As filed with the Security and Exchange Commission on November 7, 1997
Registration Nos. 333-______ and 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
JOINT REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
MEDITRUST CORPORATION MEDITRUST OPERATING COMPANY
- -------------------------------------- ------------------------------------
(Exact name of registrant as (Exact name of registrant
specified in its charter) as specified in its charter)
Delaware Delaware
- -------------------------------------- ------------------------------------
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
95-3520818 95-3419438
- -------------------------------------- ------------------------------------
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
197 First Avenue, Suite 300 197 First Avenue, Suite 100
Needham, MA 02194 Needham, MA 02194
- -------------------------------------- ------------------------------------
(Address of principal (Address of principal
executive offices) executive offices)
MEDITRUST CORPORATION MEDITRUST OPERATING COMPANY
1995 SHARE AWARD PLAN 1995 SHARE AWARD PLAN
(formerly the (formerly the
Santa Anita Realty Enterprises, Inc. Santa Anita Operating Company
1995 Share Award Plan) 1995 Share Award Plan)
- -------------------------------------- ------------------------------------
(Full title of the plan) (Full title of the plan)
David F. Benson Abraham D. Gosman
President Chairman of the Board
Meditrust Corporation Meditrust Operating Company
197 First Avenue, Suite 300 197 First Avenue, Suite 100
Needham, MA 02194 Needham, MA 02194
(781) 433-6000 (781) 453-8062
- -------------------------------------- ------------------------------------
(Name, address and telephone number (Name, address and telephone number
of agent for service) of agent for service)
---------------------
Copy to:
Michael J. Bohnen, Esq.
NUTTER, McCLENNEN & FISH, LLP
One International Place
Boston, Massachusetts 02110-2699
---------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------
Proposed
maximum Proposed
offering maximum
Title of Amount price per aggregate Amount of
securities to be unit of Paired offering registration
to be registered registered Common Stock price fee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Paired Common Stock(1) 11,375,206(2) $33.90(3) $385,656,021.51(3) $116,865.46(3)
- ------------------------------------------------------------------------------------------
</TABLE>
(1) Meditrust Corporation Common Stock, par value $0.10 per share (the "MC
Common Stock"), paired with Meditrust Operating Company, par value $0.10
(the "MOC Common Stock"). Includes rights (the "Rights") issuable pursuant
to the Rights Agreement, dated as of June 15, 1989, as amended, among
Meditrust Corporation(formerly known as Santa Anita Realty Enterprises,
Inc.), Meditrust Operating Company (formerly known as Santa Anita Operating
Company), and Boston EquiServe, as Rights Agent. One Right will be issued
with respect to each share of MC Common Stock issued under the Plans.
(2) This Joint Registration Statement covers, in addition to the number of
shares of Paired Common Stock stated above, options and other rights to
purchase or acquire the shares of Paired Common Stock covered by the
Prospectus and, pursuant to Rule 416, an additional indeterminate number of
shares which by reason of certain events specified in the Plans may become
subject to the Plans.
(3) Pursuant to Rule 457(h), the maximum offering price, per share and in the
aggregate, and the registration fee were calculated based upon the average
of the high and low prices of the Paired Common Stock reported on the New
York Stock Exchange and published in the Eastern Edition of the Wall Street
Journal as of November 4, 1997.
The Exhibit Index included in this Joint Registration Statement is at page 11.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8
(plan information and registrant information) will be sent or given to employees
as specified by Securities and Exchange Commission Rule 428(b)(1). Such
documents need not be filed with the Securities and Exchange Commission either
as part of this Joint Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents, which include the statement
of availability required by Item 2 of Form S-8, and the documents incorporated
by reference in this Joint Registration Statement pursuant to Item 3 of Form S-8
(Part II hereof), taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933.
-2-
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents By Reference
On November 5, 1997, Meditrust, a Massachusetts business trust
("Meditrust") merged with and into Santa Anita Realty Enterprises, Inc.
("Realty"), with Realty as the surviving corporation, and Meditrust Acquisition
Company, a Massachusetts business trust ("MAC") merged with and into Santa Anita
Operating Company ("Operating," and together with Realty, "The Santa Anita
Companies"), with Operating as the surviving corporation. As part of the merger,
Realty changed its name to "Meditrust Corporation" and Operating changed its
name to "Meditrust Operating Company." Meditrust Corporation ("MC") and
Meditrust Operating Company ("MOC", and MC and MOC being sometimes referred to
herein individually as a "Registrant" and collectively as the "Registrants"),
are hereby registering additional securities of the same class as other
securities for which a registration statement filed on this form relating to the
same employee benefit plans is effective, and the contents of that earlier
registration statement, filed by The Santa Anita Companies with the Securities
and Exchange Commission on May 1, 1995 (File No. 033-58995), are incorporated
herein by reference, and any information required in this Registration Statement
that is not in the earlier registration statement is set forth in this
Registration Statement. The following documents of the Registrants and of
Meditrust, filed with the Securities and Exchange Commission, are incorporated
by reference herein:
(a) The Santa Anita Companies' Joint Annual Report on Form 10-K, as
amended by amendments on Form 10K/A, for the fiscal year ended
December 31, 1996;
(b) The Santa Anita Companies' Joint Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997;
(c) The Santa Anita Companies' Joint Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997;
(d) The Santa Anita Companies' Joint Current Reports on Form 8-K, event
date January 7, 1997, event date April 13, 1997, and event date
October 2, 1997;
(e) Meditrust's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(f) Meditrust's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
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<PAGE>
(g) Meditrust's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997;
(h) Meditrust's Current Reports on Form 8-K, event date January 31, 1997,
event date April 13, 1997 and event date July 30, 1997.
(i) The Registrants' Joint Current Report on Form 8-K, event date
November 5, 1997; and
(j) The descriptions of the MC Common Stock, the Rights, and the MOC
Common Stock which are contained in registration statements filed
under the Exchange Act, and any amendment or report filed for the
purpose of updating such descriptions.
All documents subsequently filed by the Registrants and Meditrust pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference into this Joint Registration Statement
and to be a part hereof from the date of filing of such documents. Any statement
contained herein or in a document, all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Joint Registration Statement to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or amended, to constitute a part of this
Joint Registration Statement.
Item 4. Interests of Named Experts and Counsel
Michael J. Bohnen, a partner in the law firm Nutter, McClennen & Fish, LLP,
currently serves as Secretary of MOC. Nutter, McClennen & Fish, LLP, serves as
counsel to the Registrants, and has rendered a legal opinion with respect to the
validity of the shares being offered pursuant to this Registration Statement.
Item 5. Indemnification of Directors and Officers
As permitted by Section 102 of the General Corporation Law of Delaware (the
"GCL"), both the Certificate of Incorporation of MC and the Certificate of
Incorporation of MOC eliminate personal liability of its respective directors to
such company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for: (i) any breach of the duty of loyalty to such
company or its stockholders; (ii) acts or omissions not in good faith or which
involve intentional misconduct or knowing violations of law; (iii) liability
under Section 174 of the GCL relating to certain unlawful dividends and stock
-4-
<PAGE>
repurchases; or (iv) any transaction from which the director derived an improper
personal benefit.
As permitted by Section 145 of the GCL, both MC's By-laws and MOC's By-laws
provide for indemnification of directors and officers (and permit the respective
Boards of Directors to provide for indemnification of employees and agents) of
such Registrants against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and other amounts paid in settlement) actually and reasonably incurred by them
in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, in which
any such person was or is a party or is threatened to be made a party, if such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interest of such Registrant and, with respect to
any criminal action or proceeding, if such person had no reasonable cause to
believe his conduct was unlawful. In the case of an action or suit by or in the
right of the respective Registrant, such a person may be indemnified only for
expenses (including attorneys fees) and may not be indemnified in respect of any
claim, issue or matter as to which he has been adjudged liable for negligence or
misconduct in the performance of his duty to the respective Registrant, unless
and only to the extent the court in which such action or suit was brought
determines that such person is fairly and reasonably entitled to indemnity for
such expenses as such court may deem proper. In each case, indemnification of an
officer or director shall be made only upon specific authorization of a majority
of disinterested directors, by written opinion of independent legal counsel or
by the stockholders, unless the officer, or director has been successful on the
merits or otherwise in defense of any such action or suit, in which case he
shall be indemnified without such authorization. Both MC's By-laws and MOC's
By-laws require such Registrant to pay the expenses incurred by a director or
officer in defending or investigating a threatened or pending action, suit or
proceeding in advance of the final disposition of such action, suit or
proceeding upon receipt by such Registrant of an undertaking by or on behalf of
such director or officer to repay such amount if it is ultimately determined
that he is not entitled to indemnification and permit such Registrant to advance
such expenses to other employees and agents of such Registrant upon such terms
and conditions as are specified by the respective Registrant's Board of
Directors. The advancement of expenses, as well as indemnification, pursuant to
each Registrant's Bylaws is not exclusive of any other rights which those
seeking indemnification or advancement of expenses from such Registrant may
have.
Individual indemnification agreements (the "Indemnification Agreements")
have been entered into by each of MC and MOC with certain of its respective
directors and officers. The Indemnification Agreements provide for
indemnification to the fullest extent permitted by law and provide contractual
assurance to directors and officers that indemnity and advancement of expenses
will be available to them regardless of any amendment or revocation of such
Registrant's Bylaws.
-5-
<PAGE>
Both MC's By-laws and MOC's By-laws permit such Registrant to purchase and
maintain insurance on behalf of any director, officer, employee or agent of such
Registrant against liability asserted against him or her in any such capacity,
whether or not such Registrant would have the power to indemnify him against
such liability under the provisions of the Bylaws. Both MC and MOC maintain
liability insurance providing officers and directors with coverage with respect
to certain liabilities.
Item 6. Exhibits
See the attached Exhibit Index.
-6-
<PAGE>
MC SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MC certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Joint Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
Town of Needham, Commonwealth of Massachusetts, as of November 7, 1997.
MEDITRUST CORPORATION
By: /s/ David F. Benson
-------------------------------------
Name: David F. Benson
Title: Director, President and Treasurer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints David F.
Benson and Michael S. Benjamin his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Joint Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Joint
Registration Statement has been signed below by the following persons in the
capacities indicated as of November 7, 1997.
Signature Title
- --------- -----
/s/ Abraham D. Gosman
- ------------------------------ Chairman of the Board
Abraham D. Gosman
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<PAGE>
/s/ David F. Benson
- ------------------------------ Director, President and Treasurer
David F. Benson (Principal Executive Officer)
/s/ Laurie T. Gerber
- ------------------------------ Chief Financial Officer (Principal
Laurie T. Gerber Financial and Accounting Officer)
/s/ Donald J. Amaral
- ------------------------------ Director
Donald J. Amaral
/s/ William C. Baker
- ------------------------------ Director
William C. Baker
/s/ Edward W. Brooke
- ------------------------------ Director
Edward W. Brooke
/s/ C. Gerald Goldsmith
- ------------------------------ Director
C. Gerald Goldsmith
/s/ J. Terrence Lanni
- ------------------------------ Director
J. Terrence Lanni
/s/ Phillip L. Lowe
- ------------------------------ Director
Phillip L. Lowe
/s/ Thomas J. Magovern
- ------------------------------ Director
Thomas J. Magovern
- ------------------------------- Director
Gerald Tsai, Jr.
-8-
<PAGE>
MOC SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MOC certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Joint Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
Town of Needham, Commonwealth of Massachusetts, as of November 7, 1997
MEDITRUST OPERATING COMPANY
By: /s/ Abraham D. Gosman
-------------------------------
Name: Abraham D. Gosman
Title:Chairman of the Board, Chief
Executive Officer and Treasurer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Michael
J. Bohnen and Paul R. Eklund his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Joint Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Joint
Registration Statement has been signed below by the following persons in the
capacities indicated as of November 7, 1997.
Signature Title
- --------- -----
/s/ Abraham D. Gosman
- ------------------------------- Chairman of the Board, Chief
Abraham D. Gosman Executive Officer and Treasurer (Principal
Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
-9-
<PAGE>
/s/ Donald J. Amaral
- -------------------------------- Director
Donald J. Amaral
/s/ David F. Benson
- -------------------------------- Director
David F. Benson
/s/ Edward W. Brooke
- -------------------------------- Director
Edward W. Brooke
/s/ James P. Conn
- -------------------------------- Director
James P. Conn
/s/ John C. Cushman
- -------------------------------- Director
John C. Cushman
/s/ C. Gerald Goldsmith
- -------------------------------- Director
C. Gerald Goldsmith
/s/ Phillip L. Lowe
- -------------------------------- Director
Phillip L. Lowe
/s/ Thomas J. Magovern
- -------------------------------- Director
Thomas J. Magovern
- -------------------------------- Director
Gerald Tsai, Jr.
-10-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Document
- -------- -----------------------
4.1 Meditrust Corporation 1995 Share Award Plan, as amended
4.2 Meditrust Operating Company 1995 Share Award Plan, as amended
4.3 Pairing Agreement by and between Meditrust
Corporation (formerly known as Santa Anita Realty
Enterprises, Inc.) and Meditrust Operating Company
(formerly known as Santa Anita Operating Company),
dated as of December 20, 1979 (incorporated by
reference to Exhibit 5 to Registration Statement on
Form 8-A of Santa Anita Operating Company
filed February 5, 1980).
4.4 First Amendment to Pairing Agreement, by and between Meditrust
Corporation and Meditrust Operating Company, dated November 6,
1997.
4.5 Rights Agreement, dated June 15, 1989, among
Meditrust Corporation (formerly known as Santa Anita
Realty Enterprises, Inc.), Meditrust Operating
Company (formerly known as Santa Anita Operating
Company) and Harris Trust Company, as Rights Agent,
(incorporated by reference to Exhibit 5 to
Registration Statement on Form 8-A of Santa Anita
Operating Company filed February 5, 1980).
4.6 Appointment of Boston Equiserve as Rights Agent, dated October 24,
1997.
5.1 Opinion of Nutter, McClennen & Fish, LLP (opinion re: legality).
23.1 Consent of Ernst & Young LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Nutter, McClennen & Fish, LLP (included in Exhibit 5.1).
23.5 Consent of Coopers & Lybrand L.L.P.
-11-
<PAGE>
24.1 MC Power of Attorney (included in this Joint Registration Statement
under "MC Signatures").
24.2 MOC Power of Attorney (included in this Joint Registration Statement
under "MOC Signatures").
