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        You are cordially invited to attend our 2010 Annual Meeting of Shareholders to be held on May 13, 2010 at 9:30 a.m. at our corporate headquarters, which is located at 6711 Columbia Gateway Drive, Suite 300, Columbia, Maryland 21046.

        At this year's meeting, you will be asked to vote on the election of eleven members of our Board of Trustees, the amendment and restatement of our 2008 Omnibus Equity and Incentive Plan and the ratification of PricewaterhouseCoopers LLP's appointment as our independent registered public accounting firm for the current fiscal year.

        Attached you will find a notice of meeting and proxy statement that contain further information about these items and the meeting itself, including the different methods you can use to vote your proxy. Also enclosed are your proxy card and our 2009 Annual Report on Form 10-K.

        In addition to the formal business to be transacted, we will make a presentation regarding our accomplishments in 2009 and other recent developments. You will also have the opportunity at this meeting to ask questions and make comments.

        I hope to see you at the meeting.

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March 31, 2010

Notice of Annual Meeting of Shareholders

        We will hold our 2010 Annual Meeting of Shareholders on May 13, 2010 at 9:30 a.m. at our corporate headquarters. During the Annual Meeting, we will consider and take action on proposals to:

1.

Elect eleven Trustees;



2.

Approve the Amended and Restated 2008 Omnibus Equity and Incentive Plan;



3.

Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current fiscal year; and



4.

Transact any other business properly brought before the Annual Meeting.

        You may vote at the meeting if you were a shareholder of record at the close of business on March 15, 2010.

By order of the Board of Trustees,

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PROXY STATEMENT

        This proxy statement and the accompanying proxy card are being mailed, beginning on or about March 31, 2010, to owners of common shares of beneficial interest ("common shares") of Corporate Office Properties Trust (the "Company") in connection with the solicitation of proxies by the Board of Trustees (the "Board") for our 2010 Annual Meeting of Shareholders (the "Annual Meeting"). This proxy procedure is being used to permit all holders of the common shares of Corporate Office Properties Trust to vote since many may be unable to attend the Annual Meeting in person. The Board of Trustees encourages you to read this document thoroughly and to take this opportunity to vote on the matters to be decided at the Annual Meeting. Corporate Office Properties Trust's mailing address is 6711 Columbia Gateway Drive, Suite 300, Columbia, Maryland 21046. Corporate Office Properties Trust's Internet address is www.copt.com. The information on our Internet site is not part of this proxy statement.

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General Information

When are our 2009 Annual Report on Form 10-K and this proxy statement first being sent to shareholders?

        Our 2009 Annual Report on Form 10-K and this proxy statement are first being sent to shareholders beginning on or about March 31, 2010.

What will shareholders be voting on at the Annual Meeting?

1.

The election of Trustees.



2.

The approval of the Amended and Restated 2008 Omnibus Equity and Incentive Plan.



3.

The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current fiscal year.



4.

Any other business that properly comes before the Annual Meeting for a vote.

Who is entitled to vote at the Annual Meeting and how many votes do they have?

        Common shareholders of record at the close of business on March 15, 2010 may vote at the Annual Meeting. Each share has one vote. There were 58,806,713 common shares outstanding on March 15, 2010.

How do I vote?

        You must be present, or represented by proxy, at the Annual Meeting in order to vote your shares. Since many of our shareholders are unable to attend the Annual Meeting in person, we send proxy cards to all of our shareholders to enable them to vote.

What is a proxy?

        A proxy is a person you appoint to vote on your behalf. If you vote by telephone, Internet or mail using the enclosed proxy card, your shares will be voted by the proxies identified on the proxy card.

        You can vote using the proxy card in one of three ways:

1.

By telephone.    To vote by telephone, call the toll free number listed on your proxy card. You will need to follow the instructions on your proxy card and the prompts from the telephone voting system.



2.

By Internet.    To vote using the Internet, go to the website listed on your proxy card. You will need to follow the instructions on your proxy card and the website.



3.

By mail.    To vote by mail, simply mark, sign and date the enclosed proxy card and return it in the postage-paid envelope provided.

        If you vote by telephone or by Internet, you should not return your proxy card.

        If you hold your shares through a broker, bank or other nominee, you will receive separate instructions from the nominee describing how to vote your shares.

How will my proxies vote my shares?

        Your proxies will vote according to the instructions on your proxy card. If you complete and return your proxy card but do not indicate your vote on business matters, your proxies will vote as follows:

•

"FOR" each of the nominees for Trustee listed in Proposal 1;

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•

"FOR" the approval of the Amended and Restated 2008 Omnibus Equity and Incentive Plan; and



•

"FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current fiscal year.

        We do not intend to bring any other matter for a vote at the Annual Meeting, and we do not know of anyone else who intends to do so. However, your proxies are authorized to vote on your behalf, in their discretion, on any other business that properly comes before the Annual Meeting.

How do I revoke my proxy?

        You may revoke your proxy at any time before your shares are voted at the Annual Meeting by:

•

Notifying our Senior Vice President, General Counsel and Secretary, Karen M. Singer, in writing at our mailing address set forth on the first page of this proxy statement, that you are revoking your proxy;



•

Executing a later dated proxy card; or



•

Attending and voting by ballot at the Annual Meeting.

Who will count the votes?

        An officer of Corporate Office Properties Trust will act as the inspector of election and will count the votes.

What constitutes a quorum?

        As of March 15, 2010, Corporate Office Properties Trust had 58,806,713 common shares outstanding. A majority of the outstanding shares present or represented by proxy constitutes a quorum. If you sign and return your proxy card, your shares will be counted in determining the presence of a quorum, even if you withhold your vote. If a quorum is not present at the Annual Meeting, the shareholders present in person or by proxy may adjourn the meeting to a date not more than 120 days after March 15, 2010 until a quorum is present.

What vote is required to elect Trustees?

        Trustees are elected by a plurality of the votes, which means that the nominees with the most votes in favor are elected.

What vote is required on other matters?

        In general, a majority of the votes cast at a meeting of shareholders is required to approve any other matter unless a greater vote is required by law or by the Company's Declaration of Trust. With respect to the proposals to be voted on at the Annual Meeting, the required votes are as follows: for Proposal 2, the number of votes cast on the proposal must constitute at least a majority of the shares entitled to vote on the proposal and a majority of the votes cast on the proposal must be voted in favor of the proposal; and for Proposal 3, a majority of the votes cast on the proposal will be required to approve the proposal. See "How Will My Vote Be Counted" for more detail on the treatment of abstentions and "broker non-votes" on Proposals 2 and 3.

How will my vote be counted?

        With respect to Proposal 1, the election of Trustees, votes may be cast in favor of or withheld from each nominee.

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        With respect to Proposal 2, the approval of the Amended and Restated 2008 Omnibus Equity and Incentive Plan:

•

you may abstain and your abstention will have the same effect as a vote against approval of the plan as it will be considered a vote cast on this proposal; and



•

we believe that if you hold your shares through a broker in "street" name and you do not give instructions to your broker to vote your shares with respect to approval of the plan, your broker will not vote your shares with respect to approval of the plan. Your broker's failure to vote your shares in this instance will have no effect on the vote because broker non-votes are not considered votes cast, but it will affect our ability to satisfy the separate requirement that the total number of votes cast on this proposal represent more than 50% of all of the shares entitled to vote on this proposal.

        With respect to Proposal 3, ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current fiscal year:

•

you may abstain and your abstention will have no effect on the outcome of the vote; and



•

because this is a "routine matter" as defined by the rules of the New York Stock Exchange (the "NYSE"), we believe that if you hold your shares through a broker in "street" name and you do not give instructions to your broker to vote your shares with respect to Proposal 3, your broker may nevertheless vote your shares with respect to the proposal. Even if your broker does not do so, your broker's failure to vote your shares will have no effect on the outcome of the vote, as no vote will have been cast with respect to your shares.

What percentage of our common shares do the Trustees and executive officers own?

        Our Trustees and executive officers owned 1.9% of our outstanding common shares as of March 15, 2010. Our Trustees and executive officers beneficially owned in the aggregate approximately 8.8% of our common shares as of March 15, 2010 (see the discussion under the heading "Share Ownership of our Trustees, Executive Officers and 5% Beneficial Owners" for more details).

Who is soliciting my proxy, how is it being solicited and who pays the cost?

        Our Board is soliciting your proxy. The solicitation process is being conducted primarily by mail. However, proxies may also be solicited in person, by telephone or facsimile. Wells Fargo Bank, N.A., our transfer agent, will be assisting us for a fee of approximately $3,000, plus out-of-pocket expenses. We have also retained the services of Georgeson Inc. to assist us in soliciting proxies for a fee of approximately $16,000. We pay the cost of soliciting proxies and also reimburse stockbrokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation material to the owners of common shares.

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Shareholders to be Held on May 13, 2010

        The proxy statement and our 2009 Annual Report on Form 10-K are available at www.copt.com under "Investor Relations," under the subheading "Annual Meeting and Proxy Materials."

When are shareholder proposals and Trustee nominations for our 2011 Annual Meeting due?

