Exhibit 10.5
Form of Performance Units Award Letter Agreement
[Date]
[Address]
RE: Performance Unit Award
Dear [_________]:
This letter will confirm that Meditrust Operating Company ("Meditrust") awarded
you 25,000 Performance Units in its long Term Bonus Program on December 10,
1998. Said award was in recognition of your current and anticipated future
contributions and importance to the success of Meditrust, and as a result of the
Board's confidence in you.
Such Performance Units shall become payable only under the following terms and
conditions:
1. Termination Other Than for Cause - all Performance Units issued to
you shall become immediately vested in full with the value of each Unit deemed
to be $25; provided that payment with respect to the Performance Units shall be
made in cash no earlier than January 1, 2000
2. Death or Disability - all Performance Units issued to you
shall become immediately vested in full with the value of each Unit deemed to be
$25; provided that the payment with respect to the Performance Units shall be
made in cash no earlier than April 1, 2002; or
3. Change In Control - all Performance Units issued to you shall become
immediately vested in full with the value of each Unit deemed to be $50.
The terms and conditions defining the aforesaid events are set forth in Exhibit
"A", attached hereto.
Very truly yours,
/s/ Xxxxx X. Xxxx
--------------------------
Xxxxx X. Xxxx
Chairman
EXHIBIT "A"
For purposes of this Letter, the following terms shall have the following
meanings:
(1) "Termination For Cause" shall mean termination by the Employer of
the Employee's employment by reason of (i) the Employee's fraud upon, deliberate
injury or attempted injury to, or dishonesty towards the Employer that causes
material and demonstrable injury to the Employer, or (ii) the conviction of any
felony involving a crime of moral turpitude.
(2) "Termination Other Than For Cause" shall mean termination by the
Employer of the Employee's employment other than a Termination for Cause, a
Termination Upon Death or Disability, or a Termination Upon a Change in Control.
(3) "Termination Upon a Change in Control" shall mean termination of
the Employee's employment with the Employer within two (2) years following a
Change in Control either by the Employer as a Termination Other Than For Cause.
(4) "Termination Upon Death or Disability" shall mean termination by
the Employer by reason of the Employee's death or disability shall mean a
termination upon written notification to the Employee if the Employee, in the
reasonable judgment of the Board of Directors of the Employer, has failed to
perform his duties under this Agreement because of illness or physical or mental
incapacity, and such illness or incapacity continues for a period of more than
four (4) consecutive months, or in the event of the Employee's death, in which
case the Employee's employment shall be deemed to have terminated as of the last
day of the month during which his death occurs.
(5) "Permitted Spin-Off" shall mean a corporate restructuring of the
Meditrust Companies pursuant to which all of the stock of any existing or
newly-created subsidiary of the Meditrust Companies (or either of them) which
owns (or acquires by purchase, dividend, investment or otherwise) all of the
healthcare assets and investments of the Meditrust Companies (or the stock of
subsidiaries which own such assets and investments) existing immediately prior
thereto is "spun-off" ratably to the shareholders of the Meditrust Companies at
the time of such spin-off.
(6) "Spin-Off Entity" shall mean any Person resulting from a Permitted
Spin-Off.
(7) "Change in Control" shall mean (a) an acquisition by any
individual, entity or group (within the meaning of Section 13 (d) (3) or 14 (d)
(2) of the Securities Exchange Act of 1934, as amended (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 the combined voting power of the then
outstanding voting securities of the Employer entitled to vote generally in the
election of directors of the Employer (the "Outstanding Voting Securities") or
20% or more of the combined market value of the equity securities of the
Employer (the "Equity Value"); PROVIDED, HOWEVER, that any acquisition directly
from or by the Employer or any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Employer or an affiliated company
or any acquisition by a company pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of (c) below shall be excluded
from this clause (a); or (b) individuals who, as of the date hereof, constitute
the Board of Directors (the "Incumbent Board") of the Employer, cease for any
reason to constitute at least 60% of the Board of Directors of the Employer;
PROVIDED, HOWEVER, that any individual becoming a director whose election, or
nomination for election by the Employer's stockholders, was approved by a vote
of at least 60% of the directors then comprising the Incumbent Board shall be
considered as though such individual was a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors of the Employer; or (c) consummation of a reorganization,
merger or consolidation of the Employer (a "Business Combination"), unless, in
each case, following such Business Combination, (i) all or substantially all the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Equity Value and Outstanding Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
60% of the combined market value of the equity securities and more than 60% of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the corporation resulting from
such Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Employer or all or substantially all of
the Employer's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Equity Value and Outstanding Voting Securities, (ii)
no Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Employer or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of the combined voting power of the then outstanding
voting securities or 20% or more of the combined market value of the equity
securities of the corporation resulting from such business combination except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least 60% of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or the action of the Board,
providing for such Business Combination, (d) the sale or other disposition of
more than 50% of the lodging assets of the Employer, or (e) a complete
liquidation or dissolution of the Employer or approval thereof by the
stockholders of the Employer. For purposes of this definition, "Employer" shall
mean either (x) Meditrust Corporation or Meditrust Operating Company
("Meditrust" and together with the Employer, "the Meditrust Companies") or (y)
any subsidiary of Meditrust Corporation or Meditrust Operating Company, the
assets of which are substantially all of the lodging assets and investments of
Meditrust Corporation (or the stock of subsidiaries, the assets of which are
substantially all of the lodging assets and investments of Meditrust
Corporation). Notwithstanding the foregoing, any corporate restructuring
directly related to a Permitted Spin-Off, including any related change to the
Board of Directors shall not be deemed to be a Change in Control; provided,
however, that this exclusion shall not apply to any simultaneous or subsequent
sale of, or Business Combination, or other events described in clauses (a)
through (e) of this subparagraph (7) involving such Spin-Off Entity.
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