-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NLttEXgiqZlhgRZwXsxPbieRcmFdf9oSh6OqP/Sgfcq9nnErmwbjGyjfXrrkSiXx sNvQRwRwbtizYSBReUcAaw== 0001029869-97-000866.txt : 19970715 0001029869-97-000866.hdr.sgml : 19970715 ACCESSION NUMBER: 0001029869-97-000866 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970714 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MGI PROPERTIES CENTRAL INDEX KEY: 0000068330 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046268740 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06833 FILM NUMBER: 97640307 BUSINESS ADDRESS: STREET 1: 30 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173305335 MAIL ADDRESS: STREET 1: 30 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: MORTGAGE GROWTH INVESTORS DATE OF NAME CHANGE: 19880225 FORMER COMPANY: FORMER CONFORMED NAME: EASTERN SHOPPING CENTERS INC DATE OF NAME CHANGE: 19711121 10-Q 1 MGI PROPERTIES FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Period Ended: May 31, 1997 Commission File Number: 1-6833 MGI PROPERTIES (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-6268740 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One Winthrop Square, Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 422-6000 N/A Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Common shares outstanding as of July 10, 1997: 13,604,586 Page 1 of 14 pages Exhibit Index appears on Page 13 MGI PROPERTIES INDEX PART I: FINANCIAL INFORMATION Page No. Item 1: Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Earnings 4 Consolidated Statements of Cash Flow 5 Consolidated Statements of Changes in Shareholders' Equity 6 Notes to Consolidated Financial Statements 7 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Exhibit A: Computation of Earnings Per Share 12 PART II: OTHER INFORMATION Items 1 - 6 13 Signatures 14 - 2 - MGI PROPERTIES PART I -- FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS
- ---------------------------------------------------------------------------------------------------------- May 31, 1997 November 30, 1996 (unaudited) - ---------------------------------------------------------------------------------------------------------- ASSETS Real estate, at cost $ 383,158,000 $ 356,024,000 Accumulated depreciation and amortization (48,697,000) (44,810,000) - ---------------------------------------------------------------------------------------------------------- Net investments in real estate 334,461,000 311,214,000 Cash 8,601,000 15,140,000 Accounts receivable 3,796,000 3,665,000 Other assets 8,662,000 9,645,000 - ---------------------------------------------------------------------------------------------------------- $ 355,520,000 $ 339,664,000 ========================================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgage loans payable $ 112,336,000 $ 138,547,000 Other liabilities 5,729,000 6,682,000 - ---------------------------------------------------------------------------------------------------------- Total liabilities 118,065,000 145,229,000 Shareholders' equity: Common shares -- $1 par value; 17,500,000 shares authorized; 11,538,095 issued (11,502,271 at November 30, 1995) 13,601,000 11,563,000 Additional paid-in capital 206,755,000 167,185,000 Undistributed net income 17,099,000 15,687,000 - ---------------------------------------------------------------------------------------------------------- Total shareholders' equity 237,455,000 194,435,000 - ---------------------------------------------------------------------------------------------------------- $ 355,520,000 $ 339,664,000 ==========================================================================================================
See accompanying notes to consolidated financial statements. - 3 - MGI PROPERTIES CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
- ------------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended -------------------------- -------------------------- May 31, 1997 May 31, 1996 May 31, 1997 May 31, 1996 - ------------------------------------------------------------------------------------------------------------------------- INCOME Rental and other income $15,376,000 $13,122,000 $30,258,000 $25,821,000 Interest on investment securities 198,000 100,000 404,000 185,000 - ------------------------------------------------------------------------------------------------------------------------- Total income 15,574,000 13,222,000 30,662,000 26,006,000 - ------------------------------------------------------------------------------------------------------------------------- EXPENSES Property operating expenses 3,807,000 3,385,000 7,471,000 6,753,000 Real estate taxes 1,853,000 1,591,000 3,672,000 3,102,000 Depreciation and amortization 2,587,000 2,234,000 5,139,000 4,550,000 Interest 2,273,000 2,075,000 4,896,000 3,966,000 General and administrative 790,000 746,000 1,565,000 1,479,000 - ------------------------------------------------------------------------------------------------------------------------- Total expenses 11,310,000 10,031,000 22,743,000 19,850,000 - ------------------------------------------------------------------------------------------------------------------------- Income before net gain and extraordinary item 4,264,000 3,191,000 7,919,000 6,156,000 Net gain -- 9,350,000 600,000 9,350,000 - ------------------------------------------------------------------------------------------------------------------------- Income before extraordinary item 4,264,000 12,541,000 8,519,000 15,506,000 Extraordinary item - loss on prepayment of debt -- -- (306,000) -- - ------------------------------------------------------------------------------------------------------------------------- Net income $ 4,264,000 $12,541,000 $ 8,213,000 $15,506,000 ========================================================================================================================= PER SHARE DATA Net income $ 0.31 $ 1.09 $ 0.63 $ 1.35 ========================================================================================================================= Weighted average shares outstanding 13,598,472 11,535,008 12,964,645 11,526,406 =========================================================================================================================
See accompanying notes to consolidated financial statements. - 4- MGI PROPERTIES CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited) - -------------------------------------------------------------------------------- Six Months Ended May 31, ----------------------------- 1997 1996 - -------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,213,000 $ 15,506,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 5,139,000 4,550,000 Net gain (600,000) (9,350,000) Net extraordinary items 306,000 -- Other 956,000 (1,576,000) - -------------------------------------------------------------------------------- Net cash provided by operating activities 14,014,000 9,130,000 - -------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of real estate (25,664,000) (19,183,000) Additions to real estate (3,016,000) (2,832,000) Deferred tenant charges (901,000) (443,000) Net proceeds from sales of real estate interests 704,000 6,072,000 Other 376,000 (460,000) - -------------------------------------------------------------------------------- Net cash used in investing activities (28,501,000) (16,846,000) - -------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Additions to mortgage loans payable, net 15,500,000 14,000,000 Repayment of mortgage loans payable (41,711,,000) (2,396,000) Mortgage prepayment penalty (306,000) -- Cash distributions (6,801,000) (5,531,000) Proceeds from issuance of common shares 41,266,000 321,000 - -------------------------------------------------------------------------------- Net cash provided by financing activities 7,948,000 6,394,000 - -------------------------------------------------------------------------------- Net decrease in cash and short-term investments (6,539,000) (1,322,000) - -------------------------------------------------------------------------------- CASH AND SHORT-TERM INVESTMENTS Beginning of period 15,140,000 7,045,000 - -------------------------------------------------------------------------------- End of period $ 8,601,000 $ 5,723,000 ================================================================================ See accompanying notes to consolidated financial statements. - 5 - MGI PROPERTIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) - -------------------------------------------------------------------------------- Additional Common Paid-In Undistributed Shares Capital Net Income - -------------------------------------------------------------------------------- Balance at November 30, 1996 $11,563,000 $167,185,000 $ 15,687,000 Net income -- -- 8,213,000 Distributions -- -- (6,801,000) Sale of common shares 2,000,000 39,075,000 -- Options exercised and other 38,000 495,000 -- - -------------------------------------------------------------------------------- Balance at May 31, 1997 $13,601,000 $206,755,000 $ 17,099,000 ================================================================================ See accompanying notes to consolidated financial statements. - 6 - MGI PROPERTIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1: The results of the interim period are not necessarily indicative of results to be expected for the entire fiscal year. The figures contained in this interim report are unaudited and may be subject to year-end adjustments. Certain prior year amounts have been reclassified to conform with the current year presentation. In the opinion of management, all adjustments necessary for a fair presentation of financial position and results of operations have been included and such adjustments include only the normal accruals. Note 2: On June 19, 1997, the Board of Trustees declared a cash dividend of $.28 per common share payable on July 11, 1997 to shareholders of record on July 2, 1997. This dividend payment will aggregate $3.8 million. Note 3: Cash paid for interest amounted to $2.3 million and $2.1 million for the three-month periods ended May 31, 1997 and May 31, 1996, respectively. Note 4: At May 31, 1997, options to purchase an aggregate of 995,461 common shares at exercise prices ranging from $7.375 to $21.375 per share were outstanding under MGI's stock option plans for key employees and trustees. All options outstanding at May 31, 1997 expire by April 2007. Note 5: During the first quarter of fiscal 1997, the Trust prepaid a $12.3 million mortgage and incurred a $306,000 penalty ($.03 per share), which was recorded as an extraordinary loss. Note 6: MGI intends to qualify for the year ended November 30, 1997 as a real estate investment trust under the provisions of Sections 856-860 of the Internal Revenue Code of 1986, as amended. Accordingly, no provision has been made for Federal income taxes. - 7 - MGI PROPERTIES PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Shareholders' equity at May 31, 1997 was $237.5 million, compared to $194.4 million at November 30, 1996. The increase primarily reflects net proceeds of $41.1 million from an equity offering of 2,000,000 common shares as well as the excess of net income over distributions paid. At May 31, 1997, financial liquidity was provided by $8.6 million in cash and cash equivalents and by unused lines of credit aggregating $40.5 million. Through the first two quarters of fiscal 1997, the Trust has acquired seven properties totaling 476,200 square feet for an aggregate price of $25.6 million. The properties were 99% leased as of May 31, 1997. All of the properties are located in New England, including two office properties totaling 80,800 square feet in suburban Hartford, Connecticut. The remaining five buildings consist of both office/research and development and industrial properties that are located in the metropolitan Boston Massachusetts area. At the end of the second quarter, the Trust's New England investments equal approximately 52% of the total cost of its real estate. Additionally, the Trust has signed contracts to acquire, subject to its satisfactory completion of due diligence and the satisfaction of certain other conditions, five additional New England properties at prices aggregating $16.6 million. It is anticipated these investments will close later in the year, if all conditions and terms are met, although there is no assurance that MGI will acquire these properties. Mortgage and other loans payable totaled $112.3 million at May 31, 1997, a net decrease of $26.2 million, compared to $138.5 million at November 30, 1996. The Trust utilized $28.0 million of the offering proceeds to repay the outstanding balances on its lines of credit. The line was subsequently drawn down by $4.5 million in connection with the property acquisitions. In addition, the Trust refinanced a $12.3 million, 9.3% mortgage with an $11.0 million loan bearing interest at a rate of 8.12%. The balance of the change represents scheduled principal payments. Scheduled loan principal payments due within twelve months of May 31, 1997 total $3.2 million. MGI believes it will continue to be able to extend or refinance maturing mortgage loans upon satisfactory terms. Cash requirements during the balance of fiscal 1997 include distributions to shareholders, capital and tenant improvements and other leasing expenditures required to maintain MGI's occupancy levels and other investment undertakings. Principal sources of funds in the future are expected to be from property operations, lines of credit, mortgaging or refinancing of existing mortgages on properties and MGI's portfolio of investment securities. Other potential sources of funds include the proceeds of public or private offerings of additional equity or debt securities of the Trust of the sale of real estate investments. The cost of new borrowings or issuances of the Trust's equity securities will be measured against the anticipated returns of investments to be acquired with such funds. The Trust presently anticipates that primarily cash, short-term investments and debt will finance the purchase of additional properties. MGI believes the combination of available cash and short-term investment securities, the value of MGI's unencumbered properties and other resources available to it are sufficient to meet its short and long-term liquidity requirements. - 8 - MGI PROPERTIES PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Results of Operations Net income for the fiscal quarter ended May 31, 1997, was $4.3 million, or $.31 per share on the increased average number of shares outstanding, as compared to $12.5 million, or $1.09 per share, in the corresponding quarter of 1996. Included in the 1996 second quarter net income was $9.4 million of gain recognized from the sale of MGI's interests in a California apartment complex. Income before net gain and extraordinary item was $4.3 million and $3.2 million for the quarters ended May 31, 1997 and May 31, 1996, respectively. Net income for the six months ended May 31, 1997, was $8.2 million, or $.63 per share on the increased average number of shares outstanding, as compared to $15.5 million, or $1.35 per share, a year ago. Income before net gain and extraordinary item was $7.9 million and $6.1 million for the six months ended May 31, 1997 and May 31, 1996, respectively. Included in 1997 year-to-date net income was a gain of $0.6 million which was partially offset by an extraordinary loss of $0.3 million incurred in connection with a loan refinancing prepayment fee. Included in the 1996 year-to-date net income was the previously mentioned gain of $9.4 million. Funds from operations ("FFO") totaled $6.8 million in the second quarter of fiscal 1997, compared to $5.4 million in the corresponding quarter of 1996. Funds from operations for the six months ended May 31, 1997 and 1996 were $13.0 million and $10.7 million, respectively. MGI calculates FFO in conformity with the NAREIT definition which is net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. MGI believes FFO is an appropriate supplemental measure of operating performance. The following is a reconciliation of net income to FFO:
