Edgar Filing: CARRAMERICA REALTY CORP

SCHEDULE 14A INFORMATION
(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

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CarraAmerica Realty Corporation
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(Name of Registrant as Specified in Its Charter)

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CarrAmerica Realty Corporation

1850 K Street, N.W.
Washington, D.C. 20006

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 2, 2002

To Our Stockholders:

You are cordially invited to attend the 2002 annual meeting of
stockholders of CarrAmerica Realty Corporation on Thursday, May 2, 2002,
beginning at 9:30 a.m., Eastern Daylight Savings Time, at The Willard
Inter-Continental Hotel, 1401 Pennsylvania Avenue, N.W., Washington, D.C. 20004.
At the meeting, stockholders will act on the following matters:

1. Election of one director to serve a one-year term expiring in 2003
and election of two directors to serve a three-year term expiring
in 2005;

2. Consideration and action upon proposed amendments to our Articles
of Incorporation relating to our limitations on percentage
ownership of our capital stock;

3. Consideration and action upon a stockholder proposal relating to
the instatement of the election of directors annually; and

4. Any other business that properly comes before the meeting or any
adjournments thereof.

Only common stockholders of record at the close of business on March 8,
2002 will be entitled to vote at the meeting or any adjournments thereof.

IF YOU PLAN TO ATTEND:

Please note that space limitations make it necessary to limit
attendance to stockholders only. Registration will begin at 8:30 a.m., and
seating will be available at approximately 9:00 a.m. Cameras and recording
devices will not be permitted at the meeting. "Street name" holders will need to
bring a copy of a brokerage statement reflecting stock ownership as of the
record date.

WHETHER OR NOT YOU EXPECT TO ATTEND:

Whether or not you expect to attend the annual meeting, you are urged
to sign and date the enclosed proxy, which is being solicited on behalf of the
Board of Directors, and return it promptly in the enclosed envelope.

By Order of the Board of Directors,

Linda A. Madrid
Corporate Secretary

CarrAmerica Realty Corporation

1850 K Street, N.W.
Washington, D.C. 20006

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PROXY STATEMENT

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ABOUT THE MEETING

Why am I receiving this Proxy Statement?

This Proxy Statement contains information related to the solicitation
of proxies for use at our 2002 annual meeting of stockholders, to be held on
Thursday, May 2, 2002, at 9:30 a.m., Eastern Daylight Savings Time, for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
This solicitation is made on behalf of our Board of Directors. "We," "our," "us"
and "CarrAmerica" refer to CarrAmerica Realty Corporation and its subsidiaries
and affiliates. This Proxy Statement, the enclosed form of proxy and the 2001
Annual Report to Stockholders are being mailed to stockholders beginning on or
about March 28, 2002.

Who is entitled to vote at the annual meeting?

Only holders of record of our common stock at the close of business on
March 8, 2002 are entitled to receive notice of the annual meeting and to vote
the shares of common stock held by them on that date at the meeting. Our common
stock constitutes the only class of securities entitled to vote at the meeting.

What are the voting rights of stockholders?

Each share of common stock entitles its holder to cast one vote on each
matter on which a vote may be taken.

What will constitute a quorum at the annual meeting?

The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of our common stock outstanding on March 8, 2002 will
constitute a quorum, permitting the stockholders to conduct business at the
meeting. We will include abstentions and broker non-votes (i.e., shares held by
a broker or nominee which are represented at the meeting, but with respect to
which the broker or nominee is not voting on a particular proposal) in the
calculation of the number of shares considered to be present at the meeting.

At the close of business on March 8, 2002, there were [52,461,611]
shares of our common stock outstanding.

How do I vote?

You may vote either by filling out and returning the accompanying proxy
card or by filling out a written ballot at the annual meeting.

How are proxy card votes counted?

If the accompanying proxy card is properly signed and returned to us
(and not revoked), it will be voted as directed by you. Unless contrary
instructions are given, the persons designated as proxy holders on the proxy
card will vote FOR the election of all nominees for our Board of Directors named
herein, FOR amendments to the Articles of Incorporation, AGAINST a
recommendation for instatement of the election of directors annually and as
recommended by our Board of Directors with regard to any other matters, or, if
no such recommendation is given, in their own discretion.

May I change my vote after I return my proxy card?

Yes. You may revoke a previously granted proxy at any time before it is
exercised by filing with our Corporate Secretary a notice of revocation or a
duly executed proxy bearing a later date. Additionally, the powers of the proxy
holders will be suspended regarding any person who executed a proxy but then
attends the meeting in person and so requests. Attendance at the meeting will
not, in itself, constitute revocation of a previously granted proxy.

ELECTION OF DIRECTORS
(Proposal 1)

Board of Directors

Our Board of Directors is divided into three classes, with
approximately one-third of the directors scheduled to be elected by the
stockholders annually. Andrew F. Brimmer and Oliver T. Carr, Jr. have been
nominated by our Board of Directors for election as directors at the 2002 annual
meeting of stockholders to fill terms expiring at the 2005 annual meeting of
stockholders. In February 2002, Robert E. Torray was elected by a unanimous vote
of the Board of Directors to fill the vacancy on the Board of Directors created
by the resignation of C. Ronald Blankenship until the next annual meeting of
stockholders. Mr. Torray has been nominated by our Board of Directors for
election to continue to fill the vacancy created by Mr. Blankenship's
resignation, serving as a director for the remaining year of the term until the
annual meeting of stockholders in 2003. If elected, the nominees will hold
office until the expiration of their terms and until their successors are
elected and qualified.

Nominee for Election to Term Expiring in 2003

Robert E. Torray, 64, has been a director since February 2002. Mr.
Torray is the founder and has been the Chairman of Robert E. Torray & Co. Inc.,
an institutional investment firm, since 1972. Mr. Torray is also the founder and
President of The Torray Corporation, a mutual fund manager, and is the founder
and Chairman of Birmingham Capital Management Company, an investment management
company. Mr. Torray received his B.A. from Duke University.

Nominees for Election to Terms Expiring in 2005

Andrew F. Brimmer, 75, has been a director since February 1993. He has
been President of Brimmer & Company, Inc., an economic and financial consulting
firm, since 1976. Dr. Brimmer is the Wilmer D. Barrett Professor of Economics at
the University of Massachusetts, Amherst. He also serves as a director of
BlackRock Investment Income Trust, Inc. (and other funds), and Borg-Warner
Automotive, Inc. From June 1995 through August 1998, Dr. Brimmer served as
chairman of the District of Columbia Financial Control Board. He was a member of
the Board of Governors of the Federal Reserve System from March 1966 through
August 1974. Dr. Brimmer received a B.A. degree and a masters degree in
economics from the University of Washington and a Ph.D. in economics from
Harvard University. Dr. Brimmer is a member of the Audit Committee of the Board
of Directors.

Oliver T. Carr, Jr., 76, was Chairman of our Board of Directors from
February 1993 until May 2000. He also served as our Chief Executive Officer from
1993 to 1997. Mr. Carr founded The Oliver Carr Company in 1962, and since that
time he has been its Chairman of the Board and a director, as well as President
from 1962 until 2000. He also serves as Chairman Emeritus of the Board of
Trustees of The George Washington University. Mr. Carr is the father of both our
current Chairman, President & CEO, Thomas A. Carr, and Robert O. Carr, President
of CarrAmerica Urban Development, LLC. Mr. Carr is a member of the Investment
Committee and the Executive Committee of the Board of Directors.

Incumbent Directors--Terms Expiring in 2003

A. James Clark, 74, has been a director since February 1993. He is
Chairman of the Board and CEO of Clark Enterprises, Inc., a Bethesda,
Maryland-based construction company. Clark Enterprises, Inc. has been involved
in real estate and commercial and residential construction since 1972. Mr. Clark
is on the Board of Trustees of the University of Maryland College Park
Foundation and is a Trustee Emeritus of the Johns Hopkins University and the
Johns Hopkins Board of Medicine. He is also a member of the PGA Tour Golf Course
Properties Advisory Board. Mr. Clark is a graduate of the University of
Maryland. He is a member of the Investment Committee, the Executive Committee,
the Executive Compensation Committee and the Nominating Committee of the Board
of Directors.

Timothy Howard, 53, has been a director since August 1998. Mr. Howard
has been the Executive Vice President and Chief Financial Officer of Fannie Mae
since 1990 and a member of Fannie Mae's Office of the Chairman since November
2000. Mr. Howard has held positions of increasing responsibility with Fannie Mae
since beginning with the company in 1982. Mr. Howard received a masters degree
in economics and a bachelors degree in economics, magna cum laude, from the
University of California, Los Angeles. He is a member of the Audit Committee,
the Executive Compensation Committee and the Ad Hoc Compensation Committee of
the Board of Directors.

Incumbent Directors--Terms Expiring in 2004

Thomas A. Carr, 43, was named Chairman of the Board in May 2000 and has
been our President and a director since 1993. In May 1997, Mr. Carr was
appointed our Chief Executive Officer. At that time, he resigned as Chief
Operating Officer, a position he had held since April 1995. Mr. Carr was our
Chief Financial Officer from February 1993 to April 1995. Mr. Carr is a director
of The Oliver Carr Company and serves on the Boards of HQ Global Holdings, Inc.
and certain of its subsidiaries and V Technologies International Corporation
(d/b/a Agilquest). Mr. Carr holds a Master of Business Administration degree
from Harvard Business School and a Bachelor of Arts degree from Brown
University. Mr. Carr is a member of the Board of Governors of the National
Association of Real Estate Investment Trusts, the Young Presidents Organization
and the Federal City Council. Mr. Carr is the son of Oliver T. Carr, Jr. and the
brother of Robert O. Carr. Mr. Carr is a member of the Investment Committee and
the Executive Committee of the Board of Directors. In addition, Mr. Carr is a
member of management's Operating Committee and Investment Committee.

Wesley S. Williams, Jr., 59, has been a director since February 1993.
Mr. Williams has been a partner of the law firm of Covington & Burling since
1975. After serving as a junior member of the Faculty of Law of Columbia
University, Mr. Williams was an adjunct professor of real estate finance law at
Georgetown University Law Center from 1971 to 1973. In addition, he is an author
or contributing author of several texts on banking law and on real estate
investment and finance. Mr. Williams is on the Editorial Advisory Board of the
District of Columbia Real Estate Reporter. Mr. Williams serves as Deputy
Chairman of the Board of Directors of the Federal Reserve Bank of Richmond. Mr.
Williams is Co-Chairman of the Board of Directors and Co-CEO of Lockhart
Companies, Inc., and of its real estate, insurance, consumer finance, and
miscellaneous Internet and venture subsidiaries. Mr. Williams is a member of the
Executive Committee of the Board of Trustees of Penn Mutual Life Insurance
Company, of which he is the Senior Trustee. He is also a member of the Executive
Committee of the Board of Regents of the Smithsonian Institution. Mr. Williams
received B.A. and J.D. degrees from Harvard University, an M.A. degree from the
Fletcher School of Law and Diplomacy and an LL.M. from Columbia University. Mr.
Williams is a member of the Audit

Committee, Executive Compensation Committee, the Ad Hoc Compensation Committee
and Nominating Committee of the Board of Directors.

