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                                                                    Exhibit 10.5

                              EMPLOYMENT AGREEMENT
                                MICHAEL D. KAISER

         This Employment Agreement (this "Agreement"), is made and entered into
as of the 16th day of December, 1999, by and between Corporate Realty
Management, LLC, a Maryland limited liability company (the "Employer"), and
Corporate Office Properties Trust, a Maryland business trust ("COPT"), and
Michael D. Kaiser (the "Executive").

                                    RECITALS

         A. The Executive and Employer executed an agreement effective as of
September 28, 1998 providing for the employment of the Executive by the Employer
upon the terms and conditions therein stated (the "Prior Agreement").

         B. The Employer wishes to terminate the Prior Agreement and to
renegotiate a new agreement to assure itself of the continued services of the
Executive for the period provided in this Agreement and the Executive is willing
to continue in the employ of the Employer on a full-time basis for said period,
and upon the other terms and conditions hereinafter provided.

         C. The Employer recognizes that circumstances may arise in which a
change of control of the Employer or COPT, through acquisition or otherwise, may
occur, thereby causing uncertainty of employment without regard to the
competence or past contributions of the Executive, and that such uncertainty may
result in the loss of valuable services of the Executive. Accordingly, the
Employer and the Executive wish to provide reasonable security to the Executive
against changes in the employment relationship in the event of any such change
of control.

         D. COPT has agreed to become a party to this Agreement for the purpose
of assuming the liabilities, obligations and duties of the Employer to the
extent provided herein.

         E. It is the intention of the Employer and the Executive that,
notwithstanding the date of execution hereof, the Prior Agreement shall be
terminated and this Agreement shall become effective as of July 1, 1999.

         NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:

                                   AGREEMENTS

         1. TERMINATION OF PRIOR AGREEMENT. The Prior Agreement is hereby
terminated and this Agreement shall become effective as of July 1, 1999 (the
"Effective Date").

         2. POSITION AND DUTIES. As of the Effective Date, the Employer hereby
employs the Executive as the President of the Employer, or in such other
capacity as shall be

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mutually agreed between the Employer and the Executive. During the period of the
Executive's employment hereunder, the Executive shall devote his best efforts
and full business time, energy, skills and attention to the business and affairs
of the Employer. The Executive's duties and authority shall consist of and
include all duties and authority customarily performed and held by persons
holding equivalent positions with business organizations similar in nature and
size to the Employer, as such duties and authority are reasonably defined,
modified and delegated from time to time by the Board of Directors of the
Employer (the "Board"). The Executive shall have the powers necessary to perform
the duties assigned to him, and shall be provided such supporting services,
staff, secretarial and other assistance, office space and accouterments as shall
be reasonably necessary and appropriate in the light of such assigned duties.

         3. COMPENSATION. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation and
other benefits:

                  (a) BASE SALARY. The Executive shall receive an aggregate
annual minimum "Base Salary" at the annualized rate of One Hundred Thirty-Eight
Thousand Dollars ($138,000) per annum, payable in periodic installments in
accordance with the regular payroll practices of the Employer. Such Base Salary
shall be subject to review annually by the Board and Compensation Committee of
COPT ("Compensation Committee") during the term hereof, in accordance with the
established compensation policies of the Compensation Committee.

                  (b) PERFORMANCE BONUS. The Executive shall be entitled to an
annual cash "Performance Bonus," payable within ninety (90) days after the end
of the fiscal year of the Employer the amount (if any) of which shall be
determined by the Board based upon the recommendation of the Compensation
Committee.

                  (c) STOCK OPTION/RESTRICTED SHARES. Executive shall be
entitled to stock options and/or restricted shares as determined by the
Compensation Committee and the Board.

