MEDITRUST OPERATING CO, DEF 14A, 1999-06-09

MEDITRUST OPERATING CO
DEF 14A, 1999-06-09
REAL ESTATE INVESTMENT TRUSTS

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<PAGE>
SCHEDULE 14A INFORMATION

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

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

MEDITRUST CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------
(5) Total fee paid:

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

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------
(3) Filing Party:

------------------------------------------------------------------------
(4) Date Filed:

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

<PAGE>
SCHEDULE 14A INFORMATION

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

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

MEDITRUST OPERATING COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------
(5) Total fee paid:

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

/ / Fee paid previously with preliminary materials.

(1) Amount Previously Paid:

------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------
(3) Filing Party:

------------------------------------------------------------------------
(4) Date Filed:

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

<PAGE>
MEDITRUST CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 8, 1999

The Annual Meeting of Shareholders of Meditrust Corporation ("Meditrust")
will be held at the Goodwin, Procter & Hoar LLP Conference Center, Second Floor,
53 State Street, Boston, Massachusetts 02109 on Thursday, July 8, 1999 at 4:00
p.m. local time (together with all adjournments and postponements thereof, the
"Meditrust Meeting"), for the following purposes:

1. To consider and act upon a proposal to elect three Directors of
Meditrust, each to serve for a term of three years and until his successor is
duly elected and qualified.

2. To consider and act upon such other business and matters or proposals as
may properly come before the Meditrust Meeting.

The Board of Directors of Meditrust has fixed the close of business on June
7, 1999 as the record date for determining the shareholders having the right to
receive notice of and to vote at the Meditrust Meeting. Only shareholders of
record at the close of business on such date are entitled to notice of and to
vote at the Meditrust Meeting. A list of shareholders entitled to vote at the
Meditrust Meeting will be available during ordinary business hours at
Meditrust's executive offices, 197 First Avenue, Suite 300, Needham,
Massachusetts 02494, for ten days prior to the Meditrust Meeting, for
examination by any Meditrust shareholder for purposes germane to the Meditrust
Meeting.

By Order of the Board of Directors of
MEDITRUST CORPORATION

/s/ Michael S. Benjamin

Michael S. Benjamin
Secretary

Needham, Massachusetts
June 8, 1999

WHETHER OR NOT YOU PLAN TO ATTEND THE MEDITRUST MEETING, YOU ARE REQUESTED TO
SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY WHICH IS BEING SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS. A RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT PURPOSE. RETURNING THE ENCLOSED
PROXY WILL NOT AFFECT YOUR RIGHT TO ATTEND THE MEDITRUST MEETING AND VOTE YOUR
SHARES IN PERSON.
<PAGE>
MEDITRUST OPERATING COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 8, 1999

The Annual Meeting of Shareholders of Meditrust Operating Company
("Operating Company") will be held at the Goodwin, Procter & Hoar LLP Conference
Center, Second Floor, 53 State Street, Boston, Massachusetts 02109 on Thursday,
July 8, 1999 at 4:15 p.m. local time (together with all adjournments and
postponements thereof, the "Operating Company Meeting"), for the following
purposes:

1. To consider and act upon a proposal to elect two Directors of Operating
Company, each to serve for a term of three years and until his successor is duly
elected and qualified.

2. To consider and act upon such other business and matters or proposals as
may properly come before the Operating Company Meeting.

The Board of Directors of Operating Company has fixed the close of business
on June 7, 1999 as the record date for determining the shareholders having the
right to receive notice of and to vote at the Operating Company Meeting. Only
shareholders of record at the close of business on such date are entitled to
notice of and to vote at the Operating Company Meeting. A list of shareholders
entitled to vote at the Operating Company Meeting will be available during
ordinary business hours at Operating Company's executive offices, 197 First
Avenue, Suite 100, Needham, Massachusetts 02494, for ten days prior to the
Operating Company Meeting, for examination by any Operating Company shareholder
for purposes germane to the Operating Company Meeting.

By Order of the Board of Directors of
MEDITRUST OPERATING COMPANY

/s/ Gilbert G. Menna

Gilbert G. Menna
Secretary

Needham, Massachusetts
June 8, 1999

WHETHER OR NOT YOU PLAN TO ATTEND THE OPERATING COMPANY MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY WHICH IS BEING
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A RETURN ENVELOPE WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT PURPOSE.
RETURNING THE ENCLOSED PROXY WILL NOT AFFECT YOUR RIGHT TO ATTEND THE OPERATING
COMPANY MEETING AND VOTE YOUR SHARES IN PERSON.
<PAGE>
THE MEDITRUST AND OPERATING COMPANY ANNUAL MEETINGS

This Joint Proxy Statement is furnished in connection with the solicitation
by and on behalf of the Boards of Directors of Meditrust Corporation, a Delaware
corporation ("Meditrust") and Meditrust Operating Company, a Delaware
corporation ("Operating Company," together with Meditrust, "The Meditrust
Companies" and each a "Company"), of proxies from holders of Meditrust and
Operating Company common stock, which shares are paired and traded as a single
unit on the New York Stock Exchange (the "Paired Shares"), for use at the
Meditrust Meeting and Operating Company Meeting (as each is defined below). This
Joint Proxy Statement and the accompanying forms of proxy are expected to be
mailed to the respective shareholders of The Meditrust Companies on or about
June 8, 1999.

PURPOSE OF THE ANNUAL MEETINGS

MEDITRUST

At the annual meeting of shareholders of Meditrust to be held at the
Goodwin, Procter & Hoar LLP Conference Center, Second Floor, 53 State Street,
Boston, Massachusetts 02109 on Thursday, July 8, 1999 at 4:00 p.m. local time
(together with all adjournments and postponements thereof, the "Meditrust
Meeting"), holders of Meditrust common stock, par value $.10 per share
("Meditrust Common Stock") will consider and vote upon:

1. A proposal to elect three Directors of Meditrust, each to serve for a
term of three years and until his successor is duly elected and qualified.

2. Such other business and matters or proposals as may properly come before
the Meditrust Meeting.

OPERATING COMPANY

At the annual meeting of shareholders of Operating Company to be held at the
Goodwin, Procter & Hoar LLP Conference Center, Second Floor, 53 State Street,
Boston, Massachusetts 02109 on Thursday, July 8, 1999 at 4:15 p.m. local time
(together with all adjournments and postponements thereof, the "Operating
Company Meeting"), holders of Operating Company common stock, par value $.10 per
share ("Operating Company Common Stock") will consider and vote upon:

1. A proposal to elect two Directors of Operating Company, each to serve for
a term of three years and until his successor is duly elected and qualified.

2. Such other business and matters or proposals as may properly come before
the Operating Company Meeting.

RECORD DATE; VOTING RIGHTS; REVOCATION OF PROXIES

The Meditrust Companies have fixed the close of business on June 7, 1999 as
the record date ("The Meditrust Companies Record Date") for determining holders
of Paired Shares entitled to notice of and to vote at the Meditrust Meeting and
the Operating Company Meeting (collectively, the "Companies Meetings"). Each
Paired Share entitles the holder to one vote per share on each matter submitted
to the respective Company's shareholders. Only holders of Paired Shares at the
close of business on The Meditrust Companies Record Date will be entitled to
notice of and to vote at the Companies Meetings. As of The Meditrust Companies
Record Date, there were outstanding and entitled to vote

1
<PAGE>
142,434,349 Paired Shares. Paired Shares held in the treasury of Meditrust or
Operating Company are not considered outstanding.

All Paired Shares which are entitled to vote and are represented at the
Companies Meetings by properly executed proxies received prior to or at the
respective meeting will be voted at the meeting in accordance with the
instructions indicated on the proxies. IF NO INSTRUCTIONS ARE GIVEN ON A PROXY
CARD, IT WILL BE VOTED FOR APPROVAL AND ADOPTION OF THE RESPECTIVE PROPOSALS SET
FORTH THEREON. If any other matters are properly presented at the Companies
Meetings for consideration, including, among other things, consideration of a
motion to adjourn such meeting to another time and/or place, the persons named
in the enclosed forms of proxy will have discretion to vote on such matters in
accordance with their best judgment. However, proxies voted against the
proposals will not be voted in favor of adjournment in order to continue to
solicit proxies. Pursuant to the respective By-laws of each of The Meditrust
Companies, no notice of an adjourned meeting need be given other than
announcement at the respective meeting, except where the meeting is adjourned
for 30 days or more.

A shareholder who has given a proxy may revoke it at any time before it is
exercised by giving written notice to the Secretary of Meditrust or Operating
Company, as the case may be, by signing and returning a later dated proxy, or by
voting in person at the Meditrust Meeting or Operating Company Meeting, as the
case may be; however, mere attendance at the Meditrust Meeting or the Operating
Company Meeting will not in and of itself have the effect of revoking the proxy.