Three Months Ended Six Months Ended ------------------ ---------------- May 31, 1997 May 31, 1996 May 31, 1997 May 31, 1996 ------------ ------------ ------------- ------------ Net Income $4,264,000 $12,541,000 $ 8,213,000 $15,506,000 Less net gain and extraordinary item -- (9,350,000) (294,000) 9,350,000) Plus building depreciation 2,051,000 1,758,000 4,092,000 4,048,000 Plus tenant improvement and commission amortization 506,000 456,000 1,003,000 478,000 ------------ ------------ ------------- ------------ FFO $6,821,000 $5,405,000 $13,014,000 $10,682,000 ============ ============ ============= ============
The change in FFO, compared to the corresponding periods in 1996, is attributable to the same factors that affected income before net gain and extraordinary item in such periods, with the exception of depreciation and amortization expense. - 9 - MGI PROPERTIES PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) In comparing the second quarter of fiscal 1997 to that of the previous year, the increase in net income before net gain and extraordinary item of approximately $1.1 million resulted principally from a $1.6 million increase in property operating income which is offset by increases in interest expense and depreciation and amortization of $0.4 million and $0.2 million, respectively. The increase in interest expense is due to the higher average balance of debt outstanding in 1997. Property operating income is defined as rental and other income less property operating expenses and real estate taxes. The change in property operating income reflects the additional income from the acquisition of properties totaling $1.8 million, offset, in part, by the income effect of $0.2 million due to the sale of properties. Change in Property Operating Income for Quarter Ended May 31, 1997 versus May 31, 1996
Properties Held 1997 and 1996 1997 and 1996 Both Fiscal Years Acquisitions Sales Net Change ----------------- ------------- ------------- ----------- Industrial $ 6,000 $ 551,000 $ (96,000) $ 461,000 Office 26,000 1,043,000 -- 1,069,000 Office R&D 3,000 136,000 -- 139,000 Apartment 41,000 -- -- 41,000 Retail (108,000) -- -- (108,000) Land and Partnership -- 96,000 (128,000) (32,000) ----------- ----------- ----------- ----------- $ (32,000) $ 1,826,000 $ (224,000) $ 1,570,000 =========== =========== =========== ===========
For the six months ended May 31, 1997 property operating income from properties held in both fiscal years had increased approximately 1.5%, on an annualized basis, when compared to the comparable 1996 period. When the quarter and six months ended May 31, 1997 are compared to the prior year period, the performance of the "comparable properties" reflects an increase in retail vacancy at Yorkshire Plaza in Aurora, Illinois. Yorkshire Plaza was 77% leased at May 31, 1997 as compared to 95% at May 31, 1996. While management believes that the center is favorably located, the lease market is soft due to an excess supply of retail space. Substantially all of the increase in property operating income is from the acquisitions of properties located in New England which has been the focus of the Trust's investment activity over the past several years. The increase is a function of both acquisitions and increases in rental rates. During the first two quarters of fiscal 1997 the Trust signed, with tenants located in New England, leases totaling approximately 230,000 square feet which were at aggregate rents approximately 35% over prior rent levels. These increases will be recognized as new lease terms commence. As of May 31, 1997, the Trust's New England portfolio consists of thirty-nine properties aggregating 3.6 million square feet Scheduled lease expirations and completed leasing (in square feet) for the portfolio as a whole are as follows at May 31, 1997: Scheduled Expirations ---------------------- Property Percentage 1997 Remaining Scheduled Type Leased Leasing 1997 1998 - -------- ---------- ------- --------- --------- Industrial 98.3% 421,700 32,400 660,200 Office 94.6% 168,500 22,600 132,100 Office/R&D 100.0% 21,000 -- 312,000 Retail 88.6% 24,400 9,900 79,200 ------ ------- ------ --------- Total 96.4% 635,600 64,900 1,183,500 ====== ======= ====== ========= - 10 - MGI PROPERTIES PART I, ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Of the 635,600 total square feet leased year-to-date in 1997, approximately 620,000 square feet (which includes the 230,000 square feet leased in New England properties) pertained to renewals or new leases of previously occupied space. Rents on the 620,000 square feet increased an aggregate 20% over prior rent levels, which is equal to $965,000 per annum once all the leases have commenced. Of this $965,000, approximately $106,000 has been reflected in earnings for the first six months of 1997; the balance will be recognized as new lease rates go into effect over the next twelve months. The fiscal 1998 scheduled lease expirations represent 22% of MGI's total commercial portfolio, which is approximately 8% higher than 1997 scheduled expirations a year ago at this time. Scheduled remaining expirations for New England properties total 40,000 square feet and 509,000 square feet in 1997 and 1998, respectively. Existing rent levels relative to New England space coming up for renewal appear to be generally below prevailing market rents. Included in the 1998 retail expirations is 53,200 square feet scheduled to expire at the 313,000 square-foot Yorkshire Plaza in Aurora, Illinois. Forward Looking Statements Statements made or incorporated in this Report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are dependent on a number of factors which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Such factors include, among other things, satisfactory completion of the anticipated acquisitions, maintaining or improving the current occupancy and rent levels at the acquisition and other properties, as well as those set forth in Risk Factors (Item 1) and Management's Discussion and Analysis of Financial Condition and Results of Operations in MGI's Form 10-K for the year ended November 30, 1996. - 11 - MGI PROPERTIES PART I - EXHIBIT A COMPUTATION OF EARNINGS PER SHARE
- ----------------------------------------------------------------------------------------------------------------------------- Three Months Ended May 31, Six Months Ended May 31, 1997 1996 1997 1996 - ----------------------------------------------------------------------------------------------------------------------------- PRIMARY Net income $ 4,264,000 $12,541,000 $ 8,213,000 $15,506,000 ============================================================================================================================= Weighted average number of shares outstanding during the period 13,598,472 11,535,008 12,964,645 11,526,406 ============================================================================================================================= Primary earnings per share $ 0.31 $ 1.09 $ 0.63 $ 1.35 ============================================================================================================================= ASSUMING FULL DILUTION Net income $ 4,264,000 $12,541,000 $ 8,213,000 $15,506,000 ============================================================================================================================= Weighted average number of shares outstanding during the period 13,598,472 11,535,008 12,964,645 11,526,406 ============================================================================================================================= Earnings per share assuming full dilution $ 0.31 $ 1.09 $ 0.63 $ 1.35 =============================================================================================================================
Note: Outstanding stock options are not taken into account in the computation of earnings per share as they are not materially dilutive. - 12 - MGI PROPERTIES PART II - OTHER INFORMATION Item 1: Legal Proceedings: Not applicable. Item 2: Changes in Securities: Not applicable. Item 3: Defaults upon Senior Securities: Not applicable. Item 4: Submission of Matters to a Vote of Security Holders: Thefollowing matters were submitted to a vote of shareholders at the March 27, 1997 Annual Meeting of Shareholders: (a) The election of two Trustees to serve for a term of three years expiring on the date of the Trust's Annual Meeting of Shareholders in 2000. The vote on this was William F. Murdoch, Jr. - 12,418,534 affirmative and 101,987 withheld; and, Roger P. Nordblom - 12,417,461 affirmative and 103,060 withheld. (b) The ratification and approval of the adoption of the Trust's 1997 Employee Stock Option, Stock Appreciation Rights and Restricted Stock Plan. The vote on this proposal was - 11,535,434 for, 840,688 against and 144,399 abstaining. Item 5: Other Information: Not applicable. Item 6: Exhibits and Reports on Form 8-K: a) Exhibits: Part I - Exhibit A -- Computation of Earnings Per Share (see page 12). 4.1 MGI Properties amended and restated 1994 Trustees stock option plan. 4.2 MGI Properties amended and restated 1994 employee stock option and stock appreciation rights plan. 4.3 MGI Properties amended and restated 1988 stock option and stock appreciation rights plan. 27 Financial Data Schedule b) Reports on Form 8-K: None. - 13 - MGI PROPERTIES SIGNATURES Pursuant to the requirements to the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: July 11, 1997 /s/Phillip C. Vitali ------------------------------- Phillip C. Vitali Executive Vice President and Treasurer (Chief Financial Officer) Date: July 11, 199 /s/David P. Morency -------------------------------------- David P. Morency Controller (Principal Accounting Officer) - 14 - EX-99.4.1 2 A & R TRUSTEES STOCK OPTION PLAN MGI PROPERTIES AMENDED AND RESTATED 1994 TRUSTEES STOCK OPTION PLAN I. PURPOSE The purpose of the 1994 Trustees' Stock Option Plan (the "Plan") is to secure for MGI Properties and its shareholders the benefits arising from stock ownership by its trustees. The Plan will provide a means whereby such trustees purchase common shares of MGI Properties pursuant to options granted in accordance with the Plan. The Plan has been amended and restated as of December 18, 1996 in order to align the Plan with recent changes to Rule 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"). II. DEFINITIONS The following capitalized terms used in the Plan shall have the respective meanings set forth in this Article: 2.1 "Board" shall mean the Board of Trustees of the Trust. 2.2 "Chairman" shall mean the duly appointed Chairman of any standing Committee of the Board. 2.3 "Committee" shall mean a duly appointed standing committee of the Board. 2.4 "Trust" shall mean MGI Properties. 2.5 "Trustees" shall mean any person who is a member of the Board. 2.6 "Eligible Person" shall mean any Trustee. 2.7 "Exercise Price" shall mean the price per Share at which an Option may be exercised. 2.8 "Fair Market Value" shall mean the closing sale price of a Share as reported on the New York Stock Exchange Composite Tape on the Grant Date or on the preceding date if no Shares were traded on such Grant Date. If the Shares are not reported on the New York Stock Exchange or on another national securities exchange, Fair Market Value shall be deemed to be the average of the high bid and asked prices of the Shares on the over-the-counter market on the Grant Date, or the next preceding date on which the last prices were recorded. 2.9 "Grant Date" shall mean any date that an Option shall be granted pursuant to the Plan as appropriate. 2.10 "Option" shall mean an Option to purchase Shares granted pursuant to the Plan. 2.11 "Option Agreement" shall mean the written agreement described in Article VI herein. 2.12 "Permanent Disability" shall mean the condition of an Eligible Person who is unable to participate as a member of the Board, by reason of any medically determined physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve (12) months. 2.13 "Purchase Price" shall be the Exercise Price multiplied by the number of whole Shares with respect to which an Option may be exercised. 2.14 "Shares" shall mean common shares of the Trust. III. ADMINISTRATION 3.1 General. This Plan shall be administered by the full Board of Trustees or a Committee thereof composed solely of two or more persons that are "non-employee directors" within the meaning of Rule 16b-3 promulgated under the Exchange Act and in accordance with the express provisions of the Plan. 3.2 Powers of the Committee. Subject to review by the Board, the Committee shall have full and complete authority to adopt such rules and regulations and to make all such other determinations not inconsistent with the Plan as may be necessary for the administration of the Plan. IV. SHARES SUBJECT TO PLAN Subject to adjustment in accordance with Article VIII, an aggregate of 170,000 Shares is reserved for issuance under this Plan. Shares sold under this Plan may be either authorized, but unissued Shares or reacquired Shares. If an Option, or any portion thereof, shall expire or terminate for any reason without having been exercised in full, the unpurchased Shares covered by such Option shall be available for future grants of Options. -2- V. GRANTS 5.1 Grants of Options. Subject to the express provisions of the Plan, the Committee shall have the authority, in its discretion, to determine the Trustees to whom the Options shall be granted, the number of Shares which shall be subject to each Option, the purchase price of each Share which shall be subject to each Option, the period(s) during which such Options shall be exercisable (whether in whole or in part), and the other terms and provisions thereof. In determining the Trustees to whom Options shall be granted and the number of Shares for which Options shall be granted, the Committee shall consider the length of service of the Trustee and the amount of earnings of the Trust. 