MEDITRUST OPERATING COMPANY
AMENDED AND RESTATED
1995 SHARE AWARD PLAN
TABLE OF CONTENTS
Page
INTRODUCTION.................................................................1
I. THE PLAN................................................................1
1.1 Purpose............................................................1
1.2 Administration and Authorization; Power and
Procedure..........................................................1
1.3 Participation......................................................3
1.4 Shares Available for Awards........................................3
1.5 Grant of Awards....................................................5
1.6 Award Period.......................................................5
1.7 Limitations on Exercise and Vesting of Awards......................5
1.8 Acceptance of Notes to Finance Exercise............................6
1.9 No Transferability.................................................7
II. EMPLOYEE OPTIONS........................................................8
2.1 Grants.............................................................8
2.2 Option Price.......................................................8
2.3 Limitations on Grant and Terms of Incentive Stock
Options............................................................9
2.4 Limits on 10% Holders..............................................9
2.5 Option Repricing; Cancellation and Regrant; Waiver of
Restrictions......................................................10
2.6 Dividend Equivalents..............................................10
III. STOCK APPRECIATION RIGHTS..............................................10
3.1 Grants............................................................10
3.2 Exercise of Stock Appreciation Rights.............................11
3.3 Payment...........................................................11
IV. RESTRICTED STOCK AWARDS................................................12
4.1 Grants............................................................12
4.2 Restrictions......................................................12
4.3 Return to the Corporation.........................................13
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.............................13
5.1 Grants of Performance Share Awards................................13
5.2 Grants of Stock Bonuses...........................................13
5.3 Deferred Payments.................................................14
VI. OTHER PROVISIONS.......................................................14
6.1 Rights of Eligible Participants, Participants and
Beneficiaries.....................................................14
6.2 Adjustments; Acceleration.........................................15
6.3 Effect of Termination of Employment or Service....................17
6.4 Compliance with Laws..............................................17
(i)
6.5 Tax Withholding...................................................18
6.6 Plan Amendment, Termination and Suspension........................18
6.7 Effect of Pairing Agreement on Awards.............................19
6.8 Privileges of Stock Ownership.....................................20
6.9 Effective Date of the Plan........................................20
6.10 Term of the Plan..................................................20
6.11 Governing Law; Construction; Severability.........................20
6.12 Captions..........................................................21
6.13 Effect of Change of Subsidiary Status.............................21
6.14 Non-Exclusivity of Plan...........................................21
VII. DEFINITIONS............................................................22
7.1 Definitions.......................................................22
(ii)
MEDITRUST OPERATING COMPANY
AMENDED AND RESTATED
1995 SHARE AWARD PLAN
INTRODUCTION
On December 14, 1994, the Board of Directors of the Company adopted the
Plan, which was approved by shareholders of the Santa Anita Operating Company at
its 1995 Annual Meeting.
On June 12, 1997, the Board of Directors of Santa Anita Operating Company
approved certain amendments to the Plan, which were approved by shareholders of
Santa Anita Operating Company at a Special Meeting held on November 5, 1997, in
connection with the merger of Meditrust Acquisition Company ("MAC"), a
Massachusetts Business Trust, with the Santa Anita Operating Company (the
"Merger").
On November 5, 1997, the Board of Directors of the Corporation approved
certain amendments to the Plan and authorized the amendment and restatement of
the Plan, effective November 5, 1997, as follows:
I. THE PLAN.
1.1 Purpose.
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Awards to attract, motivate,
retain and reward key employees, including officers, and directors of the
Company with awards and incentives for high levels of individual performance and
improved financial performance of the Company. "Corporation" means Meditrust
Operating Company and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in Article
VII.
1.2 Administration and Authorization; Power and Procedure.
(a) Committee. This Plan shall be administered by, and all Awards to
Eligible Participants shall be authorized by, the Committee. Action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee. Subject to the
express provisions of this Plan, the Committee shall have the authority:
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(i) to determine from among those persons eligible the particular
Eligible Participants who will receive any Awards;
(ii) to grant Awards to Eligible Participants, determine the price at
which securities will be offered or awarded and the amount of securities to
be offered or awarded to any of such persons, and determine the other
specific terms and conditions of such Awards consistent with the express
limits of this Plan, and establish the installments (if any) in which such
Awards shall become exercisable or shall vest, or determine that no delayed
exercisability or vesting is required, and establish the events of
termination or reversion (if any) of such Awards;
(iii) to approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);
(iv) to construe and interpret this Plan and any agreements defining
the rights and obligations of the Company and Participants under this Plan,
further define the terms used in this Plan, and prescribe, amend and
rescind rules and regulations relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Participants, subject to any required consent under Section
6.6;
(vi) to accelerate or extend the exercisability or vesting extend the
term of any or all such outstanding Awards within the maximum ten-year term
of Awards under Section 1.6; and
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
(c) Binding Determinations. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or pursuant to
this Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Board or
Committee, or officer of the Corporation or any Subsidiary, shall be liable for
any such action or inaction of the entity or body, of another person or, except
in circumstances involving bad faith, of himself or herself. Subject only to
compliance with
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the express provisions hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this Plan.
(d) Reliance on Experts. In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case may
be, may obtain and may rely upon the advice of experts, including professional
advisors to the Corporation. No director, officer or agent of the Company shall
be liable for any such action or determination taken or made or omitted in good
faith.
(e) Delegation. The Committee may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Company.
1.3 Participation.
Awards may be granted by the Committee only to those persons that the
Committee determines to be Eligible Participants. An Eligible Participant who
has been granted an Award may, if otherwise eligible, be granted additional
Awards if the Committee shall so determine.
1.4 Shares Available for Awards.
Subject to the provisions of Section 6.2, the capital stock that may be
delivered under this Plan shall be shares of the Corporation's authorized but
unissued Common Stock, any shares of its Common Stock held as treasury shares
and shares of Meditrust Corporation Stock. The shares may be delivered for any
lawful consideration.