SOLICITATION OF PROXIES

Meditrust and Operating Company will bear equally the costs of solicitation
of proxies and of preparing, printing and mailing this Joint Proxy Statement.
Brokerage houses, fiduciaries, nominees and others will be reimbursed for their
out-of-pocket expenses in forwarding proxy materials to beneficial owners of
Paired Shares held in their names. In addition to the solicitation of proxies by
use of the mails, proxies may be solicited from holders of Paired Shares by
Directors, officers and employees of The Meditrust Companies in person or by
telephone, telegraph, facsimile or other appropriate means of communications. No
additional compensation, except for reimbursement of reasonable out-of-pocket
expenses, will be paid to these Directors, officers and employees of The
Meditrust Companies in connection with the solicitation. In addition, D.F. King
& Co., Inc., a proxy solicitation firm, has been engaged by The Meditrust
Companies to act as proxy solicitor and will receive fees estimated at $5,000
plus reimbursement of out-of-pocket expenses.

QUORUM

The holders of a majority of the common stock outstanding and entitled to
vote, present in person or represented by proxy, shall constitute a quorum at
each of the Companies Meetings. Votes cast in person or by proxy at the
Meditrust Meeting and the Operating Company Meeting will be tabulated by the
inspector of elections appointed for each respective meeting and will determine
whether or not a quorum is present. The inspector of elections will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but as unvoted for purposes of determining
the approval of any matter submitted to the shareholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will be considered
as present but not entitled to vote with respect to that matter.

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<PAGE>
PRINCIPAL AND MANAGEMENT SHAREHOLDERS OF THE MEDITRUST COMPANIES

The following table sets forth as of May 31, 1999, except as otherwise
noted, the number of Paired Shares beneficially owned, directly or indirectly,
by (i) each of the Directors of each of The Meditrust Companies, (ii) all
persons who served as chief executive officer of either of The Meditrust
Companies for the year ended December 31, 1998, (iii) each of the four most
highly compensated executive officers for the year ended December 31, 1998, (iv)
all Directors and current executive officers of The Meditrust Companies as a
group, and (v) all persons who, to the knowledge of The Meditrust Companies,
beneficially own five percent or more of the Paired Shares as of May 31, 1999.
Unless otherwise indicated, all information concerning beneficial ownership was
provided by the respective Director, executive officer or five percent
beneficial owner, as the case may be.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS
- ------------------------------------------------------------------------- ---------------------- -----------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
Donald J. Amaral......................................................... 480 *
William C. Baker......................................................... 61,400 *
David F. Benson.......................................................... 207,810(2) *
Nancy G. Brinker......................................................... 1,500 *
Edward W. Brooke......................................................... 245,962(3) *
William G. Byrnes........................................................ 100,182 *
James P. Conn............................................................ 16,469 *
John C. Cushman, III..................................................... 225,718 *
C. Gerald Goldsmith...................................................... 1,000 *
Thomas J. Magovern....................................................... 60,075 *
Stephen E. Merrill....................................................... 1,000 *
Thomas M. Taylor......................................................... 5,161,647(4) 3.6%
Gerald Tsai, Jr.......................................................... 48,064(5) *
Michael S. Benjamin...................................................... 118,665 *
Michael F. Bushee........................................................ 120,316 *
Laurie T. Gerber......................................................... 28,665 *
---------- -----
All Directors and current executive officers of
The Meditrust Companies as a group...................................... 6,398,953(6) 4.5%
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS
- ------------------------------------------------------------------------- ---------------------- -----------------
<S> <C> <C>
5% SHAREHOLDERS:
Portfolio C Investors, L.P............................................... 2,990,809(7)
The Airlie Group, L.P.................................................... 269,633(8)
Annie R. Bass Grandson's Trust for Lee M. Bass........................... 445,962(9)
Annie R. Bass Grandson's Trust for Sid. R. Bass.......................... 445,962(10)
The Bass Management Trust................................................ 658,526(11)
Hyatt Anne Bass Successor Trust.......................................... 857,701(12)
Lee M. Bass, Inc......................................................... 2,294,211(13)
Peter Sterling........................................................... 187,600
Samantha Sims Bass Successor Trust....................................... 857,701(14)
Sid R. Bass, Inc......................................................... 2,294,211(15)
Thomas M. Taylor & Co.................................................... 1,901,205(16)
William P. Hallman, Jr................................................... 140,002(17)
----------- -----
(as a Group)........................................................... 13,343,523 9.4%
c/o W. Robert Cotham
201 Main Street, Suite 2600
Fort Worth, Texas 76102
FORMER DIRECTOR AND EXECUTIVE OFFICER:
Abraham D. Gosman........................................................ 0(18) *
</TABLE>

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

Less than 1%.

(1) Unless otherwise indicated, the number of Paired Shares stated as being
owned beneficially includes (i) Paired Shares beneficially owned by spouses,
minor children and/or other relatives in which the Director or officer may
share voting power and (ii) any of the Paired Shares listed as being subject
to options exercisable within 60 days of May 31, 1999.

(2) Does not include 120 Paired Shares owned by Mr. Benson's children, to which
Mr. Benson disclaims any beneficial interest.

(3) Does not include 1,201 Paired Shares owned by Senator Brooke's wife's IRA,
6,000 Paired Shares owned of record by Senator Brooke as custodian for his
son, as to which Paired Shares Senator Brooke disclaims any beneficial
interest.

(4) Mr. Taylor may be deemed to beneficially own the shares beneficially owned
by Thomas M. Taylor & Co., Portfolio C Investors, L.P. and the Airlie Group,
L.P. The aggregate of all of such shares which Mr. Taylor may be deemed to
beneficially own is 5,161,647.

(5) Does not include 2,500 Paired Shares owned by Mr. Tsai's wife, as to which
Paired Shares Mr. Tsai disclaims any beneficial interest.

(6) Does not include an aggregate of 9,324 Paired Shares owned by or for
parents, spouses or children, as to which Paired Shares the Directors or
officers disclaim any beneficial interest.

(7) Mr. Thomas M. Taylor, solely in his capacity as the President and sole
shareholder of the general partner of the general partner of Trinity I Fund,
L.P., the sole stockholder of the general partner of Portfolio C Investors,
L.P., may also be deemed a beneficial owner of such shares.

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<PAGE>
(8) Mr. Thomas M. Taylor, solely in his capacity as President of the general
partner of the Airlie Group, L.P.'s general partner, may also be deemed a
beneficial owner of such shares.

(9) Mr. William P. Hallman, Jr., solely in his capacity as Trustee of the Annie
R. Bass Grandson's Trust for Lee M. Bass, may also be deemed a beneficial
owner of such shares.

(10) Mr. William P. Hallman, Jr., solely in his capacity as Trustee of the Annie
R. Bass Grandson's Trust for Sid R. Bass, may also be deemed a beneficial
owner of such shares.

(11) Mr. Perry R. Bass, solely in his capacity as sole Trustee and as one of two
trustors of The Bass Management Trust, may also be deemed a beneficial owner
of such shares.

(12) Panther City Investment Company, solely in its capacity as Trustee of the
Hyatt Anne Bass Successor Trust, may also be deemed a beneficial owner of
such shares.

(13) Mr. Lee M. Bass, solely in his capacity as President of Lee M. Bass, Inc.,
may also be deemed a beneficial owner of such shares.

(14) Panther City Investment Company, solely in its capacity as Trustee of the
Samantha Sims Bass Successor Trust, may also be deemed a beneficial owner of
such shares.

(15) Mr. Sid. R. Bass, solely in his capacity as President of Sid R. Bass, Inc.,
may also be deemed a beneficial owner of such shares.

(16) Mr. Thomas M. Taylor, solely in his capacity as President of Thomas M.
Taylor & Co., may also be deemed a beneficial owner of such shares.

(17) Such amount does not include shares held in Annie R. Bass Grandson's Trust
for Lee M. Bass and Annie R. Bass Grandson's Trust for Sid R. Bass, for both
of which Mr. Hallman serves as trustee.

(18) Mr. Gosman served as CEO of Operating Company until August 1998. Based on
filings made by Mr. Gosman prior to his resignation on August 3, 1998 and
subsequent information reported to The Meditrust Companies. Mr. Gosman has
not been required to make filings since his resignation; therefore The
Meditrust Companies can not verify the accuracy of this disclosure.

The information reflected for certain beneficial owners listed under the
heading "5% Shareholders" is based on statements and reports filed with the SEC
and furnished to The Meditrust Companies by such holders. No independent
investigation concerning the accuracy thereof has been made by The Meditrust
Companies.

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<PAGE>
ANNUAL MEETING PROPOSALS OF THE MEDITRUST COMPANIES

ANNUAL REPORT

The Annual Report of the Company for the fiscal year ended December 31,
1998, including financial statements, audited and reported upon by
PricewaterhouseCoopers, L.L.P., independent accountants, is being mailed
herewith to each of the Company's shareholders of record at the close of
business on June 7, 1999.