-12-
MEDITRUST CORPORATION
AMENDED AND RESTATED
1995 SHARE AWARD PLAN
TABLE OF CONTENTS
-----------------
Page
----
INTRODUCTION..................................................................1
I. THE PLAN..................................................................1
1.1 Purpose..............................................................1
1.2 Administration and Authorization; Power and Procedure................1
1.3 Participation........................................................3
1.4 Shares Available for Awards..........................................3
1.5 Grant of Awards......................................................5
1.6 Award Period.........................................................5
1.7 Limitations on Exercise and Vesting of Awards........................6
1.8 Acceptance of Notes to Finance Exercise..............................6
1.9 No Transferability...................................................7
1.10 Assumption of Meditrust Options......................................8
II. EMPLOYEE OPTIONS..........................................................8
2.1 Grants...............................................................8
2.2 Option Price.........................................................8
2.3 Limitations on Grant and Terms of Incentive Stock Options............9
2.4 Limits on 10% Holders...............................................10
2.5 Option Repricing; Cancellation and Regrant; Waiver of Restrictions..10
2.6 Dividend Equivalents................................................10
III.STOCK APPRECIATION RIGHTS................................................11
3.1 Grants..............................................................11
3.2 Exercise of Stock Appreciation Rights...............................11
3.3 Payment.............................................................11
IV. RESTRICTED STOCK AWARDS..................................................12
4.1 Grants..............................................................12
4.2 Restrictions........................................................13
4.3 Return to the Corporation...........................................13
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES...............................13
5.1 Grants of Performance Share Awards..................................13
5.2 Grants of Stock Bonuses.............................................14
5.3 Deferred Payments...................................................14
VI. OTHER PROVISIONS.........................................................14
6.1 Rights of Eligible Participants, Participants and Beneficiaries.....14
6.2 Adjustments; Acceleration...........................................15
6.3 Effect of Termination of Employment or Service......................17
6.4 Compliance with Laws................................................18
(i)
<PAGE>
6.5 Tax Withholding....................................................18
6.6 Plan Amendment, Termination and Suspension.........................19
6.7 Effect of Pairing Agreement on Awards..............................19
6.8 Privileges of Stock Ownership......................................20
6.9 Effective Date of the Plan.........................................20
6.10 Term of the Plan...................................................21
6.11 Governing Law; Construction; Severability..........................21
6.12 Captions...........................................................22
6.13 Effect of Change of Subsidiary Status..............................22
6.14 Non-Exclusivity of Plan............................................22
VII. DEFINITIONS............................................................22
7.1 Definitions........................................................22
(ii)
<PAGE>
MEDITRUST CORPORATION
AMENDED AND RESTATED
1995 SHARE AWARD PLAN
INTRODUCTION
On December 14, 1994, the Board of Directors of the Company adopted the
Plan, which was approved by shareholders of Santa Anita Realty Enterprises, Inc.
at its 1995 Annual Meeting.
On June 12, 1997, the Board of Directors of Santa Anita Realty Enterprises,
Inc. approved certain amendments to the Plan, which were approved by
shareholders of Santa Anita Realty Enterprises, Inc. at a Special Meeting held
on November 5, 1997, in connection with the merger of Meditrust, a Massachusetts
Business Trust ("Meditrust"), with Santa Anita Realty Enterprises, Inc. (the
"Merger").
On November 5, 1997, the Board of Directors of the Corporation approved
certain amendments to the Plan and authorized the amendment and restatement of
the Plan, effective November 5, 1997, as follows:
I. THE PLAN.
1.1 Purpose.
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Awards to attract, motivate,
retain and reward key employees, including officers, and directors of the
Company with awards and incentives for high levels of individual performance and
improved financial performance of the Company. "Corporation" means Meditrust
Corporation and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in Article
VII.
1.2 Administration and Authorization; Power and Procedure.
(a) Committee. This Plan shall be administered by, and all Awards to
Eligible Participants shall be authorized by, the Committee. Action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee. Subject to the
express provisions of this Plan, the Committee shall have the authority:
1
<PAGE>
(i) to determine from among those persons eligible the particular
Eligible Participants who will receive any Awards;
(ii) to grant Awards to Eligible Participants, determine the price at
which securities will be offered or awarded and the amount of securities to
be offered or awarded to any of such persons, and determine the other
specific terms and conditions of such Awards consistent with the express
limits of this Plan, and establish the installments (if any) in which such
Awards shall become exercisable or shall vest, or determine that no delayed
exercisability or vesting is required, and establish the events of
termination or reversion (if any) of such Awards;
(iii) to approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);
(iv) to construe and interpret this Plan and any agreements defining
the rights and obligations of the Company and Participants under this Plan,
further define the terms used in this Plan, and prescribe, amend and
rescind rules and regulations relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Participants, subject to any required consent under Section
6.6;
(vi) to accelerate or extend the exercisability or vesting extend the
term of any or all such outstanding Awards within the maximum ten-year term
of Awards under Section 1.6; and
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
(c) Binding Determinations. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or pursuant to
this Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Board or
Committee, or officer of the Corporation or any Subsidiary, shall be liable for
any such action or inaction of the entity or body, of another person or, except
in circumstances involving bad faith, of himself or herself. Subject only to
compliance with
2
<PAGE>
the express provisions hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this Plan.
(d) Reliance on Experts. In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case may
be, may obtain and may rely upon the advice of experts, including professional
advisors to the Corporation. No director, officer or agent of the Company shall
be liable for any such action or determination taken or made or omitted in good
faith.
(e) Delegation. The Committee may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Company.
1.3 Participation.
Awards may be granted by the Committee only to those persons that the
Committee determines to be Eligible Participants. An Eligible Participant who
has been granted an Award may, if otherwise eligible, be granted additional
Awards if the Committee shall so determine.
1.4 Shares Available for Awards.
Subject to the provisions of Section 6.2, the capital stock that may be
delivered under this Plan shall be shares of the Corporation's authorized but
unissued Common Stock, any shares of its Common Stock held as treasury shares
and shares of Operating Company Stock. The shares may be delivered for any
lawful consideration.
(a) Number of Shares. Subject to subsection (c) below, the maximum number
of Paired Shares that may be delivered pursuant to Awards granted to Eligible
Participants under this Plan shall not exceed the sum of 3,616,741 shares plus
an amount equal to 5% of the outstanding number of shares of Meditrust
Corporation Common Stock from time to time, subject to adjustments contemplated
by Section 6.2 (the "Share Limit"). The maximum number of Options and Stock
Appreciation Rights (whether payable in Paired Shares, cash or any combination
thereof) that may be granted to an Eligible Participant during any one-year
period shall not exceed 450,000, subject to adjustment as contemplated in
Section 6.2.
(b) Calculation of Available Shares. Common Stock subject to outstanding
Awards of derivative securities (as defined in Rule 16a-1(c) under the Exchange
Act) shall be reserved for issuance; a like number of shares of Operating
Company Stock shall be purchased from Operating Company or
3
<PAGE>
arrangements shall be made with Operating Company for simultaneous issuance by
Operating Company of the same number of shares of Operating Company Stock as the
number of shares of Common Stock to be issued in connection with an Award;
provided that nothing herein shall be construed to prevent the Corporation from
purchasing Paired Shares in the open market for use in connection with Awards.
If a Stock Appreciation Right or similar right is exercised or a Performance
Share Award based on the increased market value of a specified number of Paired
Shares is paid, the number of Paired Shares to which such exercise or payment
relates under the applicable Award shall be charged against the maximum amount
of Paired Shares that may be delivered pursuant to Awards under this Plan and,
if applicable, such Award. If the Corporation withholds Paired Shares pursuant
to Section 6.5, the number of shares that would have been deliverable with
respect to an Award but that are withheld pursuant to the provisions of Section
6.5 may in effect not be issued, but the aggregate number of shares issuable
with respect to the applicable Award and under the Plan shall be reduced by the
number of shares withheld and such shares shall not be available for additional
Awards under this Plan. To the extent a Performance Share Award constitutes an
equity security of such issuer (as this phrase is defined in Rule 16a-1 under
the Exchange Act) issued by the Corporation and is paid in Paired Shares, the
number of Paired Shares (if any) subject to such Performance Share Award shall
be charged (but in the case of tandem or substituted Awards, without
duplication) against the maximum number of Paired Shares that may be delivered
pursuant to Awards under this Plan.
(c) Cash Only Award Limit. Awards payable solely in cash under the Plan and
Awards payable either in cash or shares that are actually paid in cash shall
constitute and be referred to as "Cash Only Awards". The number of Cash Only
Awards shall be determined by reference to the number of Paired Shares by which
the Award is measured. The maximum number of Cash Only Awards that may be paid
shall not, together with the aggregate number of Paired Shares that may be
delivered under subsection (a), exceed the Share Limit. Awards payable either in
cash or shares shall not be counted against the Cash Only Award limit if charged
against the Share Limit. Notwithstanding the foregoing, if an Award paid or
payable solely in cash satisfies the requirements for the exclusion from the
definition of a derivative security in Rule 16a-1(c), the Award shall not be
counted against any of the limits of this Section.
(d) Reissue of Awards. Subject to any restrictions under applicable law,
any unexercised, unconverted, unvested or undistributed portion of any expired,
cancelled, terminated or forfeited Award, or any alternative form of
consideration under an Award that is not paid in connection with the settlement
of an
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Award or any portion of an Award, shall again be available for Award under
subsection (a) or (c) above, as applicable, whether or not the Participant has
received benefits of ownership (such as dividends or dividend equivalents or
voting rights) during the period in which the Participant's ownership was
restricted or otherwise not vested. Shares that are issued pursuant to Awards
and subsequently reacquired by the Corporation pursuant to the terms and
conditions of the Awards also shall be available for reissuance under the Plan.
(e) Interpretive Issues. Additional rules for determining the number of
shares or Cash Only Awards authorized under the Plan may be adopted by the
Committee, as it deems necessary or appropriate, consistent with applicable law.
(f) 9.8% Limitation. Notwithstanding any other provision of this Plan, at
no time, pursuant to the operation of this Plan, shall the Corporation own
(including deemed ownership as determined pursuant to the Code and the rules and
regulations promulgated thereunder) in excess of 9.8% of the outstanding shares
of Operating Company Stock. Each Award made pursuant to this Plan is made
subject to this limitation, and no requirement that the Corporation deliver
Operating Company Stock upon exercise of the Award shall require the Corporation
to acquire or own such number of shares of Operating Company Stock in excess of
9.8% of the outstanding shares of Operating Company Stock.
1.5 Grant of Awards.
Subject to the express provisions of this Plan, the Committee shall
determine the number of Paired Shares subject to each Award, and the price (if
any) to be paid for the Paired Shares or the Award and, in the case of
Performance Share Awards, in addition to matters addressed in Section 1.2(b),
the specific objectives, goals and performance criteria (such as an increase in
revenues, market value, earnings or book value over a base period, the years of
service before vesting, the relevant job classification or level of
responsibility or other factors) that further define the terms of the
Performance Share Award. Each Award shall be evidenced by an Award Agreement
signed by the Corporation and, if required by the Committee, by the Participant.
1.6 Award Period.
Each Award and all executory rights or obligations under the related Award
Agreement shall expire on such date (if any) as shall be determined by the
Committee, but, in the case of Options or other rights to acquire Paired Shares,
not later than ten (10) years after the Award Date.
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1.7 Limitations on Exercise and Vesting of Awards.
(a) Provisions for Exercise. Except as may otherwise be provided in an
Award Agreement, once exercisable an Award shall remain exercisable until the
expiration or earlier termination of the Award, unless the Committee otherwise
provides.
(b) Procedure. Any exercisable Award shall be deemed to be exercised when
the Secretary of the Corporation receives written notice of such exercise from
the Participant, together with any required payment made in accordance with
Section 2.2(b).
(c) Fractional Shares/Minimum Issue. Fractional share interests shall be
disregarded, but may be accumulated. The Committee, however, may determine that
cash, other securities or other property will be paid or transferred in lieu of
any fractional share interests. No fewer than 10 Paired Shares may be purchased
on exercise of any Award at one time unless the number purchased is the total
number at the time available for purchase under the Award.
1.8 Acceptance of Notes to Finance Exercise.
The Corporation may, with the Committee's approval, accept one or more
notes from any Participant in connection with the exercise or receipt of any
outstanding Award; provided that any such note shall be subject to the following
terms and conditions:
(a) The principal of the note shall not exceed the amount required to
be paid to the Corporation upon the exercise or receipt of one or more
Awards under the Plan and the note shall be delivered directly to the
Corporation in consideration of such exercise or receipt.
(b) The note shall be repaid over a period of time not to exceed five
years, with annual installments of at least 10% of principal the first four
years and a balloon payment of the remaining principal amount at the end of
the fifth year; provided that the Corporation may demand any payment, in
addition to such installments, as may be required for the note to remain in
compliance with any applicable federal or state regulation.
(c) The note shall provide for full recourse to the Participant and
shall bear interest at a rate determined by the Committee but not less than
the applicable imputed interest rate specified by the Code.
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(d) Except as otherwise provided by the Committee, if the employment
or service of the Participant terminates, the unpaid principal balance of
the note shall become due and payable on the 10th business day after such
termination; provided, however, that if a sale of any Paired Shares
acquired by the Participant in connection with an Award to which the note
relates would cause such Participant to incur liability under Section 16(b)
of the Exchange Act, the unpaid balance shall become due and payable on the
10th business day after the first day on which a sale of such shares could
have been made without incurring such liability assuming for these purposes
that there are no other transactions by the Participant subsequent to such
termination.
(e) If required by the Committee or by applicable law, the note shall
be secured by a pledge of any shares or rights financed thereby in
compliance with applicable law.
(f) The terms, repayment provisions, and collateral release provisions
of the note and the pledge securing the note shall conform with applicable
rules and regulations of the Federal Reserve Board as then in effect.
1.9 No Transferability.
(a) Awards may be exercised only by, and amounts payable or Paired Shares
issuable pursuant to an Award shall be paid only to (or registered only in the
name of), the Participant or, if the Participant has died, the Participant's
Beneficiary or, if the Participant has suffered a Total Disability, the
Participant's Personal Representative, if any, or if there is none, the
Participant, or (to the extent permitted by applicable law) to a third party
pursuant to such conditions and procedures as the Committee may establish. Other
than by will or the laws of descent and distribution or pursuant to a QDRO
(except to the extent not permitted in the case of an Incentive Stock Option),
no right or benefit under this Plan or any Award, including, without limitation,
any Option or shares of Restricted Stock that has not vested, shall be
transferrable by the Participant or shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge (other than to the Corporation) without the consent of the Committee, and
any such attempted action shall be void. The Corporation shall disregard any
attempt at transfer, assignment or other alienation prohibited by the preceding
sentences and shall pay or deliver such cash or Paired Shares in accordance with
the provisions of this Plan. The designation of a Beneficiary hereunder shall
not constitute a transfer for these purposes.
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(b) Nothing in this plan authorizes, or shall be construed to authorize, a
transfer or exchange by a Participant, Beneficiary, Personal Representative or
any third party of any shares of Common Stock or Operating Company Stock in
contravention of the provisions of the Pairing Agreement.
(c) The restrictions on exercise and transfer above shall not be deemed to
prohibit the authorization by the Committee of "cashless exercise" procedures
with unaffiliated third parties who provide financing for the purpose of (or who
otherwise facilitate) the exercise of Awards consistent with applicable legal
restrictions, or, to the extent permitted by the Committee, transfers for estate
and financial planning purposes, or transfers to such other persons or in such
other circumstances as the Committee may in the Award Agreement or other writing
expressly permit.
1.10 Assumption of Meditrust Options.
The Corporation, in the Merger, assumed the Meditrust Options. The terms
and conditions of the Meditrust Options and prospective grants of Meditrust
shares shall be governed by this Plan, provided that the exercise price and term
of the Meditrust Options shall be as set forth in the Meditrust Option
Agreement, as adjusted pursuant to the terms thereof.
