SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 Rule 14a-11(c) or Rule 14a-12
Mid-Atlantic Realty Trust
-------------------------
(Name of Registrant as Specified in Its Charter)
N/A
(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)(1) and
0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
Fee paid previously with preliminary materials: N/A
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:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
MID-ATLANTIC REALTY TRUST
170 West Ridgely Road, Suite 300
Lutherville, Maryland 21093
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
April 5, 2000
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, 401
East Pratt Street, Constellation Room - 21st Floor, Baltimore, Maryland on
Friday, May 12, 2000, at 11:00 a.m., prevailing local time, for the following
purposes:
1. To elect seven Trustees to serve for the ensuing year and until the
election and qualification of their successors;
2. To consider and vote upon the selection of independent certified
public accountants to audit the books and accounts of MART for
calendar year 2000; 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, 2000 will be entitled to notice of and to vote at the meeting.
It is important that your shares be represented and voted at the
meeting. You can vote your shares by mail, Internet or telephone. To vote your
shares by mail you must complete and return the enclosed proxy card. When voting
by mail, telephone or Internet you must be careful to follow the instructions on
or attached to the proxy card. You can revoke a proxy at any time prior to its
exercise at the meeting by voting at the meeting or by timely delivery of a
properly executed later-dated proxy (including an Internet or telephone vote).
By Order of the Board of Trustees,
PAUL F. ROBINSON
Secretary
<PAGE>
MID-ATLANTIC REALTY TRUST
170 West Ridgely Road, Suite 300
Lutherville, Maryland 21093
(410) 684-2000
-----------------------------------------
PROXY STATEMENT
The Board of Trustees of MID-ATLANTIC REALTY TRUST ("MART") is
soliciting proxies in connection with the Annual Meeting of the Shareholders of
MART to be held on May 12, 2000, and any adjournments or postponements thereof.
The approximate date this Proxy Statement and proxy card are being sent to
shareholders is April 5, 2000.
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,
2000 (the "Record Date") are entitled to notice of and to vote at the meeting.
As of the Record Date, 13,910,372 Shares were outstanding and entitled to vote
at the meeting, with each Share entitled to one vote.
You can vote your Shares in person, by mail, over the telephone or
through the Internet. You can vote by mail by completing and mailing the proxy
card in the postage paid envelope provided, over the telephone by dialing a
toll-free telephone number and following the instructions printed on the proxy
card, or through the Internet by following the instructions printed on the proxy
card. Please be aware that if you vote through the Internet you may incur costs
such as telephone and Internet access charges for which you will be responsible.
The Internet and telephone facilities for shareholders will close at 9:00 a.m.
E.S.T. on May 12, 2000.
The Internet and telephone voting procedures are designed to
authenticate shareowners by use of a control number and to allow you to confirm
that your instructions have been properly recorded.
The method by which you vote will in no way limit your right to vote at
the meeting if you later decide to attend in person. If your Shares are held in
the name of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor, from the holder of record to be able to vote at the
meeting.
All Shares entitled to vote and represented by properly completed
proxies received prior to the meeting and not revoked will be voted at the
meeting in accordance with your instructions. If you do not indicate how your
Shares should be voted on a matter, the shares represented by your properly
completed proxy will be voted as the Board of Trustees recommends.
If any other matters are properly presented at the annual meeting for
consideration, including, among other things, consideration of a motion to
adjourn the meeting to another time or place, the persons named as proxies and
acting thereunder will have discretion to vote on those matters according to
their best judgment to the same extent as the person delivering the proxy would
be entitled to vote. At the date this proxy statement went to press, we did not
anticipate that any other matters would be raised at the meeting.
3
<PAGE>
BENEFICIAL OWNERSHIP
The following table reflects the names and addresses of the only
persons known to MART to be the beneficial owners of 5% or more of the Shares.
For purposes of calculating beneficial ownership, Rule 13d-3 of the Securities
Exchange Act of 1934 requires inclusion of Shares that may be acquired within 60
days, such as upon the conversion of MART's Convertible Debentures held by each
such person (assuming those Debentures and no other Debentures are converted).
