Exhibit 10.1

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made the 2nd day of October,
2013, by and between Lauralee E. Martin, a resident of the State of Washington
(“Executive”), and HCP, Inc., a Maryland corporation, with its principal
executive office currently located at 3760 Kilroy Airport Way, Suite 300, Long
Beach, California 90806 (together with its subsidiaries, the “Company”).

 

 

 

WITNESSETH THAT:

 

WHEREAS, the Company desires to employ Executive as its Chief Executive Officer
and President, subject to the terms and conditions of this Agreement, to provide
services to the Company;

 

WHEREAS, it is the intent of the Board of Directors of the Company (the “Board”)
to consider compensation forfeited by Executive as a result of her employment
with the Company in determining the amount of compensation payable to Executive
pursuant to this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive hereby
agree as follows:

 

1.                                    Term.   The term of Executive’s employment
with the Company shall commence on October 2, 2013 (the “Effective Date”) and
shall continue until and including the third anniversary of the Effective Date
unless earlier terminated as provided herein (the “Term”).

 

2.                                    Employment; Duties.

 

(a)                               During the Term, Executive shall be employed
by the Company as its Chief Executive Officer and President.  Executive shall
report to the Board and at all times during the Term shall have powers and
duties commensurate with the positions of Chief Executive Officer and President
of a company the size and nature of the Company.

 

(b)                              Executive agrees to her employment as described
in this Paragraph 2 and agrees to devote substantially all of her working time
and efforts to the performance of her duties hereunder, except as otherwise
approved by the Board or as specifically otherwise provided in this Agreement. 
Executive shall be permitted to continue such outside positions as set forth in
Exhibit A.  Executive may also engage in religious, charitable or other
community activities as long as such activities do not materially interfere with
Executive’s performance of her duties to the Company under this Agreement. 
Other than as set forth in Exhibit A, Executive may not serve on other boards of
directors of for-profit companies without the consent of the Board.

 

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3.                                    Compensation.

 

(a)                               Base Salary.  The Company shall pay Executive
during the Term an annual salary of Eight Hundred Thousand dollars ($800,000)
(the “Base Salary”), payable in accordance with the Company’s normal business
practices for senior executives (including tax withholding), but in no event
less frequently than monthly.  Executive’s Base Salary shall be reviewed at
least annually by the Compensation Committee of the Board (the “Compensation
Committee”) and may be increased in its discretion (but not decreased).  After
any such increase in Base Salary, the term “Base Salary” shall refer to the
increased amount.

 

(b)                              Bonus.  Executive shall be eligible to receive
a cash bonus for each year (or portion thereof) during the Term (beginning with
calendar year 2013), provided that, except as otherwise provided herein,
Executive has remained employed by the Company as of the end of the applicable
year.  Executive’s target bonus opportunity for any particular year (“Target
Bonus”) shall equal Two Million Two Hundred Thousand dollars ($2,200,000).  The
amount of bonus payable to Executive for any particular year will be determined
by the Compensation Committee, in its sole discretion, taking into account the
performance of the Company and Executive for that particular year.  All such
bonuses shall be payable within 60 days after the end of the year to which such
bonus relates, provided, that the bonus payable in respect of the 2013 calendar
year shall be paid by December 31, 2013.  In determining Executive’s bonus in
respect of the 2013 calendar year, it is the intent of the Board that such bonus
will be based on the full calendar year to take into account the bonus Executive
forfeited from her previous employer as a result of her employment with the
Company.  In the event Executive’s employment terminates on or after the end of
the Term but prior to December 31, 2016, Executive shall be entitled to a pro
rata portion of the bonus in respect of the 2016 calendar year based on the
number of days employed during the 2016 calendar year.

 

(c)                               Initial Equity Awards.