5.2 Determination Final. The determination of the Committee on matters referred to this Article V shall be final. VI. TERMS OF OPTION 6.1 Written Agreement. Each Option shall be evidenced by a written Option Agreement executed by the Trust and the Eligible Person which shall specify the Grant Date, the number of Shares subject to the Option, the Exercise Price which shall be the Fair Market Value on the Grant Date and shall also include or incorporate by reference the substance of all of the following provisions and such other provisions consistent with this Plan as the Board or the Committee may determine. 6.2 Term. The term of the Option shall be not more than ten (10) years from the Grant Date of each Option, subject to earlier termination in accordance with Articles VI and IX. 6.3 Restriction on Exercise. The Committee shall have the authority to require, in its discretion, that the Eligible Person agree, at the time of the grant of an Option, not to sell or otherwise dispose of Shares acquired pursuant to the exercise of an Option granted under the Plan for a period of six (6) months following the date of grant. 6.4 Exercise Price. The Exercise Price for each Share subject to an Option shall be the Fair Market Value of the Share as determined in accordance with Section 2.8 hereof. 6.5 Manner of Exercise. An Option shall be exercised in accordance with its terms, by delivery of a written notice of exercise to the Trust and payment of the full purchase price of the Shares being purchased. An Eligible Person may exercise an Option with respect to all or less than all of the Shares for which the Option may then be exercised, but an Eligible Person must exercise the Option in whole Shares. -3- 6.6 Payment. The Purchase Price of Shares purchased pursuant to an Option or portion thereof may be paid: (a) in United States Dollars, in cash or by check, bank draft or money order payable to the Trust: (b) by delivery of Shares already owned by an Eligible Person for at least six (6) months with an aggregate Fair Market Value on the date of exercise equal to the Purchase Price; or (c) at the election of an Eligible Person, by the withholding of Shares otherwise to be received upon the exercise of an Option with an aggregate Fair Market Value on the date of exercise equal to the Purchase Price. 6.7 Transferability. Options shall be transferable (other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Internal Revenue Code of 1986, as it may from time to time be amended or Title I of the Employee Retirement Income Security Act of 1986, as amended, or the rules and regulations promulgated thereunder) to the extent authorized by the Committee in respect of a particular grant. 6.8 Termination of Service. If an Eligible Person's service as a Trustee terminates for any reason, an Option held on the date of termination may be exercised in whole or in part at any time within two (2) years after the date of such termination (but in no event after the term of the Option expires) and shall thereafter terminate. VII. GOVERNMENT AND OTHER REGULATIONS 7.1 Delivery of Shares. The obligation of the Trust to issue or transfer and deliver Shares for exercised Options under the Plan shall be subject to all applicable laws, regulations, rules, orders and approvals which shall then be in effect. 7.2 Holding of Stock After Exercise of Option. The Option Agreement shall provide that the Eligible Person, by accepting such Option, represents and agrees, for the Eligible Person and his permitted transferees hereunder that none of the Shares purchased upon exercise of the Option shall be acquired with a view to any sale, transfer or distribution of the Shares in violation of the Securities Act of 1933, as amended (the "Act") and, as a condition of exercise, the person receiving an Option shall furnish evidence satisfactory to that Trust to that effect, including an indemnification of the Trust in the event of any violation of the Act by such person. Notwithstanding the foregoing, the Trust in its sole discretion may register under the Act the Shares issuable upon exercise of the Options under the Plan. -4- VIII. ADJUSTMENTS 8.1 Proportionate Adjustments. If the outstanding Shares are increased, decreased, changed into or exchanged into a different number or kind of Shares or securities of the Trust through reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, an appropriate and proportionate adjustment shall be made to the maximum number and kind of Shares as to which Options may be granted under this Plan. A corresponding adjustment changing the number or kind of Shares allocated to unexercised Options or portions thereof, which shall have been granted prior to any such change, shall likewise be made. Any such adjustment in the outstanding Options shall be made without change in the Purchase Price applicable to the unexercised portion of the Option with a corresponding adjustment in the Exercise Price of the Shares covered by the Option. Notwithstanding the foregoing, there shall be no adjustment for the issuance of Shares on conversion of notes, preferred stock or exercise of warrants issued by the Board or the sale or issuance of Shares for such consideration as the Board deems appropriate. 8.2 Dissolution or Liquidation. Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Trust with one or more corporations or trusts as a result of which the Trust is not the surviving entity, or upon a sale of substantially all of the property or more than 80% of the then outstanding Shares of the Trust to another corporation or trust, the Trust shall give to each Eligible Person at the time of adoption of the plan for liquidation, dissolution, merger or sale either (1) a reasonable time thereafter within which to exercise the Option prior to the effective date of such liquidation or dissolution, merger or sale, or (2) the right to exercise the Option as to an equivalent number of shares of stock of the entity succeeding the Trust or acquiring its business by reason of such liquidation, dissolution, merger, consolidation or reorganization. IX. AMENDMENT OR TERMINATION OF PLAN 9.1 Amendments. The Board may at any time amend or revise the terms of the Plan; provided, however, that no such amendment or revision shall, unless appropriate shareholder approval of such amendment or revision is obtained: (a) increase the maximum number of Shares which may be sold pursuant to Options granted under the Plan, except as permitted under the provisions of Article VIII; (b) change the minimum Exercise Price set forth in Article VI; -5- (c) increase the maximum term of Options provided for in Article VI; or (d) permit the granting of Options to any one other than as provided in Article V. 9.2 Termination. The Board at any time may suspend or terminate this Plan. This Plan, unless sooner terminated, shall terminate on the tenth anniversary of its adoption by the Board. No Option may be granted under this Plan while this Plan is suspended or after it is terminated. 9.3 Consent of Holder. No amendment, suspension or termination of the Plan shall, without the consent of the holder of Options, alter or impair any rights or obligations under any Option theretofore granted under the Plan. X. MISCELLANEOUS PROVISIONS 10.1 Privilege of Stock Ownership. No Eligible Person entitled to exercise any Option granted under the Plan shall have any of the rights or privileges of a shareholder of the Trust with respect to any Shares issuable upon exercise of an Option until certificates representing the Shares shall have been issued and delivered. 10.2 Plan Expenses. Any expenses incurred in the administra- tion of the Plan shall be borne by the Trust. 10.3 Use of Proceeds. Payments received from an Eligible Person upon the exercise of Options shall be used for general corporate purposes of the Trust. 10.4 Governing Law. The Plan has been adopted under the laws of the Commonwealth of Massachusetts. The Plan and all Options which may be granted hereunder and all matters related thereto, shall be governed by and construed and enforceable in accordance with the laws of the Commonwealth of Massachusetts as it then exists. XI. SHAREHOLDER APPROVAL This Plan is subject to approval, at a duly held shareholders' meeting within twelve (12) months after the date the Board approves this Plan, by the affirmative vote of holders of a majority of the Shares of the Trust represented in person or by proxy and entitled to vote at the meeting. Options may be granted, but not exercised, before such shareholder approval. If the shareholders fail to approve the Plan within the required time period, any Options granted under this Plan shall be void, and no additional Options may thereafter be granted. -6- XI. EXCULPATION MGI Properties is a Massachusetts trust and all persons dealing with the Trust must look solely to the property of this Trust for the enforcement of any claims against the Trust. Neither the Trustees, officers, agents nor shareholders of this Trust assume any personal liability for obligations entered into on its behalf. -7- EX-99.4.2 3 A & R APPRECIATION RIGHTS PLAN MGI PROPERTIES AMENDED AND RESTATED 1994 EMPLOYEE STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN I. PURPOSE The purpose of the 1994 Employee Stock Option and Stock Appreciation Rights Plan (the "Plan") is to promote the interests of MGI Properties (the "Trust") and its shareholders by providing a means by which competent officers, key employees and employee-Trustees (hereinafter sometimes referred to as "key employees" or "optionees") of the Trust or of any subsidiary corporation or parent corporation of the Trust now existing or hereafter formed or acquired who are responsible for the continued growth of the Trust, can acquire a proprietary interest in the Trust, and thus to create in such key employees an increased interest in and a greater concern for the welfare of the Trust and its shareholders. The Plan has been amended and restated as of December 18, 1996 in order to align the Plan with recent changes to Rule 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"). The stock options ("Options") and stock appreciation rights ("Rights") offered pursuant to the Plan are a matter of separate inducement and are not in lieu of any salary or other compensation for the services of any key employee. The Trust, by means of the Plan, seeks to retain the services of persons now holding key positions and to secure the services of persons capable of filling such positions. The Options granted under the Plan are intended to be either incentive stock options ("Incentive Options") within the meaning of Section 422 of the Internal Revenue Code of 1986, as it may from time to time be amended (the "Code") or options that do not meet the requirements for Incentive Options ("Nonqualified Options"), but the Trust makes no warranty as to the qualification of any Option as an Incentive Option. II. SHARES SUBJECT TO THE PLAN The total number of Common Shares of the Trust which may be purchased pursuant to the exercise of Options granted under the Plan or acquired pursuant to the exercise of Rights granted under the Plan shall not exceed, in the aggregate, 400,000 Common Shares as of the effective date (the "Shares"). The term "Shares" shall include any securities, cash or other property into which Shares may be changed through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, issuance of rights to subscribe or change in capital structure. Shares which may be acquired under the Plan may be either authorized but unissued Shares, Shares held in the Trust's treasury, or both, at the discretion of the Trust. If and to the extent that Options granted under the Plan expire or terminate without having been exercised, Shares subject to such expired or terminated Options and related Rights shall be available for new grants of Options and related Rights under the Plan, provided that the grant and the terms of such new Options and related Rights shall in all respects comply with applicable legal requirements. Notwithstanding the above, however, the expiration or termination of Options and related Rights shall not increase the reserve of 400,000 Shares for grants to key employees. Except as provided in Article XX, the Trust may, from time to time during the period beginning March 16, 1994 (the "Effective Date") and ending on March 15, 2004 (the "Termination Date"), grant to key employees of the Trust, or of any subsidiary corporation or parent corporation of the Trust now existing or hereafter formed or acquired, Options and related Rights under the terms hereinafter set forth. As used in the Plan, the terms "subsidiary corporation" and "parent corporation" shall mean, respectively, a corporation coming within the definition of such terms contained in Sections 424(f) and 424(e) of the Code. III. ADMINISTRATION The Board of Trustees of the Trust (the "Board of Trustees") shall designate a committee for the administration of matters relating to Options to be granted to key employees (the "Committee"), whether Incentive or Nonqualified Options or both and related Rights. The Committee shall consist of two or more Trustees that are "non-employee directors" within the meaning of Rule 16b-3 (or any successor rule or regulation) ("Rule 16b-3") promulgated under the Exchange Act. A majority of the members of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee shall be the act of the Committee. Any member of the Committee may be removed at any time either with or without cause by resolution adopted by the Board of Trustees, and any vacancy on the Committee may at any time be filled by resolution adopted by the Board of Trustees. Subject to the express provisions of the Plan, the Committee shall have the authority, in its discretion, to determine the key employees to whom Options and Rights shall be granted, the number of Shares which shall be subject to each Option or Right, the -2- purchase price of each Share which shall be subject to each Option or Right, the period(s) during which such Options or Rights shall be exercisable (whether in whole or in part), and the other terms and provisions thereof. In determining the key employees to whom Options and Rights shall be granted and the number of Shares for which Options or Rights shall be granted to each such employee, the Committee shall consider the length of service, the amount of earnings, and the responsibilities and duties of such employee; provided, however, that no employee shall be granted Incentive