II. EMPLOYEE OPTIONS.
2.1 Grants.
One or more Options may be granted under this Article to any Eligible
Participant, subject to the provisions of Section 1.4. Each Option granted may
be either an Option intended to be an Incentive Stock Option (as to the Common
Stock covered by the Option, but not the Operating Company Stock), or an Option
not so intended, and such intent shall be indicated in the applicable Award
Agreement.
2.2 Option Price.
(a) Pricing Limits. Subject to Section 2.4, (i) the purchase price per
share of the Common Stock covered by each Option and (ii) the purchase price per
share of the Operating Company Stock covered by each Option shall be determined
by the Committee at the time the Option is granted, but shall not be less than
the par value of the Common Stock or Operating Company Stock, as the case may
be, on the date of grant.
(b) Payment Provisions. The purchase price of any
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shares purchased on exercise of an Option granted under this Article shall be
paid in full at the time of each purchase in one or a combination of the
following methods: (i) in cash or by electronic funds transfer; (ii) by check
payable to the order of the Corporation; (iii) if authorized by the Committee or
specified in the applicable Award Agreement, in cash in an amount equal to the
par value of the shares being purchased, and, in the form of a promissory note
(consistent with the requirements of Section 1.8) of the Participant in an
amount equal to the difference between said cash amount and the purchase price
of such shares; (iv) by notice and third party payment in such manner as may be
authorized by the Committee; (v) by the delivery of Paired Shares already owned
by the Participant, provided, however, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Award by delivering
such Paired Shares; or (vi) if authorized by the Committee or specified in the
applicable Award Agreement, by reduction in the number of Paired Shares
otherwise deliverable upon exercise by that number of Paired Shares which have a
then Fair Market Value equal to such purchase price. Previously owned Paired
Shares used to satisfy the exercise price of an Option under clause (v) shall be
valued at their Fair Market Value on the date of exercise.
2.3 Limitations on Grant and Terms of Incentive Stock Options.
(a) $100,000 Limit. To the extent that the aggregate "fair market value" of
Common Stock subject to any Option with respect to which Incentive Stock Options
first become exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive Stock Options under
this Plan and stock subject to incentive stock options under all other plans of
the Company, such options shall be treated as Nonqualified Stock Options. For
this purpose, the "fair market value" of the Common Stock subject to Options
shall be determined as of the date the Options were awarded. In reducing the
number of Options treated as Incentive Stock Options to meet the $100,000 limit,
the most recently granted Options shall be reduced first. To the extent a
reduction of simultaneously granted Options is necessary to meet the $100,000
limit, the Committee may, in the manner and to the extent permitted by law,
designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an Incentive Stock Option.
(b) Option Period. Subject to Section 2.4, each Option and all rights
thereunder shall expire no later than ten years after the Award Date.
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(c) Other Code Limits. There shall be imposed in any Award Agreement
relating to Incentive Stock Options such terms and conditions as from time to
time are required in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.
(d) Operating Company Stock. To the extent an Option is for the purchase of
Operating Company Stock, such Option shall be treated as a Nonqualified Stock
Option.
(e) Plan Limit. The number of shares of Common Stock subject to Options
that may be treated as Incentive Stock Options under the Plan shall not exceed
4,000,000 shares.
2.4 Limits on 10% Holders.
No Incentive Stock Option may be granted to any person who, at the time the
Option is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless the
exercise price of such Option with respect to the Common Stock covered by the
Option is at least 110% of the Fair Market Value of the Common Stock subject to
the Option and such Option by its terms is not exercisable after the expiration
of five years from the date such Option is granted.
2.5 Option Repricing; Cancellation and Regrant; Waiver of Restrictions.
Subject to Section 1.4 and Section 6.6 and the specific limitations on
Awards contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible
Participant, any adjustment in the exercise or purchase price, the number of
shares subject to, the restrictions upon or the term of, an Award granted under
this Article by cancellation of an outstanding Award and a subsequent regranting
of an Award, by amendment, by substitution of an outstanding Award, by waiver or
by other legally valid means. Such amendment or other action may result among
other changes in an exercise or purchase price which is higher or lower than the
exercise or purchase price of the original or prior Award, provide for a greater
or lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
2.6 Dividend Equivalents.
The Committee may, at the time of granting an Option, grant Dividend
Equivalents attributable to Paired Shares subject to the Option. Dividend
Equivalents shall be paid in cash only
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to the extent the Option is unexercised as of the dividend record date, as
specified in the Award Agreement, as follows: the Dividend Equivalent per Paired
Share shall be multiplied by the number of Paired Shares subject to the Option
and an amount equal to the product so derived shall be paid in cash to the
Participant on the dividend payment date. The Committee may in the Award specify
that Dividend Equivalents shall be paid only for a specified time period or only
as to that portion of the Option that has vested.
III. STOCK APPRECIATION RIGHTS.
3.1 Grants.
In its discretion, the Committee may grant to any Eligible Participant
Stock Appreciation Rights either concurrently with the grant of another Award
or in respect of an outstanding Award, in whole or in part, or independently of
any other Award. Any Stock Appreciation Right granted in connection with an
Incentive Stock Option shall contain such terms as may be required to comply
with the provisions of Section 422 of the Code and the regulations promulgated
thereunder.
3.2 Exercise of Stock Appreciation Rights.
(a) Exercisability. Unless the Award Agreement or the Committee otherwise
provides, a Stock Appreciation Right related to another Award shall be
exercisable at such time or times, and to the extent, that the related Award
shall be exercisable.
(b) Effect on Available Shares. In the event that a Stock Appreciation
Right is exercised, the number of Paired Shares subject to the Award shall be
charged against the number of Paired Shares subject to the Stock Appreciation
Right and the related Option of the Participant.
(c) Stand-Alone SARs. A Stock Appreciation Right granted independently of
any other Award shall be exercisable pursuant to the terms of the Award
Agreement but, unless the Committee determines otherwise, in no event earlier
than six months after the Award Date, except in the case of death or Total
Disability.
3.3 Payment.
(a) Amount. Unless the Committee otherwise provides, upon exercise of a
Stock Appreciation Right and surrender of an exercisable portion of any related
Award, the Participant shall be entitled to receive payment of an amount
determined by multiplying
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(i) the difference obtained by subtracting the exercise price per
Paired Share under the related Award (if applicable) or the initial share
value specified in the Award from the Fair Market Value of a Paired Share
on the date of exercise of the Stock Appreciation Right, by
(ii)the number of Paired Shares with respect to which the Stock
Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole discretion, shall determine
the form in which payment shall be made of the amount determined under paragraph
(a) above, either solely in cash, solely in Paired Shares (valued at Fair Market
Value on the date of exercise of the Stock Appreciation Right), or partly in
such Paired Shares and partly in cash, provided that the Committee shall have
determined that such exercise and payment are consistent with applicable law. If
the Committee permits the Participant to elect to receive cash or Paired Shares
(or a combination thereof) on such exercise, any such election shall be subject
to such conditions as the Committee may impose and, in the case of any Section
16 Person, any election to receive cash shall be subject to any applicable
limitations under Rule 16b-3.
IV. RESTRICTED STOCK AWARDS.
4.1 Grants.
The Committee may, in its discretion, grant one or more Restricted Stock
Awards to any Eligible Participant. Each Restricted Stock Award Agreement shall
specify the number of Paired Shares to be issued, the date of such issuance, the
consideration for such Paired Shares (but not less than the minimum lawful
consideration) to be paid by the Participant and the restrictions imposed on
such Paired Shares and the conditions of release or lapse of such restrictions.
Such restrictions shall not lapse earlier than six months after the Award Date,
except to the extent the Committee may otherwise provide. Stock certificates
evidencing shares of Restricted Stock pending the lapse of the restrictions
("restricted shares") shall bear a legend making appropriate reference to the
restrictions imposed hereunder and shall be held by the Corporation or by a
third party designated by the Committee until the restrictions on such shares
shall have lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the Restricted Stock
Award, the Participant may be required to provide such further assurance and
documents as the Committee may require to enforce the restrictions.
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4.2 Restrictions.
(a) Pre-Vesting Restraints. Except as provided in Section 1.9 and 4.1,
restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until such shares have vested.
(b) Dividend and Voting Rights. Unless otherwise provided in the applicable
Award Agreement, a Participant receiving a Restricted Stock Award shall be
entitled to cash dividend and voting rights for all shares issued even though
they are not vested, provided that such rights shall terminate immediately as to
any restricted shares which cease to be eligible for vesting.
(c) Cash Payments. If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award, the
Award Agreement shall specify whether and to what extent such cash shall be
returned (with or without an earnings factor) as to any restricted shares which
cease to be eligible for vesting.
4.3 Return to the Corporation.
Unless the Committee otherwise expressly provides, shares of Restricted
Stock that are subject to restrictions at the time of termination of employment
or are subject to other conditions to vest that have not been satisfied by the
time specified in the applicable Award Agreement shall not vest and shall be
returned to the Corporation in such manner and on such terms as the Committee
shall therein provide.
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
5.1 Grants of Performance Share Awards.
The Committee may, in its discretion, grant one or more Performance Share
Awards to any Eligible Participant based upon such factors as the Committee
shall deem relevant in light of the specific type and terms of the award. An
Award Agreement shall specify the maximum number of Paired Shares (if any)
subject to the Performance Share Award, the consideration (but not less than the
minimum lawful consideration) to be paid for any such shares as may be issuable
to the Participant, the duration of the Award and the conditions upon which
delivery of any Paired Shares or cash to the Participant shall be based. The
amount of cash or Paired Shares or other property that may be deliverable
pursuant to such Award shall be based upon the degree of attainment over a
specified period (a "performance cycle") as may be established by
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the Committee of such measure(s) of the performance of the Company (or any part
thereof) or the Participant as may be established by the Committee. The
Committee may provide for full or partial credit, prior to completion of such
performance cycle or the attainment of the performance achievement specified in
the Award, in the event of the Participant's death, Retirement, or Total
Disability, a Change in Control Event or in such other circumstances as the
Committee, consistent with Section 6.11(c)(2), if applicable, may determine.
5.2 Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any Eligible Participant to reward
exceptional or special services, contributions or achievements in the manner and
on such terms and conditions (including any restrictions on such shares) as
determined from time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Stock Bonus may be granted
independently or in lieu of a cash bonus.
5.3 Deferred Payments.
The Committee may authorize for the benefit of any Eligible Participant the
deferral of any payment of cash or Paired Shares that may become due or of cash
otherwise payable under this Plan, and provide for accreted benefits thereon
based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such deferral shall be
subject to such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of Participants.
VI. OTHER PROVISIONS.
6.1 Rights of Eligible Participants, Participants and Beneficiaries.
(a) Employment Status. Status as an Eligible Participant shall not be
construed as a commitment that any Award will be made under this Plan to an
Eligible Participant or to Eligible Participants generally.
(b) No Employment Contract. Nothing contained in this Plan (or in any other
documents related to this Plan or to any Award) shall confer upon any Eligible
Participant or Participant any right to continue in the employ or other service
of the Company or constitute any contract or agreement of employment or other
service, nor shall interfere in any way with the right of the Company to change
such person's compensation or other
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benefits or to terminate the employment of such person, with or without cause,
but nothing contained in this Plan or any document related hereto shall
adversely affect any independent contractual right of such person without his or
her consent thereto.
(c) Plan Not Funded. Awards payable under this Plan shall be payable in
Paired Shares or from the general assets of the Corporation, and no special or
separate reserve, fund or deposit shall be made to assure payment of such
Awards. No Participant, Beneficiary or other person shall have any right, title
or interest in any fund or in any specific asset (including shares of Common
Stock or shares of Operating Company Stock, except as expressly otherwise
provided) of the Company by reason of any Award hereunder. Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person acquires a
right to receive payment pursuant to any Award hereunder, such right shall be no
greater than the right of any unsecured general creditor of the Company.
6.2 Adjustments; Acceleration.
(a) Adjustments. If the outstanding shares of Common Stock or the
outstanding shares of Operating Company Stock are changed into or exchanged for
cash, other property or a different number or kind of shares or securities of
the Corporation or of Operating Company, as the case may be, or if additional
shares or new or different securities are distributed with respect to the
outstanding shares of Common Stock or the outstanding shares of Operating
Company Stock, through a reorganization or merger in which the Corporation or
Operating Company, as the case may be, is the surviving entity, or through a
combination, consolidation, recapitalization, reclassification, stock split,
stock dividend, reverse stock split, stock consolidation, dividend or
distribution of cash or property to the shareholders of the Corporation or of
Operating Company, or if there shall occur any other extraordinary corporate
transaction or event in respect of the Common Stock or the Operating Company
Stock or a sale of substantially all the assets of the Corporation or of
Operating Company as an entirety which in the judgment of the Committee
materially affects the Common Stock or the Operating Company Stock, then the
Committee shall, in such manner and to such extent (if any) as it deems
appropriate and equitable (1) proportionately adjust any or all of (A) the
number and kind of shares of Common Stock, Operating Company Stock or other
consideration that is subject to or may be delivered under this Plan and
pursuant to outstanding Awards, (B)
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the consideration payable with respect to Awards granted prior to any such
change and the price, if any, paid in connection with Restricted Stock Awards or
(C) the performance standards appropriate to any outstanding awards; or (2) in
the case of an extraordinary dividend or other distribution, merger,
reorganization, consolidation, combination, sale of assets, split up, exchange,
or spin off, make provision for a cash payment or for the substitution or
exchange of any or all outstanding Awards or the cash, securities or property
deliverable to the holder of any or all outstanding Awards based upon the
distribution or consideration payable to holders of Common Stock or to holders
of Operating Company Stock upon or in respect of such event; provided, however,
in each case, that with respect to Awards of Incentive Stock Options, no such
adjustment shall be made which would cause the Plan to violate Section 422 or
424(a) of the Code or any successor provisions thereto. Corresponding
adjustments shall be made with respect to any Stock Appreciation Rights based
upon the adjustments made to the Options to which they are related. In any of
such events, the Committee may take such action sufficiently prior to such event
if necessary to permit the Participant to realize the benefits intended to be
conveyed with respect to the underlying shares in the same manner as is
available to shareholders generally.
(b) Acceleration of Awards Upon Change in Control. As to any or all
Participants, upon the occurrence of a Change in Control Event (i) each Option
and Stock Appreciation Right shall become immediately exercisable, (ii)
Restricted Stock shall immediately vest free of restrictions, (iii) each
Performance Share Award shall become payable to the Participant; and (iv) each
prospective grant of Meditrust shares shall be immediately issued.
Notwithstanding the foregoing, except in the case of an Award of an Option,
prior to a Change in Control Event, the Committee may determine that, upon its
occurrence, there shall be no acceleration of benefits under Awards or determine
that only certain or limited benefits under Awards shall be accelerated and the
extent to which they shall be accelerated, and/or establish a different time in
respect of such event for such acceleration. In addition, the Committee may
override the limitations on acceleration in this Section 6.2(b) by express
provision in the Award Agreement and may accord any Participant a right to
refuse any acceleration, whether pursuant to the Award Agreement or otherwise,
in such circumstances as the Committee may approve. Any acceleration of Awards
shall comply with applicable regulatory requirements, including without
limitation Section 422 of the Code.