 

(i)                                  As a material inducement to Executive’s
accepting employment with the Company and to take into account equity
compensation Executive forfeited from her previous employer as a result of her
employment with the Company, Executive shall be granted equity awards with an
aggregate fair value of Ten Million dollars ($10,000,000) as of the Effective
Date (the “Initial Equity Awards”).  Sixty percent (60%) of the Initial Equity
Award (the “Make-Whole Award”) shall be granted as of the Effective Date in the
form of a time-vested restricted stock award, which shall vest in full on or
prior to December 31, 2013, subject to continued employment of Executive other
than as stated herein.  In the event the Company terminates Executive’s
employment for Cause (as defined in Paragraph 8(b)(i)) or Executive terminates
her employment without Good Reason (as defined in Paragraph 8(b)(ii)) during the
Term, Executive shall be required to pay to the Company within thirty (30) days
following termination of employment, a payment equal to a pro rata portion of
the Make-Whole Award, payable in cash, shares of Common Stock that vested
pursuant to the Make-Whole Award or a combination of cash and shares.  The
payment shall be equal to the product of (i) the ratio, the numerator of which
is the number of days remaining in the Term following termination

 

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of employment and the denominator of which is the total number of days in the
Term and (ii) the aggregate fair market value of the Make-Whole Award as of the
vesting date.  Upon vesting of the Make-Whole Award, neither the shares of
Common Stock issued pursuant to the Make-Whole Award (net of taxes and
transaction costs) nor any interest or right therein or part thereof may be
sold, assigned, transferred, pledged or otherwise encumbered in any manner
(other than in satisfaction of payment of the pro rata portion of the Make-Whole
Award ) prior to the seventh anniversary of the vesting date (the “Retention
Period”); provided, that in event of Executive’s termination of employment
pursuant to Section 8(c) (other than by reason of Executive’s death or
Disability) the Retention Period shall be shortened to the later of (i) the
second anniversary of Executive’s termination of employment or (ii) the fifth
anniversary of the vesting date; provided further, in the event of Executive’s
termination of employment by reason of her death or Disability, the Retention
Period shall immediately lapse.

 

(ii)                              The remaining forty percent (40%) of the
Initial Equity Award shall be in such form as determined by the Compensation
Committee and will be subject to time-based and performance-based vesting,
provided that the Board and/or Compensation Committee shall consult with
Executive in establishing the performance goals in the first 120 days after the
Effective Date.

 

(iii)                          The terms and conditions of the Initial Equity
Awards shall be set forth in separate award agreements in a form or forms
prescribed by the Company consistent with this Agreement, to be entered into by
the Company and Executive, and which shall recite the grant of such equity
awards.

 

(d)                             Equity Compensation.  Executive shall be
eligible for annual equity awards during the Term in such forms and amounts
determined by the Compensation Committee in its discretion.  Such awards shall
be subject to time-based and performance-based vesting as determined by the
Compensation Committee.

 

4.                                    Benefits and Perquisites.

 

(a)                               Retirement and Welfare Benefits.  During the
Term, Executive shall be eligible to participate in all fringe benefits,
perquisites, and such other benefit plans and arrangements as are made available
generally to the Company’s senior executives.  The benefits described herein
shall be subject to the applicable terms of the applicable plans and shall be
governed in all respects in accordance with the terms of such plans as from time
to time in effect.  Notwithstanding anything to the contrary herein, during the
Term, Executive shall not be eligible to participate in or receive benefits
under any severance plan, program, policy, arrangement or agreement of the
Company other than this Agreement.  Nothing in this Paragraph 4, however, shall
require the Company to maintain any benefit plan or provide any type or level of
benefits to its current or former employees, including Executive.

 

(b)                              Paid Time Off.  During the Term, Executive
shall be entitled to accrue vacation (at a rate of not less than four (4) weeks
per full calendar year), in accordance with and subject to the Company’s
vacation policies applicable to its executives generally as such policies are in
effect from time to time.

 

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(c)                               Reimbursement of Expenses.  The Company shall
reimburse Executive for any and all expenses reasonably incurred by Executive
during the Term in performing Executive’s duties hereunder, including travel,
meals and accommodations, upon submission by Executive of vouchers or receipts
and in compliance with such rules and policies relating thereto as the Company
may from time to time adopt.  Executive shall also be entitled to reimbursement
of reasonable commuting expenses between Executive’s home in the State of
Washington and Executive’s place of employment. Executive agrees to promptly
submit and document any reimbursable expenses in accordance with the Company’s
expense reimbursement policies to facilitate the timely reimbursement of such
expenses.

