HEALTH AND REHABILITATION PROPERTIES TRUST
400 Centre Street
Newton, Massachusetts 02158
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held May 17, 1994
To the Shareholders of
HEALTH AND REHABILITATION PROPERTIES TRUST
Notice is hereby given that the Annual Meeting of Shareholders
of Health and Rehabilitation Properties Trust (the "Company") will
be held at 9:30 A.M. on Tuesday, May 17, 1994, at State Street Bank
and Trust Company, 225 Franklin Street, 33rd Floor, Boston,
Massachusetts, for the following purposes:
1. To elect Trustees in Group II of the Company's Board of
Trustees.
2. To consider and act upon a proposal to amend the Company's
Declaration of Trust to change the Company's name to "Health and
Retirement Properties Trust".
3. To consider and act upon such other matters as may
properly come before the meeting.
The Board of Trustees has fixed the close of business on March
24, 1994 as the record date for determination of the shareholders
entitled to notice of and to vote at the meeting.
By Order of the Board of Trustees,
David J. Hegarty, Secretary
March __, 1994
WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE SIGN,
DATE AND RETURN YOUR PROXY IN THE ENVELOPE ENCLOSED HEREWITH.
<PAGE>
HEALTH AND REHABILITATION PROPERTIES TRUST
400 Centre Street
Newton, Massachusetts 02158
PROXY STATEMENT
March __, 1994
INTRODUCTION
A Notice of the Annual Meeting of Shareholders of the Company
(the "Meeting") is set forth on the preceding page and there is
enclosed herewith a form of proxy solicited by the Board of
Trustees of the Company. The cost of this solicitation will be
borne by the Company. In addition to solicitation by mail, the
Trustees and officers of the Company may solicit proxies personally
or by telephone or telegram. This proxy statement is being first
sent to shareholders on or about March __, 1994. A copy of the
Annual Report to Shareholders for the year ended December 31, 1993
(including audited financial statements of the Company) is also
being mailed herewith.
Only shareholders of record as of the close of business on
March 24, 1994 (the "Record Date") are entitled to notice of and to
vote at the Meeting and/or any adjournment thereof. The
outstanding stock of the Company on the Record Date entitled to
vote consisted of 44,722,500 Common Shares of Beneficial Interest,
$.01 par value per share (the "Shares"). The holders of the
outstanding Shares are entitled to one vote per Share.
All Shares represented by valid proxies received by the
Company prior to the Meeting will be counted for purposes of
determining the presence of a quorum and will be voted as specified
in the proxy. If no specification is made by the Shareholder, the
Shares will be voted FOR the proposals noted below. Each of the
proposals set forth herein requires the affirmative vote of the
proportion of the outstanding Shares set forth therein. A
Shareholder marking the proxy "Abstain" will not be counted as
voting in favor of the particular proposal from which the
Shareholder has elected to abstain. If a broker indicates on a
proxy that it does not have discretionary authority as to certain
Shares to vote on a particular proposal, those Shares will not be
counted as voting in favor of such proposal. A Shareholder giving
a proxy has the power to revoke it any time prior to its exercise
by delivering to the Secretary of the Company a written revocation
or a duly executed proxy bearing a later date, or by attending the
Meeting and voting his or her Shares in person. Adoption of any of
the proposals presented in this Proxy Statement would not give rise
to appraisal rights or other dissenters rights under Maryland law.
Item 1. Election of Trustees in Group II of the Board of Trustees
The number of Trustees of the Company currently is fixed at
five and the Board of Trustees currently is divided into three
groups with two Trustees in Group I, two Trustees in Group II and
one Trustee in Group III. Trustees in each Group are elected to
three-year terms.
The business of the Company is conducted under the general
direction of the Board of Trustees as provided by the Declaration
of Trust and the By-Laws of the Company and the laws of the State
of Maryland, the state of the Company's organization on October 9,
1986.
Three of the Trustees, the Rev. Justinian Manning, C.P., John
L. Harrington, and Arthur G. Koumantzelis, are the Company's
"Independent Trustees"; that is, Trustees who are not otherwise
affiliated with the Company, HRPT Advisors, Inc., a Delaware
corporation ("Advisors"), or any other person or entity that holds
in excess of 8.5% of the issued and outstanding Shares of the
Company. The Independent Trustees also comprise the Company's
Audit Committee. The Company does not have a Compensation
Committee or a Nominating Committee.
