 2001 Annual Meeting must be
submitted in writing by December 2, 2000 to John H. Gurley, Vice President,
General Counsel and Secretary, at 8815 Centre Park Drive, Suite 400, Columbia,
Maryland 21045. You should submit any proposal by a method that permits you to
prove the date of delivery to us. (See the discussion under the heading
"Requirements for Advance Notification of Nominations" for information regarding
certain procedures with respect to shareholder proposals and nominations of
Trustees.)
4
ELECTION OF TRUSTEES
The terms of our three Class II Trustees expire upon the election of their
successors at the Annual Meeting. Corporate Office Properties Trust, through our
Nominating Committee of the Board of Trustees, proposed the renomination of
Steven D. Kesler, William H. Walton and Kenneth D. Wethe for election as
Class II Trustees at the Annual Meeting. Each of these nominees has agreed to
serve a three-year term if elected.
STEVEN D. KESLER, age 48, has been one of our Trustees since
September 1998. Mr. Kesler is the Chief Executive Officer and President of
Constellation Investments, Inc., Constellation Real Estate Group, Inc. and
Constellation Real Estate, Inc., wholly-owned indirect subsidiaries of
Constellation Energy. In this role, Mr. Kesler manages a corporate investment
entity, Constellation Energy's pension plan, Constellation Energy's nuclear
decommissioning trust, a portfolio of real estate assets and a portfolio of
assisted living assets. He also began serving as Vice Chairman and President of
Constellation Health Services, Inc., a wholly-owned indirect subsidiary of
Constellation Energy, during 1999. Prior to joining Constellation Energy in
1986, Mr. Kesler was Controller of Westinghouse-Hittman Nuclear, Inc. and
Manager of Budgets, Planning and Analysis with Maryland National Corporation.
Mr. Kesler holds an MBA from The Wharton School of Business, a bachelor's from
New York University and is a Certified Public Accountant in Maryland.
WILLIAM H. WALTON, age 47, has been one of our Trustees since October 1997.
Mr. Walton is a Managing Principal of Westbrook Partners, LLC, a
fully-integrated real estate investment management company which controls
approximately $8 billion of real estate assets, which he co-founded in
April 1994. Prior to co-founding Westbrook, Mr. Walton was managing director at
Morgan Stanley Realty. Mr. Walton holds an MBA from Harvard Business School and
an AB from Princeton University.
KENNETH D. WETHE, age 58, has been one of our Trustees since January 1990.
Since 1990, Mr. Wethe has been the owner and principal officer of Wethe &
Associates, a Dallas-based firm providing independent risk management, insurance
and employee benefit services to school districts and governmental agencies.
Mr. Wethe's background includes over 25 years experience in the group insurance
and employee benefits area. He is a Certified Public Accountant and holds an MBA
from Pepperdine University and a bachelor's degree from the University of
Minnesota.
If a quorum is present at the Annual Meeting, then a plurality of all votes
cast at the meeting will be sufficient to elect a Trustee. There is no
cumulative voting in the election of Trustees.
If any nominee is unable to stand for election, which we do not presently
contemplate, the Board may provide for a lesser number of Trustees or designate
a substitute. In the latter event, shares represented by proxies may be voted
for a substitute nominee.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" EACH OF THE LISTED NOMINEES.
5
OUR BOARD OF TRUSTEES
HOW WOULD YOU DESCRIBE THE CLASSES OF THE BOARD OF TRUSTEES?
Our Declaration of Trust provides for three classes of Trustees who manage
our business affairs. You will elect successors to our Class II Trustees in this
election. Our shareholders will elect successors to our Class III Trustees in
the year 2001 and Class I Trustees in the year 2002. All Trustees will be
elected for three-year terms.
Constellation Real Estate, Inc. is entitled to designate two Trustees
because of its Series A convertible preferred shares ownership. Its designated
Trustees are Edward A. Crooke (Class III Trustee) and Steven D. Kesler
(Class II Trustee).
BESIDES THE THREE NOMINEES FOR ELECTION, WHO ARE THE OTHER MEMBERS OF OUR BOARD
OF TRUSTEES?
NAME AGE OFFICE CLASS
- ---- -------- --------------------------------------- --------
Jay H. Shidler......................... 54 Chairman of the Board of Trustees III
Clay W. Hamlin, III.................... 55 Chief Executive Officer and Trustee III
Betsy Z. Cohen......................... 58 Trustee I
Edward A. Crooke....................... 61 Trustee III
Robert L. Denton....................... 47 Trustee I
Kenneth S. Sweet, Jr. ................. 67 Trustee III
JAY H. SHIDLER has been Chairman of our Board of Trustees since
October 1997. Mr. Shidler is the founder and Managing Partner of The Shidler
Group, a nationally recognized real estate investment company. Mr. Shidler has
over 26 years of experience in real estate investment and has been directly
involved in the acquisition and management of over 1,000 properties in 40 states
and Canada totaling over $4 billion in aggregate value. Mr. Shidler is a founder
and current Chairman of the Board of Directors of First Industrial Realty
Trust, Inc. Mr. Shidler is also founder and Chairman of the Board of CGA
Group, Ltd., a holding company whose subsidiary is a AAA-rated financial
guarantor. Mr. Shidler serves on the boards of directors of several private
companies and is active as a Trustee of several charitable organizations,
including The Shidler Family Foundation. Mr. Shidler holds a bachelor's degree
in Business Administration from the University of Hawaii.