 

5.                                    Indemnification.  To the full extent
permitted by law and subject to the Company’s Certificate of Incorporation and
Bylaws, and under terms and conditions no less favorable to Executive in any
regard than to any other officer or director of the Company, the Company shall
indemnify Executive with respect to any actions commenced against Executive in
her capacity as a director or officer or former director or officer of the
Company or any Affiliate for which she may serve in such capacity, and the
Company shall advance on a timely basis any expenses incurred in defending such
actions.  “Affiliate” means an affiliate of the Company (or other referenced
entity, as the case may be) as defined in Rule 12b-2 promulgated under Section
12 of the Securities Exchange Act of 1934, as amended.

 

6.                                    Company Authority/Policies.  Executive
agrees to observe and comply with the rules and regulations of the Company as
adopted by the Board respecting the performance of her duties and to carry out
and perform orders, directions and policies communicated to her from time to
time by the Board, to the extent consistent with Executive’s duties pursuant to
Paragraph 2 above.  Executive also agrees to comply with the Company’s stock
ownership guidelines in effect from time to time.

 

7.                                    Covenants.  Executive acknowledges that
during the period of her employment with the Company or any Affiliate, she shall
have access to the Company’s “Confidential Information” (as defined below) and
will meet and develop relationships with the Company’s potential and existing
suppliers, financing sources, clients, customers and employees.  Accordingly,
Executive agrees to the following provisions of this Paragraph 7 (in addition to
Executive’s confidentiality obligations to the Company and its subsidiaries
pursuant to the Company’s policies as in effect from time to time) and agrees
this Paragraph 7 shall survive the termination of this Agreement.

 

(a)                               Noncompetition.

 

(i)                                  Executive agrees that during the period of
her employment with the Company, and to the extent permitted by applicable law,
during the period Executive is to receive the Severance Amounts, Executive shall
not:  (A) directly or indirectly, engage in, manage, operate, control,
supervise, or participate in the

 

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management, operation, control or supervision of any business or entity which
competes with (any such action individually and in the aggregate, to “compete
with” or “competitive with”) the Company or any of its subsidiaries
(collectively, the “Company Group”) or serve as an employee, consultant or in
any other capacity for such business or entity; (B) have any ownership or
financial interest, directly, or indirectly, in any competitor including,
without limitation, as an individual, partner, shareholder (other than as a
shareholder of a publicly-owned corporation in which Executive owns less than
five percent (5%) of the outstanding shares of such corporation), officer,
director, employee, principal, agent or consultant, or (C) serve as a
representative of any business organization competitive with the Company; any or
all of which, without first obtaining written approval of the Board.  Executive
also agrees that as long as she is employed by the Company, she will not
undertake the planning or organization of any business activity competitive with
the Company Group.

 

(b)                              Solicitation of Employees, Etc.  Executive
agrees that during the period of her employment with the Company and for twelve
(12) months thereafter, Executive shall not, directly or indirectly, other than
in connection with carrying out her duties during the period of her employment
with the Company, solicit or induce any of the employees or consultants of the
Company Group (or individuals who served as employees or consultants of the
Company Group at any time during the preceding nine (9) month period):  (i) to
terminate their employment or relationship with the Company Group, and/or
(ii) to work for Executive or any competitor of the Company Group.

 

(c)                               Solicitation of Clients, Etc.  Executive
agrees that during the period of her employment with the Company and for twelve
(12) months thereafter, she will not use Confidential Information (as defined
below) to, directly or indirectly, solicit, take away, divert or attempt to
divert, the business or patronage of any clients or customers of the Company for
the purpose of providing services that materially compete with the products
provided by the Company at the time of Executive’s termination.  For purposes of
this Agreement, “products provided by the Company” includes not only products
and services which the Company then provides and/or markets or sells, but also
those which it is in the process of researching and/or developing, at the time
of Executive’s termination, and/or as to which, at the time of Executive’s
termination, the Company has a strategic business plan in place to research,
develop and/or market at some time in the future.  The restrictions on
soliciting or providing services to customers of the Company apply to:  (i) any
customer or customer contact of the Company with whom Executive has had any
business relations during her employment (whether before or after the Effective
Date) with the Company; and (ii) any customer or customer contact who was a
customer or customer contact of the Company on the date of Executive’s
termination from the Company or during the twelve-month period prior to such
termination, or who was a prospective customer or customer contact of the
Company with whom the Company had actually met, or had written or telephonic
communications, during said period(s).