During 1993, the Board of Trustees held five meetings. During
1993, each Trustee attended 75% or more of the total number of
meetings of the Board and any Committee of which he was a member.
The standing Audit Committee meets with the Company's independent
auditors to discuss the procedures for conducting, and the results
of, audits of the Company's financial records, and recommends to
the Board of Trustees the hiring or retention of independent
auditors. It held one meeting during 1993.
Each Independent Trustee receives an annual fee of $17,000 for
services as a Trustee, plus $1,000 for each meeting of the Board or
Board committee attended by such Trustee, up to a maximum of $4,000
per year. The Chairperson of the Audit Committee receives an
additional $2,000 annually; such position rotates annually among
the Independent Trustees. Each Independent Trustee also receives
annual 500 Share grants under the Company's 1992 Incentive Share
Award Plan. The Company reimburses all Trustees for travel
expenses incurred in connection with their duties as Trustees of
the Company. The Company has also agreed to pay any Independent
Trustee who brings a property to the attention of the Company a fee
equal to one percent of any investment made by the Company in the
property. No fees have been earned to date by any Independent
Trustee with respect to any investments by the Company.
The present Trustees in Group II are Rev. Justinian Manning,
C.P. and Gerard M. Martin. If re-elected, Rev. Manning and Mr.
Martin will hold office until the Company's 1997 Annual Meeting of
Shareholders. To be elected, each nominee for Trustee must receive
the vote of a majority of the Shares issued and outstanding. It is
the intention of the persons authorized by the enclosed proxy to
nominate and elect Rev. Manning and Mr. Martin as the Group II
Trustees. Advisors, which has voting control over 1,996,250 Shares
(approximately 4.5% of Shares outstanding and entitled to vote)
intends to vote in favor of the election of Rev. Manning and Mr.
Martin as Group II Trustees. Rev. Manning and Mr. Martin have
served on the Board since the Company's organization in 1986.
Their principal occupations for the past five years and their ages
as of March __, 1994 are as follows:
REV. JUSTINIAN MANNING, C.P. Age: 68
The Reverend Justinian Manning, C.P., has been, since
September 1990, the pastor of St. Gabriel's parish in Brighton,
Massachusetts. From 1984 until September 1990, he was the
Treasurer of the Provincial Council of the Passionist
Provincialate. He is also on the Board of Directors of
Charlesview, a low and moderate income housing program, and St.
Elizabeth's Hospital Foundation. He is past Treasurer and a former
Director of St. Paul's Benevolent, Educational and Missionary
Institute, a New Jersey corporation, which oversees foundations in
Massachusetts, Connecticut, New York, Pennsylvania, Maryland,
Florida and the Institute's Overseas Missions. He was formerly on
the Board of Directors of St. Paul's Monastery Manor, in
Pittsburgh, Pennsylvania, a congregate housing facility. He
belongs to the Provincial Council of the Passionist Provincialate
and is the former Director of Consolidation for the Community.
GERARD M. MARTIN Age: 59
Gerard M. Martin is a private investor in real estate. Until
the merger (the "Horizon/Greenery Merger") of Greenery Rehabilitation Group,
Inc. ("Greenery") into Horizon
Healthcare Corporation ("Horizon") in February 1994, Mr.
Martin was the Chief Executive Officer and Chairman of the Board of
Directors and a 51.4% shareholder of Greenery and was the principal owner
and Chief
Executive Officer of the predecessors of Greenery since 1975.
Subsequent to the merger, Mr. Martin was elected to the Board of
Directors of Horizon. Mr. Martin has been active in the health
care industry for more than 25 years as a manager, developer and
builder. Mr. Martin and his wife are the sole shareholders of
Regional Home Care, Inc., a corporation providing respiratory
therapy services and supplies to clients in New England. Mr.
Martin is also a Director and 50% shareholder of each of Advisors,
Connecticut Subacute Corporation ("CSC") and Connecticut Subacute
Corporation II ("CSCII"). CSC and CSCII are affiliates of the
Company and Advisors.