        In accordance with our bylaws, notice relating to nominations for Trustees or proposed business to be considered at the 2011 Annual Meeting must be given no earlier than February 12, 2011 and no later than March 14, 2011. These requirements do not affect the deadline for submitting shareholder proposals for inclusion in the proxy statement for the 2011 Annual Meeting (discussed in the question and answer below), nor do they apply to questions a shareholder may wish to ask at that meeting.

When are shareholder proposals intended to be included in the proxy statement for the 2011 Annual Meeting due?

        Shareholders who wish to include proposals in the proxy statement must submit such proposals in accordance with regulations adopted by the Securities and Exchange Commission. Shareholder proposals for the 2011 Annual Meeting must be submitted in writing by December 1, 2010. In addition, shareholders may wish to have a proposal presented at the 2011 Annual Meeting but not to have such proposal included in the proxy statement for the 2011 Annual Meeting. Pursuant to our bylaws, notice of any such proposal must be received by us between February 12, 2011 and March 14, 2011. If it is not received during this period, such proposal shall be deemed "untimely" for purposes of Rule 14a-4(c) under the Exchange Act, and, therefore, the proxies will have the right to exercise discretionary voting authority with respect to such proposal.

        Any shareholder proposals must be submitted to Karen M. Singer, Senior Vice President, General Counsel and Secretary, at our mailing address set forth on the front page of this proxy statement. You should submit any proposal by a method that permits you to prove the date of delivery to us.

How can interested parties send communications to the Board?

        Any interested parties who wish to communicate with the members of our Board may communicate with the independent Trustees or the chairperson of any of the committees of the Board by e-mail or regular mail. Communications by e-mail should be sent to karen.singer@copt.com. Communications by regular mail should be sent to the attention of the Chairperson, Audit Committee; Chairperson, Compensation Committee; Chairperson, Nominating and Corporate Governance Committee; Chairperson, Investment Committee; or, for communications intended for the independent Trustees as a group, to the Independent Trustees. In each case, the communication should be sent care of Karen M. Singer, Senior Vice President, General Counsel and Secretary, at our mailing address set forth on the front page of this proxy statement.

        All communications received in accordance with this process will be reviewed by management to determine whether the communication requires immediate action. Management will pass on all communications received, or a summary of such communications, to the appropriate Trustee or Trustees. However, management reserves the right to disregard any communication that it determines is unduly hostile, threatening, illegal, does not reasonably relate to us or our business or is similarly inappropriate, and has the authority to discard or disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications.

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How can interested parties obtain information regarding our Corporate Governance Guidelines?

        Our Board has adopted Corporate Governance Guidelines to set forth our policies concerning overall governance practices. These Guidelines can be found in the investor relations section of our Internet website in the subsection entitled "Corporate Governance." Our Internet website address is www.copt.com. Our Corporate Governance Guidelines are also available in print to any shareholder upon request. To the extent modifications are made to our Corporate Governance Guidelines, such modifications will be reflected on our Internet website.

Proposal 1—Election of Trustees

        Our By-laws provide for the annual election of Trustees at the Annual Meeting of Shareholders. Our Board, at the recommendation of its Nominating and Corporate Governance Committee, has nominated all Trustees for re-election at the Annual Meeting. Each nominee has agreed to serve a one-year term. The following biographies set forth certain information with respect to the nominees for election as Trustees, all of whom currently serve as Trustees. These descriptions include the specific experience, qualifications, attributes and skills that led the Board to nominate each of them for re-election.

        Jay H. Shidler, 63, has been Chairman of our Board since October 1997. Mr. Shidler is the founder and Managing Partner of The Shidler Group, a national real estate investment firm. Since forming The Shidler Group in 1972, Mr. Shidler and his affiliates have acquired and managed over 2,000 properties in 40 states and Canada. He has founded, and been the initial investor in, numerous public and private companies, including the following three other public real estate investment trusts: TriNet Corporate Realty Trust, Inc. (formerly NYSE: TRI), now part of iStar Financial; First Industrial Realty Trust, Inc. (NYSE: FR), for which he served as Chairman of the Board of Directors from 1993 through January 2009 and currently serves as Director; and Pacific Office Properties Trust, Inc. (NYSE: PCE), for which he serves as Chairman of the Board of Directors. From 1998 through 2005, Mr. Shidler also served as a Director of Primus Guaranty, Ltd. (NYSE: PRS), a Bermuda company of which Mr. Shidler is a founder.

        Clay W. Hamlin, III, 65, has been a member of our Board since October 1997 and was appointed Vice Chairman effective April 1, 2005. Mr. Hamlin has been active in the real estate business for over 35 years. He is a Managing Partner of The Shidler Group and of LBCW Limited Partnership, a private investment entity. He was our Chief Executive Officer from October 1997 until his retirement on April 1, 2005. From May 1989 until joining us, Mr. Hamlin was the Managing Partner of The Shidler Group's Mid-Atlantic region, where he supervised the acquisition, management and leasing of over four million square feet of office and industrial property. Mr. Hamlin is a founding shareholder of First Industrial Realty Trust, Inc. and serves as a Director/Trustee of Pacific Office Properties Trust, Inc., TractManager, Inc. and the Athletics Overseers Board of the University of Pennsylvania. Mr. Hamlin received an MBA in accounting and finance from The Wharton School, University of Pennsylvania and a Juris Doctor degree from Temple University, and previously practiced as a corporate lawyer and a Certified Public Accountant.

        Thomas F. Brady, 60, has been a member of our Board since January 2002. Mr. Brady has nearly 40 years of energy marketing and utility business experience. He is the former Chairman of the Board of Directors of Baltimore Gas & Electric Company ("BGE") and Executive Vice President—Corporate Strategy at Constellation Energy Group ("CEG") (NYSE: CEG), a position he assumed in 1999. CEG is a publicly-traded supplier of energy products in the United States and parent company of BGE. BGE is an electric and gas utility serving customers in central Maryland. While serving in these positions, Mr. Brady had experience in strategic planning and merger, acquisition and disposition activities. Prior to 1999, Mr. Brady held various positions at BGE, including Vice President and Chief Accounting Officer. Mr. Brady continues to serve on the Board of Directors of BGE. He also serves as Director of

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the Maryland Chamber of Commerce and a Trustee and Treasurer of the Board of Stevenson University. Mr. Brady previously served as Chairman of the Maryland Public Broadcasting Commission and Maryland Public Television from 2003 to 2007. Mr. Brady received an MBA in finance from Loyola University Maryland and was certified as a Certified Public Accountant.

        Robert L. Denton, age 57, has been a member of our Board since May 1999. Mr. Denton's background includes significant real estate and finance experience. He joined The Shidler Group in 1994, currently serving as Managing Partner in its New York office, and is responsible for the implementation of The Shidler Group's new investment vehicles. From 1991 to 1994, Mr. Denton was a Managing Director with Providence Capital, Inc., an investment-banking firm that he co-founded. Mr. Denton serves on the Board of Directors of Pacific Office Properties Trust, Inc. Mr. Denton received an MBA from The Wharton School, University of Pennsylvania.

        Douglas M. Firstenberg, 49, has been a member of our Board since February 2007. Mr. Firstenberg has over 25 years of real estate investment and development experience, including construction and land development of more than four million square feet. He is a founding principal of Stonebridge Associates, Inc., a real estate development and advisory firm created in 1993, where he focuses on strategic planning and development projects, with a primary role in major transaction negotiations. Mr. Firstenberg is the Chair of the Board of Directors of the Montgomery College Foundation and Treasurer of the North of Massachusetts Business Improvement District.

        Randall M. Griffin, 65, has been a member of our Board since February 2005. Mr. Griffin's background includes over 35 years of experience in real estate. He has been our President and Chief Operating Officer since September 1998 and, on April 1, 2005, became our President and Chief Executive Officer. From June 1993 until September 1998, Mr. Griffin served as President of Constellation Real Estate Group, Inc. and Constellation Real Estate, Inc., both of which were wholly-owned subsidiaries of CEG. From 1990 through March 1993, Mr. Griffin worked as Vice President—Development for EuroDisney Development in Paris, France. From 1976 to 1990, Mr. Griffin worked for Linclay Corporation, a St. Louis-based real estate development, management and investment company, most recently as Executive Vice President and Chief Operating Officer. He serves on the Executive Committee of the Board of Governors of The National Aquarium in Baltimore and on the Board of Directors of the National Aquarium Society Board in Washington, D.C., the Center for Aquatic Life and Conservation Board and the National Aquarium Conservation Center. He also serves on the Board of Directors of the Maryland Business Roundtable for Education, the BWI Business Partnership, the Maryland Public Arts Commission and KEYW Corporation, a private entity. In addition, he serves on the Board of Trustees of the Greater Washington Initiative, the Board of Governors of the National Association of Real Estate Investment Trusts and the Board of Visitors of the University of Maryland, Baltimore County. Mr. Griffin received an MBA from the Harvard Business School.