 

(d)                             Disparaging Comments.  Executive agrees not to
make critical, negative or disparaging remarks about the Company or any of its
Affiliates, including, but not limited to, comments about any of its assets,
services, management, business or employment practices, and not to voluntarily
aid or voluntarily assist any person in any

 

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way with respect to any third party claims pursued against the Company Group. 
Nothing in this Paragraph 7(d) will prevent Executive or the Company from
responding fully and accurately to any question, inquiry or request for
information when required by applicable law or legal process.

 

(e)                               Confidentiality.  The Company and Executive
acknowledge that:

 

(i)                                  The Company’s business is highly
competitive;

 

(ii)                              The essence of that portion of the Company’s
business in which Executive will be involved consists, in large degree, of trade
secrets, proprietary or confidential business or financial affairs information,
materials, know-how (whether or not in writing), technology, product
information, personnel information regarding its employees, and intellectual
property belonging to the Company and confidential and proprietary business and
client relationships (all of the foregoing will be referred to collectively as
“Trade Secrets”), which have been developed at great investment of time and
resources by the Company Group so as to engender substantial goodwill of the
Company, all of which are and will be the exclusive property of the Company,
protected and kept secret by the Company; and

 

(iii)                          Without limiting Executive’s obligations under
the foregoing, Executive agrees that during the period of her employment with
the Company and at all times thereafter, Executive shall keep secret and retain
in strictest confidence and shall not use for her benefit or the benefit of
others, except in connection with the business and affairs of the Company, all
confidential information of and confidential matters (whether available in
written, electronic form or orally) relating to (A) the Company Group’s pricing
and business (including, without limitation, the strategies employed by and the
actual investments of any member of the Company Group, the contemplated business
strategies and/or investments of any member of the Company Group, and valuation
judgments or valuation data developed or used by the Company Group with respect
to any other company or assets), (B) all corporations or other business
organizations in which the Company Group has or has had an investment and
(C) third parties about which information was learned by Executive heretofore or
hereafter directly or indirectly in connection with Executive’s employment with
the Company or from the Company Group (the “Confidential Information”).  In
consideration of, and as a condition to, continued access to Confidential
Information and without prejudice to or limitation on any other confidentiality
obligation imposed by agreement or law, Executive hereby agrees to undertake to
use and protect Confidential Information in accordance with restrictions placed
on its use or disclosure.  Without limiting the foregoing, Executive shall not
disclose such Confidential Information to any director, officer, partner,
employee or agent of the Company Group unless in Executive’s reasonable good
faith judgment, such person has a need to know such Confidential Information in
furtherance of the Company Group’s business, and (except in connection with the
business and affairs of the Company) Executive shall not disclose Confidential
Information to anyone outside of the Company Group except with the Board’s
express written consent.

 

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(iv)                          Executive acknowledges that the Company’s rights
in its Trade Secrets and Confidential Information would be misappropriated
should Executive use or disclose to others the Trade Secrets and/or Confidential
Information outside the scope of her employment pursuant to this Agreement.

 

(v)                              Executive agrees that during the period of her
employment with the Company, Executive shall not directly or indirectly, use,
disseminate, or disclose, in whole or in part, any of the Company Group’s Trade
Secrets to any person, firm, corporation, association, or other entity for any
reason or purpose whatsoever, other than (A) in the regular and proper scope and
course of Executive’s employment with the Company, or (B) as required by law,
provided, however, that Executive will give the Company reasonable advance
notice of any such disclosure or use that is required by law.

 

(vi)                          As used in this Agreement, each of the terms
“Trade Secrets” and “Confidential Information” will not include any information
that becomes generally known to the public or within the relevant trade or
industry unless it becomes known due to Executive’s violation of this Agreement.