Options in any calendar year to purchase shares of stock in the Trust or in any subsidiary corporation or parent corporation of the Trust which exceed the maximum allotment prescribed in Article V. Subject to the express provisions of the Plan, the Committee also shall have the authority to construe the Plan and Options and Rights granted thereunder, to amend the Plan and Options and Rights granted thereunder, to prescribe, amend and rescind rules and regulations relating to the Plan, to determine the terms and provisions of the respective Options (which need not be identical) and Rights (which need not be identical) and to make all other determinations necessary or advisable for administering the Plan. The Committee also shall have the authority to require, in its discretion, that the key employee agree, at the time of the grant of an Option and of a related Right not to sell or otherwise dispose of Shares acquired pursuant to the exercise of an Option or Right, as the case may be, granted under the Plan for a period of six (6) months following the date of grant. The determination of the Committee on matters referred to in this Article III shall be conclusive. Any or all powers and functions of the Committee may at any time and from time to time be exercised by the full Board of Trustees or a committee of the Board of Trustees composed solely of two or more persons that, at the time of such exercise, are "non-employee directors" within the meaning of Rule 16b-3. The Committee may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by the Board of Trustees or by the Committee in the engagement of such counsel, consultant or agent shall be paid by the Trust. No member or former member of the Committee or of the Board of Trustees shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted hereunder. -3- IV. ELIGIBILITY Incentive Options and related Rights may be granted only to salaried key employees of the Trust or of any subsidiary corporation or parent corporation of the Trust, except members of the Committee and except as hereinafter provided, and shall not be granted to any officer or Trustee who is not also a salaried key employee. Nonqualified Options and related Rights may be granted to salaried key employees of the Trust or of any subsidiary corporation or parent corporation of the Trust by the Committee (provided none may be granted to members of the Committee and except as hereinafter provided). Any person who shall have retired from active employment by the Trust, although such person shall have entered into a consulting contract with the Trust, shall not be eligible to receive a grant of an Incentive Option or related Right or a Nonqualified Option or related Right. An Incentive Option shall not be granted to any person who, at the time such Incentive Option is granted, owns Shares of the Trust or any subsidiary corporation or parent corporation of the Trust which possess more than ten percent (10%) of the total combined voting power of all classes of shares of the Trust or of any subsidiary corporation or parent corporation of the Trust, unless (i) the exercise price per share is not less than one hundred ten percent (110%) of the fair market value per share on the date such Option is granted and (ii) such Option by its terms is not exercisable after the expiration of five (5) years from the date such Option is granted. In determining share ownership of any such person, the rules of Section 424(d) of the Code shall be applied and the Committee may rely on representations of fact made to it by the key employee and believed by it to be true. V. MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS The aggregate fair market value (determined at the time the Incentive Option is granted) of the stock with respect to which Incentive Options are exercisable for the first time by such optionee during any calendar year (under all such plans of the optionee's employer corporation and its parent and subsidiary corporations) shall not exceed $100,000. VI. OPTION PRICE AND PAYMENT The price for each Share purchasable under any Option granted hereunder shall be such amount as the Committee shall, in its best judgment, determine; provided, however, that, subject to Article IV hereof, the price of any Option shall not be less than one hundred -4- percent (100%) of the fair market value per Share on the date the Option is granted. If the Shares are listed on a national securities exchange in the United States on the date any Option is granted, the fair market value per Share shall be deemed to be the closing sale price at which the Shares are sold on such national securities exchange on the date such Option is granted. If the Shares are listed on a national securities exchange in the United States on such date but the Shares are not traded on such date, or such national securities exchange is not open for business on such date, the fair market value per Share shall be determined as of the closest preceding date on which such exchange shall have been open for business and the Shares were traded. If the Shares are listed on more than one national securities exchange in the United States on the date any such Option is granted, the Committee shall determine which national securities exchange shall be used for the purpose of determining the fair market value per Share. If at the date any Option is granted a public market exists for the Shares but the Shares are not listed on a national securities exchange in the United States, the fair market value per Share shall be deemed to be the mean between the closing bid and asked quotations in the over-the-counter market for the Shares in the United States on the date such Option is granted. If there are no bid and asked quotations for the Shares on such date, the fair market value per Share shall be deemed to be the mean between the closing bid and asked quotations in the over-the-counter market in the United States for the Shares on the closest date, preceding the date such Option is granted, for which such quotations are available. The Trust shall cause such stock certificates to be issued only when it shall have received the full purchase price for the Shares in cash, certified check, bank draft or money order; provided, however, that in lieu of cash, certified check, bank draft or money order, the holder of an Option may exercise his Option, in whole or in part, (i) by delivering to the Trust, Shares of the Trust (in proper form for transfer and accompanied by all requisite stock transfer tax stamps or cash in lieu thereof) owned by such holder for at least six months (and, in the case of Shares acquired upon the exercise of Incentive Options, for the holding periods required under Section 424 of the Code) and having a fair market value equal to the cash exercise price applicable to that portion of the Option being exercised by the delivery of such Shares, the fair market value of the Shares so delivered to be determined in accordance with this Article VI or as may be required in order to comply with or to conform to the requirements of any applicable laws or regulations; or (ii) through the written election of the optionee to have Shares withheld from the Shares otherwise to be received upon the exercise of an Option and having a fair market value equal to the cash exercise price applicable to -5- the portion of the Option being exercised by the withholding of such Shares, the fair market value of the Shares so withheld to be determined in accordance with this Article VI or as may be required in order to comply with or to conform to the requirements of any applicable laws or regulations. Notwithstanding the foregoing, subject to the provisions of Part 207 of Title 12, Code of Federal Regulations, as from time to time in effect (herein called "Regulation G"), the Committee, in its sole and absolute discretion, (i) may, generally or in specific instances, authorize the extension and maintenance of credit by the Trust, or (ii) may arrange for the extension or maintenance of credit by any person upon the same terms and conditions as those upon which the Trust (under the provisions of Regulation G) may extend or maintain such credit to participants under the Plan for the purpose of financing the exercise of Options granted to such participants under the Plan. Interest shall be charged on any such extension of credit at a rate not less than that promulgated under the applicable Federal rate (as defined in Section 1274(d) of the Code) for the month in which such credit is extended. VII. USE OF PROCEEDS The cash proceeds from the sale of Shares subject to the Options granted hereunder are to be added to the general funds of the Trust and used for its general purposes as the Board of Trustees shall determine. VIII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE Except as otherwise provided below, a holder of an Option may exercise such Option with respect to one hundred percent (100%) of the aggregate number of Shares, or any portion thereof, subject to the Option. Subject to the provisions of Articles IV and V, any Option granted hereunder shall be exercisable during a period of not more than ten (10) years from the date of grant of such Option. To the extent that an Option is not exercised within the period of exercisability specified therein, it shall expire as to the then unexercised part. If any Option granted hereunder shall terminate prior to the Termination Date, the Committee shall have the right to use the Shares as to which such Option shall not have been exercised to grant one or more additional Options to any eligible employee (in which case, such new Option may be either Incentive or Nonqualified, as determined by the Committee), but any such grant of an additional Option shall be made prior to the close of business on the Termination Date. In no event shall an Option granted hereunder be exercised for a fraction of a share. -6- IX. EXERCISE OF OPTIONS Options granted under the Plan shall be exercised by the optionee as to all or part of the Shares covered thereby by the giving of written notice of the exercise thereof to the Secretary of the Trust at the principal business office of the Trust, specifying the number of Shares to be purchased and accompanied by payment of the purchase price. Such payments may consist, in whole or in part, of the proceeds of loans made or guaranteed by the Trust to finance the acquisition of the Shares pursuant to Article VI hereof. X. STOCK APPRECIATION RIGHTS Rights may be granted to key employees in connection with the grant of Options upon such terms and conditions as the Committee may prescribe. Rights may be granted only in connection with the grant of an Option under the Plan and only with respect to fifty percent of the Shares related to Options. Each Right shall contain a provision that it shall become non-exercisable and shall be forfeited to the extent that the related Option is exercised or terminates for any reason other than the exercise of the Right. The exercise of Rights in lieu of the exercise of related Options shall entitle the optionee to receive Common Shares having a fair market value equal to, but in no event in excess of, the appreciation since the date of grant in the fair market value of the Common Shares subject to such related Option (the "Differential"). The Differential shall be payable only in Common Shares. Rights shall be exercisable and be payable in the following manner: 1. A Right shall be exercisable by the optionee at any time the Option to which it relates could be exercised, but only upon a showing of "hardship" by the optionee and upon consent of the Committee; provided, however, that there shall be no hardship requirement in the event of a Hostile Change in Control (as hereinafter defined). The Committee shall promulgate a standard for determining a "hardship," said standard to be applied uniformly to all optionees under the Plan. An optionee wishing to exercise shall give written notice of such exercise to the Trust addressed to the Trust's Secretary. Upon the exercise of a Right, the optionee shall only be entitled to receive Common Shares of the Trust. The Committee, upon receipt of such notice, shall, without transfer or issue tax to the optionee or other person entitled to exercise the Right, deliver to the person exercising such Right a certificate or certificates for the Trust's Common Shares which are issuable upon exercise of the Right. The date the Trust receives the written notice of exercise hereunder is referred to herein as the exercise date. If there is any adjustment to an Option pursuant to Section XIII, that adjustment shall be reflected in the tandem Right. -7- Notwithstanding the foregoing, and except in the event of a Hostile Change in Control, Rights may be exercised only if prior to the exercise thereof, or, simultaneously with the exercise thereof, the optionee or his successor, has exercised or exercises an equivalent number of Options granted pursuant to this Plan (whether related or unrelated to the Right). After a Hostile Change of Control, an optionee may exercise all Options in full as Rights, without limitation. Example: To illustrate the impact of the grant and exercise of Rights by optionees, it is assumed that: (a) An optionee was granted an Option under the Plan to purchase 100 Shares at an exercise price of $20 per share; (b) The optionee was granted Rights in tandem with the Option giving the optionee the right to exercise up to 50 Rights (one-half of the 100 Shares subject to the Option) in the event of hardship; (c) The optionee has not received any other Options; (d) The Shares have appreciated in value to $50 per Share; and (e) The optionee qualifies under the hardship requirements and wishes to acquire the maximum number of Shares upon the exercise of his Rights. Under the Plan, the optionee must first partially exercise an Option granted under the Plan and purchase 50 Shares for the specified exercise price. (For purposes of this example, it is assumed that the optionee will first exercise 50 of the 100 Options granted at $20 per share for an out-of-pocket cost of $1,000.) After his or her exercise, the optionee may surrender his Option to purchase an additional 50 Shares and may exercise Rights. Upon exercise of Rights, the optionee will be entitled to receive Shares having a value equal to $1,500, i.e., the excess of the aggregate fair market value of 50 Shares (50 Shares X $50=$2,500) over the aggregate exercise price (50 Shares X $20 = $1,000). Since the fair market value of the Shares is $50, 30 Shares would be issued to the optionee upon the exercise of his Rights ($1,500 divided by $50=30 Shares). In summary, if the optionee wishes to exercise the maximum number of Rights, the optionee will be required to purchase 50 Shares at an aggregate cost of $1,000 and surrender the balance of his Option to purchase 