<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CarrAmerica Realty Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
CarrAmerica Realty Corporation
1850 K Street, N.W.
Washington, D.C. 20006
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 4, 2000
To Our Stockholders:
The 2000 annual meeting of stockholders of CarrAmerica Realty Corporation
will be held on Thursday, May 4, 2000, beginning at 9:30 a.m., Eastern Daylight
Savings Time, at The Willard Inter-Continental Hotel, 1401 Pennsylvania Avenue,
N.W., Washington, D.C. 20004. At the meeting, stockholders will act on the
following matters:
1. Election of three directors to serve terms expiring in 2003;
2. Consideration and action upon a stockholder proposal relating to the
instatement of the election of directors annually; and
3. Any other business that properly comes before the meeting or any
adjournments thereof.
Only stockholders of record at the close of business on March 9, 2000 will
be entitled to vote at the meeting or any adjournments thereof.
IF YOU PLAN TO ATTEND:
Please note that space limitations make it necessary to limit attendance to
stockholders only. Registration will begin at 8:30 a.m., and seating will be
available at approximately 9:00 a.m. Cameras and recording devices will not be
permitted at the meeting. "Street name" holders will need to bring a copy of a
brokerage statement reflecting stock ownership as of the record date.
WHETHER OR NOT YOU EXPECT TO ATTEND:
Whether or not you expect to attend the annual meeting, you are urged to
sign and date the enclosed proxy, which is being solicited on behalf of the
Board of Directors, and return it promptly in the enclosed envelope.
By Order of the Board of Directors,
/s/ Linda A. Madrid
Linda A. Madrid
Corporate Secretary
<PAGE>
CarrAmerica Realty Corporation
1850 K Street, N.W.
Washington, D.C. 20006
----------------------
PROXY STATEMENT
----------------------
This Proxy Statement contains information related to the solicitation of
proxies for use at the 2000 annual meeting of stockholders of CarrAmerica Realty
Corporation, a Maryland corporation (the ``Company"), to be held on Thursday,
May 4, 2000, at 9:30 a.m., Eastern Daylight Savings Time, for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. This
solicitation is made on behalf of the Board of Directors of the Company. This
Proxy Statement, the enclosed form of proxy, and the 1999 Annual Report to
Stockholders are being mailed to stockholders beginning on or about March 31,
2000.
Stockholders Entitled to Vote. Only holders of record of common stock of
the Company at the close of business on March 9, 2000 are entitled to receive
notice of the annual meeting and to vote the shares of common stock held by them
on that date at the meeting. The Company's common stock constitutes the only
class of securities entitled to vote at the meeting. Each share of common stock
entitles its holder to cast one vote on each matter on which a vote may be
taken. At the close of business on March 9, 2000, there were 67,026,489 shares
of the Company's common stock outstanding.
Quorum. The presence at the meeting, in person or by proxy, of the holders
of a majority of the shares of the Company's common stock outstanding on March
9, 2000 will constitute a quorum, permitting the stockholders to conduct
business at the meeting. Abstentions and broker non-votes (i.e., shares held by
a broker or nominee which are represented at the meeting, but with respect to
which the broker or nominee is not voting on a particular proposal) will be
included in the calculation of the number of shares considered to be present at
the meeting.
Voting. If the accompanying proxy card is properly signed and returned to
the Company (and not revoked), it will be voted as directed by the stockholder.
Unless contrary instructions are given, the persons designated as proxy holders
on the proxy card will vote FOR the election of all nominees for the Board of
Directors named herein, AGAINST instatement of the election of directors
annually and as recommended by the Board of Directors with regard to any other
matters, or, if no recommendation is given, in their own discretion.
Revocation of a Proxy. Each stockholder may revoke a previously granted
proxy at any time before it is exercised by filing with the Corporate Secretary
a notice of revocation or a duly executed proxy bearing a later date. The
powers of the proxy holders will be suspended if the person who executed the
proxy attends the meeting in person and so requests. Attendance at the meeting
will not, in itself, constitute revocation of a previously granted proxy.
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
Board of Directors
The Board of Directors of the Company is divided into three classes, with
one-third of the directors scheduled to be elected by the stockholders annually.
C. Ronald Blankenship, A. James Clark and Timothy Howard have been nominated by
the Board of Directors for election as directors at the 2000 annual meeting of
stockholders to fill terms expiring at the 2003 annual meeting of stockholders.
If elected, the nominees will hold office until the expiration of their terms
and until their successors are elected and qualified.
Nominees for Election to Terms Expiring in 2003
C. Ronald Blankenship, 50, has been a director of the Company since August
1998. Mr. Blankenship was nominated to the Board as a designee of Security
Capital U.S. Realty ("SC-USREALTY"), a major stockholder of the Company. Mr.
Blankenship has been the Vice Chairman and Chief Operating Officer of Security
Capital Group Incorporated, an affiliate of SC-USREALTY, since 1998. Previously,
he was Managing Director of Security Capital Group Incorporated from 1991 to
1998. Mr. Blankenship is a director of Security Capital Group Incorporated and
Storage USA, Inc. He received his B.B.A. from the University of Texas at Austin.
Mr. Blankenship is a member of the Executive Compensation Committee of the Board
of Directors.
A. James Clark, 72, has been a director of the Company since February 1993.
He has been Chairman of the Board and President of Clark Enterprises, Inc., a
Bethesda, Maryland-based company involved in real estate, communications, and
commercial and residential construction, since 1972. Mr. Clark is a Trustee
Emeritus of the Johns Hopkins University and the Johns Hopkins Board of
Medicine. He is an Advisory Director of Potomac Electric Power Company. Mr.
Clark is also a member of the PGA Tour Golfcourse Properties Advisory Board. An
alumnus of the University of Maryland, Mr. Clark is a member of the University's
Board of Visitors and the school's Foundation. Mr. Clark is a member of the
Executive Committee, the Executive Compensation Committee, the Investment
Committee and the Nominating Committee of the Board of Directors.
Timothy Howard, 51, has been a director of the Company since August 1998.
Mr. Howard has been the Executive Vice President and Chief Financial Officer of
Fannie Mae since 1990. Mr. Howard has held positions of increasing
responsibility with Fannie Mae since beginning with the company in 1982. Mr.
Howard received his Bachelor of Science and Masters in Economics degrees from
UCLA. He is a member of the Audit Committee and Executive Compensation
Committee of the Board of Directors.
Incumbent Directors--Terms Expiring in 2001
Thomas A. Carr, 41, has been President and a director of the Company since
February 1993. In May 1997, Mr. Carr was elected Chief Executive Officer of the
Company, at which time he resigned as Chief Operating Officer of the Company, a
position he had held since April 1995. Prior to that time, Mr. Carr had been
the Company's Chief Financial Officer since February 1993. Mr. Carr is a
director of The Oliver Carr Company. He holds a Masters in Business
Administration degree from Harvard Business School, and a Bachelor of Arts
degree from Brown University. Mr. Carr is a member of the National Association
of Real Estate Investment Trusts; the Young Presidents Organization; the Federal
City Council; and the International Development Research Council. Mr. Carr is
the son of Oliver T. Carr, Jr., the Chairman of the Board of Directors of the
Company. He is a member of the Investment Committee and the Executive Committee
of the Board of Directors.