 

(f)                                Cooperation.  Executive agrees that at all
times following the termination of her employment, Executive will cooperate in
all reasonable respects with the Company and its Affiliates in connection with
(i) any and all existing or future litigation, actions or proceedings (whether
civil, criminal, administrative, regulatory or otherwise) brought by or against
the Company or any of its Affiliates, or (ii) any audit of the financial
statements of the Company or any Affiliate with respect to the period of time
when Executive was employed by the Company or any Affiliate, in each case to the
extent the Company reasonably deems Executive’s cooperation necessary. 
Executive shall be reimbursed for all reasonable out-of-pocket expenses incurred
by Executive as a result of such cooperation.  With respect to any and all
existing or future litigation, actions or proceedings (whether civil, criminal,
administrative, regulatory or otherwise) brought against Executive in connection
with her employment by the Company, the Company will honor, and proceed in
accordance with, Section 5 of this Agreement and its Certificate of
Incorporation and Bylaws as in effect from time to time.

 

(g)                              No Limitation.  Nothing contained in this
Paragraph 7 shall limit any common law or statutory obligation that Executive
may have to the Company or any of its Affiliates.  For purposes of all
provisions of this Paragraph 7, the “Company” refers to the Company and any
incorporated or unincorporated Affiliates of the Company, including any entity
which becomes Executive’s employer as a result of any reorganization or
restructuring of the Company for any reason.

 

(h)                              Acknowledgement.  Executive agrees and
acknowledges that each restrictive covenant in this Paragraph 7 is reasonable as
to duration, terms and geographical area and that the same protects the
legitimate interests of the Company and its Affiliates, imposes no undue
hardship on Executive, is not injurious to the public, and that, notwithstanding
any provision in this Agreement to the contrary, any violation of this
restrictive covenant shall be specifically enforceable in any court of competent
jurisdiction.  Executive agrees and acknowledges that a portion of the
compensation paid to Executive

 

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under this Agreement will be paid in consideration of the covenants contained in
this Paragraph 7, the sufficiency of which consideration is hereby
acknowledged.  If any provision of this Paragraph 7 as applied to Executive or
to any circumstance is adjudged by a court with jurisdiction to be invalid or
unenforceable, the same shall in no way affect any other circumstance or the
validity or enforceability of any other provisions of this Paragraph 7.  If the
scope of any such provision, or any part thereof, is too broad to permit
enforcement of such provision to its full extent, Executive agrees that the
court making such determination shall have the power to reduce the duration
and/or area of such provision, and/or to delete specific words or phrases, and
in its reduced form, such provision shall then be enforceable and shall be
enforced.  Executive agrees and acknowledges that the breach of this Paragraph 7
will cause irreparable injury to the Company and upon breach of any provision of
this Paragraph 7, the Company shall be entitled to seek injunctive relief,
specific performance or other equitable relief by any court with jurisdiction
upon short notice; provided, however, that this shall in no way limit any other
remedies which the Company may have (including, without limitation, the right to
seek monetary damages).  Each of the covenants in this Paragraph 7 shall be
construed as an agreement independent of any other provisions in this Agreement.

 

(i)                                  Permitted Statements.  Nothing in this
Agreement shall restrict either party from making truthful statements (i) when
required by law, subpoena, court order or the like; (ii) when requested by a
governmental, regulatory, or similar body or entity; or (iii) in confidence to a
professional advisor for the purpose of securing professional advice.

 

8.                                    Termination/Severance.

 

(a)                               General.

 

(i)                                  At Will Employment.  Executive’s employment
hereunder is “at will” and, therefore, may be terminated at any time, with or
without Cause or with or without Good Reason, at the option of the Company or
Executive, subject only to the severance obligations under this Paragraph 8. 
Upon a termination of Executive’s employment hereunder, unless requested
otherwise by the Company, Executive shall resign each position (if any) that
Executive then holds as an officer of the Company or as an officer or director
of any of the Company’s Affiliates.  Upon any termination of Executive’s
employment hereunder, Executive shall be entitled to receive the following: 
(A) any accrued but unpaid Base Salary (to be paid as provided in Paragraph
3(a)); (B) reimbursement for expenses incurred by Executive prior to the Date of
Termination (as defined below) in accordance with Paragraph 4(c) hereof;
(C) vested benefits, if any, to which Executive may be entitled under the
Company’s employee benefit plans as of the date of termination; and (D) any
additional amounts or benefits due under any applicable plan, program, agreement
or arrangement of the Company or its Affiliates (the amounts and benefits
described in clauses (A) through (D) above, collectively, the “Accrued
Benefits”).  Accrued Benefits under this Paragraph 8 shall in all events be paid
in accordance with the Company’s payroll procedures, expense reimbursement
procedures or plan terms, as applicable, or in accordance with applicable law.