EXECUTIVE COMPENSATION--MEDITRUST

The following table sets forth the compensation paid to those individuals
who served as Meditrust's Chief Executive Officer, or in a similar capacity, and
the four other most highly compensated executive officers other than the Chief
Executive Officer, or such individuals who served in a similar capacity, in 1998
for services rendered in all capacities to Meditrust and its subsidiaries during
the fiscal years ended December 31, 1998, 1997 and 1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
--------------------------------------
RESTRICTED SECURITIES
ANNUAL COMPENSATION STOCK UNDERLYING ALL OTHER
----------------------- AWARDS OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(6) SARS (#) ($)(1)
- --------------------------------------- ------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
David F. Benson........................ 1998 500,000 319,912(3) 2,812,500 375,000 6,860
CEO and President 1997 350,000 391,384(3) 6,610
1996 290,000 335,997(3) 6,370

Michael S. Benjamin.................... 1998 300,000 194,718(4) 1,125,000 150,000 6,785
Senior Vice President 1997 200,000 238,141(4) 6,536
and Secretary 1996 175,000 240,318(4) 6,305

Michael F. Bushee...................... 1998 300,000 194,718(4) 1,125,000 150,000 6,627
Chief Operating 1997 200,000 238,141(4) 6,377
Officer 1996 175,000 240,318(4) 6,305

Laurie T. Gerber....................... 1998 250,000 150,000 1,125,000 150,000 6,157
Chief Financial Officer 1997 155,000 149,525(5) 5,907
1996(2) 6,458 13,370(5) 0
</TABLE>

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

(1) Includes 401(k) plan contribution of $5,000, $5,000, $5,000 and $5,000 in
1998, $4,750, $4,750, $4,750 and $4,750 in 1997 and $4,750, $4,750, $4,750
and $0 in 1996, and term life insurance premium payments of $1,860, $1,785,
$1,627 and $1,157 in 1998, $1,860, $1,785, $1,627 and $1,157 in 1997 and
$1,620, $1,555, $1,555 and $0 in 1996, on behalf of Messrs. Benson, Benjamin
and Bushee and Ms. Gerber, respectively.

(2) Ms. Gerber commenced her employment with Meditrust in December 1996.

(3) For the years 1998, 1997 and 1996, $69,912, $167,286 and $121,832 of which
relates to Meditrust's issuance to Mr. Benson of (i) 2,558 Shares in four
installments valued at $36.38, $30.94, $26.81 and $16.00 per Share on
January 2, 1998, April 1, 1998, July 1, 1998 and October 1, 1998; (ii) 5,097

6
<PAGE>
Shares in three installments valued at $30.27, $31.89 and $36.38 per Share
on April 1, 1997, July 1, 1997 and October 10, 1997; and (iii) 514 Shares
and 3,827 Shares valued at $27.88 and $28.09 per Share on April 12, 1996 and
July 8, 1996. All issuance prices were the closing prices for Shares on the
New York Stock Exchange on the respective dates of issuance.

(4) For the years 1998, 1997 and 1996, $44,718, $86,875 and $130,318 of which
relates to Meditrust's issuance to each of Messrs. Benjamin and Bushee of
(i) 1,646 Shares in four installments valued at $36.38, $30.94, $26.81 and
$16.00 per Share on January 2, 1998, April 1, 1998, July 1, 1998 and October
1, 1998; (ii) 2,734 Shares in installments valued at $30.27, $31.89 and
$36.38 per Share on April 1, 1997, July 1, 1997 and January 2, 1998; and
(iii) 308, 2,792, 1,135 and 307 Shares valued at $27.88, $28.09, $29.23 and
$32.77 per Share on April 12, 1996, July 8, 1996, October 3, 1996 and
January 3, 1997. All issuance prices were the closing prices for Shares on
the New York Stock Exchange on the respective dates of issuance.

(5) For the years 1997 and 1996, $39,472 and $13,370 of which relates to
Meditrust's issuance to Ms. Gerber of (i) 1,224 Shares in three equal
installments valued at $30.27, $31.89 and $34.59 per Share on April 1, 1997,
July 1, 1997 and October 10, 1997 and (ii) 408 Shares valued at $32.77 per
Share on January 3, 1997. All issuance prices are the closing prices for
Shares on the New York Stock Exchange on the respective dates of issuance.

(6) On July 31, 1998, Meditrust issued 125,000, 50,000, 50,000 and 50,000 Shares
of restricted stock, which as of December 31, 1998 had a value of
$1,875,000, $750,000, $750,000 and $750,000, to Messrs. Benson, Benjamin and
Bushee and Ms. Gerber. The restricted stock vests on the earlier of the 8th
year or upon achievement of the following criteria: achievement of funds
from operations of $2.92 in 2000, $3.10 in 2002, $3.48 in 2003 and $3.69 in
2004. All of the restricted stock immediately vests upon a change of control
of Meditrust. Dividends were paid in August, September and November.

The following table sets forth information concerning the grant of stock
options to the following persons during the fiscal year ended December 31, 1998:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES PERCENT OF TOTAL GRANT DATE
UNDERLYING OPTIONS GRANTED EXERCISED PRESENT
OPTIONS TO EMPLOYEES BASED PRICE EXPIRATION VALUE
NAME GRANTED(#) IN 1998 ($/SHARE) DATE ($)(1)
- -------------------------------------------- ----------- --------------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
David F. Benson............................. 375,000 27 13.44 12/08 393,750
Michael S. Benjamin......................... 150,000 11 13.44 12/08 157,500
Michael F. Bushee........................... 150,000 11 13.44 12/08 157,500
Laurie T. Gerber............................ 150,000 11 13.44 12/08 157,500
</TABLE>

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

(1) In accordance with Securities and Exchange Commission rules, the
Black-Scholes option pricing model was used to estimate the grant date
present value of the options set forth in this table. The option pricing
model assumed an estimated volatility of 33%, dividend yield of 14%,
risk-free rate of return of 4.35% and an expected life of 4 years from the
grant date.

7
<PAGE>
The following table sets forth information concerning exercises of stock
options by the following persons during the fiscal year ended December 31, 1998
and the number and value of their stock options at December 31, 1998:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE- MONEY
SHARES NUMBER OF SECURITIES OPTIONS AT
ACQUIRED VALUE UNDERLYING UNEXERCISED 12/31/98
ON REALIZED OPTIONS AT 12/31/98 (#) ($)EXERCISABLE/
NAME EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE UNEXERCISABLE(2)
- --------------------------------------------- ----------------- --------------- ----------------------- ------------------
<S> <C> <C> <C> <C>
David F. Benson.............................. 0 0 187,095/759,513 0/585,000
Michael S. Benjamin.......................... 0 0 104,138/438,385 0/234,000
Michael F. Bushee............................ 0 0 104,138/438,385 0/234,000
Laurie T. Gerber............................. 0 0 24,031/246,129 0/234,000
</TABLE>

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

(1) Market value of underlying securities at exercise, less the exercise price.

(2) Market value of $15.00 as of December 31, 1998, less the exercise price.

8
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE(1)

In determining the compensation to be paid to Meditrust's executive
officers, the Compensation Committee (the "Compensation Committee") strives to
(i) reward executives for achievement of Meditrust's strategic goals and the
enhancement of shareholder value and (ii) attract, motivate and retain
highly-trained and talented executives who are vital to Meditrust's long-term
success. Individual compensation packages are generally set at levels believed
by the Compensation Committee to correspond to the median range of compensation
paid to individuals serving in comparable positions at other real estate
investment trusts with publicly-traded securities (including those comprising
the National Association of Real Estate Investment Trusts Index referred to in
the performance graph set forth hereinafter). At present, Meditrust's
compensation package is comprised of a base salary, an annual cash bonus,
long-term incentives in the form of stock options and stock grants and other
benefits typically offered to executives by major corporations.

SALARIES

During 1998, the Board of Directors, on the recommendation of the
Compensation Committee, increased the salaries paid to each of the four most
highly compensated executive officers of Meditrust (collectively, the "Senior
Executives"). These salary increases, as well as those of other Meditrust
executives, were based on cost-of-living adjustments, position tenure,
subjective assessments of individual performance, comparability considerations
and competitive data, including asset growth, revenue growth, cash flow growth
and total return to shareholders.

Under certain circumstances, Section 162(m) of the Internal Revenue Code
denies a deduction for compensation in excess of $1 million paid to an
individual who is the chief executive officer or one of the four next most
highly paid officers of a corporation. In general, compensation from all sources
is taken into account including salary, bonus and income realized from the
exercise of non-qualified stock options. Because it is a real estate investment
trust, and based on the advice of counsel, Meditrust believes that the denial of
deductions by Section 162(m) is not likely to have any adverse impact on
Meditrust. A real estate investment trust is subject to tax on its "real estate
investment trust taxable income," which is taxable income subject to adjustments
and reduced by a deduction for dividends paid. Meditrust expects to pay
sufficient dividends such that it will have no real estate investment trust
taxable income even if Section 162(m) were to be applicable to compensation paid
to one or more of its officers.

BONUS AWARDS

Executive officers of Meditrust were awarded cash bonuses in 1998 based on
the Compensation Committee's assessment of Meditrust's and the employees'
performance. The performance measures reviewed by the Compensation Committee
included Meditrust's success in implementing the restructuring plan.