In addition to Rev. Manning and Mr. Martin, the following
persons currently serve on the Board of Trustees or serve as
executive officers of the Company. Their principal occupations for
the last five years and their ages as of March __, 1994 are as follows:
JOHN L. HARRINGTON Age: 58
John L. Harrington is the President of JRY Corporation, the
principal owner of the Boston Red Sox baseball club, Executive
Director and Trustee of the Yawkey Foundation and a Trustee of the
JRY Trust. Mr. Harrington is a Director of Shawmut Bank, N.A. and
a Director of New England Sports Network, a cable television
station. Mr. Harrington was elected to the Board of Trustees in
August 1991 to fill a vacancy created by the death of Phil A.
Petitt in May 1991 and was re-elected as a Group I Trustee at the
1993 Annual Meeting of Shareholders. His term will expire at the
1996 Annual Meeting of Shareholders.
BARRY M. PORTNOY Age: 48
Barry M. Portnoy has been a partner in the law firm of
Sullivan & Worcester, counsel to the Company, since 1978, and a
Trustee of the Company since its organization. Until the
Horizon/Greenery Merger, Mr. Portnoy was a Director and 2.4%
shareholder of Greenery, and is a Director and 50% shareholder of
each of Advisors, CSC and CSCII. Subsequent to the
Horizon/Greenery merger, Mr. Portnoy was elected to the Board of
Directors of Horizon. Mr. Portnoy was re-elected as a Group I
Trustee at the 1993 Annual Meeting of Shareholders and his term
will expire at the 1996 Annual Meeting of Shareholders.
ARTHUR G. KOUMANTZELIS Age: 63
Arthur G. Koumantzelis has been, since July 1990, the Senior
Vice President and Chief Financial Officer and, from December
1991 until December 1993, was a Director of Cumberland Farms, Inc., a
private company
engaged in the convenience store business in the northeastern
United States and Florida and, through its interests in the partnership
operating its Gulf Oil Division, in
the distribution and retail sale of gasoline in the northeastern
United States. Cumberland Farms filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code in May 1992, and
emerged from bankruptcy proceedings in December, 1993. Until June
1990, Mr. Koumantzelis was a Senior Partner of Ernst & Young
(formerly Arthur Young & Company), the Company's independent
auditors. He was elected as a Group III Trustee at the 1992 Annual
Meeting of Shareholders and his term will expire at the 1995 Annual
Meeting of Shareholders.
MARK J. FINKELSTEIN Age: 47
Mark J. Finkelstein has been President and Chief Executive
Officer of the Company and President, Chief Executive Officer and
a Director of each of Advisors, CSC and CSCII and Treasurer of CSC
and CSCII since their organization. Mr. Finkelstein is a past
President of the American College of Health Care Administrators and
is a Director of the Foundation of the American College of Health
Care Administrators.
DAVID J. HEGARTY Age: 37
David J. Hegarty, a certified public accountant, became
Executive Vice President of the Company in July 1993, having joined
the Company in July 1987 as Treasurer. Mr. Hegarty has also been the
Secretary of the Company since 1987.
serves as Treasurer and Secretary of Advisors. From January 1984
to July 1987, Mr. Hegarty was an audit manager with Ernst & Young
(formerly Arthur Young & Company), the Company's independent
auditors.
JOHN G. MURRAY Age: 33
John G. Murray joined the Company in July 1993 as Treasurer.
For the three years prior to joining the Company, Mr. Murray was
employed by Fidelity Brokerage Services, Inc., most recently as
Director of Finance, Business Analysis and Planning. Prior to his
tenure at Fidelity, he was a senior manager for Ernst &
Young(formerly Arthur Young & Company), the Company's independent
auditors.
There are no family relationships among any Trustees and
executive officers of the Company. Executive officers serve at the
will of the Board of Trustees.
Item 2. Proposal to Amend the Company's Declaration of Trust to
Change the Name of the Company to "Health and Retirement Properties
Trust".
The Board of Trustees has proposed that the Company's
Declaration of Trust be amended to change the name of the Company
to "Health and Retirement Properties Trust". The Trustees believe
that this proposed new name more accurately reflects the changing
focus of the Company's intended future investments, from an emphasis
on rehabilitation facilities to an emphasis on retirement homes and assisted
living facilities.