                  (d) BENEFITS. The Executive shall be entitled to all
perquisites extended to similarly situated executives, as such are stated in the
Employer's Executive Perquisite Policy (the "Perquisite Policy") promulgated for
the Board or the Compensation Committee, and which Perquisite Policy is hereby
incorporated by reference, as amended by the Board or the Compensation Committee
from time to time. In addition, the Executive shall be entitled to participate
in all plans and benefits generally, from time to time, accorded to employees of
the Employer ("Benefit Plans"), all as determined by the Board from time to time
based upon the input of the Compensation Committee. Executive shall also receive
additional benefits as follows:

                           (i) a seven hundred fifty dollar ($750.00) per month
                  automobile allowance; and

                           (ii) the Employer shall pay to the Executive 25% of
                  the amount includible in income of the Executive upon the
                  vesting of restricted shares granted to the Executive, plus
                  25% of all taxes with respect to such grossing up amount.


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                  (e) WITHHOLDING. The Employer shall be entitled to withhold,
from amounts payable to the Executive hereunder, any federal, state or local
withholding or other taxes or charges which it is from time to time required to
withhold. The Employer shall be entitled to rely upon the opinion of its
independent accountants, with regard to any question concerning the amount or
requirement of any such withholding.

         4. TERM AND TERMINATION.

                  (a) BASIC TERM. The Executive's employment hereunder shall be
for a continuous and self-renewing three (3) year term, commencing as of the
Effective Date, unless terminated by either party, with or without cause,
effective as of the first (1st) business day after written notice to that effect
is delivered to the other party.

                  (b) PREMATURE TERMINATION.

                           (i) In the event of the termination of the employment
                  of the Executive under this Agreement by the Employer for any
                  reason other than expiration of the term hereof, termination
                  upon disability in accordance with the provisions of paragraph
                  (f) of this Section 4, or a "for-cause" termination in
                  accordance with the provisions of paragraph (d) of this
                  Section 4, then notwithstanding any actual or allegedly
                  available alternative employment or other mitigation of
                  damages by or available to the Executive, the Executive shall
                  be entitled to a "Termination Payment" equal to the sum of:
                  (w) three (3) times the rate of annualized Bonus Salary then
                  payable to the Executive; plus (x) three (3) times the average
                  of the three (3) most recent annual Performance Bonuses that
                  the Executive received; provided, however, that if the
                  Executive has been employed by the Employer for fewer than 3
                  years, then the amount set forth in (x), above, shall be equal
                  to three (3) times the average of the annual Performance
                  Bonuses that the Executive theretofore received from the
                  Employer. For purposes of calculating the Termination Payment
                  amounts due, the Executive's employment with the Employer
                  shall be agreed to have commenced on July 1, 1999. In the
                  event of a termination governed by this subparagraph (b) of
                  Section 4, the Employer shall also: (y) allow a period of
                  eighteen (18) months following the termination of employment
                  for the Executive (but in no event beyond the expiration of
                  any option term or period specified in the option agreement
                  with the Executive) to exercise any options granted under any
                  stock option or share incentive plan established by Employer
                  or COPT ("Stock Plan"); and (z) continue for the Executive
                  (provided that such items are not available to him by virtue
                  of other employment secured after termination) the
                  perquisites, plans and benefits provided under the Employer's
                  Perquisite Policy and Benefit Plans as of and after the date
                  of termination, [all items in (z) being collectively referred
                  to as "Post-Termination Perquisites and Benefits"], for the
                  lesser of the number of full months the Executive has
                  theretofore been employed by the Employer (but not less than
                  twelve (12) months)or twenty four (24) months following such
                  termination. The payments and benefits provided under (w),
                  (x), (y) and (z) above


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                  by the Employer shall not be offset against or diminish any
                  other compensation or benefits accrued as of the date of
                  termination.

                           (ii) Notwithstanding the vesting schedule otherwise
                  applicable, in the event of a termination governed by this
                  subparagraph (b) of Section 4, the Executive shall be fully
                  vested in all of the Executive's options and restricted shares
                  under any Stock Plan or similar program.

                           (iii) Any cash payments to the Executive under this
                  Section 4(b) will be made monthly over twelve (12) months,
                  unless otherwise mutually agreed by the parties to minimize
                  the Executives' tax burden in any year.

