<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- --------------------------------------------------------------------------------
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
MEDITRUST
(Name of Registrant as Specified In Its Charter)
MEDITRUST
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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> 2
MEDITRUST
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 1996
The annual meeting of shareholders of Meditrust will be held at Fleet Bank,
N.A., 75 State Street, 8th Floor, Boston, Massachusetts, on Wednesday, May 8,
1996 at 4:00 o'clock in the afternoon for the following purposes:
1. To fix the number of trustees and elect a Board of Trustees for the
ensuing year.
2. To consider and act upon proposed amendments to Meditrust's Declaration
of Trust to authorize Meditrust to issue from time to time shares of one
or more additional classes and/or series of shares of beneficial
interest.
3. To consider and act upon such other business, matters or proposals as
may properly come before the Meeting.
The Board of Trustees has fixed the close of business on April 8, 1996 as
the record date for determining the shareholders having the right to receive
notice of and to vote at the Meeting.
By Order of the Board of Trustees
MICHAEL S. BENJAMIN
Senior Vice President and Secretary
Needham Heights, Massachusetts
April 11, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN, DATE
AND MAIL PROMPTLY THE ENCLOSED PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE
BOARD OF TRUSTEES. 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 MEETING AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
MEDITRUST
197 FIRST AVENUE
NEEDHAM HEIGHTS, MASSACHUSETTS 02194
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 8, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by
and on behalf of the Board of Trustees of Meditrust, a Massachusetts business
trust (the "Company"), of proxies for use at the annual meeting of shareholders
of the Company and at any adjournment or adjournments thereof (the "Meeting") to
be held, pursuant to the accompanying Notice of Annual Meeting, at 4:00 p.m. on
May 8, 1996 at Fleet Bank, N.A., 75 State Street, 8th Floor, Boston,
Massachusetts. The Company expects to mail this Proxy Statement and the
accompanying form of proxy to shareholders on or about April 11, 1996.
VOTING AND REVOCATION OF PROXIES
Valid proxies will be voted as specified thereon at the Meeting. Any
shareholder giving a proxy in the accompanying form retains the power to revoke
it at any time prior to the exercise of the powers conferred thereby by (a)
delivering written notice of such revocation to Michael S. Benjamin, Esquire,
Senior Vice President and Secretary, Meditrust, 197 First Avenue, Needham
Heights, Massachusetts 02194; (b) delivering a duly executed proxy bearing a
later date to the Secretary of the Company; or (c) appearing at the Meeting and
requesting the return of his proxy. Any shareholder who attends the Meeting in
person will not be deemed thereby to revoke the proxy unless such shareholder
affirmatively indicates thereat his intention to vote the shares in person.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December 31,
1995, including financial statements, audited and reported upon by Coopers &
Lybrand L.L.P., independent accountants, is being mailed herewith to each of the
Company's shareholders of record at the close of business on April 8, 1996.
VOTING SECURITIES, PRINCIPAL HOLDERS THEREOF AND HOLDINGS BY CERTAIN EXECUTIVE
OFFICERS
The holders of record of shares of beneficial interest of the Company
("Shares") at the close of business on April 8, 1996 are entitled to vote at the
Meeting. On that date there were outstanding and entitled to vote [ ]
Shares. Each shareholder has one vote for each Share held by such shareholder of
record on the matters listed in the Notice of Annual Meeting.
<PAGE> 4
<TABLE>
No one was known by the Company to own beneficially more than 5% of the
Company's outstanding Shares on April 8, 1996, except as shown in the following
table:
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF
NAME AND ADDRESS OWNED(1) SHARES
- -------------------------------------------------------------------- ------------ -------------
<S> <C> <C>
Loomis, Sayles & Company, L.P. ..................................... 2,693,345(2) 5.3%
One Financial Center
Boston, MA 02111
<FN>
- ---------------
(1) None of such Shares are known to be Shares with respect to which the holder
has the right to acquire beneficial ownership.
(2) Based on information concerning beneficial ownership of Shares as of
December 31, 1995 as set forth in the Schedule 13G of Loomis, Sayles &
Company, L.P. ("Loomis") dated February 12, 1996. Loomis has sole voting
power with respect to 842,850 Shares, shared voting power with respect to
32,000 Shares and shared dispositive power with respect to 2,693,345 Shares.
</TABLE>
<TABLE>
The following table sets forth information concerning ownership of Shares
by certain executive officers of the Company:
<CAPTION>
SHARES SUBJECT
SHARES TO OPTIONS
BENEFICIALLY EXERCISABLE WITHIN PERCENTAGE OF
OWNED AS OF 60 DAYS OF SHARES
4/8/96(1) 4/8/96 OUTSTANDING
------------ ------------------ -------------
<S> <C> <C> <C>
Abraham D. Gosman................................. 933,564(2) 191,353 %
David F. Benson................................... 42,524 35,706 (3)
Michael S. Benjamin............................... 17,247 13,333 (3)
Michael F. Bushee................................. 18,620 13,333 (3)
Lisa P. McAlister................................. 14,623 13,333 (3)
<FN>
- ---------------
(1) Unless otherwise indicated, the number of Shares stated as being owned
beneficially includes (i) Shares beneficially owned by spouses, minor
children and/or other relatives in which the executive officer may share
voting or investment power and (ii) any Shares listed as being subject to
options exercisable within 60 days of April 8, 1996.
(2) Includes 162,000 Shares owned by A.M.A. Financial Corporation, of which Mr.
Gosman is President and a 98% shareholder.
(3) Less than 1%.
</TABLE>
EXECUTIVE COMPENSATION
REPORT OF THE PERSONNEL AND COMPENSATION COMMITTEE
In determining the compensation to be paid to the Company's executive
officers, the Personnel and Compensation Committee (the "Compensation
Committee") strives to (i) reward executives for achievement of the Company's
strategic goals and the enhancement of shareholder value, (ii) recognize
superior Company performance as compared to that of competing businesses and
(iii) attract, motivate and retain highly-trained and talented executives who
are vital to the Company'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
2
<PAGE> 5
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, the 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 (which are
awarded by the Stock Option Committee) and other benefits typically offered to
executives by major corporations.
SALARIES
During 1995, the Board of Trustees, on the recommendation of the
Compensation Committee, increased the salaries paid to each of the four most
highly compensated executive officers of the Company other than Mr. Gosman
(collectively, the "Senior Executives"). These salary increases, as well as
those of other Company executives, were based on cost-of-living adjustments,
position tenure, subjective assessments of individual performance, comparability
considerations (including the Company's financial performance relative to its
competitors') and competitive data, including asset growth, revenue growth, cash
flow growth and total return to shareholders. In setting compensation levels for
1995, the Compensation Committee gave considerable weight to the Company's
favorable 1994 financial results (including the 21.7% increase in the Company's
assets, 15% increase in the Company's revenues and 18.5% increase in cash flow).