(a) Number of Shares. Subject to subsection (c) below, the maximum number
of Paired Shares that may be delivered pursuant to Awards granted to Eligible
Participants under this Plan shall not exceed an amount equal to 5% of the
outstanding number of shares of Operating Common Stock from time to time,
subject to adjustments contemplated by Section 6.2 (the "Share Limit"). The
maximum number of Options and Stock Appreciation Rights (whether payable in
Paired Shares, cash or any combination thereof) that may be granted to an
Eligible Participant during any one-year period shall not exceed 450,000,
subject to adjustment as contemplated in Section 6.2.
(b) Reservation of Shares. Common Stock subject to outstanding Awards of
derivative securities (as defined in Rule 16a-1(c) under the Exchange Act) shall
be reserved for issuance; a like number of shares of Meditrust Corporation Stock
shall be purchased from Meditrust Corporation or arrangements shall be made with
Meditrust Corporation for simultaneous issuance by
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Meditrust Corporation of the same number of shares of Meditrust Corporation
Stock as the number of shares of Common Stock to be issued in connection with an
Award; provided that nothing herein shall be construed to prevent the
Corporation from purchasing Paired Shares in the open market for use in
connection with Awards. If a Stock Appreciation Right or similar right is
exercised or a Performance Share Award based on the increased market value of a
specified number of Paired Shares is paid, the number of Paired Shares to which
such exercise or payment relates under the applicable Award shall be charged
against the maximum amount of Paired Shares that may be delivered pursuant to
Awards under this Plan and, if applicable, such Award. If the Corporation
withholds Paired Shares pursuant to Section 6.5, the number of shares that would
have been deliverable with respect to an Award but that are withheld pursuant to
the provisions of Section 6.5 may in effect not be issued, but the aggregate
number of shares issuable with respect to the applicable Award and under the
Plan shall be reduced by the number of shares withheld and such shares shall not
be available for additional Awards under this Plan. To the extent a Performance
Share Award constitutes an equity security of such issuer (as this phrase is
defined in Rule 16a-1 under the Exchange Act) issued by the Corporation and is
paid in Paired Shares, the number of Paired Shares (if any) subject to such
Performance Share Award shall be charged (but in the case of tandem or
substituted Awards, without duplication) against the maximum number of Paired
Shares that may be delivered pursuant to Awards under this Plan.
(c) Cash Only Award Limit. Awards payable solely in cash under the Plan and
Awards payable either in cash or shares that are actually paid in cash shall
constitute and be referred to as "Cash Only Awards". The number of Cash Only
Awards shall be determined by reference to the number of Paired Shares by which
the Award is measured. The maximum number of Cash Only Awards that may be paid
shall not, together with the aggregate number of Paired Shares that may be
delivered under subsection (a), exceed the Share Limit. Awards payable either in
cash or shares shall not be counted against the Cash Only Award limit if charged
against the Share Limit. Notwithstanding the foregoing, if an Award paid or
payable solely in cash satisfies the requirements for the exclusion from the
definition of a derivative security in Rule 16a-1(c), the Award shall not be
counted against any of the limits of this Section.
(d) Reissue of Awards. Subject to any restrictions under applicable law,
any unexercised, unconverted, unvested or undistributed portion of any expired,
cancelled, terminated or forfeited Award, or any alternative form of
consideration under an Award that is not paid in connection with the settlement
of an Award or any portion of an Award, shall again be available for Award under
subsection (a) or (c) above, as applicable, whether
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or not the Participant has received benefits of ownership (such as dividends or
dividend equivalents or voting rights) during the period in which the
Participant's ownership was restricted or otherwise not vested. Shares that are
issued pursuant to Awards and subsequently reacquired by the Corporation
pursuant to the terms and conditions of the Awards also shall be available for
reissuance under the Plan.
(e) Interpretive Issues. Additional rules for determining the number of
shares or Cash Only Awards authorized under the Plan may be adopted by the
Committee, as it deems necessary or appropriate, consistent with applicable law.
1.5 Grant of Awards.
Subject to the express provisions of this Plan, the Committee shall
determine the number of Paired Shares subject to each Award, and the price (if
any) to be paid for the Paired Shares or the Award and, in the case of
Performance Share Awards, in addition to matters addressed in Section 1.2(b),
the specific objectives, goals and performance criteria (such as an increase in
revenues, market value, earnings or book value over a base period, the years of
service before vesting, the relevant job classification or level of
responsibility or other factors) that further define the terms of the
Performance Share Award. Each Award shall be evidenced by an Award Agreement
signed by the Corporation and, if required by the Committee, by the Participant.
1.6 Award Period.
Each Award and all executory rights or obligations under the related Award
Agreement shall expire on such date (if any) as shall be determined by the
Committee, but, in the case of Options or other rights to acquire Paired Shares,
not later than ten (10) years after the Award Date.
1.7 Limitations on Exercise and Vesting of Awards.
(a) Provisions for Exercise. Except as may otherwise be provided in an
Award Agreement, once exercisable an Award shall remain exercisable until the
expiration or earlier termination of the Award, unless the Committee otherwise
provides.
(b) Procedure. Any exercisable Award shall be deemed to be exercised when
the Secretary of the Corporation receives written notice of such exercise from
the Participant, together with any required payment made in accordance with
Section 2.2(b).
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(c) Fractional Shares/Minimum Issue. Fractional share interests shall be
disregarded, but may be accumulated. The Committee, however, may determine that
cash, other securities or other property will be paid or transferred in lieu of
any fractional share interests. No fewer than 10 Paired Shares may be purchased
on exercise of any Award at one time unless the number purchased is the total
number at the time available for purchase under the Award.
1.8 Acceptance of Notes to Finance Exercise.
The Corporation may, with the Committee's approval, accept one or more
notes from any Participant in connection with the exercise or receipt of any
outstanding Award; provided that any such note shall be subject to the following
terms and conditions:
(a) The principal of the note shall not exceed the amount required to
be paid to the Corporation upon the exercise or receipt of one or more
Awards under the Plan and the note shall be delivered directly to the
Corporation in consideration of such exercise or receipt.
(b) The note shall be repaid over a period of time not to exceed five
years, with annual installments of at least 10% of principal the first four
years and a balloon payment of the remaining principal amount at the end of
the fifth year; provided that the Corporation may demand any payment, in
addition to such installments, as may be required for the note to remain in
compliance with any applicable federal or state regulation.
