MID-ATLANTIC REALTY TRUST
1306 Concourse Drive, Suite 200
Linthicum, Maryland 21090
__________________________________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_____________________________________________________________________________
April 5, 1995
To the Shareholders of Mid-Atlantic Realty Trust:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of MID-ATLANTIC
REALTY TRUST ("MART") will be held at The World Trade Center Baltimore, 401 East
Pratt Street, Constellation Room - 21st Floor, Baltimore, Maryland, on May 12,
1995, at 11:00 o'clock a.m., prevailing local time, for the following purposes:
1. To elect Trustees to serve for the ensuing year and until the election and
qualification of their successors;
2. To consider and act upon the selection of independent certified public
accountants to audit the books and accounts of MART for calendar year 1995; and
3. To transact such other business as may properly be brought before the
meeting or any adjournments thereof.
Only the shareholders of record of MART at the close of business on March 17,
1995 will be entitled to notice of and to vote at the meeting.
By Order of the Board of Trustees,
PAUL F. ROBINSON
Secretary
IMPORTANT - YOUR PROXY IS ENCLOSED
Shareholders who do not plan to attend the meeting are requested to complete,
date, sign and return promptly the enclosed proxy in the enclosed envelope. No
postage is required for mailing in the United States. <PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Trustees of MID-ATLANTIC REALTY
TRUST ("MART") in connection with the Annual Meeting of the Shareholders of MART
to be held on May 12, 1995, and any adjournments or postponements thereof. The
proxy is revocable at any time before exercise by written notice to Paul F.
Robinson, Secretary of MART, at the principal office of MART.
Only holders of record of MART's common shares of beneficial interest, par
value $.01 per share (the "Shares") at the close of business on March 17, 1995
(the "Record Date") are entitled to notice of and to vote at the meeting. As of
the Record Date, 6,291,407 Shares were outstanding and entitled to vote at the
meeting, with each Share entitled to one vote.
BENEFICIAL OWNERSHIP
The following table reflects the names and addresses of the only persons known
to MART to own beneficially (as defined under Section 13(d) of the Securities
Exchange Act of 1934, as amended) 5% or more of the outstanding Shares.
Beneficial owners of MART's outstanding Debentures are deemed to be beneficial
owners of the number of Shares into which the Debentures are convertible. The
following beneficial ownership information is given as of the Record Date:
Name and Address Shares Beneficially Percent
of Beneficial Owner Owned of Class
_________________________________________________________________________
Merrill Lynch & Co., Inc. (1) 671,450 (1) 9.8%
World Financial Center, North Tower
250 Vesey Street
New York, NY 10281
Smith Barney, Inc. (2) 1,090,733 (2) 16.0%
1345 Avenue of the Americas
New York, NY 10105
________________
(1) Reflects shared voting and investment power with the following affiliated
entities: Merrill Lynch Group, Inc. of the same address; and Princeton
Services, Inc., Merrill Lynch Asset Management, L.P. and Merrill Lynch
Global Allocation Funds, Inc., each of 800 Scodders Mill Road,
Plainsboro, New Jersey 08536.
(2) Reflects shared voting and investment power with the following affiliated
entities: Smith Barney Holdings, Inc., 1345 Avenue of the Americas, New York,
NY 10105; and The Travelers Inc., 65 East 55th Street, New York, NY 10022.
ELECTION OF TRUSTEES
A Board of Trustees of eight persons is to be elected by the shareholders. All
of the nominees will be elected as Trustees to serve until the 1996 Annual
Meeting of Shareholders and until their respective successors have been elected
and qualify.
Unless authority to vote is withheld, the enclosed proxy will be voted in favor
of the election as Trustees of the following nominees. The Board of Trustees
does not know of any nominee who will be unable to serve, but if any of them
becomes unable to serve, the proxies may be voted with discretionary authority
for the election of other persons as Trustees.