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Caroline S. McBride, 46, has been a director of the Company since July
1996. Ms. McBride was nominated to the Board of Directors as a designee of SC-
USREALTY. Since June 1996, Ms. McBride has been a Managing Director of the
Capital Division of Security Capital Group. Prior thereto, from July 1978 to
May 1996, Ms. McBride was with IBM, where she was director of private market
investments for the IBM Retirement Fund from 1994 to 1996 and director of real
estate investments for the IBM Retirement Fund from 1992 to 1994. Ms. McBride
is on the Board of Directors of Storage USA, Inc. Ms. McBride received her
Masters in Business Administration degree from New York University and a
Bachelor of Arts degree from Middlebury College. Ms. McBride is a member of the
Investment Committee of the Board of Directors.
Wesley S. Williams, Jr., 57, has been a director of the Company since
February 1993. Mr. Williams has been a partner of the law firm of Covington &
Burling, Washington, D.C., since 1975. He was adjunct professor of real estate
finance law at Georgetown University Law Center from 1971 to 1973 and is a
contributing author to several texts on banking law and on real estate finance
and investment. Mr. Williams is on the Editorial Advisory Board of the District
of Columbia Real Estate Reporter. Mr. Williams serves as a director of
Blackstar Communications, Inc.; Blackstar LLC; and the Federal Reserve Bank of
Richmond, Virginia. Mr. Williams is Co-Chairman of the Board of Directors and
Co-CEO of Lockhart Caribbean Corporation and its real estate, insurance,
consumer finance, internet services and media subsidiaries. Mr. Williams is a
member of the Executive Committee of the Board of Trustees of Penn Mutual Life
Insurance Company, of which he is the Senior Trustee. He received B.A. and J.D.
degrees from Harvard University, an M.A. degree from the Fletcher School of Law
and Diplomacy and an LL.M. from Columbia University. Mr. Williams is a member
of the Executive Compensation Committee and the Audit Committee of the Board of
Directors.
Incumbent Directors--Terms Expiring in 2002
Andrew F. Brimmer, 73, has been a director of the Company since February
1993. He has been President of Brimmer & Company, Inc., an economic and
financial consulting firm, since 1976. Dr. Brimmer is the Wilmer D. Barrett
Professor of Economics at the University of Massachusetts--Amherst. He also
serves as a director of BlackRock Investment Income Trust, Inc. (and other
funds) and Borg-Warner Automotive, Inc. From 1995 to 1998, Dr. Brimmer served
as chairman of the District of Columbia Financial Control Board. He also was a
member of the Board of Governors of the Federal Reserve System from 1966 to
1974. Dr. Brimmer received a B.A. degree and a masters degree in economics from
the University of Washington and a Ph.D. in economics from Harvard University.
Dr. Brimmer is a member of the Audit Committee of the Board of Directors.
Oliver T. Carr, Jr., 74, has been Chairman of the Board of Directors of the
Company since February 1993. He also served as Chief Executive Officer of the
Company from 1993 to 1997. Mr. Carr founded The Oliver Carr Company in 1962 and
since that time has been its Chairman of the Board and a director. In addition,
Mr. Carr has served as President of The Oliver Carr Company since February 1993.
He was Chairman of the Board of Trustees of The George Washington University
from July 1988 until May 1995. Mr. Carr is the father of Thomas A. Carr, the
Company's current President and Chief Executive Officer. Mr. Carr is a member
of the Investment Committee and Executive Committee of the Board of Directors.
William D. Sanders, 58, has been a director of the Company since May 1996.
Mr. Sanders was nominated to the Board as a designee of SC-USREALTY. He is the
founder and Chairman of Security Capital Group. Mr. Sanders retired on December
31, 1989 as Chief Executive Officer of LaSalle Partners Limited, a firm he
founded in 1968. Mr. Sanders is on the Board of Directors of Security Capital
European Realty, SC-USREALTY, and Storage USA, Inc. Mr. Sanders is a former
trustee and member of the executive committee of the University of Chicago and a
former trustee fellow of Cornell University. Mr. Sanders received his Bachelor
of Science degree from Cornell University. He is a member of the Nominating
Committee of the Board of Directors.
3
<PAGE>
Committees of the Board of Directors; Meetings
Among the committees of the Board of Directors are a standing Audit
Committee, Executive Compensation Committee, Nominating Committee, Executive
Committee and Investment Committee. The functions performed by these committees
are described below.
Audit Committee. The Audit Committee makes recommendations concerning the
engagement of independent public accountants, reviews with the independent
public accountants the plans and results of the audit engagement, approves
professional services provided by the independent public accountants, reviews
the independence of the independent public accountants, considers the range of
audit and non-audit fees of the independent public accountants, and reviews the
adequacy of the Company's internal accounting controls. The Board of Directors
of the Company has adopted a written charter for the Audit Committee. The Audit
Committee met five times in 1999.
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for fiscal year 1999 with the Company's management,
and also has discussed with KPMG LLP, the Company's independent auditors, the
matters required to be discussed by Statement on Auditing Standards No. 61 ("SAS
61"). The Audit Committee has received both the written disclosures required by
SAS 61 and independence matters required by Independence Standards Board
Standard No. 1. Based on the foregoing, the Audit Committee recommended to the
Board of Directors of the Company that the audited financial statements of the
Company for fiscal year 1999 be included in the Company's Annual Report on Form
10-K filed with the SEC on March 27, 2000. The Audit Committee consists of
Messrs. Brimmer, Howard and Williams. All of the members of the Audit Committee
are independent of the Company (as defined in Sections 303.01(B)(2)(a) and (3)
of the New York Stock Exchange's listing standards).
Executive Compensation Committee. The Executive Compensation Committee is
comprised entirely of non-employee directors, and is responsible for
implementing and/or recommending to the Board of Directors compensation policies
applicable to the Company's executive officers and for monitoring compliance
with such policies. The Committee determines the Chief Executive Officer's
compensation and approves compensation recommendations for the other executive
officers of the Company upon the recommendation of the Chief Executive Officer.
It also administers the Company's employee stock option plan. The Executive
Compensation Committee met four times in 1999.
Nominating Committee. The Nominating Committee was established to consider
and make recommendations to the Board of Directors regarding nominees for
election as members of the Board of Directors. In addition, the Nominating
Committee has the authority to review and approve compensation, benefits and
other forms of remuneration for non-employee directors. The Nominating
Committee is willing to consider nominees recommended by stockholders.
Stockholders who wish to suggest qualified candidates must comply with the
advance notice provisions and other requirements of Section 3.11 of the
Company's by-laws. The Nominating Committee did not meet in 1999.
Executive Committee. The Executive Committee may exercise the full
authority of the Board of Directors, except that the Executive Committee may not
amend the Company's charter or by-laws, adopt a plan of merger or consolidation,
recommend to stockholders the sale or lease of all or substantially all of the
Company's assets, elect directors, elect or remove officers or establish
compensation for executive officers. The Executive Committee did not meet in
1999, but took action by unanimous written consent once.