The 1994 financial results generally exceeded management's expectations, which
further influenced the Compensation Committee's decision to increase salaries.
Performance assessments were also given greater weight in the Compensation
Committee's determinations relative to the other factors.
Mr. Gosman's 1995 base salary was paid pursuant to the provisions of his
employment agreement (the "Employment Agreement") with the Company which was
entered into on January 1, 1993 and a salary reduction agreement between Mr.
Gosman and the Company relating to the split-dollar life insurance agreement
described hereinafter under "Further Information Regarding the Board of Trustees
and Executive Officers." The terms of the Employment Agreement, including salary
terms, were determined through negotiations between Mr. Gosman and the
Compensation Committee. Factors considered by the Compensation Committee in the
course of those negotiations included Mr. Gosman's unique insight and experience
in the health care industry, his leadership abilities, his past contributions to
the success of the Company, his perceived importance to the continued success of
the Company, his four-year commitment to lead the Company and the Company's
financial performance, as measured by asset growth, revenue growth, cash flow
growth and total return to shareholders, under Mr. Gosman's leadership.
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, the Company believes that the denial
of deductions by Section 162(m) would have no adverse impact on the Company. 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. The Company 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 the Company were awarded cash bonuses in 1995 based
on the Compensation Committee's assessment of the Company's performance in 1994.
The performance measures reviewed by the Compensation Committee included the
Company's revenue growth, cash flow growth and total return to shareholders
compared to that of its competitors. These measures were assigned approximately
equal weight
3
<PAGE> 6
in the Compensation Committee's determinations. The Company's performance in
each of these measures generally compared favorably to its competitors'
corresponding results. The increases in the bonuses paid to executive officers
in 1995 over those paid in 1994 were based in large part on these results.
Pursuant to the Agreement, Mr. Gosman received bonus compensation in 1995
which consisted solely of Shares. In its 1992 negotiations regarding the amount
of bonus compensation to be paid to Mr. Gosman each year during the four-year
term of the Agreement, the Board of Trustees considered the performance measures
listed above, Mr. Gosman's unique abilities and experience and his perceived
contributions to the Company's financial performance in 1991 and 1992, including
the approximately 57% and 10% total returns (comprised of stock price
appreciation and dividend yield) on Shares in 1991 and 1992, respectively. Mr.
Gosman's annual bonus under the Agreement is paid in Shares in order to further
align his interests with those of the Company's shareholders.
OTHER COMPENSATION PLANS
The Company maintains certain broad-based employee benefit plans in which
Mr. Gosman and 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 Company
performance.
Submitted by,
Thomas J. Magovern, Chairman
Robert Cataldo
Philip L. Lowe
REPORT OF THE STOCK OPTION COMMITTEE
The Board's Stock Option Committee administers the Company's 1988 Stock
Option Plan and 1992 Equity Incentive Plan. Stock options and stock grants are
awarded under these plans in order to provide incentives to trustees, officers
and key employees of the Company to maximize their efforts on behalf of the
Company, to attract and retain those highly competent individuals upon whose
judgment, initiative and leadership the Company's continuing success largely
depends and to align the interests of the trustees, officers and key employees
of the Company with those of the Company's shareholders. The size of individual
option and stock grants is determined by the Stock Option 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 the Company. In recognition of the
Company's favorable 1994 financial results, the Stock Option Committee granted
stock options and awards in 1995 to Mr. Gosman and the Senior Executives, as
reflected in certain of the tables appearing hereinafter.
It is the present policy of the Stock Option Committee to review
periodically the Company's stock option and stock grant award levels and the
over-all effectiveness of the Company's equity incentive plans in achieving the
objectives of the Company.
Submitted by,
Gerald Tsai, Jr., Chairman
Edward W. Brooke
4
<PAGE> 7
The following table sets forth the compensation paid to the Company's Chief
Executive Officer (the "CEO") and four most highly compensated executive
officers other than the CEO for services rendered in all capacities to the
Company and its subsidiaries during the fiscal years ended December 31, 1995,
1994 and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ALL OTHER
ANNUAL COMPENSATION COMPENSATION
NAME AND ---------------------------- ------------
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1)
------------------ ---- ------- ------- ------------
<S> <C> <C> <C> <C>
Abraham D. Gosman................................ 1995 767,559 834,375(2) 375,754(3)
Chairman and CEO 1994 900,000 806,250(4) 5,344
1993 900,000 821,875(5) 5,174
David F. Benson.................................. 1995 275,000 123,060(6) 6,240
President 1994 250,000 65,253(7) 5,367
1993 210,000 30,000 5,188
Michael S. Benjamin.............................. 1995 165,000 84,459(8) 6,175
Senior Vice President and Secretary 1994 150,000 40,191(9) 5,138
1993 130,000 20,000 4,972
Michael F. Bushee................................ 1995 165,000 84,459(8) 6,175
Chief Operating Officer 1994 150,000 40,191(9) 5,096
1993 130,000 20,000 4,929
Lisa P. McAlister................................ 1995 121,000 83,133(10) 5,404
Chief Financial Officer and Treasurer 1994 110,000 40,191(11) 5,404
1993 90,000 20,000 3,897
</TABLE>
[FN]
- ---------------
(1) Includes 401(k) plan contribution of $4,620, $4,620, $4,620, $4,620 and
$4,620 in 1995, $4,583, $4,589, $4,609, $4,610 and $4,610 in 1994, $4,497,
$4,497, $4,497, $4,497 and $3,313 in 1993 and term life insurance premium
payments of $0, $1,620, $1,555, $1,555 and $784 in 1995, $761, $778, $529,
$486 and $372 in 1994, $677, $691, $475, $432 and $401 in 1993 on behalf of
Messrs. Gosman, Benson, Benjamin, Bushee and Ms. McAlister, respectively.
(2) 25,000 shares in four equal quarterly installments valued at $29.50,
$34.25, $34.625 and $35.125 per Share, which were the closing prices for
Shares on the New York Stock Exchange on the respective dates of issuance
(April 4, 1995, July 3, 1995, October 2, 1995 and January 2, 1996).
(3) $371,134 of which reflects the current dollar value of the benefit to Mr.
Gosman of the portion of the premium paid by the Company in 1995 with
respect to a split-dollar life insurance agreement (see "Further
Information Regarding the Board of Trustees and Executive Officers" below
for a description of such agreement). The benefit for 1995 was determined
by calculating the time value of money (using the applicable short-term
federal funds rate of 6.62%) of the premium paid by the Company in 1995
($2,969,260) for the period from May 19, 1995 (the date on which the
premium was paid) until June 18, 1997 (which is the earliest date on which
the Company could terminate the agreement and obtain a refund of the
premium paid).