Principal Occupation Trustee
Name During the Last Five Years Age Since
____________________________________________________________________________
David F. Benson President of Meditrust (a publicly 46 1993
owned real estate investment trust)
since 1991; Treasurer of Meditrust
since 1985
Marc P. Blum Partner - Gordon, Feinblatt, Rothman, 52 1993
Hoffberger & Hollander; Chief Executive
Officer of World Total Return Fund Limited
Partnership (a private investment fund) since
1992; Chief Executive Officer of Coles Colonial
Limited Partnership (owner of furniture stores)
Robert A. Frank Managing Director and Group Head of the 45 1993
Real Estate Securities Research Department
of Alex. Brown & Sons Incorporated (a
publicly owned investment banking firm)
since 1989; Principal since 1989
LeRoy E. Hoffberger President of CPC, Inc. (real estate 69 1993
investments); Vice President of Merchants
Terminal Corp. (warehouse company); Of
Counsel to Gordon, Feinblatt, Rothman,
Hoffberger & Hollander
F. Patrick Hughes President and Chief Executive Officer 47 1993
of MART; President and Chief Operating
Officer of BTR Realty, Inc. from November,
1990; Senior Vice President and Chief
Financial Officer prior thereto
M. Ronald Lipman Partner - Lipman, Frizzell & Mitchell, 56 1993
L.L.C. (real estate consultants)
Stanley J. Moss Legal Counsel, NatWest Markets 64 1993
(investment bankers); Director, Ground
Round Restaurants, Inc.; Member of the
Board of Advisors of Workbench, Inc.;
Of Attorney, Of Counsel to Katten, Muchin
& Zavis from 1991 to 1992; Senior Vice
President, Secretary and Corporate
Counsel to Drexel Burnam Lambert
Incorporated from 1987 to 1990
Daniel S. Stone President of Stone & Associates, 50 1993
Inc. (real estate developers and
consultants)
Messrs. Blum and Hoffberger are also directors of New York Venture Fund, Inc.,
Venture Muni+, Inc., Venture Income, Inc. and Retirement Planning Funds of
America, Inc., all of which are investment companies registered under the
Investment Company Act of 1940. Mr. Benson is also a trustee of Meditrust.
Mr. Blum is a partner of, and Mr. Hoffberger is of counsel to, the law firm of
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, Baltimore, Maryland. During
1994, MART paid or incurred legal fees in the amount of approximately $166,675
for services rendered by that firm.
In 1994, the Board of Trustees held six meetings. During that year, each
Trustee attended, in the aggregate, more than 80% of the meetings of the Board
of Trustees and of the committees on which he served.
Committees of the Board of Trustees
The Board of Trustees has an Executive Compensation Committee, an Audit
Committee, an Investment Committee and a Nominating Committee. The Audit
Committee consists of Messrs. Blum, Frank and Moss and recommends to the Board
the selection of the independent public accountants, reviews with such
accountants and management financial statements, other results of the audit, and
internal accounting procedures and controls. The Audit Committee also reviews
and considers all proposed related party transactions. The Executive
Compensation Committee consists of Messrs. Benson, Blum, Frank and Moss and
makes recommendations to the Board regarding compensation of Trustees and
executive officers, executive compensation generally, and benefit plans for
management to be considered by the Board. The Investment Committee consists of
Messrs. Lipman, Stone and Hoffberger, with Mr. Hughes serving as a member ex
officio. The Investment Committee reviews the performance of MART's properties
and evaluates redevelopment and acquisition opportunities. The Nominating
Committee consists of Messrs. Blum, Benson and Stone. The Nominating Committee
makes recommendations regarding nominations for Trustees and officers.
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee of MART consists of Messrs. Frank, Benson,
Blum and Moss. As Chairman of the Board of Trustees, Mr. Hoffberger is an
executive officer of MART. There are no interlocking relationships involving
the Board of Trustees which are subject to the SEC executive compensation
disclosure rules.