        David M. Jacobstein, 63, has been a member of our Board since August 2009. Mr. Jacobstein's background includes over 20 years of executive-level experience in real estate. Mr. Jacobstein served as senior advisor to the real estate practice of Deloitte LLP from June 2007 through June 2009, where his responsibilities included client development, strategic planning and thought leadership addressing key industry and market trends. From 1999 to May 2007, he served as President and Chief Operating Officer of Developers Diversified Realty Corporation (NYSE: DDR), a real estate investment trust, and also served on its Board of Trustees from 2000 to 2004. From 1986 to 1999, he served as Vice Chairman and Chief Operating Officer of Wilmorite, Inc., an owner, developer and manager of regional shopping malls. Mr. Jacobstein began his career as a corporate and securities lawyer. Mr. Jacobstein is a member of the Advisory Board for The Marcus and Millichap Company. He received a Juris Doctor degree from The George Washington University Law Center.

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        Steven D. Kesler, 58, has been a member of our Board since September 1998. Since 2006, Mr. Kesler has served as Chief Financial Officer for CRP (Chesapeake Realty Partners) Operations, LLC, a private company that is actively engaged in the development of residential land and the construction and operation of commercial properties and residential rental communities. He served as a Managing Director of The Casey Group, a regional consulting firm that helps clients find solutions to operating and financial management issues, from 2005 to 2006. Mr. Kesler also served as the Chief Executive Officer and/or President of Constellation Investments, Inc. from 1988 and the Chief Executive Officer and President of Constellation Real Estate, Inc. and Constellation Health Services, Inc. from 1998 until his retirement in 2003; all of these entities were wholly-owned indirect subsidiaries of CEG. In these roles, Mr. Kesler managed a corporate investment entity, CEG's pension plan and nuclear decommissioning trust and a portfolio of real estate assets, including assisted living facilities. Mr. Kesler previously served as a Director on the Boards of Atapco, Inc., a private real estate and investment company, and Ace Guaranty Corporation, a financial guaranty subsidiary of Ace, Limited, a public company. Mr. Kesler received an MBA in finance from The Wharton School, University of Pennsylvania and previously practiced as a Certified Public Accountant.

        Kenneth S. Sweet, Jr., 77, has been a member of our Board since October 1997. Mr. Sweet has been Managing Partner and Chairman of Gordon Stuart Associates, a venture capital investment firm, since 1996. Mr. Sweet was Chairman of GSA Management, LLC and Managing Director of GS Capital, LP, a venture capital and real estate partnership that he founded, from 1994 to 2004. In 1971, Mr. Sweet founded K.S. Sweet Associates, which developed and managed over one billion dollars in real estate assets, and was the real estate consultant and fee developer for ten large nonprofit institutions. From 1957 to 1971, Mr. Sweet was with The Fidelity Mutual Life Insurance Company, serving as Financial Vice President and Chief Investment Officer from 1965 to 1971. Mr. Sweet serves as a Trustee of the Eisenhower Fellowship and Director of the National Center for the American Revolution and Chairman of its Construction Committee. He previously served as a Director, Chairman of the Real Estate Committee and a member of the Finance Committee of Main Line Health until 2006. He was also the Chairman of the Bryn Mawr Hospital Foundation and Chairman of Main Line Health Real Estate Investment & Partnership (a real estate partnership between The Lankenau Foundation and Main Line Health).

        Richard Szafranski, 62, has been a member of our Board since August 2009. His background includes over 40 years in national security experience and expertise in pay for performance, strategic planning, scenario planning, market assessments and business development. He is a partner in Toffler Associates, a strategy and management consulting firm, at which he provides consulting services for senior executives in U.S. Government agencies, including the U.S. intelligence community, and commercial firms in the global defense, communications and aerospace sectors. He retired from active service in the United States Air Force as a colonel in 1996. Mr. Szafranski served on the Board of Directors for Ceridian Corporation from 2006 to 2007 and SBS Technologies, Inc from 2002 to 2005. He has a Master of Arts in Human Resources Management from Central Michigan University and has completed executive education on corporate governance at the Harvard Business School.

        Kenneth D. Wethe, 68, has been a member of our Board since January 1990. Mr. Wethe has over 30 years of experience in the group insurance and employee benefits area. Since 1988, he has been the owner and principal officer of Wethe & Associates, a Dallas-based firm providing independent risk management, insurance and employee benefit services to school districts and governmental agencies. Mr. Wethe serves as Chairman of the Board of Directors of the Enterprise Education Foundation. Mr. Wethe received an MBA from Pepperdine University and is a Certified Public Accountant.

        If any of the nominees is unable to stand for election, the Board may provide for a lesser number of Trustees or designate a substitute. In the latter event, shares represented by proxies will be voted for a substitute nominee.

        The Board recommends a vote "FOR" each of the nominees listed in Proposal 1.

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Our Board of Trustees

How do we determine whether our Trustees are independent?

        We believe that in order for our Board to effectively serve in its capacity, it is important, and the NYSE mandates, that at least a majority of our Trustees be independent as defined by the applicable rules of the NYSE. Therefore, we require that a substantial majority of the Board be independent, as so defined. No Trustee will be considered independent unless the Board affirmatively determines that the Trustee has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The following per se exclusions apply to the determination of Trustee independence: a Trustee will not be deemed independent until three years after the end of any of the following relationships or situations: (1) the Trustee is employed by the Company or a member of his/her immediate family is an executive officer of the Company; (2) the Trustee or a member of his/her immediate family receives, in any year, more than $120,000 in direct compensation from the Company (other than Trustee and committee fees and pension or other forms of deferred compensation for prior service, provided such compensation is not contingent in any way on continued service); (3) the Trustee is employed by or affiliated with the Company's present or former internal auditors or outside independent registered public accounting firm serving as the Company's auditors, or a member of the Trustee's immediate family is a current partner of such auditors or firm, is a current employee of such auditors or such firm and personally works on the Company's audit, or was within the past three years a partner or employee of such auditors or firm and personally worked on the Company's audit during that time; (4) the Trustee or a member of his/her immediate family is employed as an executive officer of another entity of which any of the Company's then-current executive officers serves on that other entity's compensation committee; or (5) the Trustee is an employee, or a member of his/her immediate family is an executive officer, of another company that makes payments to or receives payments from the Company for property or services in an amount which, in any year, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues. In determining Trustee independence, the Board also considered the ownership by Mr. Shidler, Mr. Hamlin and Mr. Denton of a land parcel adjacent to land owned by the Company, and the potential development of all of the land under a common development plan, in its analyses of the independence of these Trustees.

Are our Trustees independent of Corporate Office Properties Trust?

        The Board has determined that each of our Trustees meet the independence guidelines described above except for Clay W. Hamlin, III, our Vice Chairman of the Board and former Chief Executive Officer, who, through March 31, 2008, received compensation from the Company under his consulting agreement with the Company entered into upon his retirement, and Randall M. Griffin, our current President and Chief Executive Officer.

What is the leadership structure of our Board of Trustees?

        Our governance documents provide the Board with flexibility to select the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of our business and what is in the best interests of the Company's shareholders. Our current leadership structure is comprised of an independent Chairman of the Board separate from the Chief Executive Officer. Among other things, the Board believes that having an independent Chairman enhances the ability of non-management Trustees to raise issues and concerns for Board consideration without immediately involving management and has determined that this structure is the most appropriate structure at this time.

        Under our Bylaws, the Chairman of the Board shall preside over the meetings of the Board and of the shareholders at which he or she shall be present and shall in general oversee all of the business and

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affairs of the Company. In the absence of the Chairman, the Vice Chairman of the Board shall preside at such meetings at which he or she shall be present. In the absence of both the Chairman and Vice Chairman, the Chief Executive Officer shall preside over the meetings of the Trustees and of the shareholders at which he shall be present. The Chairman and the Vice Chairman shall perform such other duties as may be assigned by the Trustees. The Chief Executive Officer shall have responsibility for implementation of the policies of the Company, as determined by the Board, and for the administration of the business affairs of the Company.

What is our policy regarding Trustee attendance at regularly scheduled meetings of the Board and annual meetings of shareholders?

        The Board holds a minimum of four regularly scheduled meetings per year, including the annual meetings of the Board held in conjunction with our annual meetings of shareholders. Trustees are expected to attend all regularly scheduled meetings and to have reviewed, prior to the meetings, all written meeting materials distributed to them in advance. Trustees are expected to be physically present at all regularly scheduled meetings, and a Trustee who is unable to attend a meeting is expected to notify the Chairman of the Board in advance of such meeting. If a Trustee attends a regularly scheduled meeting by telephone for the entire meeting, such Trustee shall be deemed to have attended the meeting for the purposes of determining whether a quorum exists and for voting purposes. A Trustee may not send a representative with a proxy to vote on his or her behalf if such Trustee is not able to attend a scheduled meeting.

        Trustees are expected to be present at our annual meetings of shareholders. All of our Trustees attended the 2009 Annual Meeting of Shareholders.

What is our policy regarding meetings of non-management Trustees?

        The non-management Trustees meet in executive session at least annually without management. The Chairman of the Board presides at the executive sessions. The non-management Trustees may meet in executive session at any time to consider issues that they deem important to address without management present.

How are the Trustees compensated?

