1
Exhibit 4
MEDITRUST
1992 EQUITY INCENTIVE PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF AUGUST 15, 1996
SECTION 1. PURPOSE
The purpose of the 1992 Equity Incentive Plan (the "Plan") of Meditrust is
to enable Meditrust and its subsidiaries to attract, retain and motivate their
employees, consultants and trustees and to enable such persons to participate in
the long-term growth of the Company by providing for or increasing the
proprietary interests of such persons in the Company, thereby assisting the
Company to achieve its long-range goals.
SECTION 2. DEFINITIONS
As used in the Plan:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" means any Option, Stock Appreciation Right, Performance Stock Unit
or Restricted Stock awarded under the Plan.
"Board" means the Board of Trustees of the Company.
"Closing Price" means the closing price of a Share on the New York Stock
Exchange or, if Shares are not listed on such exchange, on any other national
exchange on which Shares are listed or on NASDAQ.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Stock Option Committee of the Board, which shall
consist of two or more trustees, each of whom shall be a "non-employee director"
within the meaning of Rule 16b-3(b)(3)(i) under the Act, or any successor
provision.
"Committee Member" means a trustee appointed by the Board to be a member of
the Committee.
"Company" means Meditrust, a Massachusetts business trust, and any present
or future parent or subsidiary corporations (as defined in Section 424 of the
Code) or any successor to such corporations.
2
"Fair Market Value" means, with respect to Shares or any other property,
the fair market value as determined by the Committee in good faith or in the
manner established by the Committee from time to time.
"Incentive Stock Option" means an option to purchase Shares awarded to a
Participant under the Plan which is intended to meet the requirements of Section
422 of the Code or any successor provision.
"Non-Qualified Stock Option" means an option to purchase Shares awarded to
a Participant under the Plan which is not intended to be an Incentive Stock
Option.
"Option" means an Incentive Stock Option or a Non-Qualified Stock Option.
"Participant" means a person selected by the Board or the Committee to
receive an Award under the Plan.
"Performance Cycle" or "Cycle" means the period of time selected by the
Board or the Committee during which performance is measured for the purpose of
determining the extent to which an award of Performance Shares has been earned.
"Performance Stock Unit" means Shares awarded to a Participant under
Section 9.
"Restricted Period" means the period of time selected by the Board or the
Committee during which an award of Restricted Stock may be forfeited to the
Company.
"Restricted Stock" means Shares awarded to a Participant under Section 7
which are subject to forfeiture.
"Section 16 Participant" means a Participant subject to Section 16 of the
Act.
"Shares" or "Stock" means shares of beneficial interest, without par value,
of the Company.
"Stock Appreciation Right" or "SAR" means a right awarded to a Participant
under Section 8.
SECTION 3. ADMINISTRATION
(a) The Plan shall be administered by the Board. The Board may, in its
discretion, delegate some or all of its powers with respect to the Plan to the
-2-
3
Committee. All references hereinafter to the powers of the Committee assume that
the Board has duly delegated such powers to the Committee. Among other things,
the Board and the Committee shall have authority, subject to the terms of the
Plan, to grant Awards, to determine the individuals to whom and the time or
times at which Awards may be granted and to determine the terms and conditions
of any Award granted hereunder.
(b) The Board and the Committee shall have authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the
operation of the Plan as it shall from time to time consider advisable, to
interpret the provisions of the Plan and any Award, and to decide all disputes
arising in connection with the Plan. The decisions and interpretations of the
Board and the Committee shall be final and binding. Any action of the Board or
the Committee with respect to the administration of the Plan shall be taken
pursuant to a majority vote of a quorum or by the unanimous written consent of
their respective members.
SECTION 4. ELIGIBILITY
All employees, trustees and consultants of the Company shall be eligible to
participate in the Plan.
SECTION 5. STOCK AVAILABLE FOR AWARDS
(a) At any given time, Awards may be made under the Plan for up to an
aggregate number of Shares equal to 5% of the total number of Shares then
outstanding; of such aggregate number of Shares for which Awards may be granted
under the Plan, 500,000 shall be available for the grant of Incentive Stock
Options. If any Award in respect of Shares expires or is terminated before
exercise or is forfeited for any reason, without a payment in the form of Stock
being made to the Participant, the Shares subject to such Award, to the extent
of such expiration, termination or forfeiture, shall again be available for
award under the Plan. Shares issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.