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 this proposed amendment. The Board of
Trustees has unanimously approved and recommends that Shareholders
vote FOR the adoption of the amendment described in Item 2.
OTHER INFORMATION
Compensation of Executive Officers
The Company does not have any employees; services which
otherwise would be provided by employees are performed by Advisors.
Payments by the Company to Advisors are described in "Certain
Relationships and Related Transactions".
The following table provides summary compensation information
for Mark J. Finkelstein, an employee of Advisors who performs the
duties of chief executive officer of the Company:
<TABLE>
<CAPTION> SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Securities
Name and Other Restricted Underlying
Principal Annual Stock Option LTIP All Other
Position Year Salary Bonus Compensation Awards SARs Payouts Compensation
CEO: 1993 None None None $37,875(2) None None None
Mark J. 1992 None None None $35,250(3) None None None
Finkelstein 1991 (1) -0-
</TABLE>
(1) Except with respect to options and incentive share
awards, the Company has not paid and has no current plans to pay
compensation to its executive officers. The Company's Stock Option
Plan, originally adopted in 1986, was terminated by the Trustees in
1992. There are no options outstanding under such plan. Advisors,
which conducts the day-to-day operations of the Company,
compensates Mr. Finkelstein in connection with his services to
Advisors and to the Company. In accordance with the transitional
provisions applicable to the revised rules on executive
compensation disclosure adopted by the Securities and Exchange
Commission, certain disclosure for fiscal year 1991 has been
omitted.
(2) On June 29, 1993, Mr. Finkelstein was granted an
incentive share award, pursuant to the Company's 1992 Incentive
Share Award Plan, of 3,000 shares, of which one third vested
immediately upon grant and one third of which will vest on each of
the first and second anniversaries of the grant. These 3,000
Shares are entitled to dividends as declared by the Company. The
dollar amount shown represents the 3,000 Shares multiplied by the
closing price for the Shares on the New York Stock Exchange on the
date of grant.
(3) On July 20, 1992, Mr. Finkelstein was granted an
incentive share award, pursuant to the Company's 1992 Incentive
Share Award Plan, of 3,000 Shares, of which one third vested
immediately upon grant, one third vested on the first anniversary
of the grant, and one third of which will vest on the second
anniversary of the grant. These 3,000 Shares (a) are entitled to
dividends as declared by the Company, and (b) together with the
3,000 Shares described in footnote 2 above, constitute the total
amount of restricted stock held by Mr. Finkelstein at December 31,
1993. The dollar amount shown represents the 3,000 Shares
multiplied by the closing price for the Shares on the New York
Stock Exchange on the date of grant.
Performance Graph -- Comparison of Cumulative Total Return
The graph below shows, for the years indicated, the Company's
cumulative total shareholder return on its Shares (assuming a $100
investment on December 31, 1988) as compared with (a) the Standard
& Poor's 500 Index and (b) the National Association of Real Estate
Investment Trust, Inc.'s index of all publicly traded real estate
investment companies listed on the New York Stock Exchange, the
American Stock Exchange and the NASDAQ/National Market System
(NAREIT). The comparison assumes all dividends are reinvested.
Note: Pursuant to Rule 304(d) of Regulation S-T promulgated
under the Securities Act of 1933, as amended, the performance graph
described in the preceding paragraph has been omitted from this
EDGAR filing. The omitted graph is a linear graph depicting the
points shown below. A supplementary paper copy of such performance
graph will be submitted to the appropriate Branch Chief within the
Securities and Exchange Commission's Division of Corporate
Finance.)
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
HRP 100 128 127 244 231 303
NAREIT 100 98 81 110 124 146
S&P 100 131 127 166 179 196
</TABLE>
Compensation Committee Interlocks and Insider Participation
The Company does not have a standing Compensation Committee;
rather, a committee comprised of the Company's Independent Trustees
makes recommendations for grants of Shares under the Company's 1992
Incentive Share Award Plan (the "Plan"), and such recommendations
are acted upon by the full Board of Trustees. Barry M. Portnoy, a
member of the Board of Trustees, is a partner in the firm of
Sullivan & Worcester, counsel to the Company.
Compensation Committee Report
The Company developed and implemented the Plan in May 1992 in
recognition of the following circumstances. First, the Company's
Shares are primarily a yield vehicle for Shareholders and do not
appreciate in value in the same manner as other equity securities.