Committees of the Board of Directors; Meetings

Among the committees of our Board of Directors are a standing Audit
Committee, Executive Compensation Committee, Nominating Committee, Executive
Committee and Investment Committee. Additionally, during 2001 our Ad Hoc
Compensation Committee, which previously had been established by our Board of
Directors, was reconvened. The functions performed by these committees are
described below.

Audit Committee. Our Board's Audit Committee makes recommendations
concerning the engagement of independent public accountants, reviews with the
independent public accountants the plans and results of the audit engagement,
approves professional services provided by the independent public accountants,
reviews the independence of the independent public accountants, considers the
range of audit and non-audit fees of the independent public accountants, and
reviews the adequacy of our internal accounting controls. The Audit Committee
met five times in 2001. All of the members of the Audit Committee are
independent of CarrAmerica (as defined in Sections 303.01(B)(2)(a) and (3) of
the New York Stock Exchange's listing standards).

Executive Compensation Committee and Ad Hoc Compensation Committee. Our
Board's Executive Compensation Committee is comprised entirely of non-employee
directors, and is responsible for implementing and/or recommending to the Board
of Directors compensation policies applicable to our executive officers and for
monitoring compliance with such policies. The Committee determines the Chief
Executive Officer's compensation and approves compensation recommendations for
our other executive officers upon the recommendation of the Chief Executive
Officer. It also administers our employee stock option plan. The Ad Hoc
Compensation Committee was a committee comprised solely of directors who
qualified as "outside directors" under Section 162(m) of the Internal Revenue
Code. We established the Ad Hoc Compensation Committee to consider and make
grants of options that otherwise would be subject to a limitation on
deductibility under the Internal Revenue Code. The Executive Compensation
Committee met twice in 2001. The Ad Hoc Compensation Committee met once in 2001.

Nominating Committee. Our Board's Nominating Committee was established
to consider and make recommendations to the Board of Directors regarding
nominees for election as members of the Board of Directors. In addition, the
Nominating Committee has the authority to review and approve compensation,
benefits and other forms of remuneration for non-employee directors. The
Nominating Committee is willing to consider nominees recommended by
stockholders. Stockholders who wish to suggest qualified candidates must comply
with the advance notice provisions and other requirements of Section 3.11 of our
by-laws. The Nominating Committee did not meet in 2001.

Executive Committee. Our Board's Executive Committee may exercise the
full authority of our Board of Directors, except that the Executive Committee
may not amend our charter or by-laws, authorize dividends, adopt a plan of
merger or consolidation, recommend to stockholders the sale or lease of all or
substantially all of our assets, elect any of our directors, elect or remove any
of our officers or establish compensation for any of our executive officers. The
Executive Committee did not meet in 2001. The Executive Committee acted once by
unanimous written consent during 2001.

Investment Committee. Our Board's Investment Committee has the
authority to approve and authorize expenditures, agreements and other actions
relating to the acquisition and/or disposition of

assets by us, the incurrence of indebtedness by us or other encumbrances on our
assets or other matters treated as capital items and involving less than $100
million for any single transaction or series of related transactions, so long as
such matters are consistent with our annual budget (as to amount and type of
transaction). The Investment Committee met four times in 2001.

Our Board of Directors held four meetings and acted five times by
unanimous written consent during 2001. None of our directors attended fewer than
75% of the aggregate number of meetings of the Board of Directors held during
the period he or she served on our Board and the number of meetings of
committees of the Board of Directors on which he or she served during the period
of service in 2001.

Compensation of Directors

We pay an annual retainer of $20,000 to directors who are not our
employees. Each non-employee director may elect to receive his annual retainer
in cash or options to purchase shares of our common stock. A director who elects
to receive options receives a number of options based on the Black-Scholes
valuation of a share of the Company's common stock on the date of the most
recent annual meeting. We also pay each such non-employee director a fee (plus
out-of-pocket expenses) for attendance (in person or by telephone) at each
meeting of our Board of Directors and for each committee meeting held on a
non-Board meeting day. Our Board of Directors meeting fee is $1,000 and the
committee meeting fee is $500. In addition, the chairman of each committee
receives an additional annual fee of $1,000.

We also compensate our directors through our 1997 Stock Option and
Incentive Plan (the "1997 Plan"). Each non-employee director receives options to
purchase 3,000 shares of our common stock upon such non-employee director's
initial election to our Board. In addition, each continuing non-employee
director receives a grant of options to purchase 7,500 shares of our common
stock immediately following the election of directors at each annual meeting of
our stockholders. Both employee directors and non-employee directors are
eligible to receive other grants under the 1997 Plan, which grants are provided
at the discretion of our Executive Compensation Committee.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our executive officers and directors, and persons who own more than ten
percent of a registered class of our equity securities, to file reports of
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission and
the New York Stock Exchange. Such executive officers, directors and greater than
ten percent stockholders are required by the SEC to furnish us with copies of
all Forms 3, 4 and 5 they file.

Based on our review of the copies of such forms we have received and on
written representations from certain reporting persons that they were not
required to file a Form 5 for the fiscal year, we believe that our executive
officers, directors and greater than ten percent stockholders complied with the
Section 16(a) filing requirements applicable to them with respect to
transactions during 2001.

Vote Required and Recommendation

When a quorum is present, the affirmative vote of a majority of the
votes present at the annual meeting will be required for the election of
directors. A properly executed proxy marked

"Withhold Authority" with respect to the election of one or more directors will
not be voted with respect to the director or directors indicated, although it
will be counted for purposes of determining whether there is a quorum.
Accordingly, abstentions or broker non-votes as to the election of directors
will have the effect of a vote against the election of the candidates.

Our Board of Directors recommends a vote FOR the candidates named in
this Proxy Statement as directors to hold office until the expiration of the
terms for which they have been nominated and until their successors are elected
and qualified. Should any one or more of these nominees become unable to serve
for any reason before the annual meeting, our Board of Directors may designate a
substitute nominee or nominees, in which event the persons designated as proxy
holders on the enclosed proxy will vote for the election of such substitute
nominee or nominees, or may reduce the number of members of our Board of
Directors.

APPROVAL OF AMENDMENTS TO ARTICLES OF INCORPORATION
(Item 2)

Introduction

For CarrAmerica to continue to qualify as a REIT under the Internal
Revenue Code, no more than 50% in value of our outstanding capital stock may be
owned, directly or indirectly, by five or fewer "individuals" (as defined in the
Internal Revenue Code to include certain entities) during the last half of any
taxable year. The capital stock also must be beneficially owned by 100 or more
persons during at least 335 days of each taxable year or during a proportionate
part of any short taxable year. In part because we intend to maintain our
qualification as a REIT, our Articles of Incorporation contain ownership limits
designed to satisfy these provisions of the Internal Revenue Code.

Subject to certain exceptions specified in our Articles of
Incorporation, our Articles of Incorporation provide that no holder of our
capital stock may own, or be deemed to own by virtue of certain attribution
provisions of the Code, more than 5% of the issued and outstanding shares of our
common stock and/or more than 5% of any class or series of our preferred stock.
The Articles of Incorporation also allow our Board of Directors to increase the
ownership limit from 5% up to 9.8% if certain conditions are met. On December
19, 2001, our Board increased the ownership limit from 5% to 9.8% in accordance
with our Articles of Incorporation.

Proposed Amendments to the Articles Of Incorporation

General

Our Board has adopted resolutions setting forth a proposal to amend our
Articles of Incorporation as described below. The resolution declares that the
amendments are advisable and directs that they be submitted to our stockholders
for approval. The stockholders will consider the amendments at the Annual
Meeting.

The full text of Article V of our Articles of Incorporation, as amended
by the proposed amendments, is included as Appendix A to this Proxy Statement.
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Amendments Regarding Increasing the Ownership Limit

Security Capital Group Incorporated, or Security Capital, owned a
significant percentage of our outstanding shares of common stock until December
19, 2001, when it sold all of its remaining shares. In connection with Security
Capital's sale of its interests in CarrAmerica, our Board increased the
ownership limit from 5% to 9.8%. In approving the increase, our Board believed
that the ownership limit could be increased to 9.8% without raising concerns
relating to our REIT status. The Board also believed that the increased limit
would facilitate an orderly offering by Security Capital and could increase
investments by institutions in our common stock. Our Board is seeking
stockholder approval to amend the Articles of Incorporation to reflect the
increase in the ownership limit that the Board already has approved.

Our Board has periodically provided waivers of the current ownership
limit to certain institutional investors when they have desired to own more
stock than was permitted under our Articles of Incorporation. However, our Board
believes that the waiver process, which requires special documentation, can be
inefficient and time-consuming. The increase in the ownership limit

will allow continued investment of up to 9.8% per holder by strategic
institutional investors who may from time to time own in excess of 5% without
having to continue to apply the existing waiver process on a case-by-case basis.

Further, our Board has received the advice of counsel and others that
it deems necessary and advisable in order to determine that our status as a REIT
under the Internal Revenue Code would not be adversely affected by the increase
in the ownership limit. Our Board has determined that, after giving effect to
the increase in the ownership limit, five persons who are considered individuals
under the Internal Revenue Code could not beneficially own, in the aggregate
more than 49.0% of the value of the outstanding stock of CarrAmerica.

Finally, our Board believes that a 9.8% ownership limit is more
consistent than a 5% ownership limit with the ownership limits of other REITs
that do not have special limits in excess of 9.8% for significant individual
shareholders.

Amendment to Delete Ability of Board of Directors to Increase Ownership
Limit

Under our Articles of Incorporation, our Board currently has the right
to increase the ownership limit up to 9.8%. Following the increase in the
ownership limit from 5% to 9.8% on December 19, 2001, our Board believes that
the provisions in our Articles of Incorporation that permit our Board to
increase the ownership limit to 9.8% are no longer necessary. Our Board has
proposed that our Articles of Incorporation be amended to delete the provisions
which currently grant our Board the right to increase the ownership limit.

Amendment to Delete Provisions Related to Special Shareholders

A modified ownership limit was added to our Articles of Incorporation
in 1996, when Security Capital made its initial investment in CarrAmerica. The
purpose of these provisions, known as "special shareholder" provisions, was to
permit Security Capital and its affiliates to maintain a substantial position in
our capital stock without violating our then-existing ownership limits. The
provisions provide that "special shareholders" are exempted from the general
ownership limits, and instead are subject to a special ownership limit of 45% of
the outstanding shares of our common stock and 45% of the outstanding shares of
each series of our preferred stock.