4
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Investment Committee. The Investment Committee has the authority to
approve and authorize expenditures, agreements and other actions relating to the
acquisition and/or disposition of assets by the Company, the incurrence of
indebtedness by the Company or other encumbrances on the assets of the Company
or other matters treated as capital items and involving less than $100,000,000
for any single transaction or series of related transactions, so long as such
matters are consistent with the annual budget (as to amount and type of
transaction). The Investment Committee met six times during 1999.
The Board of Directors held six meetings during 1999 and took action by
unanimous written consent once. None of the directors attended fewer than 75%
of the aggregate number of meetings of the Board of Directors held during the
period he or she served on the Board and the number of meetings of committees of
the Board of Directors on which he or she served during the period of service in
1999.
Compensation of Directors
The Company pays an annual retainer of $20,000 to directors who are not
employees of the Company. The Company also pays each non-employee director a
fee (plus out-of-pocket expenses) for attendance (in person or by telephone) at
each meeting of the Board of Directors and committee meeting held on a non-Board
meeting day. The Board of Directors meeting fee is $1,000 and the committee
meeting fee is $500. In addition, the chairman of each committee receives an
additional annual fee of $1,000.
The Company also compensates its directors through its 1995 Non-Employee
Director Stock Option Plan (the "1995 Plan") and its 1997 Stock Option and
Incentive Plan (the "1997 Plan"). The 1995 Plan provides for the grant of 3,000
options to purchase shares of common stock of the Company upon a non-employee
director's initial election to the Board. In addition, under the 1995 Plan each
continuing non-employee director receives a grant of options to purchase 7,500
shares of the Company's common stock immediately following the election of
directors at each annual meeting of the Company's stockholders. Pursuant to an
amendment approved by the stockholders of the Company at the 1999 Annual
Meeting, both employee directors and non-employee directors are eligible to
receive grants under the 1997 Plan, which grants are provided at the discretion
of the Company's Executive Compensation Committee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission and the New York Stock Exchange. Executive officers,
directors and greater than ten percent stockholders are required by the SEC to
furnish the Company with copies of all Forms 3, 4 and 5 they file.
Based on the Company's review of the copies of such forms it has received
and on written representations from certain reporting persons that they were not
required to file a Form 5 for the fiscal year, the Company believes that its
executive officers, directors and greater than ten percent stockholders complied
with all Section 16(a) filing requirements applicable to them with respect to
transactions during 1999.
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Vote Required and Recommendation
When a quorum is present, the affirmative vote of a majority of the votes
present at the annual meeting will be required for the election of directors. A
properly executed proxy marked "Withhold Authority" with respect to the election
of one or more directors will not be voted with respect to the director or
directors indicated, although it will be counted for purposes of determining
whether there is a quorum. Accordingly, abstentions or broker non-votes as to
the election of directors will have the effect of a vote against the election of
the candidates.
The Board of Directors of the Company recommends a vote FOR the candidates
named in this Proxy Statement as directors to hold office until the expiration
of the terms for which they have been nominated and until their successors are
elected and qualified. Should any one or more of these nominees become unable
to serve for any reason before the annual meeting, the Board of Directors may
designate a substitute nominee or nominees, in which event the persons
designated as proxy holders on the enclosed proxy will vote for the election of
such substitute nominee or nominees, or may reduce the number of members of the
Board of Directors.
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<PAGE>
STOCKHOLDER PROPOSAL RELATING TO
INSTATEMENT OF THE ELECTION
OF DIRECTORS ANNUALLY
(Proposal 2)
Mrs. Evelyn Y. Davis, 2600 Virginia Ave., N.W., Suite 215, Washington, DC
20037, holding 200 shares of the Company's common stock, has given notice of her
intention to propose the following resolution at the 2000 Annual Meeting of
Stockholders:
"RESOLVED: "That the stockholders of Carr America [sic] recommend that the
Board of Directors take the necessary steps to instate the election of directors
ANNUALLY, instead of the stagger system which was recently adopted."
The following statement has been submitted by Mrs. Davis in support of the
resolution:
"The great majority of New York Stock Exchange listed corporations elect
all of their directors each year.
This insures that ALL directors will be more accountable to ALL
shareholders each year and to a certain extent prevents the self-perpetuation of
the Board.
If you AGREE, please mark your proxy FOR this resolution."
_________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 2.
The Company's current system of electing directors to staggered three-year
terms has been in place since the Company completed the initial public offering
of its common stock in February 1993. Under this method, currently one-third of
the directors are elected annually by the Company's stockholders, dividing the
Board of Directors into three equal classes.
The Board of Directors believes that this board classification provides the
Company and its stockholders with significant continuity and stability, factors
which are of vital importance to the Company's business. At all times, the
Company benefits from having at least two-thirds of the Board of Directors
experienced with the Company's long-term business strategy and operations. This
enables the Board of Directors to build on past experience and plan for a
reasonable time into the future. Board classification provides an effective
balance between the need for continuity and experience on the Board and the need
for revalidation of the stockholder mandate through the election process.
The Board believes that directors elected to a classified Board are no less
accountable to stockholders than they would be if elected annually. Directors
are continually accountable to stockholders by virtue of state law fiduciary
duties and their ongoing legal obligations to serve the best interests of all
stockholders. Accountability is not affected by the length of a director's
term.
In addition, the classified Board is intended to encourage persons who may
seek to acquire control of the Company to initiate such action through
negotiations with the Board. At least two meetings of the stockholders would
generally be required to replace a majority of the Board. Board classification
reduces the risk to the Company and its stockholders of the uncertainty and
instability resulting from a precipitous change in the majority control of the
Board. By reducing the threat of an abrupt change in the composition of the
entire Board, classification of directors would give the
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Board sufficient time to review any takeover proposal, study appropriate
alternatives and achieve the best results for all stockholders. The Board
believes that although a classified board enhances the ability to negotiate
favorable terms with a proponent of an unfriendly or unsolicited proposal, it
does not necessarily discourage takeover offers.
Adoption of this proposal would not in itself eliminate the classified
Board. The proposal simply recommends that the Board of Directors take steps to
instate the election of directors annually. Further action by the stockholders
would be necessary to amend the By-laws of the Company with a vote of a majority
of the votes cast at a stockholders meeting at which a quorum is present.
Finally, the Board notes that a similar proposal regarding declassification
of the Board of Directors was not approved by the stockholders of the Company at
the 1996 annual meeting of the Company.
The Board believes that a classified Board is in the best interests of the
stockholders of the Company and that stockholders should oppose efforts to
eliminate it.