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

(1) The report of the Compensation Committee shall not be deemed to be
incorporated by reference by any general statement incorporating by
reference this Joint Proxy Statement into any filings of The Meditrust
Companies pursuant to the Securities Act or the Exchange Act, except to the
extent The Meditrust Companies specifically incorporate this report by
reference therein, and shall not be deemed soliciting material or otherwise
deemed filed under either such Acts.

9
<PAGE>
EQUITY INCENTIVE PLANS

The Compensation Committee administers Meditrust's 1995 Share Award Plan.
Stock options and stock grants are awarded under this plan in order to provide
incentives to Directors, officers and key employees of Meditrust to maximize
their efforts on behalf of Meditrust, to attract and retain those highly
competent individuals upon whose judgment, initiative and leadership Meditrust's
continuing success largely depends and to align the interests of the Directors,
officers and key employees of Meditrust with those of Meditrust's shareholders.
The size of individual option and stock grants is determined by the Compensation
Committee based on its comparison of option and stock grants to executives with
similar responsibilities in other companies and the executive's level of
responsibility and relative importance to the operations of Meditrust.

It is the present policy of the Compensation Committee to review
periodically Meditrust's stock option and stock grant award levels and the
over-all effectiveness of Meditrust's equity incentive plans in achieving the
objectives of Meditrust.

OTHER COMPENSATION PLANS

Meditrust maintains certain broad-based employee benefit plans in which the
Senior Executives participated. These plans include a 401(k) savings plan, life,
disability and health insurance plans and allowances for automobile use. These
plans are not directly or indirectly tied to Meditrust's performance.

Submitted by,
C. Gerald Goldsmith, Chairman
Thomas J. Magovern
Gerald Tsai, Jr.
Thomas M. Taylor

10
<PAGE>
EXECUTIVE COMPENSATION--OPERATING COMPANY

The following table sets forth the compensation paid to those individuals
who served as Operating Company's Chief Executive Officer, or in a similar
capacity, and the two other most highly compensated executive officers other
than the Chief Executive Officer (collectively, the "Operating Company Senior
Executives"), or such individuals who served in a similar capacity, in 1998 for
services rendered in all capacities to Operating Company and its subsidiaries
during the fiscal years ended December 31, 1998, 1997 and 1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION RESTRICTED ALL OTHER
---------------------- STOCK AWARDS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) ($)(1)
- ------------------------------------------------ ------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Abraham D. Gosman............................... 1998(2) 591,669 1,000,000 (3) 5,874
Former Chief 1997(2) 140,580 0 0 26,616(4)
Executive Officer 1996(2) N/A N/A N/A N/A

William C. Baker................................ 1998 0 45,844 (5) (6)
President 1997 300,000 350,000 0 4,352(7)
1996 225,000 250,000 0 3,264

Edward J. Robinson.............................. 1998(8) 187,501 0 0 1,250(6)
Chief Operating 1997(8) N/A N/A N/A N/A
Officer 1996(8) N/A N/A N/A N/A
</TABLE>

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

(1) Includes 401(k) plan contribution of $5,000, $0 and $1,250 in 1998, $741, $0
and $0 in 1997 and $0, $0 and $0 in 1996, and term life insurance premium
payments of $874, $0 and $1,250 in 1998, $136, $4,352 and $0 in 1997 and $0,
$3,264 and $0 in 1996, on behalf of Messrs. Gosman, Baker and Robinson.

(2) Mr. Gosman became the Chief Executive Officer of Operating Company on
November 5, 1997. He was not otherwise employed by Operating Company until
that date. Information provided with respect to 1997 is for the period
November 5, 1997 through December 31, 1997.

(3) On July 28, 1998, Operating Company issued 800,000 Shares of restricted
stock at $25.25 per Share to Mr. Gosman, which as of the grant date had a
value of $20,200,000. This grant was forfeited on November 14, 1998.
Dividends were paid in August, September and November of 1998.

(4) Reflects the dollar value as of December 31, 1997, of the benefit to Mr.
Gosman of the portion of the premium paid by Operating Company in 1997 with
respect to a split-dollar life insurance agreement (see "Further Information
Regarding the Boards of Directors and Executive Officers" below for a
description of such agreement). The benefit for 1997 was determined by
calculating the time value of money (using applicable short-term federal
funds rate of 5.68%) of the portion of the premium paid by the employer in
1997 ($468,600) relating to non-term life insurance for the period from May
19, 1997 (the date on which the premium was paid) until June 18, 1998 (which
was the earliest date on which the employer could terminate the agreement
and obtain a refund of

11
<PAGE>
the premium paid). Operating Company assumed the obligations of Meditrust
under such split-dollar life insurance agreement on November 5, 1997.

(5) On July 31, 1998, Operating Company issued 75,000 Shares of restricted stock
at $22.50 per Share to Mr. Baker, which as of the grant date had a value of
$1,687,500. As of December 31, 1998 the restricted stock had a value of
$1,125,000. This grant was forfeited on January 4, 1999. Dividends were paid
in August, September and November.

(6) Does not include severance payments of $1,723,800 and $1,234,651 paid to
Messrs. Baker and Robinson.

(7) Does not include severance payments of $1,583,233 paid in 1997 to Mr. Baker.

(8) Mr. Robinson became the Chief Operating Officer of Operating Company in
April 1998 and ceased to be employed by Operating Company in August 1998. He
was not otherwise employed by Operating Company until that date. Information
provided with respect to 1998 is for the period commencing in April 1998.

The following table sets forth information concerning exercises of stock
options by the following persons during the fiscal year ended December 31, 1998
and the number and value of their stock options at December 31, 1998:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED IN-THE-
SHARES NUMBER OF SECURITIES MONEY OPTIONS AT
ACQUIRED VALUE UNDERLYING UNEXERCISED 12/31/98
ON REALIZED OPTIONS AT 12/31/98 (#) ($)EXERCISABLE/
NAME EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE UNEXERCISABLE
- ------------------------------------------ ----------- ---------- --------------------------- ---------------------
<S> <C> <C> <C> <C>
Abraham D. Gosman......................... 25,234 328,039 0/0 0/0
William C. Baker.......................... 75,000 1,200,000 0/0 0/0
Edward J. Robinson........................ 0 0 0/0 0/0
</TABLE>

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

(1) Market value of underlying securities at exercise, less the exercise price.

12
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE(2)

In determining the compensation to be paid to Operating Company's executive
officers, the Compensation Committee of Operating Company (the "Operating
Company Compensation Committee") strives to (i) reward executives for
achievement of Operating Company's strategic goals and the enhancement of
shareholder value and (ii) attract, motivate and retain highly-trained and
talented executives who are vital to Operating Company's long-term success. At
present, Operating Company's compensation package is comprised of a base salary,
an annual cash bonus, long-term incentives in the form of stock options and
stock grants and other benefits typically offered to executives by major
corporations.

SALARIES

During 1998, the Board of Directors, on the recommendation of the Operating
Company Compensation Committee, increased the salaries paid to Operating
Company's Chief Executive Officer as well as other Operating Company executives.
These salary increases were based on cost-of-living adjustments, position
tenure, subjective assessments of individual performance, comparability
considerations and competitive data, including asset growth, revenue growth,
cash flow growth and total return to shareholders.

To the extent readily determinable, and as one of the factors of
compensation matters, the Operating Company Compensation Committee considers the
anticipated tax treatment to Operating Company and to the executives of various
payments and benefits. Some types of compensation payments and their
deductibility depend upon the timing of an executive's vesting or exercise of
previously granted rights. Further interpretations of and changes in the tax
laws and other factors beyond the Operating Company Compensation Committee's
control also affect the deductibility of compensation. For these and other
reasons, the Operating Company Compensation Committee will not necessarily limit
executive compensation to that deductible under Section 162(m) of the Internal
Revenue Code. The Operating Company Compensation Committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent with
its other compensation objectives.

BONUS AWARDS

Executive officers of Operating Company were awarded cash bonuses in 1998
based on the Operating Company Compensation Committee's assessment of Operating
Company's and the employees' performance. The performance measures reviewed by
the Operating Company Compensation Committee included Operating Company's
success in implementing the restructuring plan.

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

(2) The report of the Operating Company Compensation Committee shall not be
deemed to be incorporated by reference by any general statement
incorporating by reference this Joint Proxy Statement into any filings of
The Meditrust Companies pursuant to the Securities Act or the Exchange Act,
except to the extent The Meditrust Companies specifically incorporate this
report by reference therein, and shall not be deemed soliciting material or
otherwise deemed filed under either such Acts.