Prior to the sale of its interests in CarrAmerica, Security Capital was
the sole stockholder subject to the modified ownership limit for "special
shareholders" in our Articles of Incorporation. Now that Security Capital no
longer owns shares of our common or preferred stock, our Board believes that the
modified ownership limit for "special shareholders" is no longer necessary, and
proposes to delete these provisions from our Articles of Incorporation.

Amendment to Delete Provisions Related to Existing Holders

A modified ownership limit was included in our Articles of
Incorporation at the time of our formation in 1993 in order to permit certain
then-existing stockholders to continue to maintain their positions in the
Company's securities without violating the ownership limit contained in our
Articles of Incorporation. These provisions provide that certain specified
stockholders are exempted from the general ownership limits, and instead are
subject to a special ownership limit which permits them to continue to own their
existing positions subject to certain limitations.

Our Board has determined that there is no longer any stockholder that
qualifies as an "existing holder." Therefore, our Board believes that the
modified ownership limit for existing

holders is no longer necessary, and proposes to delete these provisions from our
Articles of Incorporation.

Vote Required and Recommendation

When a quorum is present, the affirmative vote of a majority of the
issued and outstanding shares of common stock will be required for the approval
of the proposed amendments to our Articles of Incorporation. Abstentions or
broker non-votes will have the same effect as votes cast against the proposal.

Our Board of Directors recommends a vote FOR approval of the proposed
amendments to the Articles of Incorporation.

STOCKHOLDER PROPOSAL RELATING TO
INSTATEMENT OF THE ELECTION
OF DIRECTORS ANNUALLY
(Proposal 3)

Mrs. Evelyn Y. Davis, 2600 Virginia Ave., N.W., Suite 215, Washington,
DC 20037, holding 200 shares of our common stock, has given notice of her
intention to propose the following resolution at the 2002 Annual Meeting of
Stockholders:

"RESOLVED: `That the stockholders of Carr American Realty [sic]
recommend that the Board of Directors take the necessary steps to instate the
election of directors ANNUALLY, instead of the stagger system which was recently
adopted.'"

Mrs. Davis submitted to us the following statement in support of the
resolution:

"The great majority of New York Stock Exchange listed corporations
elect all their directors each year.

This insures that ALL directors will be more accountable to ALL
shareholders each year and to a certain extent prevents the self-perpetuation of
the Board.

Last year the owners of 21,129,885 shares, representing approximately
38.5% of shares voting, voted FOR this proposal.

If you AGREE, please mark your proxy FOR this resolution."

-----------------------------------------

Our Board of Directors recommends a vote AGAINST Proposal 3.

Our current system of electing directors to staggered three-year terms
has been in place since we completed the initial public offering of our common
stock in February 1993. Under this method, currently approximately one-third of
our directors are elected annually by our stockholders, dividing our Board of
Directors into three classes.

Our Board of Directors believes that this board classification provides
us and our stockholders with significant continuity and stability, factors which
are of vital importance to our business. At all times, we benefit from having at
least two-thirds of our Board of Directors experienced with our long-term
business strategy and operations. This enables our Board of Directors to build
on past experience and plan for a reasonable time into the future. Board
classification provides an effective balance between the need for continuity and
experience on the Board and the need for revalidation of the stockholder mandate
through the election process.

Our Board believes that directors elected to a classified Board are no
less accountable to stockholders than they would be if elected annually. Our
directors are continually accountable to stockholders by virtue of state law
fiduciary duties and their ongoing legal obligations to serve the best interests
of all stockholders. Accountability is not affected by the length of a
director's term.

In addition, the classified Board is intended to encourage persons who
may seek to acquire control of us to initiate such action through negotiations
with our Board. At least two meetings of our stockholders would generally be
required to replace a majority of our Board. Board classification

reduces the risk to us and our stockholders of the uncertainty and instability
resulting from a precipitous change in the majority control of our Board. By
reducing the threat of an abrupt change in the composition of the entire Board,
classification of directors would give our Board sufficient time to review any
takeover proposal, study appropriate alternatives and achieve the best results
for all of our stockholders. Our Board believes that although a classified board
enhances the ability to negotiate favorable terms with a proponent of an
unfriendly or unsolicited proposal, it does not necessarily discourage takeover
offers.

Adoption of this proposal would not in itself eliminate the classified
Board. The proposal simply recommends that our Board of Directors take steps to
instate the election of directors annually. Further action by our stockholders
would be necessary to amend our Articles of Incorporation with a vote of 2/3% of
share entitled to vote on such matter.

Finally, our Board notes that similar proposals regarding
declassification of our Board of Directors were not approved by our stockholders
at our 1996, 2000 and 2001 annual meetings.

Our Board believes that a classified Board is in our best interests as
well as the best interests of our stockholders, and that you should oppose
efforts to eliminate it.

-------------------------------

Our Board of Directors recommends a vote AGAINST Proposal 3.

EXECUTIVE COMPENSATION

The following table provides information on the annual and long-term
compensation for our Chief Executive Officer and our four most highly
compensated other executive officers (our "Named Executive Officers") for the
periods indicated:

Summary Compensation Table

Long-Term Compensation
-------------------------------
Annual Compensation Awards
------------------------------------- -------------------------------
Other Restricted Securities
Annual Stock Unit Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Awards ($)(1) Options (#)(2) Compensation
--------------------------- ---- ------ ----- ------------ ------------- -------------- ------------

Thomas A. Carr................ 2001 $ 450,000 $ 450,000 $ 0 $ 0 41,563 $ 91,046 (3)
President and Chief 2000 $ 450,000 $ 600,000 $ 0 $ 0 125,000 $ 9,892 (3)
Executive Officer; Chairman 1999 $ 450,000 $ 550,000 $ 0 $ 0 0 $ 9,104 (3)
of the Board of Directors

Philip L. Hawkins............. 2001 $ 380,000 $ 323,000 $ 0 $ 0 32,250 $ 73,979 (4)
Chief Operating Officer 2000 $ 380,000 $ 458,000 $ 0 $ 0 100,000 $ 40,302 (4)
1999 $ 380,000 $ 400,000 $ 0 $ 0 0 $ 37,566 (4)

Richard F. Katchuk............ 2001 $ 380,000 $ 304,000 $ 0 $ 0 33,250 $ 69,862 (7)
Chief Financial Officer 2000 $ 375,385 $ 398,000 $ 0 $ 0 100,000 $ 34,446 (7)
1999 $ 319,019 (5) $ 280,000 $ 0 $ 1,000,000 (6) 85,000 $ 23,159 (7)

Karen B. Dorigan.............. 2001 $ 300,000 $ 150,000 $ 0 $ 0 33,250 $ 37,994 (10)
Chief Investment Officer 2000 $ 221,269 (8) $ 220,000 $ 0 $ 350,003 (9) 50,000 $ 21,999 (10)
1999 $ 196,562 $ 200,000 $ 0 $ 0 0 $ 13,735 (10)

Kent C. Gregory (11).......... 2001 $ 215,000 $ 182,750 $ 0 $ 0 16,625 $ 153,724 (12)
Managing Director- 2000 $ 211,808 $ 182,750 $ 0 $ 0 50,000 $ 20,909 (12)
National Accounts 1999 $ 205,000 $ 174,250 $ 0 $ 0 0 $ 22,002 (12)

(1) Represents the value of grants of restricted stock units made under our
1997 Stock Option and Incentive Plan. The restricted stock units vest
ratably over a five-year period, assuming the grantee is still an employee
of CarrAmerica or otherwise eligible for vesting on the vesting date. On
each vesting date, the grantee will receive shares representing 20% of the
total number of restricted stock units granted plus an amount equal to the
dividends that would have been paid on such shares had the shares been
outstanding since the grant date, or the cash equivalent thereof, at our
option. The grants of restricted stock units do not entitle the grantees to
any current voting rights. The grantees are entitled to dividend equivalent
payments under the terms of their restricted stock unit agreements. As of
December 31, 2001, the total holdings of restricted stock units of the
Named Executive Officers (with one unit deemed equivalent to the value of
one share) and the market value of such holdings based on the last sale
price of our common stock on the New York Stock Exchange on December 31,
2001 were as follows: Mr. Thomas A. Carr: 83,553 units ($2,514,945); Mr.
Hawkins: 62,664 units ($1,886,186); Mr. Katchuk: 43,669 units ($1,314,437);
Ms. Dorigan: 30,020 units ($903,602); and Mr. Gregory: 41,776 units
($1,257,458).

(2) All option grants were made under our 1997 Stock Option and Incentive Plan.

(3) Includes: (i) employer contributions for 2001, 2000 and 1999 to the
CarrAmerica Realty Corporation Retirement Plan in the amounts of $12,750,
$8,500 and $8,000, respectively, and employer contributions for 2001, 2000
and 1999 for life, accidental death and dismemberment and long-term
disability insurance premiums in the amounts of $1,296, $1,032 and $1,104,
respectively; (ii) an employer contribution for 2001 to the CarrAmerica
Realty Corporation Amended and Restated Executive Deferred Compensation
Plan in the amount of $27,000; and (iii) $50,000 paid to Mr. Carr in the
form of forgiveness of a loan payable by Mr. Carr to the Company.

(4) Includes: (i) employer contributions for 2001, 2000 and 1999 to the
CarrAmerica Realty Corporation Retirement Plan in the amounts of $12,750,
$8,500 and $8,000, respectively, and employer contributions for 2001, 2000
and 1999 for life, AD&D and long-term disability insurance premiums in the
amounts of $1,296, $1,032 and $1,104, respectively; (ii) the cost to us of
a split-dollar life insurance policy, for which we paid a premium of
$30,500 and $28,462 in 2000 and 1999, respectively; and (iii) an employer
contribution for 2001 to the CarrAmerica Realty Corporation Amended and
Restated Executive Deferred Compensation Plan in the amount of $59,933.

(5) Mr. Katchuk began his employment with CarrAmerica in 1999. The amount set
forth as salary for Mr. Katchuk for 1999 represents actual salary paid to
him for work performed from his hire date to December 31, 1999. His
annualized salary for 1999 was $350,000.

(6) Mr. Katchuk was awarded 22,727 restricted stock units on February 1, 1999
and 20,942 restricted stock units on August 1, 1999. Each award vests in
five equal annual installments on the first, second, third, fourth and
fifth anniversary of the date of grant.

(7) Includes: (i) employer contributions for 2001 and 2000 to the CarrAmerica
Realty Corporation Retirement Plan in the amounts of $12,750 and $8,500
respectively, and employer contributions for 2001, 2000 and 1999 for life,
AD&D and long-term disability insurance premiums in the amounts of $1,296,
$1,032 and $948, respectively; (ii) the cost to us of a split-dollar life
insurance policy, for which we paid a premium of $24,500 and $22,211 in
2000 and 1999, respectively; and (iii) an employer contribution for 2001 to
the CarrAmerica Realty Corporation Amended and Restated Executive Deferred
Compensation Plan in the amount of $55,816.