The following information is based on data contained in Schedules 13G filed with
the Securities and Exchange Commission:
Name and Address Shares Beneficially Percent
of Beneficial Owner Owned of Class
------------------- ----- --------
David L. Babson and Co., Inc. 822,100 5.9%
One Memorial Drive
Cambridge, Massachusetts 02142-1300
Palisade Capital Management, LLC 1,140,000 8.2%
One Bridge Plaza
Fort Lee, New Jersey 07024
ELECTION OF TRUSTEES
A Board of Trustees of seven persons is to be elected by the
shareholders. All of the nominees will be elected as Trustees to serve until the
2001 Annual Meeting of Shareholders and until their respective successors have
been elected and qualify. The number of Board members was reduced to seven after
the resignation of Jack H. Pechter in August 1999. Under MART's Declaration of
Trust and Maryland law, Trustees are elected by a plurality vote, which means
the affirmative vote of holders of a majority of the Shares present (in person
or by proxy) and voted at the meeting. Consequently, withholding of votes,
abstentions and broker non-votes will have no effect on the outcome of this
vote.
Unless authority to vote is withheld, your 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.
<TABLE>
<CAPTION>
Principal Occupation Trustee
Name During the Last Five Years Age Since
- ---- ------------------------------ --- -----
<S> <C> <C> <C>
David F. Benson.................. Consultant to Meditrust Corporation (a publicly owned 51 1993
real estate investment trust) from February, 2000; prior
thereto, President, CEO and Director, of Meditrust
Corporation
Marc P. Blum..................... Chief Executive Officer of World Total Return Fund 57 1993
Limited Partnership and U.S.A. Fund Limited
Partnership (private investment funds); Chief Executive
Officer of Coles Colonial Limited Partnership (operator
of Drexel-Heritage furniture stores); Of Counsel to
Gordon, Feinblatt, Rothman, Hoffberger & Hollander,
LLC
4
<PAGE>
Robert A. Frank.................. Executive Vice President, Legg Mason Wood Walker, 50 1993
Inc. (a publicly owned investment banking firm) from
January, 2000; Prior thereto, Executive Vice President,
Director of Research and co-Head of Capital Markets
from September 1996; Prior thereto, Managing Director
and Group Head of Real Estate Securities Research
Department of Alex. Brown & Sons Incorporated (a
publicly owned investment banking firm now known as
DB Alex. Brown)
LeRoy E. Hoffberger.............. Chairman of the Board of MART; President of CPC, 74 1993
Inc. (real estate investments); Chairman of the Board of
Merchants Terminal Corp. (warehouse company); Of
Counsel to Gordon, Feinblatt, Rothman, Hoffberger &
Hollander, LLC
F. Patrick Hughes................ President and Chief Executive Officer of MART 52 1993
M. Ronald Lipman................. Member - Lipman, Frizzell & Mitchell, L.L.C. (real 61 1993
estate consultants)
Daniel S. Stone.................. President of Stone & Associates, Inc. (real estate 55 1993
developers and consultants)
</TABLE>
Mr. Blum is also a director of ten funds in the Davis Fund complex,
which are investment companies registered under the Investment Company Act of
1940; Mr. Blum and Mr. Hoffberger are also Of Counsel to the law firm of Gordon,
Feinblatt, Rothman, Hoffberger & Hollander, LLC, which is general counsel to
MART. In their position as Of Counsel, Mr. Hoffberger and Mr. Blum are not
members of the firm, do not provide substantial services to or for the firm,
and do not receive material compensation from the firm.
In 1999, the Board of Trustees held seven meetings. During that year,
each Trustee attended, in the aggregate, at least 85% of the meetings of the
Board of Trustees and 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 Lipman and
meets with the Board and independent accountants to review financial results and
the quarterly and annual reports, discuss the financial statements, recommend to
the Board the selection of the independent public accountants, and review with
such accountants and management the internal accounting procedures and controls.
The Audit Committee is also responsible for reviewing proposed related party
transactions, if any. The Audit Committee held one meeting in 1999.