•

Employee Trustees receive no compensation, other than their normal salary, for serving on the Board or its committees.



•

For 2009, non-employee Trustees received the following:



•

Fees, paid in cash, as set forth below:

•

Reimbursement for out-of-pocket expenses, such as travel and lodging costs incurred in connection with meeting attendance; and



•

Annual grants of options to purchase 5,000 common shares with an exercise price equal to the fair market value of the common shares on the date of grant. These options are

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exercisable beginning one year from the date of grant and expire ten years after the date of grant.

•

For 2010, non-employee Trustees will receive the following:



•

Fees, paid in cash, set forth below:

•

Reimbursement for out-of-pocket expenses, such as travel and lodging costs incurred in connection with meeting attendance; and



•

Annual grants of 2,000 restricted shares. These shares vest one year from the date of grant. Recipients of restricted shares are entitled to receive dividends on such shares and can cast votes for such shares prior to shares vesting.

To assist in the evaluation of Trustee compensation, the Compensation Committee engaged Towers Watson, an external compensation consulting firm, to prepare a benchmarking study of director compensation for a peer group of companies that are similar in size and business structure to us, and which may compete with us for Trustee talent. The changes in Trustee compensation for 2010 relative to 2009 were approved by the Board based in large part on the following:

•

the benchmarking study revealed that our Trustee compensation for 2009 was below the 25^th percentile for directors at the peer group companies. The Company's strong performance, both on an absolute basis and relative to the peer group, warrants Trustee compensation between the 50^th and 75^th percentile;



•

an annual committee fee and an increased annual Trustee fee in lieu of meeting fees (for the first twelve Board meetings per calendar year) emphasizes overall Trustee contributions over meeting attendance; and



•

awarding restricted shares instead of options to purchase common shares improves alignment with the interests of shareholders and further assists Trustees in meeting share ownership guidelines established in February 2009.

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        The table below sets forth the total amounts of compensation earned by our non-employee Trustees during 2009.

What are the current committees of our Board?

        The Board currently has four committees: (1) the Audit Committee; (2) the Nominating and Corporate Governance Committee; (3) the Compensation Committee; and (4) the Investment Committee. Descriptions of these committees are set forth below:

•

The Audit Committee oversees the following:



•

the integrity of the Company's financial statements and other financial information provided by the Company to its shareholders and the investment community;



•

the Company's compliance with legal and regulatory requirements and ethical behavior;



•

the retention of the Company's independent registered public accounting firm, including oversight of their performance, qualifications and independence, and approval of audit and non-audit services; and



•

the Company's accounting and financial reporting processes, internal control systems and internal audit function.

The Committee also provides an avenue for communication among the Company's independent registered public accounting firm, internal auditors, management and the Board.

•

The Nominating and Corporate Governance Committee serves the following purposes:



•

recommends to the Board the structure and operations of the Board;

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•

identifies individuals qualified to serve as Trustees and recommends that the Board select the Trustee nominees identified by the Committee for election at the next annual meeting of shareholders;



•

recommends to the Board the responsibilities of each Board committee, the structure and operation of each committee and the Trustee nominees for assignment to each committee;



•

oversees the Board' annual evaluation of its performance and the performance of other Board committees;



•

reviews and monitors management development and succession planning activities; and



•

develops and recommends to the Board for adoption a set of Corporate Governance Guidelines applicable to the Company and periodically reviews the same.



•

The Compensation Committee administers executive compensation programs, policies and practices. The Compensation Committee also recommends executive compensation to the Board and administers our executive incentive plans.



•

The Investment Committee approves all of our investments, acquisitions, dispositions and borrowings that are individually in excess of $10 million. Investments of greater than $50 million must also be approved by the full Board.

All members of the Audit, Nominating and Corporate Governance and Compensation Committees are independent Trustees. The practices of the Audit, Nominating and Corporate Governance and Compensation Committees are outlined in their respective charters, which are available on our Internet website in the subsection entitled "Corporate Governance" or in print to any shareholder upon request. To the extent modifications are made to the charters, such modifications will be reflected on our Internet website.

        The committees on which Trustees served and the number of meetings held during 2009 are set forth below.

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        During 2009, the Board held four quarterly meetings and four special meetings. Each incumbent Trustee in 2009 attended at least 75% of the aggregate of the meetings of the Board and meetings held by all committees on which such Trustee served.

How are our Trustees nominated?

        The Nominating and Corporate Governance Committee of the Board is responsible for recommending nominations to the Board and shareholders. In arriving at nominations, the Nominating and Corporate Governance Committee reviews with the Board the size, function, and needs of the Board and, in doing so, takes into account the principle that the Board as a whole should be competent in the following areas: (1) industry knowledge; (2) accounting and finance; (3) business judgment; (4) management; (5) leadership; (6) public real estate investment trusts ("REITs") and commercial real estate business; (7) business strategy; (8) crisis management; (9) corporate governance; and (10) risk management. The Board also seeks members from diverse backgrounds. Trustees should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated, and be selected based upon contributions that they can make to the Company. In determining whether to recommend a Trustee for re-election, the Nominating and Corporate Governance Committee also considers the Trustee's past attendance at meetings and participation in and contributions to the activities of the Board and its committees.

        Our Board does not have an explicit diversity policy. Nevertheless, diversity of race, ethnicity, gender, age, cultural background and professional experiences is considered in evaluating candidates for nomination. The Board believes that its members should have reputations for integrity and ethical behavior and that they should collectively represent a broad spectrum of experience and expertise. Diversity is important because a variety of points of view contribute to a more effective decision-making process.

        The Nominating and Corporate Governance Committee has a policy regarding consideration of shareholder recommendations for Trustee nominees, which is set forth below:

The Committee considers nominees recommended by the Company's common shareholders using the same criteria it employs in identifying its own nominees. Any shareholder wishing to make a recommendation should send the following information to the Chairman of the Nominating and Corporate Governance Committee, care of Karen M. Singer, Senior Vice President, General Counsel and Secretary, at our mailing address set forth on the first page of this proxy statement, no later than the date that is 120 days prior to the one-year anniversary of the date of the mailing of the Company's proxy statement for its most recent annual meeting of shareholders:

•

the name of the candidate and the information about the individual that would be required to be included in a proxy statement under the rules of the Securities and Exchange Commission;



•

information about the relationship between the candidate and the nominating shareholder;



•

the consent of the candidate to serve as a Trustee;



•

proof of the number of shares of the Company's common shares that the nominating shareholder owns and the length of time the shares have been owned; and



•

a separate statement of the candidate's qualifications relating to the Board's membership criteria.

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What is the Board's approach to risk oversight?

        The Board plays an important role in the risk oversight of the Company. The Board establishes and monitors the Company's risk tolerance and oversees its risk management activities primarily by:

•

maintaining for itself and its committees direct decision-making authority with respect to matters with significant inherent risks, including material acquisition, development and financing activities and the appointment and retention of senior management;



•

reviewing and discussing regular periodic reports relating to the performance of the Company and risks to the achievement of its objectives;



•

approving the Company's annual budget and capital plan; and



•

overseeing specific areas of the Company's business by the Compensation, Audit and Nominating and Corporate Governance Committees.

The Board and its Committees also rely on management to bring significant matters to their attention.

        Pursuant to its charter, the Audit Committee is responsible for the review of the Company's risk assessment and management activities. The Committee discharges these responsibilities by reviewing and discussing with management, the Company's internal audit function and the Company's independent registered public accounting firm any significant risks or exposures faced by the Company, the steps taken to identify, minimize, monitor or control such risks or exposures, and the Company's underlying policies with respect to risk assessment and risk management. Consistent with NYSE Rules, the Audit Committee also provides oversight at the Board level with respect to risk assessment and risk management, particularly regarding the activities of the Company's internal audit function and integrity of the Company's financial statements and internal control over financial reporting. The Company's internal audit function reports to the Audit Committee regarding such activities on an ongoing basis, including at each of the Audit Committee's meetings. The Board is informed regarding these risk oversight activities at the four quarterly meetings of the Board.

Our Executive Officers

Below is information with respect to our executive officers who are not Trustees.

        Roger A. Waesche, Jr., 55, has been our Executive Vice President since January 2004, after holding the position of Senior Vice President since September 1998. Mr. Waesche became our Chief Operating Officer in August 2006, after serving as our Chief Financial Officer since March 1999. Prior to joining us, Mr. Waesche served as Senior Vice President for Constellation Real Estate, Inc., where he was responsible for all financial operations, including treasury, accounting, budgeting and financial planning. Mr. Waesche also had primary responsibility for Constellation Real Estate, Inc.'s asset investment and disposition activities. Prior to joining Constellation Real Estate, Inc. in 1984, Mr. Waesche practiced as a Certified Public Accountant with Coopers & Lybrand. He serves on the Board of Trustees of Sheppard Pratt Health System. Mr. Waesche is also a member on the Maryland Industrial Development Financing Authority and a board member of the Economic Alliance of Greater Baltimore.