(8) Ms. Dorigan's annual salary was $210,000 from January until November 2000,
when it was increased to $300,000.

(9) Ms. Dorigan was awarded 4,834 restricted stock units on February 16, 2000
and 8,475 restricted stock units on November 2, 2000. Each award vests in
five equal annual installments on the first, second, third, fourth and
fifth anniversary of the date of grant.

(10) Includes: (i) employer contributions for 2001, 2000 and 1999 to the
CarrAmerica Realty Corporation Retirement Plan in the amounts of $12,750,
$8,500 and $8,000, respectively, and employer contributions for 2001, 2000
and 1999 for life, AD&D and long-term disability insurance premiums in the
amounts of $1,128, $1,032 and $959, respectively; (ii) the cost to us of a
split-dollar life insurance policy, for which we paid a premium of $12,000
and $4,617 in 2000 and 1999, respectively; and (iii) an employer
contribution for 2001 to the CarrAmerica Realty Corporation Amended and
Restated Executive Deferred Compensation Plan in the amount of $24,116.

(11) Mr. Gregory resigned from the Company effective as of December 31, 2001.

(12) Includes: (i) employer contributions for 2001, 2000 and 1999 to the
CarrAmerica Realty Corporation Retirement Plan in the amounts of $12,750,
$8,500 and $8,000, respectively, and employer contributions for 2001, 2000
and 1999 for life, AD&D and long-term disability insurance premiums in the
amounts of $1,149, $1,032 and $992, respectively; (ii) the cost to us of a
split-dollar life insurance policy, for which we paid a premium of $10,963
and $13,010 in 2000 and 1999, respectively; (iii) an employer contribution
for 2001 to the CarrAmerica Realty Corporation Amended and Restated
Executive Deferred Compensation Plan in the amount of $19,102; and (iv)
$120,723 in severance and accrued vacation payments.

The following table provides information on options granted to the
Named Executive Officers during our last fiscal year. All such options are
exercisable at the fair market value of a share of our common stock on the date
of grant. The options have no value unless our stock price appreciates and the
holder satisfies all applicable vesting requirements. All the options granted to
the Named Executive Officers and to our other executive officers during 2001
vest 25% per year over four years. Options we granted to other employees during
2001 also vest 25% per year over four years.

Option Grants in Last Fiscal Year

Potential Realizable Value at
Assumed Annual Rates of Stock Price
Individual Grants Appreciation for Option Term
------------------------------------------------------------------------------ ------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise Price
Options in Fiscal Price Expiration
Name Granted Year /Share) Date 5% ($) 10% ($)
----- ------- ------------ --------- ---------- ------ -------

Thomas A. Carr 41,563 3.55% $ 28.61 2/14/11 $ 747,843 $ 1,895,148

Philip L. Hawkins 33,250 2.84% $ 28.61 2/14/11 $ 598,267 $ 1,516,100

Richard F. Katchuk 33,250 2.84% $ 28.61 2/14/11 $ 598,267 $ 1,516,100

Karen B. Dorigan 33,250 2.84% $ 28.61 2/14/11 $ 598,267 $ 1,516,100

Kent C. Gregory 16,625 1.42% $ 28.61 2/14/11 $ 299,134 $ 758,050

Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values

Number of Securities Values of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Value Options at FY End(1) Options at FY End(2)
------------------------------- ---------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ------------- ------------- ---------------- -------------

Thomas A. Carr ........... 96,250 $ 892,163 201,451 520,676 $ 402,184 $ 2,872,538
Philip L. Hawkins ........ 29,000 $ 340,468 129,911 400,728 $ 195,335 $ 2,246,377
Richard F. Katchuk ....... 46,250 $ 397,543 - 150,750 - $ 1,099,543
Karen B. Dorigan ......... - - 87,032 98,758 $ 401,309 $ 490,282
Kent C. Gregory .......... 12,500 $ 117,055 93,911 122,603 $ 157,985 $ 583,831

__________________
(1) Number of shares of our common stock underlying options granted under our
1997 Stock Option and Incentive Plan or shares of our common stock for
which Class A Units of Carr Realty, L.P. underlying options granted under
the 1993 Carr Realty Option Plan would have been redeemable.

(2) Based on the last reported sale price of our common stock on the NYSE on
December 31, 2001 of $30.10.

Employment Contracts

Change-in-Control Arrangements. We have entered into change-in-control
agreements with each of Thomas A. Carr, Philip L. Hawkins, Richard F. Katchuk
and Karen B. Dorigan. These

agreements generally provide that if within three years from the date of a
"change in control" (as defined below), the employment of the executive with
CarrAmerica is terminated without cause, or in the event that the executive
terminates his or her employment with us based on a change in or diminishment of
his or her responsibilities or a reduction in salary, such executive will be
entitled to severance pay, including an amount equal to two times the
executive's base annual salary and bonus compensation with us. Additionally, the
executive will be eligible for certain continued benefits from us during the
ensuing two-year period. Each of the agreements with Messrs. Carr, Hawkins and
Katchuk initially is in effect until May 6, 2002, and thereafter may be extended
automatically for additional one-year periods. The agreement with Ms. Dorigan
initially is in effect until February 6, 2004, and thereafter may be extended
automatically for additional one-year periods.

For purposes of each of these agreements, a "change in control" generally
means any of the following events: (i) the consummation of a reorganization,
merger or consolidation involving CarrAmerica, unless all or substantially all
of the individuals or entities who were the beneficial owners of our voting
securities continue to own at least 60% of the outstanding voting securities of
the surviving entity in substantially the same proportions as their ownership
immediately prior to the transaction and individuals representing at least a
majority of the board of directors of the surviving entity were directors of our
Board of Directors as of the respective dates of the agreements (including
individuals who subsequently become directors whose nomination or election was
approved by at least a majority of the directors constituting our Board of
Directors as of such dates); (ii) individuals who, as of the respective dates of
the agreements, constitute our Board of Directors (including individuals who
subsequently become directors whose nomination or election was approved by at
least a majority of the directors constituting our Board of Directors as of such
dates) cease for any reason to constitute a majority of our Board of Directors;
or (iii) the approval by our stockholders of our complete liquidation or
dissolution or the sale or other disposition of more than 50% of our operating
assets.

Notwithstanding anything to the contrary set forth in any of our
filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, that might incorporate SEC filings, in whole or in
part, the following Performance Graph, the Report of the Executive Compensation
Committee and Ad Hoc Compensation Committee and the Report of the Audit
Committee shall not be incorporated by reference into any such filings:

PERFORMANCE GRAPH

[GRAPHIC REMOVED HERE]

The points on the graph represent the following numbers:

Last Trading Day of CarrAmerica S&P 500 NAREIT Equity
------------------- ----------- ------- -------------
2001 ....................... $ 145 $ 166 $ 136
2000 ....................... $ 141 $ 189 $ 120
1999 ....................... $ 90 $ 207 $ 94
1998 ....................... $ 93 $ 171 $ 99
1997 ....................... $ 115 $ 133 $ 120
1996 ....................... $ 100 $ 100 $ 100

REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE AND
AD HOC COMPENSATION COMMITTEE

Our Board's Executive Compensation Committee and Ad Hoc Compensation
Committee present this report on our compensation policies as they affected the
compensation reported above for our executive officers for fiscal year 2001. In
performing their responsibilities, these committees have had the benefit of
reports prepared by our outside compensation consultant. The outside consultants
provided information and advice on competitive compensation policies and
practices and on the reasonableness of the compensation paid to our executives.

Executive Compensation Philosophy

CarrAmerica's executive officer compensation policies incorporate a
variety of objectives. Executive officers are rewarded commensurate with
CarrAmerica's performance, providing competitive compensation opportunities that
recognize individual performance and responsibility that assists us in
attracting and retaining a highly motivated, performance-oriented executive
management team. We believe that the use of such objectives to determine
compensation for our executive officers serves as an important part of the
foundation for enhancement of our stockholders' value. We implemented our
executive officer compensation policies for 2001 with a compensation program
based on the total direct compensation package of each executive officer. We
evaluated each officer's package as a whole and in terms of two components: an
annual component, which includes base salary and a cash bonus opportunity; and a
long-term incentive component.

In assessing the competitiveness of CarrAmerica's executive officer
compensation, the Executive Compensation Committee periodically reviews
materials brought to its attention by our outside compensation consultants.
During its most recent bi-annual compensation review, one of the Company's
consultants reported on the compensation practices of 20 comparable
publicly-traded office REITs with median market capitalizations of approximately
$2.1 billion and of 30 other large publicly-traded non-REIT organizations with
median market capitalizations of approximately $1.5 billion. Our current market
capitalization is approximately $1.89 billion. The REITs whose compensation
practices were reviewed constitute only a portion of the REITs included in the
NAREIT Equity Index, which is used in the Performance Graph above to compare
stockholder returns. The Executive Compensation Committee believes that in
competing for executive talent competitors are not necessarily companies
included in the NAREIT Equity Index, most of which have smaller capitalizations
than ours.

Annual Component

Base Salaries. We established base salary ranges for our executive
officers for fiscal year 2001 after a review of base salaries by the Executive
Compensation Committee, taking into consideration information previously
provided by our outside compensation consultant. The principal elements that
entered into our determination to set base salaries to the levels reported for
2001 were the competitiveness of our base salaries compared to those paid by
other large office REITs and other comparable for-profit corporations outside
the real estate area, the roles and responsibilities of the individual, the
contributions of the individual to our business, the requirements of the
individual's job and the individual's prior experience and accomplishments.

Cash Bonuses. We use annual cash bonuses as a primary method of rewarding
executive officers commensurate with the Company's performance and individual
performance. Early in fiscal year 2001, we established a target bonus amount for
each executive officer equal to a percentage of the executive officer's base
salary, after review of the proposed targets by the Executive Compensation
Committee. The target bonus amounts for the Named Executive Officers were equal
to 50% to 100% of their base salaries.

Payment of the target bonus amounts was to be based primarily on three factors,
contingent upon the adequacy of our cash and capital resources: (i) our
attainment of a specific target in terms of funds from operations (FFO) per
share; (ii) each officer's achievement of individualized quantitative financial
and operational goals related to the activities he or she managed; and (iii) a
qualitative component at our management's discretion. We retain the discretion
to increase or decrease annual bonuses in any given year above or below target
amounts to take into account extraordinary performance or events.

Long-Term Incentive Component

We use two forms of long-term incentive compensation - stock options and
restricted stock units - as methods of aligning the financial interests of
executive officers more closely with those of CarrAmerica's stockholders. The
Executive Compensation Committee believes that recognizing executive officer
retention as an important component of overall compensation will maintain and
improve our performance. In particular, we use long-term incentive compensation
to make executive compensation more competitive with levels at companies
competing with us for executive talent. In general, we attempted to set total
direct compensation for our executive officers competitive with those for
executive officers of peer group REITs and peer group public companies based on
market capitalization.