CLAY W. HAMLIN, III has been a Trustee and our Chief Executive Officer since
October 1997. He was our President from October 1997 until September 1998. From
May 1989 until joining us, Mr. Hamlin was the Managing Partner of The Shidler
Group's Mid-Atlantic region, where he acquired, managed and leased over four
million square feet of commercial property. He has been active in the real
estate business for 27 years. Mr. Hamlin is an attorney, a Certified Public
Accountant and holds an MBA from The Wharton School of Business and an
undergraduate degree from the University of Pennsylvania. Mr. Hamlin is also a
founding shareholder of First Industrial Realty Trust, Inc.
BETSY Z. COHEN has been a Trustee since May 1999. Mrs. Cohen is Chairman of
the Jefferson Division of Hudson National Bank. She founded Jefferson Bank in
1974 and served as Chairman and Chief Executive Officer until the sale of
Jeffbanks, Inc., Jefferson Bank's parent company, to Hudson United
Bancorp, Inc. on December 1, 1999. Since 1997, Mrs. Cohen also has served as
Chairman, Chief Executive Officer and trustee of Resource Asset Investment
Trust, a real estate investment trust.
6
From 1985 until 1993, Mrs. Cohen was a director of First Union Corp. of
Virginia, a bank holding company, and its predecessor, Dominion
Bankshares, Inc. Mrs. Cohen also is a director of The Maine Merchant Bank, LLC
and Aetna, Inc.
EDWARD A. CROOKE has been one of our Trustees since September 1998.
Mr. Crooke is Vice Chairman, retired, of Constellation Energy. Mr. Crooke was
Vice Chairman of Constellation Energy from April 1999 to January 1, 2000. He
also served as President and Chief Operating Officer of Baltimore Gas and
Electric Company, a wholly owned direct subsidiary of Constellation Energy, from
1992 to 1999 and a director from 1988 to April 1999. He retired as a director,
Chairman of the Board, President and Chief Executive Officer on January 1, 2000
of Constellation Enterprises, Inc., the parent company of most of Constellation
Energy's unregulated subsidiaries. He also had served as director of each of
Constellation Enterprises, Inc.'s direct subsidiaries and most of its indirect
subsidiaries, and was Chairman of the Board of each of the direct subsidiaries
until he retired on January 1, 2000. Mr. Crooke serves as a director of
Constellation Energy Group, Allfirst Financial, Inc., Allfirst Bank, AEGIS
Insurance Services, Inc. and Baltimore Equitable Insurance. Mr. Crooke holds an
MBA in Finance from Loyola College and a bachelor's degree in Economics from the
University of Maryland.
ROBERT L. DENTON has been one of our Trustees since May 1999. Mr. Denton
joined The Shidler Group in 1994 and is currently a Managing Partner and the
resident principal in the New York office. From 1991 to 1994, Mr. Denton was
with Providence Capital, Inc., an investment banking firm which he co-founded.
Mr. Denton is also a trustee of CGA Group, Ltd. Mr. Denton holds an MBA from the
Wharton School of Business and a bachelor's degree from the University of
Pennsylvania.
KENNETH S. SWEET, JR. has been one of our Trustees since October 1997.
Mr. Sweet is Chairman of GSA Management, Inc. and Managing Director of GS
Capital, L.P., a venture capital and real estate partnership which he founded in
1991. In 1971, Mr. Sweet founded K.S. Sweet Associates which specialized in real
estate and venture capital investments. From 1957 to 1971, he was with The
Fidelity Mutual Life Insurance Company. Mr. Sweet has over 38 years of
investment experience in the fields of real estate, venture capital and
investment management. Mr. Sweet serves as a director, chairman of the real
estate committee and a member of the finance committee of Main Line Health and
the Philadelphia Chapter of the Nature Conservancy and is on the Advisory
Committee of the Arthur Ashe Youth Tennis Center. Mr. Sweet holds a bachelor's
degree from Lafayette College and attended The Wharton School of Business.
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HOW ARE THE TRUSTEES COMPENSATED?
- - Employee Trustees receive no compensation, other than their normal salary, for
serving on the Board of Trustees or its committees.
- - Non-employee Trustees receive:
- $15,000 annual fee;
- $500 per meeting;
- Reimbursement for out-of-pocket expenses;
- Eligibility to participate in our 1998 Long Term Incentive Plan; and
- Annual grants of options to purchase 5,000 common shares, exercisable at
the then fair market value of the common shares.
HOW ARE OUR TRUSTEES NOMINATED?
The nominating committee of the Board of Trustees is responsible for
presenting nominations to the Board of Trustees and shareholders. (See the
discussion under the heading "Requirements for Advance Notification of
Nominations" concerning information about procedures for shareholder nominations
for Trustees.)
WHAT ARE THE CURRENT COMMITTEES OF OUR BOARD OF TRUSTEES?
The Board of Trustees currently has four committees. The committees on which
Trustees serve and the number of meetings held during 1999 are identified below.
BOARD MEMBER AUDIT INVESTMENT COMPENSATION NOMINATING
- ------------ --------- ---------- ------------ ----------
Jay H. Shidler...................................... X X
Betsy Z. Cohen...................................... X
Edward A. Crooke.................................... X X
Robert L. Denton.................................... X
Kenneth S. Sweet, Jr................................ X X X
William H. Walton................................... X
Kenneth D. Wethe.................................... X X
Meetings Held in 1999............................... 6 8 4 1
During 1999, the Board of Trustees had 7 meetings. Each Trustee attended a
minimum of 75% of the total of the Board of Trustees' meetings and their
committee meetings.