(c) The note shall provide for full recourse to the Participant and
shall bear interest at a rate determined by the Committee but not less than
the applicable imputed interest rate specified by the Code.
(d) Except as otherwise provided by the Committee, if the employment
or service of the Participant terminates, the unpaid principal balance of
the note shall become due and payable on the 10th business day after such
termination; provided, however, that if a sale of any Paired Shares
acquired by the Participant in connection with an Award to which the note
relates would cause such Participant to incur liability under Section 16(b)
of the Exchange Act, the unpaid balance shall become due and payable on the
10th business day after the first day on which a sale of such shares could
have been made without incurring such liability assuming for these purposes
that there are no other transactions by the Participant subsequent to such
termination.
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(e) If required by the Committee or by applicable law, the note shall
be secured by a pledge of any shares or rights financed thereby in
compliance with applicable law.
(f) The terms, repayment provisions, and collateral release provisions
of the note and the pledge securing the note shall conform with applicable
rules and regulations of the Federal Reserve Board as then in effect.
1.9 No Transferability.
(a) Awards may be exercised only by, and amounts payable or Paired Shares
issuable pursuant to an Award shall be paid only to (or registered only in the
name of), the Participant or, if the Participant has died, the Participant's
Beneficiary or, if the Participant has suffered a Total Disability, the
Participant's Personal Representative, if any, or if there is none, the
Participant, or (to the extent permitted by applicable law) to a third party
pursuant to such conditions and procedures as the Committee may establish. Other
than by will or the laws of descent and distribution or pursuant to a QDRO
(except to the extent not permitted in the case of an Incentive Stock Option),
no right or benefit under this Plan or any Award, including, without limitation,
any Option or shares of Restricted Stock that has not vested, shall be
transferrable by the Participant or shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge (other than to the Corporation) without the consent of the Committee, and
any such attempted action shall be void. The Corporation shall disregard any
attempt at transfer, assignment or other alienation prohibited by the preceding
sentences and shall pay or deliver such cash or Paired Shares in accordance with
the provisions of this Plan. The designation of a Beneficiary hereunder shall
not constitute a transfer for these purposes.
(b) Nothing in this plan authorizes, or shall be construed to authorize, a
transfer or exchange by a Participant, Beneficiary, Personal Representative or
any third party of any shares of Common Stock or Meditrust Corporation Stock in
contravention of the provisions of the Pairing Agreement.
(c) The restrictions on exercise and transfer above shall not be deemed to
prohibit the authorization by the Committee of "cashless exercise" procedures
with unaffiliated third parties who provide financing for the purpose of (or who
otherwise facilitate) the exercise of Awards consistent with applicable legal
restrictions, or, to the extent permitted by the Committee, transfers for estate
and financial planning purposes, or transfers to such other persons or in such
other circumstances as the Committee may in the Award Agreement or other writing
expressly permit.
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II. EMPLOYEE OPTIONS.
2.1 Grants.
One or more Options may be granted under this Article to any Eligible
Participant, subject to the provisions of Section 1.4. Each Option granted may
be either an Option intended to be an Incentive Stock Option (as to the Common
Stock covered by the Option, but not the Meditrust Corporation Stock), or an
Option not so intended, and such intent shall be indicated in the applicable
Award Agreement.
2.2 Option Price.
(a) Pricing Limits. Subject to Section 2.4, (i) the purchase price per
share of the Common Stock covered by each Option and (ii) the purchase price per
share of the Meditrust Corporation Stock covered by each Option shall be
determined by the Committee at the time the Option is granted, but shall not be
less than the par value of the Common Stock or Meditrust Corporation Stock, as
the case may be, on the date of grant.
(b) Payment Provisions. The purchase price of any shares purchased on
exercise of an Option granted under this Article shall be paid in full at the
time of each purchase in one or a combination of the following methods: (i) in
cash or by electronic funds transfer; (ii) by check payable to the order of the
Corporation; (iii) if authorized by the Committee or specified in the applicable
Award Agreement, in cash in an amount equal to the par value of the shares being
purchased, and, in the form of a promissory note (consistent with the
requirements of Section 1.8) of the Participant in an amount equal to the
difference between said cash amount and the purchase price of such shares; (iv)
by notice and third party payment in such manner as may be authorized by the
Committee; (v) by the delivery of Paired Shares already owned by the
Participant, provided, however, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Award by delivering
such Paired Shares; or (vi) if authorized by the Committee or specified in the
applicable Award Agreement, by reduction in the number of Paired Shares
otherwise deliverable upon exercise by that number of Paired Shares which have a
then Fair Market Value equal to such purchase price. Previously owned Paired
Shares used to satisfy the exercise price of an Option under clause (v) shall be
valued at their Fair Market Value on the date of exercise.
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2.3 Limitations on Grant and Terms of Incentive Stock Options.
(a) $100,000 Limit. To the extent that the aggregate "fair market value" of
Common Stock subject to any Option with respect to which Incentive Stock Options
first become exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive Stock Options under
this Plan and stock subject to incentive stock options under all other plans of
the Company, such options shall be treated as Nonqualified Stock Options. For
this purpose, the "fair market value" of the Common Stock subject to Options
shall be determined as of the date the Options were awarded. In reducing the
number of Options treated as Incentive Stock Options to meet the $100,000 limit,
the most recently granted Options shall be reduced first. To the extent a
reduction of simultaneously granted Options is necessary to meet the $100,000
limit, the Committee may, in the manner and to the extent permitted by law,
designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an Incentive Stock Option.
(b) Option Period. Subject to Section 2.4, each Option and all rights
thereunder shall expire no later than ten years after the Award Date.
(c) Other Code Limits. There shall be imposed in any Award Agreement
relating to Incentive Stock Options such terms and conditions as from time to
time are required in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.
(d) Meditrust Corporation Stock. To the extent an Option is for the
purchase of Meditrust Corporation Stock, such Option shall be treated as a
Nonqualified Stock Option.
(e) Plan Limit. The number of shares of Common Stock subject to Options
that may be treated as Incentive Stock Options under the Plan shall not exceed
4,000,000 shares.