13
<PAGE>
EQUITY INCENTIVE PLANS

The Operating Company Compensation Committee administers Operating Company's
1995 Share Award Plan. Stock options and stock grants are awarded under this
plan in order to provide incentives to Directors, officers and key employees of
Operating Company to maximize their efforts on behalf of Operating Company, to
attract and retain those highly competent individuals upon whose judgment,
initiative and leadership Operating Company's continuing success largely depends
and to align the interests of the Directors, officers and key employees of
Operating Company with those of Operating Company's shareholders. The size of
individual option and stock grants is determined by the Operating Company
Compensation Committee based on its comparison of option and stock grants to
executives with similar responsibilities in other companies and the executive's
level of responsibility and relative importance to the operations of Operating
Company.

It is the present policy of the Operating Company Compensation Committee to
review periodically Operating Company's stock option and stock grant award
levels and the over-all effectiveness of Operating Company's equity incentive
plans in achieving the objectives of Operating Company.

OTHER COMPENSATION PLANS

Operating Company maintains certain broad-based employee benefit plans in
which the Operating Company Senior Executives participated. These plans include
a 401(k) savings plan, life, disability and health insurance plans and
allowances for automobile use. These plans are not directly or indirectly tied
to Operating Company's performance.

Submitted by,
C. Gerald Goldsmith, Chairman
Thomas J. Magovern
Gerald Tsai, Jr.
Thomas M. Taylor

14
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished
to The Meditrust Companies during its most recent fiscal year, Forms 5 and
amendments thereto furnished to The Meditrust Companies with respect to its most
recent fiscal year and written representations furnished to The Meditrust
Companies, no officer, Director or 10% beneficial owner of The Meditrust
Companies failed to timely file a required Form except for Mr. Edward Robinson,
former Chief Operating Officer of Operating Company. Mr. Robinson, whose
employment with Operating Company terminated on August 31, 1998, failed to
timely file a Form 3 when he initially became an executive officer on April 15,
1998. A Form 3 was filed for Mr. Robinson on May 12, 1998.

PERFORMANCE GRAPH(3)

Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the shares of Meditrust's Predecessor
and The Meditrust Companies against the cumulative market-weighted return of the
Standard & Poor's Composite 500 Stock Index and the National Association of Real
Estate Investment Trusts ("NAREIT") All REIT Total Return Index (which is
comprised of all tax-qualified real estate investment trusts, without regard to
investment focus, listed on the New York Stock Exchange, American Stock Exchange
and NASDAQ National Market System) for the period of five fiscal years
commencing January 1, 1994 and ending December 31, 1998.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
MEDITRUST S&P 500 NAREIT
<S> <C> <C> <C>
12/31/1993 $100.00 $100.00 $100.00
1994 $101.80 $101.31 $100.81
1995 $125.72 $139.23 $119.26
1996 $154.19 $171.19 $161.90
1997 $180.71 $228.32 $192.44
1998 $90.48 $293.57 $156.22
</TABLE>

<TABLE>
<CAPTION>
12/31/93 1994 1995 1996 1997 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Meditrust....................................... $ 100.00 $ 101.80 $ 125.72 $ 154.19 $ 180.71 $ 90.48
S&P 500......................................... $ 100.00 $ 101.31 $ 139.23 $ 171.19 $ 228.32 $ 293.57
NAREIT.......................................... $ 100.00 $ 100.81 $ 119.26 $ 161.90 $ 192.44 $ 156.22
</TABLE>

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

(3) Assumes that the value of an investment in Meditrust Shares and each index
was $100 on December 31, 1993 and that all dividends were reinvested on a
monthly basis.

15
<PAGE>
PROPOSAL 1--ELECTION OF DIRECTORS OF THE MEDITRUST COMPANIES

The respective Boards of Directors of each of The Meditrust Companies are
divided into three classes. Each class has a term of three years and the terms
are staggered so that in each year only one class of Directors for each of The
Meditrust Companies is elected. The nominees standing for re-election in 1999
for each of The Meditrust Companies and, in the case of James P. Conn, standing
for re-election in 1999 for Meditrust only, together with the Directors whose
terms do not expire, are listed below. It is the intention of the persons named
as proxies in the accompanying form of proxy (unless otherwise indicated) to
vote such proxies to elect the nominees for Director named in the following
table, all of whom are currently members of the Board of Directors. If elected,
the nominees will serve as Directors until The Meditrust Companies 2002 annual
meeting and until their successors are chosen and qualified. In the event that
any of the nominees becomes unavailable (which is not now anticipated by The
Meditrust Companies), the persons named as proxies have discretionary authority
to vote for a substitute or to reduce the number of Directors to be fixed and
elected. The Boards of Directors have no reason to believe that any of said
persons will be unwilling or unable to serve if elected. Election of each of the
nominees will require the affirmative vote of a majority of the stock having
voting power present in person or represented by proxy and voting at the
Meditrust Meeting or the Operating Company Meeting, provided that such majority
is at least a majority of the number of shares required to constitute a quorum.
Abstentions and broker non-votes with regard to any item being acted upon at the
Companies Meetings will not be treated as votes cast.

NOMINEES FOR DIRECTOR

<TABLE>
<CAPTION>
DIRECTOR OF
NAMED ENTITY AND
NAME AND PRINCIPAL ITS PREDECESSOR
OCCUPATION OR EMPLOYMENT AGE DIRECTOR OF SINCE TERMS EXPIRE
- ------------------------------------------- --- ------------------------------ ---------------- -------------
<S> <C> <C> <C> <C>
James P. Conn ............................. 61 Meditrust 1995 1999
Managing Director and Chief Investment
Officer of Financial Security Assurance,
Inc., an insurance company

Stephen E. Merrill ........................ 52 Meditrust and Operating 1998 and 1998 1999
President, Bingham Consulting Group, LLC Company

Thomas M. Taylor .......................... 56 Meditrust and Operating 1998 and 1998 1999
President of Thomas M. Taylor & Co., an Company
investment consulting firm
</TABLE>

16
<PAGE>
THE BOARDS OF DIRECTORS OF THE MEDITRUST COMPANIES RECOMMENDS THAT YOU VOTE
"FOR" THE NOMINEES FOR DIRECTOR.

CONTINUING DIRECTORS

<TABLE>
<CAPTION>
DIRECTOR OF
NAMED ENTITY AND
NAME AND PRINCIPAL ITS PREDECESSOR
OCCUPATION OR EMPLOYMENT AGE DIRECTOR OF SINCE TERMS EXPIRE
- ------------------------------------------- --- ------------------------------ ---------------- -------------
<S> <C> <C> <C> <C>
William C. Baker .......................... 65 Operating Company 1991 2000
President and Treasurer of Operating

David F. Benson ........................... 50 Meditrust and Operating 1991 and 1997 2001
Chief Executive Officer, President and Company
Treasurer of Meditrust

Nancy G. Brinker .......................... 52 Meditrust and Operating 1998 and 1998 2001
Founding Chairman, Susan G. Komen Breast Company
Cancer Foundation

Edward W. Brooke .......................... 79 Meditrust and Operating 1985 and 1997 2000
Retired Company

William G. Byrnes ......................... 48 Operating Company 1998 2001
Professor of Finance,
Georgetown University Business School

John C. Cushman, III ...................... 58 Meditrust 1996 2000
President and Chief Executive Officer of
Cushman Realty Corporation, a commercial
real estate brokerage firm

C. Gerald Goldsmith ....................... 71 Meditrust and Operating 1997 and 1997 2000
Independent investor and financial Company
consultant

Thomas J. Magovern ........................ 56 Meditrust and Operating 1985 and 1997 2001
Financial/Real Estate Consultant Company
</TABLE>

William C. Baker has been a Director of Operating Company since 1991 and has
been President and Treasurer of Operating Company since August 1998. Mr. Baker
was Chief Executive Officer of Santa Anita Realty Enterprises from April 1996 to
August 1996. Mr. Baker was the President of Red Robin International, Inc., a
restaurant company, from 1993 to 1995, a private investor from 1988 to 1992 and
Chairman of the Board and Chief Executive Officer of Del Taco, Inc. from 1976 to
1988. He has also served as Chairman of the Board of Coast Newport Properties
since 1991. Mr. Baker is a Director of Callaway Golf Company and Public Storage,
Inc. He is also the President and Chief Executive Officer of Los Angeles Turf
Club, Incorporated.

17
<PAGE>
David F. Benson has been a Director of Meditrust since 1991 and a Director
of Operating Company since 1997. Mr. Benson has been interim Chief Executive
Officer of Meditrust since August 1998, President of Meditrust since September
1991 and Treasurer since October 1996. Mr. Benson also served as Treasurer of
Meditrust from January 1986 to May 1992. He was Treasurer of the Mediplex Group,
Inc. from January 1986 through June 1987. He was previously associated with the
Boston office of PricewaterhouseCoopers, L.L.P. from 1975 to 1985 where he
specialized in providing financial services to a variety of health care clients.
Previous to that Mr. Benson was associated with the New York investment banking
firm, Brown Brothers Harriman & Company. Mr. Benson is also a trustee of
Mid-Atlantic Realty Trust, a shopping center REIT, traded on the New York Stock
Exchange, and a non-executive Director of NHP, Plc, a UK company specializing in
the purchase and leasing of purpose-built nursing homes.