(4) 25,000 shares in four equal quarterly installments valued at $33.125,
$33.875, $31.625 and $30.375 per Share, which were the closing prices for
Shares on the New York Stock Exchange on the respective dates of issuance
(April 11, 1994, July 6, 1994, October 4, 1994 and January 3, 1995).
(5) 25,000 Shares in four equal quarterly installments valued at $33, $33,
$33.375 and $32.125 per Share, which were the closing prices for Shares on
the New York Stock Exchange on the respective dates of issuance (April 5,
1993, July 6, 1993, October 5, 1993 and January 6, 1994).
5
<PAGE> 8
(6) $48,060 of which relates to the Company's issuance to Mr. Benson of 1,440
Shares in four equal quarterly installments valued at $29.50, $34.25,
$34.625 and $35.125 per Share, which were the closing prices for Shares on
the New York Stock Exchange on the respective dates of issuance (April 4,
1995, July 3, 1995, October 2, 1995 and January 2, 1996).
(7) $20,253 of which relates to the Company's issuance to Mr. Benson of 628
Shares in four equal quarterly installments valued at $33.125, $33.875,
$31.625 and $30.375 per Share, which were the closing prices for Shares on
the New York Stock Exchange on the respective dates of issuance (April 11,
1994, July 6, 1994, October 4, 1994 and January 3, 1995).
(8) $29,459.38 of which relates to the Company's issuance to each of Messrs.
Benjamin and Bushee of 847 Shares in four equal quarterly installments
valued at $29.50, $34.25, $34.625 and $35.125 per Share, which were the
closing prices for Shares on the New York Stock Exchange on the respective
dates of issuance (April 4, 1995, July 3, 1995, October 2, 1995 and January
2, 1996).
(9) $10,191 of which relates to the Company's issuance to each of Messrs.
Benjamin and Bushee of 316 Shares in four equal quarterly installments
valued at $33.125, $33.875, $31.625 and $30.375 per Share, which were the
closing prices for Shares on the New York Stock Exchange on the respective
dates of issuance (April 11, 1994, July 6, 1994, October 4, 1994 and
January 3, 1995).
(10) $28,133.38 of which relates to the Company's issuance to Ms. McAlister of
843 Shares in four equal quarterly installments valued at $29.50, $34.25,
$34.625 and $35.125 per Share, which were the closing prices for Shares on
the New York Stock Exchange on the respective dates of issuance (April 4,
1995, July 3, 1995, October 2, 1995 and January 2, 1996).
(11) $10,191 of which relates to the Company's issuance to Ms. McAlister of 316
Shares in four equal quarterly installments valued at $33.125, $33.875,
$31.625 and $30.375 per Share, which were the closing prices for Shares on
the New York Stock Exchange on the respective dates of issuance (April 11,
1994, July 6, 1994, October 4, 1994 and January 3, 1995).
<TABLE>
The following table sets forth information concerning exercises of stock
options by the following persons during the fiscal year ended December 31, 1995
and the number and value of their stock options at December 31, 1995.
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE 12/31/95(#) 12/31/95($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($)(1) UNEXERCISABLE UNEXERCISABLE(2)
---- ----------- -------- --------------- ------------------
<S> <C> <C> <C> <C>
Abraham D. Gosman.................. 0 0 171,353/60,000 1,638,045/285,000
David F. Benson.................... 0 0 15,706/60,000 135,464/285,000
Michael S. Benjamin................ 6,334 55,548 0/40,000 0/190,000
Michael F. Bushee.................. 6,334 54,631 0/40,000 0/190,000
Lisa P. McAlister.................. 4,667 40,253 0/40,000 0/190,000
<FN>
- ---------------
(1) Market value of underlying securities at exercise, less the exercise price.
(2) Market value of $34.875 as of December 31, 1995, less the exercise price.
</TABLE>
6
<PAGE> 9
<TABLE>
PERFORMANCE GRAPH(1)
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Shares 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, 1991 and ending December
31, 1995.
[GRAPH]
<CAPTION>
Measurement Period
(Fiscal Year Covered) Meditrust S&P 500 NAREIT
<S> <C> <C> <C>
12/31/90 $100.00 $100.00 $100.00
1991 $155.66 $130.55 $135.68
1992 $171.79 $140.50 $152.20
1993 $194.43 $154.60 $180.43
1994 $197.29 $156.63 $181.88
1995 $243.89 $215.47 $215.18
<FN>
- ---------------
(1) Assumes that the value of an investment in Meditrust Shares and each index
was $100 on December 31, 1990 and that all dividends were reinvested on a
monthly basis.
</TABLE>
ITEM I
ELECTION OF TRUSTEES
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 trustee named in the following table, all of whom are currently
members of the Board of Trustees. If elected, the nominees will serve as
trustees until the next scheduled 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 Company), the persons named as proxies have
discretionary authority to vote for a substitute or to reduce the number of
trustees to be fixed and elected. The Board of Trustees, which currently
consists of eight persons, has no reason to believe that any of said persons
will be unwilling or unable to serve if elected. The trustees will be elected by
a plurality of the votes cast at the Meeting by the holders of Shares entitled
to vote at the Meeting. The affirmative vote of the holders of a majority of the
outstanding Shares of the Company present or represented at the Meeting and
7
<PAGE> 10
entitled to vote thereat is required to fix the number of trustees for the
ensuing year, provided that such majority is at least a majority of the
outstanding Shares entitled to vote at the Meeting.
Abstentions and broker non-votes with regard to any item being acted upon
at the Meeting will not be treated as votes cast.