50 Shares. In such circumstances, the optionee will receive 30 Shares upon exercise of his Rights. -8- A "Hostile Change in Control" means a transaction, event or election constituting a "Change in Control" (as hereinafter defined) which was not approved by, or in an election, the Trustees elected were not nominated or elected by, at least two-thirds of the members of the Board of Trustees of the Trust in office immediately prior to the Change in Control. A "Change in Control" of the Trust means and includes each and all of the following occurrences: (i) Any business combination, including but not limited to a merger of the Trust, which has been approved by the requisite vote of the shareholders; (ii) The acquisition by any person or "group" of persons (as defined under Section 13(d) of the Exchange Act), directly or indirectly, of twenty-five percent (25%) or more of the combined voting power of the outstanding shares of the Trust entitled to vote generally in the election of Trustees; (iii) Individuals who at the beginning of any period of three (3) consecutive years constitute the entire Board of Trustees of the Trust shall for any reason during such period cease to constitute a majority thereof; (iv) A change in control that would be required to be reported as such under the Exchange Act and/or the exercise by a person or group of "control" of the Trust within the meaning of Section 2(9) of the Investment Company Act of 1940, as amended; or (v) The Trust fails to qualify as a "REIT" under Internal Revenue Code Sections 856 et seq., by reason of five or fewer individuals owning more than 50% in value of the outstanding shares. If a Hostile Change in Control which would otherwise result in the abrogation of the hardship requirement and of the prior or simultaneous exercise of the Options requirement, will, in the nonreviewable judgment of the Committee, be deemed to constitute a "golden parachute" as same is defined under Section 280G of the Internal Revenue Code of 1986 ("Section 280G"), the Committee shall reduce the number of Shares which may otherwise be issued as a result of the exercise of the Right, to the extent necessary to avoid Section 280G treatment as a "golden parachute." Notwithstanding such an adjustment, however, the Trust makes no warranty as to the avoidance of Section 280G treatment. 2. The exercise of a Right shall automatically result in the surrender of the related Option by the optionee on a share for share basis to the extent Shares under such related Option are used to calculate the Differential. Shares issued pursuant to the -9- exercise of a Right shall not be available for granting further Options under the Plan. 3. The Committee may impose any other conditions it prescribes upon the exercise of a Right, which conditions may include a condition that the Right may only be exercised in accordance with rules and regulations adopted by the Committee from time to time. 4. Upon the exercise of a Right and surrender of the related Option right, the Trust shall issue to the person surrendering the related Option right an amount equivalent to the Differential, in the Trust's Common Shares as determined in accordance with this Article X. The shares to be issued upon the exercise of a Right may consist either in whole or in part of shares of the Trust's authorized but unissued Common Shares or the Trust's authorized and issued Common Shares held in its treasury. No fractional Common Shares shall be issued and the Committee shall determine whether cash shall be given in lieu of such fractional share or whether such fractional share shall be eliminated. Each Right and all rights and obligations thereunder shall expire on a date no later than the date of expiration of the underlying Option. A Right shall terminate and may no longer be exercised upon the termination of the related Option. XI. NONTRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS Neither an Incentive Option nor a related Right granted hereunder shall be transferable otherwise than by will, the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code, or Title I of the Employee Retirement Income Security Act of 1986, as amended, or the rules and regulations promulgated thereunder. Any Incentive Option or related Right granted hereunder shall be exercisable, during the lifetime of the holder, only by such holder or by such holder's guardian or legal representative. Nonqualified Options may be transferable only to the extent authorized by the Committee in respect of a particular grant. XII. TERMINATION OF EMPLOYMENT Upon termination of employment of any key employee with the Trust and all subsidiary corporations and any parent corporation of the Trust, any Option or Right previously granted to the key employee shall to the extent not theretofore exercised, terminate and become null and void, except that: (a) If the key employee shall die, or become totally and permanently disabled (as described in Section 105(d)(4) of the -10- Code), while in the employ of such corporation or Trust or at a time when such employee was entitled to exercise an Option or related Right as herein provided, in case of death, the legal representative of such employee, or such person who acquired such Option and/or related Right by bequest or inheritance or by reason of death of the key employee or in the case of total and permanent disability, the key employee may, not later than one (1) year from the date of death or total and permanent disability, exercise such Option or such related Right in respect of any or all of the total number of Shares as shall have been subject to such Option or Right; and (b) if the employment of any key employee to whom such Option or such related Right shall have been granted shall terminate by reason of such employee's retirement (at such age or upon such conditions as shall be specified by the Committee) or dismissal by the Trust other than for cause (as defined below), and while such employee is entitled to exercise such Option or such related Right as herein provided, such employee shall have the right to exercise such Option or Right so granted, to the extent of the number of Shares subject to such Option or Right which were purchasable by him at the date of termination of his employment, at any time up to and including three (3) months after the date of such termination of employment. Notwithstanding the foregoing, the optionee may exercise options granted hereunder at any time up to two years after his employment with the Trust ceases for any reason; however, if any option is exercised after the periods set forth in the preceding paragraph, or such longer periods for the valid exercise of an Incentive Option after termination as may be established under the Code, such option shall no longer be an Incentive Option but shall convert into a Non-qualified Option. In no event, however, shall any person be entitled to exercise any Option after the expiration of the period of exercisability of such Option as specified therein. If an Option or related Right granted hereunder shall be exercised by the legal representative of a deceased employee or former employee, or by a person who acquired an Option or Right hereunder by bequest or inheritance or by reason of the death of any employee or former employee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or by equivalent proof of the right of such legal representative or other person to exercise such Option or Right. For the purposes of the Plan, an employment relationship shall be deemed to exist between an individual and the Trust (or any parent or subsidiary corporation) if, at the time of the determination, the individual was an "employee" of the Trust (or -11- any parent or subsidiary corporation) for purposes of Section 422(a) of the Code. If an individual is on leave of absence taken with the consent of the corporation by which such individual was employed, or is on active military service, and is determined to be an "employee" for purposes of the exercise of an Option or Right, such individual shall not be entitled to exercise such Option or Right during such period and while the employment relationship is treated as continuing intact unless such individual shall have obtained the prior written consent of such corporation, which consent shall be signed by the Chairman of the Board, the President, an executive vice-president or other duly authorized officer of such corporation. A termination of employment shall not be deemed to occur by reason of (i) the transfer of a key employee from employment by the Trust to employment by a subsidiary corporation or a parent corporation of the Trust or (ii) the transfer of a key employee from employment by a subsidiary corporation or a parent corporation of the Trust to employment by the Trust or by another subsidiary or parent corporation of the Trust. XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS Notwithstanding any other provision contained herein, in the event of any change in the Shares subject to the Plan or to any Option or Right granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off, combination of shares, or exchange of shares) and with respect to other dilutive or anti-dilutive events appropriate adjustments shall be made by the Committee as to the maximum number of Shares subject to the Plan available for Incentive Options and related Rights or Nonqualified Options and related Rights, as the case may be, the maximum number of Shares for which Options or Rights may be granted to any one employee, and the number of Shares and price per Share subject to outstanding Options or Rights as shall be equitable to prevent dilution or enlargement of rights under Options or Rights, and the determination of the Committee as to these matters shall be conclusive; provided, however, that (i) any such adjustment with respect to an Incentive Option and any related Right shall comply with the rules of Section 424(a) of the Code, and (ii) in no event shall any adjustment be made which would render any Incentive Option granted hereunder other than an Incentive Option for purposes of Section 422 of the Code. XIV. RIGHT TO TERMINATE EMPLOYMENT OR TRUSTEESHIP The Plan shall not impose any obligation on the Trust or on any subsidiary corporation or parent corporation thereof to continue the employment or trusteeship or directorship of any holder of an Option or Right; nor shall it impose any obligation on the part of any holder of an Option or Right to remain in the -12- employ, or to remain a trustee or director, of the Trust or of any subsidiary corporation or parent corporation thereof. XV. PURCHASE FOR INVESTMENT; SECURITIES ACT REGISTRATION Except as hereafter provided, the holder of an Option or related Right granted hereunder shall, upon any exercise hereof, execute and deliver to the Trust a written statement, in form satisfactory to the Trust, in which such holder represents and warrants that such holder is purchasing or acquiring the Shares acquired thereunder for such holder's own account, for investment only and not with a view to the resale or distribution thereof, and agrees that any subsequent resale or distribution of any of such Shares shall be made only pursuant to either (a) a Registration Statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which Registration Statement has become effective and is current with regard to the Shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the holder shall, prior to any offer of sale or sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Trust, from counsel for or approved by the Trust, as to the application of such exemption thereto. The foregoing restriction shall not apply to (i) issuance by the Trust so long as the Shares being issued are registered under the Securities Act and a prospectus in respect thereof is current or (ii) reofferings of Shares by affiliates of the Trust (as defined in Rule 405 or any successor rule or regulation promulgated under the Securities Act) if the Shares being reoffered are registered under the Securities Act and a prospectus in respect thereof is current. XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES Upon any exercise of an Option or related Right which may be granted hereunder and, in the case of an Option, payment of the purchase price in accordance with Article VI hereof, a certificate or certificates for the Shares as to which the Option or related Right has been exercised shall be issued by the Trust in the name of the person exercising the Option or related Right and shall be delivered to or upon the order of such person or persons. The Trust may endorse such legend or legends upon the certificates of Shares issued upon exercise of an Option or Right granted hereunder, and the Committee may issue such "stop transfer" instructions to its transfer agent in respect of such Shares, as such Committee, in its discretion, determines to be necessary or appropriate to (i) prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act, (ii) implement the provisions of any agreement between the Trust and the optionee or grantee with respect to such Shares, or (iii) permit the Trust to determine the occurrence of a -13- disqualifying disposition, as described in Section 421(b) of the Code, of Shares transferred upon exercise of an Incentive Option granted under the Plan. The Trust shall pay all issue or transfer taxes with respect to the issuance or transfer of Shares, as well as all fees and expenses necessarily incurred by the Trust in connection with such issuance or transfer, except fees and expenses which may be necessitated by the filing or amending of a Registration Statement under the Securities Act, which fees and expenses shall be borne by the recipient of the Shares unless such Registration Statement has been filed by the Trust for its own corporate purposes (and the Trust so states) in which event the recipient of the Shares shall bear only such fees and expenses as are attributable solely to the inclusion of such Shares in the Registration Statement. All Shares issued as provided herein shall be fully paid and non-assessable to the extent permitted by law. XVII. WITHHOLDING TAXES The Trust may require a key employee exercising a Nonqualified Option or a related Right granted hereunder to reimburse the Trust which employs such employee for any taxes required by any government to be withheld or otherwise deducted and paid by such Trust or corporation in respect of the issuance of Shares. In lieu thereof, the Trust or corporation which employs such employee shall have the right to withhold the amount of such taxes from any other sums due or to become due from such Trust or corporation to the employee upon such terms and conditions as the Committee shall prescribe. XVIII. LISTING OF SHARES AND RELATED MATTERS If at any time the Board of Trustees shall determine in its