(b) In the event that the Board or the Committee determines in its sole
discretion that any stock dividend, extraordinary cash dividend, creation of a
class of equity securities, recapitalization, reclassification, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange of Shares,
warrants or rights offering to purchase Shares at a price substantially below
fair market value, or other similar transaction affects the Shares such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan to Participants, the Board or the
Committee shall have the right to adjust
-3-
4
equitably any or all of (i) the number and kind of Shares or securities in
respect of which Awards may be made under the Plan to Participants, (ii) the
number and kind of Shares subject to outstanding Awards held by Participants,
and (iii) the award, exercise or conversion price with respect to any of the
foregoing held by Participants, and if considered appropriate, the Board or the
Committee may make provision for a cash payment with respect to an outstanding
Award held by a Participant, provided that the number of Shares subject to any
Award shall always be a whole number.
SECTION 6. OPTIONS
(a) Subject to the provisions of the Plan, the Board or the Committee may
award Incentive Stock Options and Non-Qualified Stock Options and determine the
number of Shares to be covered by each Option, the option price therefor, the
term of the Option, and the other conditions and limitations applicable to the
exercise of the Option. The terms and conditions of Incentive Stock Options
shall be subject to and comply with Section 422 of the Code, or any successor
provision, and any regulations thereunder. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted to the Board or the Committee under the Plan be exercised, so as to
disqualify the Plan or, without the consent of the optionee, any Incentive Stock
Option granted under the Plan, under Section 422 of the Code.
(b) The option price per Share purchasable under an Option shall not be
less than 100% of the Fair Market Value of the Shares on the date of award with
respect to Incentive Stock Options and shall be the price determined by the
Board or the Committee, which may be less than, equal to or greater than the
Fair Market Value of the Shares on the date of award with respect to
Non-Qualified Stock Options. If the Participant owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of beneficial interest
or stock of the Company or any subsidiary or parent corporation of the Company
and an Incentive Stock Option is granted to such Participant, the option price
shall be not less than 110% of Fair Market Value of the Shares on the date of
award.
(c) No Option shall be exercisable more than ten years after the date the
option is awarded. If a Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of beneficial interest or stock of the
Company or any subsidiary or parent corporation of the Company and an Incentive
Stock Option is awarded to such Participant, such Option shall not be
exercisable after the expiration of five years from the date of award.
-4-
5
(d) No Shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company.
Such payment may be made in whole or in part in cash or by certified or bank
check or, to the extent permitted by the Board or the Committee at or after the
award of the Option, by delivery of a note or Shares owned by the Participant,
including Restricted Stock, valued at their Fair Market Value on the date of
delivery, or such other lawful consideration as the Board or the Committee may
determine.
(e) No Incentive Stock Option shall be transferable by the Participant
otherwise than by will or by the laws of descent and distribution, and all
Incentive Stock Options shall be exercisable during the Participant's lifetime
only by the Participant. A Participant shall notify the Company in the event
that he or she disposes of Shares acquired upon exercise of an Incentive Stock
Option within the two-year period following the date the Incentive Stock Option
was granted or within the one-year period following the date he or she received
Shares upon the exercise of an Incentive Stock Option.
(f) The Board or the Committee may at any time accelerate the
exercisability of all or any portion of any Option.
SECTION 7. RESTRICTED STOCK
(a) A Restricted Stock Award is an Award entitling the Participant to
acquire Shares for a specified purchase price, if any, subject to any conditions
and restrictions, including, without limitation, a Company right during a
specified period or periods to repurchase such Shares at their original purchase
price (or to require forfeiture of such Shares) upon the Participant's
termination of employment, as the Board or the Committee shall determine. A
Restricted Stock Award may include, without limitation, the award of Shares as
bonus stock without cash consideration or any Restricted Period or conditions of
forfeiture.
(b) Subject to the provisions of the Plan, the Board or the Committee may
award Shares of Restricted Stock and determine the purchase price (if any)
therefor, the duration of the Restricted Period (if any) during which, and the
conditions (if any) under which, the Shares may be forfeited to or repurchased
by the Company and any other terms and conditions of such Awards. Shares of
Restricted Stock may be issued for no cash consideration or such minimum
consideration as may be required by applicable law.
(c) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as permitted by the Board or the
Committee, during the Restricted Period. Shares of Restricted Stock shall be
-5-
6
evidenced in such manner as the Board or the Committee may determine. Any
certificates issued in respect of Shares of Restricted Stock shall be registered
in the name of the Participant and, unless otherwise determined by the Board or
the Committee, deposited by the Participant, together with a stock power
endorsed in blank, with the Company. At the expiration of the Restricted Period,
the Company shall deliver such certificates to the Participant.