AUDIT COMMITTEE--This committee reviews our accounting, financial reporting
and internal control functions and recommends the annual appointment of our
independent accountants and reviews their services. All members are independent
non-employee Trustees.
INVESTMENT COMMITTEE--This committee approves all of our real estate
investments and acquisitions. Investments of greater than $25 million must also
be approved by the full Board of Trustees.
8
COMPENSATION COMMITTEE--This committee administers executive compensation
programs, policies and practices. The committee also acts in an advisory role on
senior management compensation and administers our executive incentive plans.
All members are non-employee Trustees.
NOMINATING COMMITTEE--This committee considers and recommends nominees for
election as Trustees and officers.
OUR EXECUTIVE OFFICERS
Below is information with respect to our executive officers who are not
Trustees.
RANDALL M. GRIFFIN, age 55, has been our President and Chief Operating
Officer since September 1998. Mr. Griffin previously served as President of
Constellation Real Estate Group, Inc. and Constellation Real Estate, Inc. since
June 1993. From 1990 through March 1993, Mr. Griffin worked as Vice President-
Development for EuroDisney Development in Paris, France. From 1976 to 1990,
Mr. Griffin worked for Linclay Corporation, a St. Louis-based real estate
development, management and investment company, most recently as Executive Vice
President and Chief Operating Officer. Mr. Griffin holds an MBA from Harvard
Business School and a BA degree from Ohio Wesleyan University. Mr. Griffin
serves on the Board of Directors of The National Aquarium as its Vice Chairman
and the Columbia Festival of the Arts. He is Vice Chairman of the Maryland
Economic Development Commission, and serves on its Executive Committee.
ROGER A. WAESCHE, JR., age 45, has been our Senior Vice President since
September 1998 and Chief Financial Officer since March 1999. Prior to joining
us, Mr. Waesche was responsible for all financial operations of Constellation
Real Estate, Inc., including treasury, accounting, budgeting and financial
planning. Mr. Waesche also had primary responsibility for Constellation's asset
investment and disposition activities. Prior to joining Constellation in 1984,
Mr. Waesche was a practicing Certified Public Accountant with Coopers & Lybrand
L.L.P. Mr. Waesche holds an MBA in Finance and an undergraduate degree in
Accounting from Loyola College.
JOHN H. GURLEY, age 61, has been our Secretary, Vice President and General
Counsel since September 1998. Prior to joining us, Mr. Gurley served as Vice
President and General Counsel of Constellation Real Estate, Inc. with
responsibility for all legal matters. In this role, Mr. Gurley managed lease
negotiations for more than two million square feet of office and retail space
and handled all land purchases and sales, as well as financing and related
matters. Prior to his employment with Constellation in 1987, Mr. Gurley spent
17 years with The Rouse Company where he worked eight years as Assistant General
Counsel. Before that he worked in private practice for five years with Semmes,
Bowen & Semmes where he provided a broad spectrum of real estate related
services to various clients. He received his undergraduate degree from
Georgetown University and earned his JD from the University of Maryland School
of Law.
MICHAEL D. KAISER, age 48, has been President of Corporate Realty
Management, LLC, our property management company, since April 1996 and President
of Corporate Management Services, LLC, an indirect subsidiary since January
2000. Prior to joining Corporate Realty Management, LLC, Mr. Kaiser served as
Vice President of Asset Management of Constellation Real Estate, Inc. He has
more than 24 years of real estate experience, including a background in
development, leasing and management of real estate projects in the
Baltimore-Washington area. Mr. Kaiser received his undergraduate degree and MBA
in business and finance from Loyola College. He serves on the Board of Directors
of the Baltimore Chapter of the Building Owners and Managers Association.
9
DWIGHT S. TAYLOR, age 55, has been President of Corporate Development
Services, LLC, our development company, since September 1999, previously serving
as Senior Vice President since joining the company in September 1998.
Mr. Taylor has more than 24 years of real estate experience, including 14 years
with Constellation Real Estate, Inc. and four years with The Rouse Company. From
1977 to 1981, Mr. Taylor was Senior Vice President of the Baltimore Economic
Development Corporation. He currently serves as Secretary/Treasurer of the
Maryland Chapter of the National Association of Industrial Office Properties and
served as Chairman of the Associated Black Charities from 1989 to 1991. He also
serves on the Board of Directors of Micros Systems, Inc.
10
REPORT OF THE COMPENSATION COMMITTEE
WHAT IS OUR COMPENSATION PHILOSOPHY?
Our philosophy is to provide competitive compensation levels, but where
appropriate align compensation of senior management with the long-term interests
of our shareholders. We have designed the compensation of the senior management
team to motivate management to focus on our operating results and sustained
shareholder value by:
- Establishing a plan that attracts, retains and motivates key management
through competitive compensation within the industry.
- Linking a portion of senior management compensation with the returns
realized by shareholders.
- Building a pay-for-performance system which encourages and rewards
successful initiatives within a team environment based on company,
business unit and individual objectives.
WHAT IS THE STRUCTURE OF OUR EXECUTIVE COMPENSATION?
The elements of our executive compensation programs are:
- Base salary
- Annual incentive awards
- Long-term incentives
- Special awards in recognition of superior achievements
Our compensation plan has been structured to provide incentives for senior
management performance that promote continuing improvements in our financial
results and share price over both the short and long-term.