Nancy G. Brinker has been a Director of The Meditrust Companies since April
1998. She has served as Founding Chairman of the Susan G. Komen Breast Cancer
Foundation since 1982, and she has been a healthcare consultant since 1992. She
was a Director of Caremark, Intl. from 1993 to 1996 and Chief Executive Officer
of In Your Corner, Inc., a health and wellness products and information company
from October 1995 to April 1998. She is a member of the Board of Directors of
Physician Reliance Network, Inc.

Edward W. Brooke has been a Director of Meditrust since 1985 and a Director
of Operating Company since 1997. Senator Brooke was a partner of O'Connor &
Hannan, a Washington, D.C. law firm, from 1979 until January 1997. From 1979
until October 1990 he was Of Counsel to Csaplar & Bok, a Boston law firm. He was
United States Senator from Massachusetts from January 1967 to January 1979 and
the Massachusetts Attorney General from 1963 to 1967.

William G. Byrnes has been a Director of Operating Company since April 1998.
He has been appointed a Distinguished Teaching Professor of Finance at the
Georgetown University Business School, effective August 1998. He was a Managing
Director of BT Alex. Brown (and its predecessor, Alex. Brown & Sons
Incorporated) from 1981 through February 1998. He is a member of the Board of
Directors of JDN Realty Corporation and Security Capital Preferred Growth,
Incorporated.

James P. Conn has been a Director of Meditrust since 1995. Mr. Conn had been
the Managing Director and Chief Investment Officer of Financial Security
Assurance, Inc., an insurance company. He was also the President and Chief
Executive Officer of Bay Meadows Operating Company, a horse racing operator,
from 1988 to 1992. Mr. Conn is a Trustee of the investment companies; Gabelli
Equity Trust and Gabelli Global Multimedia Trust and a member of the Board of
Directors of First Republic Bank.

John C. Cushman, III has been a Director of Meditrust since 1996. Mr.
Cushman has been the President and Chief Executive Officer of Cushman Realty
Corporation since 1978. He is a Director of National Golf Properties, Inc., an
owner of golf courses.

C. Gerald Goldsmith has been a Director of The Meditrust Companies since
August 1997. Mr. Goldsmith was Chairman and President of I.C.D., a New York
Stock Exchange listed company from 1972 to 1976, and since then he has been an
independent investor and financial advisor. He currently serves as a Director of
Nine West Group, Inc., Palm Beach National Bank & Trust Company, American
Banknote Corporation, Innkeepers USA Trust and Plymouth Rubber. He also serves
as Chairman of the Board of Intercoastal Health Foundation.

18
<PAGE>
Thomas J. Magovern has been a Director of Meditrust since 1985 and a
Director of Operating Company since 1997. Mr. Magovern was a Regional Vice
President of Real Estate Asset Management of Summit Bank (successor to United
Jersey Bank), a New Jersey banking institution, from November 1995 to 1998. He
was a principal of Nationwide Financial Corp., a real estate consulting firm,
from September 1993 to October 1995. Mr. Magovern was Executive Vice President
of Northeast Savings, F.A. from January 1991 until February 1993. Prior to that
time he had been Senior Vice President of City Savings Bank, F.S.B. from April
1989 until January 1991 and a Vice President of that bank for more than five
years.

Stephen E. Merrill has been a Director of The Meditrust Companies since May
1998. Mr. Merrill is the President of Bingham Consulting Group, LLC, and was Of
Counsel to the law firm Choate, Hall & Stewart from March 1997 to February 1999.
Previously, Mr. Merrill served as Governor of the State of New Hampshire from
1993 through 1997. He was senior partner in the law firm Merrill & Broderick
from 1989 through 1993 and served as Attorney General for the State of New
Hampshire from 1985 through 1989.

Thomas M. Taylor has been a Director of The Meditrust Companies since 1998.
Mr. Taylor has been interim Chairman of the Boards of Meditrust and Operating
Company since August 1998. Prior to that he was Chairman of the Board of La
Quinta Inns, Inc. from 1994 to 1998. He has been President of the investment
consulting firm, Thomas M. Taylor & Co. since 1985 and President of TMT-FW,
Inc., a diversified investment firm, since September 1989. Mr. Taylor is also
Director of Kirby Corporation, MacMillan Bloedel Limited, Moore Corporation
Limited, Agrium Inc. and John Wiley & Sons, Inc., and Chairman of the Board of
Encal Energy, Ltd.

INFORMATION REGARDING THE BOARD OF DIRECTORS OF MEDITRUST

The Board of Directors of Meditrust met 29 times in 1998. Each Director of
Meditrust attended at least 75% of the meetings of the Board of Directors and
all committees on which he or she served in 1998.

The Executive Committee, consisting of Messrs. Taylor, Brooke, Amaral, Lowe
(retired) and Gosman (resigned), exercises all of the powers of the Board of
Directors between meetings of the Board of Directors, except such powers as are
reserved to the Board of Directors by law. The Executive Committee, acting in
its capacity as the Nominating Committee, also makes recommendations to the
Board of Directors concerning the Board's size and composition and suggests
prospective candidates for Director. The Executive Committee will consider
shareholder recommendations for nominees for Director. Shareholders of Meditrust
wishing to make recommendations should write to the Executive Committee c/o
Michael S. Benjamin, Esquire, Senior Vice President and Secretary, Meditrust
Corporation, 197 First Avenue, Suite 300, Needham Heights, Massachusetts 02494.
The Executive Committee met 3 times in 1998.

The Audit Committee, consisting of Messrs. Amaral, Conn, Taylor and Lowe
(retired) and Ms. Brinker, confers with PricewaterhouseCoopers, L.L.P.,
independent accountants, regarding the plans, scope and results of their audits
and any recommendations they may have with respect to internal accounting
controls and other matters relating to accounting procedures and the books and
records of Meditrust. The Audit Committee met 6 times in 1998.

19
<PAGE>
The Compensation Committee, consisting of Messrs. Goldsmith, Magovern, Tsai
and Taylor, reviews the compensation of and other employment matters relating to
Meditrust's officers and administrative employees and grants awards under
Meditrust's Share Award Plan. The Compensation Committee met 8 times in 1998.

The Investment Committee of Meditrust, consisting of Messrs. Brooke, Amaral,
Cushman, Merrill, Taylor and Gosman (resigned), has general oversight and review
of all of Meditrust's real estate financing transactions, and has authority to
approve financing transactions of up to $25 million. The Investment Committee
met 14 times in 1998.

The Ad Hoc/Special Committee of Meditrust, consisting of Messrs. Brooke,
Merrill, Conn and Taylor, reviewed the issues relating to Mr. Gosman's
separation from the Companies. The Ad Hoc/ Special Committee was established in
1998 and met 9 times in 1998.

INFORMATION REGARDING THE BOARD OF DIRECTORS OF OPERATING COMPANY

The Board of Directors of Operating Company met 29 times in 1998. Each
Director of Operating Company attended at least 75% of the meetings of the Board
of Directors and all committees on which he or she served in 1998.

The Executive Committee, consisting of Messrs. Taylor, Brooke, Amaral and
Gosman (resigned), exercises all of the powers of the Board of Directors between
meetings of the Board of Directors, except such powers as are reserved to the
Board of Directors by law. The Executive Committee, acting in its capacity as
the Nominating Committee, also makes recommendations to the Board of Directors
concerning the Board's size and composition and suggests prospective candidates
for Director. The Executive Committee will consider shareholder recommendations
for nominees for Director. Shareholders of Operating Company wishing to make
recommendations should write to the Executive Committee c/o Gilbert G. Menna,
Esquire, Secretary, Meditrust Operating Company, 197 First Avenue, Suite 100,
Needham Heights, Massachusetts 02494. The Executive Committee met 3 times during
1998.

The Audit Committee, consisting of Messrs. Amaral, Taylor and Lowe (retired)
and Ms. Brinker, confers with PricewaterhouseCoopers, L.L.P., independent
accountants, regarding the plans, scope and results of their audits and any
recommendations they may have with respect to internal accounting controls and
other matters relating to accounting procedures and the books and records of
Operating Company. The Audit Committee met 6 times in 1998.

The Compensation Committee, consisting of Messrs. Goldsmith, Magovern, Tsai,
Taylor and Lanni (resigned), reviews the compensation of and other employment
matters relating to Operating Company's officers and administrative employees
and grants awards under Operating Company's Share Award Plan. The Compensation
Committee met 8 times in 1998.

The Acquisition Committee, consisting of Messrs. Taylor, Baker, Benson,
Goldsmith and Byrnes, reviews and recommends to the Board of Directors all
transactions involving business acquisitions. The Acquisition Committee met 2
times in 1998.

The Ad Hoc/Special Committee, consisting of Messrs. Taylor, Baker and
Byrnes, reviewed the issues relating to Mr. Gosman's separation from the
Companies. The Ad Hoc/Special Committee was established in 1998 and met 9 times
in 1998.