2.4 Limits on 10% Holders.
No Incentive Stock Option may be granted to any person who, at the time the
Option is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless the
exercise price of such Option with respect to the Common Stock covered by the
Option is at least 110% of the Fair Market Value of the Common Stock subject to
the Option and such Option by its terms
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is not exercisable after the expiration of five years from the date such Option
is granted.
2.5 Option Repricing; Cancellation and Regrant; Waiver of Restrictions.
Subject to Section 1.4 and Section 6.6 and the specific limitations on
Awards contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible
Participant, any adjustment in the exercise or purchase price, the number of
shares subject to, the restrictions upon or the term of, an Award granted under
this Article by cancellation of an outstanding Award and a subsequent regranting
of an Award, by amendment, by substitution of an outstanding Award, by waiver or
by other legally valid means. Such amendment or other action may result among
other changes in an exercise or purchase price which is higher or lower than the
exercise or purchase price of the original or prior Award, provide for a greater
or lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
2.6 Dividend Equivalents.
The Committee may, at the time of granting an Option, grant Dividend
Equivalents attributable to Paired Shares subject to the Option. Dividend
Equivalents shall be paid in cash only to the extent the Option is unexercised
as of the dividend record date, as specified in the Award Agreement, as follows:
the Dividend Equivalent per Paired Share shall be multiplied by the number of
Paired Shares subject to the Option and an amount equal to the product so
derived shall be paid in cash to the Participant on the dividend payment date.
The Committee may in the Award specify that Dividend Equivalents shall be paid
only for a specified time period or only as to that portion of the Option that
has vested.
III. STOCK APPRECIATION RIGHTS.
3.1 Grants.
In its discretion, the Committee may grant to any Eligible Participant
Stock Appreciation Rights either concurrently with the grant of another Award or
in respect of an outstanding Award, in whole or in part, or independently of any
other Award. Any Stock Appreciation Right granted in connection with an
Incentive Stock Option shall contain such terms as may be required to comply
with the provisions of Section 422 of the Code and the regulations promulgated
thereunder.
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3.2 Exercise of Stock Appreciation Rights.
(a) Exercisability. Unless the Award Agreement or the Committee otherwise
provides, a Stock Appreciation Right related to another Award shall be
exercisable at such time or times, and to the extent, that the related Award
shall be exercisable.
(b) Effect on Available Shares. In the event that a Stock Appreciation
Right is exercised, the number of Paired Shares subject to the Award shall be
charged against the number of Paired Shares subject to the Stock Appreciation
Right and the related Option of the Participant.
(c) Stand-Alone SARs. A Stock Appreciation Right granted independently of
any other Award shall be exercisable pursuant to the terms of the Award
Agreement but, unless the Committee determines otherwise, in no event earlier
than six months after the Award Date, except in the case of death or Total
Disability.
3.3 Payment.
(a) Amount. Unless the Committee otherwise provides, upon exercise of a
Stock Appreciation Right and surrender of an exercisable portion of any related
Award, the Participant shall be entitled to receive payment of an amount
determined by multiplying
(i) the difference obtained by subtracting the exercise price per
Paired Share under the related Award (if applicable) or the initial share
value specified in the Award from the Fair Market Value of a Paired Share
on the date of exercise of the Stock Appreciation Right, by
(ii)the number of Paired Shares with respect to which the Stock
Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole discretion, shall determine
the form in which payment shall be made of the amount determined under paragraph
(a) above, either solely in cash, solely in Paired Shares (valued at Fair Market
Value on the date of exercise of the Stock Appreciation Right), or partly in
such Paired Shares and partly in cash, provided that the Committee shall have
determined that such exercise and payment are consistent with applicable law. If
the Committee permits the Participant to elect to receive cash or Paired Shares
(or a combination thereof) on such exercise, any such election shall be subject
to such conditions as the Committee may impose and, in the case of any Section
16 Person, any election to
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receive cash shall be subject to any applicable limitations under
Rule 16b-3.
IV. RESTRICTED STOCK AWARDS.
4.1 Grants.
The Committee may, in its discretion, grant one or more Restricted Stock
Awards to any Eligible Participant. Each Restricted Stock Award Agreement shall
specify the number of Paired Shares to be issued, the date of such issuance, the
consideration for such Paired Shares (but not less than the minimum lawful
consideration) to be paid by the Participant and the restrictions imposed on
such Paired Shares and the conditions of release or lapse of such restrictions.
Such restrictions shall not lapse earlier than six months after the Award Date,
except to the extent the Committee may otherwise provide. Stock certificates
evidencing shares of Restricted Stock pending the lapse of the restrictions
("restricted shares") shall bear a legend making appropriate reference to the
restrictions imposed hereunder and shall be held by the Corporation or by a
third party designated by the Committee until the restrictions on such shares
shall have lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the Restricted Stock
Award, the Participant may be required to provide such further assurance and
documents as the Committee may require to enforce the restrictions.
4.2 Restrictions.
(a) Pre-Vesting Restraints. Except as provided in Section 1.9 and 4.1,
restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until such shares have vested.
(b) Dividend and Voting Rights. Unless otherwise provided in the applicable
Award Agreement, a Participant receiving a Restricted Stock Award shall be
entitled to cash dividend and voting rights for all shares issued even though
they are not vested, provided that such rights shall terminate immediately as to
any restricted shares which cease to be eligible for vesting.
(c) Cash Payments. If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award, the
Award Agreement shall specify whether and to what extent such cash shall be
returned (with or without an earnings factor) as to any restricted shares which
cease to be eligible for vesting.
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4.3 Return to the Corporation.
Unless the Committee otherwise expressly provides, shares of Restricted
Stock that are subject to restrictions at the time of termination of employment
or are subject to other conditions to vest that have not been satisfied by the
time specified in the applicable Award Agreement shall not vest and shall be
returned to the Corporation in such manner and on such terms as the Committee
shall therein provide.