HOW DO WE DETERMINE BASE SALARIES?
We determine base salaries by each individual's experience and comparisons
to similar base salaries in other real estate investment trusts and the real
estate industry. Base salaries are generally positioned to approximate the
median of the salaries shown in our REIT peer group comparison. Special factors
considered in determining the compensation of our CEO are discussed below.
Changes in salaries will depend upon such factors as individual performance,
compensation levels within the industry and the economic conditions affecting
our operations.
HOW DO WE DETERMINE ANNUAL INCENTIVE AWARDS?
We establish annual incentive award targets for the senior management team
at the beginning of each fiscal year. The incentive award, which may be a
combination of cash bonus and share option grants, is based on the individual's
success in achieving those targets.
11
We base the amount of the award on a combination of the following segments:
- Our overall performance
- Business unit performance
The relative importance of each segment is determined by the senior
manager's position within our organization. The CEO and President & COO awards
are based most heavily on operating results and shareholder return. The awards
to other senior managers are based on the strategic accomplishments and
performance of their business units. The overall operating objectives are based
on two measurements related to our funds from operations and adjusted funds from
operations. The bonus plan provides that no bonus will be paid unless a
threshold level of performance, as approved by the Compensation Committee, is
achieved. The Compensation Committee has the option to recommend to the Board of
Trustees the increase of awards to members of the senior management team who
have shown exemplary performance and far exceeded all objectives.
The Compensation Committee approved bonuses to our Chief Executive Officer
and our other four most highly paid executives totaling $337,000 in 1999. The
Compensation Committee considered our operating performance and each
individual's contributions to our success in determining the bonus amounts.
HOW IS COMPENSATION USED TO ENSURE SENIOR MANAGEMENT IS FOCUSED ON LONG-TERM
RESULTS?
Our long-term incentive plan for senior management is approved by the
Compensation Committee annually. This plan focuses on our overall operating
performance and bears a direct relationship to the value realized by our
shareholders. The plan has also been structured to align the interests of senior
management and our shareholders by providing a significant long-term incentive
opportunity in the form of options for common shares and restricted shares.
The long-term incentive plan for senior management uses nonqualified stock
options and rewards senior management over a two-year time frame:
- An interim grant was made shortly after the close of 1999 based on our
actual performance.
- A second grant will be made shortly after the close of 2000 based on our
cumulative performance during 1999 and 2000.
- The nonqualified share options vest over a four-year period with
25 percent vesting on the date of the grant and 25 percent vesting on each
subsequent anniversary (provided the optionee remains continually
employed).
- Share options will be granted at an exercise price equal to the fair
market value of a common share on the grant date.
HOW DO WE DETERMINE THE COMPENSATION OF OUR CHIEF EXECUTIVE OFFICER?
Mr. Hamlin served as our Chief Executive Officer during 1999. The
compensation awarded to Mr. Hamlin consisted primarily of base salary and an
annual incentive award. Mr. Hamlin's base salary was $90,000, significantly
below comparable REIT Chief Executive Officers. Mr. Hamlin's base salary was
initially set at this level as a result of his substantial equity interest in
Corporate Office Properties Trust as shown in "Share Ownership of our Trustees,
Executive Officers and 5% Beneficial Owners." Under our compensation plan,
Mr. Hamlin was eligible for an annual incentive award.
12
TEN-YEAR OPTION REPRICINGS
On July 12, 1999, we reduced the exercise price on 360,500 of our employees'
options from $9.25 to $8.00. No options held by executive officers or Trustees
were repriced.
COMPENSATION COMMITTEE
Edward A. Crooke
Kenneth S. Sweet, Jr.
13
COMMON SHARES PERFORMANCE GRAPH
The following graph assumes $100 was invested on December 31, 1994 in the
common shares of the predecessor corporation to Corporate Office Properties
Trust and continued to be invested in Corporate Office Properties Trust after
its reformation as a Maryland trust in March 1998. This graph compares the
cumulative return (assuming reinvestment of dividends) of this investment with a
similar investment at that time in the S&P 500 Index or the Index of the
National Association of Real Estate Investment Trusts ("NAREIT").
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
Corporate Office Properties Trust (NYSE symbol OFC)... 100 74.30 85.32 181.94 137.46 158.00
S&P 500............................................... 100 137.43 168.98 225.37 289.78 350.72
NAREIT Equity......................................... 100 115.27 155.92 187.51 154.69 147.54
14
SHARE OWNERSHIP OF OUR TRUSTEES,
EXECUTIVE OFFICERS AND 5% BENEFICIAL OWNERS
The following table shows certain information, as of March 14, 2000,
regarding the beneficial ownership (as defined under the regulations of the
Securities and Exchange Commission) of our common shares and units in our
operating partnership by each Trustee, each nominee for election as Trustee,
each executive officer, all Trustees and executive officers as a group and each
person known to us to be the beneficial owner of more than five percent of our
outstanding common shares. Each person named in the table below has voting and
investment power with respect to the securities listed opposite such person's
name, except as otherwise noted.