_______________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 2.
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EXECUTIVE COMPENSATION
The following table provides information on the annual and long-term
compensation for the Company's Chief Executive Officer and the four most highly
compensated other executive officers of the Company (the ``Named Executive
Officers") for the periods indicated:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
-------------------------------
Annual Compensation Awards
------------------------------------ -------------------------------
Other Restricted Securities
Annual Stock Unit Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Awards ($)(1) Options (#)(2) Compensation
- --------------------------- ---- --------- -------- ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas A. Carr.................... 1999 $450,000 $550,000 0 0 0 $47,746(4)
President and Chief 1998 $332,500(3) $350,000 0 $2,000,000 550,000 $ 9,080(4)
Executive Officer 1997 $275,000 $300,000 0 0 76,814 $ 8,932(4)
Kent C. Gregory................... 1999 $205,000 $174,250 0 0 0 $39,391(6)
Managing Director-- 1998 $205,000 $153,750 0 $1,000,000 150,000 $ 8,940(6)
National Accounts 1997 $136,125(5) $ 97,500 0 0 42,389 $ 220(6)
Philip L. Hawkins................. 1999 $380,000 $400,000 0 0 0 $66,546(9)
Chief Operating Officer Chairman 1998 $281,975(7) $230,750 0 $1,500,000 400,000 $ 9,080(9)
of the Board 1997 $210,000 $250,000 $87,422(8) 0 62,389 $ 8,932(9)
Richard F. Katchuk................ 1999 $319,019(10) $280,000 0 $1,000,000 85,000 $23,159(11)
Chief Financial Officer 1998 N/A
1997 N/A
Linda A. Madrid................... 1999 $200,000 $120,000 0 $ 500,000 0 $29,445(12)
Managing Director, General 1998 $170,922(13) $ 80,000 0 0 100,000 $ 726
Counsel and Secretary 1997 N/A
</TABLE>
(1) Represents the value of grants of restricted stock units made under the
Company's 1997 Stock Option and Incentive Plan. The restricted stock units
vest ratably over a five-year period, assuming the grantee is still an
employee of the Company or otherwise eligible for vesting on the vesting
date. On each vesting date, the grantee will receive shares representing
20% of the total number of restricted stock units granted plus an amount
equal to the dividends that would have been paid on such shares had the
shares been outstanding since the grant date, or the cash equivalent
thereof, at the Company's option. The grants of restricted stock units do
not entitle the grantees to any current dividend or voting rights. As of
December 31, 1999, the total holdings of restricted stock units of the
Named Executive Officers (with one unit deemed equivalent to the value of
one share) and the market value of such holdings were as follows: Mr.
Thomas A. Carr: 83,553 units ($1,785,945); Mr. Gregory: 41,776 units
($892,962); Mr. Hawkins: 62,664 units ($1,339,443); Mr. Katchuk: 43,669
units ($933,424); and Ms. Madrid: 20,888 units ($446,481). The following
table provides information on grants of restricted stock units during 1999
scheduled to vest in under three years from the date of grant:
<TABLE>
<CAPTION>
No. of Units No. of Units No. of Shares No. of Shares
Grantee Vesting on Vesting on Vesting on Vesting on
--------- 2/2/00 8/2/00 2/2/01 8/2/01
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Richard F. Katchuk 4,545 4,188 4,545 4,189
</TABLE>
(2) All option grants were made under the Company's 1997 Stock Option and
Incentive Plan.
(3) Mr. Carr's annual salary was $300,000 from January until October 1998, when
it was increased to $450,000.
(4) Consists of employer contributions for 1999, 1998 and 1997 to the
CarrAmerica Realty Retirement Plan and Trust in the amounts of $8,000,
$8,000 and $7,800, respectively, and life, AD&D and long-term disability
insurance premiums in the amounts of $1,104, $1,080 and $1,132,
respectively. Includes $38,642 of dividend equivalent payments made in 1999
based on ownership of vested restricted stock units.
(5) Mr. Gregory began his employment with the Company in 1997. The amount set
forth as salary for Mr. Gregory for 1997 represents actual salary paid to
him for work performed from his hire date to December 31, 1997. His
annualized salary for 1997 was $195,000.
(6) Consists of an $8,000 contribution to the CarrAmerica Realty Retirement Plan
and Trust for each of 1999 and 1998 and contributions for 1999, 1998 and
1997 for life, AD&D and long-term disability insurance premiums in the
amounts of $992, $940 and $220, respectively. In addition, includes the
cost to the Company of a split-dollar life insurance policy, for which the
Company paid a premium of $13,010 in 1999. The Company is entitled to a
refund of a portion of the cumulative annual premium paid by it pursuant to
the related insurance agreement prior to payment of any benefits. Includes
$17,389 of dividend equivalent payments made in 1999 based on ownership of
vested restricted stock units.
9
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(7) Mr. Hawkins' annual salary was $250,000 from January until October 1998,
when it was increased to $380,000.
(8) Reimbursement for employment-related expenses.
(9) Consists of $8,000, $8,000 and $7,800 contributions to the CarrAmerica
Realty Retirement Plan and Trust for 1999, 1998 and 1997, respectively, and
contributions for 1999, 1998 and 1997 for life, AD&D and long-term
disability insurance premiums in the amounts of $1,104, $1,080 and $1,132,
respectively. In addition, includes the cost to the Company of a split-
dollar life insurance policy, for which the Company paid a premium of
$28,462 in 1999. The Company is entitled to a refund of a portion of the
cumulative annual premium paid by it pursuant to the related insurance
agreement prior to payment of any benefits. Includes $28,980 in dividend
equivalent payments made in 1999 based on ownership of vested restricted
stock units.
(10) Mr. Katchuk began his employment with the Company in 1999. The amount set
forth as salary for Mr. Katchuk for 1999 represents actual salary paid to
him for work performed from his hire date to December 31, 1999. His
annualized salary for 1999 was $350,000.
(11) Consists of employer contributions for 1999 of $948 for life, AD&D and
long-term disability insurance premiums. Includes the cost to the Company
of a split-dollar life insurance policy, for which the Company paid a
premium of $22,211 in 1999. The Company is entitled to a refund of a
portion of the cumulative annual premium paid by it pursuant to the related
insurance agreement prior to payment of any benefits.
(12) Consists of $6,185 in contributions to the CarrAmerica Realty Retirement
Plan and Trust for 1999 and contributions for 1999 and 1998 for life, AD&D
and long-term disability insurance premiums in the amounts of $912 and
$726, respectively. Includes the cost to the Company of a split-dollar
life insurance policy, for which the Company paid a premium of $12,692 in
1999. The Company is entitled to a refund of a portion of the cumulative
annual premium paid by it pursuant to the related insurance agreement prior
to payment of any benefits. Includes $9,659 in dividend equivalent
payments made in 1999 based on ownership of vested restricted stock units.
(13) Ms. Madrid began her employment with the Company in 1998. The amount set
forth as salary for Ms. Madrid for 1998 represents actual salary paid to
her for work performed from her hire date to December 31, 1998. Her
annualized salary for 1998 was $180,000.