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Notwithstanding any other provision of this Plan, this Section 6.2(b) shall
be effective through November 5, 2002 and may not be amended or terminated
during such period except as required by law or to make changes that do not
diminish the benefits or rights provided by this Section 6.2(b). The Board may,
in its sole discretion and for any reason, provide written notice of termination
or amendment (effective as of the then applicable expiration date, but not with
respect to a Change in Control Event occurring on or before such expiration
date) no later than six months before the expiration date of this Section
6.2(b). If such amendment or termination is not made, this Section 6.2(b) shall
be automatically extended for an additional period of 60 months past the
expiration date. This Section 6.2(b) shall continue to be automatically extended
for an additional 60 months at the end of such 60-month period and each
succeeding 60-month period unless notice is given in the manner described in
this Section 6.2(b).
(c) Possible Early Termination of Accelerated Awards. If any Option or
other right to acquire Paired Shares under this Plan has not been exercised
prior to (i) a dissolution of the Corporation, (ii) a reorganization event
described in Section 6.2(a) that the Corporation does not survive, or (iii) the
consummation of a reorganization event described in Section 6.2(a) that results
in a Change in Control Event approved by the Board and no provision has been
made for the survival, substitution, exchange or other settlement of such
Option or right, such Option or right shall thereupon terminate.
(d) Golden Parachute Limitations. In no event shall an Award be accelerated
under this Plan to an extent or in a manner which would not be fully deductible
by the Company for federal income tax purposes because of Section 280G of the
Code, nor shall any payment hereunder be accelerated if any portion of such
accelerated payment would not be deductible by the Company because of Section
280G of the Code. If a holder would be entitled to benefits or payments
hereunder and under any other plan or program which would constitute "parachute
payments" as defined in Section 280G of the Code, then the holder may by written
notice to the Company designate the order in which such parachute payments shall
be reduced or modified so that the Company is not denied federal income tax
deductions for any "parachute payments" because of Section 280G of the Code.
6.3 Effect of Termination of Employment or Service.
The Committee shall establish in respect of each Award granted to an
Eligible Participant the effect of a termination of employment or service on the
rights and benefits thereunder and in so doing may make distinctions based upon
the cause of
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termination, e.g., Retirement, early retirement, termination for cause,
disability or death. Notwithstanding any terms to the contrary in an Award
Agreement or this Plan, the Committee may decide in its complete discretion at
the time of termination (or within a reasonable time thereafter) to extend the
exercise period of an Award (although not beyond the period described in Section
2.3(b)) and the number of shares covered by the Award with respect to which the
Award is exercisable or vested.
6.4 Compliance with Laws.
This Plan, the granting and vesting of Awards under this Plan and the
offer, issuance and delivery of Paired Shares and/or the payment of money under
this Plan or under Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations (including, but not
limited to, state and federal securities laws and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to assure
compliance with all applicable legal requirements.
6.5 Tax Withholding.
(a) Cash or Shares. Upon any exercise, vesting, or payment of any Award,
the Company shall have the right at its option to (i) require the Participant
(or Personal Representative or Beneficiary, as the case may be) to pay or
provide for payment of the amount of any taxes which the Company may be required
to withhold with respect to such transaction or (ii) deduct from any amount
payable in cash the amount of any taxes which the Company may be required to
withhold with respect to such cash amount. In any case where a tax is required
to be withheld in connection with the delivery of Paired Shares under this Plan,
the Committee may grant (either at the time of the Award or thereafter) to the
Participant the right to elect, or the Committee may require (either at the time
of the Award or thereafter), pursuant to such rules and subject to such
conditions as the Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their then Fair Market Value, to satisfy such
withholding obligation.
(b) Tax Loans. The Committee may, in its discretion, authorize
a loan to an Eligible Participant in the amount of any taxes which the Company
may be required to withhold with respect
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to Paired Shares received (or disposed of, as the case may be) pursuant to a
transaction described in subsection (a) above. Such a loan shall be for a term,
at a rate of interest and pursuant to such other terms and conditions as the
Committee, under applicable law may establish and such loan need not comply with
the provisions of Section 1.8.
6.6 Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in part, or take
any action hereunder. No Awards may be granted during any suspension of this
Plan or after termination of this Plan, but the Committee shall retain
jurisdiction as to Awards then outstanding in accordance with the terms of this
Plan.
(b) Shareholder Approval. To the extent required under Section 422 of the
Code or any other applicable law, or deemed necessary or advisable by the Board,
any amendment to this Plan shall be subject to shareholder approval.
(c) Amendments to Awards. Without limiting any other express authority of
the Committee under, but subject to the express limits of, this Plan, the
Committee by agreement or resolution may waive conditions of or limitations on
Awards that the Committee in the prior exercise of its discretion has imposed,
without the consent of the Participant, and may make other changes to the terms
and conditions of Awards that do not affect in any manner materially adverse to
the Participant, his or her rights and benefits under an Award.
(d) Limitations on Amendments to Plan and Awards. No amendment, suspension
or termination of the Plan or change of or affecting any outstanding Award
shall, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Corporation under any Award granted under this Plan prior
to the effective date of such change. Changes contemplated by Section 6.2 shall
not be deemed to constitute changes or amendments for purposes of this Section
6.6.
6.7 Effect of Pairing Agreement on Awards.
(a) Pairing Agreement. This Plan shall be subject to the terms and
conditions of the Pairing Agreement.
(b) Paired Shares. All Awards shall be subject to the following:
(i) the grant of any Award for Common Stock
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pursuant to this Plan shall also be for an equal number of shares of
Operating Company Stock; upon the exercise of any Options to purchase
Common Stock, or the payment of a Restricted Stock Award, a Stock
Appreciation Right, a Performance Share Award payable in Common Stock or a
Stock Bonus, the Participant shall obtain a number of shares of Operating
Company Stock equal to the number of shares of Common Stock to be issued
upon exercise or payment;
(ii) the grant of any Award for Operating Company Stock pursuant to
this Plan shall also be for an equal number of shares of Common Stock; upon
the exercise of any Options to purchase Operating Company Stock, or the
payment of a Restricted Stock Award, a Stock Appreciation Right, a
Performance Share Award payable in Operating Company Stock or a Stock
Bonus, the Participant shall obtain a number of shares of Common Stock
equal to the number of shares of Operating Company Stock to be issued upon
exercise or payment.
(c) Stock Certificates. Upon exercise of an Option or payment of an Award,
the person receiving Paired Shares shall be entitled to one stock certificate
evidencing the Paired Shares acquired; provided that any person who tenders
Paired Shares to the Corporation in payment of a portion or all of the purchase
price of the stock purchased upon exercise of an Option, shall be entitled to
receive two certificates, one representing a number of Paired Shares equal to
the number of Paired Shares exchanged for the stock acquired upon exercise, and
another representing the additional Paired Shares, if any, acquired upon
exercise of the Option.
6.8 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the Committee or this Plan, a
Participant shall not be entitled to any privilege of stock ownership as to any
Paired Shares not actually delivered to and held of record by him or her. No
adjustment will be made for dividends or other rights as a shareholder for which
a record date is prior to such date of delivery.
6.9 Effective Date of the Plan.
This Plan shall be effective as of December 15, 1994, the date of Board
approval, subject to shareholder approval within 12 months thereafter.
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6.10 Term of the Plan.
No Award shall be granted more than ten years after the effective date of
this Plan (the "termination date"). Unless otherwise expressly provided in this
Plan or in an applicable Award Agreement, any Award theretofore granted may
extend beyond such date, and all authority of the Committee with respect to
Awards hereunder shall continue during any suspension of this Plan and in
respect of outstanding Awards on such termination date.
6.11 Governing Law; Construction; Severability.
(a) Choice of Law. This Plan, the Awards, all documents evidencing Awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the Commonwealth of Massachusetts applicable to
contracts made and performed within such State, except as such laws may be
supplanted by the laws of the United States of America, which laws shall then
govern its effect and its construction to the extent they supplant Massachusetts
law.
(b) Severability. If any provision shall be held by a court of competent
jurisdiction to be invalid and unenforceable, the remaining provisions of this
Plan shall continue in effect.
(c) Plan Construction. (1) It is the intent of the Corporation that this
Plan and Awards hereunder satisfy and be interpreted in a manner that in the
case of Participants who are or may be subject to Section 16 of the Exchange Act
satisfies the applicable requirements of Rule 16b-3 so that such persons will be
entitled to the benefits of Rule 16b-3 or other exemptive rules under Section 16
of the Exchange Act and will not be subjected to avoidable liability thereunder.
If any provision of this Plan or of any Award or any prior action by the
Committee would otherwise frustrate or conflict with the intent expressed above,
that provision to the extent possible shall be interpreted and deemed amended so
as to avoid such conflict, but to the extent of any remaining irreconcilable
conflict with such intent as to such persons in the circumstances, such
provision shall be deemed void.
(2) It is the further intent of the Company that Options or Stock
Appreciation Rights with an exercise or base price not less than Fair Market
Value on the date of grant that are granted to or held by a person subject to
Section 162(m) of the Code shall qualify as performance-based compensation under
Section 162(m) of the Code, and this Plan shall be interpreted consistent with
such intent.
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6.12 Captions.
Captions and headings are given to the sections and subsections of this
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
6.13 Effect of Change of Subsidiary Status.
For purposes of this Plan and any Award hereunder, if an entity ceases to
be a Subsidiary, a termination of employment shall be deemed to have occurred
with respect to each employee of such Subsidiary who does not continue as an
employee of another entity within the Company.
6.14 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit the authority of the
Board or the Committee to grant awards or authorize any other compensation, with
or without reference to the Common Stock and/or Operating Company Stock, under
any other plan or authority.
VII. DEFINITIONS.
7.1 Definitions.
(a) "Award" shall mean an award of any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share Award, Stock Bonus, Dividend
Equivalent or other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.
(b) "Award Agreement" shall mean any writing setting forth the terms of an
Award that has been authorized by the Committee.
(c) "Award Date" shall mean the date upon which the Committee took the
action granting an Award or such later date as the Committee designates as the
Award Date at the time of the Award.
(d) "Award Period" shall mean the period beginning on an Award Date and
ending on the expiration date of such Award.
(e) "Beneficiary" shall mean the person, persons, trust or trusts entitled
by will or the laws of descent and
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distribution to receive the benefits specified in the Award Agreement and under
this Plan in the event of a Participant's death, and shall mean the
Participant's executor or administrator if no other Beneficiary is identified
and able to act under the circumstances.
(f) "Board" shall mean the Board of Directors of the Corporation.
(g) "Change in Control Event" shall mean:
(1) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (A) the then outstanding shares
of Common Stock (the "Outstanding Common Stock") or (B) the combined voting
power of the then outstanding voting securities of the Corporation entitled
to vote generally in the election of directors (the "Outstanding Voting
Securities"); provided, however, that the following acquisitions shall not
constitute a Change in Control Event: (A) any acquisition directly from the
Corporation (except that an acquisition by virtue of the exercise of a
conversion privilege shall not be considered within this clause (A) unless
the converted security was itself acquired directly from the Corporation),
(B) any acquisition by the Corporation, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Corporation
or any corporation controlled by the Corporation or (D) any acquisition by
any corporation pursuant to a reorganization, merger or consolidated, if,
following such reorganization, merger or consolidation, the conditions
described in clauses (A) and (B) of paragraph (3) below are satisfied;
(2) Individuals who, as of November 5, 1997, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual who becomes a director
subsequent to the date hereof whose election, or nomination for election by
the Corporation's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board;
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
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promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; or
(3) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation (a "transaction"), unless,
following such transaction in each case, (A) more than 80% of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such transaction and the combined voting power
of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Common Stock and Outstanding Voting Securities immediately prior to such
transaction and (B) no Person (excluding the Corporation, any employee
benefit plan (or related trust) of the Corporation or such corporation
resulting from such transaction and any Person beneficially owning,
immediately prior to such transaction, directly or indirectly, 20% or more
of the Outstanding Common Stock or Outstanding Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such transaction or the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors; or
(4) Approval by the shareholders of the Corporation of (A) a complete
liquidation or dissolution of the Corporation or (B) the sale or other
disposition of all or substantially all of the assets of the Corporation,
unless such assets are sold to a corporation and following such sale or
other disposition, the conditions described in clauses (A) and (B) of
paragraph (3) above are satisfied.
(h) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(i) "Commission" shall mean the Securities and Exchange Commission.
(j) "Committee" shall mean the Personnel and Compensation Committee of the
Board, which Committee shall be comprised only of two or more directors or such
greater number of directors as may be required under applicable law, each of
whom, during such time as one or more Participants may be subject to Section 16
of the Exchange Act, shall be a Non-Employee Director within the meaning of Rule
16b-3 and, in respect of any decision
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involving a Participant who may be subject to Section 162(m) of the Code, shall
be a Disinterested and Outside director.
(k) "Common Stock" shall mean the common stock of the Corporation, $.10 par
value per share, and such other securities or property as may become the subject
of Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
(l) "Company" shall mean, collectively, the Corporation and its
Subsidiaries.
(m) "Corporation" shall mean Meditrust Corporation, a Delaware corporation,
and its successors.
(n) "Disinterested and Outside" shall mean "disinterested" within the
meaning of any applicable regulatory requirements, and "outside" within the
meaning of Section 162(m) of the Code, and any regulations promulgated
thereunder.
(o) "Dividend Equivalent" shall mean an amount equal to the amount of cash
dividends or other cash distributions paid (or such portion of such dividend or
other distribution as may be designated by the Committee) with respect to each
Paired Share after the date of an Award of a Dividend Equivalent.
(p) "Eligible Participant" shall mean a director, an officer (whether or
not a director) or any other employee of the Company, or any Other Eligible
Person, as determined by the Committee in its discretion.
(q) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
(r) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(s) "Fair Market Value" shall mean, with respect to Common Stock or
Operating Company Stock, the fair market value of an unpaired share of Common
Stock or Operating Company Stock, as the case may be, as determined in good
faith by the Committee. The Fair Market Value of a Paired Share shall mean the
closing price of a Paired Share on the Composite Tape, as published in the
Eastern Edition of The Wall Street Journal, of the principal national securities
exchange on which the Paired Shares are so listed or admitted to trade, on such
date, or, if there is no trading of the Paired Shares on such date, then the
closing price of the Paired Shares as quoted on such Composite Tape on the next
preceding date on which there was trading in such shares; provided, however, if
the Paired Shares are not listed or admitted to trade on a national securities
exchange, the
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Committee may designate such other exchange, market or source of data as it
deems appropriate for determining such value for Plan purposes.
(t) "Incentive Stock Option" shall mean an Option which is designated as an
incentive stock option within the meaning of Section 422 of the Code and which
contains such provisions as are necessary to comply with that section.
(u) "Meditrust Options" means the options to purchase shares of beneficial
interest in Meditrust, granted by Meditrust, pursuant to its employee benefit
plans prior to November 5, 1997.
(v) "Nonqualified Stock Option" shall mean an Option that is designated as
a Nonqualified Stock Option and shall include any Option intended as an
Incentive Stock Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an incentive
stock option shall be deemed to be designated a nonqualified stock option under
this Plan and not an incentive stock option under the Code.
(w) "Non-Employee Director" shall have the meaning set forth in Rule 16b-3.
(x) "Operating Company" means Meditrust Operating Company, a Delaware
corporation.