(d) A Participant shall have all the rights of a shareholder with respect
to the Restricted Stock including voting and dividend rights, subject to
restrictions on transferability and Company repurchase or forfeiture rights
described in this Section and subject to any other conditions, determined by the
Board or the Committee and contained in the Award.
SECTION 8. STOCK APPRECIATION RIGHTS
(a) A Stock Appreciation Right is an Award entitling the Participant to
receive an amount in cash or Shares or a combination thereof having a value
equal to (or if the Board or the Committee shall so determine at time of grant,
less than) the excess of the Fair Market Value of a Share on the date of
exercise over the Fair Market Value of a Share on the date of grant (or over the
option exercise price, if the Stock Appreciation Right was granted in tandem
with an Option) multiplied by the number of Shares with respect to which the
Stock Appreciation Right shall have been exercised.
(b) Subject to the provisions of the Plan, the Board or the Committee may
award SARs in tandem with an Option (at or after the award of the Option), or
alone and unrelated to an Option, and determine in its sole discretion the terms
and conditions applicable thereto, including the form of payment. SARs granted
in tandem with an Option shall terminate to the extent that the related Option
is exercised, and the related Option shall terminate to the extent that the
tandem SARs are exercised. Subject to this Section 8(b) and to such rules as the
Board or the Committee may, in its discretion and for any reason whatsoever,
impose, an SAR granted in connection with an Option will be exercisable at such
time or times, and only to the extent, that a related Option is exercisable, and
shall not be transferable except to the extent that such related Option may be
transferable.
(c) An SAR related to an Option which can be exercised only during limited
periods following a change in control of the Company may entitle the Participant
to receive an amount based upon the highest price paid or offered for Shares in
any transaction relating to the change in control or paid during the thirty-day
period immediately preceding the occurrence of the change in control in any
transaction reported in the stock market (or NASDAQ) on which the Shares are
normally traded.
-6-
7
(d) Notwithstanding that an Option at the time of exercise shall not be
accompanied by a related Stock Appreciation Right, if the market price of the
Shares subject to such Option exceeds the exercise price of such Option at the
time of its exercise, the Board or the Committee may, in its discretion, cancel
such Option, in which event the Company shall pay to the person exercising such
Option an amount equal to the difference between the Fair Market Value of the
Shares to have been purchased pursuant to such exercise of such Option
(determined on the date the Option is cancelled) and the aggregate consideration
to have been paid by such person upon such exercise. Such payment shall be by
check, bank draft or in Shares having a Fair Market Value (determined on the
date the payment is to be made) equal to the amount of such payments or any
combination thereof, as determined by the Board or the Committee. The Board or
the Committee may exercise its discretion under the first sentence of this
paragraph (d) only in the event of a written request of the person exercising
the Option, which request shall not be binding on the Board or the Committee.
SECTION 9. PERFORMANCE STOCK UNITS
(a) A Performance Stock Unit is an Award entitling the Participant to
acquire Shares upon the attainment of specified performance goals. Subject to
the provisions of the Plan, the Board or the Committee may award Performance
Stock Units and determine the performance goals applicable to each such Award,
the number of such shares for each Performance Cycle, the duration of each
Performance Cycle and all other limitations and conditions applicable to the
awarded Performance Stock Units. There may be more than one Performance Cycle in
existence at any one time, and the duration of Performance Cycles may differ
from each other. The payment value of each Performance Stock Unit shall be equal
to the Fair Market Value of one Share on the date the Performance Stock Unit is
earned or, in the discretion of the Board or the Committee, on the date the
Board or the Committee determines that the Performance Stock Unit has been
earned.
(b) During any Performance Cycle, the Board or the Committee may adjust the
performance goals for such Performance Cycle as it deems equitable in
recognition of unusual or non-recurring events affecting the Company, changes in
applicable tax laws or accounting principles, or such other factors as the Board
or the Committee may determine.
(c) As soon as practicable after the end of a Performance Cycle, the Board
or the Committee shall determine the number of Performance Stock Units which
have been earned by the Participant on the basis of performance in relation to
the established performance goals. The payment values of earned Performance
Stock Units shall be distributed to the Participant as soon as practicable
thereafter. The
-7-
8
Board or the Committee shall determine, at or after the time of award, whether
payment values will be settled in whole or in part in cash or other property,
including Shares or Awards.
SECTION 10. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) Each Award under the Plan shall be evidenced by a writing delivered to
the Participant specifying the terms and conditions thereof and containing such
other terms and conditions not inconsistent with the provisions of the Plan as
the Board or the Committee considers necessary or advisable to achieve the
purposes of the Plan or comply with applicable tax and regulatory laws and
accounting principles.