The Executive Compensation Committee consists of Messrs. Benson, Blum
and Frank, 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 Executive Compensation
Committee held one meeting in 1999.
5
<PAGE>
The Investment Committee consists of Messrs. Lipman, Stone and
Hoffberger, with Mr. Hughes serving as a member ex officio. The Investment
Committee, which held five meetings in 1999, studies potential acquisition
opportunities, reviews the performance of MART's properties and evaluates
development and redevelopment opportunities.
The Nominating Committee, which consists of Messrs. Blum, Benson and
Stone, makes recommendations regarding nominations for Trustees and officers.
The Nominating Committee would consider nominees recommended by shareholders
upon timely written notice given to MART. The time period during which this
notice must be given is specified at the end of this proxy statement under the
caption "Submission of Shareholder Proposals to be Considered at the May 2001
Annual Meeting." The Nominating Committee held one meeting in 1999.
Trustee Compensation
MART paid its Trustees (other than Mr. Hughes, who is employed as
President and Chief Executive Officer of MART) a retainer of $12,000 per annum,
$1,000 per meeting for each Board and committee meeting attended in person, and
$500 for meetings attended by telephone. In lieu of cash, Trustees have the
option of taking their fees in MART Shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that
MART's Trustees and executive officers and each person who owns more than 10% of
MART's Shares, file with the Securities and Exchange Commission an initial
report of beneficial ownership and subsequent reports of changes in beneficial
ownership of the Shares. To MART's knowledge, based on written certifications
received from such persons, all reports required to be so filed by such persons
have been filed on a timely basis. MART believes that all of its Trustees and
executive officers, and all persons owning beneficially more than 10% of the
Shares, complied with all filing requirements applicable to them with respect to
transactions during the fiscal year ended December 31, 1999.
INFORMATION REGARDING SHARE OWNERSHIP OF MANAGEMENT
The following table reflects, as of the Record Date, the number of
Shares owned by each Trustee and executive officer, each nominee to become a
Trustee and by all Trustees and executive officers as a group. Share ownership
of Trustees and executive officers is calculated in accordance with Regulation
13D under the Securities Exchange Act of 1934, which includes Shares that a
person has the right to acquire within 60 days, including upon exercise of
options and conversion of Debentures.
<TABLE>
<CAPTION>
Name of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class
--------------------------------- ------------------ --------
<S> <C> <C>
David F. Benson 28,110 0.2%
Marc P. Blum 392,481 (2) 2.8%
Robert A. Frank 29,166 0.2%
LeRoy E. Hoffberger 207,105 (3) 1.5%
F. Patrick Hughes 384,308 2.8%
M. Ronald Lipman 63,555 0.5%
Daniel S. Stone 34,400 0.2%
Paul F. Robinson 232,800 1.6%
All Trustees and Executive Officers
as a Group (8 persons included) 1,392,862 (4) 10.0%
- --------------------
Footnotes on next page.
6
<PAGE>
<FN>
(1) Includes 26,000 Shares, 26,000 Shares, 26,000 Shares, 46,000 Shares,
147,000 Shares, 22,000 Shares, 26,000 Shares, and 93,200 Shares subject
to immediately exercisable options granted pursuant to the Company's
1993 Omnibus Share Plan and the 1995 Stock Option Plan to each of
Messrs. Benson, Blum, Frank, Hoffberger, Hughes, Lipman, Stone and
Robinson, respectively.
(2) Includes 366,481 Shares held by World Total Return Fund Limited
Partnership and by U.S.A. Fund Limited Partnership, investment funds of
which Mr. Blum is the President and CEO of the General Partner and in
which he holds a substantial interest.
(3) Excludes 134,624 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 95,000 Shares
owned by CPC, Inc., a corporation of which Mr. Hoffberger is a director,
stockholder and executive officer and includes 25,749 Shares registered
in the name of Mr. Hoffberger as co-trustee under two trust agreements.
(4) Includes 20,937 shares held by the Trustees' Deferred Compensation Trust
which the Board of Trustees has the power to vote.