10
<PAGE>
The following table provides information on options granted to the Named
Executive Officers during the last fiscal year. All such options are
exercisable at the fair market value of a share of the Company's common stock on
the date of grant. The options have no value unless the Company's stock price
appreciates and the holder satisfies all applicable vesting requirements. All
the options granted to the Named Executive Officers and to executive officers of
the Company during 1999 vest 20% per year over five years, except as noted in
the footnotes to the table. Options granted by the Company to other employees
during 1999 vest 25% per year over four years.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Individual Grants Appreciation for Option Term
- --------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration
Name Granted Year ($ /Share) Date 5% ($) 10% ($)
---- ---------- ---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Thomas A. Carr 0 0 0 0 0 0
Kent C. Gregory 0 0 0 0 0 0
Philip L. Hawkins 0 0 0 0 0 0
Richard F. Katchuk 85,000 16.87% 22.00 2/1/09 1,176,033 2,980,298
Linda A. Madrid 0 0 0 0 0 0
</TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Securities Values of Unexercised
Shares Underlying Unexercised In-the-Money
Shares Options at FY End(1) Options at FY End(2)
Acquired Acquired Value ----------------------------- -----------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------- ----------- -------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas A. Carr............. 0 0 210,725 536,089 0 0
Kent C. Gregory............ 0 0 46,955 145,434 0 0
Philip L. Hawkins.......... 0 0 76,955 405,434 0 0
Richard F. Katchuk......... 0 0 0 85,000 0 0
Linda A. Madrid............ 0 0 20,000 80,000 0 0
</TABLE>
- ---------------
(1) Number of shares of common stock underlying options granted under the
Company's 1997 Stock Option and Incentive Plan or shares of common stock for
which Class A Units of Carr Realty, L.P. underlying options granted under
the 1993 Carr Realty Option Plan would have been redeemable.
(2) Based on the last reported sale price of the Company's common stock on the
NYSE on December 31, 1999 of $21.375.
Employment Contracts
Change-in-Control Arrangements. The Company has entered into change-in-
control agreements with each of Thomas A. Carr, Philip L. Hawkins and Richard F.
Katchuk. These agreements generally provide that if within three years from the
date of a "change in control" (as defined below), the employment of the
executive with the Company is terminated without cause, or in the event that the
executive terminates his employment with the Company based on a change in or
diminishment of his responsibilities, or a reduction in his salary, such
executive will be entitled to
11
<PAGE>
severance pay, based on his level of past salary and bonus compensation with the
Company. Additionally, the executive will be eligible for certain continued
benefits from the Company during the ensuing two-year period. Each of these
agreements initially is in effect until May 6, 2002, and may be extended
automatically for additional one-year periods thereafter.
For purposes of each of these agreements, a "change in control" generally
means any of the following events: (i) the consummation of a reorganization,
merger or consolidation involving the Company, unless all or substantially all
of the individuals or entities who were the beneficial owners of the Company's
voting securities continue to own at least 60% of the outstanding voting
securities of the surviving entity in substantially the same proportions; (ii)
individuals who currently constitute the Board of Directors of the Company
(including individuals who subsequently become directors whose nomination or
election was approved by at least a majority of the directors constituting the
Board of Directors as of the respective dates of the agreements) cease for any
reason to constitute a majority of the Board of Directors; (iii) the approval by
the Company's stockholders of a reorganization, merger or consolidation in which
the Company is not the surviving entity; or (iv) the approval by the Company's
stockholders of a complete liquidation or dissolution of the Company or the sale
or other disposition of more than 50% of the operating assets of the Company.
12
<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, that might incorporate SEC filings, in whole or in
part, the following Performance Graph and the Report of the Executive
Compensation Committee shall not be incorporated by reference into any such
filings:
PERFORMANCE GRAPH
Comparison Of 5 Year Cumulative Total Return*
Among CarrAmerica Realty Corporation, The S & P 500 Index And
The NAREIT Equity Index
[CHART APPEARS HERE]
* Assumes $100 invested on December 31, 1994 in common stock of CarrAmerica
Realty Corporation or in the securities comprising the S&P 500 index or the
NAREIT Equity index, assuming reinvestment of dividends.
The points on the graph represent the following numbers:
Last Trading Day of CarrAmerica S&P 500 NAREIT Equity
- --------------------- ----------- ------- -------------
1999................. $172 $351 $148
1998................. $179 $290 $155
1997................. $220 $226 $188
1996................. $191 $169 $156
1995................. $148 $138 $115
1994................. $100 $100 $100
13
<PAGE>
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee of the Company's Board of Directors
presents this report on the Company's compensation policies as they affected the
compensation reported above for the Company's executive officers for fiscal year
1999. In performing their responsibilities, the Executive Compensation
Committee had the benefit of reports prepared by the Company's outside
compensation consultant. The outside consultant provided information and advice
on competitive compensation policies and practices and on the reasonableness of
the compensation paid to executives of the Company.
Executive Compensation Philosophy
The Company's executive officer compensation policies incorporate a variety
of objectives, including rewarding executive officers commensurate with the
Company's performance, providing competitive compensation opportunities,
recognizing individual performance and responsibility, and assisting the Company
in attracting and retaining a highly motivated, performance-oriented executive
management team. The Company believes that the use of such objectives to
determine compensation for its executive officers serves as an important part of
the foundation from which to enhance stockholder value. The Company implemented
its executive officer compensation policies for 1999 with a compensation program
based on the total direct compensation package of each executive officer. The
Company evaluated each officer's package as a whole and in terms of two
components: an annual component, which includes base salary and a cash bonus
opportunity; and a long-term incentive component.
In assessing the competitiveness of the Company's executive officer
compensation, the Executive Compensation Committee reviewed materials brought to
its attention by the Company's outside compensation consultant. The consultant
reported on the compensation practices of 20 large publicly-traded office REITs
with median market capitalizations of approximately $2.0 billion and of 30 other
large publicly-traded non-REIT organizations with median market capitalizations
of approximately $1.5 billion. The Company's current capitalization is
approximately $2.0 billion. The REITs whose compensation practices were
reviewed constitute only a portion of the REITs included in the NAREIT Equity
Index, which is used in the Performance Graph above to compare stockholder
returns. The Committee believes that the Company's competitors for executive
talent are not necessarily companies included in the NAREIT Equity Index, most
of which have smaller capitalizations than that of the Company.
Annual Component
Base Salaries. The Company established base salary ranges for executive
officers for fiscal year 1999 in late 1998 after a formal annual review of base
salaries by the Executive Compensation Committee. An outside compensation
consultant provided advice in the course of the review. The principal elements
that entered into the Company's determination to set base salaries to the levels
reported for 1999 were the competitiveness of the Company's base salaries
compared to those paid by other large office REITs and other comparable for-
profit corporations outside the real estate area, the roles and responsibilities
of the individual, the contributions of the individual to the Company's
business, the requirements of the individual's job and the individual's prior
experience and accomplishments.
Cash Bonuses. The Company uses annual cash bonuses as a primary method of
rewarding executive officers commensurate with the Company's performance and
individual performance. Early in fiscal year 1999, the Company established a
target bonus amount for each executive officer equal to a percentage of the
executive officer's base salary, after review of the proposed targets by the
Executive Compensation Committee. The target bonus amounts for the Named
Executive Officers were equal to 50% to 100% of their base salaries. Payment of
the target bonus amounts was to be based primarily on
14
<PAGE>
three factors, contingent upon the adequacy of the Company's cash and capital
resources: (i) the Company's attainment of a specific target in terms of funds
from operations (FFO) per share; (ii) each officer's achievement of
individualized quantitative financial and operational goals related to the
activities he or she managed; and (iii) a qualitative component at management's
discretion. The Company retains the discretion to increase or decrease annual
bonuses in any given year above or below target amounts to take into account
extraordinary performance or events.