                  (c) CONSTRUCTIVE TERMINATION. If at any time during the term
of this Agreement, except in connection with a "for-cause" termination pursuant
to paragraph (d) of this Section 4, the Executive is Constructively Discharged
(as hereinafter defined), then the Executive shall have the right, by written
notice to the Employer given within one hundred and twenty (120) days of such
Constructive Discharge, to terminate his services hereunder, effective as of
thirty (30) days after such notice, and the Executive shall have no rights or
obligations under this Agreement other than as provided in Sections 5 and 6
hereof. The Executive shall in such event be entitled to a Termination Payment
of Base Salary and Performance Bonus compensation as well as all of the
Post-Termination Perquisites and Benefits, as if such termination of his
employment had been effectuated pursuant to paragraph (b) of this Section 4.

                  For purposes of this Agreement, the Executive shall be deemed
to have been "Constructively Discharged" upon the occurrence of any one of the
following events:

                           (i) The Executive is not re-elected to, or is removed
                  from, the position with the Employer as set forth in Section 2
                  hereof, other than as a result of the Executive's election or
                  appointment to positions of equal or superior scope and
                  responsibility; or

                           (ii) The Executive shall fail to be vested by the
                  Employer with the powers, authority and support services
                  normally attendant to any of said offices; or

                           (iii) The Employer shall notify the Executive that
                  the employment of the Executive will be terminated or
                  materially modified in the future or that the Executive will
                  be Constructively Discharged in the future; or

                           (iv) The Employer changes the primary employment
                  location of the Executive to a place that is more than fifty
                  (50) miles from the primary employment location, 8815 Centre
                  Park Drive, Columbia, Maryland 21045, as of the Effective Date
                  of this Agreement; or

                           (v) The Employer otherwise commits a material breach
                  of its obligations under this Agreement.


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                  (d) TERMINATION FOR CAUSE. The employment of the Executive and
this Agreement may be terminated "for-cause" as hereinafter defined. Termination
"for- cause" shall mean the termination of employment on the basis or as a
result of (i) a material violation by the Executive of any applicable material
law or regulation respecting the business of the Employer; (ii) the Executive
being found guilty of, or being publicly associated with, to the Employer's
detriment, a felony or an act of dishonesty in connection with the performance
of his duties as an officer of the Employer, or the Executive's commission of an
act which in the opinion of a reasonable third party disqualifies the Executive
from serving as an officer or director of the Employer; or (iii) the willful or
negligent failure of the Executive to perform his duties hereunder in any
material respect. The Executive shall be entitled to at least thirty (30) days'
prior written notice of the Employer's intention to terminate his employment for
any cause (except the Executive's death), specifying the grounds for such
termination, affording the Executive a reasonable opportunity to cure any
conduct or act (if curable) alleged as grounds for such termination, and a
reasonable opportunity to present to the Board his position regarding any
dispute relating to the existence of such cause. In the event the Employer
terminates the Executive's employment "for cause" the Executive shall be
entitled only to the Base Salary through the date of the termination of the
Executive's employment "for cause" and any other additional benefit in
accordance with applicable plans, programs or agreements with the Employer.

                  (e) TERMINATION UPON DEATH. In the event payments are due and
owing under this Agreement at the death of the Executive, such payments shall be
made to such beneficiary, designee or fiduciary as Executive may have designated
in writing, or failing such designation, to the executor or administrator of his
estate, in full settlement and satisfaction of all claims and demands on behalf
of the Executive. Such payments shall be in addition to any other death benefits
of the Employer made available for the benefit of the Executive, and in full
settlement and satisfaction of all payments provided for in this Agreement.
Notwithstanding the vesting schedule otherwise applicable in the event of a
termination governed by this subparagraph (e) of Section 4, all of options and
restricted shares granted to the Executive under any Stock Plan or similar
program shall be fully vested.