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
5.1 Grants of Performance Share Awards.
The Committee may, in its discretion, grant one or more Performance Share
Awards to any Eligible Participant based upon such factors as the Committee
shall deem relevant in light of the specific type and terms of the award. An
Award Agreement shall specify the maximum number of Paired Shares (if any)
subject to the Performance Share Award, the consideration (but not less than the
minimum lawful consideration) to be paid for any such shares as may be issuable
to the Participant, the duration of the Award and the conditions upon which
delivery of any Paired Shares or cash to the Participant shall be based. The
amount of cash or Paired Shares or other property that may be deliverable
pursuant to such Award shall be based upon the degree of attainment over a
specified period (a "performance cycle") as may be established by the Committee
of such measure(s) of the performance of the Company (or any part thereof) or
the Participant as may be established by the Committee. The Committee may
provide for full or partial credit, prior to completion of such performance
cycle or the attainment of the performance achievement specified in the Award,
in the event of the Participant's death, Retirement, or Total Disability, a
Change in Control Event or in such other circumstances as the Committee,
consistent with Section 6.11(c)(2), if applicable, may determine.
5.2 Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any Eligible Participant to reward
exceptional or special services, contributions or achievements in the manner and
on such terms and conditions (including any restrictions on such shares) as
determined from time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Stock Bonus may be granted
independently or in lieu of a cash bonus.
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5.3 Deferred Payments.
The Committee may authorize for the benefit of any Eligible Participant the
deferral of any payment of cash or Paired Shares that may become due or of cash
otherwise payable under this Plan, and provide for accreted benefits thereon
based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such deferral shall be
subject to such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of Participants.
VI. OTHER PROVISIONS.
6.1 Rights of Eligible Participants, Participants and Beneficiaries.
(a) Employment Status. Status as an Eligible Participant shall not be
construed as a commitment that any Award will be made under this Plan to an
Eligible Participant or to Eligible Participants generally.
(b) No Employment Contract. Nothing contained in this Plan (or in any other
documents related to this Plan or to any Award) shall confer upon any Eligible
Participant or Participant any right to continue in the employ or other service
of the Company or constitute any contract or agreement of employment or other
service, nor shall interfere in any way with the right of the Company to change
such person's compensation or other benefits or to terminate the employment of
such person, with or without cause, but nothing contained in this Plan or any
document related hereto shall adversely affect any independent contractual right
of such person without his or her consent thereto.
(c) Plan Not Funded. Awards payable under this Plan shall be payable in
Paired Shares or from the general assets of the Corporation, and no special or
separate reserve, fund or deposit shall be made to assure payment of such
Awards. No Participant, Beneficiary or other person shall have any right, title
or interest in any fund or in any specific asset (including shares of Common
Stock or shares of Meditrust Corporation Stock, except as expressly otherwise
provided) of the Company by reason of any Award hereunder. Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person acquires a
right to receive payment pursuant to any Award hereunder, such right shall
14
be no greater than the right of any unsecured general creditor of the Company.
6.2 Adjustments; Acceleration.
(a) Adjustments. If the outstanding shares of Common Stock or the
outstanding shares of Meditrust Corporation Stock are changed into or exchanged
for cash, other property or a different number or kind of shares or securities
of the Corporation or of Meditrust Corporation, as the case may be, or if
additional shares or new or different securities are distributed with respect to
the outstanding shares of Common Stock or the outstanding shares of Meditrust
Corporation Stock, through a reorganization or merger in which the Corporation
or Meditrust Corporation, as the case may be, is the surviving entity, or
through a combination, consolidation, recapitalization, reclassification, stock
split, stock dividend, reverse stock split, stock consolidation, dividend or
distribution of cash or property to the shareholders of the Corporation or of
Meditrust Corporation, or if there shall occur any other extraordinary corporate
transaction or event in respect of the Common Stock or the Meditrust Corporation
Stock or a sale of substantially all the assets of the Corporation or of
Meditrust Corporation as an entirety which in the judgment of the Committee
materially affects the Common Stock or the Meditrust Corporation Stock, then the
Committee shall, in such manner and to such extent (if any) as it deems
appropriate and equitable (1) proportionately adjust any or all of (A) the
number and kind of shares of Common Stock, Meditrust Corporation Stock or other
consideration that is subject to or may be delivered under this Plan and
pursuant to outstanding Awards, (B) the consideration payable with respect to
Awards granted prior to any such change and the price, if any, paid in
connection with Restricted Stock Awards or (C) the performance standards
appropriate to any outstanding awards; or (2) in the case of an extraordinary
dividend or other distribution, merger, reorganization, consolidation,
combination, sale of assets, split up, exchange, or spin off, make provision for
a cash payment or for the substitution or exchange of any or all outstanding
Awards or the cash, securities or property deliverable to the holder of any or
all outstanding Awards based upon the distribution or consideration payable to
holders of Common Stock or to holders of Meditrust Corporation Stock upon or in
respect of such event; provided, however, in each case, that with respect to
Awards of Incentive Stock Options, no such adjustment shall be made which would
cause the Plan to violate Section 422 or 424(a) of the Code or any successor
provisions thereto. Corresponding adjustments shall be made with respect to any
Stock Appreciation Rights based upon the adjustments made to the Options to
which they are related. In any of such events, the Committee may take such
action sufficiently prior to such event if necessary to permit
15
the Participant to realize the benefits intended to be conveyed with respect to
the underlying shares in the same manner as is available to shareholders
generally.
(b) Acceleration of Awards Upon Change in Control. As to any or all
Participants, upon the occurrence of a Change in Control Event (i) each Option
and Stock Appreciation Right shall become immediately exercisable, (ii)
Restricted Stock shall immediately vest free of restrictions, and (iii) each
Performance Share Award shall become payable to the Participant. Notwithstanding
the foregoing, except in the case of an Award of an Option, prior to a Change in
Control Event, the Committee may determine that, upon its occurrence, there
shall be no acceleration of benefits under Awards or determine that only certain
or limited benefits under Awards shall be accelerated and the extent to which
they shall be accelerated, and/or establish a different time in respect of such
event for such acceleration. In addition, the Committee may override the
limitations on acceleration in this Section 6.2(b) by express provision in the
Award Agreement and may accord any Participant a right to refuse any
acceleration, whether pursuant to the Award Agreement or otherwise, in such
circumstances as the Committee may approve. Any acceleration of Awards shall
comply with applicable regulatory requirements, including without limitation
Section 422 of the Code.