(y) "Operating Company Stock" means the common stock of Operating Company,
$.10 par value per share, and such other securities or property as may become
subject of Awards or become subject to Awards, pursuant to an adjustment made
under Section 6.2 of this Plan.
(z) "Option" shall mean an option to purchase Paired Shares under this
Plan. The Committee shall designate any Option granted to an Eligible
Participant as a Nonqualified Stock Option or an Incentive Stock Option,
provided that all Options with respect to Operating Company Stock shall be
Nonqualified Stock Options.
(aa) "Other Eligible Person" shall mean any individual consultant, advisor
or (to the extent provided in the next sentence) agent who renders or has
rendered bona fide services (other than services in connection with the offering
or sale of securities of the Company in a capital raising transaction) to the
Company, and who is selected to participate in this Plan by the Committee;
provided that if the Corporation's officers and directors are or become subject
to Section 16 of the Exchange Act, a Non-Employee Director shall not thereafter
be selected as an Other Eligible Person. A non-employee agent providing bona
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fide services to the Company (other than as an eligible advisor or consultant)
may also be selected as an Other Eligible Person if such agent's participation
in this Plan would not adversely affect (x) the Corporation's eligibility to use
Form S-8 to register under the Securities Act of 1933, as amended, the offering
of shares issuable under this Plan by the Company or (y) the Corporation's
compliance with any other applicable laws.
(bb) "Paired Share" means a share of Common Stock and a share of Operating
Company Stock.
(cc) "Pairing Agreement" means the Pairing Agreement between the
Corporation and Operating Company, dated as of December 31, 1979, as it may be
amended from time to time.
(dd) "Participant" shall mean an Eligible Participant who has been granted
an Award under this Plan.
(ee) "Performance Share Award" shall mean an Award made pursuant to the
provisions, and subject to the terms and conditions, of Article V of the Plan.
(ff) "Personal Representative" shall mean the person or persons who, upon
the Total Disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and who shall have
become the legal representative of the Participant.
(gg)"Plan" shall mean this Amended and Restated 1995 Share Award Plan.
(hh)"QDRO" shall mean a qualified domestic relations order as defined in
Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA (to the same
extent as if this Plan were subject thereto), or the applicable rules
thereunder.
(ii) "Restricted Stock" shall mean Paired Shares awarded to a Participant
subject to payment of such consideration, if any, and such conditions on
vesting and such transfer and other restrictions as are established in or
pursuant to this Plan, for so long as such shares remain unvested under the
terms of the applicable Award Agreement.
(jj)"Retirement" shall mean retirement from active service as an employee,
officer or director of the Company on or after attaining age 65.
(kk)"Rule 16b-3" shall mean Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act.
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(ll)"Section 16 Person" shall mean a person subject to Section 16(a) of the
Exchange Act.
(mm)"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
(nn) "Share Limit" shall have the meaning specified in Section 1.4(a).
(oo) "Stock Appreciation Right" shall mean a right to receive a number of
Paired Shares or an amount of cash, or a combination of shares and cash, the
aggregate amount or value of which is determined by reference to a change in the
Fair Market Value of the Paired Shares that is authorized under this Plan.
(pp) "Subsidiary" shall mean any corporation or other entity a majority of
whose outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
(qq)"Total Disability" shall mean a "permanent and total disability" within
the meaning of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions or conditions as the Committee by rule may include.
28
MEDITRUST OPERATING COMPANY
AMENDED AND RESTATED
1995 SHARE AWARD PLAN
TABLE OF CONTENTS
Page
INTRODUCTION.................................................................1
I. THE PLAN................................................................1
1.1 Purpose............................................................1
1.2 Administration and Authorization; Power and
Procedure..........................................................1
1.3 Participation......................................................3
1.4 Shares Available for Awards........................................3
1.5 Grant of Awards....................................................5
1.6 Award Period.......................................................5
1.7 Limitations on Exercise and Vesting of Awards......................5
1.8 Acceptance of Notes to Finance Exercise............................6
1.9 No Transferability.................................................7
II. EMPLOYEE OPTIONS........................................................8
2.1 Grants.............................................................8
2.2 Option Price.......................................................8
2.3 Limitations on Grant and Terms of Incentive Stock
Options............................................................9
2.4 Limits on 10% Holders..............................................9
2.5 Option Repricing; Cancellation and Regrant; Waiver of
Restrictions......................................................10
2.6 Dividend Equivalents..............................................10
III. STOCK APPRECIATION RIGHTS..............................................10
3.1 Grants............................................................10
3.2 Exercise of Stock Appreciation Rights.............................11
3.3 Payment...........................................................11
IV. RESTRICTED STOCK AWARDS................................................12
4.1 Grants............................................................12
4.2 Restrictions......................................................12
4.3 Return to the Corporation.........................................13
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.............................13
5.1 Grants of Performance Share Awards................................13
5.2 Grants of Stock Bonuses...........................................13
5.3 Deferred Payments.................................................14
VI. OTHER PROVISIONS.......................................................14
6.1 Rights of Eligible Participants, Participants and
Beneficiaries.....................................................14
6.2 Adjustments; Acceleration.........................................15
6.3 Effect of Termination of Employment or Service....................17
6.4 Compliance with Laws..............................................17
(i)
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6.5 Tax Withholding...................................................18
6.6 Plan Amendment, Termination and Suspension........................18
6.7 Effect of Pairing Agreement on Awards.............................19
6.8 Privileges of Stock Ownership.....................................20
6.9 Effective Date of the Plan........................................20
6.10 Term of the Plan..................................................20
6.11 Governing Law; Construction; Severability.........................20
6.12 Captions..........................................................21
6.13 Effect of Change of Subsidiary Status.............................21
6.14 Non-Exclusivity of Plan...........................................21
VII. DEFINITIONS............................................................22
7.1 Definitions.......................................................22
(ii)
<PAGE>
MEDITRUST OPERATING COMPANY
AMENDED AND RESTATED
1995 SHARE AWARD PLAN
INTRODUCTION
On December 14, 1994, the Board of Directors of the Company adopted the
Plan, which was approved by shareholders of the Santa Anita Operating Company at
its 1995 Annual Meeting.
On June 12, 1997, the Board of Directors of Santa Anita Operating Company
approved certain amendments to the Plan, which were approved by shareholders of
Santa Anita Operating Company at a Special Meeting held on November 5, 1997, in
connection with the merger of Meditrust Acquisition Company ("MAC"), a
Massachusetts Business Trust, with the Santa Anita Operating Company (the
"Merger").
On November 5, 1997, the Board of Directors of the Corporation approved
certain amendments to the Plan and authorized the amendment and restatement of
the Plan, effective November 5, 1997, as follows:
I. THE PLAN.
1.1 Purpose.
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Awards to attract, motivate,
retain and reward key employees, including officers, and directors of the
Company with awards and incentives for high levels of individual performance and
improved financial performance of the Company. "Corporation" means Meditrust
Operating Company and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in Article
VII.
1.2 Administration and Authorization; Power and Procedure.
(a) Committee. This Plan shall be administered by, and all Awards to
Eligible Participants shall be authorized by, the Committee. Action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee. Subject to the
express provisions of this Plan, the Committee shall have the authority:
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(i) to determine from among those persons eligible the particular
Eligible Participants who will receive any Awards;
(ii) to grant Awards to Eligible Participants, determine the price at
which securities will be offered or awarded and the amount of securities to
be offered or awarded to any of such persons, and determine the other
specific terms and conditions of such Awards consistent with the express
limits of this Plan, and establish the installments (if any) in which such
Awards shall become exercisable or shall vest, or determine that no delayed
exercisability or vesting is required, and establish the events of
termination or reversion (if any) of such Awards;
(iii) to approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);
(iv) to construe and interpret this Plan and any agreements defining
the rights and obligations of the Company and Participants under this Plan,
further define the terms used in this Plan, and prescribe, amend and
rescind rules and regulations relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Participants, subject to any required consent under Section
6.6;
(vi) to accelerate or extend the exercisability or vesting extend the
term of any or all such outstanding Awards within the maximum ten-year term
of Awards under Section 1.6; and
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
(c) Binding Determinations. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or pursuant to
this Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Board or
Committee, or officer of the Corporation or any Subsidiary, shall be liable for
any such action or inaction of the entity or body, of another person or, except
in circumstances involving bad faith, of himself or herself. Subject only to
compliance with
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the express provisions hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this Plan.
(d) Reliance on Experts. In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case may
be, may obtain and may rely upon the advice of experts, including professional
advisors to the Corporation. No director, officer or agent of the Company shall
be liable for any such action or determination taken or made or omitted in good
faith.
(e) Delegation. The Committee may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Company.
1.3 Participation.
Awards may be granted by the Committee only to those persons that the
Committee determines to be Eligible Participants. An Eligible Participant who
has been granted an Award may, if otherwise eligible, be granted additional
Awards if the Committee shall so determine.
1.4 Shares Available for Awards.
Subject to the provisions of Section 6.2, the capital stock that may be
delivered under this Plan shall be shares of the Corporation's authorized but
unissued Common Stock, any shares of its Common Stock held as treasury shares
and shares of Meditrust Corporation Stock. The shares may be delivered for any
lawful consideration.
(a) Number of Shares. Subject to subsection (c) below, the maximum number
of Paired Shares that may be delivered pursuant to Awards granted to Eligible
Participants under this Plan shall not exceed an amount equal to 5% of the
outstanding number of shares of Operating Common Stock from time to time,
subject to adjustments contemplated by Section 6.2 (the "Share Limit"). The
maximum number of Options and Stock Appreciation Rights (whether payable in
Paired Shares, cash or any combination thereof) that may be granted to an
Eligible Participant during any one-year period shall not exceed 450,000,
subject to adjustment as contemplated in Section 6.2.
(b) Reservation of Shares. Common Stock subject to outstanding Awards of
derivative securities (as defined in Rule 16a-1(c) under the Exchange Act) shall
be reserved for issuance; a like number of shares of Meditrust Corporation Stock
shall be purchased from Meditrust Corporation or arrangements shall be made with
Meditrust Corporation for simultaneous issuance by
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Meditrust Corporation of the same number of shares of Meditrust Corporation
Stock as the number of shares of Common Stock to be issued in connection with an
Award; provided that nothing herein shall be construed to prevent the
Corporation from purchasing Paired Shares in the open market for use in
connection with Awards. If a Stock Appreciation Right or similar right is
exercised or a Performance Share Award based on the increased market value of a
specified number of Paired Shares is paid, the number of Paired Shares to which
such exercise or payment relates under the applicable Award shall be charged
against the maximum amount of Paired Shares that may be delivered pursuant to
Awards under this Plan and, if applicable, such Award. If the Corporation
withholds Paired Shares pursuant to Section 6.5, the number of shares that would
have been deliverable with respect to an Award but that are withheld pursuant to
the provisions of Section 6.5 may in effect not be issued, but the aggregate
number of shares issuable with respect to the applicable Award and under the
Plan shall be reduced by the number of shares withheld and such shares shall not
be available for additional Awards under this Plan. To the extent a Performance
Share Award constitutes an equity security of such issuer (as this phrase is
defined in Rule 16a-1 under the Exchange Act) issued by the Corporation and is
paid in Paired Shares, the number of Paired Shares (if any) subject to such
Performance Share Award shall be charged (but in the case of tandem or
substituted Awards, without duplication) against the maximum number of Paired
Shares that may be delivered pursuant to Awards under this Plan.
(c) Cash Only Award Limit. Awards payable solely in cash under the Plan and
Awards payable either in cash or shares that are actually paid in cash shall
constitute and be referred to as "Cash Only Awards". The number of Cash Only
Awards shall be determined by reference to the number of Paired Shares by which
the Award is measured. The maximum number of Cash Only Awards that may be paid
shall not, together with the aggregate number of Paired Shares that may be
delivered under subsection (a), exceed the Share Limit. Awards payable either in
cash or shares shall not be counted against the Cash Only Award limit if charged
against the Share Limit. Notwithstanding the foregoing, if an Award paid or
payable solely in cash satisfies the requirements for the exclusion from the
definition of a derivative security in Rule 16a-1(c), the Award shall not be
counted against any of the limits of this Section.
(d) Reissue of Awards. Subject to any restrictions under applicable law,
any unexercised, unconverted, unvested or undistributed portion of any expired,
cancelled, terminated or forfeited Award, or any alternative form of
consideration under an Award that is not paid in connection with the settlement
of an Award or any portion of an Award, shall again be available for Award under
subsection (a) or (c) above, as applicable, whether
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or not the Participant has received benefits of ownership (such as dividends or
dividend equivalents or voting rights) during the period in which the
Participant's ownership was restricted or otherwise not vested. Shares that are
issued pursuant to Awards and subsequently reacquired by the Corporation
pursuant to the terms and conditions of the Awards also shall be available for
reissuance under the Plan.
(e) Interpretive Issues. Additional rules for determining the number of
shares or Cash Only Awards authorized under the Plan may be adopted by the
Committee, as it deems necessary or appropriate, consistent with applicable law.
1.5 Grant of Awards.
Subject to the express provisions of this Plan, the Committee shall
determine the number of Paired Shares subject to each Award, and the price (if
any) to be paid for the Paired Shares or the Award and, in the case of
Performance Share Awards, in addition to matters addressed in Section 1.2(b),
the specific objectives, goals and performance criteria (such as an increase in
revenues, market value, earnings or book value over a base period, the years of
service before vesting, the relevant job classification or level of
responsibility or other factors) that further define the terms of the
Performance Share Award. Each Award shall be evidenced by an Award Agreement
signed by the Corporation and, if required by the Committee, by the Participant.
1.6 Award Period.
Each Award and all executory rights or obligations under the related Award
Agreement shall expire on such date (if any) as shall be determined by the
Committee, but, in the case of Options or other rights to acquire Paired Shares,
not later than ten (10) years after the Award Date.
1.7 Limitations on Exercise and Vesting of Awards.
(a) Provisions for Exercise. Except as may otherwise be provided in an
Award Agreement, once exercisable an Award shall remain exercisable until the
expiration or earlier termination of the Award, unless the Committee otherwise
provides.
(b) Procedure. Any exercisable Award shall be deemed to be exercised when
the Secretary of the Corporation receives written notice of such exercise from
the Participant, together with any required payment made in accordance with
Section 2.2(b).
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(c) Fractional Shares/Minimum Issue. Fractional share interests shall be
disregarded, but may be accumulated. The Committee, however, may determine that
cash, other securities or other property will be paid or transferred in lieu of
any fractional share interests. No fewer than 10 Paired Shares may be purchased
on exercise of any Award at one time unless the number purchased is the total
number at the time available for purchase under the Award.
1.8 Acceptance of Notes to Finance Exercise.
The Corporation may, with the Committee's approval, accept one or more
notes from any Participant in connection with the exercise or receipt of any
outstanding Award; provided that any such note shall be subject to the following
terms and conditions:
(a) The principal of the note shall not exceed the amount required to
be paid to the Corporation upon the exercise or receipt of one or more
Awards under the Plan and the note shall be delivered directly to the
Corporation in consideration of such exercise or receipt.
(b) The note shall be repaid over a period of time not to exceed five
years, with annual installments of at least 10% of principal the first four
years and a balloon payment of the remaining principal amount at the end of
the fifth year; provided that the Corporation may demand any payment, in
addition to such installments, as may be required for the note to remain in
compliance with any applicable federal or state regulation.