</FN>
</TABLE>
EXECUTIVE COMPENSATION
The following table reflects, with respect to the chief executive
officer and each executive officer of MART whose annual compensation exceeded
$100,000 in 1999, the aggregate amounts paid to or accrued for such officers as
compensation in 1999, 1998 and 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards
------------------- ------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary Bonus($) Compensation($)(1) Award($)(2) Options Compensation($)(3)
- ------------------ ---- ------ ----- ------------ ------ ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
F. Patrick Hughes 1999 $230,000 (4) 7,800 --- --- 807
President and 1998 $230,000 57,500 12,165 --- --- 807
Chief Executive Officer 1997 $210,000 105,000 7,800 2,675,000 75,000 807
Paul F. Robinson
Executive Vice President, 1999 $165,000 (4) 9,892 --- --- 1,580
Secretary, and 1998 $160,000 41,250 9,801 --- --- 1,264
General Counsel 1997 $140,000 70,000 6,874 1,783,329 50,000 1,571
- -------------------
</TABLE>
(1) Consists of car allowance and amounts reimbursed under MART's executive
medical reimbursement plan.
(2) Reflects grants of restricted stock that were made pursuant to the 1997
Restricted Share Plan adopted by the Board of Trustees on November 14,
1997. Pursuant to the plan, MART has reserved 400,000 Shares for
issuance to Trustees, officers and employees, subject to certain
restrictions and risk of forfeiture. Mr. Hughes and Mr. Robinson
received grants of 200,000 and 133,333 Shares, respectively, having a
market price of $13.375 per Share as of November 14, 1997, the date of
grant. With respect to each grant, the Shares vested and/or vest as
follows: 15% vested on January 1, 1998; 8.5% vested on January 1, 1999;
and 76.5% vest at a rate of 8.5% on each January 1 of 2000 through
2008. The Shares are subject to a risk of forfeiture in the event of
termination of employment (other than in a change in control of MART),
and are restricted as to transfer prior to vesting. Mr. Hughes and Mr.
Robinson have the right to vote and receive dividends on the Shares.
The market value of all of the shares, vested and unvested, on December
31, 1999 was $2,012,500 for Mr. Hughes and $1,341,663 for Mr. Robinson.
(3) Consists of premiums paid by MART on term life insurance policies on
the lives of Messrs. Hughes and Robinson which are payable to their
respective heirs or estates.
7
<PAGE>
(4) The sum of $304,508 was accrued by MART for company-wide bonuses for
1999; however, as of the date of this Proxy Statement, no bonus
allocation has been made for that fiscal year except as otherwise
reflected in the table.
The following table reflects certain information regarding options
exercised during and held as of the end of the last fiscal year. No options were
granted during the last fiscal year.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money-Options
Options at FY End at FY End
----------------- ---------
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
<S> <C> <C>
F. Patrick Hughes 147,000/-0- $12,937/-0-
Paul F. Robinson 93,200/-0- $7,762/-0-
</TABLE>
Executive Employment Agreements
MART has Executive Employment Agreements ("Agreements") with F. Patrick
Hughes and Paul F. Robinson. Under the Agreements, the annual base salary for
each of Messrs. Hughes and Robinson for this last fiscal year was $230,000 and
$165,000 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 at all times two years. In the event of the termination of
employment due to a change of control in MART, all compensation payable to the
executive for the remainder of the employment period becomes immediately due and
payable. At the election of the executive, such compensation may be payable in a
lump sum, discounted to present value.
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee consists of Messrs. Benson, Blum
and Frank. Mr. Blum and Mr. Hoffberger are Of Counsel to the law firm of Gordon,
Feinblatt, Rothman, Hoffberger & Hollander, LLC, Baltimore, Maryland, which is
principal counsel to MART. During 1999, MART paid legal fees to that firm for
services rendered in the amount of $331,764. As Of Counsel, Mr. Hoffberger and
Mr. Blum are not members of the firm, do not provide substantial services to or
for the firm, and do not receive material compensation from the firm.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The compensation of members of management of MART 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 philosophy of the Committee is to ensure
that the interests of management and employees are identical to 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 and restricted stock grants which
will reward management and employees for adding shareholder value. Base salary
8
<PAGE>
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 and restricted stock grants provide
management and employees with a long-term investment in MART, the value of which
is dependent upon their success in maximizing shareholder value.