Trustee Compensation
MART pays its Trustees (other than Messrs. Hoffberger and Hughes who are
members of management) a retainer of $6,000 per annum, $750 per meeting for
each Board and committee meeting attended in person and $500 for meetings
attended by telephone. In addition, under MART's Omnibus Share Plan, each
non-management Trustee automatically receives an option ("Trustee Option")
to purchase 10,000 Shares exercisable at the market price on the date the
option is granted. Trustee Options are exercisable to purchase 4,000
Shares six months after a Trustee's election, and to purchase 3,000
Shares on each of the first and second anniversaries of his or her election.
The current Trustee Options, which have an exercise price of $10.50 per
Share, became exercisable on August 1, 1994 to purchase 4,000 Shares,
and are exercisable as of each of January 1, 1995 and 1996 to purchase
an additional 3,000 Shares, respectively.
Mr. Hoffberger, as Chairman of the Board and an officer of MART, receives a
salary of $6,000 per annum. Mr. Hughes is not compensated for his service as a
Trustee.
INFORMATION REGARDING SHARE OWNERSHIP OF MANAGEMENT
As of the Record Date, the number of Shares owned by each Trustee, each nominee
to become a Trustee and by all Trustees and executive officers as a group were
as follows:
Name of Shares Percent
Beneficial Owner Beneficially Owned of Class
_________________________________________________________________
David F. Benson 1,333 *
Marc P. Blum 32,681(1)(3) .5%
Robert A. Frank 3,166 *
LeRoy E. Hoffberger 123,424(2)(3) 2.0%
F. Patrick Hughes 35,299 .6%
M. Ronald Lipman 34,224 .5%
Stanley J. Moss 1,000 *
Daniel S. Stone 1,200 *
Paul F. Robinson 1,121 *
All Trustees and Executive Officers
as a Group (9 persons included) 233,448(4) 3.7% (4)
____________________
*less than .1%
(1)Mr. Blum's Shares are held by World Total Return Fund Limited Partnership, an
investment fund of which Mr. Blum is the President of the General Partner and in
which he holds a substantial interest.
(2)Does not include 134,624 Shares or 2.1% of the outstanding Shares owned by
the Hoffberger Foundation, Inc., a charitable foundation of which Mr.
Hoffberger is an officer and director. The number of Shares in the above
table includes 60,000 Shares owned by CPC, Inc., a corporation of which Mr.
Hoffberger is a director, stockholder and executive officer, and 2,517
Shares registered in the name of Mr. Hoffberger as co-trustee under a
trust agreement.
(3)Does not include 188,740 Shares held by New York Venture Fund, Inc.
and $350,000 principal amount of MART's Convertible Subordinated Debentures,
convertible into 33,333 Shares, held by Retirement Planning Funds of America,
Inc., of which funds Messrs. Blum and Hoffberger are directors. The aggregate
number of Shares beneficially owned by such funds is 222,073 or 3.5% of the
outstanding Shares.
(4)The total number of Shares held by all Trustees and executive officers
as a group including the Shares held by the Hoffberger Foundation, Inc.
and the investment funds specified in Note (3) is 590,145, representing
9.4% of the outstanding Shares of MART.
EXECUTIVE COMPENSATION
The following tables reflect, with respect to the Chief Executive Officer
and each executive officer whose annual compensation exceeded $100,000
in 1994, the aggregate amounts paid to or accrued for such officers
as compensation in 1994 and in 1993 (on an annualized basis) and
certain information regarding stock options granted to them. Because
MART did not have any substantial operations prior to September 1993,
no information is given for previous periods.