Upon the Executive Compensation Committee's recommendation, our Board of
Directors concluded that our long-term incentive opportunities for executive
officers should be assessed on an annual basis. The Executive Compensation
Committee believes that a compensation mix weighted more heavily towards
long-term incentive compensation better aligns the interests of our executive
officers at levels with those of our stockholders, because long-term incentive
compensation is more closely linked to long-term performance and stock price.

Stock Options. In 2001, we included grants of stock options among the
long-term incentives afforded to our executive officers. We believe that the
interests of stockholders are served by giving key employees the opportunity to
participate in the appreciation of our common stock. To encourage our employees
to seek long-term appreciation in the value of our common stock, stock options
vest over a specified period of time. Accordingly, an employee generally must
remain with CarrAmerica for a period of years to enjoy the full economic benefit
of a stock option.

Restricted Stock Units. Since 1998, we have made grants of restricted
stock units to our executive officers as another form of long-term incentive
compensation. Following our evaluation of the interim review of long-term
compensation conducted in 2002, we made strategic adjustments to the expected
mix of future restricted stock units and stock options. The Executive
Compensation Committee believes that the strategic use of restricted stock unit
grants ensures that our overall long-term incentive compensation payable to our
executive officers will continue to be in line with the compensation
arrangements that have been implemented by our competitors for executive talent.

Chief Executive Officer Compensation

The Executive Compensation Committee has determined that the compensation
reported for our Chief Executive Officer for 2001 was substantially in
conformity with the policies described above for all of our other executive
officers. The Committee, however, provided that a greater percentage of the
CEO's total compensation would be payable through annual bonus and other
incentive compensation, rather than through base salary. The Committee granted
the CEO a bonus equal to approximately 100% of his base salary after the end of
the year based on his exceptional performance, as demonstrated by us reaching
our target FFO, the effective implementation of our strategic plan, the
continued development of our management team and the successful implementation
of our capital and business plans during 2001.

Deductibility of Executive Officer Compensation

Section 162(m) of the Internal Revenue Code denies a deduction for
compensation in excess of $1 million paid to certain executive officers, unless
certain performance disclosure and stockholder approval requirements are met.
Our stock option grants to our executive officers in 2001 are intended to
qualify as "performance-based" compensation not subject to the Section 162(m)
deduction limitation. Our restricted stock unit grants in 2001 are subject to
the $1 million deduction limitation because they vest over time and are not
considered "performance-based" within the meaning of Section 162(m). The
Executive Compensation Committee believes that a substantial portion of the
compensation awarded to our executive officers as annual cash bonuses would be
exempted from the $1 million deduction limitation. The Committee's present
intention is to qualify, to the extent reasonable, a substantial portion of each
executive officer's compensation for deductibility under applicable tax laws.

Ad Hoc Compensation Committee Executive Compensation Committee
(as to information on option grants) (as to remainder of information)
Timothy Howard A. James Clark
Wesley S. Williams, Jr. Timothy Howard
Wesley S. Williams, Jr.

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

A. James Clark, Timothy Howard and Wesley S. Williams, Jr. served on the
Executive Compensation Committee of our Board of Directors during 2001. Timothy
Howard and Wesley S. Williams, Jr. also served on the Ad Hoc Compensation
Committee during 2001. None of these individuals was or ever has been an
employee of CarrAmerica or any of our subsidiaries.

Mr. Clark owns interests in certain entities that were parties to certain
transactions involving us. A wholly owned subsidiary of Clark Enterprises, Inc.,
an entity of which Mr. Clark is the majority stockholder and which is a holder
of Class A Units of Carr Realty, L.P., has provided general contracting services
to one of our affiliates, CarrAmerica Development, Inc., and we have retained an
affiliate of Clark Enterprises, Inc. to provide asset management services for
third-party properties that we manage. In connection with these services, the
Company and CarrAmerica Development, Inc. paid $540,000 to Clark Enterprises
for 2001.

In addition, Clark Enterprises provides general contracting services for
some of the joint ventures in which we own a minority interest and for which
CarrAmerica Development, Inc. provides development and architectural services.
In 2001, joint venture entities in which we own a 40%, 35% and 30% interest paid
$22.0 million, $21,000 and $2.9 million, respectively, to Clark Enterprises for
general contracting services.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee has reviewed and discussed the audited consolidated
financial statements of CarrAmerica for fiscal year 2001 with CarrAmerica's
management, and also has discussed with KPMG LLP, CarrAmerica's independent
auditors, the matters required to be discussed by Statement on Auditing
Standards No. 61. The Audit Committee has received both the written disclosures
and the letter from KPMG LLP required by Independence Standards Board Standard
No. 1, and has discussed with KPMG LLP the independence of KPMG LLP from
CarrAmerica. In addition, the Audit Committee has considered whether the
provision of services by KPMG LLP falling under the heading "All Other Fees"
(see "Independent Auditors" below) is compatible with maintaining the
independence of KPMG LLP from CarrAmerica (services falling under the heading
"Financial Systems Design and Implementation Fees" being inapplicable, as there
were no such services provided by KPMG LLP for the last fiscal year). The Audit
Committee also reconfirmed its charter adopted last year.

Based on the foregoing, the Audit Committee recommended to CarrAmerica's
Board of Directors that CarrAmerica's audited consolidated financial statements
for fiscal year 2001 be included in CarrAmerica's Annual Report on Form 10-K for
the year ended December 31, 2001.

Audit Committee
Andrew F. Brimmer
Timothy Howard
Wesley S. Williams, Jr.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The following table sets forth information regarding the beneficial
ownership of shares of our common stock as of March 8, 2002 for (1) each person
known by us to be the beneficial owner of more than 5% of the outstanding common
stock, (2) each of our directors and each Named Executive Officer, and (3) all
of our directors and executive officers as a group. Unless otherwise indicated
in the footnotes, all such interests are owned directly, and the person or
entity identified as the beneficial owner has sole voting and investment power.
The number of shares reported as beneficially owned by a person represents the
number of shares of common stock the person holds (including shares of common
stock that may be issued upon exercise of options that are exercisable within 60
days of March 8, 2002) plus the number of shares into which Class A Units of
Carr Realty, L.P. (including Class A Units of Carr Realty, L.P. that may be
issued upon the exercise of options that are exercisable within 60 days of March
8, 2002) and Units of CarrAmerica Realty, L.P. held by the person are redeemable
(if we elect to issue shares rather than pay cash upon such redemption). For
purposes of the following table, the number of shares of our common stock, Class
A Units of Carr Realty, L.P. and Units of CarrAmerica Realty, L.P. deemed
outstanding includes [52,461,611] shares of our common stock, 4,656,930 Class A
Units of Carr Realty, L.P. and 1,155,200 Units of CarrAmerica Realty, L.P. as
well as 104,911 Class A Units of Carr Realty, L.P. and 900,139 shares of our
common stock issuable upon exercise of options exercisable within 60 days of
March 8, 2002. The extent to which a person holds Class A Units of Carr Realty,
L.P. or Units of CarrAmerica Realty, L.P. or options to purchase common stock or
Class A Units of Carr Realty, L.P. which are exercisable within 60 days of March
8, 2002, rather than common stock, is set forth in the footnotes.

Percent Percent of
Name and Address Number of Shares/Units of All All Shares &
of Beneficial Owner Beneficially Owned Shares(1) Units(2)
------------------- ------------------ --------- --------

More Than 5% Beneficial Owner

Cohen & Steers Capital Management, Inc. (3) ............ 4,778,595 9.1% 8.2%
757 Third Avenue
New York, NY 10017

Directors

Andrew F. Brimmer (4) .................................. 25,574 * *
Brimmer & Company
4400 MacArthur Boulevard, NW
Washington, DC 20007

Oliver T. Carr, Jr. (5) ................................ 1,889,473 3.5% 3.2%
CarrAmerica Realty Corporation
655 15th Street, NW
Washington, DC 20005

Thomas A. Carr (6) ..................................... 332,782 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006

A. James Clark (7) ..................................... 988,449 1.9% 1.7%
Clark Enterprises, Inc.
7500 Old Georgetown Road
Bethesda, MD 20814

Percent Percent of
Name and Address Number of Shares/Units of All All Shares &
of Beneficial Owner Beneficially Owned Shares(1) Units(2)
------------------- ------------------ --------- --------

Timothy Howard (8) ................................... 44,875 * *
Fannie Mae
3900 Wisconsin Ave, N.W.
Washington, DC 20016

Robert E. Torray (9) ................................. 520,000 * *
Robert E. Torray & Co. Inc.
7501 Wisconsin Ave., Suite 1100
Bethesda, MD 20814

Wesley S. Williams, Jr. (10) ........................ 33,200 * *
Covington & Burling
1201 Pennsylvania Avenue, NW
Washington, DC 20044

Named Executive Officers

Karen B. Dorigan (11) ............................... 118,276 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006

Kent C. Gregory (12) ................................ 114,734 * *
CarrAmerica Realty Corporation
1600 Parkwood Circle, Ste. 150
Atlanta, GA 30339

Philip L. Hawkins (13) .............................. 160,150 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006

Richard F. Katchuk (14) ............................. 26,272 * *
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 20006

All directors and executive officers as a group
(12 persons) (15) ................................... 4,298,796 7.8% 7.3%

________________________
* Less than 1%.

(1) Assumes that all options to acquire shares of our common stock held by
the person that are shown, if any, are exercised, that all Class A Units
of Carr Realty, L.P. and Units of CarrAmerica Realty, L.P. held by the
person, if any, are redeemed for shares of our common stock, and that all
options to acquire Class A Units of Carr Realty, L.P. held by the person
that are shown, if any, are exercised and that the underlying Units are
redeemed for shares of our common stock. The total number of shares
outstanding used in calculating this percentage includes all currently
issued and outstanding shares of our common stock plus shares of our
common stock issuable upon redemption of all Class A Units and Units of
CarrAmerica Realty, L.P. beneficially owned by the person (including
Class A Units issuable to such person upon exercise of options that are
shown), but assumes that none of the Class A Units and Units of
CarrAmerica Realty, L.P. held by other persons are redeemed for shares of
our common stock.

(2) Intended to show fully diluted beneficial ownership. Assumes that all
options to acquire shares of our common stock and options to acquire
Class A Units of Carr Realty, L.P. held by the person that are shown, if
any, are exercised. The total number of shares outstanding used in
calculating this percentage includes all currently issued and outstanding
shares of our common stock and assumes that all of the Class A Units and
Units of CarrAmerica Realty, L.P. held by other persons (including Class
A Units issuable to such person upon exercise of options that are shown)
are redeemed for shares of our common stock.

(3) Based on a filing made pursuant to Section 13(g) of the Securities
Exchange Act of 1934 by Cohen & Steers Capital Management, Inc.
Represents 4,778,595 shares of our common stock over which Cohen & Steers
has sole dispositive power, 4,120,495 of such shares with respect to
which Cohen & Steers has sole voting power.