<TABLE>
<CAPTION>
SHARES SUBJECT SHARES
SHARES TO OPTIONS BENEFICIALLY OWNED
BENEFICIALLY EXERCISABLE AS A PERCENTAGE OF
NAME AND PRINCIPAL OCCUPATION OR TRUSTEE OWNED AS OF WITHIN 60 DAYS SHARES OUTSTANDING
EMPLOYMENT AGE SINCE 4/8/96(1) OF 4/8/96 AS OF 4/8/96
- -------------------------------------- --- ------- ----------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
Abraham D. Gosman..................... 67 1985 933,564(2) 191,353 []%
Chairman and Chief Executive Officer
of
the Company
David F. Benson....................... 47 1991 42,524 35,706 (3)
President of the Company
Edward W. Brooke...................... 76 1985 69,526(4) 20,000 (3)
Partner in the law firm of
O'Connor & Hannan
Robert Cataldo........................ 71 1985 33,935 20,000 (3)
President of Sheldon Corporation, a
health care and real estate
consulting
firm
Philip L. Lowe........................ 78 1987 23,000(5) 20,000 (3)
Principal of Philip L. Lowe and
Associates, a consulting firm
Thomas J. Magovern.................... 53 1985 27,251 20,000 (3)
Regional Vice President, Real Estate
Asset Management, United Jersey
Bank, a New Jersey banking
institution
Gerald Tsai, Jr....................... 67 1992 28,000 20,000 (3)
Chairman, Chief Executive Officer
and President of Delta Life
Corporation, an annuity company
Frederick W. Zuckerman................ 61 1990 25,000 20,000 (3)
General Partner, Zuckerman,
Firstenberg and Associates L.L.C.,
an investment banking and financial
advisory firm
All trustees and officers as a group -- -- 1,184,301(6) 347,059
(13 in number)...................... []%
</TABLE>
[FN]
- ---------------
(1) Unless otherwise indicated, the number of Shares stated as being owned
beneficially includes (i) Shares beneficially owned by spouses, minor
children and/or other relatives in which the trustee may share voting or
investment power and (ii) any Shares listed as being subject to options
exercisable within 60 days of April 8, 1996.
(2) Includes 162,000 Shares owned by A.M.A. Financial Corporation, of which Mr.
Gosman is President and a 98% shareholder.
(3) Less than 1%.
8
<PAGE> 11
(4) Does not include 817 Shares owned by Mr. Brooke's wife, 2,271 Shares owned
of record by Mr. Brooke as custodian for his son and 2,100 Shares owned of
record by Mr. Brooke as trustee for his grandchildren, as to which Shares
Mr. Brooke disclaims any beneficial interest.
(5) Does not include 1,500 Shares owned by Mr. Lowe's wife, as to which Shares
Mr. Lowe disclaims any beneficial interest.
(6) Does not include an aggregate of 7,038 Shares owned by or for parents,
spouses or children, as to which Shares the trustees or officers disclaim
any beneficial interest.
Abraham D. Gosman has been the Chairman of the Company since its
organization in 1985 and became Chief Executive Officer in February 1991. Mr.
Gosman is also the founder, Chairman of the Board, Chief Executive Officer and
President of PhyMatrix Corporation, a provider of managerial and administrative
services to a variety of specialized medical care and treatment providers, which
completed its initial public offering in January 1996. Mr. Gosman was the Chief
Executive Officer and Chairman of the Board of The Mediplex Group, Inc.
("Mediplex"), an operator and developer of health care facilities, from August
1990 until June 1994, when Mediplex was acquired by Sun Healthcare Group, Inc.
Mr. Gosman has been in the health care and development business for more than
thirty years.
David F. Benson has been President of the Company since September 1991 and
was Treasurer of the Company from January 1986 to May 1992. He was Treasurer of
Mediplex from January 1986 through June 1987. He was previously associated with
Coopers & Lybrand L.L.P., independent accountants, from 1979 to 1985. Mr. Benson
is a trustee of Mid-Atlantic Realty Trust.
Edward W. Brooke has been a partner of O'Connor & Hannan, a Washington,
D.C. law firm, since 1979. 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.
Robert Cataldo has been President of Sheldon Corporation, a health care and
real estate consulting firm, since July 1983.
Philip L. Lowe has been a principal of Philip L. Lowe and Associates, a
consulting firm, and its predecessors for more than five years. Mr. Lowe is a
director of Analog Devices, Inc.
Thomas J. Magovern has been a Regional Vice President, Real Estate Asset
Management of United Jersey Bank, a New Jersey banking institution, since
November 1995. 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.
Gerald Tsai, Jr. has been the Chairman, Chief Executive Officer and
President of Delta Life Corporation, an annuity company, since February 1993.
Mr. Tsai retired in 1991 as Chairman of the Executive Committee of the Board of
Directors of Primerica Corporation (a diversified financial services company),
which position he held since December 1988. From January 1987 to December 1988,
Mr. Tsai was Chairman, and from April 1986 to December 1988, he was Chief
Executive Officer of Primerica Corporation. He is a director of Rite Aid
Corporation, Sequa Corporation, Triarc Companies, Inc., Proffitt's, Inc. and
Zenith National Insurance Corp. Mr. Tsai is also a Trustee of Boston University
and New York University Medical Center.
Frederick W. Zuckerman has been a general partner in the investment banking
and financial advisory firm of Zuckerman, Firstenberg & Associates LLC, since
, 1995. He was Vice President and Treasurer of International
Business Machines Corporation, an information technology corporation, from
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September 1993 to January 1995. He was Senior Vice President and Treasurer of
RJR Nabisco, Inc., a consumer food and tobacco producer, from February 1991 to
September 1993. Mr. Zuckerman was Vice President and Treasurer of Chrysler
Corporation, a motor vehicle manufacturer, from December 1981 until September
1990. Mr. Zuckerman is a director of The Singapore Fund, The Turner Corporation,
Anacomp, Inc., The Japan Equity Fund, NVR, Inc., Pantone Inc., Olympic Financial
Ltd. and Caere Corp.
FURTHER INFORMATION REGARDING THE BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
The Board of Trustees of the Company met 11 times in 1995. Each trustee
attended at least 75% of the meetings of the Board of Trustees and all
committees on which he served in 1995.
The Executive Committee, consisting of Messrs. Gosman, Brooke and
Zuckerman, exercises all the powers of the Board of Trustees between meetings of
the Board of Trustees, except such powers as are reserved to the Board of
Trustees by law. The Executive Committee met 19 times in 1995.
The Audit Committee, consisting of Messrs. Lowe, Magovern and Tsai, confers
with Coopers & Lybrand 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 the Company. The Audit Committee met
seven times in 1995.
The Nominating Committee, consisting of Messrs. Gosman, Brooke and Cataldo,
makes recommendations to the Board of Trustees concerning the Board's size and
composition and suggests prospective candidates for trustee. The Nominating
Committee met once during 1995. The Nominating Committee will consider
shareholder recommendations for nominees for trustee. Shareholders of the
Company wishing to make recommendations should write to the Nominating Committee
c/o Michael S. Benjamin, Esquire, Senior Vice President and Secretary,
Meditrust, 197 First Avenue, Needham Heights, Massachusetts 02194.
The Personnel and Compensation Committee, consisting of Messrs. Cataldo,
Lowe and Magovern, reviews the compensation of and other employment matters
relating to the Company's officers and administrative employees. The Personnel
and Compensation Committee met three times in 1995.
The Stock Option Committee, consisting of Messrs. Magovern and Zuckerman,
administers the Company's 1988 Stock Option Plan and 1992 Equity Incentive Plan.