                  (f) TERMINATION UPON DISABILITY. The Employer may terminate
the Executive's employment after the Executive is determined to be disabled
under the long-term disability program of the Employer then covering the
Executive or by a physician engaged by the Employer and reasonably approved by
the Executive. In the event of a dispute regarding the Executive's "disability,"
such dispute shall be resolved through arbitration as provided in paragraph (d)
of Section 11 hereof, except that the arbitrator appointed by the American
Arbitration Association shall be a duly licensed medical doctor. The Executive
shall be entitled to the compensation and benefits provided for under this
Agreement during any period of incapacitation occurring during the term of this
Agreement, and occurring prior to the establishment of the Executive's
"disability" during which the Executive is unable to work due to a physical or
mental infirmity. Notwithstanding anything contained in this Agreement to the
contrary, until the date specified in a notice of termination relating to the
Executive's disability, the Executive shall be entitled to return to his
positions with the Employer as set forth in this Agreement, in which event no
disability of the Executive will be deemed to have occurred.


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Notwithstanding the vesting schedule otherwise applicable, in the event of a
termination governed by this subparagraph (f) of Section 4, the Executive shall
be fully vested in all of the Executive's options and restricted shares under
any Stock Plan or similar program.

                  (g) TERMINATION UPON CHANGE OF CONTROL.

                           (i) In the event of a Change in Control (as defined
                  below) and the termination of the Executive's employment by
                  Executive or by the Employer under either 1 or 2 below, the
                  Executive shall be entitled to a Termination Payment equal to
                  the sum of (w) three (3) times the rate of annualized Base
                  Salary then payable to the Executive, plus (x) three (3) times
                  the average of the three (3) most recent annual Performance
                  Bonuses that the Executive received; provided, however, that
                  if the Executive has been employed by the Employer for fewer
                  than three (3) years, than the amount set forth in (x), above
                  shall be equal to three (3) times the average of the annual
                  Performance Bonuses that the Executive has theretofore
                  received from the Employer. The Employer shall also continue
                  for the Executive the Post-Termination Perquisites and
                  Benefits for the same period and to the same extent as
                  provided in paragraph (b) of this Section 4; provided,
                  however, that notwithstanding the vesting schedule otherwise
                  applicable, immediately following a Change in Control (whether
                  or not the Executive's employment is terminated), the
                  Executive shall be fully vested in all of Executive's options
                  and restricted shares outstanding under any Stock Plan or
                  similar program and shall be allowed a period of eighteen (18)
                  months following the termination of employment of the
                  Executive for the Executive's exercise of such options. The
                  following shall constitute termination under this paragraph:

                           1 . The Executive terminates his employment under
                  this Agreement pursuant to a written notice to that effect
                  delivered to the Board within six (6) months after the
                  occurrence of the Change in Control.

                           2. Executive's employment is terminated, including
                  Constructively Discharged, by the Employer or its successor
                  either in contemplation of or after Change in Control, other
                  than on a for-cause basis.

                  (ii) For purposes of this paragraph, the term "Change in
         Control" shall mean the following occurring after the date of this
         Agreement:

                           1. The consummation of the acquisition by any person
                  (as such term is defined in Section 13(d) or 14(d) of the
                  Securities Exchange Act of 1934, as amended (the " 1934 Act")
                  of beneficial ownership (within the meaning of Rule 13d-3
                  promulgated under the 1934 Act) of fifty percent (50%) or more
                  of the combined voting power embodied in the then-outstanding
                  voting securities of COPT or the Employer; or

                           2. Approval by the stockholders of COPT or the
                  Employer of: (1) a merger or consolidation of COPT or the
                  Employer, if the stockholders of COPT


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                  or the Employer immediately before such merger or
                  consolidation do not, as a result of such merger or
                  consolidation, own, directly or indirectly, more than fifty
                  percent (50%) of the combined voting power of the then
                  outstanding voting securities of the entity resulting from
                  such merger or consolidation in substantially the same
                  proportion as was represented by their ownership of the
                  combined voting power of the voting securities of COPT or the
                  Employer outstanding immediately before such merger or
                  consolidation; or (2) a complete or substantial liquidation or
                  dissolution, or an agreement for the sale or other
                  disposition, of all or substantially all of the assets of COPT
                  or the Employer.

         Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because fifty percent (50%) or more of the combined voting
then-outstanding securities is acquired by: (1) a trustee or other fiduciary
holding securities under one or more employee benefit plans maintained for
employees of the entity; or (2) any corporation or other entity which,
immediately prior to such acquisition, is owned directly or indirectly by the
stockholders of COPT or the Employer in the same proportion as their ownership
of stock in COPT or the Employer immediately prior to such acquisition.

                           (iii) If it is determined, in the opinion of the
                  Employer's independent accountants, in consultation with the
                  Employer's independent counsel, that any amount payable to the
                  Executive by the Employer under this Agreement, or any other
                  plan or agreement under which the Executive participates or is
                  a party, would constitute an "Excess Parachute Payment" within
                  the meaning of Section 280G of the Internal Revenue Code of
                  1986, as amended (the "Code") and be subject to the excise tax
                  imposed by Section 4999 of the Code (the "Excise Tax"), the
                  Employer shall pay to the Executive a "grossing-up" amount
                  equal to the amount of such Excise Tax and all federal and
                  state income or other taxes with respect to payment of the
                  amount of such Excise Tax, including all such taxes with
                  respect to any such grossing-up amount. If at a later date,
                  the Internal Revenue Service assesses a deficiency against the
                  Executive for the Excise Tax which is greater than that which
                  was determined at the time such amounts were paid, the
                  Employer shall pay to the Executive the amount of such
                  unreimbursed Excise Tax plus any interest, penalties and
                  professional fees or expenses, incurred by the Executive as a
                  result of such assessment, including all such taxes with
                  respect to any such additional amount. The highest marginal
                  tax rate applicable to individuals at the time of payment of
                  such amounts will be used for purposes of determining the
                  federal and state income and other taxes with respect thereto.
                  The Employer shall withhold from any amounts paid under this
                  Agreement the amount of any Excise Tax or other federal, state
                  or local taxes then required to be withheld. Computations of
                  the amount of any grossing-up supplemental compensation paid
                  under this subparagraph shall be made by the Employer's
                  independent accountants, in consultation with the Employer's
                  independent legal counsel. The Employer shall pay all
                  accountant and legal counsel fees and expenses.


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                  (h) VOLUNTARY TERMINATION. In the event of a termination of
employment by the Executive on his own initiative, other than a termination due
to death, disability or a Constructive Discharge, the Executive shall have the
same entitlements as provided in paragraph (d) of this Section 4 for a
termination "for-cause."

         5. CONFIDENTIALITY AND LOYALTY. The Executive acknowledges that
heretofore or hereafter during the course of his employment he has produced and
received, and may hereafter produce, receive and otherwise have access to
various materials, records, data, trade secrets and information not generally
available to the public (collectively, "Confidential Information") regarding the
Employer and its subsidiaries and affiliates. Accordingly, during and subsequent
to termination of this Agreement, the Executive shall hold in confidence and not
directly or indirectly disclose, use, copy or make lists of any such
Confidential Information, except to the extent that such information is or
thereafter becomes lawfully available from public sources, or such disclosure is
authorized in writing by the Employer, required by law or by any competent
administrative agency or judicial authority, or otherwise as reasonably
necessary or appropriate in connection with the performance by the Executive of
his duties hereunder. All records, files, documents, computer diskettes,
computer programs and other computer-generated material, as well as all other
materials or copies thereof relating to the Employer's business, which the
Executive shall prepare or use, shall be and remain the sole property of the
Employer, shall not be removed from the Employer's premises without its written
consent, and shall be promptly returned to the Employer upon termination of the
Executive's employment hereunder. The Executive agrees to abide by the
Employer's reasonable policies, as in effect from time to time, respecting
confidentiality and the avoidance of interests conflicting with those of the
Employer.