 

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(ii)                              Notice of Termination.  Except for termination
as a result of Executive’s death during the Term, any termination of Executive’s
employment by the Company or any such termination by Executive shall be
communicated by written Notice of Termination to the other party hereto.  For
purposes of this Agreement, a “Notice of Termination” shall mean a notice which
shall indicate the specific termination provision hereunder relied upon by the
terminating party.

 

(iii)                          Date of Termination.  “Date of Termination” shall
mean: (A) if Executive’s employment is terminated by her death, the date of her
death; (B) if Executive’s employment is terminated on account of her Disability,
the date on which Notice of Termination is given by the Company, or such later
date as is indicated in the Notice of Termination; (C) if Executive’s employment
is terminated by the Company for Cause, the date on which a Notice of
Termination is given by the Company, or such later date as is indicated in the
Notice of Termination; (D) if Executive’s employment is terminated by the
Company without Cause, the date as is indicated in the Notice of Termination;
(E) if Executive’s employment is terminated by Executive without Good Reason,
thirty (30) days after the date on which a Notice of Termination is given by
Executive, or such other date as is mutually agreed by Executive and the
Company; and (F) if Executive’s employment is terminated by Executive for Good
Reason, the date on which the Notice of Termination is given by Executive after
the end of the Good Reason Period, or such other date as is mutually agreed by
Executive and the Company.

 

(b)                              Termination by the Company for Cause or by
Executive without Good Reason.

 

(i)                                  The Company may terminate Executive’s
employment hereunder for any reason, including, but not limited to, for Cause. 
“Cause” means the occurrence of any of the following: (A) Executive’s willful
and continued failure to perform her duties with the Company (other than any
such failure resulting from her or her incapacity due to physical or mental
illness) after a written demand for performance is delivered to Executive by the
Company, which demand specifically identifies the manner in which the Company
believes that Executive has not performed her duties; (B) Executive’s willful
and continued failure to follow and comply with the policies of the Company as
in effect from time to time (other than any such failure resulting from
Executive’s incapacity due to physical or mental illness) after a written demand
for performance is delivered to Executive by the Company, which demand
specifically identifies the manner in which the Company believes that Executive
has not followed or complied with such Company policies; (C) Executive’s willful
commission of an act of fraud or dishonesty resulting in material economic or
financial injury to the Company; (D) Executive’s willful engagement in illegal
conduct or gross misconduct; (E) Executive’s breach of any provision of
Paragraph 7 of this Agreement; or (F) Executive’s indictment for, conviction of,
or a plea of guilty or nolo contendere to any felony.

 

(ii)                              Executive may terminate her employment
hereunder for any reason, including, but not limited to, Good Reason.  “Good
Reason” means the occurrence, without the express prior written consent of
Executive, of any of the following events:

 

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(A) the failure by the Company to pay Executive any portion of Executive’s Base
Salary within ten (10) days of the date such compensation is due, (B) the
relocation of Executive’s principal location of employment to a location outside
of Los Angeles County or Orange County, except for required travel for Company
business, (C) any material diminution of Executive’s duties, responsibilities or
authorities hereunder, (D) any material breach by the Company of any of its
material obligations to Executive, or (E) any failure of the Company to obtain
the assumption in writing of its obligations under this Agreement by any
successor to all or substantially all of its business or assets within 30 days
after any reorganization, amalgamation, combination, merger, consolidation,
sale, liquidation, dissolution or similar transaction, unless such assumption
occurs by operation of law.  Notwithstanding the foregoing, “Good Reason” to
terminate Executive’s employment shall not exist unless (a) a written notice has
first been delivered to the Board by Executive (the “Good Reason Notice”), which
Good Reason Notice (1) specifically identifies the event(s) Executive believes
constitutes Good Reason and (2) provides thirty (30) days from the date of such
Good Reason Notice for the Company to cure such circumstances (the “Good Reason
Period”) and (b) the Company has failed to timely cure such circumstances.  If
the Company fails to timely cure such circumstances in accordance with the
foregoing, Executive may send a notice to the Board that she is terminating her
employment for Good Reason (“Good Reason Termination Notice”), in which case her
employment hereunder shall thereupon be terminated for Good Reason.  If any Good
Reason Notice to the Board shall not have been delivered by Executive within
ninety (90) days following the date Executive becomes aware of the purported
existence of a Good Reason event, or any Good Reason Termination Notice to the
Board shall not have been delivered by Executive within thirty (30) days
following the end of the Good Reason Period, then any purported termination of
Executive’s employment relating to the applicable event shall not be a
termination for Good Reason, under this Agreement.