The Stock Option Committee met once in 1995.
The Finance Committee, consisting of Messrs. Benson, Tsai and Zuckerman,
reviews and recommends to the Board debt and equity financing opportunities
available to the Company. The Finance Committee did not hold any formal meetings
during 1995.
The Company pays each trustee who is not otherwise an employee of the
Company a fee of $30,000 per year for services as a trustee plus $1,000 per day
for attendance at each meeting of the full Board of Trustees. In addition, the
Chairman and each member of a committee of the Board of Trustees are paid $1,250
and $1,000, respectively, for attendance at a committee meeting. The Company
reimburses the trustees for travel expenses incurred in connection with their
duties as trustees of the Company. In addition, the Company from time to time
pays trustees additional fees in connection with various special projects. In
March 1996, the Company paid $100,000 to Sheldon Corporation, an entity
wholly-owned by Mr. Cataldo, and issued to Mr. Cataldo 7,435 Shares valued at
approximately $250,000 for services to the Company relating to the negotiation
of selected loans in 1995.
In March 1996, the Company paid $2,500 to each of Mr. Magovern and Mr.
Zuckerman for their service on the Stock Option Committee in 1994 and 1995.
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The Company has adopted a Deferred Compensation Plan for trustees of the
Company pursuant to which the trustees may defer receipt of fees. Currently, no
trustee participates in such plan.
In January 1996, the Company adopted a Trustee Retirement Plan for trustees
of the Company who have served on the Board for at least five years and who are
not employed by the Company upon their retirement from the Board. Pursuant to
the plan, the Company will 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 (currently $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 (currently $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.
There are no family relationships among any of the trustees or executive
officers of the Company.
Effective January 1, 1993, Abraham D. Gosman entered into the Employment
Agreement pursuant to which he will serve as Chief Executive Officer of the
Company. The Employment Agreement has an initial term of four years which may be
renewed for additional terms by mutual agreement of the Company and Mr. Gosman.
Mr. Gosman's base compensation is $900,000 per year. In addition, Mr. Gosman
will receive annually 25,000 Shares during the term of the Employment Agreement
pursuant to the Company's 1992 Equity Incentive Plan. In the event of a "Change
of Control" (which is defined as the acquisition by any person or group of 20%
or more of the Shares, but only if a majority of the "Continuing Trustees"
(defined in the Employment Agreement generally as the current trustees and any
trustee nominated or elected by the current trustees) disapprove of such
acquisition), Mr. Gosman shall be paid his base salary through the remaining
term of the Employment Agreement, less the amount of salary and benefits payable
to Mr. Gosman by a new employer. Mr. Gosman may upon 30 days' prior written
notice to the Company demand the present value of such amount in a lump sum. Mr.
Gosman shall also be entitled to participate in benefit plans of the Company
until he is employed by a new employer. In the event of a termination resulting
from a cause other than death, disability or a "Termination For Cause" (defined
in the Employment Agreement as a termination due to a material breach of the
Employment Agreement or the commission of certain other wrongful acts), Mr.
Gosman shall be paid his base salary for one year, less the amount of
compensation payable to Mr. Gosman by a new employer. In the event of a
Termination For Cause or termination after such annual review of the Board of
Trustees, Mr. Gosman is not entitled to receive any severance payments.
In May 1995, the Company entered into a Split-Dollar Agreement with a trust
established by Mr. Gosman (the "Insurance Trust"), pursuant to which the Company
and the Insurance Trust share in the premium costs of a life insurance policy
purchased by the Insurance Trust that will pay a benefit of approximately $50
million upon the death of Mr. Gosman. Pursuant to such agreement, the Company
has agreed to advance the portion of the policy premiums not related to the term
life insurance portion of the policy. The 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. The Company's right to reimbursement is secured by
an assignment of the life insurance policy and a promissory note of Mr. Gosman
in the amount of the excess, if any, of the premiums paid by the Company over
the cash surrender value of the insurance policy.
In connection with the Split-Dollar Agreement, Mr. Gosman agreed with the
Company that if the Split-Dollar Agreement is in effect at the time of his death
and the net death benefit payable to the Insurance Trust is at least $24
million, then no shares owned by Mr. Gosman at his death will be sold by any of
his heirs during the first year following his death and no more than 100,000 of
such Shares will be sold during any three-month period in the second, third and
fourth years following his death. At the request of the Company, Mr. Gosman also
agreed to a $132,441 reduction in his 1995 base salary payable under the
Employment Agreement.
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ITEM II
AMENDMENTS TO THE COMPANY'S DECLARATION OF TRUST
TO AUTHORIZE ADDITIONAL CLASSES AND SERIES OF SHARES
DESCRIPTION OF PROPOSED AMENDMENTS
The Company's Board of Trustees has proposed amendments to the Company's
Declaration of Trust which would authorize the Company to issue shares of one or
more additional classes and/or series of shares of beneficial interest without
par value. These shares, which would likely take the form of preferred stock,
are hereinafter referred to as the "Preferred Shares." If the proposed
amendments are approved, the Board of Trustees would be empowered, without the
necessity of further action or authorization by the Company's shareholders
(unless required in a specific case by applicable laws or regulations or stock
exchange rules), to authorize the issuance of the Preferred Shares from time to
time in one or more classes and/or series, and to fix by resolution or
resolutions, designations, preferences, limitations and relative rights of each
such class or series. Each class and/or series of Preferred Shares could, as
determined by the Board of Trustees at the time of issuance, rank, with respect
to dividends and redemption and liquidation rights, senior to the Company's
issued and outstanding Shares. No such shares are presently authorized by the
Company's Declaration of Trust and the Company does not, at present, have any
agreements, understandings or arrangements concerning the issuance of any such
shares.
The amendments would authorize the Board of Trustees to determine, among
other things, with respect to each class or series of Preferred Shares which may
be issued: (a) the distinctive designation and number of shares constituting
such class or series; (b) the dividend rates, if any, on the shares of that
class or series and whether dividends would be payable in cash, property, rights
or securities; (c) whether dividends would be non-cumulative, cumulative to the
extent earned, partially cumulative or cumulative and, if cumulative, the date
from which dividends on the series would accumulate; (d) whether, and upon what
terms and condition, the shares of that class or series would be convertible
into or exchangeable for other securities or cash or other property or rights;
(e) whether, and upon what terms and conditions, the shares of that class or
series would be redeemable; (f) the rights and the preferences, if any, to which
the shares of that class or series would be entitled in the event of voluntary
or involuntary dissolution or liquidation of the Company; (g) whether a sinking
fund would be provided for the redemption of the class or series and, if so, the
terms of and amounts payable into such sinking fund; (h) whether the holders of
such securities would have voting rights and the extent of those voting rights;
and (i) any other preferences, privileges and relative rights of such class or
series as the Board of Trustees may deem advisable. Holders of the Company's
Shares have no preemptive right to purchase or otherwise acquire any Preferred
Shares that may be issued in the future.