The commonly accepted measure of performance for a real estate
investment trust ("REIT") is funds from operations. Generally, funds earned in
cash from operations are the basis for distributions to shareholders as a
dividend. To the extent management succeeds at increasing funds from operations
and dividends, share prices and shareholder value 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 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 1999 was
based upon salaries paid to such personnel in the preceding year, with
appropriate adjustments. 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 high caliber executive talent. To that end, the Committee
will take into account salaries of senior management of comparable companies
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 for management and employees. The program makes available a cash
bonus pool consisting of a percentage of the amount by which MART's funds from
operations for the year exceeds a specified increase over the preceding year.
The Committee has also adopted a bonus program for operating personnel for
exceeding annual goals. For example, personnel engaged in development and
redevelopment of properties would be rewarded for achieving returns at or above
specified levels. Management personnel may 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.
In 1997, the Committee implemented an annual cash bonus program
potentially equal to 100% of base salary for senior management, consisting of
Mr. Hughes, as Chief Executive Officer, and Mr. Robinson, as Executive Vice
President. Under the program, cash incentive compensation equal to 50% of base
salary is available upon attainment of certain objectives. The other half is
payable in whole or in part at the discretion of the Committee for company
performance including, among other things, achieving significant total return
and/or for exceptional performance relating to development, redevelopment and
acquisition criteria.
Long-Term Incentive Compensation Plans. To promote the best long-term
benefits to MART and its shareholders and to provide incentives for MART's
Trustees, officers and employees, MART has a Restricted Share Plan, an Omnibus
Share Plan and a Stock Option Plan.
9
<PAGE>
Restricted Share Plan. In 1997, the Committee recommended, and the
Board of Trustees approved, a Restricted Share Plan. The Committee believes that
the grant of restricted share awards ("Restricted Shares") provides a long-term
incentive to such persons who contribute to the growth of MART and establishes a
direct link between compensation and shareholder return. Shares awarded are
subject to such terms, conditions and restrictions as may be determined by the
Committee, subject to the provisions of the Restricted Share Plan. The
restrictions may include stock transfer restrictions and forfeiture provisions
designed to facilitate the achievement by participants of MART's Share ownership
goals. The Committee may vary the grants of Restricted Shares based on a
subjective assessment of MART's overall performance in relation to long-term
goals and plans. In determining the individuals to whom awards will be made and
the amounts of the grants, the Committee considers the relative position and
responsibilities of each executive officer, past performance of each officer to
MART, total shareholder return relative to peer companies, growth in funds from
operations over time and a review of competitive compensation for executive
officers of similar rank in peer companies.
Stock Option Plans. The Committee determines stock option grants under
MART's Omnibus Share Plan and 1995 Stock Option Plan. The purpose of these plans
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.
Because the value of stock options granted to an executive is directly related
to MART's success in enhancing its market value over time, the Committee feels
that its stock option plans have been very effective in aligning the interests
of management and shareholders.
Specific grants are determined taking into account an executive's
current responsibilities and historical performance, as well as the executive's
perceived contribution to MART's funds from operations. Options are also used to
provide incentives to newly-promoted officers at the time they are asked to
assume greater responsibilities. In evaluating option grants, the Committee
considers prior grants and Shares currently held, as well as the recipient's
success in meeting operational goals and the recipient's level of
responsibility. However, no fixed formula is utilized to determine particular
grants. The terms of the options, including vesting, exercisability and term,
are determined by the Committee, subject to the provisions of the plans. Most of
the awards granted or to be granted under these plans vest over a period of
several years, thereby providing a long-term incentive and encouraging a
long-term relationship with MART. Share options are typically granted at
prevailing market price, and therefore will only have value if MART's Share
price increases over the exercise price. The Committee believes that the
opportunity to acquire a significant equity interest in MART is a strong
motivation for executive officers to maximize long-term value for MART's
shareholders and promotes longevity and retention of key employees. Under the
Omnibus Share Plan, the aggregate number of Shares available for issuance is the
number of Shares equal to 7% of the outstanding shares of MART. The Omnibus
Share Plan provides for accelerated vesting of awards in the event of an
"Extraordinary Event" resulting in a change in control.