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FURTHER INFORMATION REGARDING THE BOARDS OF DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS COMPENSATION

The Meditrust Companies pay each Director who is not otherwise an employee
of The Meditrust Companies a fee of $30,000 per year for services as a Director
plus $1,000 per day for attendance at each meeting of the full Board of
Directors. In addition, the Chairman and each member of a committee of the Board
of Directors are paid $1,250 and $1,000, respectively, for attendance at a
committee meeting. The Meditrust Companies reimburse the Directors for travel
expenses incurred in connection with their duties as Directors of The Meditrust
Companies. In addition, The Meditrust Companies from time to time pays Directors
additional fees in connection with various special projects.

Meditrust's Predecessor maintained a Trustee Retirement Plan for Trustees of
Meditrust's Predecessor who had served on the Board for at least five years and
who were not employed by Meditrust's Predecessor upon their retirement from the
Board. Pursuant to the plan, Meditrust's Predecessor was obligated to issue to
each eligible retired Trustee annual installments of Shares having a fair market
value equal to the amount of the basic Trustee fee paid to such Trustee (most
recently $30,000) during the last full year of such Trustee's service on the
Board plus the amount payable to such Trustee for attendance at six Board
meetings (most recently $6,000) during such year. Annual benefits will be paid
for the number of years equal to the number of years that the retired Trustee
served on the Board. During 1998, Meditrust paid $337,559, $337,559, $187,550
and $298,560 to each of Messrs. Brooke, Magovern, Tsai and Lowe respectively,
former Trustees of Meditrust's Predecessor, in the form of unrestricted
Meditrust shares which amounts were equal to the present value of each
individuals' accumulated benefits. The Board has terminated such plan as it
relates to existing Directors and has not instituted a replacement plan.

FINANCING ARRANGEMENT WITH EXECUTIVE OFFICER

During 1996, Meditrust granted secured loans aggregating up to $240,000 to
David F. Benson, with a weighted average interest rate of approximately 6% per
annum. As of December 31, 1998, the balance outstanding on these loans was
$90,341, all of which is payable on or before May 19, 2000.

EMPLOYMENT ARRANGEMENTS

EMPLOYMENT ARRANGEMENTS WITH EXECUTIVE OFFICERS. Effective January 1, 1999,
each of David F. Benson, Michael S. Benjamin, Michael F. Bushee and Laurie T.
Gerber (each, an "Executive") entered into an Employment Agreement with
Meditrust. Mr. Benson's Employment Agreement provides that he will serve as
President and Chief Executive Officer of Meditrust until the fourth anniversary
of the effective date of his Employment Agreement. Messrs. Benjamin's and
Bushee's and Ms. Gerber's Employment Agreements provide that they will serve as
the Senior Vice President and General Counsel, Chief Operating Officer and Chief
Financial Officer, respectively, of Meditrust until the third anniversary of the
effective date of the respective Employment Agreement. Each Employment Agreement
is automatically extended for an additional one-year term unless either of the
respective parties thereto elects to terminate the respective Employment
Agreement by notice in writing at least 90 days prior to the end of the term of
such Employment Agreement. Each Executive is eligible to receive an annual bonus
to be determined by the Compensation Committee of an amount between 75% and 100%
of his base compensation in the case of Mr. Benson and between 40% and 80% of
his or her base compensation in the case of each of Messrs. Benjamin and Bushee
and Ms. Gerber.

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<PAGE>
Upon termination of employment due to the death or disability of an
Executive, all unexercisable stock options and non-vested stock-based grants and
performance units will immediately vest and will be exercisable for 90 days.
Additionally, Meditrust will provide health insurance coverage for at least two
years.

If an Executive's employment is terminated by such Executive for "good
reason," or if Meditrust terminates his or her employment without "cause,"
Meditrust will pay such Executive a severance payment equal to, at a minimum,
three times, in the case of Mr. Benson, and two times in the case of Messrs.
Benjamin and Bushee and Ms. Gerber the sum of his or her average base
compensation (determined in accordance with the respective Employment Agreement)
and average incentive compensation (determined in accordance with the respective
Employment Agreement) (for each Executive, the "Severance Payment").

If a "Change in Control" (as defined in the respective Employment Agreement,
which definition does not include a spin-off of the healthcare division to
shareholders) occurs and the Executive's employment is terminated for any reason
or no reason, in the case of Mr. Benson, or for any reason other than death,
disability or voluntary resignation, in the case of Messrs. Benjamin or Bushee
or Ms. Gerber, within two years of such Change in Control, Meditrust must pay
the subject Executive a lump sum amount equal to such Executive's Severance
Payment and all stock options and other stock-based awards and performance units
will become immediately exercisable or non-forfeitable. In addition, Meditrust
will provide Mr. Benson with a tax gross-up payment to cover any excise tax due.

EMPLOYMENT ARRANGEMENTS WITH FORMER CHIEF EXECUTIVE OFFICER. Effective July
7, 1998, Abraham D. Gosman entered into an Employment Agreement pursuant to
which his service as Chief Executive Officer of Operating Company was extended
through December 31, 2002. Mr. Gosman's base compensation was $1,000,000 per
year. In addition, Mr. Gosman was eligible to receive a bonus at the end of each
fiscal year of up to 100% of his base compensation. Mr. Gosman was also awarded
800,000 performance shares and options to purchase 1,600,000 paired shares of
The Meditrust Companies at $30.75 per paired share (the "Option"). The Option
was scheduled to vest in 25% increments on each of February 27, 1999, February
27, 2000, February 27, 2001 and February 27, 2002. Mr. Gosman was issued 100,000
units in the Long Term Bonus Program. In the event of Mr. Gosman's termination
following a change in the control of Operating Company or other than for cause,
the Employment Agreement provided that Mr. Gosman would have the right to
exchange up to 800,000 performance shares for an equal number of newly issued
units in the Long Term Bonus Program. In the event that Mr. Gosman's employment
was terminated upon a change of control of Operating Company or a termination
other than for cause, the Employment Agreement provided that (i) all unvested
performance shares would become immediately vested in full, (ii) all performance
units issued (including units issued in exchange for performance shares) would
become immediately vested in full with the value of each unit to be $50, (iii)
any unvested options to purchase shares of Operating Company or The Meditrust
Companies held by Mr. Gosman would become immediately vested and exercisable in
full and (iv) Mr. Gosman would be paid a lump sum within 30 days of such
termination equal to three times the sum of his base salary and maximum bonus
opportunity for the year of termination. In the event of termination because of
death or disability the Employment Agreement provided that Mr. Gosman or his
estate would be paid his base salary and maximum bonus for the balance of the
original term of the Agreement and, except in the event of Mr. Gosman's death,
Operating Company would continue to make advance premium payments with respect
to the split-dollar life insurance policy.

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<PAGE>
In May 1995, Meditrust's Predecessor entered into a split-dollar agreement
with a trust established by Mr. Gosman (the "Insurance Trust"), pursuant to
which Meditrust's Predecessor and the Insurance Trust were to share in the
premium costs of a life insurance policy purchased by the Insurance Trust that
would pay a benefit of approximately $50 million upon the death of Mr. Gosman.
The split-dollar agreement was assumed by Operating Company. Pursuant to such
agreement, Operating Company agreed to advance the portion of the policy
premiums not related to the term life insurance portion of the policy. Operating
Company is entitled to reimbursement of the amounts advanced, without interest,
upon the first to occur of (a) Mr. Gosman ceasing to be employed by the Company,
(b) the death of Mr. Gosman or (c) the surrender of the policy. Operating
Company's right to reimbursement is secured by an assignment of the life
insurance policy and a guaranty of Mr. Gosman in the amount of the excess, if
any, of the premium paid by Operating Company over the cash surrender value of
the insurance policy. In connection with the split-dollar agreement, Mr. Gosman
agreed with Operating Company that if the split-dollar agreement was in effect
at the time of his death and the net death benefit payable to the Insurance
Trust was at least $24 million, then no shares owned by Mr. Gosman at his death
would be sold by any of his heirs during the first year following his death and
no more than 100,000 of such Shares would be sold during any three-month period
in the second, third and fourth years following his death.

On August 3, 1998, Abraham D. Gosman resigned from his position as Director
and Chairman of the Boards of Directors of the Companies and Chief Executive
Officer and Treasurer of Operating Company. On May 10, 1999, Meditrust and
Operating Company entered into a Separation Agreement with Mr. Gosman pursuant
to which Mr. Gosman received severance payments totaling $25 million in cash
plus the continuation until 2002 of the split-dollar arrangements described
above.

FAMILY RELATIONSHIPS

There are no family relationships among any of the Directors or executive
officers of The Meditrust Companies.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers, L.L.P. were the independent accountants of The
Meditrust Companies for fiscal 1998. The Boards of Directors intend to select
them as independent accountants of The Meditrust Companies for fiscal 1999 at
its annual meeting on July 8, 1999. Representatives of PricewaterhouseCoopers,
L.L.P. will be present at the Meditrust Meeting and the Operating Company
Meeting and will be afforded an opportunity to make a statement if they desire
to do so. Such representatives of PricewaterhouseCoopers, L.L.P. will also be
available at that time to respond to appropriate questions addressed to the
officer presiding at the Meditrust Meeting and the Operating Company Meeting.