 

(iii)                          If during the Term, Executive’s employment is
terminated by the Company for Cause or by Executive without Good Reason, then
the Company shall, through the Date of Termination, pay Executive her Accrued
Benefits.  Thereafter, the Company shall have no further obligations to
Executive except as otherwise provided hereunder.  The vesting and exercise of
any stock options and the forfeitability of any stock-based grants held by
Executive shall be governed by the terms of the applicable plan document and the
related agreements between Executive and the Company.

 

(c)                               Termination by the Company without Cause or by
Executive for Good Reason; Death or Disability.

 

(i)                                  Executive’s employment with the Company may
be terminated by the Company without Cause, by Executive for Good Reason or as a
result of Executive’s death or Disability.  “Disability” means that Executive
(A) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months, or (B) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3)
months under an accident and health plan, or disability plan, covering employees
of the Company.

 

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(ii)                              If during the Term, Executive’s employment is
terminated by the Company without Cause, Executive terminates her employment for
Good Reason, or Executive’s employment is terminated due to her death or
Disability, then, subject to (x) signing by Executive (or Executive’s estate or
beneficiaries, if applicable) of a general release of claims in a form attached
hereto as Exhibit B (the “Release”), the Release becoming irrevocable, all
within thirty (30) days after the Date of Termination and (y) Executive’s
continued compliance with the provisions of Paragraph 7, Executive shall be
entitled to the following:

 

(A)                          Salary continuation in an amount (the “Severance
Amount”) equal to the greater of (x) two (2) times the sum of her annual Base
Salary and her Target Bonus or (y) the product of (1) the sum of her annual Base
Salary and Target Bonus divided by 365 and (2) the number of days remaining in
the Term.  The Severance Amount shall be paid in equal installments in
accordance with the Company’s then payroll practice over a twenty-four
(24) month period for amounts payable under (x) or the remainder of the Term
(for amounts payable under (y), beginning with the first payroll date that
occurs at least thirty (30) days after the Date of Termination.  Solely for
purposes of Section 409A of the Code, each installment payment is considered a
separate payment;

 

(B)                           Executive shall be entitled to full acceleration
of vesting as of the Date of Termination of any then-outstanding awards granted
to Executive under the Company’s stock and other equity and long-term incentive
plans (to the extent such awards have not previously become vested).  Any stock
options that are then vested (including any that become vested pursuant to the
preceding sentence) and that are granted to Executive on or after the Effective
Date shall, notwithstanding any provision of any applicable plan or award
agreement, remain exercisable until the later of (x) two (2) years after the
Date of Termination or (y) the date specified in the applicable plan or award
agreement; provided in no event shall any stock option be exercisable beyond its
original expiration date.  Notwithstanding the foregoing two sentences, any
equity-based awards that are subject to forfeiture and/or vesting requirements
based on the satisfaction of performance-based criteria, to the extent that such
awards are outstanding as of the Date of Termination, shall vest in full based
upon the target number of shares subject to such award, without regard to any
time-based forfeiture and/or vesting provisions.

 

(C)                           The Company shall reimburse Executive for the full
amount of the COBRA premiums incurred by Executive during the 24 month period
following the date of such termination, provided that (A) such reimbursement
does not result in adverse tax consequences to the Company under
Section 105(h) of the Code or otherwise and (B) such reimbursement

 

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shall immediately cease in the event that Executive becomes eligible to
participate in the health insurance plan of a subsequent employer or other
service recipient (or at such time as the Company ceases to offer group medical
coverage to its active executive employees or the Company is otherwise under no
obligation to offer COBRA continuation coverage to Executive).