(4) Dr. Brimmer owns 100 shares of our common stock and options to purchase
25,474 shares of our common stock which are exercisable within 60 days of
March 8, 2002.

(5) The aggregate amount of shares of our common stock beneficially owned by
Mr. Oliver T. Carr, Jr. consists of 121,165 shares of our common stock
and 284,672 Class A Units owned directly by him, 183,919 shares of our
common stock held in an irrevocable trust for the benefit of Mr. Carr,
150,000 Class A Units held in an irrevocable trust for the benefit of his
spouse, 346,755 shares of our common stock and 650,462 Class A Units
owned by The Oliver Carr Company, of which Mr. Carr is a director,
chairman of the board and trustee of the majority stockholder, and Mr.
Carr's options to purchase 95,000 Class A Units and options to purchase
57,500 shares of our common stock which are exercisable within 60 days of
March 8, 2002. Mr. Carr disclaims beneficial ownership of 63,664 shares
of our common stock owned by his spouse and 19,077 shares of our common
stock owned by his children.

(6) Mr. Thomas Carr is a director of The Oliver Carr Company. Mr. Carr
disclaims beneficial ownership of the shares of our common stock and
Class A Units held by The Oliver Carr Company. Mr. Carr holds 19,024
shares of our common stock individually, 2,179 shares of our common stock
jointly with his spouse, 23,581 Class A Units directly and 2,907 Class A
Units are held by his children. Mr. Carr has options to purchase 285,091
shares of our common stock which are exercisable within 60 days of March
8, 2002.

(7) The aggregate number of our shares of common stock beneficially owned by
Mr. Clark consists of 4,666 shares of our common stock and 358,596 Class
A Units owned directly by him and 569,979 Class A Units owned by Clark
Enterprises, Inc., of which Mr. Clark is chairman, president, a director
and the majority stockholder. Mr. Clark owns options to purchase 55,208
shares of our common stock which are exercisable within 60 days of March
8, 2002.

(8) Mr. Howard has options to purchase 44,875 shares of our common stock
which are exercisable within 60 days of March 8, 2002.

(9) The aggregate number of shares of our common stock beneficially owned by
Mr. Torray consists of 500,000 shares of our common stock owned directly
by him and 20,000 shares of our common stock owned by his wife. Mr.
Torray disclaims beneficial ownership of 1,304,900 shares of our common
stock held by Robert E. Torray & Co. Inc. in its capacity as an
investment advisor.

(10) Mr. Williams owns 200 shares of our common stock and options to purchase
33,000 shares of our common stock which are exercisable within 60 days of
March 8, 2002.

(11) Ms. Dorigan owns 632 shares of our common stock and options to purchase
117,644 shares of our common stock which are exercisable within 60 days
of March 8, 2002.

(12) Mr. Gregory owns 16,667 shares of our common stock and options to
purchase 98,067 shares of our common stock which are exercisable within
60 days of March 8, 2002.

(13) Mr. Hawkins owns 11,927 shares of our common stock and options to
purchase 138,312 shares of our common stock and 9,911 Class A Units which
are exercisable within 60 days of March 8, 2002.

(14) Mr. Katchuk owns 8,312 shares of our common stock and options to purchase
17,960 shares of our common stock which are exercisable within 60 days of
March 8, 2002.

(15) Includes an aggregate of 2,951,538 options and Class A Units described in
footnotes 4-14 above.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Carr Real Estate Services, Inc., one of our affiliates in which The
Oliver Carr Company owns voting stock and non-voting stock, provides management
and leasing services for certain properties in which we own a controlling
interest. Fees paid to Carr Real Estate Services, Inc. for these services with
respect to these properties totaled $3.3 million for 2001. Carr Real Estate
Services, Inc. also provides management and leasing services for partnerships in
which Oliver T. Carr, Jr. and/or A. James Clark, two of our directors, have
interests. Fees paid to Carr Real Estate Services, Inc. for these services by
these partnerships totaled $1.5 million for 2001.

CarrAmerica Development, Inc., another of our affiliates in which The
Oliver Carr Company owned voting stock during 2001, provides development and
architectural services to many of our properties. Fees paid to CarrAmerica
Development, Inc. for these services with respect to these properties totaled
$2.9 million for 2001. CarrAmerica Development, Inc. also provides development
and architectural services for partnerships in which Oliver T. Carr, Jr. and/or
A. James Clark, two of our directors, have interests. Fees paid to CarrAmerica
Development for these services by these partnerships totaled $0.3 million for
2001.

From time to time we retain an affiliate of The Oliver Carr Company to
provide asset management services in relation to properties we manage for third
parties. In 2001, we paid this affiliated company of The Oliver Carr Company
approximately $65,000 for such services.

We have entered into consulting agreements with each of Carr Real Estate
Services, Inc. and CarrAmerica Development, Inc. pursuant to which we have
provided certain consulting services. Fees paid to us for these services by Carr
Real Estate Services, Inc. and CarrAmerica Development, Inc. totaled $3.1
million and $1.0 million, respectively, for 2001. In April 2001, CarrAmerica
Development, Inc. became a wholly-owned subsidiary of ours.

CarrAmerica Development, Inc. borrows money from us periodically to
finance its development business. As of December 31, 2001, we had loaned
CarrAmerica Development, Inc. an aggregate of $155.0 million, $62.6 million of
which was secured by real estate and $92.4 million of which was loaned on an
unsecured basis. These loans bear interest at the rate of 9% per annum. The
unsecured loan is payable upon demand and the secured loan matures on March 31,
2030.

In connection with the recapitalization of CarrAmerica Development, Inc.
in April 2000, The Oliver Carr Company executed a promissory note payable to
CarrAmerica Development, Inc. in the amount of $688,950 to fund equity
contributions by The Oliver Carr Company. Since April 2000, CarrAmerica
Development, Inc. has loaned an additional $191,374 to The Oliver Carr Company
to fund additional equity contributions by The Oliver Carr Company. In April
2001, we purchased from The Oliver Carr Company all of its voting stock in
CarrAmerica Development, Inc. for an aggregate purchase price of $1,820,530,
including the assumption of the $880,324 promissory note payable to CarrAmerica
Development, Inc. Amounts payable under the promissory note were offset against
amounts CarrAmerica Development, Inc. owed to us, and the note was canceled.

A wholly owned subsidiary of Clark Enterprises, Inc., an entity of which
Mr. Clark is the majority stockholder and which is a holder of Class A Units of
Carr Realty, L.P., has provided general contracting services to CarrAmerica
Development, Inc., and we have retained an affiliate of Clark Enterprises, Inc.
to provide asset management services for third-party properties that we

manage. In connection with these services, the Company and CarrAmerica
Development, Inc. paid $540,000 to Clark Enterprises for 2001.

We previously made a loan to Mr. Thomas Carr, our Chairman, President and
Chief Executive Officer, as part of an incentive plan to encourage purchases of
our stock. This loan bore interest at 6.73% per annum and was scheduled to
mature in August 2007, or earlier under certain circumstances. Mr. Carr's loan
was for a total principal amount of $474,996, of which he repaid $424,996 in
March 2001 and of which the remaining $50,000 was forgiven by us as part of Mr.
Carr's bonus for 2000 which was paid in 2001.

In November, 2001, we repurchased from Security Capital, then a greater
than 46% stockholder of ours, 9.2 million shares of our common stock at a price
of $28.85 per share, or an aggregate purchase price of approximately $265.7
million in cash. At the time of the transaction, William D. Sanders, C. Ronald
Blankenship and Caroline S. McBride, Security Capital's designees to our Board
of Directors, were executive officers of Security Capital, and William Sanders
and C. Ronald Blankenship were also directors of Security Capital. The
transaction was approved by a special committee of our Board of Directors that
was comprised of all directors other than the Security Capital designees. On
December 19, 2001, Security Capital sold all of its remaining shares of our
common stock to the public in an underwritten offering. Pursuant to a
termination agreement entered into between us and Security Capital on December
13, 2001, William D. Sanders, C. Ronald Blankenship and Caroline S. McBride,
resigned from our Board of Directors effective as of December 19, 2001.

INDEPENDENT AUDITORS

KPMG LLP, which served as our independent auditors for the last fiscal
year and has been selected to serve as our independent auditors for the current
fiscal year, will have representatives present at the annual meeting, will have
the opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.

For services rendered during or in connection with our fiscal year 2001,
as applicable, KPMG LLP billed the following fees:

Audit Fees $ 414,425

Financial Information Systems Design
and Implementation Fees $ 0

All Other Fees $1,444,379

An aggregate of $1,357,304 of the $1,444,379 that KPMG LLP billed to us
in 2001 for all other fees was for tax advice and assistance.

OTHER MATTERS

Our management knows of no other matters which may be presented for
consideration at the annual meeting. If any other matters properly come before
the meeting, however, the holders of proxies solicited by this Proxy Statement
intend to vote such proxies as recommended by our Board of Directors or, if no
such recommendation is given, in accordance with their judgment on such matters.
If a stockholder proposal that was excluded from this Proxy Statement in
accordance with Rule 14a-8 of the Securities Exchange Act of 1934, as amended,
is properly brought before the meeting, it is intended that the proxy holders
will use their discretionary authority to vote the proxies against such
proposal.

STOCKHOLDER PROPOSALS

Proposals of stockholders pursuant to Rule 14a-8 of the Securities
Exchange Act of 1934, as amended, to be presented at the 2003 annual meeting
must be received by our Corporate Secretary before November 28, 2002 to be
considered for inclusion in our proxy material.

In addition, any stockholder who wishes to propose a nominee to our Board
of Directors or submit any other matter to a vote at a meeting of our
stockholders (other than a stockholder proposal included in our proxy materials
pursuant to Rule 14a-8 of the rules promulgated under the Securities Exchange
Act of 1934, as amended) must comply with the advance notice provisions and
other requirements of Section 3.11 of our by-laws, which are on file with the
Securities and Exchange Commission and may be obtained from our Corporate
Secretary upon request. If a stockholder nomination or proposal is received
after the date specified in the advance notice provisions, our proxy for next
year's annual meeting may confer discretionary authority to vote on such matter
without any discussion of the matter in the Proxy Statement.

VOTING PROCEDURES AND COSTS OF PROXY SOLICITATION

A properly executed proxy marked "Abstain" with respect to any such
matter to be voted upon will not be voted, although we will count it for
purposes of determining the presence of a quorum.

We pay for preparing, assembling and mailing this Proxy Statement and
any other proxy materials transmitted on behalf of our Board of Directors. We
will, upon request, reimburse brokerage firms and others for their reasonable
expenses in forwarding proxy materials to the beneficial owners of our common
stock.

* * * *

Your vote is important. Please complete the enclosed proxy card and mail
it in the enclosed postage-paid envelope as soon as possible.