The text of the proposed amendments is attached hereto as Exhibit A and the
foregoing summary is qualified in its entirety by reference to such text.
Provisions of the Declaration of Trust that are to be deleted by the proposed
amendments are indicated by lineation in Exhibit A. Provisions that are to be
added to the Declaration of Trust by the proposed amendments are indicated by
underlined, bold-faced type in Exhibit A.
If the proposed amendments are approved, any technical modifications to the
Declaration of Trust necessary or appropriate to effect the proposed amendments,
including modifications to the index, will also be deemed to be authorized.
REASONS FOR AND POSSIBLE EFFECTS OF PROPOSED AMENDMENTS
The Board of Trustees recommends the authorization of the Preferred Shares
to increase the Company's financial flexibility. The Board believes that the
complexity of modern business financing and acquisition transactions requires
greater flexibility in the Company's capital structure than now exists. Given
the extensive
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financing requirements of the Company, lowering its cost of capital is essential
to fully realizing the accretive benefits of future investments. The Board
believes that the Preferred Shares would be an attractive investment and would
provide the Company with a significant new source of capital, similar to that
used by other real estate investment trusts, which will enhance the continued
growth and success of the Company. The Company believes that Preferred Shares
will generally have a lower all-in-cost than common equity. As compared to
unsecured debt, the Company believes that Preferred Shares offer greater
flexibility due to their lack of a final maturity and more limited covenants.
The Preferred Shares would be available for issuance from time to time as
determined by the Board of Trustees for any proper corporate purpose. Such
purposes might include, without limitation, issuance in public or private sales
for cash as a means of obtaining additional capital for use in the Company's
business and operations, and issuance as part or all of the consideration
required to be paid by the Company for acquisitions of other businesses or
properties. The Company does not, at present, have any agreements,
understandings or arrangements which would result in the issuance of any
Preferred Shares.
It is not possible to state the precise effect of the authorization of the
Preferred Shares upon the rights of holders of Shares until the Board of
Trustees determines the respective preferences, limitations and relative rights
of the holders of one or more classes or series of the Preferred Shares.
However, such effect might include: (a) reduction of the amount otherwise
available for payment of dividends on Shares, to the extent dividends are
payable on any issued Preferred Shares, and restrictions on dividend payments on
Shares if dividends on the Preferred Shares are in arrears; (b) dilution of the
voting power of the Shares to the extent that the Preferred Shares have voting
rights; and (c) the holders of Shares not being entitled to share in the
Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the Preferred Shares.
The amendments may be viewed as having the effect of discouraging an
unsolicited attempt by another person or entity to acquire control of the
Company. Issuances of authorized Preferred Shares can be implemented, and have
been implemented by some companies in the past, with voting or conversion
privileges intended to make acquisition of a company more difficult or more
costly. Such an issuance could discourage or limit the shareholders'
participation in certain types of transactions that might be proposed (such as a
tender offer), whether or not such transactions were favored by the majority of
the shareholders, and could enhance the ability of officers and trustees to
retain their positions. It is noted, however, that the Board currently has the
power under the Declaration of Trust to redeem Shares of any person or entity
which acquires more than 9.9% of the outstanding Shares in order to protect the
Company's status as a real estate investment trust under the Internal Revenue
Code. Consequently, the approval of the proposed amendments should have little
or no incremental effect in discouraging unsolicited take-over attempts.
The affirmative vote of the holders of a majority of the outstanding Shares
of the Company entitled to vote at the Meeting is required to authorize the
proposed amendments to the Declaration of Trust.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENTS TO THE
DECLARATION OF TRUST. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY CARD.
CERTAIN TRANSACTIONS
The Company currently leases its principal executive offices from Continuum
Care of Massachusetts, Inc. ("CCM"), which is wholly-owned by Mr. Gosman and his
two adult sons. The lease provides for an average annual rental fee of $181,776
over the initial five-year term of the lease, which expires on March 31, 1999.
The lease term may be extended for an additional term of one year and ten
months.
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The Company has provided financing to affiliates of Life Care Centers of
America, Inc. ("Life Care") for the construction of four health care facilities
to be located in Auburn, Plymouth, Raynham and West Bridgewater, Massachusetts.
Life Care has retained CCM to construct the facilities pursuant to turnkey
development agreements with CCM in the amounts of $10,431,900, $10,953,585,
$11,912,824 and $11,287,581 for the Auburn, Plymouth, Raynham and West
Bridgewater facilities, respectively.
During 1995, the Company agreed to provide mortgage financing in the
aggregate amount of $163,409,418 (of which $76,388,340 has been funded) to
entities controlled directly or indirectly by Mr. Gosman for the construction of
six health care facilities to be located in Dedham and Needham, Massachusetts,
Palm Beach, Florida, New Haven, Connecticut and Princeton, New Jersey.
During 1995, the Company agreed to provide mortgage financing in the
aggregate amount of $62,642,000 (of which $46,204,113 has been funded) to
certain limited partnerships affiliated with the Dasco Company in which Mr.
Gosman holds equity interests. Mr. Gosman owns from 7.125% to 47.5% of the
aggregate equity interests in such limited partnerships.
All of the terms and conditions of the above transactions and arrangements
were approved by the Company's Independent Trustees. The Board of Trustees
believes that the Company entered into the above transactions in the ordinary
course of its business, and the terms of these transactions and arrangements are
fair as to the Company and were made on terms not less favorable to the Company
than those prevailing at the time for comparable transactions and arrangements
with other persons.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. were the independent accountants of the Company
for fiscal 1995. The Board of Trustees intends to select the independent
accountants of the Company for fiscal 1996 at its annual meeting on May 8, 1996.
Representatives of Coopers & Lybrand L.L.P. will be present at the Meeting and
will be afforded an opportunity to make a statement if they desire to do so.
Such representatives of Coopers & Lybrand L.L.P. will also be available at that
time to respond to appropriate questions addressed to the officer presiding at
the Meeting.
PROPOSALS BY SHAREHOLDERS
If any shareholder intends to present a proposal at the Company's next
Annual Meeting of Shareholders and wishes to request that the same be included
in the proxy statement and form of proxy to be furnished on behalf of the Board
of Trustees with respect to such meeting, a copy of such proposal, meeting the
eligibility standards promulgated by the Securities and Exchange Commission,
must be received by the Company at its principal executive offices, 197 First
Avenue, Needham Heights, Massachusetts 02194 Attention: Michael S. Benjamin,
Esquire, Senior Vice President and Secretary on or before December 12, 1996.