(b) Each Award may be made alone, in addition to or in relation to any
other Award. The terms of each Award need not be identical, and the Board and
the Committee need not treat Participants uniformly. Except as otherwise
provided by the Plan or a particular Award, any determination with respect to an
Award may be made by the Board or the Committee at the time of award or at any
time thereafter.
(c) The Board or the Committee shall determine whether Awards to
Participants are settled in whole or in part in cash, Shares, other securities
of the Company, Awards or other property. The Board or the Committee may permit
a Participant to defer all or any portion of a payment under the Plan, including
the crediting of interest on deferred amounts denominated in cash and dividend
equivalents on amounts denominated in Shares.
(d) The Board or the Committee shall determine the effect on an Award of
the disability, death, retirement or termination of employment of a Participant
and the extent to which, and the period during which, the Participant's legal
representative, guardian or designated beneficiary may receive payment of an
Award or exercise rights thereunder.
(e) In order to preserve the rights of a Participant under an Award in the
event of a change in control of the Company, the Board or the Committee in its
discretion may, at the time an Award is made or at any time thereafter, take one
or more of the following actions with respect to any such change of control: (i)
provide for the acceleration of any time period relating to the exercise or
realization of the Award, (ii) provide for the purchase of the Award upon the
Participant's request for an amount of cash or other property that could have
been received upon the exercise or realization of the Award had the Award been
currently exercisable or payable, (iii) adjust the terms of the Award in a
manner determined by the Board or the Committee, (iv) cause the Award to be
assumed, or new rights substituted therefor, by
-8-
9
another entity, or (v) make such other provision as the Board or the Committee
may consider equitable and in the best interests of the Company.
(f) The Participant shall pay to the Company, or make provision
satisfactory to the Board or the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. In the discretion of the Board or the
Committee, such tax obligations may be paid, in whole or in part, in Shares,
including Shares retained from the Award creating the tax obligation, valued at
their Fair Market Value on the date of delivery. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to the Participant.
(g) For purposes of the Plan, the following events shall not be deemed a
termination of employment of a Participant:
(i) a transfer to the employment of the Company from a subsidiary or
from the Company to a subsidiary, or from one subsidiary to another, or
(ii) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the Participant's right
to reemployment is guaranteed either by a statute or by contract or under
the policy pursuant to which the leave of absence was granted or if the
Board or the Committee otherwise so provides in writing.
For purposes of the Plan, employees of a subsidiary of the Company shall be
deemed to have terminated their employment on the date on which such subsidiary
ceases to be a subsidiary of the Company.
(h) The Board or the Committee may amend, modify or terminate any
outstanding Award held by a Participant including substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, converting an Incentive Stock Option to a Non-Qualified Stock
Option, and modifying or waiving the restrictions with respect to any Restricted
Stock, provided that the Participant's consent to such action shall be required
unless the Board or the Committee determines that the action, taking into
account any related action, would not materially and adversely affect the
Participant.
(i) Notwithstanding any other provision of the Plan, any Non-Qualified
Stock Option, SAR or other similar right related to an equity security issued
under the Plan shall not be transferable other than pursuant to the terms of
such Award, as permitted in writing by the Board or the Committee, by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code
-9-
10
or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. The Board or the Committee shall have no authority to take any
action if the authority to take such action, or the taking of such action, would
disqualify the Plan from the exemption provided by Rule 16b-3 under the Act, and
any successor provision.
SECTION 11. MISCELLANEOUS
(a) No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to
continued employment. The Company expressly reserves the right at any time to
dismiss a Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Award.
(b) Nothing contained in the Plan shall prevent the Company from adopting
other or additional compensation arrangements for its employees.
(c) Subject to the provisions of the applicable Award, no Participant shall
have any rights as a shareholder with respect to any Shares to be distributed
under the Plan until he or she becomes the holder thereof. A Participant to whom
Shares are awarded shall be considered the holder of the Shares at the time of
the Award except as otherwise provided in the applicable Award.
(d) The Plan shall be effective on April 13, 1992, subject to the approval
of the shareholders of the Company within twelve months of such effective date
if Incentive Stock Options are to be granted under the Plan. Prior to such
approval, Awards of Incentive Stock Options and Awards to Section 16
Participants may be made under the Plan if they are made expressly subject to
shareholder approval. Awards other than Incentive Stock Options and to
Participants other than Section 16 Participants may be made regardless of
whether shareholder approval is obtained.
(e) The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that no amendment shall be made without
shareholder approval if such approval is necessary to comply with any applicable
tax or regulatory requirement.
(f) Awards may not be made under the Plan after April 13, 2002, but then
outstanding Awards may extend beyond such date.
-10-