        Stephen E. Riffee, 52, has been our Executive Vice President and Chief Financial Officer since August 2006. Prior to that time, Mr. Riffee served CarrAmerica Realty Corporation, a real estate investment trust, as Chief Financial Officer from April 2002 to July 2006 and Senior Vice President, Controller and Treasurer from July 1999 to March 2002. Prior to joining CarrAmerica Realty Corporation, Mr. Riffee held positions with Marriott International, Inc. and Burlington Northern Railroad and practiced as a Certified Public Accountant with KPMG Peat Marwick.

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        Wayne Lingafelter, 50, has been our Executive Vice President, Development & Construction Services since January 2009, previously serving as Senior Vice President-Development & Construction since May 2008. Prior to joining us, Mr. Lingafelter served Duke Realty Corporation, a real estate investment trust, for 20 years in several positions, the most recent of which included Senior Vice President of Government Solutions from February 2006 to May 2008 and Senior Vice President of Cleveland Operations from 2002 to February 2006.

        Karen M. Singer, 45, has been our Senior Vice President, General Counsel and Secretary since September 2006, after holding the position of Vice President, General Counsel and Secretary since January 2004. Ms. Singer served as Assistant Secretary and Associate General Counsel of the Company from September 1998 through December 2003. From August 1996 through August 1998, Ms. Singer was Assistant General Counsel of Constellation Real Estate, Inc. From 1989 through January 1996, Ms. Singer was in private practice as an associate at Weinberg and Green, LLC, now a part of Saul Ewing LLP, where she provided a broad spectrum of real estate related services to various clients. Ms. Singer currently serves on the Board of Directors of Art With a Heart, Inc., the Maryland Zoological Society, Inc. and the Esophageal Cancer Action Network, Inc.

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Share Ownership of our Trustees,
Executive Officers and 5% Beneficial Owners

        The following table shows certain information as of March 15, 2010 (unless otherwise noted) regarding the beneficial ownership of our common shares by each Trustee, each nominee for election as Trustee, each executive officer, all Trustees and executive officers as a group and each person known to us to be the beneficial owner of more than 5% of our outstanding common shares. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and means sole or shared voting or dispositive power with respect to securities. Each party named in the table below has sole voting and dispositive power with respect to the securities listed opposite such party's name, except as otherwise noted.

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Compensation Discussion and Analysis

Overview

        This section describes the material elements of compensation for our Named Executive Officers, also referred to herein as executives. The executives are: (1) Randall M. Griffin, President and Chief Executive Officer; (2) Roger A. Waesche, Jr., Executive Vice President and Chief Operating Officer; (3) Stephen E. Riffee, Executive Vice President and Chief Financial Officer; (4) Wayne H. Lingafelter, Executive Vice President—Development and Construction Services; and (5) Karen M. Singer, Senior Vice President, General Counsel and Secretary. The Board administers our executive compensation plans with the assistance of the Compensation Committee.

        Highlights of our 2009 activities pertaining to executive compensation include the following:

•

Mr. Lingafelter's appointment became effective on January 2, 2009, at which time he became eligible to earn compensation set forth under the terms of his employment agreement;



•

the other executives received increases in base salaries ranging from 4.2% to 8.9%;



•

executives earned annual cash incentive awards between the target and maximum levels set under the award plan established early in 2009 in recognition of their performance relative to a range of performance levels under the plan;



•

the Compensation Committee engaged Towers Watson as its external consultant in determining executive compensation; and



•

the Compensation Committee, with the assistance of its consultant, developed a new plan for executive long-term equity awards effective in 2010.

Compensation Objectives

        Our compensation philosophy is to ensure that the executives' interests are aligned with those of our shareholders, promote the achievement of the Company's annual and long-term performance objectives, and attract, retain and motivate superior executive talent. This philosophy holds that the compensation of each executive should be influenced significantly by the Company's performance and the executive's individual performance, and generally be commensurate with that of executives performing similar responsibilities for an appropriate peer group of companies. An executive's compensation relative to that of counterparts in the peer group can vary based on the executive's skill and experience in the position (both overall and with the Company), the performance of the executive and his or her business unit, the amount that we pay other executives and the competition in the marketplace for the talents of the executive. We believe that providing the opportunity to earn a higher relative level of total compensation compared to that of comparable executives in the peer group for superior performance is important in order for us to retain our executives.

        Our incentive programs provide compensation in the form of both cash and long-term equity awards in order to reward both short and long-term performance. The allocation of total compensation between cash and long-term equity awards is reviewed annually in comparison to the peer group to assist in determining the compensation of our executives both in total and by component. Long-term equity awards represent a significant, if not the largest, component of our executives' incentive compensation because:

•

we believe that these awards help ensure that a significant portion of our executives' net worth is tied to the value of our common shares, aligning the interests of the executives with those of our shareholders; and



•

these awards vest over time and, therefore, serve as a retention tool.

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Role of the Compensation Committee of the Board

        The Compensation Committee's primary responsibilities are set forth below:

•

to periodically review and, based on such review, recommend to the Board our compensation philosophy and the adequacy of compensation plans and programs for executives;



•

to recommend to the Board compensation arrangements and incentive goals for executives and to administer compensation plans and programs;



•

to review the performance of executives and recommend to the Board incentive compensation and compensation arrangements, as appropriate based upon performance;



•

to recommend to the Board compensation arrangements for non-management members of the Board;



•

to review and monitor succession planning activities in conjunction with the Nominating and Corporate Governance Committee and management development plans and activities; and



•

to review and discuss the section of this proxy statement entitled "Compensation Discussion and Analysis" as prepared by management and determine whether to recommend it to the Board for inclusion in this annual proxy statement.

        Major compensation decisions must be approved by the independent non-management members of the Board after recommendation by the Compensation Committee. The Board is responsible for oversight of the Compensation Committee's activities, except where the Compensation Committee has sole authority to act as required by an NYSE listing standard or applicable law or regulation. The Compensation Committee has complete and open access to management and any other resources of the Company required to assist it in carrying out its duties and responsibilities, including sole authority, in its discretion, to retain, set compensation for and terminate any consultants, legal counsel or other advisors.

        The Compensation Committee makes use of analyses provided, at its direction, by external consultants in determining executive compensation. The Compensation Committee used the Schonbraun McCann Group as its external consultant until May 2009, when it engaged Towers Watson. These consultants provide data relevant for benchmarking executive compensation, discuss compensation practices and make recommendations to the Compensation Committee regarding compensation programs and pay levels. The consultants did not perform any work for the Company at the direction of management during 2009.

Role of Management

        Mr. Griffin meets with the Compensation Committee to make recommendations to the Committee, discuss the Committee's recommendations to the Board and present analyses based on the Committee's requests. He discusses the impact of compensation recommendations on the business, reviews executive benchmarking data and informs the Committee of the other executives' performance. He also presents management's perspective on business objectives and discusses his perspective on succession planning for the Company. Mr. Griffin attends Compensation Committee meetings and general meetings of the Board, but he does not attend those portions of Board and Compensation Committee meetings intended to be held without members of management present, including those relating to his compensation.

        Mr. Riffee presents financial projections and results pertinent to the compensation decision process, evaluates the financial implications of Compensation Committee actions under consideration and provides information relating thereto.

        Ms. Singer provides legal consultations pertaining to Compensation Committee activities.

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        Holly G. Edington, our Senior Vice President-Human Resources who reports directly to Mr. Griffin, also takes direction from, and provides suggestions to, the Compensation Committee, oversees the actual formulation of compensation plans incorporating the recommendations of the Compensation Committee and assists the Chairman of the Compensation Committee in preparing the agenda for its meetings.

Compensation Benchmarking

        Our objective in benchmarking is to provide compensation to our executives that is comparable with compensation of executives performing similar responsibilities for companies that are similar in size and business structure to us, and which may compete with us for executive talent. The Compensation Committee obtains executive compensation information for other companies from its external consultant for benchmarking purposes. In order to assist in this process, the consultant obtains an understanding of the goals, objectives and responsibilities of each executive position based on reviews of job descriptions and discussions with management and the Compensation Committee.

        The Compensation Committee, with the assistance of its external consultant, developed a peer group comprised of 15 companies for 2009 and 20 companies for 2010 (the "2009 peer group" and the "2010 peer group," respectively) to use for purposes of benchmarking the compensation of our executives for those respective years. The 2009 and 2010 peer groups were selected from a blend of publicly-traded office, diversified and industrial REITs based, in large part, on the relationship of the following criteria to those of the Company: market capitalization; geographic location; comparability of management structure; and level of performance (in terms of growth in key earnings metrics and total shareholder return). Approximately two-thirds of the companies selected for the 2009 peer group had larger market capitalizations than the Company largely because we wished to compare ourselves to bigger enterprises in recognition of the growth that the Company has experienced and expects to continue. The 2010 peer group was refined to place emphasis on centering the Company among the peer companies based on market capitalization in lieu of predicting expected growth of the Company and the peers under the current uncertain economic climate. The companies included in the 2009 and 2010 peer groups are set forth below (named companies were included in both 2009 and 2010 peer groups, except where otherwise noted):

        The external consultant provided peer group compensation data to the Compensation Committee. Base salaries, annual cash incentive awards, long-term equity awards and total compensation for our executives were compared to compensation information for comparable positions in each of the peer groups in detail and at the 25th, 50th (the median) and 75th percentiles and the average. The consultant provided benchmarking information for these various data points in order to enhance the Compensation Committee's understanding of how the Company's executive compensation compared to that of the peer groups. The consultant also provided the Compensation Committee data from executive compensation surveys prepared by the National Association of Real Estate Investment Trusts.