Long-Term Incentive Component
The Company uses two forms of long-term incentive compensation - stock
options and restricted stock units - as methods of aligning the financial
interests of its executive officers more closely with those of its stockholders.
The Executive Compensation Committee also believes that recognizing executive
officer retention as an important component will maintain and improve the
Company's performance. In particular, the Company increased long-term incentive
compensation to make its executive compensation more competitive with levels at
companies competing for executive talent. In general, the Company attempted to
set total direct compensation for its executive officers competitive with those
for executive officers of peer group REITs and peer group public companies based
on capitalization.
Upon the Executive Compensation Committee's recommendation, the Board of
Directors concluded that the Company's long-term incentive opportunities for
executive officers should be assessed on an annual basis. A compensation mix
weighted more heavily towards long-term incentive compensation better aligns the
interests of the Company's executive officers at levels with those of its
stockholders, because long-term incentive compensation is more closely linked to
long-term performance and stock price.
Stock Options. The Executive Compensation Committee includes grants of
stock options among the long-term incentives afforded its executive officers.
The Executive Compensation Committee believes that the interests of stockholders
are best served by giving key employees the opportunity to participate in the
appreciation of the Company's common shares. To encourage the Company's
employees to seek long-term appreciation in the value of the Company's common
stock, stock options vest over a specified period of time. Accordingly, an
employee generally must remain with the Company for a period of years to enjoy
the full economic benefit of a stock option.
Restricted Stock Units. The Company makes grants of restricted stock units
to its executive officers as another form of long-term incentive compensation.
These grants resulted from a recommendation of the Company's outside
compensation consultant. The consultant reported that it had detected a trend
in the Company's REIT peer group towards granting restricted stock or restricted
stock units. In years past, the Company and its peer group companies relied
primarily on stock options for their long-term incentive programs. The
Executive Compensation Committee believes that these restricted stock unit
grants bring the Company's overall long-term incentive compensation payable to
its executive officers more in line with the compensation arrangements that have
been implemented by the Company's competitors for executive talent.
The Company's Board of Directors determined that the restricted stock unit
grants should vest ratably over five years in order to moderate their negative
earnings impact and to increase the retention value of the awards.
Chief Executive Officer Compensation
The compensation reported for the Company's Chief Executive Officer for
1999 was determined by the Executive Compensation Committee substantially in
conformity with the policies described above for all other executive officers of
the Company. The Committee, however, provided
15
<PAGE>
that a greater percentage of the CEO's total compensation would be payable
through annual bonus and other incentive compensation, rather than through base
salary. The Committee granted the CEO a bonus equal to approximately 120% of his
base salary after the end of the year based on his exceptional performance, as
demonstrated by the Company exceeding its target FFO, effective implementation
of the Company's strategic plan, development of the Company's management team,
and successful adaptation of the Company's business and capital plans, during a
difficult year characterized by an unfavorable capital market and other
significant management challenges.
Deductibility of Executive Officer Compensation
Section 162(m) of the Internal Revenue Code denies a deduction for
compensation in excess of $1 million paid to certain executive officers, unless
certain performance, disclosure, and stockholder approval requirements are met.
The Company's stock option grants to executive officers in 1999 are intended to
qualify as "performance-based" compensation not subject to the Section 162(m)
deduction limitation. The Company's restricted stock unit grants in 1999 are
subject to the $1 million deduction limitation because they vest over time and
are not considered "performance-based" within the meaning of Section 162(m).
The Executive Compensation Committee believes that a substantial portion of the
compensation awarded to executive officers as annual cash bonuses would be
exempted from the $1 million deduction limitation. The Committee's present
intention is to qualify, to the extent reasonable, a substantial portion of each
executive officer's compensation for deductibility under applicable tax laws.
Executive Compensation Committee
C. Ronald Blankenship
A. James Clark
Timothy Howard
Wesley S. Williams, Jr.
16
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
A. James Clark, C. Ronald Blankenship, Timothy Howard and Wesley S.
Williams, Jr. served on the Executive Compensation Committee of the Board of
Directors during 1999. None of these individuals was or ever has been an
employee of the Company or any of its subsidiaries. Mr. Clark and Mr.
Blankenship had the relationships described below that are required to be
disclosed in this Proxy Statement.
Mr. Clark owns interests in certain entities that were parties to certain
transactions involving the Company. A wholly owned subsidiary of Clark
Enterprises, Inc., an entity of which Mr. Clark is the majority stockholder and
which is a holder of Class A Units of Carr Realty, L.P., has provided
construction management services to an affiliate of the Company, CarrAmerica
Development, Inc. In connection with these services, the affiliate paid $3.1
million to Clark Enterprises for 1999.
Mr. Blankenship is Vice Chairman and Chief Operating Officer of Security
Capital Group Incorporated, an affiliate of SC-USREALTY, a major stockholder of
the Company. The Company made payments of $.2 million to Security Capital
Investment Research Incorporated, another affiliate of SC-USREALTY, for research
rendered in connection with the acquisition of operating and development
properties for 1999.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information regarding the beneficial
ownership of shares of common stock of the Company as of March 9, 2000 for (1)
each person known by the Company to be the beneficial owner of more than 5% of
the outstanding common stock, (2) each director of the Company and each Named
Executive Officer, and (3) the directors and executive officers of the Company
as a group. Unless otherwise indicated in the footnotes, all such interests are
owned directly, and the person or entity identified as the beneficial owner has
sole voting and investment power. The number of shares reported as beneficially
owned by a person represents the number of shares of common stock the person
holds (including shares of common stock that may be issued upon exercise of
options that are exercisable within 60 days of March 9, 2000) plus the number of
shares into which Class A Units of Carr Realty, L.P. held by the person
(including Class A Units of Carr Realty, L.P. that may be issued upon the
exercise of options that are exercisable within 60 days of March 9, 2000) are
redeemable (if the Company elects to issue shares rather than pay cash upon such
redemption). For purposes of the following table, the number of shares of
common stock and Class A Units deemed outstanding includes 67,026,489 shares of
common stock, 4,703,842 Class A Units of Carr Realty, L.P., 1,247,567 Units of
CarrAmerica Realty, L.P. and 240,000 Class A Units of Carr Realty, L.P. and
493,953 shares of common stock issuable upon exercise of options exercisable
within 60 days of March 9, 2000. The extent to which a person holds Class A
Units of Carr Realty, L.P. or CarrAmerica Realty, L.P. or options to purchase
common stock or Class A Units of Carr Realty, L.P. which are exercisable within
60 days of March 9, 2000, rather than common stock, is set forth in the
footnotes.