discretion that the listing, registration or qualification of the Shares covered by the Plan upon any national securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares under the Plan, no Shares shall be delivered unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Board of Trustees. XIX. AMENDMENT OF THE PLAN The Board of Trustees or the Committee may, from time to time, amend the Plan; provided, however, that no amendment shall be made, without the approval of the shareholders of the Trust if such approval is required by the Code in respect of Incentive Options or -14- under Rule 16b-3 with respect to any Options granted pursuant to the Plan. Notwithstanding the foregoing, amendments by the Trustees or the Committee, to conform to or comply with changes in the Code or Rule 16b-3 may be adopted without shareholder approval (unless such approval is required by the Code). The rights and obligations under any Option or Right granted before amendment of the Plan or any unexercised portion of such Option or Right shall not be adversely affected by amendment of the Plan or the Option or Right without the consent of the holder of the Option or Right. XX. TERMINATION OR SUSPENSION OF THE PLAN The Board of Trustees may at any time suspend or terminate the Plan. The Plan, unless sooner terminated by action of the Board of Trustees, shall terminate at the close of business on the Termination Date. An Option or Right may not be granted while the Plan is suspended or after it is terminated. Rights and obligations under any Option or Right granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except upon the consent of the person to whom the Option or Right was granted. The power of the Committee to construe and administer any Options or Rights granted prior to the termination or suspension of the Plan under Article III shall nevertheless continue after such termination or during such suspension. XXI. GOVERNING LAW The Plan, such Options and Rights as may be granted thereunder and all related matters shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts, from time to time obtaining. XXII. EFFECTIVE DATE The Plan shall become effective at 5:00 P.M., Eastern time, on the Effective Date, the date on which the Plan is adopted and approved by the shareholders of the Trust. XXIII. EXCULPATION MGI Properties is a Massachusetts trust and all persons dealing with the Trust must look solely to the property of this Trust for the enforcement of any claims against the Trust. Neither the Trustees, officers, agents nor shareholders of this Trust assume any personal liability for obligations entered into on its behalf. -15- EX-99.4.3 4 A & R 1988 STOCK OPTION APPRECIATION RIGHTS PLAN MGI PROPERTIES AMENDED AND RESTATED 1988 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN The resolutions adopted on March 12, 1989 by the MGI Properties Board of Trustees, attached hereto as Exhibit A, are hereby incorporated by reference as if they were included herein, including the provision that this Amended and Restated Plan be deemed to be two separate plans administered as two separate and distinct plans, one for Trustees and one for key employees. I. PURPOSE The purpose of this Stock Option And Stock Appreciation Rights Plan (the "Plan") is to promote the interests of MGI PROPERTIES, formerly Mortgage Growth Investors (the "Trust") and its shareholders by providing a means by which competent officers, key employees and Trustees of the Trust or of any subsidiary corporation or parent corporation of the Trust now existing or hereafter formed or acquired who are responsible for the continued growth of the Trust, can acquire a proprietary interest in the Trust, and thus to create in such key employees and Trustees an increased interest in and a greater concern for the welfare of the Trust and its shareholders. The Plan has been amended and restated as of December 18, 1996 in order to align the Plan with recent changes to Rule 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"). The stock options ("Options") and stock appreciation rights ("Rights") offered pursuant to the Plan are a matter of separate inducement and are not in lieu of any salary or other compensation for the services of any key employee or Trustee. The Trust, by means of the Plan, seeks to retain the services of persons now holding key positions and to secure the services of persons capable of filling such positions. The Options granted under the Plan are intended to be either incentive stock options ("Incentive Options") within the meaning of Section 422 of the Internal Revenue Code of 1986, as it may from time to time be amended (the "Code") or options that do not meet the requirements for Incentive Options ("Nonqualified Options"), but the Trust makes no warranty as to the qualification of any Option as an Incentive Option. II. SHARES SUBJECT TO THE PLAN The total number of Common Shares of the Trust which either may be purchased pursuant to the exercise of Options granted under the Plan or acquired pursuant to the exercise of Rights granted under the Plan shall not exceed, in the aggregate, 450,000 shares as of the effective date (the "Shares"), 300,000 of which Shares may be issued pursuant to Incentive Options and/or to Nonqualified Options or Rights granted in tandem therewith to key employees (to the extent hereinafter provided) and 150,000 of which may be issued pursuant to Nonqualified Options to Trustees. The term "Shares" shall include any securities, cash or other property into which Shares may be changed through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, issuance of rights to subscribe or change in capital structure. Shares which may be acquired under the Plan may be either authorized but unissued Shares, Shares held in the Trust's treasury, or both, at the discretion of the Trust. If and to the extent that Options granted under the Plan expire or terminate without having been exercised, Shares subject to such expired or terminated Options and related Rights shall be available for new grants of Options and related Rights under the Plan, provided that the grant and the terms of such new Options and related Rights shall in all respects comply with the provisions of the Plan. Notwithstanding the above, however, the expiration or termination of Options and related Rights (which Rights may be granted to employees only) shall not increase the reserve of 300,000 shares for grants to employees or the reserve of 150,000 Shares for grants to Trustees. Except as provided in Article XXII, the Trust may, from time to time during the period beginning March 17, 1988 (the "Effective Date") and ending March 16, 1998 (the "Termination Date"), grant to key employees or Trustees, or of any subsidiary corporation or parent corporation of the Trust now existing or hereafter formed or acquired, Options or, for employees only, both Options and related Rights, under the terms hereinafter set forth. As used in the Plan, the terms "subsidiary corporation" and "parent corporation" shall mean, respectively, a corporation coming within the definition of such terms contained in Sections 424(f) and 424(e) of the Code. III. ADMINISTRATION The Board of Trustees of the Trust (the "Board of Trustees") shall designate two committees, one for the administration of matters relating to Options to be granted to key employees ("Employees' Committee"), whether Incentive or Nonqualified Options -2- or both and related Rights, and the other committee for the administration of matters relating to Options to be granted to Trustees (the "Trustees' Committee"), which Options may only be Nonqualified Options. Each Committee shall consist of no fewer than three Trustees. Each member of the Employees' Committee shall be a "non-employee director" within the meaning of Rule 16b-3 (or any successor rule or regulation) ("Rule 16b-3") promulgated under the the Exchange Act. A majority of the members of the governing Committee shall constitute a quorum, and the act of a majority of the members of the governing Committee shall be the act of such Committee. Any member of either Committee may be removed at any time either with or without cause by resolution adopted by the Board of Trustees, and any vacancy on either Committee may at any time be filled by resolution adopted by the Board of Trustees. Subject to the express provisions of the Plan, each Committee shall have authority, in its discretion, to determine the employees to whom Options and Rights shall be granted and the Trustees to whom Options shall be granted, the number of Shares which shall be subject to each Option or Right, the purchase price of each Share which shall be subject to each Option or Right, the period(s) during which such Options or Rights shall be exercisable (whether in whole or in part), and the other terms and provisions thereof. In determining the employees to whom Options and Rights shall be granted and the Trustees to whom Options shall be granted and the number of Shares for which Options or Rights shall be granted to each employee or Trustee, as the case may be, each Committee shall consider the length of service, the amount of earnings, and the responsibilities and duties of such employee or Trustee, as the case may be; provided, however, that no employee shall be granted Incentive Options in any calendar year to purchase shares of stock in the Trust or in any subsidiary corporation or parent corporation of the Trust which exceed the maximum allotment prescribed in Article V. Subject to the express provisions of the Plan, each Committee also shall have authority to construe the Plan and Options and Rights (in the case of the Employees' Committee) granted thereunder, to amend the Plan and Options and Rights granted thereunder, to prescribe, amend and rescind rules and regulations relating to the Plan, to determine the terms and provisions of the respective Options (which need not be identical) and Rights (which need not be identical) and to make all other determinations necessary or advisable for administering the Plan. Each Committee also shall have the authority to require, in its discretion, that the employee or Trustee, as the case may be, agree, at the time of the grant of an Option and for employees only, of a related Right, not to sell or otherwise dispose of Shares acquired pursuant to the exercise of an Option or Right, as the case may be, granted under the Plan for a period of six (6) months following the date of acquisition. -3- The determination of the governing Committee on matters referred to in this Article III shall be conclusive. Any or all powers and functions of either Committee may at any time and from time to time be exercised by the full Board of Trustees or a committee of the Board of Trustees composed solely of two or more persons that, at the time of such exercise, are "non-employee directors" within the meaning of Rule 16b-3. Each Committee may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by the Board of Trustees or by either Committee in the engagement of such counsel, consultant or agent shall be paid by the Trust. No member or former member of either Committee or of the Board of Trustees shall be liable for any action or determination made in good faith with respect to the Plan or any Option or related Right granted hereunder. IV. ELIGIBILITY Incentive Options and related Rights may be granted only to salaried key employees of the Trust or of any subsidiary corporation or parent corporation of the Trust, except members of the Employees' Committee and except as hereinafter provided, and shall not be granted to any officer or Trustee who is not also a salaried key employee. Any person who shall have retired from active employment by the Trust, although such person shall have entered into a consulting contract with the Trust, shall not be eligible to receive a grant of an Incentive Option or related Right. Nonqualified Options and related Rights, may be granted to salaried key employees of the Trust or of any subsidiary corporation or parent corporation of the Trust by the Employees' Committee (provided none may be granted to members of the Employees' Committee and except as hereinafter provided). Nonqualified Options may be granted by the Trustees' Committee to Trustees who are and are not also salaried key employees of the Trust, of any subsidiary corporation or parent corporation of the Trust. Grants of Nonqualified Options by the Trustees' Committee, however, may be made only during the calendar months of December, March, June and September and no grant shall entitle the Trustee (in his capacity as such) to purchase in excess of 25,000 Shares (subject to adjustment pursuant to Article XIII hereunder) pursuant to a Nonqualified Option. Any person who was a Trustee but is no longer a Trustee of the Trust, shall not thereafter be eligible to receive a grant of a Nonqualified Option by reason of his former status as a Trustee. -4- An Option shall not be granted to any person who, at the time such Option is granted, owns Shares of the Trust or any subsidiary corporation or parent corporation of the Trust which possess more than ten percent (10%) of the total combined voting power of all classes of shares of the Trust or of any subsidiary corporation or parent corporation of the Trust, unless (i) the exercise price per share is not less than one hundred ten percent (110%) of the fair market value per share on the date such Option is granted and (ii) such Option by its terms is not exercisable after the expiration of five (5) years from the date such Option is granted. In determining share ownership of any such person the rules of Section 424(d) of the Code shall be applied, and either Committee may rely on representations of fact made to it by the employee or Trustee, as the case may be, and believed by it to be true. V. MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS The aggregate fair market value (determined at the time the Incentive Option is granted) of the stock with respect to which Incentive Options are exercisable for the first time by such optionee during any calendar year (under all such plans of the optionee's employer corporation and its parent and subsidiary corporations) shall not exceed $100,000. VI. OPTION PRICE AND PAYMENT The price for each Share purchasable under any Option granted hereunder shall be such amount as the governing Committee shall, in its best judgment, determine; provided, however, that, the price of any Option shall not be less than one hundred percent (100%) of the fair market value per Share at the date the Option is granted; and, provided further, however, that in the case of an Option granted to a person who at the time such Option is granted, owns shares of the Trust or any subsidiary corporation or parent corporation which possess more than ten percent (10%) of the total combined voting power of all