APPENDIX A

Proposed Amendment to Article V (marked against existing Article V)
-------------------------------------------------------------------
"ARTICLE V.

REIT Provisions
---------------

Section 5.1. Definitions. The following terms shall have the following
-----------
meanings:

(a) "Acquire" shall mean the acquisition of Beneficial Ownership of
shares of Stock by any means including, without limitation, acquisition pursuant
to any option, warrant, pledge or other security interest or similar right to
acquire shares, but shall not include the acquisition of any such rights unless,
as a result, the acquiror would be considered a Beneficial Owner (if the
acquisition would have been effective), as defined below. The term "Acquisition"
shall have a correlative meaning.

(b) "Beneficial Ownership" shall mean ownership of Stock by a Person who
is or would be treated as an owner of such shares of Stock either directly, or
indirectly pursuant to Section 542(a)(2) of the Code, taking into account, for
this purpose, constructive ownership determined under Section 544 of the Code,
as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.

(c) "Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 5.13, each of which shall be an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.

(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

(e) "Common Stock" shall mean any shares of Stock issued by the
Corporation that are Common Stock under Section 4.1 of these Articles of
Incorporation.

(f) "Effective Date" shall mean the date on which the Articles of
Amendment to the Corporation's Articles of Incorporation adopting this amended
and restated version of Article V are filed with the Department of Assessments
and Taxation of the State of Maryland.

(g) "IRS" shall mean the United States Internal Revenue Service.

(h) "Market Price" shall mean, with respect to any class of Stock, the
last reported sales price, regular way, on the NYSE of shares of such class of
Stock on the trading day immediately preceding the relevant date, or if such
class of Stock is not then traded on the NYSE, the last reported sales price,
regular way, of shares of such class of Stock on the trading day immediately
preceding the relevant date as reported on the principal exchange or quotation
system on which such class of Stock may be traded, provided, however, that if
-------- -------
the Board of Directors determines in good faith that a lower price is
appropriate, then the Market Price shall be such lower price as determined in
good faith by the Board of Directors, or if such class of Stock is not then
traded over any exchange or quotation system, the Market Price shall be the
price determined in good faith by the Board of Directors of the Corporation as
the fair market value of shares of such class of Stock on the relevant date.

(i) "NYSE" shall mean the New York Stock Exchange.

(j) "Ownership Limit" shall mean (i) with respect to the Common Stock,
9.8% of the outstanding shares of Common Stock of the Corporation; and (ii) with
respect to any class or series of Preferred Stock, 9.8% of the outstanding
shares of such class or series of Preferred Stock of the Corporation.

(k) "Person" shall mean an individual, corporation, partnership, limited
liability company, estate, trust (including a trust qualified under Section
401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside
for or to be used exclusively for the purposes described in Section 642(c) of
the Code, association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity and also includes a group as
that term is used for purposes of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended; but does not include an underwriter which participates
in a public offering of the Stock for a period of 90 days following the purchase
by such underwriter of the Stock, provided that the ownership of Stock by such
-------------
underwriter would not result in the Corporation being "closely held" within the
meaning of Section 856(h) of the Code and would not otherwise result in the
Corporation failing to qualify as a REIT.

(l) "Preferred Stock" shall mean any shares of Stock issued by the
Corporation that are Preferred Stock under Section 4.1 of these Articles of
Incorporation.

(m) "Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which would result in a violation of the limitations in
Section 5.2, the purported owner for whom the Purported Record Transferee would
have acquired or owned shares of Stock if such Transfer had been valid under
Section 5.2.

(n) "Purported Record Transferee" shall mean with respect to any
purported Transfer which would result in a violation of the limitations in
Section 5.2, the record holder of the Stock if such Transfer had been valid
under Section 5.2.

(o) "REIT" shall mean a Real Estate Investment Trust under Section 856
of the Code.

(p) "Restriction Termination Date" shall mean the date on which the
Corporation determines pursuant to Section 5.15 of these Articles of
Incorporation that it is no longer in the best interests of the Corporation to
attempt to, or continue to, qualify as a REIT.

(q) "Stock" shall mean shares of stock of the Corporation that are
either Common Stock or Preferred Stock.

(r) "Transfer" shall mean any issuance, sale, transfer, gift,
assignment, pledge, hypothecation, devise or other disposition of Stock or the
right to vote or receive dividends on Stock (including (i) the granting of any
option or entering into any agreement for the sale, transfer or other
disposition of Stock, or the right to vote or receive dividends on Stock or (ii)
the sale, transfer, assignment or other disposition or grant of any Acquisition
Rights or other securities or rights convertible into or exchangeable for Stock,
or the right to vote or receive dividends on Stock), whether voluntary or
involuntary, whether of record, constructively, or beneficially, and whether by
operation of law or otherwise.

(s) "Trust" shall mean the trust created pursuant to Section 5.12.

(t) "Trustee" shall mean the Person unaffiliated with the Corporation,
or the Purported Beneficial Transferee, or the Purported Record Transferee, that
is appointed by the Corporation to serve as trustee of the Trust.

-2-

Section 5.2 Restrictions.
------------

Except as provided in Section 5.10, prior to the Restriction
Termination Date:

(i) no Person shall Acquire any shares of Stock if, as the
result of such Acquisition, such Person shall Beneficially Own shares of Stock
in excess of the Ownership Limit;

(ii) no Person shall Acquire any shares of Stock if, as a
result of such Acquisition, the Stock would be directly or indirectly
Beneficially Owned by less than 100 Persons (determined without reference to the
rules of attribution under Section 544 of the Code); and

(iii) no Person shall Acquire any shares of Stock if, as a
result of such Acquisition, the Corporation would be "closely held" within the
meaning of Section 856(h) of the Code.

Section 5.3 Remedies for Breach.
-------------------

(a) If, notwithstanding the other provisions contained in this
Article V, at any time there is a purported Transfer, Acquisition, change in the
capital structure of the Corporation or other event (including, without
limitation, a change in the relationship between two or more Persons that causes
the application of Section 544 of the Code, as modified by Section 856(h)),
that, if effective, would result in the violation of one or more of the
restrictions on ownership and transfer described in Section 5.2, then (1) in the
case of a Transfer or Acquisition, that number of shares of Stock purported to
be Transferred or Acquired that otherwise would cause such Person to violate
Section 5.2 (rounded up to the next whole share) shall be automatically
transferred to a Trust for the benefit of a Charitable Beneficiary, as described
in Section 5.12, effective as of the close of business on the day immediately
prior to the date of such purported Transfer or Acquisition, and such Person
shall acquire no rights in such shares of Stock; (2) in the case of any event
other than a Transfer or Acquisition (a "Beneficial Ownership Event"), that
number of shares of Stock that would be owned by Persons (the "Affected
Persons") as a result of such Beneficial Ownership Event that otherwise would
violate Section 5.2 (rounded up to the next whole share) shall be automatically
transferred to a Trust for the benefit of a Charitable Beneficiary, as described
in Section 5.12, effective as of the close of business on the day immediately
prior to such Beneficial Ownership Event, and such Affected Persons or Persons
shall acquire no rights (or have no continuing rights) in such shares of Stock;
or (3) if the transfer to the Trust described in either clause (1) or clause (2)
hereof would not be effective for any reason to prevent any Person from
Beneficially Owning Stock in violation of Section 5.2, then the Transfer,
Acquisition, or other Beneficial Ownership Event that would otherwise cause such
Person to violate Section 5.2 shall be void ab initio.

(b) Notwithstanding the other provisions hereof, any Transfer or
Acquisition of shares of Stock that, if effective, would result in the Stock
being beneficially owned by less than 100 persons (determined without reference
to any rules of attribution under Section 544 of the Code) shall be void ab
initio, and the intended transferee shall acquire no rights in such shares of
Stock.

(c) In addition to, and without limitation by, subparagraphs (a) and (b)
above, if the Board of Directors or its designees shall at any time determine in
good faith that a Transfer, Acquisition or other event has taken place that
results in a violation of Section 5.2 or that a Person intends to Acquire, has
attempted to Acquire, or may Acquire direct ownership, Beneficial Ownership
(determined without reference to any rules of attribution under Section 544 of
the Code) or Beneficial Ownership of any Stock in violation of Section 5.2, the
Board of Directors or its designees shall take such action as it deems advisable
to refuse to give effect to or to prevent such Transfer, Acquisition or other
event, including, but not limited to, causing the Corporation to refuse to give
effect to such Transfer, Acquisition or other event on the books of the
Corporation or instituting proceedings to

-3-

enjoin such Transfer, Acquisition or other event; provided, however, that any
-----------------
Transfer or Acquisition (or, in the case of events other than a Transfer or
Acquisition, ownership or Beneficial Ownership) in violation of Section 5.2
shall automatically result in the transfer to the Trust described in Section
5.12, irrespective of any action (or non-action) by the Board of Directors.

(d) Nothing contained in this Section 5.3 shall limit the authority
of the Board of Directors to take such other action as it deems necessary or
advisable to protect the Corporation and the interests of its stockholders by
preservation of the Corporation's status as a REIT.

Section 5.4. Notice of Restricted Transfer. Any Person who
------------------------------
acquires or attempts or intends to acquire shares of Stock in violation of
Section 5.2 shall immediately give written notice to the Corporation of such
event and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
Transfer or attempted or intended Transfer on the Corporation's status as a
REIT.

Section 5.5. Owners Required To Provide Information. Prior to the
--------------------------------------
Restriction Termination Date:

(a) every stockholder of record of more than 5% (or such lower
percentage as required by the Code or regulations promulgated thereunder) of the
outstanding Stock of the Corporation shall, within 30 days after December 31 of
each year, give written notice to the Corporation stating the name and address
of such record stockholder, the number of shares Beneficially Owned by it, and a
description of how such shares are held; provided that a shareholder of record
-------------
who holds outstanding Stock of the Corporation as nominee for another person,
which other person is required to include in gross income the dividends received
on such Stock (an "Actual Owner"), shall give written notice to the Corporation
stating the name and address of such Actual Owner and the number of shares of
such Actual Owner with respect to which the stockholder of record is nominee.

(b) every Actual Owner of more than 5% (or such lower percentage
as required by the Code or regulations promulgated thereunder) of the
outstanding Stock of the Corporation who is not a stockholder of record of the
Corporation, shall within 30 days after December 31 of each year, give written
notice to the Corporation stating the name and address of such Actual Owner, the
number of shares Beneficially Owned, and a description of how such shares are
held.

(c) each person who is a Beneficial Owner of Stock and each
Person (including the stockholder of record) who is holding Stock for a
Beneficial Owner shall provide to the Corporation such information as the
Corporation may request, in good faith, in order to determine the Corporation's
status as a REIT.

Section 5.6. Ambiguity. In the case of an ambiguity in the
---------
application of any of the provisions of this Article V, including any
definition contained in Section 5.1, the Board of Directors shall have the power
to determine the application of the provisions of this Article V with respect to
any situation based on the facts known to it.