(c) The note shall provide for full recourse to the Participant and
shall bear interest at a rate determined by the Committee but not less than
the applicable imputed interest rate specified by the Code.
(d) Except as otherwise provided by the Committee, if the employment
or service of the Participant terminates, the unpaid principal balance of
the note shall become due and payable on the 10th business day after such
termination; provided, however, that if a sale of any Paired Shares
acquired by the Participant in connection with an Award to which the note
relates would cause such Participant to incur liability under Section 16(b)
of the Exchange Act, the unpaid balance shall become due and payable on the
10th business day after the first day on which a sale of such shares could
have been made without incurring such liability assuming for these purposes
that there are no other transactions by the Participant subsequent to such
termination.
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(e) If required by the Committee or by applicable law, the note shall
be secured by a pledge of any shares or rights financed thereby in
compliance with applicable law.
(f) The terms, repayment provisions, and collateral release provisions
of the note and the pledge securing the note shall conform with applicable
rules and regulations of the Federal Reserve Board as then in effect.
1.9 No Transferability.
(a) Awards may be exercised only by, and amounts payable or Paired Shares
issuable pursuant to an Award shall be paid only to (or registered only in the
name of), the Participant or, if the Participant has died, the Participant's
Beneficiary or, if the Participant has suffered a Total Disability, the
Participant's Personal Representative, if any, or if there is none, the
Participant, or (to the extent permitted by applicable law) to a third party
pursuant to such conditions and procedures as the Committee may establish. Other
than by will or the laws of descent and distribution or pursuant to a QDRO
(except to the extent not permitted in the case of an Incentive Stock Option),
no right or benefit under this Plan or any Award, including, without limitation,
any Option or shares of Restricted Stock that has not vested, shall be
transferrable by the Participant or shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge (other than to the Corporation) without the consent of the Committee, and
any such attempted action shall be void. The Corporation shall disregard any
attempt at transfer, assignment or other alienation prohibited by the preceding
sentences and shall pay or deliver such cash or Paired Shares in accordance with
the provisions of this Plan. The designation of a Beneficiary hereunder shall
not constitute a transfer for these purposes.
(b) Nothing in this plan authorizes, or shall be construed to authorize, a
transfer or exchange by a Participant, Beneficiary, Personal Representative or
any third party of any shares of Common Stock or Meditrust Corporation Stock in
contravention of the provisions of the Pairing Agreement.
(c) The restrictions on exercise and transfer above shall not be deemed to
prohibit the authorization by the Committee of "cashless exercise" procedures
with unaffiliated third parties who provide financing for the purpose of (or who
otherwise facilitate) the exercise of Awards consistent with applicable legal
restrictions, or, to the extent permitted by the Committee, transfers for estate
and financial planning purposes, or transfers to such other persons or in such
other circumstances as the Committee may in the Award Agreement or other writing
expressly permit.
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II. EMPLOYEE OPTIONS.
2.1 Grants.
One or more Options may be granted under this Article to any Eligible
Participant, subject to the provisions of Section 1.4. Each Option granted may
be either an Option intended to be an Incentive Stock Option (as to the Common
Stock covered by the Option, but not the Meditrust Corporation Stock), or an
Option not so intended, and such intent shall be indicated in the applicable
Award Agreement.
2.2 Option Price.
(a) Pricing Limits. Subject to Section 2.4, (i) the purchase price per
share of the Common Stock covered by each Option and (ii) the purchase price per
share of the Meditrust Corporation Stock covered by each Option shall be
determined by the Committee at the time the Option is granted, but shall not be
less than the par value of the Common Stock or Meditrust Corporation Stock, as
the case may be, on the date of grant.
(b) Payment Provisions. The purchase price of any shares purchased on
exercise of an Option granted under this Article shall be paid in full at the
time of each purchase in one or a combination of the following methods: (i) in
cash or by electronic funds transfer; (ii) by check payable to the order of the
Corporation; (iii) if authorized by the Committee or specified in the applicable
Award Agreement, in cash in an amount equal to the par value of the shares being
purchased, and, in the form of a promissory note (consistent with the
requirements of Section 1.8) of the Participant in an amount equal to the
difference between said cash amount and the purchase price of such shares; (iv)
by notice and third party payment in such manner as may be authorized by the
Committee; (v) by the delivery of Paired Shares already owned by the
Participant, provided, however, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Award by delivering
such Paired Shares; or (vi) if authorized by the Committee or specified in the
applicable Award Agreement, by reduction in the number of Paired Shares
otherwise deliverable upon exercise by that number of Paired Shares which have a
then Fair Market Value equal to such purchase price. Previously owned Paired
Shares used to satisfy the exercise price of an Option under clause (v) shall be
valued at their Fair Market Value on the date of exercise.
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2.3 Limitations on Grant and Terms of Incentive Stock Options.
(a) $100,000 Limit. To the extent that the aggregate "fair market value" of
Common Stock subject to any Option with respect to which Incentive Stock Options
first become exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive Stock Options under
this Plan and stock subject to incentive stock options under all other plans of
the Company, such options shall be treated as Nonqualified Stock Options. For
this purpose, the "fair market value" of the Common Stock subject to Options
shall be determined as of the date the Options were awarded. In reducing the
number of Options treated as Incentive Stock Options to meet the $100,000 limit,
the most recently granted Options shall be reduced first. To the extent a
reduction of simultaneously granted Options is necessary to meet the $100,000
limit, the Committee may, in the manner and to the extent permitted by law,
designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an Incentive Stock Option.
(b) Option Period. Subject to Section 2.4, each Option and all rights
thereunder shall expire no later than ten years after the Award Date.
(c) Other Code Limits. There shall be imposed in any Award Agreement
relating to Incentive Stock Options such terms and conditions as from time to
time are required in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.
(d) Meditrust Corporation Stock. To the extent an Option is for the
purchase of Meditrust Corporation Stock, such Option shall be treated as a
Nonqualified Stock Option.
(e) Plan Limit. The number of shares of Common Stock subject to Options
that may be treated as Incentive Stock Options under the Plan shall not exceed
4,000,000 shares.
2.4 Limits on 10% Holders.
No Incentive Stock Option may be granted to any person who, at the time the
Option is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless the
exercise price of such Option with respect to the Common Stock covered by the
Option is at least 110% of the Fair Market Value of the Common Stock subject to
the Option and such Option by its terms
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is not exercisable after the expiration of five years from the date such Option
is granted.
2.5 Option Repricing; Cancellation and Regrant; Waiver of Restrictions.
Subject to Section 1.4 and Section 6.6 and the specific limitations on
Awards contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible
Participant, any adjustment in the exercise or purchase price, the number of
shares subject to, the restrictions upon or the term of, an Award granted under
this Article by cancellation of an outstanding Award and a subsequent regranting
of an Award, by amendment, by substitution of an outstanding Award, by waiver or
by other legally valid means. Such amendment or other action may result among
other changes in an exercise or purchase price which is higher or lower than the
exercise or purchase price of the original or prior Award, provide for a greater
or lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
2.6 Dividend Equivalents.
The Committee may, at the time of granting an Option, grant Dividend
Equivalents attributable to Paired Shares subject to the Option. Dividend
Equivalents shall be paid in cash only to the extent the Option is unexercised
as of the dividend record date, as specified in the Award Agreement, as follows:
the Dividend Equivalent per Paired Share shall be multiplied by the number of
Paired Shares subject to the Option and an amount equal to the product so
derived shall be paid in cash to the Participant on the dividend payment date.
The Committee may in the Award specify that Dividend Equivalents shall be paid
only for a specified time period or only as to that portion of the Option that
has vested.
III. STOCK APPRECIATION RIGHTS.
3.1 Grants.
In its discretion, the Committee may grant to any Eligible Participant
Stock Appreciation Rights either concurrently with the grant of another Award or
in respect of an outstanding Award, in whole or in part, or independently of any
other Award. Any Stock Appreciation Right granted in connection with an
Incentive Stock Option shall contain such terms as may be required to comply
with the provisions of Section 422 of the Code and the regulations promulgated
thereunder.
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3.2 Exercise of Stock Appreciation Rights.
(a) Exercisability. Unless the Award Agreement or the Committee otherwise
provides, a Stock Appreciation Right related to another Award shall be
exercisable at such time or times, and to the extent, that the related Award
shall be exercisable.
(b) Effect on Available Shares. In the event that a Stock Appreciation
Right is exercised, the number of Paired Shares subject to the Award shall be
charged against the number of Paired Shares subject to the Stock Appreciation
Right and the related Option of the Participant.
(c) Stand-Alone SARs. A Stock Appreciation Right granted independently of
any other Award shall be exercisable pursuant to the terms of the Award
Agreement but, unless the Committee determines otherwise, in no event earlier
than six months after the Award Date, except in the case of death or Total
Disability.
3.3 Payment.
(a) Amount. Unless the Committee otherwise provides, upon exercise of a
Stock Appreciation Right and surrender of an exercisable portion of any related
Award, the Participant shall be entitled to receive payment of an amount
determined by multiplying
(i) the difference obtained by subtracting the exercise price per
Paired Share under the related Award (if applicable) or the initial share
value specified in the Award from the Fair Market Value of a Paired Share
on the date of exercise of the Stock Appreciation Right, by
(ii)the number of Paired Shares with respect to which the Stock
Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole discretion, shall determine
the form in which payment shall be made of the amount determined under paragraph
(a) above, either solely in cash, solely in Paired Shares (valued at Fair Market
Value on the date of exercise of the Stock Appreciation Right), or partly in
such Paired Shares and partly in cash, provided that the Committee shall have
determined that such exercise and payment are consistent with applicable law. If
the Committee permits the Participant to elect to receive cash or Paired Shares
(or a combination thereof) on such exercise, any such election shall be subject
to such conditions as the Committee may impose and, in the case of any Section
16 Person, any election to
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receive cash shall be subject to any applicable limitations under
Rule 16b-3.
IV. RESTRICTED STOCK AWARDS.
4.1 Grants.
The Committee may, in its discretion, grant one or more Restricted Stock
Awards to any Eligible Participant. Each Restricted Stock Award Agreement shall
specify the number of Paired Shares to be issued, the date of such issuance, the
consideration for such Paired Shares (but not less than the minimum lawful
consideration) to be paid by the Participant and the restrictions imposed on
such Paired Shares and the conditions of release or lapse of such restrictions.
Such restrictions shall not lapse earlier than six months after the Award Date,
except to the extent the Committee may otherwise provide. Stock certificates
evidencing shares of Restricted Stock pending the lapse of the restrictions
("restricted shares") shall bear a legend making appropriate reference to the
restrictions imposed hereunder and shall be held by the Corporation or by a
third party designated by the Committee until the restrictions on such shares
shall have lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the Restricted Stock
Award, the Participant may be required to provide such further assurance and
documents as the Committee may require to enforce the restrictions.
4.2 Restrictions.
(a) Pre-Vesting Restraints. Except as provided in Section 1.9 and 4.1,
restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until such shares have vested.
(b) Dividend and Voting Rights. Unless otherwise provided in the applicable
Award Agreement, a Participant receiving a Restricted Stock Award shall be
entitled to cash dividend and voting rights for all shares issued even though
they are not vested, provided that such rights shall terminate immediately as to
any restricted shares which cease to be eligible for vesting.
(c) Cash Payments. If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award, the
Award Agreement shall specify whether and to what extent such cash shall be
returned (with or without an earnings factor) as to any restricted shares which
cease to be eligible for vesting.
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4.3 Return to the Corporation.
Unless the Committee otherwise expressly provides, shares of Restricted
Stock that are subject to restrictions at the time of termination of employment
or are subject to other conditions to vest that have not been satisfied by the
time specified in the applicable Award Agreement shall not vest and shall be
returned to the Corporation in such manner and on such terms as the Committee
shall therein provide.
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
5.1 Grants of Performance Share Awards.
The Committee may, in its discretion, grant one or more Performance Share
Awards to any Eligible Participant based upon such factors as the Committee
shall deem relevant in light of the specific type and terms of the award. An
Award Agreement shall specify the maximum number of Paired Shares (if any)
subject to the Performance Share Award, the consideration (but not less than the
minimum lawful consideration) to be paid for any such shares as may be issuable
to the Participant, the duration of the Award and the conditions upon which
delivery of any Paired Shares or cash to the Participant shall be based. The
amount of cash or Paired Shares or other property that may be deliverable
pursuant to such Award shall be based upon the degree of attainment over a
specified period (a "performance cycle") as may be established by the Committee
of such measure(s) of the performance of the Company (or any part thereof) or
the Participant as may be established by the Committee. The Committee may
provide for full or partial credit, prior to completion of such performance
cycle or the attainment of the performance achievement specified in the Award,
in the event of the Participant's death, Retirement, or Total Disability, a
Change in Control Event or in such other circumstances as the Committee,
consistent with Section 6.11(c)(2), if applicable, may determine.
5.2 Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any Eligible Participant to reward
exceptional or special services, contributions or achievements in the manner and
on such terms and conditions (including any restrictions on such shares) as
determined from time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Stock Bonus may be granted
independently or in lieu of a cash bonus.
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5.3 Deferred Payments.
The Committee may authorize for the benefit of any Eligible Participant the
deferral of any payment of cash or Paired Shares that may become due or of cash
otherwise payable under this Plan, and provide for accreted benefits thereon
based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such deferral shall be
subject to such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of Participants.
VI. OTHER PROVISIONS.
6.1 Rights of Eligible Participants, Participants and Beneficiaries.
(a) Employment Status. Status as an Eligible Participant shall not be
construed as a commitment that any Award will be made under this Plan to an
Eligible Participant or to Eligible Participants generally.
(b) No Employment Contract. Nothing contained in this Plan (or in any other
documents related to this Plan or to any Award) shall confer upon any Eligible
Participant or Participant any right to continue in the employ or other service
of the Company or constitute any contract or agreement of employment or other
service, nor shall interfere in any way with the right of the Company to change
such person's compensation or other benefits or to terminate the employment of
such person, with or without cause, but nothing contained in this Plan or any
document related hereto shall adversely affect any independent contractual right
of such person without his or her consent thereto.
(c) Plan Not Funded. Awards payable under this Plan shall be payable in
Paired Shares or from the general assets of the Corporation, and no special or
separate reserve, fund or deposit shall be made to assure payment of such
Awards. No Participant, Beneficiary or other person shall have any right, title
or interest in any fund or in any specific asset (including shares of Common
Stock or shares of Meditrust Corporation Stock, except as expressly otherwise
provided) of the Company by reason of any Award hereunder. Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person acquires a
right to receive payment pursuant to any Award hereunder, such right shall
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be no greater than the right of any unsecured general creditor of the Company.