         6. NON-COMPETITION COVENANT.

                  (a) RESTRICTIVE COVENANT. The Employer and the Executive have
jointly reviewed the tenant lists, property submittals, logs, broker lists, and
operations of the Employer, and have agreed that as an essential ingredient of
and in consideration of this Agreement and the payment of the amounts described
in Sections 3 and 4 hereof, the Executive hereby agrees that, except with the
express prior written consent of the Employer, for a period equal to the lesser
of the number of FULL months the Executive has at any time been employed by the
Employer or twenty-four (24) months after the termination of the Executive's
employment with the Employer (the "Restrictive Period"), he will not directly or
indirectly compete with the business of the Employer, including, but not by way
of limitation, by directly or indirectly owning, managing, operating,
controlling, financing, or by directly or indirectly serving as an employee,
officer or director of or consultant to, or by soliciting or inducing, or
attempting to solicit or induce, any employee or agent of Employer to terminate
employment with Employer and become employed by any person, firm, partnership,
corporation, trust or other entity which owns or operates a business similar to
that of the Employer (the "Restrictive Covenant"). For purposes of this
subparagraph (a), a business shall be considered "similar" to that of the
Employer if it is engaged in the acquisition, development, ownership, operation,
management or leasing of suburban office property (i) in any geographic market
or submarket in which the Employer owns more than 750,000 s.f. of properties
either as of the date hereof or as of the date of termination of the Executive's
employment. If the Executive violates the Restrictive Covenant


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and the Employer brings legal action for injunctive or other relief, the
Employer shall not, as a result of the time involved in obtaining such relief,
be deprived of the benefit of the FULL period of the Restrictive Covenant.
Accordingly, the Restrictive Covenant shall be deemed to have the duration
specified in this paragraph (a) computed from the date the relief is granted but
reduced by the time between the period when the Restrictive Period began to run
and the date of the first violation of the Restrictive Covenant by the
Executive. In the event that a successor of the Employer assumes and agrees to
perform this Agreement or otherwise acquires the Employer, this Restrictive
Covenant shall continue to apply only to the primary service area of the
Employer as it existed immediately before such assumption or acquisition and
shall not apply to any of the successor's other offices or markets. The
foregoing Restrictive Covenant shall not prohibit the Executive from owning,
directly or indirectly, capital stock or similar securities which are listed on
a securities exchange or quoted on the National Association of Securities
Dealers Automated Quotation System which do not represent more than five percent
(5%) of the outstanding capital stock of any corporation.

                  (b) REMEDIES FOR BREACH OF RESTRICTIVE COVENANT. The Executive
acknowledges that the restrictions contained in Sections 5 and 6 of this
Agreement are reasonable and necessary for the protection of the legitimate
proprietary business interests of the Employer; that any violation of these
restrictions would cause substantial injury to the Employer and such interests;
that the Employer would not have entered into this Agreement with the Executive
without receiving the additional consideration offered by the Executive in
binding himself to these restrictions; and that such restrictions were a
material inducement to the Employer to enter into this Agreement. In the event
of any violation or threatened violation of these restrictions, the Employer
shall be relieved of any further obligations under this Agreement, shall be
entitled to any rights, remedies or damages available at law, in equity or
otherwise under this Agreement, and shall be entitled to preliminary and
temporary injunctive relief granted by a court of competent jurisdiction to
prevent or restrain any such violation by the Executive and any and all persons
directly or indirectly acting for or with him, as the case may be, while
awaiting the decision of the arbitrator selected in accordance with paragraph
(d) of Section 11 of this Agreement, which decision, if rendered adverse to the
Executive, may include permanent injunctive relief to be granted by the court.