Section 5.7. Intentionally Omitted.

Section 5.8. Intentionally Omitted.

-4-

Section 5.9. Intentionally Omitted.

Section 5.10. Exception. The Board of Directors, in its sole
---------
discretion, may exempt a Person (the "Exempted Holder") from the Ownership
Limit, with respect to the Common Stock or any class or series of Preferred
Stock if the Board shall have determined that the Person is not an individual
for purposes of Section 542(a)(2) of the Code and that no individual's
Beneficial Ownership of such Stock will violate the Ownership Limit and the
Board of Directors obtains such representations and undertakings, if any, from
such Person as the Board determines in its sole and absolute discretion are
reasonably necessary or advisable to ascertain that no individual's Beneficial
Ownership of such Stock will violate the Ownership Limit. Prior to granting any
exception pursuant to this Section 5.10, the Board of Directors may require a
ruling from the IRS, or an opinion of counsel, in either case in form and
substance satisfactory to the Board of Directors in its sole discretion, as it
may deem necessary or advisable in order to determine or ensure the
Corporation's status as a REIT. Notwithstanding the receipt of any ruling or
opinion, the Board of Directors may impose such conditions or restrictions as it
deems appropriate in connection with granting such exception.

Section 5.11. Legend. Each certificate for Stock shall bear the
------
following legend:

"No Person (1) may Beneficially Own shares of Common Stock in
excess of 9.8 percent (or such greater percentage as may be
determined by the Board of Directors of the Corporation) of
the outstanding Common Stock of the Corporation, (2) may
Beneficially Own shares of any class or series of Preferred
Stock in excess of 9.8 percent (or such greater percentage as
may be determined by the Board of Directors of the
Corporation) of the outstanding shares of such class or series
of Preferred Stock of the Corporation, or (3) Beneficially Own
Stock that would result in the Corporation's being "closely
held" (within the meaning of Section 856(h) of the Code) or
Acquire Stock that would result in the Corporation having less
than 100 shareholders (as determined for purposes of Section
856(a)(5) of the Code). Any Person who attempts to
Beneficially Own shares of Stock in excess of the above
limitations must immediately notify the Corporation. If any of
the restrictions on transfer or ownership set forth in Article
V of the Articles of Incorporation are violated, the Stock
represented hereby will be automatically transferred to the
Trustee of a Trust for the benefit of a Charitable Beneficiary
pursuant to the terms of Article V of the Articles of
Incorporation. In addition, attempted Transfers of Stock in
violation of the limitations described above (as modified or
expanded upon in Article V of the Corporation's Articles of
Incorporation), may be void ab initio. A Person who attempts
to Beneficially Own shares of Stock in violation of the
ownership limitations set forth in Section 5.2 of the Articles
of Incorporation shall have no claim, cause of action, or any
other recourse whatsoever against a transferor of such shares.
All capitalized terms in this legend have the meanings defined
in the Corporation's Articles of Incorporation, a copy of
which, including the restrictions on transfer, will be sent
without charge to each stockholder who so requests.

-5-

Section 5.12. Transfer of Stock in Trust.
--------------------------

(a) Ownership in Trust; Status of Shares Held in Trust. Upon any
---------------------------------------------------
purported Transfer (whether or not such Transfer is the result of a transaction
engaged in through the facilities of the NYSE), Acquisition or other event that
results in the transfer of Stock to a Trust pursuant to Section 5.3, such shares
of Stock shall be deemed to have been transferred to the Trustee in its capacity
as Trustee for the exclusive benefit of one or more Charitable Beneficiaries.
The Trustee shall be appointed by the Corporation and shall be a Person
unaffiliated with the Corporation, any Purported Beneficial Transferee or
Purported Record Transferee. Each Charitable Beneficiary shall be designated by
the Corporation as provided in Section 5.13. Shares of Stock so held in Trust
shall be issued and outstanding stock of the Corporation. The Purported
Beneficial Transferee or Purported Record Transferee shall not benefit
economically from ownership of any shares of Stock held in Trust by the Trustee,
shall have no rights to dividends paid with respect to such shares, and shall
not possess any rights to vote or other rights attributable to the shares held
in Trust. The Purported Record Transferee and the Purported Beneficial
Transferee of shares of Stock in violation of Section 5.2 shall have no claim,
cause of action, or any other recourse whatsoever against the purported
transferor of such shares.

(b) Dividend Rights. The Trustee shall have all rights to dividends
---------------
with respect to shares of Stock held in the Trust, which rights shall be
exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend
or distribution paid prior to the discovery by the Corporation that the shares
of Stock have been transferred to the Trustee with respect to such shares shall
be paid over to the Trustee by the recipient thereof upon demand, and any
dividend declared but unpaid shall be paid when due to the Trustee. Any
dividends or distributions so paid over to the Trustee shall be held in trust
for the Charitable Beneficiary.

(c) Rights upon Liquidation. In the event of any voluntary or
-----------------------
involuntary liquidation, dissolution winding up of or any distribution of the
assets of the Corporation, the Trustee shall be entitled to receive, ratably
with each other holder of Stock of the class of Stock that is held in the Trust,
that portion of the assets of the Corporation available for distribution to the
holders of such class (determined based upon the ratio that the number of shares
of such class of Stock held by the Trustee bears to the total number of shares
of such class of Stock then outstanding). The Trustee shall distribute any such
assets received in respect of the Stock held in the Trust in any liquidation,
dissolution or winding up of, or distribution of the assets of the Corporation
in accordance with Section 5.12(d) below.

(d) Sale of Shares by Trustee. Within twenty days of receiving
-------------------------
notice from the Corporation that shares of Stock have been transferred to the
Trust, the Trustee of the Trust shall sell the shares held in Trust to a Person,
designated by the Trustee, whose ownership of the shares of Stock held in the
Trust would not violate the ownership limitations set forth in Section 5.2. Upon
such sale, the interest of the Charitable Beneficiary in the shares sold shall
terminate and the Trustee shall distribute the net proceeds of the sale to the
Purported Record Transferee and to the Charitable Beneficiary as provided in
this Section 5.12. The Purported Record Transferee shall receive the lesser of
(1) (x) the price per share such Purported Record Transferee paid for the Stock
in the purported Transfer that resulted in the transfer of shares of Stock to
the Trust, or (y) if the Transfer or other event that resulted in the transfer
of shares of Stock to the Trust was not a transaction in which the Purported
Record Transferee gave full value for such shares of Stock, a price per share
equal to the Market Price on the date of the purported Transfer or other event
that resulted in the transfer of such shares of Stock to the Trust and (2) the
price per share received by the Trustee from the sale or other disposition of
the shares held in the Trust. Any net sales proceeds in excess of the amount
payable to the Purported Record Transferee shall be immediately paid to the
Charitable Beneficiary. If, prior to the discovery by the Corporation that
shares of Stock have been transferred to the Trustee, such shares are sold by
the Purported Record Transferee, then (i) such

-6-

shares shall be deemed to have been sold on behalf of the Trust and (ii) to the
extent that the Purported Record Transferee received an amount for such shares
that exceeds the amount such Purported Record Transferee was entitled to receive
pursuant to this subparagraph (d), such excess shall be paid to the Trustee upon
demand. The Trustee shall have the right and power (but not the obligation) to
offer any share of Stock held in the Trust for sale to the Corporation on such
terms and conditions as the Trustee shall determine to be appropriate.

(e) Voting and Notice Rights. The Trustee shall have all voting rights
-------------------------
and rights to receive any notice of any meetings, which rights shall be
exercised for the exclusive benefit of the Charitable Beneficiary. The Purported
Record Transferee shall have no voting rights with respect to shares held in
Trust.

Section 5.13. Designation of Charitable Beneficiary. By written notice
--------------------------------------
to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust such
that (i) the shares of Stock held in the Trust would not violate the
restrictions set forth in Section 5.2 in the hands of such Charitable
Beneficiary and (ii) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

Section 5.14. Settlement. Nothing in this Article V shall preclude
-----------
the settlement of any transaction entered into through the facilities of the
NYSE (but the fact that settlement of a transaction is permitted shall not
negate the effect of any other provision of this Article V and all of the
provisions of this Article V shall apply to the purported transferee of the
shares of Stock in such transaction).

Section 5.15. Termination of REIT Status. The Board of Directors shall
---------------------------
take no action to terminate the Corporation's status as a REIT or to amend the
provisions of this Article V until such time as (i) the Board of Directors
adopts a resolution recommending that the Corporation terminate its status as a
REIT or amend this Article V, as the case may be, (ii) the Board of Directors
presents the resolution at an annual or special meeting of the stockholders and
(iii) such resolution is approved by holders of a majority of the voting power
of the issued and outstanding shares of Stock.

Section 5.16. Severability. If any provision of this Article or
------------
any application of any such provision is determined to be invalid by any Federal
or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court."

-7-

FORM OF PROXY CARD
THIS PROXY IS SOLICITED BY AND ON
BEHALF OF THE BOARD OF
DIRECTORS

P CarrAmerica Realty Corporation
R
O REVOCABLE PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
X MAY 2, 2002
Y
The undersigned hereby appoints Linda A. Madrid and Ann Marie Pulsch,
or either of them, proxies, with full power of substitution, to act for and to
vote the shares of the Common Stock of CARRAMERICA REALTY CORPORATION that the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of said Company to be held on May 2, 2002, and at any
and all adjournments thereof.

Receipt of the Company's Notice of Annual Meeting of Stockholders and
Proxy Statement is acknowledged.

IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

DETACH HERE

[X] Please mark votes as in this example.

This Proxy when properly executed will be voted as directed hereon, or if no
direction is indicated, will be voted FOR the election of the Board of
Directors' nominees for director, FOR Proposal 2 and AGAINST Proposal 3.

FOR AGAINST ABSTAIN
1. To elect Directors: 2. To amend the Articles of [_] [_] [_]
Incorporation relating to
Nominee for term expiring 2003: increasing limitations on
(01) Robert E. Torray ownership of our capital stock
3. To recommend to instate the [_] [_] [_]
Nominees for terms expiring 2005: election of directors annually
(01) Andrew F. Brimmer and (02) Oliver
T. Carr, Jr.

[_] FOR ALL [_] WITHHOLD
NOMINEES FROM ALL
NOMINEES

[_] ----------------------------------
For all nominees except as noted above

In their discretion, the Proxies
are authorized to vote upon such
other business as may properly come
before the meeting.

MARK HERE
FOR ADDRESS [_]
CHANGE AND
NOTE AT LEFT

(Please date and sign
exactly as name appears on
this proxy card. Joint
owners should each sign.
When signing as attorney,
executor, administrator,
trustee, guardian, etc.,
give full title as well)

SIGNATURE: ___________________________ DATE: ________ SIGNATURE: ____________________________ DATE: ________