17
<PAGE>
<TABLE>
<CAPTION>
Percent Percent of
Name and Address Number of Shares/Units of All All Shares &
of Beneficial Owner Beneficially Owned Shares(1) Units(2)
- ------------------------------------- ---------------------- ---------- ---------------
<S> <C> <C> <C>
More Than 5% Beneficial Owner
Security Capital U.S. Realty
Security Capital Holdings S. A. (3).. 28,603,417 42.7% 39.2%
69, route d'Esch
L-2953 Luxembourg
Directors
C. Ronald Blankenship (3)............ 3,500 * *
Security Capital Group
125 Lincoln Avenue
Santa Fe, NM 87501
Andrew F. Brimmer (4)................ 21,213 * *
Brimmer & Company
4400 MacArthur Boulevard, NW
Washington, DC 20007
Oliver T. Carr, Jr. (5).............. 1,690,000 2.5% 2.3%
CarrAmerica Realty Corporation
655 15th Street, NW
Washington, DC 20005
Thomas A. Carr (6)................... 300,906 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006
A. James Clark (7)................... 951,967 1.4% 1.3%
Clark Enterprises, Inc.
7500 Old Georgetown Road
Bethesda, MD 20814
Timothy Howard (8)................... 8,060 * *
Fannie Mae
3900 Wisconsin Ave, N.W.
Washington, DC 20016
Caroline S. McBride (9).............. 18,393 * *
Security Capital Group
399 Park Avenue, 23rd Floor
New York, NY 10022
William D. Sanders (10).............. 23,393 * *
Security Capital Group
125 Lincoln Avenue
Santa Fe, NM 87501
Wesley S. Williams, Jr. (11)......... 19,083 * *
Covington & Burling
1201 Pennsylvania Avenue, NW
Washington, DC 20044
Named Executive Officers
Kent C. Gregory (12)................. 78,522 * *
CarrAmerica Realty Corporation
1600 Parkwood Circle, Ste. 150
Atlanta, GA 30339
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Percent Percent of
Name and Address Number of Shares/Units of All All Shares &
of Beneficial Owner Beneficially Owned Shares(1) Units(2)
- -------------------------------------------------------------- ---------------------- ---------- ---------------
<S> <C> <C> <C>
Philip L. Hawkins (13)........................................ 140,344 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006
Richard F. Katchuk (14)....................................... 21,794 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006
Linda A. Madrid (15).......................................... 25,000 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006
All directors and executive officers as a group (13 persons).. 3,302,205 4.7% 4.5%
</TABLE>
- -----------------
* Less than 1%.
(1) Assumes that all options to acquire shares of common stock held by the
person that are shown, if any, are exercised, that all Class A Units of Carr
Realty, L.P. held by the person, if any, are redeemed for shares of common
stock, and that all options to acquire Class A Units of Carr Realty, L.P.
held by the person that are shown, if any, are exercised and that the
underlying Units are redeemed for shares of common stock. The total number
of shares outstanding used in calculating this percentage includes all
currently issued and outstanding shares of common stock plus shares of
common stock issuable upon redemption of all Class A Units beneficially
owned by the person (including Class A Units issuable to such person upon
exercise of options that are shown), but assumes that none of the Class A
Units held by other persons are redeemed for shares of common stock.
(2) Intended to show fully diluted beneficial ownership. Assumes that all
options to acquire shares of common stock and options to acquire Class A
Units of Carr Realty, L.P. held by the person that are shown, if any, are
exercised. The total number of shares outstanding used in calculating this
percentage includes all currently issued and outstanding shares of common
stock and assumes that all of the Class A Units held by other persons
(including Class A Units issuable to such person upon exercise of options
that are shown) are redeemed for shares of common stock.
(3) Mr. Blankenship is a director of Security Capital Group, an affiliate of
Security Capital Holdings S.A., a wholly-owned subsidiary of SC-USREALTY,
but disclaims beneficial ownership of the shares held by Security Capital
Holdings, S.A. Mr. Blankenship owns no shares of common stock, but has
options to purchase 3,500 shares of common stock which are exercisable
within 60 days of March 9, 2000.
(4) Dr. Brimmer owns 100 shares of common stock and options to purchase 21,113
shares of common stock which are exercisable within 60 days of March 9,
2000.
(5) The aggregate amount of shares of common stock beneficially owned by Mr.
Oliver T. Carr, Jr. consists of 104,718 shares of common stock and 284,672
Class A Units owned directly by him, and 10,000 shares of common stock owned
by his spouse and 150,000 Class A Units held in an irrevocable trust for the
benefit of his spouse, 2,065 shares of common stock owned by Mr. and Mrs.
Carr as joint tenants, 5,160 shares held by their children, 338,083 shares
of common stock and 650,462 Class A Units owned by The Oliver Carr Company,
of which Mr. Carr is a director, chairman of the board, president and
trustee of the majority stockholder, and Mr. Carr's options to purchase
120,000 Class A Units and options to purchase 30,000 shares of common stock
which are exercisable within 60 days of March 9, 2000. Mr. Carr disclaims
beneficial ownership of the 5,160 shares held in an irrevocable trust for
the benefit of his minor children.
(6) Mr. Thomas Carr is a director of The Oliver Carr Company. Mr. Carr
disclaims beneficial ownership of the shares of common stock and Class A
Units held by The Oliver Carr Company. Mr. Carr holds 18,993 shares of
common stock, 26,281 Class A Units directly and 2,907 Class A Units are held
by his children. Mr. Carr has options to purchase 120,000 Class A Units and
132,725 shares of common stock which are exercisable within 60 days of March
9, 2000.
(7) The aggregate amount of shares of common stock beneficially owned by Mr.
Clark consists of 4,666 shares of common stock and 358,596 Class A Units
owned directly by him and 569,979 Class A Units owned by Clark Enterprises,
Inc., of which Mr. Clark is chairman, president, a director and the majority
stockholder. Mr. Clark owns options to purchase 18,726 shares of common
stock which are exercisable within 60 days of March 9, 2000.
(8) Mr. Howard has options to purchase 8,060 shares of common stock which are
exercisable within 60 days of March 9, 2000.
(9) Ms. McBride is an officer of Security Capital Group, an affiliate of
Security Capital Holdings, S.A., a wholly owned subsidiary of SC-USREALTY,
but disclaims beneficial ownership of the shares held by Security Capital
Holdings, S.A. Ms. McBride owns options to purchase 18,393 shares of common
stock which are exercisable within 60 days of March 9, 2000.
19
<PAGE>
(10) Mr. Sanders is a director of Security Capital Group, an affiliate of
Security Capital Holdings S.A., a wholly-owned subsidiary of SC-USREALTY,
but disclaims beneficial ownership of the shares held by Security Capital
Holdings, S.A. Mr. Sanders has options to purchase 23,393 shares of common
stock of the Company which are exercisable within 60 days of March 9, 2000.
(11) Mr. Williams owns 200 shares of common stock and options to purchase 18,833
shares of common stock which are exercisable within 60 days of March 9,
2000.
(12) Mr. Gregory owns 12,389 shares of common stock and options to purchase
61,955 shares of common stock which are exercisable within 60 days of March
9, 2000.