COMMON PREFERRED PERCENT OF
PERCENT OF PARTNERSHIP PARTNERSHIP ALL
COMMON SHARES ALL UNITS UNITS COMMON
BENEFICIALLY COMMON BENEFICIALLY BENEFICIALLY SHARES AND
OWNED(1) SHARES(1) OWNED OWNED UNITS(2)
------------- ---------- ------------ ------------ ----------
Constellation Real Estate, Inc.(3)... 7,030,793 38.6% -- -- 22.7%
United Properties Group, Inc.(4)..... -- -- -- 974,662 7.5
Jay H. Shidler(5).................... 307,500 1.7 3,448,317 -- 12.1
Clay W. Hamlin, III(6)............... 604,167 3.3 4,045,615 -- 15.0
Betsy Z. Cohen....................... 6,000 * -- -- *
Edward A. Crooke..................... 10,000 * -- -- *
Robert L. Denton..................... 5,000 * 434,910 -- 1.4
Steven D. Kesler..................... 5,400 * -- -- *
Kenneth S. Sweet, Jr................. 33,875 * -- -- *
William H. Walton.................... 12,500 * -- -- *
Kenneth D. Wethe..................... 22,759 * -- -- *
Randall M. Griffin................... 403,533 2.2 -- -- 1.3
Roger A. Waesche, Jr................. 121,125 * -- -- *
John H. Gurley....................... 11,667 * -- -- *
Michael D. Kaiser.................... 64,167 * -- -- *
Dwight S. Taylor..................... 58,517 * -- -- *
All Trustees and Executive Officers
as a Group (14 persons)............ 1,666,210 9.2% 7,928,842 -- 31.0%
- ------------------------
* Represents less than one percent.
(1) Includes the following common shares issuable under options exercisable
within 60 days of March 14, 2000: 7,500--Shidler; 294,167--Hamlin;
5,000--Cohen; 5,000--Crooke; 5,000--Denton; 5,000--Kesler; 12,500--Sweet;
12,500--Walton; 22,500--Wethe; 88,333--Griffin; 35,000--Waesche; 11,667--
Gurley; 14,167--Kaiser; 14,167--Taylor; and 532,501--all Trustees and
executive officers as a group.
(2) Assumes that all units of our operating partnership are exchanged for common
shares and assumes we elect to issue common shares rather than pay cash upon
exchange of partnership units.
(3) Constellation Real Estate, Inc. is located at 111 Market Place, Baltimore,
Maryland 21202. In addition to the common shares in the table, Constellation
also owns 984,308 Series A convertible preferred shares which are
convertible into 1,845,381 common shares beginning in September 2000.
(4) United Properties Group, Inc. is located at 305 West Grand Street, Suite
100, Montvale, New Jersey 07645. United Properties Group, Inc.'s preferred
units in our operating partnership are convertible into 2,320,670 common
units in our operating partnership beginning in December 2000.
(5) Jay Shidler's address is 810 Richards Street, Suite 1000, Honolulu, Hawaii
96813.
(6) Clay Hamlin's address is 401 City Avenue, Suite 615, Bala Cynwyd,
Pennsylvania 19004.
15
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require that we disclose
late filings of reports of share ownership (and changes in share ownership) by
our Trustees, officers and greater than 10% shareholders. Our Trustees, officers
and greater than 10% shareholders are required by those rules to furnish us with
copies of the reports of share ownership (and changes in share ownership) they
file with the Securities and Exchange Commission. Based solely on our review of
the copies of such reports received by us, we believe that during the year ended
December 31, 1999, all filing requirements applicable to our Trustees, officers
and greater than 10% shareholders were satisfied, with the exception of the
following reports which were not timely filed for the years indicated: Form 4
for one transaction in 1999 by Jay H. Shidler, a Trustee; Form 4 for one
transaction in 1999 by Robert Denton, a Trustee; Form 4 for two transactions in
1999 by Clay W. Hamlin, a Trustee and executive officer; Form 4 for one
transaction in 1998 by Jacob H. Baugher, III, an officer; Form 4 for one
transaction in 1999 by James K. Davis, an officer; and Form 4 for one
transaction in 1999 by David P. Hartsfield, a former officer. All of the
transactions of curent Trustees and employees described above were reported with
the Securities and Exchange Commission prior to the mailing of this proxy.
SUMMARY COMPENSATION TABLE
The table below provides information about the annual compensation of our
Chief Executive Officer and our other four most highly compensated executive
officers who were executive officers as of December 31, 1999.
LONG TERM
ANNUAL COMPENSATION($) COMPENSATION AWARDS
--------------------------------------- -----------------------
RESTRICTED
SHARE
OTHER AWARDS SHARE OTHER COMPENSATION
NAME AND POSITION YEAR SALARY(1) BONUS(1) COMPENSATION(2) ($)(3) OPTIONS(4) ($) (5)
- ----------------- -------- --------- -------- ---------------- ---------- ---------- -------------------
Clay W. Hamlin, III.......... 1999 90,000 -- 6,765 -- 200,000 1,216
Chief Executive Officer 1998 88,503 38,500 571 -- -- --
1997 18,000 -- -- -- -- --
Randall M. Griffin........... 1999 311,585 170,000 16,795 2,212,500 300,000 11,828
President and Chief Operating 1998 62,308 38,500 3,000 -- 200,000 2,059
Officer
Roger A. Waesche, Jr......... 1999 170,993 80,000 11,511 576,172 -- 15,853
Senior Vice President and 1998 40,385 15,000 2,019 -- 82,500 2,154
Chief Financial Officer
Michael D. Kaiser............ 1999 134,774 37,000 2,418 368,750 -- 13,585
President of Corporate Realty 1998 30,462 26,400 445 -- 27,500 1,998
Management, LLC
Dwight S. Taylor............. 1999 139,820 50,000 8,202 322,656 -- 6,800
President of Corporate 1998 29,344 6,500 1,642 -- 27,500 443
Development Services, LLC
- ------------------------------
(1) Messrs. Griffin, Waesche, Kaiser and Taylor became officers of Corporate
Office Properties Trust on September 28, 1998.