classes of shares of the Trust or of any subsidiary corporation or parent corporation of the Trust, the purchase price for each share shall be such amount as the Employees' Committee or Trustees' Committee, as the case may be, in its best judgment, shall determine to be not less than one hundred and ten percent (110%) of the fair market value per share at the date the Option is granted. If the Shares are listed on a national securities exchange in the United States on the date any Option is granted, the fair market value per Share shall be deemed to be the closing quotation at which the Shares are sold on such national securities exchange on the date such Option is granted. If the Shares are listed on a national securities exchange in the United States on such date but the Shares are not traded on such date, or such national securities exchange is not open for business on such date, the fair market value per Share shall be determined as of the closest preceding -5- date on which such exchange shall have been open for business and the Shares were traded. If the Shares are listed on more than one national securities exchange in the United States on the date any such Option is granted, the governing Committee shall determine which national securities exchange shall be used for the purpose of determining the fair market value per share. If at the date any Option is granted a public market exists for the Shares but the Shares are not listed on a national securities exchange in the United States, the fair market value per Share shall be deemed to be the mean between the closing bid and asked quotations in the over-the-counter market for the Shares in the United States on the date such Option is granted. If there are no bid and asked quotations for the Shares on such date, the fair market value per Share shall be deemed to be the mean between the closing bid and asked quotations in the over-the-counter market in the United States for the Shares on the closest date, preceding the date such Option is granted, for which such quotations are available. The Trust shall cause such stock certificates to be issued only when it shall have received the full purchase price for the Shares in cash, certified check or bank draft, provided, however, that in lieu of cash, certified check or bank draft, the holder of an Option may exercise his Option, in whole or in part, by delivering to the Trust, Shares of the Trust (in proper form for transfer and accompanied by all requisite stock transfer tax stamps or cash in lieu thereof) owned by such holder for at least six months and having a fair market value equal to the cash exercise price applicable to that portion of the Option being exercised by the delivery of such Shares, the fair market value of the Shares so delivered to be determined as of the date immediately preceding the date on which the Option is exercised, or as may be required in order to comply with or to conform to the requirements of any applicable laws or regulations. VII. USE OF PROCEEDS The cash proceeds of the sale of Shares subject to the Options granted hereunder are to be added to the general funds of the Trust and used for its general purposes as the Board of Trustees shall determine. VIII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE Except as otherwise provided below, a holder of an Option may exercise such Option with respect to one hundred percent (100%) of the aggregate number of Shares, or any portion thereof, subject to the Option. -6- Subject to the provisions of Articles IV and V any Option granted hereunder shall be exercisable during a period of not more than ten (10) years from the date of grant of such Option. To the extent that an Option is not exercised within the period of exercisability specified therein, it shall expire as to the then unexercised part. If any Option granted hereunder shall terminate prior to the Termination Date, the Employees' Committee or the Trustees' Committee, as the case may be, shall have the right to use the Shares as to which such Option shall not have been exercised to grant one or more additional Options to any eligible employee (in which case, such new Option may be either Incentive or Nonqualified, as determined by the Employees' Committee) or Trustee (in which case, such new Option may only be a Nonqualified Option), as the case may be, but any such grant of an additional Option shall be made prior to the close of business on the Termination Date. In no event shall an Option granted hereunder be exercised for a fraction of a share. IX. EXERCISE OF OPTIONS Options granted under the Plan shall be exercised by the optionee as to all or part of the Shares covered thereby by the giving of written notice of the exercise thereof to the Secretary of the Trust at the principal business office of the Trust, specifying the number of Shares to be purchased and accompanied by payment of the purchase price. In the case of Nonqualified Options, however, such written notice may be delivered only within the thirty-day period commencing the first day following the filing by the Trust of its annual or periodic reports on Form 10-K or 10-Q, as the case may be, with the Securities and Exchange Commission. X. STOCK APPRECIATION RIGHTS Rights may be granted to key employees in connection with the grant of Options upon such terms and conditions as the Employees' Committee may prescribe. Rights may be granted only in connection with the grant of an Option under the Plan and only with respect to up to fifty percent of the Shares related to Options. Each Right shall contain a provision that it shall become non-exercisable and shall be forfeited to the extent that the related Option is exercised or terminates for any reason other than the exercise of the Right. The exercise of Rights in lieu of the exercise of related Options shall entitle the Optionee to receive Common Shares having a fair market value equal to, but in no event in excess of, the appreciation since the date of grant in the fair market value of the Common Shares subject to such related Option (the "Differential"). The Differential shall be payable only in Common Shares. -7- Rights shall be exercisable and be payable in the following manner: 1. A Right shall be exercisable by the optionee at any time the Option to which it relates could be exercised, but only upon a showing of "hardship" by the optionee and upon consent of the Employees' Committee; provided, however, that there shall be no hardship requirement in the event of a Hostile Change in Control (as hereinafter defined). The Employees' Committee shall promulgate a standard for determining a "hardship," said standard to be applied uniformly to all optionees under the Plan. An optionee wishing to exercise shall give written notice of such exercise to the Trust addressed to the Trust's Secretary. Upon the exercise of a Right, the optionee shall only be entitled to receive Common Shares of the Trust. The Employees' Committee, upon receipt of such notice, shall, without transfer or issue tax to the optionee or other person entitled to exercise the Right, deliver to the person exercising such Right a certificate or certificates for the Trust's Common Shares which are issuable upon exercise of the Right. The date the Trust receives the written notice of exercise hereunder is referred to herein as the exercise date. If there is any adjustment to an Option pursuant to Section XIII, that adjustment shall be reflected in the tandem Right. Notwithstanding the foregoing, and except in the event of a Hostile Change in Control, Rights may be exercised only if prior to the exercise thereof, or, simultaneously with the exercise thereof, the optionee or his successor, has exercised or exercises an equivalent number of Options granted pursuant to this Plan (whether related or unrelated to the Right). After a Hostile Change in Control an Employee-Optionee may exercise all Options in full as Rights, without limitation. Example: To illustrate the impact of the grant and exercise of Rights by Employee-Optionees, it is assumed that: (i) An Optionee was granted an Option under the Plan to purchase 100 Shares at an exercise price of $20 per share; (ii) The Optionee was granted Rights in tandem with the Option giving the Optionee the right to exercise up to 50 Rights (one-half of the 100 Shares subject to the Option) in the event of hardship; (iii) The Optionee has not received any other Options; (iv) The Shares have appreciated in value to $50 per Share; and -8- (v) The Optionee qualifies under the hardship requirements and wishes to acquire the maximum number of Shares upon the exercise of his Rights. Under the Plan, the Optionee must first partially exercise an Option granted under the Plan and purchase 50 Shares for the specified exercise price. (For purposes of this example, it is assumed that the Optionee will first exercise 50 of the 100 Options granted at $20 per share for an out-of-pocket cost of $1,000.) After his exercise, the Optionee may surrender his Option to purchase an additional 50 Shares and may exercise Rights. Upon exercise of Rights, the Optionee will be entitled to receive Shares having a value equal to $1,500, i.e., the excess of the aggregate fair market value of 50 Shares (50 Shares x $50 = $2,500) over the aggregate exercise price (50 Shares x $20 = $1,000). Since the fair market value of the Shares is $50, 30 Shares would be issued to the Optionee upon the exercise of his Rights ($1,500 divided by $50=30 Shares). In summary, if the Optionee wishes to exercise the maximum number of Rights, the optionee will be required to purchase 50 Shares at an aggregate cost of $1,000 and surrender the balance of his Option to purchase 50 Shares. In such circumstances, the Optionee will receive 30 Shares upon exercise of his Rights. A "Hostile Change in Control" means a transaction, event or election constituting a "Change in Control" (as hereinafter defined) which was not approved by, or in an election, the Trustees elected were not nominated or elected by, at least two-thirds of the members of the Board of Trustees of the Trust in office immediately prior to the Change in Control. A "Change in Control" of the Trust means and includes each and all of the following occurrences: (i) Any business combination, including but not limited to a merger of the Trust, which has been approved by the requisite vote of the shareholders; (ii) The acquisition by any person or "group" of persons (as defined under Regulation 13(d) of the Securities Exchange Act of 1934), directly or indirectly, of twenty-five percent (25%) or more of the combined voting power of the outstanding shares of the Trust entitled to vote generally in the election of Trustees; (iii) Individuals who at the beginning of any period of three (3) consecutive years constitute the entire Board of Trustees of the Trust shall for any reason during such period cease to constitute a majority thereof; -9- (iv) A change in control that would be required to be reported as such under the Securities Exchange Act of 1934 and/or the regulations promulgated thereunder or the exercise by a person or group of "control" of the Trust within the meaning of Section 2(9) of the Investment Company Act of 1940, as amended; (v) The Trust fails to qualify as a "REIT" under Internal Revenue Code Sections 856, et seq., by reason of five or fewer individuals owning more than 50% in value of the outstanding shares. If a Hostile Change in Control which would otherwise result in the abrogation of the hardship requirement and of the prior or simultaneous exercise of Options requirement, will, in the nonreviewable judgment of the Employees' Committee, be deemed to constitute a "golden parachute" as same is defined by Section 280G of the Internal Revenue Code of 1986 ("Section 280G"), the Employees' Committee shall reduce the number of Shares which may otherwise be issued as a result of the exercise of the Right, to the extent necessary to avoid Section 280G treatment as a "golden parachute." Notwithstanding such an adjustment, however, the Trust makes no warranty as to the avoidance of Section 280G treatment. 2. The exercise of a Right shall automatically result in the surrender of the related Option by the optionee on a share for share basis to the extent shares under such related Option are used to calculate the Differential. Shares issued pursuant to the exercise of a Right shall not be available for granting further Options under this Plan. 3. The Employees' Committee may impose any other conditions it prescribes upon the exercise of a Right, which conditions may include a condition that the Right may only be exercised in accordance with rules and regulations adopted by the Employees' Committee from time to time. 4. Upon the exercise of a Right and surrender of the related Option right, the Trust shall issue to the person surrendering the related Option right an amount equivalent to the Differential, in the Trust's Common Shares as determined in accordance with this Article X. The shares to be issued upon the exercise of a Right may consist either in whole or in part of shares of the Trust's authorized but unissued Common Shares or the Trust's authorized and issued Common Shares held in its treasury. No fractional Common Share shall be issued and the Employees' Committee shall determine whether cash shall be given in lieu of such fractional share or whether such fractional share shall be eliminated. Each Right and all rights and obligations thereunder shall expire on a date no later than the date of expiration of the underlying Option. -10- A Right shall terminate and may no longer be exercised upon the termination of the related Option, other than as a consequence of the exercise of the Right. XI. NONTRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS Neither an Incentive Option nor a related Right granted hereunder shall be transferable otherwise than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code, or Title I of the Employee Retirement Income Security Act of 1986, as amended, or the rules and regulations promulgated thereunder. Any Incentive Option or related Right granted hereunder shall be exercisable, during the lifetime of the holder, only by such holder or by such holder's guardian or legal representative. Nonqualified Options may be transferable only to the extent authorized by the Committee in respect of a particular grant. XII. TERMINATION OF EMPLOYMENT OR OF TRUSTEESHIP Upon termination of employment of any employee or upon termination of trusteeship of any Trustee with the Trust and all subsidiary corporations and any parent corporation of the Trust, any Option or Right previously granted to the employee or any Option previously granted to the Trustee shall, to the extent not theretofore exercised, terminate and become null and void, except that (a) If the employee or Trustee shall die, or