Therefore, a conventional stock option plan would not provide
appropriate incentives for the Company's management. Second,
because the executive officers of the Company are employees of
Advisors and not of the Company, and receive their salary
compensation from Advisors, the Trustees wished to establish a
vehicle which would, among other things, (a) foster a continuing
identity of interest between management of the Company and its
Shareholders, and (b) recognize that the Company's executive
officers perform certain duties on behalf of the Company, primarily
with regard to shareholder relations and investor communications,
which fall outside of the services covered by the investment
advisory contract between the Company and Advisors (the "Advisory
Agreement"). In addition, the Trustees may impose vesting
restrictions or other conditions on the granted Shares, which may
further promote continuity of management.
In 1993, Mark J. Finkelstein, chief executive officer of the
Company, received a grant of 3,000 Shares under the Plan, 1,000
Shares of which vested immediately upon grant and 1,000 Shares of
which will vest on each of the first and second anniversaries of
the date of grant. The determination of the number of Shares
granted to Mr. Finkelstein was not specifically based on an
estimate of the Company's performance, but instead was based on the
relationship of the fair market value of the Shares so granted to
the value of the "outside" services to the Company, as discussed
above, performed by Mr. Finkelstein during the year preceding the
grant.
JOHN L. HARRINGTON
ARTHUR G. KOUMANTZELIS
REV. JUSTINIAN MANNING, P.C.
GERARD M. MARTIN
BARRY M. PORTNOY
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with
respect to the beneficial ownership of the Shares by each
beneficial owner known to the Company to hold more than 5% of the
Shares, each Trustee, and all officers and Trustees of the Company
as a group, as of March __, 1994. The address of each of the
Trustees and officers of the Company is c/o Health and
Rehabilitation Properties Trust, 400 Centre Street, Newton,
Massachusetts 02158.
<TABLE>
<CAPTION>
Shares
Beneficially
Name Owned Percentage
<S> <C> <C>
Mark J. Finkelstein(1)...... 16,141 *
John L. Harrington....... 1,086 *
Arthur G. Koumantzelis...... 1,086 *
Rev. Justinian Manning, C.P. 1,000 *
Gerard M. Martin(2)......... 1,996,250 4.46%
Barry M. Portnoy(2)......... 1,996,250 4.46%
All executive officers and
Trustees as a group
(8 persons)(1)(3)........... 2,019,563 4.52%
- ---------------
* Less than 1% of the Company's outstanding Shares.
(1) Includes 3,000 Shares held jointly with Mr. Finkelstein's
mother, 3,000 Shares held by Mr. Finkelstein's mother, 2,778
Shares held by Mr. Finkelstein on behalf of his children and
3,000 Shares awarded under the 1992 Award Plan which have
not yet vested.
(2) Neither Mr. Martin nor Mr. Portnoy owns any Shares directly.
Advisors, which is wholly owned by Messrs. Martin and
Portnoy, owns 996,250 Shares directly and, solely in its
capacity as voting trustee of a voting trust agreement,
exercises voting control over one million Shares owned by
AMS Properties, Inc. ("AMSP") and pledged to the Company to
secure the obligations of GranCare, Inc., AMSP and GCI
Healthcare Centers, Inc. to the Company. Messrs. Martin and
Portnoy may be deemed to have beneficial ownership of all of
these Shares.
(3) Includes 5,000 Shares awarded under the 1992 Award Plan
which have not yet vested.
Certain Relationships and Related Transactions.
In November 1993, the Company acquired a 143 bed nursing
home in Seattle, Washington from Greenery for the appraised value of $5.1 million. The
facility was immediately leased to Sun Healthcare Group, Inc.
("Sun"). The Company simultaneously extended and adjusted Sun's
existing leases for three properties owned by the Company. The
total minimum annual rent payable to the Company for these four
facilities is approximately $2.5 million.
As of December 31, 1993, the Company had invested $384.81
million (48.2% of total investments) in thirteen properties
leased by Greenery and $32.42 million (8.43% of total
investments) in three properties leased by CSC. During 1993,
total rent and interest, including additional rent and additional
interest based on increases in net patient revenues, received by
the Company from its investments in Greenery properties and in
CSC properties were $22.53 million and $4.48 million,
respectively. Greenery also held an option, which expired
unexercised on December 31, 1993, to repurchase, individually or
in the aggregate, five properties owned by the Company and leased
to Greenery, at the Company's cost of $73.53 million.