(2) Includes auto allowances and Company matching of officers' 401(k)
contributions.
(3) Represents the value of grants of restricted shares that were made under our
1998 Long Term Incentive Plan on the date of grant. These shares are subject
to forfeiture restrictions that lapse annually through 2004 upon the
Company's attainment of defined earnings or shareholder return growth
targets. These shares may not be sold, transferred or encumbered while the
forfeiture restrictions are in place. Holders of these shares have the right
to vote and receive dividends on the shares. As of December 31, 1999, the
total holdings of restricted shares by the named officers and the market
value of such holdings were as follows: Mr. Griffin: 300,000 shares
($2,287,500); Mr. Waesche: 78,125 shares ($595,703); Mr. Kaiser: 50,000
shares ($381,250); and Mr. Taylor: 43,750 shares ($333,594).
16
(4) Does not reflect options granted during 2000 that were attributable to 1999.
A summary of these options by the named officers were as follows:
Mr. Hamlin: 225,000 options; Mr. Griffin: 60,000 options; Mr. Waesche:
30,000 options; Mr. Kaiser: 20,000 options; and Mr. Taylor: 20,000 options.
(5) Includes medical expenses, health insurance, life insurance, income tax
payments associated with restricted share grants and personal financial and
tax preparation fees paid by the Company on behalf of the officers.
EMPLOYMENT AGREEMENTS
We have entered into an employment agreement with Clay W. Hamlin, III for a
basic term of July 1, 1999 through December 31, 2000 with continuous and
self-renewing one-year terms unless terminated by either party on one day's
prior notice. Under the agreement, Mr. Hamlin's base salary is $100,000 per year
and he receives additional allowances for an automobile, personal financial
planning and income tax preparation totaling $20,500 per year. His incentive
compensation is set by the Board of Trustees upon the Compensation Committee's
recommendation. The Compensation Committee may take action in future years to
increase his base salary. The employment agreement provides for certain
severance payments in the event of his disability or termination by us without
cause or by Mr. Hamlin based upon constructive termination. The agreement also
provides for certain payments to be made in the event of a change of control of
Corporate Office Properties Trust. He is required to devote his full business
time to our affairs and is prohibited from competing directly or indirectly with
us during the term of the agreement and for a period thereafter.
We have entered into an employment agreement with Randall M. Griffin for a
five-year basic term commencing July 1, 1999 with a continuous and self-renewing
three-year term after the third year of the basic term without further action
unless terminated by either party on one day's prior notice. Under the
agreement, Mr. Griffin's base salary is $350,000 per year and he receives
additional allowances for an automobile, personal financial planning and income
tax preparation totaling $16,000 per year. His incentive compensation is set by
the Board of Trustees upon the Compensation Committee's recommendation. The
Compensation Committee may take action in future years to increase his base
salary. The employment agreement provides for certain severance payments in the
event of his disability or termination by us without cause or by Mr. Griffin
based upon constructive termination. The agreement also provides for certain
payments to be made in the event of a change of control of Corporate Office
Properties Trust. He is required to devote his full business time to our affairs
and is prohibited from competing directly or indirectly with us during the term
of the agreement and for a period thereafter.
We have entered into an employment agreement with Roger A. Waesche, Jr. for
a three-year term commencing July 1, 1999 with continuous and self-renewing
three-year terms unless terminated by either party on one day's prior notice.
Under the agreement, Mr. Waesche's base salary is $175,000 per year and he
receives an additional automobile allowance totaling $7,500 per year. His
incentive compensation is set by the Board of Trustees upon the Compensation
Committee's recommendation. The Compensation Committee may take action in future
years to increase his base salary. The employment agreement provides for certain
severance payments in the event of his disability or termination by us without
cause or by Mr. Waesche based upon constructive termination. The agreement also
provides for certain payments to be made in the event of a change of control of
17
Corporate Office Properties Trust. He is required to devote his full business
time to our affairs and is prohibited from competing directly or indirectly with
us during the term of the agreement and for a period thereafter.
We have entered into an employment agreement with Dwight S. Taylor for a
three-year term commencing September 15, 1999 with continuous and self-renewing
three-year terms unless terminated by either party on one day's prior notice.
Under the agreement, Mr. Taylor's base salary is $150,000 per year and he
receives an additional automobile allowance totaling $9,000 per year. His
incentive compensation is set by the Board of Trustees upon the Compensation
Committee's recommendation. The Compensation Committee may take action in future
years to increase his base salary. The employment agreement provides for certain
severance payments in the event of his disability or termination by us without
cause or by Mr. Taylor based upon constructive termination. The agreement also
provides for certain payments to be made in the event of a change of control of
Corporate Office Properties Trust. He is required to devote his full business
time to our affairs and is prohibited from competing directly or indirectly with
us during the term of the agreement and for a period thereafter.
We have entered into an employment agreement with Michael D. Kaiser for a
three-year term commencing September 15, 1999 with continuous and self-renewing
three-year terms unless terminated by either party on one day's prior notice.