         7. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily
transferred to an affiliate of the Employer, such transfer shall not be deemed
to terminate or modify this Agreement, and the employing corporation to which
the Executive shall have been transferred shall, for all purposes of this
Agreement, be construed as standing in the same place and stead as the Employer
as of the date of such transfer. For purposes hereof, an affiliate of the
Employer shall mean any corporation or other entity directly or indirectly
controlling, controlled by, or under common control with the Employer. The
Employer shall be secondarily liable to the Executive for the obligations
hereunder in the event the affiliate of the Employer cannot or refuses to honor
such obligations. For all relevant purposes hereof, the tenure of the Executive
shall be deemed to include the aggregate term of his employment by the Employer
or its affiliate.

         8. INTEREST IN ASSETS. Neither the Executive nor his estate shall
acquire hereunder any rights in funds or assets of the Employer, otherwise than
by and through the actual payment of amounts payable hereunder; nor shall the
Executive or his estate have any power to


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transfer, assign (except into a trust for purposes of estate planning),
anticipate, hypothecate or otherwise encumber in advance any of said payments;
nor shall any of such payments be subject to seizure for the payment of any
debt, judgment, alimony, separate maintenance or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise of the Executive.

         9. INDEMNIFICATION.

                  (a) The Employer shall provide the Executive (including his
heirs, personal representatives, executors and administrators), during the term
of this Agreement and thereafter throughout all applicable limitations periods,
with coverage under the Employer's then-current directors' and officers'
liability insurance policy, at the Employer's expense.

                  (b) In addition to the insurance coverage provided for in
paragraph (a) of this Section 9, the Employer shall defend, hold harmless and
indemnify the Executive (and his heirs, personal representatives, executors and
administrators) to the fullest extent permitted under applicable law, and
subject to the requirements, limitations and specifications set forth in the
Bylaws and other organizational documents of the Employer, against all expenses
and liabilities reasonably incurred by him in connection with or arising out of
any action, suit or proceeding in which he may be involved by reason of his
having been an officer of the Employer (whether or not he continues to be an
officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.

                  (c) In the event the Executive becomes a party, or is
threatened to be made a party, to any action, suit or proceeding for which the
Employer has agreed to provide insurance coverage or indemnification under this
Section 9, the Employer shall, to the full extent permitted under applicable
law, advance all expenses (including the reasonable attorneys' fees of the
attorneys selected by Employer and approved by Executive for the representation
of the Executive), judgments, fines and amounts paid in settlement (collectively
"Expenses") incurred by the Executive in connection with the investigation,
defense, settlement, or appeal of any threatened, pending or completed action,
suit or proceeding, subject to receipt by the Employer of a written undertaking
from the Executive covenanting: (i) to reimburse the Employer for all Expenses
actually paid by the Employer to or on behalf of the Executive in the event it
shall be ultimately determined that the Executive is not entitled to
indemnification by the Employer for such Expenses; and (ii) to assign to the
Employer all rights of the Executive to insurance proceeds, under any policy of
directors' and officers' liability insurance or otherwise, to the extent of the
amount of Expenses actually paid by the Employer to or on behalf of the
Executive.

         10. ASSUMPTION BY COPT. By its execution of this Agreement, COPT agrees
to be secondarily liable to the Executive, and shall assume the liabilities,
obligations and duties of the Employer as contained in this Agreement in the
event the Employer can not or refuses to honor such obligations.


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         11. GENERAL PROVISIONS.

                  (a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Executive, the Employer and his and its
respective personal representatives, successors and assigns, and any successor
or assign of the Employer shall be deemed the "Employer" hereunder. The Employer
shall require any successor to all or substantially all of the business and/or
assets of the Employer, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the Employer
would be required to perform if no such succession had taken place. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
by the Executive other than his rights to compensation and benefits, which may
be transferred only by will or by operation of law.

                  (b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement
constitutes the entire agreement between the parties respecting the subject
matter hereof, and supersedes all prior negotiations, undertakings, agreements
and arrangements with respect thereto, whether written or oral. Except as
otherwise explicitly provided herein, this Agreement may not be amended or
modified except by written agreement signed by the Executive and the Employer.