Awards under the Omnibus Share Plan and 1995 Stock Plan have been and
will continue to 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.
The foregoing report is submitted by the following Trustees of MART,
comprising all of the members of the Compensation Committee of the Board of
Trustees.
EXECUTIVE COMPENSATION COMMITTEE
Robert A. Frank, Chairman
David F. Benson
Marc P. Blum
10
<PAGE>
PERFORMANCE GRAPH
The following graph tracks the cumulative total return for MART for
fiscal years 1995 through 1999, 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 January 1, 1995.
Mid-Atlantic Realty Trust
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Period Ending
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Index 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- -----------------------------------------------------------------------------------------------------------------------------
MART 100.00 116.03 166.23 234.92 213.15 192.22
- -----------------------------------------------------------------------------------------------------------------------------
S&P 500 100.00 137.58 169.03 225.44 289.79 350.78
- -----------------------------------------------------------------------------------------------------------------------------
EQUITY NAREIT 100.00 115.27 155.92 187.51 154.69 147.54
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of Trustees has
selected KPMG LLP, independent certified public accountants, to audit the books
and accounts of MART for calendar year 2000. The Board of Trustees considers
such accountants to be well qualified and recommends a vote in favor of their
selection.
11
<PAGE>
Representatives of KPMG LLP 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.
The Board of Trustees unanimously recommends that you vote FOR the
appointment of KPMG LLP as independent certified public accountants.
SUBMISSION OF SHAREHOLDER PROPOSALS TO BE CONSIDERED
AT THE MAY 2001 ANNUAL MEETING
Any shareholder desiring to present a proposal to be included in the
proxy statement and voted on by the shareholders at the Annual Meeting of
Shareholders to be held in May 2001 must submit in writing proposals, including
all supporting materials, to MART at its principal executive offices no later
than December 1, 2000.
Any shareholder desiring to present a proposal at the Annual Meeting of
Shareholders to be held in May 2001 should notify MART in writing of the
proposal, in reasonable detail, on or before December 1, 2000. If proper notice
is not so given, MART may exercise its discretionary authority to vote its
proxies with respect to the proposal in the manner it deems appropriate.
Pursuant to the relevant rules under the Securities Exchange Act of 1934, MART
may exercise discretionary authority to vote proxies on a matter not
specifically reflected in the proxy statement unless it has received timely
notice that a shareholder intends to present the matter at the meeting.
The relevant date for notice purposes is specified in MART's bylaws,
which require that a shareholder must notify MART of the intention to present
any matter at the Annual Meeting of Shareholders not later than 120 days before
the date on which MART first mailed its proxy materials for the prior year's
Annual Meeting of Shareholders nor earlier than 150 days prior to such date. If
such notice is given by that date, MART may describe the proposal in the proxy
statement and thereby retain its discretionary authority to vote on the
proposal.
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
vote over the Internet or by telephone or 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, 2000
12
<PAGE>
PROXY
MID-ATLANTIC REALTY TRUST
170 West Ridgely Road, Suite 300
Lutherville, Maryland 21093
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 The
World Trade Center in Baltimore, Maryland on Friday, May 12, 2000 at 11:00 a.m.,
prevailing local time, and any adjournments thereof.
13
<PAGE>
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.
1. ELECTION OF TRUSTEES FOR []
01 David F. Benson, 02 Marc P. Blum, 03 Robert A. Frank, 04 LeRoy E. Hoffberger,
05 F. Patrick Hughes, 06 M. Ronald Lipman, 07 Daniel S. Stone
WITHHELD AUTHORITY FOR ALL []
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 RATIFY THE APPOINTMENT OF KPMG LLP as the independent
certified public accountants of MART for the fiscal year ending
December 31, 2000.
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.
Signature____________________Signature____________________ Date_________________
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.
14
<PAGE>