Summary Compensation Table
Annual Compensation
_____________________________________________
Name and
Principal Other Annual
Position Year Salary Bonus Compensation (1)
____________________________________________________________________
F. Patrick Hughes
President and Chief 1994 $152,000 $30,000 $12,800
Executive Officer 1993 $132,000 - $12,754
Paul F. Robinson 1994 $98,000 $15,000 $6,082
Vice President, 1993 $93,214 - $7,998
Secretary, and
General Counsel
Summary Compensation Table
Long Term Compensation
______________________________________
Awards Payouts
Name and ________________________ __________
Principal Restricted Stock LTIP All Other
Position Year Award(s) Options Payouts Compensation
___________________________________________________________________________
F. Patrick Hughes
President and Chief 1994 - 45,000 - $387 (2)
Executive Officer 1993 - - - $387 (2)
Paul F. Robinson, 1994 - 27,000 - -
Vice President, 1993 - - - -
Secretary and
General Counsel
___________________
(1)Consists of car allowance and amounts reimbursed under MART's
Executive Medical Reimbursement Plan.
(2)Consists of premiums paid by MART on a term life insurance policy on
the life of Mr. Hughes which is payable to Mr. Hughes' heirs or estate.
Option Grants In Last Fiscal Year
Potential
Realizable Value
Individual Grants at Assumed Annual
_______________________________________ Rates of Stock
%of Price Appreciation
Number of Total for Option Term
Securities Granted to _______________
Underlying Employees
Optional In Fiscal Exercise Expiration
Name Granted Year Price Date 5% 10%
__________________________________________________________ ______________
F. Patrick Hughes 45,000 23% $10.50 2/1/99 - 0 - - 0 -
Paul F. Robinson 27,000 14% $10.50 2/1/99 - 0 - - 0 -
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End FY-End
_____________________________
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
_______________________________________________________________________
F. Patrick Hughes 15,000/30,000 - 0 -
Paul F. Robinson 9,000/18,000 - 0 -
Executive Employment Agreements
MART has Executive Employment Agreements with F. Patrick Hughes and
Paul F. Robinson. Under the Agreement the annual base salary for each
of Messrs. Hughes and Robinson for this last fiscal year was $152,000 and
$98,000, respectively. The Agreements provide annual increases of at least
one-half of the annual increase in the Consumer Price Index. The term of
each Agreement is two years; unless written notice to the contrary is
given at least 90 days prior to each anniversary date of the Agreement,
the Agreement is automatically renewed on each such anniversary for an
additional one year period. In the event of the termination of employment
due to a change of control in MART which was not approved by the Board
of Trustees, all compensation payable to the executive for the remainder
of the employment period (including any renewal period then in effect)
becomes immediately due and payable. At the election of the executive,
such compensation may be payable in a lump sum, discounted to present
value.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The compensation of management is determined by the Board of Trustees based
upon the recommendation of the Executive Compensation Committee (the
"Committee"). The Committee is comprised of independent Trustees, who
are responsible for developing and implementing a comprehensive compensation
program for management.
Compensation Philosophy. The Committee's goal is to align the interests
of management and employees with the interests of MART's owners - the
shareholders. To that end, the Committee has implemented and will continue
to implement a compensation strategy that includes base salary and cash
bonus, as well as incentive stock options which will reward management
and employees for adding shareholder value. Base salary is established at
levels which are necessary to attract and retain a high caliber of
management, and cash bonuses provide short-term rewards for current
accomplishments. Incentive stock options provide management and employees
with a long-term investment in MART, the value of which is dependent upon
their success in maximizing shareholder values.
The measure of current performance for a real estate investment trust
("REIT") is funds from operations, since most of the funds from operations
are distributed to shareholders. To the extent management succeeds at
increasing funds from operations, share prices and shareholder values should
be increased. Creating long-term shareholder value, however, is not
always consistent with increased short-term distributions. To properly
reward management for achieving a well-balanced result, the Committee
believes that both short-term results as well as long-term values
must be considered and separately recognized.
The Committee also recognizes the individual functions of each employee
and provides for individual goals to be attained by each person. While
the favorable performance of MART as a whole is the basis for any reward, the
performance by each employee is the most significant factor in determining
awards. The compensation of Mr. Hughes as the Chief Executive Officer of
MART, however, is based upon the foregoing factors as well as the overall
performance of MART and its management. As CEO, Mr. Hughes is responsible
for the overall condition of the company and its resources, and his performance
is evaluated by the Committee, in its discretion, on that basis as well
as on objective criteria based on reaching certain financial and
other benchmarks.