Notwithstanding any other provision of this Plan, this Section 6.2(b) shall
be effective through November 5, 2002 and may not be amended or terminated
during such period except as required by law or to make changes that do not
diminish the benefits or rights provided by this Section 6.2(b). The Board may,
in its sole discretion and for any reason, provide written notice of termination
or amendment (effective as of the then applicable expiration date, but not with
respect to a Change in Control Event occurring on or before such expiration
date) no later than six months before the expiration date of this Section
6.2(b). If such amendment or termination is not made, this Section 6.2(b) shall
be automatically extended for an additional period of 60 months past the
expiration date. This Section 6.2(b) shall continue to be automatically extended
for an additional 60 months at the end of such 60-month period and each
succeeding 60-month period unless notice is given in the manner described in
this Section 6.2(b).
(c) Possible Early Termination of Accelerated Awards. If any Option or
other right to acquire Paired Shares under this Plan has not been exercised
prior to (i) a dissolution of the Corporation, (ii) a reorganization event
described in Section
16
6.2(a) that the Corporation does not survive, or (iii) the consummation of a
reorganization event described in Section 6.2(a) that results in a Change in
Control Event approved by the Board and no provision has been made for the
survival, substitution, exchange or other settlement of such Option or right,
such Option or right shall thereupon terminate.
(d) Golden Parachute Limitations. In no event shall an Award be accelerated
under this Plan to an extent or in a manner which would not be fully deductible
by the Company for federal income tax purposes because of Section 280G of the
Code, nor shall any payment hereunder be accelerated if any portion of such
accelerated payment would not be deductible by the Company because of Section
280G of the Code. If a holder would be entitled to benefits or payments
hereunder and under any other plan or program which would constitute "parachute
payments" as defined in Section 280G of the Code, then the holder may by written
notice to the Company designate the order in which such parachute payments shall
be reduced or modified so that the Company is not denied federal income tax
deductions for any "parachute payments" because of Section 280G of the Code.
6.3 Effect of Termination of Employment or Service.
The Committee shall establish in respect of each Award granted to an
Eligible Participant the effect of a termination of employment or service on the
rights and benefits thereunder and in so doing may make distinctions based upon
the cause of termination, e.g., Retirement, early retirement, termination for
cause, disability or death. Notwithstanding any terms to the contrary in an
Award Agreement or this Plan, the Committee may decide in its complete
discretion at the time of termination (or within a reasonable time thereafter)
to extend the exercise period of an Award (although not beyond the period
described in Section 2.3(b)) and the number of shares covered by the Award with
respect to which the Award is exercisable or vested.
6.4 Compliance with Laws.
This Plan, the granting and vesting of Awards under this Plan and the
offer, issuance and delivery of Paired Shares and/or the payment of money under
this Plan or under Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations (including, but not
limited to, state and federal securities laws and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Corporation, provide such assurances and
17
representations to the Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal requirements.
6.5 Tax Withholding.
(a) Cash or Shares. Upon any exercise, vesting, or payment of any Award,
the Company shall have the right at its option to (i) require the Participant
(or Personal Representative or Beneficiary, as the case may be) to pay or
provide for payment of the amount of any taxes which the Company may be required
to withhold with respect to such transaction or (ii) deduct from any amount
payable in cash the amount of any taxes which the Company may be required to
withhold with respect to such cash amount. In any case where a tax is required
to be withheld in connection with the delivery of Paired Shares under this Plan,
the Committee may grant (either at the time of the Award or thereafter) to the
Participant the right to elect, or the Committee may require (either at the time
of the Award or thereafter), pursuant to such rules and subject to such
conditions as the Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their then Fair Market Value, to satisfy such
withholding obligation.
(b) Tax Loans. The Committee may, in its discretion, authorize a loan to an
Eligible Participant in the amount of any taxes which the Company may be
required to withhold with respect to Paired Shares received (or disposed of, as
the case may be) pursuant to a transaction described in subsection (a) above.
Such a loan shall be for a term, at a rate of interest and pursuant to such
other terms and conditions as the Committee, under applicable law may establish
and such loan need not comply with the provisions of Section 1.8.
6.6 Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in part, or take
any action hereunder. No Awards may be granted during any suspension of this
Plan or after termination of this Plan, but the Committee shall retain
jurisdiction as to Awards then outstanding in accordance with the terms of this
Plan.
(b) Shareholder Approval. To the extent required under Section 422 of the
Code or any other applicable law, or deemed necessary or advisable by the Board,
any amendment to this Plan shall be subject to shareholder approval.
18
(c) Amendments to Awards. Without limiting any other express authority of
the Committee under, but subject to the express limits of, this Plan, the
Committee by agreement or resolution may waive conditions of or limitations on
Awards that the Committee in the prior exercise of its discretion has imposed,
without the consent of the Participant, and may make other changes to the terms
and conditions of Awards that do not affect in any manner materially adverse to
the Participant, his or her rights and benefits under an Award.
(d) Limitations on Amendments to Plan and Awards. No amendment, suspension
or termination of the Plan or change of or affecting any outstanding Award
shall, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Corporation under any Award granted under this Plan prior
to the effective date of such change. Changes contemplated by Section 6.2 shall
not be deemed to constitute changes or amendments for purposes of this Section
6.6.
6.7 Effect of Pairing Agreement on Awards.
(a) Pairing Agreement. This Plan shall be subject to the terms and
conditions of the Pairing Agreement.
(b) Paired Shares. All Awards shall be subject to the following:
(i) the grant of any Award for Common Stock pursuant to this Plan
shall also be for an equal number of shares of Meditrust Corporation
Stock; upon the exercise of any Options to purchase Common Stock, or
the payment of a Restricted Stock Award, a Stock Appreciation Right, a
Performance Share Award payable in Common Stock or a Stock Bonus, the
Participant shall obtain a number of shares of Meditrust Corporation
Stock equal to the number of shares of Common Stock to be issued upon
exercise or payment;
(ii) the grant of any Award for Meditrust Corporation Stock
pursuant to this Plan shall also be for an equal number of shares of
Common Stock; upon the exercise of any Options to purchase Meditrust
Corporation Stock, or the payment of a Restricted Stock Award, a Stock
Appreciation Right, a Performance Share Award payable in Meditrust
Corporation Stock or a Stock Bonus, the Participant shall obtain a
number of shares of Common Stock equal to the number of shares of
Meditrust Corporation Stock to be issued upon exercise or payment.