In February 1994, Horizon acquired Greenery in a stock for
stock merger. In connection with the Horizon/Greenery Merger,
- Horizon became the lessee of seven facilities
previously leased by the Company to Greenery. The rent
for these facilities is substantially the same as that
previously paid by Greenery. The initial lease term
was extended through June 30, 2005, and Horizon has
renewal options totalling an additional 20 years.
- The Company granted Horizon options to purchase any or
all of the seven leased facilities. The options may be
exercised at a rate of not more than one facility in
any 12 month period and expire December 31, 2003. The
option purchase prices are approximately equal to the
Company's investment in these facilities.
- Horizon purchased from the Company three facilities
previously leased by Greenery. The purchase price of
$28.4 million was paid $23.3 million in cash and the
balance of $5.1 million in a note secured by a first
mortgage on one of the facilities. The mortgage loan
bears interest at 11.5% per annum and matures on
December 31, 2000. The Company realized a gain from
these sales of approximately $3.7 million.
- The Company lent Horizon $4.3 million secured by a
first mortgage on one facility which Horizon acquired
from Greenery in the Horizon/Greenery Merger. The mortgage loan bears
interest at 11.5% per annum and matures on December 31,
2000.
- Horizon assumed management responsibility for three of
the Company's facilities in Connecticut previously
leased to Greenery. The Company purchased leasehold
improvements made at these facilities by Greenery for
their net book value of approximately $541,000. The
existing leases with Greenery were terminated and the
facilities were leased to CSCII. The lease with CSCII
and the management contract with Horizon will continue
for up to five years until the Company locates a
substitute operator. Under the terms of the management
contract between Horizon and CSCII, Horizon will
guarantee the lease payments to the Company, which are
approximately equal to the previous lease obligations
of Greenery for these facilities.
Until the consummation of the Horizon/Greenery Merger, Mr.
Martin was Chairman of the Board and Chief Executive Officer of
Greenery and, together with his wife, owned 51.4% of Greenery's
outstanding common stock. Mr. Portnoy was a Director and 2.4%
shareholder of Greenery. As a result of the Horizon/Greenery
Merger, Mr. Martin and his wife hold approximately 4.8% of
Horizon's outstanding common stock. Subsequent to the Horizon/Greenery Merger,
Mr. Martin and Mr. Portnoy were elected to Horizon's Board of
Directors. Mr. Martin and Mr. Portnoy are also each Directors
and 50% shareholders of CSC and CSCII. Mr. Finkelstein is
President, Chief Executive Officer, Treasurer and a Director of
CSC and CSCII.
The Advisory Agreement provides for an annual advisory fee
equal to 0.70% of the Company's Average Invested Capital, as
defined in the Advisory Agreement, up to $250 million, and 0.50%
of Average Invested Capital equal to or exceeding $250 million;
and an annual incentive fee, which was revised in 1993,
calculated on the basis of increases in the Company's operating
cash flow above threshold amounts (15% of cash flow above the
threshold amount of $1.37/Share in 1994, which threshold
increases by $.05/Share annually thereafter), but no more than
$.01/Share. All incentive fees which may be earned by the
Advisor will be paid in Shares. Advisors' fee will be waived to
the extent necessary to limit the Company's total annual
operating expenses to the greater of (i) 2% of Average Invested
Capital or (ii) 25% of the Company's Net Income determined as set
forth in the Advisory Agreement. The aggregate advisory fee paid
to Advisors for fiscal year 1993 was $2.59 million, of which
approximately $1.08 million was attributable to investments in
Greenery and approximately $225,858 was attributable to
investments in CSC.
Mr. Martin and Mr. Portnoy each may have material interests
in the transactions between Greenery and the Company, between
Horizon and the Company, between Advisors and the Company,
between CSC and the Company, and between CSCII and the Company.