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        In 2009, the consultant also conducted a comprehensive pay for performance assessment of the Company's executive compensation program and the linkage between organizational performance and the value of the compensation delivered to the executives. The assessment demonstrated that the Company's 2008 total direct compensation levels were generally consistent with its strong performance relative to the 2010 peer group, with both actual pay and performance in the upper quartile.

Base Salary

        We view base salary as the fixed rate of pay for ongoing performance throughout the year that is required to attract and retain executives. The base salaries of executives are determined in consideration of their position's scope of responsibilities and their personal skills and experience. Executives are eligible for periodic increases in their base salary as a result of individual performance, significant increases in their duties and responsibilities or increases in the base salaries of executives in the peer group. Peer group base salary information is reviewed annually for each executive position. Other factors considered in decisions regarding base salary include budgetary considerations and a desire to create an appropriate level of differentiation between the base salaries of the executives.

        Executive annual base salary actions in 2009 included the following:

•

Mr. Lingafelter's annual base salary was established at $325,000 effective with his appointment to his current office; and



•

increases in the annual base salaries of the other executives were approved on February 26, 2009, retroactively effective as of January 1, 2009, as follows:



•

Mr. Griffin's increased from $600,000 to $625,000, or 4.2%;



•

Mr. Waesche's increased from $450,000 to $475,000, or 5.6%;



•

Mr. Riffee's increased from $370,000 to $400,000, or 8.1%; and



•

Ms. Singer's increased from $280,000 to $305,000, or 8.9%.

The executives' adjusted salary levels were determined by the Compensation Committee after referring to a summary of projected base salaries of our 2009 peer group for a range comprising the 50th and 75th percentiles. The increases received by Mr. Griffin, Mr. Waesche and Ms. Singer were due in large part to their annual base salaries having lagged below the mid-point of this range. In the cases of Mr. Griffin and Mr. Waesche, the increased salary levels continue to lag below the mid-point of this range but were not increased further due in large part to the Compensation Committee's consideration of the current economic environment. The increase received by Mr. Riffee was to bring his level to the highest end of the range for his position in recognition of the strength of his contributions to the Company.

Annual Cash Incentive Awards

        Our philosophy of awarding annual cash incentive awards is designed to tie executive pay to annual performance by the Company overall and, in most cases, by each executive. During the initial part of each year, the Compensation Committee establishes an annual plan for annual cash incentive awards that defines a range of awards, as a percentage of salary, for Company and individual performance under defined objectives for three levels of performance: a threshold level, a target level and a maximum level. The target level performance for objectives used under these plans equate to management's estimate of the related objectives set forth in the annual budget; this level of performance is intended to be challenging yet attainable. The maximum level of performance for objectives is intended to have a much lower likelihood of being attained, but is intended to still be attainable with superior performance, as it is established within the range for objectives set forth in the budget. The threshold level of performance for objectives is established at a level that is somewhat

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higher than the lower range of the objectives set forth in the budget and, therefore, has a higher likelihood of being attained than the target. Actual awards are determined once actual performance with respect to these objectives is known. The Board also uses discretion on a case-by-case basis in determining adjustments to executive annual cash incentive awards in order to enable the consideration of other factors that award computations may not capture.

2009 Objectives for Annual Cash Incentive Awards

        The Company has two classifications of objectives that it uses for annual cash incentive awards: (1) Company objectives and (2) individual objectives. The mix between these classifications of objectives, as set forth in the table below, varies by executive based on their responsibilities:

        The Board, with the assistance of the Compensation Committee and management, developed the 2009 plan objectives using the Company's annual budget and information regarding other related business and operations initiatives. The measures used in defining Company objectives in 2009 were diluted funds from operations per share, excluding operating property acquisition costs (defined herein as "diluted FFO per share"), and diluted adjusted funds from operations per share ("diluted AFFO per share"), both of which are measurements frequently used by equity REITs to evaluate financial performance. We use these Company objectives because we believe that they are useful measures in evaluating the effectiveness of our operations and are core objectives in our annual budgets. Further, we believe that growth in these measures in the long run contributes to the creation of shareholder value and, as a result, linking compensation to these measures helps to align the interests of our executives with those of our shareholders. The Company objectives were calculated in the same manner as in our reported financial results. The table below sets forth the 2009 Company objectives:

        Mr. Griffin's annual cash incentive award plan was based solely on Company objectives since his responsibilities were substantially for the Company as a whole. Individual performance objectives for each other executive were tailored to the operations of the business unit for which the executive was responsible. Most of Mr. Waesche's and Mr. Lingafelter's individual objectives had defined numerical measures set forth for determining the level of performance for purposes of computing awards, while most of the other executives' individual objectives did not since their objectives generally were not as conducive to the assignment of specific measures. The levels of performance for executive individual objectives that did not have defined numerical measures for assessing performance was determined

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based upon qualitative evaluations by Mr. Griffin, the Compensation Committee and the Board. Individual objectives for the other Named Executive Officers included the following:

•

Mr. Waesche had nine individual objectives consisting of: property operations measures, including asset management objectives (such as net operating income, capital expenditures, occupancy rates, growth in same-office property cash net operating income and volume of acquisition and disposition activity); and property management objectives (including customer satisfaction survey results and property operating expense savings). The weightings of these objectives as a percentage of his total individual objectives ranged from 3% to 20%;



•

Mr. Riffee had eight individual objectives consisting of: effectiveness in capital planning and plan execution; completion of initiatives to expand capital partner relationships and increase his and Mr. Griffin's visibility to the investor community; progress towards improving processes and capabilities and report development in a number of areas (including financial reporting, budgeting, forecasting and analysis); progress and results associated with technology implementations and system administration; progress towards strengthening the Company's approach to vision, goal setting and performance measurement; and personal development activities. The weightings of these objectives as a percentage of his total individual objectives ranged from 10% to 30%;



•

Mr. Lingafelter had five individual objectives consisting of: development and construction projects completed; construction starts; investment value of projects for which design, engineering and documentation was completed; implementation of a defined process improvement initiative; and implementation of organizational changes. The weightings of Mr. Lingafelter's objectives as a percentage of his total individual objectives ranged from 10% to 30%; and



•

Ms. Singer had five individual objectives consisting of: tracking and monitoring of joint venture relationships; evaluation of external resource use by legal department; collaboration on improvements to in-house, company-wide training programs; implementing process improvements relating to the Corporate Secretary role; and effectiveness in oversight of the Company's internal audit function. The weightings of these objectives as a percentage of her total individual objectives ranged from 15% to 30%.

2009 Award Targets and Actuals

        The 2009 annual cash incentive award targets for the executives were generally determined based on the 50th percentile of peer group executives for achieving threshold level of performance, with increases to as high as the 75th percentile for achieving the maximum level of performance. The ranges of awards, as a percentage of annual base salary, available to Mr. Griffin, Mr. Waesche and Ms. Singer under the 2009 plan were maintained at the levels used for 2008 due in large part to the Compensation Committee's consultant's expectation that peer company executives award levels would not change. The range of award levels, as a percentage of annual base salary, available to Mr. Riffee was increased from 2008 due to the Compensation Committee and Board's determination that his strong individual performance and continued development supported his placement in a higher percentile relative to individuals at his position among the peer group companies.

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        The range of annual cash incentive awards established and the amounts ultimately awarded by the Board for 2009 for the executive officers is set forth below:

The aggregate achievement on Company objectives was near the maximum level; in calculating this aggregate achievement, the Compensation Committee agreed to recognize the diluted AFFO per share portion in an amount that was above the maximum level, provided that this approach would not result in the aggregate achievement of Company objectives exceeding the maximum. Aggregate achievement on individual objectives by each executive was between the target and maximum level. The 2009 actual award amounts were determined by the achievement of established objectives (described above) except in the case of: (a) Mr. Griffin, who received a $35,062 discretionary award and Mr. Lingafelter, who received a $14,250 discretionary award, as additional recognition for the executives' contributions to the Company's success that neither the Compensation Committee nor the Board believed was sufficiently reflected in the computed amount; and (b) Mr. Waesche, who voluntarily requested that his award be reduced due to his assessment of performance with respect to certain aspects of the performance of his business unit.

Long-Term Equity Awards

        Long-term equity awards are designed to align the interests of the executives with those of our shareholders. Since these awards typically vest over a period of time, they also encourage the executives to remain with the Company. The Company's practice is generally to issue such awards to executives on the date of the first quarterly Board meeting of each year. Long-term equity awards have historically taken the following forms:

•

Common shares subject to forfeiture restrictions ("restricted shares").  The Company has granted restricted shares to executives generally upon the achievement of performance criteria each year from 2003 to 2009. Restricted shares have also been granted to new executives upon their hiring. Once granted, restricted shares vest over a defined period of time as the executive remains employed by the Company. Recipients of restricted share grants are entitled to receive dividends on such shares and can cast votes on shareholder matters for such shares prior to share vesting.