become totally and permanently disabled (as described in Section 105(d)(4) of the Code), while in the employ of or while acting as a Trustee of such corporation or Trust or at a time when such employee or Trustee was entitled to exercise an Option or related Right as herein provided, in case of death, the legal representative of such employee, Trustee or such person who acquired such Option and/or related Right by bequest or inheritance or by reason of death of the employee or Trustee or in the case of total and permanent disability the employee or Trustee may, not later than one (1) year from the date of death or total and permanent disability, exercise such Option or, in the case of an employee, such related Right in respect of any or all of the total number of Shares as shall have been subject to such Option or Right; and (b) if the employment of any employee or if the trusteeship of any Trustee to whom such Option or, in the case of an employee, such related Right shall have been granted shall terminate by reason of the employee's or Trustee's retirement (at such age or upon such conditions as shall be specified by the Employees' Committee or by the Trustees' Committee, as the case may be) or dismissal by the Trust other -11- than for cause (as defined below), and while such employee or Trustee is entitled to exercise such Option or, in the case of an employee, such related Right as herein provided, such employee or Trustee shall have the right to exercise such Option or Right so granted, to the extent of the number of Shares subject to such Option or Right which were purchasable by him at the date of termination of his employment or trusteeship, at any time up to and including three (3) months after the date of such termination of employment or trusteeship. In no event, however, shall any person be entitled to exercise any Option or related Right after the expiration of the period of exercisability of such Option or related Right as specified therein. If any employee voluntarily terminates his employment, or is discharged for cause, or, if any Trustee voluntarily terminates his trusteeship, or is relieved as a Trustee for cause, any Option or related Right granted hereunder shall, unless otherwise specified by the governing Committee in the Option or related Right, forthwith terminate with respect to any unexercised portion thereof; provided, however, that in the event of a Hostile Change in Control (as defined in Article X hereinabove), only an employee's termination for "just cause" (as then defined in the Trust's "Plan For Severance Compensation After Hostile Takeover," which definition is incorporated by reference herein) will terminate an employee's Option and related Right (if any) granted hereunder. If an Option or a related Right granted hereunder shall be exercised by the legal representative of a deceased employee or former employee, Trustee or former Trustee, or by a person who acquired an Option or Right granted hereunder by bequest or inheritance or by reason of the death of any employee or former employee, Trustee or former Trustee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or by equivalent proof of the right of such legal representative or other person to exercise such Option or Right. For the purpose of the Plan, "for cause" shall mean, as determined by the governing Committee or by the Board of Trustees, in its sole discretion, (a) the willful commission by an employee or Trustee of an act that causes or may cause substantial damage to the Trust or a subsidiary corporation or parent corporation of the Trust; (b) the commission by an employee or Trustee of an act of fraud in the performance of such employee's or Trustee's duties on behalf of the Trust or a subsidiary corporation or parent corporation of the Trust; or (c) conviction of the employee or Trustee for commission of a felony in connection with the performance of the duties of such employee or of such Trustee on -12- behalf of the Trust or a subsidiary corporation or parent corporation of the Trust. For the purposes of the Plan, an employment relationship shall be deemed to exist between an individual and the Trust (or any parent or subsidiary corporation) if, at the time of the determination, the individual was an "employee" of the Trust (or any parent or subsidiary corporation) for purposes of Section 422(a) of the Code. If an individual is on leave of absence taken with the consent of the corporation by which such individual was employed, or is on active military service, and is determined to be an "employee" for purposes of the exercise of an Option or Right, such individual shall not be entitled to exercise such Option or Right during such period and while the employment relationship is treated as continuing intact unless such individual shall have obtained the prior written consent of such corporation, which consent shall be signed by the Chairman of the Board, the President, a senior vice-president or other duly authorized officer of such corporation. A termination of employment or of trusteeship, as the case may be, shall not be deemed to occur by reason of (i) the transfer of an employee from employment by the Trust to employment by a subsidiary corporation or a parent corporation of the Trust or (ii) the transfer of an employee from employment by a subsidiary corporation or a parent corporation of the Trust to employment by the Trust or by another subsidiary corporation or parent corporation of the Trust, (iii) the transfer of a Trustee from the Board of Trustees of the Trust to the Board of Directors of a subsidiary corporation or parent corporation of the Trust or (iv) the transfer of a director from the Board of Directors of a subsidiary or parent corporation of the Trust to the Board of Trustees of the Trust. XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS Notwithstanding any other provision contained herein, in the event of any change in the Shares subject to the Plan or to any Option or Right granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off, combination of shares, or exchange of shares) appropriate adjustments shall be made, and with respect to other dilutive or anti-dilutive events appropriate adjustments shall be made by the governing Committee as to the maximum number of Shares subject to the Plan available for Incentive Options and related Rights or available for Nonqualified Options and related Rights, as the case may be, the maximum number of Shares for which Options or Rights may be granted to any one employee or Trustee, and the number of Shares and price per Share subject to outstanding Options or Rights as shall be equitable to prevent dilution or enlargement of rights under Options or Rights, and the determination of the governing Committee as to these -13- matters shall be conclusive; provided, however, that (i) any such adjustment with respect to an Incentive Option and any related Right shall comply with the rules of Section 424(a) of the Code, and (ii) in no event shall any adjustment be made which would render any Incentive Option granted hereunder other than an Incentive Option for purposes of Section 422 of the Code. XIV. RIGHT TO TERMINATE EMPLOYMENT OR TRUSTEESHIP The Plan shall not impose any obligation on the Trust or on any subsidiary corporation or parent corporation thereof to continue the employment or trusteeship of any holder of an Option or Right; nor shall it impose any obligation on the part of any holder of an Option or Right to remain in the employ of the Trust or to remain as a Trustee of the Trust or of any subsidiary corporation or parent corporation thereof. XV. PURCHASE FOR INVESTMENT; SECURITIES ACT REGISTRATION Except as hereafter provided, the holder of an Option or related Right granted hereunder shall, upon any exercise hereof, execute and deliver to the Trust a written statement, in form satisfactory to the Trust, in which such holder represents and warrants that such holder is purchasing or acquiring the Shares acquired thereunder for such holder's own account, for investment only and not with a view to the resale or distribution thereof, and agrees that any subsequent resale or distribution of any of such Shares shall be made only pursuant to either (a) a Registration Statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which Registration Statement has become effective and is current with regard to the Shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the holder shall, prior to any offer of sale or sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Trust, from counsel for or approved by the Trust, as to the application of such exemption thereto. The foregoing restriction shall not apply to (i) issuance by the Trust so long as the Shares being issued are registered under the Securities Act and a prospectus in respect thereof is current or (ii) reofferings of Shares by affiliates of the Trust (as defined in Rule 405 or any successor rule or regulation promulgated under the Securities Act) if the Shares being reoffered are registered under the Securities Act and a prospectus in respect thereof is current. XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES Upon any exercise of an Option or related Right which may be granted hereunder and, in the case of an Option, payment of the purchase price, a certificate or certificates for the Shares as to which the Option or related Right has been exercised shall be -14- issued by the Trust in the name of the person exercising the Option or related Right and shall be delivered to or upon the order of such person or persons. The Trust may endorse such legend or legends upon the certificates of Shares issued upon exercise of an Option or Right granted hereunder, and the governing Committee may issue such "stop transfer" instructions to its transfer agent in respect of such Shares, as such Committee, in its discretion, determines to be necessary or appropriate to (i) prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act, (ii) implement the provisions of any agreement between the Trust and the optionee or grantee with respect to such Shares, or (iii) permit the Trust to determine the occurrence of a disqualifying disposition, as described in Section 421(b) of the Code, of Shares transferred upon exercise of an Incentive Option granted under the Plan. The Trust shall pay all issue or transfer taxes with respect to the issuance or transfer of Shares, as well as all fees and expenses necessarily incurred by the Trust in connection with such issuance or transfer, except fees and expenses which may be necessitated by the filing or amending of a Registration Statement under the Securities Act, which fees and expenses shall be borne by the recipient of the Shares unless such Registration Statement has been filed by the Trust for its own corporate purposes (and the Trust so states) in which event the recipient of the shares shall bear only such fees and expenses as are attributable solely to the inclusion of such Shares in the Registration Statement. All Shares issued as provided herein shall be fully paid and non-assessable to the extent permitted by law. XVII. WITHHOLDING TAXES The Trust may require an employee or Trustee who is an employee exercising a Nonqualified Option or a related Right granted hereunder to reimburse the Trust which employs such employee or Trustee for any taxes required by any government to be withheld or otherwise deducted and paid by such Trust or corporation in respect of the issuance of Shares. In lieu thereof, the Trust or corporation which employs such employee shall have the right to withhold the amount of such taxes from any other sums due or to become due from such Trust or corporation to the employee or Trustee upon such terms and conditions as the Employees' Committee shall prescribe. XVIII. LISTING OF SHARES AND RELATED MATTERS If at any time the Board of Trustees shall determine in its discretion that the listing, registration or qualification of the Shares covered by the Plan upon any national securities -15- exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares under the Plan, no Shares shall be delivered unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Board of Trustees. XIX. AMENDMENT OF THE PLAN The Board of Trustees or the Committee may, from time to time, amend the Plan, provided that no amendment shall be made, without the approval of the shareholders of the Trust if such approval is required by the Code in respect of Incentive Options or under Rule 16b-3 with respect to any Options granted pursuant to the Plan. Notwithstanding the foregoing, amendments by the Trustees, to conform to or comply with changes in the Code or Rule 16b-3 may be adopted without shareholder approval (unless such approval is required by the Code). The rights and obligations under any Option or Right granted before amendment of the Plan or any unexercised portion of such Option or Right shall not be adversely affected by amendment of the Plan or the Option or Right without the consent of the holder of the Option or Right. XX. TERMINATION OR SUSPENSION OF THE PLAN The Board of Trustees may at any time suspend or terminate the Plan. The Plan, unless sooner terminated under Article XXII or by action of the Board of Trustees, shall terminate at the close of business on the Termination Date. An Option or Right may not be granted while the Plan is suspended or after it is terminated. Rights and obligations under any Option or Right granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except upon the consent of the person to whom the Option or Rights was granted. The power of the governing Committee to construe and administer any Options or Rights granted prior to the termination or suspension of the Plan under Article III shall nevertheless continue after such termination or during such suspension. XXI. GOVERNING LAW The Plan, such Options and Rights as may be granted thereunder and all related matters shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts, from time to time obtaining. -16- XXII. EFFECTIVE DATE The Plan shall become effective at 5:00 P.M., Eastern time, on the Effective Date, the date on which the Plan is adopted and approved by the Shareholders of the Trust. XXIII. EXCULPATION MGI PROPERTIES is a Massachusetts Trust and all persons dealing with the Trust must look solely to the property of this Trust for the enforcement of any claims against the Trust. Neither the Trustees, officers, agents nor shareholders of this Trust assume any personal liability for obligations entered into on its behalf. -17- EX-27 5 R14 FDS FOR 1996 SECOND QTR 10-Q
5 1,000 3-MOS NOV-30-1997 MAY-31-1997 8,601 000 3,796 000 000 8,662 383,158 (48,697) 355,520 5,729 112,336 13,601 000 000 206,755 355,520 15,376 15,574 000 9,037 000 000 2,273 4,264 000 4,264 000 000 000 4,264 .31 .31
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