OTHER MATTERS
The Board of Trustees knows of no business, matters or proposals which will
be presented for consideration at the Meeting other than as discussed above.
However, if any such business, matters or proposals should come before the
Meeting, it is the intention of the persons named in the enclosed form of proxy
to vote the proxies with respect to any such business, matters or proposals in
accordance with their best judgment.
The cost of preparing, assembling and mailing the proxy material will be
borne by the Company. The Company will request persons, firms and corporations
holding Shares in their names, or in the name of their
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<PAGE> 17
nominees, which Shares are beneficially owned by others, to send proxy material
to and obtain proxies from such beneficial owners. The Company will reimburse
such holders for their reasonable expenses in so doing. The Company has retained
D. F. King & Co., Inc. ("King") to assist with the solicitation of proxies on
behalf of the Board of Trustees of the Company. King will solicit proxies by
means of mailings and telegraphic and telephonic communications. The estimated
cost of King's proxy solicitation services is $8,000, which will be borne by
the Company. Employees of the Company may also solicit proxies by use of
telegraphic and telephonic communications, in addition to the use of the mails.
By Order of the Board of Trustees
MICHAEL S. BENJAMIN
Senior Vice President and Secretary
April 11, 1996
THE DECLARATION OF TRUST ESTABLISHING MEDITRUST, DATED AUGUST 6, 1985, AS
AMENDED (THE "DECLARATION"), A COPY OF WHICH IS DULY FILED IN THE OFFICE OF THE
SECRETARY OF STATE OF THE COMMONWEALTH OF MASSACHUSETTS, PROVIDES THAT THE NAME
"MEDITRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS
TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY; AND THAT NO TRUSTEE, OFFICER,
SHAREHOLDER, EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL
LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE
COMPANY. ALL PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO
THE ASSETS OF THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION.
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EXHIBIT A
ITEM II
PROPOSED AMENDMENTS TO THE DECLARATION
OF TRUST TO AUTHORIZE ADDITIONAL
CLASSES AND SERIES OF SHARES
6.1 Description of Shares. The interest of the Shareholders shall be
divided into shares of beneficial interest which shall be known collectively as
"Shares," all of which shall be validly issued, fully paid and nonassessable by
the Trust upon receipt of full consideration for which they have been issued or
without additional consideration if issued by way of share dividend or share
split. Each holder of Shares shall as a result thereof be deemed to have agreed
to and be bound by the terms of this Declaration. The Shares may be issued for
such consideration as the Trustees shall deem advisable. [There]* THE SHARES
shall be [one class of Shares]* without par value. The number of Shares which
the Trust shall have authority to issue is unlimited. The Trustees are hereby
expressly authorized at any time, and from time to time, to provide for the
issuance of Shares upon such terms and conditions and pursuant to such
agreements as the Trustees may determine.
THE SHARES MAY CONSIST OF ONE OR MORE CLASSES OR SERIES. THE TRUSTEES MAY,
FROM TIME TO TIME, ESTABLISH AND DESIGNATE THE DIFFERENT CLASSES AND SERIES AND
DESIGNATE VARIATIONS IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE
DIFFERENT CLASSES AND SERIES AS PROVIDED BELOW, BUT IN ALL OTHER RESPECTS ALL
SHARES SHALL BE IDENTICAL.
SUBJECT TO THE PROVISIONS HEREOF, THE TRUSTEES ARE AUTHORIZED TO ESTABLISH
ONE OR MORE CLASSES OR SERIES OF SHARES AND, TO THE EXTENT NOW OR HEREAFTER
PERMITTED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, TO FIX AND DETERMINE
THE PREFERENCES, VOTING POWERS, QUALIFICATIONS AND SPECIAL OR RELATIVE RIGHTS OR
PRIVILEGES OF EACH CLASS OR SERIES INCLUDING, BUT NOT LIMITED TO:
(A) THE NUMBER OF SHARES TO CONSTITUTE SUCH CLASS OR SERIES AND THE
DISTINGUISHING DESIGNATION THEREOF;
(B) THE DIVIDEND RATE ON THE SHARES OF SUCH CLASS OR SERIES AND THE
PREFERENCES, IF ANY, AND THE SPECIAL AND RELATIVE RIGHTS OF SUCH SHARES OF
SUCH SERIES AS TO DIVIDENDS;
(C) WHETHER OR NOT THE SHARES OF SUCH CLASS OR SERIES SHALL BE
REDEEMABLE, AND, IF REDEEMABLE, THE PRICE, TERMS AND MANNER OF REDEMPTION;
(D) THE PREFERENCES, IF ANY, AND THE SPECIAL AND RELATIVE RIGHTS OF
THE SHARES OF SUCH CLASS OR SERIES UPON THE VOLUNTARY OR INVOLUNTARY
DISSOLUTION OR LIQUIDATION OF THE COMPANY;
(E) WHETHER OR NOT THE SHARES OF SUCH CLASS OR SERIES SHALL BE SUBJECT
TO THE OPERATION OF A SINKING OR PURCHASE FUND AND, IF SO, THE TERMS AND
PROVISIONS OF SUCH FUND;
(F) WHETHER OR NOT THE SHARES OF SUCH CLASS OR SERIES SHALL BE
CONVERTIBLE INTO ANY OTHER CLASS OR SERIES OF SHARES AND, IF SO, THE
CONVERSION PRICE OR RATIO AND OTHER CONVERSION RIGHTS;
(G) THE CONDITIONS UNDER WHICH THE SHARES OF SUCH CLASS OR SERIES
SHALL HAVE SEPARATE VOTING RIGHTS OR NO VOTING RIGHTS; AND
(H) SUCH OTHER DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH CLASS OR SERIES TO THE FULL EXTENT NOW OR HEREAFTER
PERMITTED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
16
* [denotes deleted sections]
<PAGE> 19
NOTWITHSTANDING THE FIXING OF THE NUMBER OF SHARES CONSTITUTING A
PARTICULAR CLASS OR SERIES, THE TRUSTEES MAY AT ANY TIME AUTHORIZE THE ISSUANCE
OF ADDITIONAL SHARES OF THE SAME CLASS OR SERIES.
BEFORE THE TRUST SHALL ISSUE ANY SHARES OF ANY NEWLY DESIGNATED CLASS OR
SERIES, A CERTIFICATE SETTING FORTH THE RESOLUTION OR RESOLUTIONS OF THE
TRUSTEES FIXING THE VOTING POWERS, DESIGNATIONS, PREFERENCES AND RIGHTS OF SUCH
CLASS OR SERIES, THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, AND
THE NUMBER OF SHARES OF SUCH CLASS OR SERIES AUTHORIZED BY THE TRUSTEES, SHALL
BE EXECUTED BY A MAJORITY OF THE TRUSTEES AND FILED WITH THE SECRETARY OF STATE
OF THE COMMONWEALTH OF MASSACHUSETTS IN ACCORDANCE WITH SECTION 8.4 HEREOF.