•

Options to purchase common shares ("options").  The Company has, in the past, granted options to executives, but has not done so since 2004 due to the Board's belief that restricted shares are more effective in aligning executives' interests with those of our shareholders and promoting executive retention.

        This was a transitionary year for the Company's long-term equity awards to executives. In early 2008, we established a plan relating to 2008 compensation under which awards were ultimately granted in February 2009. In 2009, the Compensation Committee and the Board developed a new plan for executive long-term equity awards, resulting in the grant of a new award type called performance share units ("PSUs") effective in 2010. We describe these activities and awards under the respective plans below.

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Awards made in 2009

        In 2008, the Compensation Committee established an annual plan that defined total compensation (representing the sum of base salary, annual cash incentive awards for the year, as paid in the following year, and long-term equity awards for the year, as awarded in the following year), for executives relative to counterpart executives in the peer group. Under the plan, the Company's performance was measured relative to the performance of the peer group companies based on a three-year trailing average of the following performance measures for the period ended December 31, 2008: total shareholder return (which is calculated based on a combination of total dividend return and growth in common share price), diluted FFO per share and diluted AFFO per share. Following the conclusion of this period, total compensation was established at an amount which correlated that of each executive with the percentile of the Company's performance relative to the peer group. Due in large part to the deterioration of conditions over the course of the year in the broader global and United States economies and specifically in the commercial real estate industry, the Compensation Committee determined in early 2009 that for compensation relating to 2008, less reliance would be placed on a formulaic approach in determining awards. Instead, total compensation was based on a more subjective evaluation and approval of the appropriate percentile relative to the peer group executives that should apply for each of the Company's executives. The values of the long-term equity awards were then calculated using the 2009 peer group executives' total compensation at the approved percentiles and deducting the Company executives' base salaries and annual cash incentive awards. Factors considered in the subjective evaluation of the peer group total compensation percentiles applying to executives included the following:

•

the total compensation percentile computed using the methodology set forth in the 2008 long-term incentive plan based on the Company's actual performance relative to the performance of the peer group;



•

the Company's other significant achievements in 2008;



•

evaluations of the executives' individual performance and responsibilities relative to the peer group executives;



•

current economic conditions; and



•

the reasonableness of the percentage increase in total compensation over 2007 for each of the executives in light of the above factors.

        The table below sets forth the actual long-term equity awards to executives for 2008, as awarded in 2009, along with the approved total compensation percentile from which they were based:

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        In determining actual awards, the Compensation Committee believed that despite current economic conditions, increases in total compensation for each of the executives were warranted to: adequately recognize the Company's performance on both an absolute and relative basis to the peer group as demonstrated through the 2008 long-term incentive plan criteria and the Company's other achievements in 2008; and have total compensation of the executives be competitive with the mid-point between the 50^th and 75^th percentile of the peer group. However, in recognition of current economic conditions, it believed that increases in total compensation should generally not exceed 10 to 15%, except in the cases of Mr. Waesche, whose increase recognized an increase in his responsibilities during the year, and Mr. Riffee, whose strong individual performance and continued development supported his placement in a higher percentile relative to individuals at his position among the peer group companies.

Awards made in 2010

        On March 4, 2010, the Board granted PSUs as set forth below, which were determined as a percentage of executive salaries:

These percentages were developed using a broad perspective and multiple data points, including: (1) competitive market long-term equity award data at the median; (2) the Company's historical long-term equity award levels; and (3) the target total compensation to be delivered to executives. The number of PSUs granted was derived by first multiplying the executives' base salaries by their respective target award percentages, and dividing the result by the average of the closing price of our common shares on the NYSE over the 15 successive trading days ending with the grant date. These initial grants have a performance period beginning on the grant date and concluding the earlier of three years from the grant date or the date of: (1) termination by the Company without cause, death or disability of the executive or constructive discharge of the executive (collectively, "qualified termination"); or (2) a sale event. The number of PSUs earned ("earned PSUs") at the end of the performance period will be determined based on the percentile rank of the Company's total shareholder return relative to the those of the companies in the 2010 peer group, as set forth in the following schedule:

At the end of the performance period, the Company, in settlement of the award, will issue a number of fully-vested common shares equal to the sum of:

•

the number of earned PSUs in settlement of the award plan; plus



•

the aggregate dividends that would have been paid with respect to the common shares issued in settlement of the earned PSUs through the date of settlement had such shares been issued on

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the grant date, divided by the share price on such settlement date, as defined under the terms of the agreement.

        If a performance period ends due to a sale event or qualified termination, the number of earned PSUs is prorated based on the portion of the three-year performance period that has elapsed. If employment is terminated by the employee or the Company for cause, all PSUs are forfeited. PSUs do not carry voting rights.

        The Compensation Committee and Board believes that the approach for executive long-term equity awards under the 2010 plan provides a number of improvements over the Company's approach in 2008, including the following:

•

executive and shareholder risks and rewards are more closely aligned by a long-term, forward looking plan focused entirely on relative total shareholder return;



•

retention of key executives is enhanced due to highly leveraged potential payouts available under the plan; and



•

grants and potential awards under the plan are clearly determined and communicated to the executives at the beginning of the performance period.

        On March 4, 2010, the Board also approved grants to the executives of restricted shares as set forth below:

The sizes of these grants were developed based on the Company's strong historical performance relative to the peer group, the design of the new long-term incentive plan and competitive market data.. These restricted shares vest in equal one-third increments annually over a three-year period provided that the executives remain employed by the Company. These grants were designed to recognize:

•

the Company's total shareholder return performance ranking above the 75^th percentile of the companies in the 2010 peer group for the three years ended December 31, 2009; and



•

the Company's transition to the new PSU-based plan type under which awards will not, absent a sale event or qualified termination event defined in the plan agreement, be earned and vest for three years.

Retirement Benefits

        Our retirement benefits are designed to assist executives in accumulating sufficient wealth to provide income during their retirement years. The retirement benefits are designed to attract and retain executives and to encourage such executives to save money for their retirement, while allowing us to

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maintain a competitive cost structure. Information pertaining to our retirement benefits is set forth below.

401(k) plan during 2009

        Our executives participate in a 401(k) defined contribution plan covering substantially all of our employees that provides for Company matching contributions in an amount equal to an aggregate of 3.5% on the first 6% of participant pre-tax and/or after tax contributions to the plan.

Nonqualified deferred compensation plan

        We offer our senior management team (director level and above) a nonqualified deferred compensation plan. This plan allows for the deferral of up to 100% of a participant's cash compensation on a pre-tax basis and enables such participant to receive a tax-deferred return on such deferrals. The plan also provides, at the Company's sole discretion, for us to match the participant's contribution in an amount equal to 50% of the participant's elective deferral for the plan up to a maximum of 6% of a participant's annual compensation after deducting contributions, if any, made under our 401(k) plan. Participants may diversify their investments among a wide array of investment alternatives, including mutual funds and brokerage accounts. The plan does not guarantee a return or provide for above-market preferential earnings. The plan is not qualified under the Employee Retirement and Income Security Act of 1974. The deferral account balances increase or decrease in value based on the performance of the investments selected by the participants. Participants in this plan defer their contributions for three years from the beginning of the calendar year following the year in which the deferral election is made. Participants may choose to receive account balances in a lump sum or in five, 10 or 15 annual installments. Upon termination of employment, a participant's account balance will be distributed within 60 days of separation unless the participant is a "specified employee," as defined in the plan, in which case such distribution shall not be made for six months. Payments are due to parties designated by the participant in lump sum upon the death of a participant. Participant account balances become fully vested in the event of a "change in control" of the Company, as defined in the plan, or in the event that a participant becomes permanently disabled. Participation in the deferred compensation plan is voluntary. Information about the Named Executive Officers' participation in our deferred compensation plans is set forth below in the tables entitled "All Other Compensation" and "Nonqualified Deferred Compensation Table."

Severance and Change-in-Control Benefits

        The employment agreements of all the executives have termination of employment clauses related to: (1) premature termination; (2) constructive termination; (3) cause; (4) death; (5) disability; (6) change in control; and (7) voluntary termination. The terms of our employment agreements reflect negotiations with our executives in order to recruit and retain their services. We believe that these clauses are consistent with market practice and, therefore, make the terms of these agreements competitive.

        The employment agreements of our executives provide for severance payments and accelerated vesting of long-term equity awards in the event of termination by us without cause (premature termination) or by the executives based upon constructive termination. The employment agreements provide for these items in order to assist employees in their transition to new employment.

        The employment agreements also provide for payments to executives and accelerated vesting of long-term equity awards in the event of a change in control of the Company. We adopted the change in control provisions to increase the likelihood that, in the event that the Company is considering a change in control transaction, the employees involved in considering the offer will act in the interest of the shareholders. If a change in control were to occur, the employees would likely no longer be in a position to influence our performance and may not be in a position to earn their incentive awards or

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vest in their equity awards. Therefore, the change-in-control provisions are designed to make a transaction as neutral to the employees' economic interests as possible. All executives have gross-up provisions as part of their employment agreements, except for Ms. Singer.

