Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On June 22, 2021, Corporate Office Properties Trust (the "Registrant") and its
subsidiary, Corporate Office Properties, L.P. (the "Operating Partnership"),
entered into a Letter Agreement (the "2021 Letter Agreement") with Stephen E.
Budorick, the Registrant's President and Chief Executive Officer, regarding Mr.
Budorick's participation in the Registrant's and the Operating Partnership's
Executive Change in Control and Severance Plan (the "Plan"). The 2021 Letter
Agreement supersedes a previous Letter Agreement between the Registrant, the
Operating Partnership and Mr. Budorick, dated May 12, 2016, pertaining to his
participation in the Plan. The 2021 Letter Agreement establishes a five-year
participation period for Mr. Budorick under the Plan, after which he will cease
to participate in the Plan unless otherwise agreed to by the Registrant, the
Operating Partnership and Mr. Budorick.
Under the Plan, each executive selected to participate is entitled to receive
the following payments and benefits in the event the executive is terminated
prior to the end of any defined participation period for any reason other than
death, disability or for "cause," as defined in the Plan, or is "Constructively
Discharged," as defined in the Plan: (1) a severance payment equal to a
specified severance multiple, described below, multiplied by the sum of the
executive's annual base salary plus the average of the executive's annual cash
performance bonuses for the last three years; (2) a pro-rated annual cash
performance bonus for the year of termination through the date of termination
based on the amount of the executive's target annual cash performance bonus for
that year; (3) full vesting of equity awards subject to a time-based vesting
schedule (with vesting of equity awards subject to performance-based vesting
conditions to remain governed by the terms of the applicable award agreement);
(4) the right to exercise existing stock options for up to 18 months following
termination; and (5) continuing coverage under the Operating Partnership's group
medical, dental and vision plans for up to 24 months following termination
unless such benefits are available to the executive through another group plan.
If any payments and benefits to be paid or provided to an executive, whether
pursuant to the Plan or otherwise, would be subject to "golden parachute" excise
taxes under the Internal Revenue Code, the executive's payments and benefits
will be reduced to the extent necessary to avoid such excise taxes, but only if
such a reduction of pay or benefits would result in a greater after-tax benefit
to the executive.
An executive's receipt of payments and benefits under the Plan will be
conditioned upon the executive's execution of a general release of claims in
favor of the Registrant and the Operating Partnership. In addition, in order to
participate in the Plan, an executive must agree to comply with non-competition
and non-solicitation covenants while the executive is employed and for 12 months
thereafter and confidentiality and non-disparagement covenants. The Registrant
and the Operating Partnership may amend or terminate the Plan at any time,
provided that executive's rights to payments and benefits upon a termination in
connection with or within 12 months after a "Change in Control," as defined in
the Plan, may not be adversely affected by an amendment or termination occurring
within 12 months before or after the Change in Control.
Mr. Budorick's severance multiple under the Plan will be 2.00 or, in the event
of a termination within six months prior to and 12 months after a Change in
Control, the multiple will be 2.99.
Item 9.01. Financial Statements and Exhibits
Exhibit Number Exhibit Title
104 Cover Page Interactive Data File (embedded within the Inline XBRL
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