Exhibit 10.3
Employment Letter Agreement dated as of June 30, 2000 by and between
Meditrust Corporation and Michael F. Bushee
June 30, 2000
Mr. Michael F. Bushee
37 Meadow Drive
Middleton, MA 01949
RE: Employment Agreement dated July [sic] 1, 1999 between Meditrust
Corporation (the "Company" or "Employer") and Michael F. Bushee (the
"Employee") as amended by First Amendment to Employment Agreement dated
July [sic] 24, 2000 (the "Employment Agreement").
Dear Michael:
This will confirm that the Company has requested that you remain employed
with the Company at its Needham office (or an alternative office in the Boston
metropolitan area) until December 31, 2002 (the "Anticipated Termination Date")
and that, until the Anticipated Termination Date, you continue to implement the
Company's strategic plan to sell a significant portion of the healthcare
portfolio. You have agreed to the foregoing, subject to the following
conditions, all of which shall be deemed to supplement and amend the Employment
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning as defined in the Employment Agreement.
1. Payment with respect to your Performance Units shall be made in cash
on the earlier to occur of (i) the Anticipated Termination Date or
(ii) a Termination Other Than for Cause or Termination for Good
Reason;
2. If your employment is terminated Other Than for Cause, in a
Termination for Good Reason or on the Anticipated Termination Date,
for purposes of calculating payments and other benefits under the
Employment Agreement, the Unexpired Term shall be three (3) years;
3. The Employee's Base Salary shall be increased effective on July 1,
2000 to $425,000;
4. Termination of your employment with the Company on the Anticipated
Termination Date shall be considered a Termination Other Than for
Cause (or a Termination Upon a Change in Control in the event a
Change in Control has occurred prior to, or occurs within nine (9)
months following, such date);
Mr. Michael F. Bushee
June 30, 2000
Page 2 of 3
5. The Employer has requested that the Employee continue to work for
the Employer through the Anticipated Termination Date and as an
additional inducement to Employee to continue his employment through
such date, in addition to the Severance Compensation provided in the
Employment Agreement, which shall also be payable in connection with
a termination on the Anticipated Termination Date, the Employee
shall be eligible to be paid a bonus equal to 100% of his Base
Salary (the "Maximum Bonus Payment") on December 31, 2000, December
31, 2001 and December 31, 2002, provided, however, that with respect
to each such bonus payment, 80% of each such bonus payment shall be
based on achievement of the asset sale criteria described on
Schedule A attached hereto and incorporated herein and 20% of each
such bonus payment shall be discretionary. Although nothing herein
shall be deemed to be a guaranty of employment through the
Anticipated Termination Date; if Employee is terminated in a
Termination Other Than for Cause or in a Termination for Good Reason
prior to the Anticipated Termination Date, in addition to and
simultaneously with the Severance Compensation, Employee shall be
paid the Maximum Bonus Payment(s) that would have been paid on
December 3lst of each year after such termination, through and
including the Anticipated Termination Date;
6. In accordance with the change to the Company's vacation policy, upon
any termination you shall be paid for all accrued and unused
vacation time;
7. Outplacement services shall be made available to you for a
reasonable period of time after any termination; such services shall
be provided on a basis and for a duration comparable to outplacement
services offered by the Company to terminated employees in November
1998;
8. It is hereby agreed that neither the relocation of the Company's
principal offices from Needham, Massachusetts to Dallas, Texas, nor
the fact that your duties and responsibilities will hereinafter
change, including a primary focus towards selling a significant
portion of the Company's healthcare portfolio, will be considered
to be a Termination for Good Reason under the Employment Agreement;
9. Paragraph 5.1(b) of the Employment Agreement regarding
non-competition, but not non-solicitation, after termination of
employment is hereby deleted;
10. For purposes of determining whether a Change in Control has occurred
pursuant to Paragraph 2.l(h)(d) of the Employment Agreement, the
initial measurement date shall be January 1, 1999 and the
calculation shall be based upon the net book value of such assets as
reported on the Company's financial statements as of that date; and
11. Except as amended hereby, the Employment Agreement shall remain in
full force and effect.
Mr. Michael F. Bushee
June 30, 2000
Page 3 of 3
Thank you for your ongoing participation in effectuating the Company's
strategic plan. Please acknowledge your agreement to the foregoing by signing
this letter where indicated below and returning it to the undersigned.
Very truly yours,
MEDITRUST CORPORATION
By: /s/ Francis W. Cash
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Francis W. Cash
Acknowledged and Agreed
/s/ Michael F. Bushee
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Michael F. Bushee
Exhibit A
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Management has prepared a three year forecast for the years 2000 -- 2002 based
on actual Q1 2000 results and other expectations. This forecast was provided to
the banks in negotiating the extension and to the Boards of Directors at the
June 8, 2000 Board Meeting.
o Asset sales and mortgage repayments were estimated as follows:
Q2-Q4
2000 2001 2002
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Expected cash proceeds $106 $398 $325
Year 2000 asset sales and mortgage repayments include:
o Repayment of two MOB Mortgages with a face value of $55M, which generated
proceeds of $48M and closed on April 7, 2000.
o An expected mortgage repayment in Q3 of $8M.
o Unidentified mortgage repayments with a face value of $70M generating
proceeds of approximately $50M in Q4.