6.2 Adjustments; Acceleration.
(a) Adjustments. If the outstanding shares of Common Stock or the
outstanding shares of Meditrust Corporation Stock are changed into or exchanged
for cash, other property or a different number or kind of shares or securities
of the Corporation or of Meditrust Corporation, as the case may be, or if
additional shares or new or different securities are distributed with respect to
the outstanding shares of Common Stock or the outstanding shares of Meditrust
Corporation Stock, through a reorganization or merger in which the Corporation
or Meditrust Corporation, as the case may be, is the surviving entity, or
through a combination, consolidation, recapitalization, reclassification, stock
split, stock dividend, reverse stock split, stock consolidation, dividend or
distribution of cash or property to the shareholders of the Corporation or of
Meditrust Corporation, or if there shall occur any other extraordinary corporate
transaction or event in respect of the Common Stock or the Meditrust Corporation
Stock or a sale of substantially all the assets of the Corporation or of
Meditrust Corporation as an entirety which in the judgment of the Committee
materially affects the Common Stock or the Meditrust Corporation Stock, then the
Committee shall, in such manner and to such extent (if any) as it deems
appropriate and equitable (1) proportionately adjust any or all of (A) the
number and kind of shares of Common Stock, Meditrust Corporation Stock or other
consideration that is subject to or may be delivered under this Plan and
pursuant to outstanding Awards, (B) the consideration payable with respect to
Awards granted prior to any such change and the price, if any, paid in
connection with Restricted Stock Awards or (C) the performance standards
appropriate to any outstanding awards; or (2) in the case of an extraordinary
dividend or other distribution, merger, reorganization, consolidation,
combination, sale of assets, split up, exchange, or spin off, make provision for
a cash payment or for the substitution or exchange of any or all outstanding
Awards or the cash, securities or property deliverable to the holder of any or
all outstanding Awards based upon the distribution or consideration payable to
holders of Common Stock or to holders of Meditrust Corporation Stock upon or in
respect of such event; provided, however, in each case, that with respect to
Awards of Incentive Stock Options, no such adjustment shall be made which would
cause the Plan to violate Section 422 or 424(a) of the Code or any successor
provisions thereto. Corresponding adjustments shall be made with respect to any
Stock Appreciation Rights based upon the adjustments made to the Options to
which they are related. In any of such events, the Committee may take such
action sufficiently prior to such event if necessary to permit
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the Participant to realize the benefits intended to be conveyed with respect to
the underlying shares in the same manner as is available to shareholders
generally.
(b) Acceleration of Awards Upon Change in Control. As to any or all
Participants, upon the occurrence of a Change in Control Event (i) each Option
and Stock Appreciation Right shall become immediately exercisable, (ii)
Restricted Stock shall immediately vest free of restrictions, and (iii) each
Performance Share Award shall become payable to the Participant. Notwithstanding
the foregoing, except in the case of an Award of an Option, prior to a Change in
Control Event, the Committee may determine that, upon its occurrence, there
shall be no acceleration of benefits under Awards or determine that only certain
or limited benefits under Awards shall be accelerated and the extent to which
they shall be accelerated, and/or establish a different time in respect of such
event for such acceleration. In addition, the Committee may override the
limitations on acceleration in this Section 6.2(b) by express provision in the
Award Agreement and may accord any Participant a right to refuse any
acceleration, whether pursuant to the Award Agreement or otherwise, in such
circumstances as the Committee may approve. Any acceleration of Awards shall
comply with applicable regulatory requirements, including without limitation
Section 422 of the Code.
Notwithstanding any other provision of this Plan, this Section 6.2(b) shall
be effective through November 5, 2002 and may not be amended or terminated
during such period except as required by law or to make changes that do not
diminish the benefits or rights provided by this Section 6.2(b). The Board may,
in its sole discretion and for any reason, provide written notice of termination
or amendment (effective as of the then applicable expiration date, but not with
respect to a Change in Control Event occurring on or before such expiration
date) no later than six months before the expiration date of this Section
6.2(b). If such amendment or termination is not made, this Section 6.2(b) shall
be automatically extended for an additional period of 60 months past the
expiration date. This Section 6.2(b) shall continue to be automatically extended
for an additional 60 months at the end of such 60-month period and each
succeeding 60-month period unless notice is given in the manner described in
this Section 6.2(b).
(c) Possible Early Termination of Accelerated Awards. If any Option or
other right to acquire Paired Shares under this Plan has not been exercised
prior to (i) a dissolution of the Corporation, (ii) a reorganization event
described in Section
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6.2(a) that the Corporation does not survive, or (iii) the consummation of a
reorganization event described in Section 6.2(a) that results in a Change in
Control Event approved by the Board and no provision has been made for the
survival, substitution, exchange or other settlement of such Option or right,
such Option or right shall thereupon terminate.
(d) Golden Parachute Limitations. In no event shall an Award be accelerated
under this Plan to an extent or in a manner which would not be fully deductible
by the Company for federal income tax purposes because of Section 280G of the
Code, nor shall any payment hereunder be accelerated if any portion of such
accelerated payment would not be deductible by the Company because of Section
280G of the Code. If a holder would be entitled to benefits or payments
hereunder and under any other plan or program which would constitute "parachute
payments" as defined in Section 280G of the Code, then the holder may by written
notice to the Company designate the order in which such parachute payments shall
be reduced or modified so that the Company is not denied federal income tax
deductions for any "parachute payments" because of Section 280G of the Code.
6.3 Effect of Termination of Employment or Service.
The Committee shall establish in respect of each Award granted to an
Eligible Participant the effect of a termination of employment or service on the
rights and benefits thereunder and in so doing may make distinctions based upon
the cause of termination, e.g., Retirement, early retirement, termination for
cause, disability or death. Notwithstanding any terms to the contrary in an
Award Agreement or this Plan, the Committee may decide in its complete
discretion at the time of termination (or within a reasonable time thereafter)
to extend the exercise period of an Award (although not beyond the period
described in Section 2.3(b)) and the number of shares covered by the Award with
respect to which the Award is exercisable or vested.
6.4 Compliance with Laws.
This Plan, the granting and vesting of Awards under this Plan and the
offer, issuance and delivery of Paired Shares and/or the payment of money under
this Plan or under Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations (including, but not
limited to, state and federal securities laws and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Corporation, provide such assurances and
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<PAGE>
representations to the Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal requirements.
6.5 Tax Withholding.
(a) Cash or Shares. Upon any exercise, vesting, or payment of any Award,
the Company shall have the right at its option to (i) require the Participant
(or Personal Representative or Beneficiary, as the case may be) to pay or
provide for payment of the amount of any taxes which the Company may be required
to withhold with respect to such transaction or (ii) deduct from any amount
payable in cash the amount of any taxes which the Company may be required to
withhold with respect to such cash amount. In any case where a tax is required
to be withheld in connection with the delivery of Paired Shares under this Plan,
the Committee may grant (either at the time of the Award or thereafter) to the
Participant the right to elect, or the Committee may require (either at the time
of the Award or thereafter), pursuant to such rules and subject to such
conditions as the Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their then Fair Market Value, to satisfy such
withholding obligation.
(b) Tax Loans. The Committee may, in its discretion, authorize a loan to an
Eligible Participant in the amount of any taxes which the Company may be
required to withhold with respect to Paired Shares received (or disposed of, as
the case may be) pursuant to a transaction described in subsection (a) above.
Such a loan shall be for a term, at a rate of interest and pursuant to such
other terms and conditions as the Committee, under applicable law may establish
and such loan need not comply with the provisions of Section 1.8.
6.6 Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in part, or take
any action hereunder. No Awards may be granted during any suspension of this
Plan or after termination of this Plan, but the Committee shall retain
jurisdiction as to Awards then outstanding in accordance with the terms of this
Plan.
(b) Shareholder Approval. To the extent required under Section 422 of the
Code or any other applicable law, or deemed necessary or advisable by the Board,
any amendment to this Plan shall be subject to shareholder approval.
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(c) Amendments to Awards. Without limiting any other express authority of
the Committee under, but subject to the express limits of, this Plan, the
Committee by agreement or resolution may waive conditions of or limitations on
Awards that the Committee in the prior exercise of its discretion has imposed,
without the consent of the Participant, and may make other changes to the terms
and conditions of Awards that do not affect in any manner materially adverse to
the Participant, his or her rights and benefits under an Award.
(d) Limitations on Amendments to Plan and Awards. No amendment, suspension
or termination of the Plan or change of or affecting any outstanding Award
shall, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Corporation under any Award granted under this Plan prior
to the effective date of such change. Changes contemplated by Section 6.2 shall
not be deemed to constitute changes or amendments for purposes of this Section
6.6.
6.7 Effect of Pairing Agreement on Awards.
(a) Pairing Agreement. This Plan shall be subject to the terms and
conditions of the Pairing Agreement.
(b) Paired Shares. All Awards shall be subject to the following:
(i) the grant of any Award for Common Stock pursuant to this Plan
shall also be for an equal number of shares of Meditrust Corporation
Stock; upon the exercise of any Options to purchase Common Stock, or
the payment of a Restricted Stock Award, a Stock Appreciation Right, a
Performance Share Award payable in Common Stock or a Stock Bonus, the
Participant shall obtain a number of shares of Meditrust Corporation
Stock equal to the number of shares of Common Stock to be issued upon
exercise or payment;
(ii) the grant of any Award for Meditrust Corporation Stock
pursuant to this Plan shall also be for an equal number of shares of
Common Stock; upon the exercise of any Options to purchase Meditrust
Corporation Stock, or the payment of a Restricted Stock Award, a Stock
Appreciation Right, a Performance Share Award payable in Meditrust
Corporation Stock or a Stock Bonus, the Participant shall obtain a
number of shares of Common Stock equal to the number of shares of
Meditrust Corporation Stock to be issued upon exercise or payment.
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(c) Stock Certificates. Upon exercise of an Option or payment of an
Award, the person receiving Paired Shares shall be entitled to one stock
certificate evidencing the Paired Shares acquired; provided that any person
who tenders Paired Shares to the Corporation in payment of a portion or all
of the purchase price of the stock purchased upon exercise of an Option
shall be entitled to receive two certificates, one representing a number of
Paired Shares equal to the number of Paired Shares exchanged for the stock
acquired upon exercise, and another representing the additional Paired
Shares, if any, acquired upon exercise of the Option.
6.8 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the Committee or this Plan, a
Participant shall not be entitled to any privilege of stock ownership as to any
Paired Shares not actually delivered to and held of record by him or her. No
adjustment will be made for dividends or other rights as a shareholder for which
a record date is prior to such date of delivery.
6.9 Effective Date of the Plan.
This Plan shall be effective as of December 15, 1994, the date of Board
approval, subject to shareholder approval within 12 months thereafter.
6.10 Term of the Plan.
No Award shall be granted more than ten years after the effective date of
this Plan (the "termination date"). Unless otherwise expressly provided in this
Plan or in an applicable Award Agreement, any Award theretofore granted may
extend beyond such date, and all authority of the Committee with respect to
Awards hereunder shall continue during any suspension of this Plan and in
respect of outstanding Awards on such termination date.
6.11 Governing Law; Construction; Severability.
(a) Choice of Law. This Plan, the Awards, all documents evidencing Awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the Commonwealth of Massachusetts applicable to
contracts made and performed within such State, except as such laws may be
supplanted by the laws of the United States of America, which laws shall then
govern its effect and its construction to the extent they supplant Massachusetts
law.
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<PAGE>
(b) Severability. If any provision shall be held by a court of competent
jurisdiction to be invalid and unenforceable, the remaining provisions of this
Plan shall continue in effect.
(c) Plan Construction. (1) It is the intent of the Corporation that this
Plan and Awards hereunder satisfy and be interpreted in a manner that in the
case of Participants who are or may be subject to Section 16 of the Exchange Act
satisfies the applicable requirements of Rule 16b-3 so that such persons will be
entitled to the benefits of Rule 16b-3 or other exemptive rules under Section 16
of the Exchange Act and will not be subjected to avoidable liability thereunder.
If any provision of this Plan or of any Award or any prior action by the
Committee would otherwise frustrate or conflict with the intent expressed above,
that provision to the extent possible shall be interpreted and deemed amended so
as to avoid such conflict, but to the extent of any remaining irreconcilable
conflict with such intent as to such persons in the circumstances, such
provision shall be deemed void.
(2) It is the further intent of the Company that Options or Stock
Appreciation Rights with an exercise or base price not less than Fair Market
Value on the date of grant that are granted to or held by a person subject to
Section 162(m) of the Code shall qualify as performance-based compensation under
Section 162(m) of the Code, and this Plan shall be interpreted consistent with
such intent.
6.12 Captions.
Captions and headings are given to the sections and subsections of this
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
6.13 Effect of Change of Subsidiary Status.
For purposes of this Plan and any Award hereunder, if an entity ceases to
be a Subsidiary, a termination of employment shall be deemed to have occurred
with respect to each employee of such Subsidiary who does not continue as an
employee of another entity within the Company.
6.14 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit the authority of the
Board or the Committee to grant awards or authorize any other compensation, with
or without reference to the Common Stock and/or Meditrust Corporation Stock,
under any other plan or authority.
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VII. DEFINITIONS.
7.1 Definitions.
(a) "Award" shall mean an award of any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share Award, Stock Bonus, Dividend
Equivalent or other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.
(b) "Award Agreement" shall mean any writing setting forth the terms of an
Award that has been authorized by the Committee.
(c) "Award Date" shall mean the date upon which the Committee took the
action granting an Award or such later date as the Committee designates as the
Award Date at the time of the Award.
(d) "Award Period" shall mean the period beginning on an Award Date and
ending on the expiration date of such Award.
(e) "Beneficiary" shall mean the person, persons, trust or trusts entitled
by will or the laws of descent and distribution to receive the benefits
specified in the Award Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's executor or administrator
if no other Beneficiary is identified and able to act under the circumstances.
(f) "Board" shall mean the Board of Directors of the Corporation.
(g) "Change in Control Event" shall mean:
(1) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of Common Stock (the "Outstanding Common
Stock") or (B) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); provided,
however, that the following acquisitions shall not constitute a Change
in Control Event: (A) any acquisition directly from the Corporation
(except that an acquisition by virtue of the
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exercise of a conversion privilege shall not be considered within this
clause (A) unless the converted security was itself acquired directly
from the Corporation), (B) any acquisition by the Corporation, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any corporation controlled by the
Corporation or (D) any acquisition by any corporation pursuant to a
reorganization, merger or consolidated, if, following such
reorganization, merger or consolidation, the conditions described in
clauses (A) and (B) of paragraph (3) below are satisfied;
(2) Individuals who, as November 5, 1997, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual who
becomes a director subsequent to the date hereof whose election, or
nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board; but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(3) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation (a "transaction"), unless,
following such transaction in each case, (A) more than 80% of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such transaction and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such transaction and (B) no Person
(excluding the Corporation, any employee benefit plan (or related
trust) of the Corporation or such corporation resulting from such
transaction and any Person beneficially owning, immediately prior to
such transaction, directly or indirectly, 20% or more of the
Outstanding Common Stock or Outstanding Voting Securities, as the case
may be) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such transaction or the
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combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors; or
(4) Approval by the shareholders of the Corporation of (A) a
complete liquidation or dissolution of the Corporation or (B) the sale
or other disposition of all or substantially all of the assets of the
Corporation, unless such assets are sold to a corporation and
following such sale or other disposition, the conditions described in
clauses (A) and (B) of paragraph (3) above are satisfied.
(h) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(i) "Commission" shall mean the Securities and Exchange Commission.