Base Salary. Base salary for senior management for fiscal year 1994 was
based in part upon salaries paid to such personnel in the preceding year
(1993). It is the intention of the Committee to review MART's executive
compensation structure to insure that MART has the continued ability to attract
and retain the high caliber executive talent. To that end, the Committee will
take into account salaries of senior management of companies of similar
size within the REIT industry. The base salary for Mr. Hughes will be
consistent with the base salaries of chief executive officers of peer
companies.
Incentive Bonuses. The Committee has implemented a discretionary cash bonus
program in 1994 for management and employees. The program makes available
a discretionary cash bonus pool consisting of a percentage of the amount
by which MART's funds from operations for the year exceed a specified
increase over the preceding year. Bonuses are payable to employees based
upon MART's performance and upon other subjective criteria relating to
individual performance. Personnel engaged in development and redevelopment
of properties may be rewarded for achieving returns above specified
levels. Property management personnel may also participate in such bonus
pools. The purpose of this program is to closely align the interests
of management and employees with the interests of MART's shareholders on
a year to year basis. The performance of the Chief Executive Officer
will also be tied to the overall performance of MART and its management.
Incentive Stock Option Plan. To promote the best long-term benefits to
MART and its shareholders, MART has an Omnibus Share Plan ("Plan") under
which Trustees, officers and employees may be granted awards of stock
options, stock appreciation rights, performance shares and restricted
stock. The purpose of the Plan is to provide equity-based incentive
compensation based on the long-term appreciation in value of MART's
Shares and to promote the interests of MART and its shareholders by
encouraging greater management ownership of MART's Shares. Most of the
options granted or to be granted under the Plan vest over a period of
several years, thereby providing a long-term incentive and encouraging
a long-term relationship between the employee and MART.
Awards under the Plan will be made to employees who have demonstrated
significant management potential or who have the capacity for contributing
in a substantial measure to the successful performance of MART. Currently,
the maximum number of Shares which may be issued under the Plan is
300,000, or 5% of the outstanding Shares of MART. It is the intention
of the Committee that a number of Shares equal to 5% of the outstanding
Shares of MART be reserved at all times for issuance to Trustees,
management and employees as long-term equity-based incentive compensation
awards.
EXECUTIVE COMPENSATION COMMITTEE
Robert A. Frank, Chairman
David F. Benson
Marc P. Blum
Stanley J. Moss
<PAGE>
PERFORMANCE GRAPH
MART commenced operations on September 11, 1993 upon the merger of BTR
Realty, Inc. ("BTR") into MART, as a result of which MART acquired the
business and operations of BTR. Consequently, MART had less than four
months of operations during 1993. The following graph tracks the
cumulative total return for MART during those months and for 1994,
compared to the S&P 500 and the National Association of Real Estate
Investment Trusts ("NAREIT") Equity REIT Total Return Index. The
cumulative total return represents stock price appreciation and
assumes reinvestment of all dividends paid during the indicated period.
The graph assumes an investment of $100 on September 1, 1993.
<TABLE>
MID-ATLANTIC REALTY TRUST
CUMULATIVE TOTAL RETURN
9/1/93 TO 12/31/94
<CAPTION>
S&P 500 EQUITY NAREIT MART
<S> <C> <C> <C>
09/01/93 $100.00 $100.00 $100.00
09/30/93 99.26 104.88 97.62
10/31/93 101.28 102.89 97.62
11/30/93 100.33 97.30 95.24
12/31/93 101.56 97.14 87.38
01/31/94 104.96 99.97 85.00
02/28/94 102.13 104.31 95.71
03/31/94 97.69 100.44 94.14
04/30/94 98.98 102.15 95.33
05/31/94 100.57 104.43 91.76
06/30/94 98.09 102.29 91.38
07/31/94 101.33 101.79 89.00
08/31/94 105.45 102.10 89.00
09/30/94 102.92 100.20 94.57
10/31/94 105.27 96.72 89.81
11/30/94 101.40 93.40 80.29
12/31/94 102.89 100.22 87.14
</TABLE>
Because of the short period (approximately 16 months) covered by the graph,
the graph is not an accurate measure of the cumulative total return or
performance of MART or a proper indicator of its comparison to the S&P
500 or the Equity REIT Total Return Index in general.
SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of Trustees has
selected KPMG Peat Marwick as independent certified public accountants
to audit the books and accounts of MART for calendar year 1995. The
Board of Trustees considers such accountants to be well qualified and
recommends a vote in favor of their selection.
Representatives of KPMG Peat Marwick are expected to be present at
the Annual Meeting with the opportunity to make a statement if they so
desire and to be available to respond to appropriate questions.
SUBMISSION OF SHAREHOLDER PROPOSALS TO BE CONSIDERED
AT THE MAY 1996 ANNUAL MEETING
Any shareholder desiring to present a proposal to be considered
by the shareholders at the Annual Meeting of Shareholders to be held
in May 1996, and desiring that information concerning such proposal be
included in the proxy statement and form of proxy relating to such
meeting furnished to shareholders by the Board of Trustees, should
submit in writing proposals, including all supporting materials, to
MART at its principal executive offices no later than December 1, 1995.
OTHER MATTERS
The solicitation of proxies will be made by mail at MART's expense,
including charges and expenses of brokerage firms, banks and
others for forwarding solicitation material to shareholders.
The Board of Trustees of MART is not aware of any other matter which
may be presented for action at the meeting, but should any other matter
requiring a vote of the shareholders arise, it is intended that the proxies
will be voted with respect thereto in accordance with the best judgment
of the person or persons voting the proxies, discretionary authority to
do so being included in the proxy.
Shareholders who do not plan to attend the Annual Meeting are urged to
complete, date, sign and return the enclosed proxy in the enclosed
envelope, to which no postage need be affixed if mailed in the United
States. Prompt response is helpful and your cooperation will be
appreciated.
By Order of the Board of Trustees,
PAUL F. ROBINSON
Secretary
Dated: April 5, 1995
PROXY
MID-ATLANTIC REALTY TRUST
1306 Concourse Drive, Suite 200
Linthicum, Maryland 21090
This Proxy is Solicited on Behalf of the Board of Trustees of Mid-Atlantic
Realty Trust.
The undersigned hereby appoints LeRoy E. Hoffberger, F. Patrick Hughes and
Paul F. Robinson, and each of them, as proxies, each with the power
of substitution, to vote as designated below all of the shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders to
be held at The World Trade Center Baltimore, 401 East Pratt Street,
Constellation Room - 21st Floor, Baltimore, Maryland, on May 12, 1995
at 11:00 a.m., prevailing local time, and any adjournments thereof.
1. ELECTION OF TRUSTEES: FOR all nominees listed below []
(except as set forth to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below []
Marc P. Blum, Robert A. Frank, LeRoy E. Hoffberger, F. Patrick Hughes,
M. Ronald Lipman, Daniel S. Stone, David F. Benson, Stanley J. Moss
The terms of all Trustees expire at the next annual meeting at which
their successors are elected and qualify.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
_____________________________________________________________
2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG Peat Marwick as the
independent certified public accountants of MART for the fiscal year
ending December 31, 1995.
For [] Against [] Abstain []
3. In their discretion, the proxies are authorized to vote upon any
other business which properly comes before the meeting and any
adjournments thereof.
This proxy, when properly executed, will be voted in the manner directed
hereby by the undersigned shareholders. If no direction is made, this
proxy will be voted in favor of all nominees and for Proposal No. 2.
Please sign exactly as your name appears on your proxy card. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by the
President or other authorized officer. If a partnership, please
sign in partnership name by an authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THE CARD IN THE ENCLOSED ENVELOPE.
DATED: _____________,1995 Signature________________________________
DATED: _____________,1995 Signature________________________________