19
(c) Stock Certificates. Upon exercise of an Option or payment of an
Award, the person receiving Paired Shares shall be entitled to one stock
certificate evidencing the Paired Shares acquired; provided that any person
who tenders Paired Shares to the Corporation in payment of a portion or all
of the purchase price of the stock purchased upon exercise of an Option
shall be entitled to receive two certificates, one representing a number of
Paired Shares equal to the number of Paired Shares exchanged for the stock
acquired upon exercise, and another representing the additional Paired
Shares, if any, acquired upon exercise of the Option.
6.8 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the Committee or this Plan, a
Participant shall not be entitled to any privilege of stock ownership as to any
Paired Shares not actually delivered to and held of record by him or her. No
adjustment will be made for dividends or other rights as a shareholder for which
a record date is prior to such date of delivery.
6.9 Effective Date of the Plan.
This Plan shall be effective as of December 15, 1994, the date of Board
approval, subject to shareholder approval within 12 months thereafter.
6.10 Term of the Plan.
No Award shall be granted more than ten years after the effective date of
this Plan (the "termination date"). Unless otherwise expressly provided in this
Plan or in an applicable Award Agreement, any Award theretofore granted may
extend beyond such date, and all authority of the Committee with respect to
Awards hereunder shall continue during any suspension of this Plan and in
respect of outstanding Awards on such termination date.
6.11 Governing Law; Construction; Severability.
(a) Choice of Law. This Plan, the Awards, all documents evidencing Awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the Commonwealth of Massachusetts applicable to
contracts made and performed within such State, except as such laws may be
supplanted by the laws of the United States of America, which laws shall then
govern its effect and its construction to the extent they supplant Massachusetts
law.
20
(b) Severability. If any provision shall be held by a court of competent
jurisdiction to be invalid and unenforceable, the remaining provisions of this
Plan shall continue in effect.
(c) Plan Construction. (1) It is the intent of the Corporation that this
Plan and Awards hereunder satisfy and be interpreted in a manner that in the
case of Participants who are or may be subject to Section 16 of the Exchange Act
satisfies the applicable requirements of Rule 16b-3 so that such persons will be
entitled to the benefits of Rule 16b-3 or other exemptive rules under Section 16
of the Exchange Act and will not be subjected to avoidable liability thereunder.
If any provision of this Plan or of any Award or any prior action by the
Committee would otherwise frustrate or conflict with the intent expressed above,
that provision to the extent possible shall be interpreted and deemed amended so
as to avoid such conflict, but to the extent of any remaining irreconcilable
conflict with such intent as to such persons in the circumstances, such
provision shall be deemed void.
(2) It is the further intent of the Company that Options or Stock
Appreciation Rights with an exercise or base price not less than Fair Market
Value on the date of grant that are granted to or held by a person subject to
Section 162(m) of the Code shall qualify as performance-based compensation under
Section 162(m) of the Code, and this Plan shall be interpreted consistent with
such intent.
6.12 Captions.
Captions and headings are given to the sections and subsections of this
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
6.13 Effect of Change of Subsidiary Status.
For purposes of this Plan and any Award hereunder, if an entity ceases to
be a Subsidiary, a termination of employment shall be deemed to have occurred
with respect to each employee of such Subsidiary who does not continue as an
employee of another entity within the Company.
6.14 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit the authority of the
Board or the Committee to grant awards or authorize any other compensation, with
or without reference to the Common Stock and/or Meditrust Corporation Stock,
under any other plan or authority.
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VII. DEFINITIONS.
7.1 Definitions.
(a) "Award" shall mean an award of any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share Award, Stock Bonus, Dividend
Equivalent or other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.
(b) "Award Agreement" shall mean any writing setting forth the terms of an
Award that has been authorized by the Committee.
(c) "Award Date" shall mean the date upon which the Committee took the
action granting an Award or such later date as the Committee designates as the
Award Date at the time of the Award.
(d) "Award Period" shall mean the period beginning on an Award Date and
ending on the expiration date of such Award.
(e) "Beneficiary" shall mean the person, persons, trust or trusts entitled
by will or the laws of descent and distribution to receive the benefits
specified in the Award Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's executor or administrator
if no other Beneficiary is identified and able to act under the circumstances.
(f) "Board" shall mean the Board of Directors of the Corporation.
(g) "Change in Control Event" shall mean:
(1) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of Common Stock (the "Outstanding Common
Stock") or (B) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); provided,
however, that the following acquisitions shall not constitute a Change
in Control Event: (A) any acquisition directly from the Corporation
(except that an acquisition by virtue of the
22
exercise of a conversion privilege shall not be considered within this
clause (A) unless the converted security was itself acquired directly
from the Corporation), (B) any acquisition by the Corporation, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any corporation controlled by the
Corporation or (D) any acquisition by any corporation pursuant to a
reorganization, merger or consolidated, if, following such
reorganization, merger or consolidation, the conditions described in
clauses (A) and (B) of paragraph (3) below are satisfied;
(2) Individuals who, as November 5, 1997, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual who
becomes a director subsequent to the date hereof whose election, or
nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board; but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(3) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation (a "transaction"), unless,
following such transaction in each case, (A) more than 80% of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such transaction and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such transaction and (B) no Person
(excluding the Corporation, any employee benefit plan (or related
trust) of the Corporation or such corporation resulting from such
transaction and any Person beneficially owning, immediately prior to
such transaction, directly or indirectly, 20% or more of the
Outstanding Common Stock or Outstanding Voting Securities, as the case
may be) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such transaction or the
23
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors; or
(4) Approval by the shareholders of the Corporation of (A) a
complete liquidation or dissolution of the Corporation or (B) the sale
or other disposition of all or substantially all of the assets of the
Corporation, unless such assets are sold to a corporation and
following such sale or other disposition, the conditions described in
clauses (A) and (B) of paragraph (3) above are satisfied.
(h) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(i) "Commission" shall mean the Securities and Exchange Commission.