(j) "Committee" shall mean the Personnel and Compensation Committee of the
Board, which Committee shall be comprised only of two or more directors or such
greater number of directors as may be required under applicable law, each of
whom, during such time as one or more Participants may be subject to Section 16
of the Exchange Act, shall be a Non-Employee Director within the meaning of Rule
16b-3 and, in respect of any decision involving a Participant who may be subject
to Section 162(m) of the Code, shall be a Disinterested and Outside director.
(k) "Common Stock" shall mean the common stock of the Corporation, $.10 par
value per share, and such other securities or property as may become the subject
of Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
(l) "Company" shall mean, collectively, the Corporation and its
Subsidiaries.
(m) "Corporation" shall mean Meditrust Operating Company, a Delaware
corporation, and its successors.
(n) "Disinterested and Outside" shall mean "disinterested" within the
meaning of any applicable regulatory requirements, including Rule 16b-3, and
"outside" within the meaning of Section 162(m) of the Code, and any regulations
promulgated thereunder.
(o) "Dividend Equivalent" shall mean an amount equal to the amount of cash
dividends or other cash distributions paid (or such portion of such dividend or
other distribution as may be designated by the Committee) with respect to each
Paired Share after the date of an Award of a Dividend Equivalent.
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(p) "Eligible Participant" shall mean a director, an officer (whether or
not a director) or any other employee of the Company, or any Other Eligible
Person, as determined by the Committee in its discretion.
(q) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
(r) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(s) "Fair Market Value" shall mean, with respect to Common Stock or
Meditrust Corporation Stock, the fair market value of an unpaired share of
Common Stock or Meditrust Corporation Stock, as the case may be, as determined
in good faith by the Committee. The Fair Market Value of a Paired Share shall
mean the closing price of a Paired Share on the Composite Tape, as published in
the Eastern Edition of The Wall Street Journal, of the principal national
securities exchange on which the Paired Shares are so listed or admitted to
trade, on such date, or, if there is no trading of the Paired Shares on such
date, then the closing price of the Paired Shares as quoted on such Composite
Tape on the next preceding date on which there was trading in such shares;
provided, however, if the Paired Shares are not listed or admitted to trade on a
national securities exchange, the Committee may designate such other exchange,
market or source of data as it deems appropriate for determining such value for
Plan purposes.
(t) "Incentive Stock Option" shall mean an Option which is designated as an
incentive stock option within the meaning of Section 422 of the Code and which
contains such provisions as are necessary to comply with that section.
(u) "Nonqualified Stock Option" shall mean an Option that is designated as
a Nonqualified Stock Option and shall include any Option intended as an
Incentive Stock Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an incentive
stock option shall be deemed to be designated a nonqualified stock option under
this Plan and not an incentive stock option under the Code.
(v) "Non-Employee Director" shall have the meaning set forth in Rule 16b-3.
(w) "Option" shall mean an option to purchase Paired Shares under this
Plan. The Committee shall designate any Option granted to an Eligible
Participant as a Nonqualified Stock Option or an Incentive Stock Option,
provided that all Options with
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respect to Meditrust Corporation Stock shall be Nonqualified Stock Options.
(x) "Other Eligible Person" shall mean any individual consultant, advisor
or (to the extent provided in the next sentence) agent who renders or has
rendered bona fide services (other than services in connection with the offering
or sale of securities of the Company in a capital raising transaction) to the
Company, and who is selected to participate in this Plan by the Committee;
provided that if the Corporation's officers and directors are or become subject
to Section 16 of the Exchange Act, a Non-Employee Director shall not thereafter
be selected as an Other Eligible Person. A non-employee agent providing bona
fide services to the Company (other than as an eligible advisor or consultant)
may also be selected as an Other Eligible Person if such agent's participation
in this Plan would not adversely affect (x) the Corporation's eligibility to use
Form S-8 to register under the Securities Act of 1933, as amended, the offering
of shares issuable under this Plan by the Company or (y) the Corporation's
compliance with any other applicable laws.
(y) "Paired Share" means a share of Common Stock and a share of Meditrust
Corporation Stock.
(z) "Pairing Agreement" means the Pairing Agreement between the Corporation
and Meditrust Corporation, dated as of December 31, 1979, as it may be amended
from time to time.
(aa) "Participant" shall mean an Eligible Participant who has been granted
an Award under this Plan.
(bb) "Performance Share Award" shall mean an Award made pursuant to the
provisions, and subject to the terms and conditions, of Article V of the Plan.
(cc) "Personal Representative" shall mean the person or persons who, upon
the Total Disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and who shall have
become the legal representative of the Participant.
(dd)"Plan" shall mean this Amended and Restated 1995 Share Award Plan.
(ee)"QDRO" shall mean a qualified domestic relations order as defined in
Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA (to the same
extent as if this Plan were subject thereto), or the applicable rules
thereunder.
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(ff) "Meditrust Corporation" means Meditrust Corporation, a Delaware
corporation.
(gg) "Meditrust Corporation Stock" means the common stock of Meditrust
Corporation, $.10 par value per share, and such other securities or property as
may become subject of Awards or become subject to Awards, pursuant to an
adjustment made under Section 6.2 of this Plan.
(hh) "Restricted Stock" shall mean Paired Shares awarded to a Participant
subject to payment of such consideration, if any, and such conditions on vesting
and such transfer and other restrictions as are established in or pursuant to
this Plan, for so long as such shares remain unvested under the terms of the
applicable Award Agreement.
(ii)"Retirement" shall mean retirement from active service as an employee,
officer or director of the Company on or after attaining age 65.
(jj)"Rule 16b-3" shall mean Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act.
(kk)"Section 16 Person" shall mean a person subject to Section 16(a) of the
Exchange Act.
(ll)"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
(mm) "Share Limit" shall have the meaning specified in Section 1.4(a).
(nn) "Stock Appreciation Right" shall mean a right to receive a number of
Paired Shares or an amount of cash, or a combination of shares and cash, the
aggregate amount or value of which is determined by reference to a change in the
Fair Market Value of the Paired Shares that is authorized under this Plan.
(oo) "Subsidiary" shall mean any corporation or other entity a majority of
whose outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
(pp)"Total Disability" shall mean a "permanent and total disability" within
the meaning of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions or conditions as the Committee by rule may include.
27
FIRST AMENDMENT TO PAIRING AGREEMENT
Dated: November 6, 1997
Reference is hereby made to that certain Pairing Agreement dated as of the
20th day of December, 1979 by and between Santa Anita Realty Enterprises, Inc.,
a Delaware corporation ("Realty"), and Santa Anita Operating Company, a Delaware
corporation ("Operating") (herein the "Original Agreement").
WHEREAS, pursuant to that certain Third Amended and Restated Agreement and
Plan of Merger, by and among Meditrust, Meditrust Acquisition Company ("MAC"),
Realty and Operating, dated as of April 13, 1997, Meditrust merged with and into
Realty, with Realty as the surviving corporation, and MAC merged with and into
Operating, with Operating as the surviving corporation (the "Merger");
WHEREAS, in connection with the Merger, Realty has changed its corporate
name to "Meditrust Corporation" and Operating changed its corporate name to
"Meditrust Operating Company"; and
WHEREAS, each of Meditrust Corporation and Meditrust Operating Company
desires to amend the Original Agreement to more fully reflect the agreement
between the parties.
NOW, THEREFORE, in consideration of the mutual agreements contained in the
Original Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. In Section 2(c) of the Original Agreement, the phrase "date of exercise"
shall be replaced with the phrase "date of grant."
2. In Section 2(d) of the Original Agreement, the phrase "date of exercise"
shall be replaced with the phrase "date of grant."
3. As modified by this Amendment, the Original Agreement is ratified,
confirmed and approved in all respects.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
MEDITRUST CORPORATION MEDITRUST OPERATING COMPANY
By: /s/ David F. Benson By: /s/ Abraham D. Gosman
------------------------------ ---------------------------------
David F. Benson, its President Abraham D. Gosman, its Chief
Executive Officer
Santa Anita Operating Company Santa Anita Realty Enterprises, Inc.
285 West Huntington Drive A Real Estate Investment Trust
P.O. Box 60014 301 W. Huntington Drive, Suite 405
Arcadia, California 91066-6014 P.O. Box 60025
Telephone: (818) 574-7223 Arcadia, California 91066-6025
FAX: (818) 446-9565 Telephone: (818) 574-5550
FAX: (818) 574-5997
October 24, 1997
Mr. John C. Castellanos
Assistant Vice President
HARRIS TRUST COMPANY OF CALIFORNIA
601 South Figueroa, Suite 4900
Los Angeles, California 90017
Dear John:
This is to advise you that Santa Anita Realty Enterprises, Inc. and Santa
Anita Operating Company have appointed Boston EquiServe as the successor rights
agreement agent to Harris Trust Company of California effective the close of
business November 5, 1997. We hereby authorize you to work with Bill Gustafson
(617) 575- 2395 and his team to supply any information they require.
Thank you in advance for your cooperation.
Sincerely,
Santa Anita Operating Company Santa Anita Realty Enterprises, Inc.
/s/ Kathryn J. McMahon /s/ Brian L. Fleming
- ----------------------------------- ----------------------------------
Kathryn J. McMahon Brian L. Fleming
EXHIBIT 5.1
(617) 439-2000
November 7, 1997
12742-426
Meditrust Corporation
197 First Avenue, Suite 300
Needham, MA 02194
Meditrust Operating Company
197 First Avenue, Suite 100
Needham, MA 02194
Re: Registration Statement on Form S-8
Dear Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act") of 11,375,206 shares of Common Stock of Meditrust
Corporation ("MC"), formerly known as Santa Anita Realty Enterprises, Inc.
("Realty"), par value $0.10 per share ("MC Stock"), and 11,375,206 shares of
Common Stock of Meditrust Operating Company ("MOC"), formerly known as Santa
Anita Operating Company ("Operating"), par value $0.10 per share ("MOC Stock"),
to be issued in connection with (i) the exercise of stock options to be issued
pursuant to the amendment to the Meditrust Corporation 1995 Share Award Plan
(formerly known as the Santa Anita Realty Enterprises, Inc. 1995 Share Award
Plan) (the "MC Plan"), approved by the stockholders of Realty on November 5,
1997, (ii) the exercise of stock options to be issued pursuant to the amendment
to the Meditrust Operating Company 1995 Share Award Plan (formerly known as the
Santa Anita Operating Company 1995 Share Award Plan) (the "MOC Plan"), approved
by the stockholders of Operating on November 5, 1997, (iii) the grant of
performance share awards under each of the MC Plan and the MOC Plan, and (iv)
the exercise of currently outstanding Meditrust stock options which have been
assumed by MC under the Realty Plan (the "Meditrust Options"), all pursuant to
the Registration Statement on Form S-8 (the "Registration Statement"), filed
with the Securities and Exchange Commission on November 7, 1997, you have
requested our opinion set forth below. Such shares of MC Common Stock and MOC
Common Stock, which will be paired for transfer and trading purposes, are
referred to herein as "Shares."
<PAGE>
Meditrust Corporation
Meditrust Operating Company
November 7, 1997
Page 2
We have considered such facts and examined such questions of law as we
have considered appropriate for purposes of rendering the opinion expressed
below.
We are opining only as to the General Corporation Law of the State of
Delaware and we express no opinion with respect to the applicability or the
effect of any other laws or as to any matters of municipal law or of any other
local agencies within any state.
Subject to the foregoing and in reliance thereon, in our opinion, upon
payment for and delivery of the Shares in accordance with the terms and
conditions set forth in the MC Plan and the MOC Plan, and the countersigning of
the certificate or certificates representing the Shares by a duly authorized
signatory of the registrar for the MC Common Stock and the MOC Common Stock, the
Shares will be duly authorized, validly issued, fully paid and non-assessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
NUTTER, McCLENNEN & FISH, LLP
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference of our report dated April 14,
1997 accompanying the financial statement and schedules of:
(a) Santa Anita Companies
(b) Santa Anita Realty Enterprises, Inc., and
(c) Santa Anita Operating Company and Subsidiaries
appearing in the above-listed entities' Annual Report on Form 10-K, as amended
by amendments on Form 10-K/A, for the year ended December 31, 1996 in the joint
Registration Statement on Form S-8 and related Prospectus for the Meditrust
Corporation 1995 Share Award Plan (formerly known as the Santa Anita Realty
Enterprises, Inc. 1995 Share Award Plan), as amended, and the Meditrust
Operating Company 1995 Share Award Plan (formerly known as the Santa Anita
Operating Company 1995 Share Award Plan), as amended, filed by Meditrust
Corporation (formerly known as "Santa Anita Realty Enterprises, Inc.") and
Meditrust Operating Company (formerly known as "Santa Anita Operating Company").
Ernst & Young LLP
Los Angeles, California
November 6, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Managing General Partner
H-T Associates:
We consent to incorporation by reference in the Joint Registration Statement on
Form S-8 and related prospectus for the Meditrust Corporation 1995 Share Award
Plan (formerly known as the Santa Anita Realty Enterprises, Inc. 1995 Share
Award Plan), as amended, and the Meditrust Operating Company 1995 Share Award
Plan (formerly known as the Santa Anita Operating Company 1995 Share Award
Plan), as amended, filed by Meditrust Corporation and Meditrust Operating
Company, of our report dated February 10, 1997, relating to the consolidated
balance sheets of H-T Associates and subsidiary (the "Partnership") as of
December 31, 1996 and 1995, and the related consolidated statements of
operations, partners' capital (deficit) and cash flows for each of the years in
the three-year period ended December 31, 1996, which report appears in the
December 31, 1996 Joint Annual Report on Form 10-K, as amended by amendments on
Form 10-K/A, of Santa Anita Realty Enterprises, Inc. and Santa Anita Operating
Company. Our report dated February 10, 1997, contains an explanatory paragraph
that states that the Partnership's primary subsidiary is in technical default on
its notes payable at December 31, 1996. As such, those notes may be callable at
the lender's discretion. This technical default raises substantial doubt about
the Partnership's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
KPMG Peat Marwick LLP
San Diego, California
November 6, 1997
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The General Partner
Anita Associates:
We consent to incorporation by reference in the Joint Registration Statement on
Form S-8 and related prospectus for the Meditrust Corporation 1995 Share Award
Plan (formerly known as the Santa Anita Realty Enterprises, Inc. 1995 Share
Award Plan), as amended, and the Meditrust Operating Company 1995 Share Award
Plan (formerly known as the Santa Anita Operating Company 1995 Share Award Plan,
as amended, filed by Meditrust Corporation and Meditrust Operating Company, of
our report dated February 7, 1997, relating to the balance sheets of Anita
Associates as of December 31, 1996 and 1995, and the related statements of
income, partners' deficit and cash flows for each of the years in the three-year
period ended December 31, 1996, which report appears in the December 31, 1996
Joint Annual Report on Form 10-K, as amended by amendments on Form 10-K/A, of
Santa Anita Realty Enterprises, Inc. and Santa Anita Operating Company.
KPMG Peat Marwick LLP
San Diego, California
November 6, 1997
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Joint Registration
Statement on Form S-8 of Meditrust Corporation, formerly known as Santa Anita
Realty Enterprises, Inc. and Meditrust Operating Company, formerly known as
Santa Anita Operating Company, of our reports dated January 16, 1997 on our
audits of the consolidated financial statements and financial statement
schedules of Meditrust as of December 31, 1996 and 1995, and for the years ended
December 31, 1996, 1995 and 1994.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
November 6, 1997