Under the agreement, Mr. Kaiser's base salary is $138,000 per year and he
receives an additional automobile allowance totaling $9,000 per year. His
incentive compensation is set by the Board of Trustees upon the Compensation
Committee's recommendation. The Compensation Committee may take action in future
years to increase his base salary. The employment agreement provides for certain
severance payments in the event of his disability or termination by us without
cause or by Mr. Kaiser based upon constructive termination. The agreement also
provides for certain payments to be made in the event of a change of control of
Corporate Office Properties Trust. He is required to devote his full business
time to our affairs and is prohibited from competing directly or indirectly with
us during the term of the agreement and for a period thereafter.
OPTION GRANT TABLE
The table below provides information about grants of share options made
during 1999 to the executive officers shown in our Summary Compensation Table.
NUMBER OF WEIGHTED
COMMON PERCENT OF AVERAGE
SHARES UNDERLYING TOTAL OPTIONS EXERCISE PRICE
OPTIONS GRANTED GRANTED TO PER COMMON GRANT DATE
NAME (1) EMPLOYEES SHARE EXPIRATION DATE PRESENT VALUE (2)
- ---- ----------------- ------------- -------------- ---------------- -----------------
Clay W. Hamlin,
III................ 200,000 30.1 $9.25 3/11/09 $ 80,000
Randall M. Griffin... 300,000 45.1 $7.50 1/01/09-12/16/09 $261,200
- ------------------------
(1) All options are granted at the fair market value of the common shares at the
date of grant. Options granted are for a term of ten years from the date of
grant and vest over a 3 to 5 year period after the grant date.
18
(2) We chose to use the Black-Scholes option pricing model to estimate the grant
date present value of the options set forth in this table. Our use of this
model should not be construed as an endorsement of its accuracy at valuing
options. All share option valuation models, including the Black-Scholes
model, require a prediction about the future movement of the share price.
The following assumptions were made for purposes of calculating the grant
date present value: an expected life of 3.85 years, volatility of 27%, a
dividend yield of 8.4% and a risk-free interest rate of 5.57%. The real
value of the options in this table depends upon the actual performance of
our common shares during the applicable period.
OPTION EXERCISE TABLE
The table below provides information about the exercise of share options
during 1999 and the value of share options unexercised at the end of 1999 for
executive officers. Value is calculated using the difference between the option
exercise price and the year-end share price multiplied by the number of shares
underlying the options.
NO. OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
NO. OF SHARES DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- --------- ----------- ------------- ----------- -------------
Clay W. Hamlin, III -- $ -- 69,167 133,333 $88 $ --
Randall M. Griffin -- -- 73,333 426,667 -- 70,000
Roger A. Waesche, Jr. -- -- 27,500 55,000 -- --
Michael D. Kaiser -- -- 9,167 18,333 -- --
Dwight S. Taylor -- -- 9,167 18,333 -- --
CERTAIN TRANSACTIONS
On September 15, 1999, we acquired a 49% interest in a newly organized joint
venture. On the same day, the joint venture acquired nine office buildings
located in Greater Harrisburg, Pennsylvania from First Industrial Realty
Trust, Inc., a publicly held real estate investment company where Jay Shidler,
the Chairman of our Board of Trustees, serves as Chairman of the Board of
Directors. The joint venture acquired these buildings for $39,925,000. On
December 3, 1999, we acquired the remaining 51% interest in the joint venture.
The recorded cost of the nine office buildings upon completion of these
transactions totaled $40,082,000.
On August 12, 1999, we acquired an 89% ownership interest in three office
buildings located in Harrisburg, Pennsylvania from an entity controlled by Clay
Hamlin, our Chief Executive Officer and a Trustee. The recorded cost of the
three buildings totaled $5,960,000. On November 4, 1999, we acquired a parcel of
land located in Harrisburg, Pennsylvania from an entity controlled by Clay
Hamlin for $191,000.
During 1999, we acquired two parcels of land from Constellation Real
Estate, Inc., our largest shareholder, for $5,853,000.
During 1999, Baltimore Gas and Electric Company, a wholly-owned direct
subsidiary of Constellation Energy, provided utility services to most of our
properties in the Baltimore/Washington Corridor.
19
We recognized revenue of $944,000 in 1999 on office space leased to
Constellation Real Estate, Inc. During 1999, Corporate Development Services,
LLC, our indirect subsidiary, earned construction management fees of $60,000
from an entity owned by Clay Hamlin. During 1999, Corporate Office
Management, Inc., our indirect subsidiary, earned a leasing commission of
$117,000 from an entity owned by Clay Hamlin. During 1999, Corporate Office
Management, Inc. earned fees from a project consulting and management agreement
with Constellation Real Estate, Inc. of $1,100,000. During 1999, Corporate
Realty Management, LLC, our indirect subsidiary, earned fees and expense
reimbursements of $500,000 under a property management agreement with Baltimore
Gas and Electric Company.