To the extent that the terms of the Company's investments in
properties owned or leased by Greenery, Horizon, CSC and CSCII
have been negotiated among related parties, they have not been
determined on an arm's-length basis. Investment terms, however,
have been based upon independent appraisals of the properties,
where available, cash flow available for rent or debt service
and, in some cases, negotiations with the representatives of the
underwriters of the Company's public offerings. All existing
business relationships between the Company, on the one hand, and
Greenery (or Horizon, as successor to Greenery by merger),
Advisors, CSC, CSCII and/or their affiliates, on the other hand,
have been approved by, and all such future relationships will be
submitted for approval by, majority vote of the Independent
Trustees. Mr. Portnoy is a partner in the firm of Sullivan &
Worcester, counsel to the Company and to Greenery, Advisors, CSC,
CSCII and affiliates of each of the foregoing.
AUDITORS
The Company is not required to submit the selection of its
auditor to a vote of shareholders. The Company's independent
auditor since its organization in 1986 has been Ernst & Young and
one of its predecessors, Arthur Young & Company.
A representative of Ernst & Young is expected to be present
at the Meeting, with the opportunity to make a statement if
desired, and is expected to be available to respond to
appropriate questions from shareholders who are present at the
Meeting.
SHAREHOLDER PROPOSALS
The Company's 1995 Annual Meeting is presently expected to
be held on or about May 16, 1995. Proposals of shareholders
intended to be presented at the 1995 Annual Meeting must be
received not later than November 30, 1994, for inclusion in the
Company's proxy statement and proxy for that meeting.
OTHER MATTERS
As of this time, the Board of Trustees knows of no other
matters to be brought before the Meeting. However, if other
matters properly come before the Meeting or any adjournment
thereof, and if discretionary authority to vote with respect
thereto has been conferred by the enclosed proxy, the persons
named in the proxy will vote the proxy in accordance with their
best judgment as to such matters.
By Order of the Board of Trustees
David J. Hegarty, Secretary
Newton, Massachusetts
March __, 1994
<PAGE>
FORM OF FRONT OF PROXY
[X] PLEASE MARK VOTES AS IN
THIS EXAMPLE
1. Election of Trustees in Group II.
[ ] FOR [ ] WITHHOLD AUTHORITY [ ] FOR ALL EXCEPT
Rev. Justinian Manning Mr. Gerard M. Martin
(If you do not wish your shares voted "For" a particular nominee,
mark the "For All Except" box and strike a line through the
nominee(s) name. Your shares will be voted for the remaining
nominee(s).
2. Proposal to Amend the Company's Declaration of Trust to
Change the Company's Name to "Health and Retirement
Properties Trust".
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before
the meeting.
Mark box at right if comments or address change
have been noted on the reverse side of this card. [ ]
RECORD DATE SHARES:
(Signature) X: Date:______________________
(Signature) X: Date:____________________
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such.
DETACH CARD BEFORE MAILING
HEALTH AND REHABILITATION PROPERTIES TRUST
Dear Shareholder:
Please take note of the important information enclosed with
this Proxy Ballot. There are a number of issues related to
the management and operation of your Trust that require your
immediate attention and approval. These are discussed in
detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to
exercise your right to vote your shares.
Please mark the boxes on the proxy card to indicate how your
shares shall be voted. Then sign the card, detach it and
return your proxy vote in the enclosed postage paid
envelope.
Your vote must be received prior to the Annual Meeting of
Shareholders, May 17, 1994.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
Health and Rehabilitation Properties Trust
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FORM OF BACK OF PROXY
HEALTH AND REHABILITATION PROPERTIES TRUST
400 Centre Street, Newton, Massachusetts
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints GERARD M. MARTIN, BARRY M.
PORTNOY and MARK J. FINKELSTEIN, and each of them, as Proxies of
the undersigned, each with the power to appoint his substitute,
and hereby authorizes a majority of them, or any one if only one
be present, to represent and to vote, as designated below, all
the Common Shares of Beneficial Interest of Health and
Rehabilitation Properties Trust held of record by the undersigned
or with respect to which the undersigned is entitled to vote or
act, at the Annual Meeting of Shareholders to be held on May 17,
1994 or any adjournment thereof.
This proxy when properly executed will be voted in the
manner directed herein by the undersigned Shareholder(s). If no
direction is made, this proxy will be voted FOR Proposals 1 and
2.
Address Change/Comments:
_________________________________________________________________
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