(j) "Committee" shall mean the Personnel and Compensation Committee of the
Board, which Committee shall be comprised only of two or more directors or such
greater number of directors as may be required under applicable law, each of
whom, during such time as one or more Participants may be subject to Section 16
of the Exchange Act, shall be a Non-Employee Director within the meaning of Rule
16b-3 and, in respect of any decision involving a Participant who may be subject
to Section 162(m) of the Code, shall be a Disinterested and Outside director.
(k) "Common Stock" shall mean the common stock of the Corporation, $.10 par
value per share, and such other securities or property as may become the subject
of Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
(l) "Company" shall mean, collectively, the Corporation and its
Subsidiaries.
(m) "Corporation" shall mean Meditrust Operating Company, a Delaware
corporation, and its successors.
(n) "Disinterested and Outside" shall mean "disinterested" within the
meaning of any applicable regulatory requirements, including Rule 16b-3, and
"outside" within the meaning of Section 162(m) of the Code, and any regulations
promulgated thereunder.
(o) "Dividend Equivalent" shall mean an amount equal to the amount of cash
dividends or other cash distributions paid (or such portion of such dividend or
other distribution as may be designated by the Committee) with respect to each
Paired Share after the date of an Award of a Dividend Equivalent.
24
(p) "Eligible Participant" shall mean a director, an officer (whether or
not a director) or any other employee of the Company, or any Other Eligible
Person, as determined by the Committee in its discretion.
(q) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
(r) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(s) "Fair Market Value" shall mean, with respect to Common Stock or
Meditrust Corporation Stock, the fair market value of an unpaired share of
Common Stock or Meditrust Corporation Stock, as the case may be, as determined
in good faith by the Committee. The Fair Market Value of a Paired Share shall
mean the closing price of a Paired Share on the Composite Tape, as published in
the Eastern Edition of The Wall Street Journal, of the principal national
securities exchange on which the Paired Shares are so listed or admitted to
trade, on such date, or, if there is no trading of the Paired Shares on such
date, then the closing price of the Paired Shares as quoted on such Composite
Tape on the next preceding date on which there was trading in such shares;
provided, however, if the Paired Shares are not listed or admitted to trade on a
national securities exchange, the Committee may designate such other exchange,
market or source of data as it deems appropriate for determining such value for
Plan purposes.
(t) "Incentive Stock Option" shall mean an Option which is designated as an
incentive stock option within the meaning of Section 422 of the Code and which
contains such provisions as are necessary to comply with that section.
(u) "Nonqualified Stock Option" shall mean an Option that is designated as
a Nonqualified Stock Option and shall include any Option intended as an
Incentive Stock Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an incentive
stock option shall be deemed to be designated a nonqualified stock option under
this Plan and not an incentive stock option under the Code.
(v) "Non-Employee Director" shall have the meaning set forth in Rule 16b-3.
(w) "Option" shall mean an option to purchase Paired Shares under this
Plan. The Committee shall designate any Option granted to an Eligible
Participant as a Nonqualified Stock Option or an Incentive Stock Option,
provided that all Options with
25
respect to Meditrust Corporation Stock shall be Nonqualified Stock Options.
(x) "Other Eligible Person" shall mean any individual consultant, advisor
or (to the extent provided in the next sentence) agent who renders or has
rendered bona fide services (other than services in connection with the offering
or sale of securities of the Company in a capital raising transaction) to the
Company, and who is selected to participate in this Plan by the Committee;
provided that if the Corporation's officers and directors are or become subject
to Section 16 of the Exchange Act, a Non-Employee Director shall not thereafter
be selected as an Other Eligible Person. A non-employee agent providing bona
fide services to the Company (other than as an eligible advisor or consultant)
may also be selected as an Other Eligible Person if such agent's participation
in this Plan would not adversely affect (x) the Corporation's eligibility to use
Form S-8 to register under the Securities Act of 1933, as amended, the offering
of shares issuable under this Plan by the Company or (y) the Corporation's
compliance with any other applicable laws.
(y) "Paired Share" means a share of Common Stock and a share of Meditrust
Corporation Stock.
(z) "Pairing Agreement" means the Pairing Agreement between the Corporation
and Meditrust Corporation, dated as of December 31, 1979, as it may be amended
from time to time.
(aa) "Participant" shall mean an Eligible Participant who has been granted
an Award under this Plan.
(bb) "Performance Share Award" shall mean an Award made pursuant to the
provisions, and subject to the terms and conditions, of Article V of the Plan.
(cc) "Personal Representative" shall mean the person or persons who, upon
the Total Disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and who shall have
become the legal representative of the Participant.
(dd)"Plan" shall mean this Amended and Restated 1995 Share Award Plan.
(ee)"QDRO" shall mean a qualified domestic relations order as defined in
Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA (to the same
extent as if this Plan were subject thereto), or the applicable rules
thereunder.
26
(ff) "Meditrust Corporation" means Meditrust Corporation, a Delaware
corporation.
(gg) "Meditrust Corporation Stock" means the common stock of Meditrust
Corporation, $.10 par value per share, and such other securities or property as
may become subject of Awards or become subject to Awards, pursuant to an
adjustment made under Section 6.2 of this Plan.
(hh) "Restricted Stock" shall mean Paired Shares awarded to a Participant
subject to payment of such consideration, if any, and such conditions on vesting
and such transfer and other restrictions as are established in or pursuant to
this Plan, for so long as such shares remain unvested under the terms of the
applicable Award Agreement.
(ii)"Retirement" shall mean retirement from active service as an employee,
officer or director of the Company on or after attaining age 65.
(jj)"Rule 16b-3" shall mean Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act.
(kk)"Section 16 Person" shall mean a person subject to Section 16(a) of the
Exchange Act.
(ll)"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
(mm) "Share Limit" shall have the meaning specified in Section 1.4(a).
(nn) "Stock Appreciation Right" shall mean a right to receive a number of
Paired Shares or an amount of cash, or a combination of shares and cash, the
aggregate amount or value of which is determined by reference to a change in the
Fair Market Value of the Paired Shares that is authorized under this Plan.
(oo) "Subsidiary" shall mean any corporation or other entity a majority of
whose outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
(pp)"Total Disability" shall mean a "permanent and total disability" within
the meaning of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions or conditions as the Committee by rule may include.
27