REQUIREMENTS FOR ADVANCE NOTIFICATION OF NOMINATIONS
Article II, Section 13 of our Bylaws provides that a shareholder may not
nominate a person for election as a Trustee or propose business to be considered
by the shareholders at an annual meeting unless (i) the shareholder is a holder
of record both at the time of giving the notice described in (iii) below and at
the time of the annual meeting, (ii) the shareholder is entitled to vote at the
annual meeting and (iii) the shareholder delivers written notice of such
shareholder's intent to make such nomination or proposal (containing the
relevant information described below) to our Secretary at our principal
executive offices not later than the close of business on the 60th day and not
earlier than the close of business on the 90th day prior to the first
anniversary of the preceding year's annual meeting. However, if the date of the
annual meeting is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, the shareholder must deliver such written notice not
earlier than the close of business on the 90th day prior to the annual meeting
and not later than the close of business on the later of the 60th day prior to
the annual meeting or the 10th day following the day on which we first make a
public announcement of the date of the meeting. The public announcement of a
postponement or adjournment of an annual meeting to a later date or time will
not commence a new time period for the giving of a shareholder's notice as
described above. If the number of Trustees to be elected to the Board of
Trustees is increased and we do not make a public announcement naming all of the
nominees for Trustee or specifying the size of the increased Board of Trustees
at least 70 days prior to the first anniversary of the preceding year's annual
meeting, a shareholder's written notice will also be considered timely, but only
with respect to nominees for any new positions created by such increase, if
delivered to our Secretary at our principal executive offices not later than the
close of business on the 10th day following the day on which we first make such
public announcement.
Article II, Section 13 of our Bylaws also provides that a shareholder may
not nominate a person for election as a Trustee at a special meeting of
shareholders at which Trustees are to be elected unless (i) the Board of
Trustees has determined that Trustees shall be elected at the special meeting,
(ii) the shareholder is a holder of record both at the time of giving the notice
described in (iv) below and at the time of the special meeting, (iii) the
shareholder is entitled to vote at the special meeting and (iv) the shareholder
delivers written notice of such shareholder's intent to make such nomination
(containing the relevant information described below) to our Secretary at our
principal executive offices not earlier than the close of business on the 90th
day prior to the special meeting and not later than the close of business on the
later of the 60th day prior to the special meeting or the 10th day following the
day on which we first make a public announcement of the date of the special
meeting and of the nominees proposed by the Board of Trustees to be elected at
the special meeting. The public announcement of a postponement or adjournment of
a special meeting to a later date or time will not commence a new time period
for the giving of a shareholder's notice as described above.
20
The shareholder's notice must set forth, as relevant, (i) as to each person
whom the shareholder proposes to nominate for election or reelection as a
Trustee all information relating to such person that is required to be disclosed
in solicitations of proxies for election of Trustees in an election contest or
is otherwise required pursuant to Regulation 14A under the Securities Exchange
Act of 1934 (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a Trustee if elected); (ii) as to any
other business that the shareholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and of the beneficial owner, if any, on whose
behalf the proposal is made; and (iii) as to the shareholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination or proposal is
made, the name and address of such shareholder, as they appear on our books, and
of the beneficial owner, and the number of each class of our shares which are
owned beneficially and of record by the shareholder and beneficial owner.
For purposes of the procedures described above, our Bylaws define a "public
announcement" as disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable news service or in a document publicly
filed by us with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
A shareholder also must comply with all applicable requirements of state law
and of the Exchange Act and its rules and regulations with respect to
nominations of Trustees and proposals of business to be conducted at our
shareholder meetings. The chairman of a meeting may refuse to acknowledge the
nomination of any person by a shareholder or any shareholder proposal not made
in compliance with the procedures described above. Such procedures will not be
deemed to affect any rights of shareholders to request inclusion of proposals in
our proxy statements pursuant to Rule 14a-8 under the Exchange Act.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP performed customary auditing services for us for
the year ended December 31, 1999. We have selected PricewaterhouseCoopers as our
auditor for the next year. We expect one of its representatives to be present at
the Annual Meeting who will have an opportunity to make a statement, if they
desire to do so, and to answer questions.
ANNUAL REPORT ON FORM 10-K
We will provide without charge to each person solicited by this proxy
statement a copy of our Annual Report on Form 10-K for the year ended
December 31, 1999 as filed with the Securities and Exchange Commission that
includes all financial statements and schedules. You must make this request in
writing to the Vice President-Investor Relations, at IR@COPT.COM or 8815 Centre
Park Drive, Suite 400, Columbia, MD 21045.
21
CORPORATE OFFICE PROPERTIES TRUST
ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 16, 2000
10:00 A.M.
THE WORLD TRADE CENTER BALTIMORE
401 EAST PRATT STREET
BALTIMORE, MARYLAND
[GRAPHIC OMITTED]
CORPORATE OFFICE PROPERTIES TRUST
8815 CENTRE PARK DRIVE, SUITE 400
COLUMBIA, MD 21045-2272
PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES FOR USE AT THE ANNUAL MEETING
ON MAY 16, 2000.
The common shares you hold in your account or in a dividend reinvestment account
will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEM 1.
By signing the proxy, you revoke all prior proxies and appoint Clay W. Hamlin,
III and Randall M. Griffin, and each of them, with full power of substitution,
to vote your shares on the matters shown on the reverse side and any other
matters which may come before the Annual Meeting and all adjournments.
SEE REVERSE FOR VOTING INSTRUCTIONS.
TO VOTE YOUR PROXY BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Corporate Office Properties Trust, c/o Shareowner
Services-, P.O. Box 64873, St. Paul, MN 55164-0873.
[GRAPHIC OMITTED]
- ------- -------
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ITEM 1.
1. Election of Trustees: 01 Steven D. Kesler [ ] Vote FOR [ ] Vote WITHHELD
02 William H. Walton all nominees from all
03 Kenneth D. Wethe (except as nominees
marked)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, WRITE
THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Date
Indicate changes below: ---------------------------
Signature(s) in Box
Please sign exactly as your name(s) appear
on Proxy. If held in joint tenancy, all
persons must sign. Trustees, administrators,
etc., should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.