CERTAIN TRANSACTIONS

Meditrust currently subleases its principal executive offices from Continuum
Care of Massachusetts, Inc. ("CCM"), which is wholly-owned by Abraham D. Gosman,
Operating Company's former Chief Executive Officer, and his two adult sons, on
the same terms as CCM's lease with its landlord. The lease provides for an
average annual rental fee of $181,776 over the initial five-year term of the
lease, which expired on March 31, 1999. The lease has been extended until
January 31, 2001. Operating Company currently subleases its office from
Meditrust.

23
<PAGE>
In April 1995, Meditrust provided $11,287,581 of financing to an affiliate
of Life Care Centers of America, Inc. ("Life Care") for the construction of a
health care facility in West Bridgewater, Massachusetts. Life Care retained CCM
to construct the facility pursuant to a turnkey development agreement in such
amount, of which approximately $561,943 remains payable under the terms of the
agreement. Final payment will occur upon the achievement of specified
performance criteria by the facility.

During 1995, 1996, 1997 and 1998, Meditrust agreed to provide mortgage and
sale/leaseback financing in the aggregate amount of $236,503,180 (of which
$222,663,076 had been funded through March 31, 1999) to entities controlled
directly or indirectly by Mr. Gosman and which are currently outstanding for the
construction and/or permanent financing of 10 health care facilities located in
Palm Beach, Florida (two facilities), Princeton, New Jersey, Needham,
Massachusetts, Dedham, Massachusetts, Park Ridge, New Jersey, Deerfield Beach,
Florida, Boynton Beach, Florida, Jensen Beach, Florida and Bonita Springs,
Florida.

On January 22, 1998 and January 30, 1998, Meditrust acquired all of the
assets of, or all of the partnership interests in, 11 limited partnerships in
which Mr. Gosman held a minority equity interest, for an aggregate purchase
price of $110,527,841. The limited partnerships held medical office buildings,
which Meditrust currently leases directly to the occupants thereof.

During 1997 and 1998, Meditrust agreed to provide mortgage financing in the
aggregate of $68,675,000 (of which $63,250,000 had been funded through March 31,
1999), to certain limited partnerships in which Mr. Gosman holds a minority
equity interest for the construction and/or permanent financing of five medical
office buildings in the states of Arizona, Florida, Nevada and New Jersey. Mr.
Gosman owns from 6.76875% to 12% of the aggregate interests in such limited
partnerships.

On March 4, 1998, Meditrust provided acquisition financing in the amount of
$24,228,723 to an entity in which Mr. Gosman owns a 42.5% equity interest and
Mr. Bushee owns a 2.5% equity interest, for the development of 134 acres of land
in Jupiter, Florida. The loan balance on March 31, 1999 was $18,718,176.

Operating Company paid $1,022,439 and $508,994 to Chancellor Aviation
Corporation and Magnum Aviation Services Corporation, respectively, each of
which is owned by Mr. Gosman, in connection with certain services rendered to
Meditrust in 1998.

Cushman Realty Corporation ("CRC"), which is owned in part by John C.
Cushman, III, a Director of Meditrust, is representing La Quinta as a real
estate broker in connection with moving La Quinta's headquarters from San
Antonio, Texas to Dallas, Texas. CRC is receiving no fee.

OTHER MATTERS

As of the date of this Joint Proxy Statement, The Meditrust Companies'
Boards of Directors know of no business, matters or proposals which will be
presented for consideration at the respective meetings other than as described
in this Joint Proxy Statement. If any other matters shall properly come before
the Meditrust Meeting or the Operating Company Meeting and be voted upon, the
enclosed proxies will be deemed to confer discretionary authority on the
individuals named as proxies therein to vote the shares represented by such
proxies as to any such matters. The persons named as proxies intend to vote in
accordance with the recommendation of the management of Meditrust or Operating
Company.

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<PAGE>
PROPOSALS BY SHAREHOLDERS

Any Meditrust or Operating Company shareholder who intends to submit a
proposal for inclusion in the proxy materials for the 2000 annual meetings of
Meditrust or Operating Company must submit such proposal in writing to the
respective Secretary of Meditrust or Operating Company by February 9, 2000, if
the proposal is to be considered for inclusion in the Joint Proxy Statement of
Meditrust and Operating Company and the form of the proxy relating to those
meetings. The Meditrust Companies' By-laws include advance notice and other
requirements regarding proposals for shareholder action at shareholders'
meetings other than those proposed by the Board of Directors. A copy of the
By-laws of either Meditrust or Operating Company may be obtained by written
request addressed to the respective secretary at the address set forth in "The
Meetings--The Meditrust and Operating Company Meetings."

WHERE YOU CAN FIND MORE INFORMATION

The Meditrust Companies file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy reports,
statements, or other information we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from commercial document retrieval
services and at the web site maintained by the SEC at "http://www.sec.gov."

The Meditrust Companies' SEC filings are also available through their
website at "http://www.reit.com" or by contacting their Investor Relations
Departments at the addresses and phone numbers listed below:

<TABLE>
<S> <C>
Meditrust Corporation Meditrust Operating Company
197 First Avenue, Suite 300 197 First Avenue, Suite 100
Needham, MA 02494 Needham, MA 02494
Attn: Investor Relations Attn: Investor Relations
Tel: (781) 433-6000 Tel: (781) 453-8062
</TABLE>

If you would like to request documents from us, please do so by July 1, 1999
to receive them before the Meditrust Meeting or Operating Company Meeting. You
should rely only on the information contained in this Joint Proxy Statement to
vote on The Meditrust Companies' proposals. We have not authorized anyone to
provide you with information that is different from what is contained in this
Joint Proxy Statement. This Joint Proxy Statement is dated June 8, 1999. You
should not assume that the information contained in this Joint Proxy Statement
is accurate as of any date other than such date, and the mailing of this Joint
Proxy Statement to stockholders shall not create any implication to the
contrary.

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<PAGE>

PROXY FOR ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD JULY 8, 1999

MEDITRUST CORPORATION
MEDITRUST OPERATING COMPANY

The undersigned hereby appoints David F. Benson and Michael S. Benjamin,
and each of them acting singly, with full power of substitution, attorneys
and proxies to represent the undersigned at the Annual Meeting of
Shareholders of Meditrust Corporation to be held on July 8, 1999 and at any
adjournment or postponement thereof with all power which the undersigned
would possess if personally present, and to vote all shares of common stock
of Meditrust Corporation which the undersigned may be entitled to vote at
said meeting upon the matters set forth in the Notice of Annual Meeting in
accordance with the following instructions and with discretionary authority
on such other matters as may properly come before the Annual Meeting or any
adjournment or postponement thereof. All previously dated proxies are hereby
revoked.

The undersigned hereby appoints David F. Benson and Michael S. Benjamin,
and each of them acting singly, with full power of substitution, attorneys
and proxies to represent the undersigned at the Annual Meeting of
Shareholders of Meditrust Operating Company to be held on July 8, 1999 and at
any adjournment or postponement thereof with all power which the undersigned
would possess if personally present, and to vote all shares of common stock
of Meditrust Operating Company which the undersigned may be entitled to vote
at said meeting upon the matters set forth in the Notice of Annual Meeting in
accordance with the following instructions and with discretionary authority
on such other matters as may properly come before the Annual Meeting or any
adjournment thereof. All previously dated proxies are hereby revoked.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER SPECIFIED
HEREIN. IF NO SPECIFICATION IS MADE THE PROXIES INTEND TO VOTE FOR EACH OF
THE PROPOSALS.

- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------

<PAGE>

PROPOSALS

MEDITRUST CORPORATION:

1. To elect the following Directors to serve until 2002:
James P. Conn, Stephen E. Merrill, Thomas M. Taylor.

MEDITRUST OPERATING COMPANY:

1. To elect the following Directors to serve until 2002:
Stephen E. Merrill, Thomas M. Taylor.

Please mark
/X/ votes as in
this example.

PLEASE REFER ABOVE FOR EXPLANATION OF PROPOSALS SET FORTH BELOW.

<TABLE>
<S> <C>
MEDITRUST CORPORATION: MEDITRUST OPERATING COMPANY:

1. To elect the Directors to serve until 2002: 1. To elect the Directors to serve until 2002:
James P. Conn, Stephen E. Merrill, Thomas M. Taylor Stephen E. Merrill, Thomas M. Taylor

FOR WITHHELD FOR WITHHELD
ALL / / / / FROM ALL ALL / / / / FROM ALL
NOMINEES NOMINEES NOMINEES NOMINEES

/ / _____________________________________________ / / _____________________________________________
For all nominees except as noted above For all nominees except as noted above

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /

In signing, please write name(s) exactly as appearing in the imprint
of this card. For shares held jointly each owner should sign. If
signing as executor, or in any other representative capacity, or as
an officer of a corporation, please indicate your full title as such.
</TABLE>