                  (c) ENFORCEMENT AND GOVERNING LAW. The provisions of this
Agreement shall be regarded as divisible and separate; if any of said provisions
should be declared invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not be affected thereby. This Agreement shall be construed and the legal
relations of the parties hereto shall be determined in accordance with the laws
of the State of Maryland as it constitutes the situs of the corporation and the
employment hereunder, without reference to the law regarding conflicts of law.

                  (d) ARBITRATION. Except as provided in paragraph (b) of
Section 6, any dispute or controversy arising under or in connection with this
Agreement or the Executive's employment by the Employer shall be settled
exclusively by arbitration, conducted by a single arbitrator sitting in
Baltimore, MD in accordance with the rules of the American Arbitration
Association (the "AAA") then in effect. The arbitrator shall be selected by the
parties from a list of eleven (11) arbitrators provided by the AAA, provided
that no arbitrator shall be related to or affiliated with either of the parties.
No later than ten (10) days after the list of proposed arbitrators is received
by the parties, the parties, or their respective representatives, shall meet at
a mutually convenient location in Baltimore, Maryland, or telephonically. At
that meeting, the party who sought arbitration shall eliminate one (1) proposed
arbitrator and then the other party shall eliminate one (1) proposed arbitrator.
The parties shall continue to alternatively eliminate names from the list of
proposed arbitrators in this manner until each party has eliminated five (5)
proposed arbitrators. The remaining arbitrator shall arbitrate the dispute. Each
party shall submit, in writing, the specific requested action or decision it
wishes to take, or make, with respect to the matter in dispute, and the
arbitrator shall be obligated to choose one (1) party's specific requested
action or decision, without being permitted to effectuate any compromise or
"new" position; provided, however, that the arbitrator is authorized to award
amounts not in dispute during the pendency of any dispute or controversy arising
under or in connection with this Agreement. The


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<PAGE>


Employer shall bear the cost of all counsel, experts or other representatives
that are retained by both parties, together with all costs of the arbitration
proceeding, including, without limitation, the fees, costs and expenses imposed
or incurred by the arbitrator. Judgment may be entered on the arbitrator's award
in any court having jurisdiction; including, if applicable, entry of a permanent
injunction under paragraph (b) of Section 6.

                  (e) PRESS RELEASES AND PUBLIC DISCLOSURE. Any press release or
other public communication by either the Executive or the Employer with any
other person concerning the terms, conditions or circumstances of Executive's
employment, or the termination of such employment, shall be subject to prior
written approval of both the Executive and the Employer, subject to the proviso
that the Employer shall be entitled to make requisite and appropriate public
disclosure of the terms of this Agreement, without the Executive's consent or
approval, as required under applicable statutes, and the rules and regulations
of the Securities and Exchange Commission and the Stock Exchange on which the
shares of Employer may from time to time be listed.

                  (f) WAIVER. No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by the other party, shall be deemed a waiver of
any similar or dissimilar provisions or conditions at the same time or any prior
or subsequent time.

                  (g) NOTICES. Notices given pursuant to this Agreement shall be
in writing, and shall be deemed given when received, and, if mailed, shall be
mailed by United States registered or certified mail, return receipt requested,
postage prepaid. Notices to the Employer shall be addressed to the principal
headquarters of the Employer, Attention: Chairman. Notices to the Executive
shall be sent to the address set forth below the Executive's signature on this
Agreement, or to such other address as the party to be notified shall have given
to the other.


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<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

"Employer"                                "Executive"
Corporate Realty Management, LLC, a
Maryland limited liability company

By: /s/ Randall M. Griffin                 /s/ Michael D. Kaiser
   ---------------------------------      -------------------------------------
   Randall M. Griffin, CHRM                 Michael D. Kaiser

Corporate Office Properties Trust, a Maryland
business trust

By: /s/ Clay W. Hamlin, III
   --------------------------------
   Clay W. Hamlin, III, CEO



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