(13) Mr. Hawkins owns 17,389 shares of common stock and options to purchase
110,955 shares of common stock and 12,000 Class A Units which are
exercisable within 60 days of March 9, 2000.
(14) Mr. Katchuk owns 544 shares of common stock and options to purchase 21,250
shares of common stock which are exercisable within 60 days of March 9,
2000.
(15) Ms. Madrid has options to purchase 25,000 shares of common stock which are
exercisable within 60 days of March 9, 2000.
Under the terms of a Stockholders Agreement entered into by the Company and
SC-USREALTY in connection with SC-USREALTY's initial investment in the Company,
SC-USREALTY generally is required to vote its shares of common stock of the
Company either in accordance with the recommendation of the Company's Board of
Directors or proportionally in accordance with the votes of the other holders of
common stock in matters submitted to the stockholders for a vote. SC-USREALTY
is permitted to vote its shares in its sole discretion under certain
circumstances, including with respect to the election of its nominees as
directors of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Carr Real Estate Services, Inc., an affiliate of the Company in which The
Oliver Carr Company owns voting stock, provides management and leasing services
for certain properties in which the Company owns a controlling interest. Fees
paid to Carr Real Estate Services, Inc. for these services with respect to these
properties totaled $4.5 million for 1999. Carr Real Estate Services, Inc. also
provides management and leasing services for partnerships in which Oliver T.
Carr, Jr. and/or A. James Clark, two directors of the Company, have interests.
Fees paid to Carr Real Estate Services, Inc. for these services by these
partnerships totaled $2.3 million for 1999.
CarrAmerica Development, Inc., an affiliate of the Company in which The
Oliver Carr Company owns voting stock, provides development and architectural
services to many of the Company's properties. Fees paid to CarrAmerica
Development for these services with respect to these properties totaled $3.4
million for 1999. CarrAmerica Development, Inc. also provides development and
architectural services for partnerships in which Oliver T. Carr, Jr. and/or A.
James Clark, two directors of the Company, have interests. Fees paid to
CarrAmerica Development for these services by these partnerships totaled $0.1
million for 1999.
The Company has entered into consulting agreements with each of Carr Real
Estate Services, Inc. and CarrAmerica Development, Inc. pursuant to which the
Company has provided certain consulting services. Fees paid to the Company for
these services by Carr Real Estate Services, Inc. and CarrAmerica Development
totaled $0.3 million and $2.9 million, respectively, for 1999.
The Company also has guaranteed a $200 million credit facility obtained by
HQ Global Workplaces, Inc. ("HQ"), of which approximately $140.5 million was
outstanding as of December 31, 1999. During 1999, the Company advanced loans to
OmniOffices (UK) Ltd. ("Omni UK") and OmniOffices (Lux) 1929 Holding Company
S.A. ("Lux") in the aggregate amounts of approximately (Pounds)4.1 million and
$3.1 million, respectively. Several directors and executive officers of the
Company (Messrs. Thomas Carr, Philip Hawkins, Richard Katchuk and Kent Gregory
and Ms. Linda Madrid), SC-USREALTY and The Oliver Carr Company directly or
indirectly own voting stock of HQ or are directors of HQ, and HQ owns voting
stock of Omni UK and Lux.
20
<PAGE>
INDEPENDENT AUDITORS
KPMG LLP, which served as independent auditors of the Company for the last
fiscal year and has been selected to serve as independent auditors for the
current fiscal year, will have representatives present at the annual meeting,
will have the opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
OTHER MATTERS
The Company's management knows of no other matters which may be presented
for consideration at the annual meeting. If any other matters properly come
before the meeting, however, the holders of proxies solicited by this Proxy
Statement intend to vote such proxies in accordance with their judgment on such
matters. If a stockholder proposal that was excluded from this Proxy Statement
in accordance with Rule 14a-8 of the Securities Exchange Act of 1934, as
amended, is properly brought before the meeting, it is intended that the proxy
holders will use their discretionary authority to vote the proxies against such
proposal.
STOCKHOLDER PROPOSALS
Proposals of stockholders pursuant to Rule 14a-8 of the Securities Exchange
Act of 1934, as amended, to be presented at the 2001 annual meeting must be
received by the Corporate Secretary of the Company before December 1, 2000 to be
considered for inclusion in the Company's proxy material.
In addition, any stockholder who wishes to propose a nominee to the Board
of Directors or submit any other matter to a vote at a meeting of stockholders
(other than a stockholder proposal included in the Company's proxy materials
pursuant to Rule 14a-8 of the rules promulgated under the Securities Exchange
Act of 1934, as amended) must comply with the advance notice provisions and
other requirements of Section 3.11 of the Company's by-laws, which are on file
with the Securities and Exchange Commission and may be obtained from the
Corporate Secretary of the Company upon request. If a stockholder nomination or
proposal is received after the date specified in the advance notice provisions,
the Company's proxy for next year's annual meeting may confer discretionary
authority to vote on such matter without any discussion of the matter in the
Proxy Statement.
VOTING PROCEDURES AND COSTS OF PROXY SOLICITATION
A properly executed proxy marked "Abstain" with respect to any such matter
to be voted upon will not be voted, although it will be counted for purposes of
determining the presence of a quorum.
The Company pays for preparing, assembling, and mailing this Proxy
Statement and any other proxy materials transmitted on behalf of the Board of
Directors. The Company will, upon request, reimburse brokerage firms and others
for their reasonable expenses in forwarding proxy materials to the beneficial
owners of the Company's common stock.
* * * *
Your vote is important. Please complete the enclosed proxy card and mail
it in the enclosed postage-paid envelope as soon as possible.
21
<PAGE>
DETACH HERE
THIS PROXY IS SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS OF
CARRAMERICA REALTY CORPORATION
REVOCABLE PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 2000
The undersigned hereby appoints Linda A. Madrid and Ann Marie Pulsch,
P or any of them, Proxies, with full power of substitution, to act for and
R to vote the shares of the Common Stock of CARRAMERICA REALTY CORPORATION
O which the undersigned would be entitled to vote if personally present at
X the Annual Meeting of Stockholders of said Company to be held on
Y May 4, 2000, and at any and all adjournments thereof.
Receipt of the Company's Notice of Annual Meeting of Stockholders and Proxy
Statement is acknowledged.
IMPORTANT - THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
<PAGE>
DETACH HERE
[X] Please mark
votes as in
this example
This Proxy when properly executed will be voted as directed hereon, or if no
direction is indicated, will be voted FOR the election of the Board of
Directors' nominees for director, and AGAINST Proposal 2
1. To elect Directors.
Nominees for terms expiring 2003: (01) A. James Clark, (02) Timothy Howard
and (03) C. Ronald Blankenship
FOR WITHHOLD
ALL FROM ALL
NOMINEES [ ] [ ] NOMINEES
[ ]
--------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. To instate the election of directors annually. [ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
(Please date and sign exactly as name appears on this Proxy Card. Joint
owners should each sign. When signing as attorney, executor, administrator,
trustee, guardian, etc., give full title as well.)
Signature: Date:
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Signature: Date:
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