        The terms of severance and change in control benefits are described in detail in the section below entitled "Potential Payments on Termination, Change in Control, Death or Disability."

        Due to the authority vested with the executives and the knowledge of Company proprietary information held by such executives, the Company must protect its real estate interests in each of its major markets. For this reason, executive employment agreements include non-compete provisions for either a 12 or 24-month period following termination of employment of executives.

Other Benefits and Perquisites

        As employees, our executive officers are eligible to participate in employee benefit programs generally available to our other employees, including medical, dental, life and disability insurance. In addition, we compensate our executive officers with certain personal benefits and perquisites that are not generally available to most of our other employees; these benefits and perquisites include the following:

•

auto allowances;



•

reimbursement for a defined amount of personal financial and tax preparation fees;



•

participation in the Johns Hopkins Executive Wellness Program; and



•

supplemental long-term disability insurance coverage in the case of our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer (our Chief Operating Officer has elected not to receive such coverage).

        The value of these benefits to the Named Executive Officers is included in the tables below entitled "Summary Compensation Table" and "All Other Compensation." The Compensation Committee believes that these benefits are aligned with our desire to attract and retain superior management talent for the benefit of the Company.

Accounting for Compensation Elements

        The tax and accounting implications associated with the key elements of our executive compensation are set forth below:

•

Salary is expensed as incurred.



•

Annual cash incentive awards are recognized over the period to which such awards relate.



•

Option, restricted share and PSU grants are recognized over the period during which the employee is required to provide service in exchange for the award (generally the vesting or performance period).

Tax Compliance Policy

        Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), limits the deductibility on certain corporations' income tax return to compensation of $1 million for Named Executive Officers. Certain performance-based compensation plans are excluded from this limitation provided that the shareholders approve the plan and certain other requirements are met. The Compensation Committee's policy with respect to Section 162(m) is to make reasonable efforts to ensure that compensation is deductible to the extent permitted, while simultaneously providing the Company's executives with appropriate rewards for their performance. We did not pay any

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compensation in 2009 that was not deductible under Section 162(m) of the Internal Revenue Code, and we do not believe that any future nondeductible compensation that is paid will have a material impact on the Company.

        Section 409A of the Code relates to the tax treatment of earnings when a payment the Company is obligated to make to an executive is deferred to a future tax year. The Company, with the assistance of external counsel, completed a review of all its various executive compensation and benefits plans with respect to compliance with Section 409A.

        Sections 280G and 4999 of the Code relate to a 20% excise tax that may be levied on a payment made to an executive as a result of a change-in-control, if the payment exceeds three times the executive's base earnings (as defined by the Code section). The Company seeks to minimize the tax consequences as might arise under a potential change-in-control of the Company. The current employment agreements include provisions that provide executives with a tax gross-up if subject to the excise tax imposed by 280G.

Executive Ownership and Capital Accumulation

        We believe that the ownership of shares in the Company by executives assists in aligning executive interests with those of our shareholders. On February 26, 2009, the Board approved share ownership guidelines for our Trustees and executives. The ownership guidelines are as follows:

        The ownership guidelines generally include common shares beneficially owned by the respective individuals, including unvested restricted shares, certain share equivalents under Company sponsored plans and units in the Company's Operating Partnership owned by such individuals, although the guidelines exclude outstanding stock options.

        For Trustees and executives in office as of March 1, 2009, the effective date of these Ownership Guidelines was March 1, 2009. For those individuals, the share ownership goal was determined using their retainers or base salaries in effect as of that date and a common share price of $26.18 per share. The share ownership goal under the ownership guidelines for persons assuming a Trustee or executive level position after March 1, 2009 is determined using their retainers or base salaries as of the date they become subject to the ownership guidelines and using the average closing price of our common shares on the NYSE for the 60 trading days prior to such date. Once established, a person's share ownership goal will not change because of changes in his or her retainer or base salary or fluctuations in our common share price. An individual's share ownership goal will only be re-established upon a change to a different executive position. Generally, individuals will have a five-year period to attain their share ownership goals. Trustees and executives subject to the Ownership Guidelines as of March 1, 2009 have until March 1, 2014 to achieve the ownership guidelines. If an individual's share ownership goal increases because of a change in position, a five-year period to achieve the incremental amount of shares will begin on the effective date of the change in position.

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        The Compensation Committee and the Board currently do not consider the accumulated wealth of executive officers from prior year awards under our long-term equity plan in making compensation decisions.

Trading Controls

        Executives and Trustees are required to receive the permission of Karen M. Singer, Senior Vice President, General Counsel and Secretary, prior to entering into transactions in Company shares or share equivalents. Executives and Trustees are subject to black-out periods on the trading of Company shares for a period of time before the completion of each quarter end and a period of time following the release of earnings for each quarter end.

        Executives and Trustees bear full responsibility if they violate Company policy by permitting shares to be bought or sold without pre-approval by Ms. Singer or when trading is restricted.

Compensation Committee Interlocks and Insider Participation

        The Compensation Committee is comprised entirely of the four independent Trustees listed above. The Compensation Committee members do not have any non-trivial professional, familial or financial relationship with the Chief Executive Officer, other executive officers or the Company, other than his relationship as a Trustee.

Report of the Compensation Committee

        The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed with management. Based on its review and discussions with management, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in the Company's Annual Report on Form 10-K for 2009 and the Company's 2010 proxy statement. This report is provided by the following independent Trustees, who comprise the committee.

COMPENSATION COMMITTEE

Thomas F. Brady, Chairman
Douglas M. Firstenberg
Kenneth S. Sweet, Jr.
Richard Szafranski

Compensation and Risk

        We reviewed the elements of executive and non-executive compensation to determine whether they encourage excessive or unintended risk-taking and concluded that:

•

significant weighting toward long-term equity compensation discourages short-term risk taking;



•

vesting schedules for restricted shares and PSUs cause management to have a significant amount of unvested awards at any time;



•

performance goals are set based on a business plan approved by the Board and their achievement does not automatically entitle management to annual cash incentive awards or equity awards, which are at the discretion of the Board;



•

the Board exercises approval rights over significant investment decisions that could expose the Company to long-term risks; and



•

share ownership guidelines suggest management hold a certain amount of our stock such that the executives' interests are aligned with shareholders.

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Accordingly, we concluded that risks arising from our policies and practices for compensating employees are not reasonably likely to have a material adverse effect on the Company.

Summary Compensation Table

        The following table summarizes the compensation earned by our Named Executive Officers for 2009, 2008 and 2007.

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All Other Compensation

Employment Agreements

        We have employment agreements with our Named Executive Officers that establish various parameters of their compensation, particularly their base salaries and certain benefit entitlements. A description of material terms of these agreements follows:

•

Randall M. Griffin is party to an agreement that commenced on April 1, 2005 and expires on March 31, 2012;



•

Roger A. Waesche, Jr. is party to an agreement that commenced on July 1, 2002 and expires on June 30, 2013;



•

Stephen E. Riffee is party to an agreement that commenced on August 14, 2006 and expires on August 13, 2012;



•

Wayne Lingafelter is party to an agreement that commenced on January 2, 2009 and expires on January 1, 2015; and



•

Karen M. Singer is party to an agreement that commenced on September 15, 2005 and expires on September 14, 2010.

Each of these agreements has a continuous and self-renewing one-year term after the basic term unless otherwise indicated by either the Company or the executive prior to a specified point in time during the then current term. These agreements may be terminated by either the Company or the executive at any time on one day's prior notice. Under the employment agreements, the executive officers are required to devote their full business time to our affairs and are prohibited from competing directly or indirectly with us during the term of the agreement and for a period thereafter. The agreements provide that incentive compensation shall be set by the Board upon the Compensation Committee's recommendation. The Board may take action in future years to increase the executive officers' base salaries. Base salary and allowance for automobile, personal financial planning and income tax

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preparation as of December 31, 2009 provided for under the agreements of the Named Executive Officers are set forth below:

These employment agreements provide for severance packages in the event of (1) termination by us without cause or by the executive based upon constructive termination or (2) a change of control of Corporate Office Properties Trust, as defined in the agreements. The employment agreements also provide for full vesting of common share options and restricted shares upon death or disability. These provisions are discussed further in the section below entitled "Potential Payments on Termination, Change in Control, Death or Disability."

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2009 Grants of Plan-Based Awards

        The following table sets forth information about equity and non-equity awards granted to the Named Executive Officers for 2009.

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Outstanding Equity Awards at December 31, 2009

        The table below provides information about unexercised common share options and unvested restricted shares at December 31, 2009 for the Named Executive Officers.

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Option Exercises and Stock Vested in 2009

        The table below provides information about the value realized on options exercised and restricted shares vesting during 2009 for the Named Executive Officers.

Nonqualified Deferred Compensation

        The following table shows the contributions, earnings and account balances for the Named Executive Officers in the Company's nonqualified deferred compensation plan:

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