The holders of Shares shall be entitled to receive, when and as declared
from time to time by the Trustees out of any funds legally available for the
purpose, such dividends or distributions as may be declared from time to time by
the Trustees. In the event of the termination of the Trust pursuant to Section
8.1 or otherwise, or upon the distribution of its assets, the assets of the
Trust available for payment and distribution to Shareholders shall be
distributed ratably among the holders of Shares at the time outstanding in
accordance with Section 8.2. All EXCEPT AS OTHERWISE AUTHORIZED BY THE TRUSTEES
WITH RESPECT TO ANY PARTICULAR CLASS OR SERIES, ALL Shares shall have equal
noncumulative voting rights at the rate of one vote per share and equal
dividend, distribution, liquidation and other rights, and shall have no
preference, conversion, exchange, sinking fund or redemption rights. No holder
of Shares shall be entitled as a matter of right to subscribe for or purchase
any part of any new or additional issue of Shares of any class whatsoever of the
Trust, or of securities convertible into any shares of any class whatsoever of
the Trust, whether now or hereafter authorized and whether issued for cash or
other consideration or by way of dividend.
8.3 Amendment Procedure. This Declaration may be amended (except as to the
limitations of personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust and the prohibition of assessments upon
Shareholders set forth in Section 7.2) at a meeting of Shareholders by holders
of Shares representing a majority (or, with respect to (i) amendments to Article
V, (ii) amendments to the proviso to Section 8.1, and (iii) amendments to this
Section 8.3 that would reduce the percentage vote required to approve any
amendments to this Declaration, three quarters) of the total number of votes
authorized to be cast by Shares, then outstanding and entitled to vote thereon,
PROVIDED THAT THE TRUSTEES MAY AUTHORIZE ONE OR MORE CLASSES OR SERIES OF SHARES
TO VOTE SEPARATELY AS A CLASS OR SERIES WITH RESPECT TO CERTAIN OR ALL
AMENDMENTS TO THE DECLARATION AS DETERMINED BY THE TRUSTEES. Two-thirds of the
Trustees may, after fifteen (15) days written notice to the Shareholders, also
amend this Declaration without the vote or consent of Shareholders if they deem
it necessary to conform this Declaration to the requirements of (i) the REIT
Provisions of the Internal Revenue Code, (ii) other applicable federal laws or
regulations or (iii) any state securities or "blue sky" laws or requirements of
administrative agencies thereunder in connection with any public offering of
Shares, but the Trustees shall not be liable for failing so to do. Actions by
the Trustees pursuant to Section 6.1 or Section 9.6(a) that result in amending
this Declaration shall be effected without vote or consent of Shareholders.
8.4 Amendments Effective. Any amendment pursuant to any Section of this
Declaration of Trust (INCLUDING ANY RESOLUTION ADOPTED PURSUANT TO SECTION 6.1
HEREOF) shall not become effective until a certification in recordable form
signed by a majority of the Trustees setting forth an amendment and reciting
that it was duly adopted as aforesaid or a copy of this Declaration, as amended,
in recordable form, and executed by a majority of the Trustees, is filed with
the Secretary of State of the Commonwealth of Massachusetts.
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8.6 Sale of Assets, Merger. The Trustees, with the approval of a majority
of the Trustees (and, in the case of a merger, a majority of the Independent
Trustees) and the affirmative vote or written consent of the holders of Shares
representing (I) a majority of the total number of votes authorized to be cast
by Shares then outstanding and entitled to vote thereon AND (II) SUCH PERCENTAGE
AS DETERMINED BY THE TRUSTEES OF THE TOTAL NUMBER OF VOTES AUTHORIZED TO BE CAST
BY ANY CLASS AND/OR SERIES OF SHARES AS SHALL HAVE BEEN AUTHORIZED BY THE
TRUSTEES TO VOTE SEPARATELY AS A CLASS OR SERIES ON SUCH MATTERS, may: (a) sell,
lease or exchange all or substantially all of the property and assets of the
Trust or (b) merge the Trust into any corporation, association, trust or
organization.
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<PAGE> 21
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 8, 1996
MEDITRUST
The undersigned, having received the Notice of Annual Meeting and the Board
of Trustees' Proxy Statement, hereby appoint(s) Abraham D. Gosman, Edward W.
Brooke and David F. Benson, and each of them, Proxies of the undersigned (with
full power of substitution) to attend the above Annual Meeting of Shareholders
of Meditrust to be held May 8, 1996, and all adjournments thereof (the
"Meeting"), and there to vote all shares of beneficial interest of Meditrust
that the undersigned would be entitled to vote, if personally present, in regard
to all matters which may come before the Meeting.
The undersigned hereby confer(s) upon the Proxies, and each of them,
discretionary authority (i) to consider and act upon such business, matters or
proposals other than the proposals set forth below as may properly come before
the Meeting and (ii) with respect to the election of trustees in the event that
any of the nominees is unable or unwilling to serve if elected. THIS PROXY WHEN
PROPERLY EXECUTED WILL BE VOTED IN THE MANNER SPECIFIED HEREIN. IF NO
SPECIFICATION IS MADE, THE PROXIES INTEND TO VOTE FOR ALL OF THE NOMINEES.
/X/ Please mark votes as in this example
1. To fix the number of trustees at eight and to vote for the election of
all nominees listed below (except as otherwise indicated).
/ / FOR all nominees / / WITHHELD from all nominees
NOMINEES: Abraham D. Gosman David F. Benson Edward W. Brooke
Thomas J. Magovern Robert Cataldo Philip L. Lowe
Gerald Tsai, Jr. and Frederick W. Zuckerman
- --------------------------------------------------------------------------------
For, except vote withheld from nominee(s) listed above
2. To approve the amendments to the Declaration of Trust described in Item
II of the Board of Trustees' Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE (SEE REVERSE SIDE)
<PAGE> 22
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<S> <C>
MARK HERE FOR
ADDRESS CHANGE
AND NOTE BELOW / /
IN SIGNING, PLEASE WRITE NAME(S) EXACTLY AS APPEARING IN THE
IMPRINT ON THIS CARD. FOR SHARES HELD JOINTLY, EACH JOINT
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.
DATE: --------------------------------------------------------- ---------------------------------------------------------------
SIGNATURE
DATE: --------------------------------------------------------- ---------------------------------------------------------------
SIGNATURE
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