 

(d)                             Expiration/Non-Renewal of Term by the Company. 
For the avoidance of doubt, the expiration of the Term of this Agreement by the
Company (in accordance with Subparagraph 1(a) above) will not constitute a
termination of employment by the Company other than for Cause, and Executive
acknowledges that the severance provisions of Paragraph 8 shall not apply.

 

(e)                               No Mitigation.  Without regard to the reason
for the termination of Executive’s employment hereunder, Executive shall be
under no obligation to mitigate damages with respect to such termination under
any circumstances and in the event Executive is employed or receives income from
any other source, there shall be no offset against the amounts due from the
Company hereunder.

 

9.                                    Parachute Payments.

 

(a)                               Anything in this Agreement to the contrary
notwithstanding, in the event that the amount of any compensation, payment or
distribution by the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, calculated in a manner consistent with Section 280G of the Code
and the applicable regulations thereunder (the “Payments”), would be subject to
the Excise Tax, the following provisions shall apply:

 

(i)                                  If the Payments, reduced by the sum of
(x) the Excise Tax and (y) the total of the Federal, state, and local income and
employment taxes payable by Executive on the amount of the Payments which are in
excess of the Threshold Amount, are greater than or equal to the Threshold
Amount, Executive shall be entitled to the full benefits payable under this
Agreement.

 

(ii)                              If the Threshold Amount is less than (x) the
Payments, but greater than (y) the Payments reduced by the sum of (1) the Excise
Tax and (2) the total of the Federal, state, and local income and employment
taxes on the amount of the Payments which are in excess of the Threshold Amount,
then the Payments shall be reduced (but not below zero) to the minimum extent
necessary so that the sum of all Payments shall not exceed the Threshold
Amount.  In such event, the Payments shall be reduced in the following order:
(A) cash payments not subject to Section 409A of the Code; (B) cash payments
subject to Section 409A of the Code (to the extent such reduction does not
result in tax penalties to Executive); (C) equity-based payments and
acceleration; and (D) non-cash forms of benefits.  To the extent any payment is
to be made over time (e.g., in installments, etc.), then the payments shall be
reduced in reverse chronological order.  No reductions shall be made under this
Subparagraph 9(a)(ii) unless agreed to by Executive.

 

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(b)                              For the purposes of this Paragraph 9,
“Threshold Amount” shall mean three times Executive’s “base amount” within the
meaning of Section 280G(b)(3) of the Code and the regulations promulgated
thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax
imposed by Section 4999 of the Code, and any interest or penalties incurred by
Executive with respect to such excise tax.

 

(c)                               The determination as to which of the
alternative provisions of Subparagraph 9(a) shall apply to Executive shall be
made by a nationally recognized accounting firm selected by the Company, which
does not provide services to the acquirer or other counter-party in the
transaction to which this Paragraph 9 applies (the “Accounting Firm”), which
shall provide detailed supporting calculations both to the Company and Executive
within 15 business days of the Date of Termination, if applicable, or at such
earlier time as is reasonably requested by the Company or Executive.  For
purposes of determining which of the alternative provisions of Subparagraph
9(a) shall apply, Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation applicable to individuals for
the calendar year in which the determination is to be made, and state and local
income taxes at the highest marginal rates of individual taxation in the state
and locality of Executive’s residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.

 

10.                            Conflicting Agreements.  Executive hereby
represents and warrants that the execution of this Agreement and the performance
of her obligations hereunder will not breach or be in conflict with any other
agreement to which she is a party or is bound, and that she is not now subject
to any covenants against competition or similar covenants which would affect the
performance of her obligations hereunder.

 

11.                            Notices.  Any notices provided hereunder must be
in writing and shall be deemed effective upon the earlier of one (1) business
day following personal delivery (including personal delivery by telecopy or
telex), or the third (3rd) business day after mailing by first class mail to the
recipient at the address indicated below:

 

To the Company:

 

HCP, Inc.
3760 Kilroy Airport Way, Suite 300
Long Beach, CA 90806
Attention:  Chairman of the Board

 

To Executive:

 

At the address shown in the Company’s personnel records

 

or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.

 

12.                            Integration.  This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements between the parties with respect to any
related subject matter.

 

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13.                            Assignment; Successors and Assigns, etc.  Neither
the Company nor Executive may make any assignment of this Agreement or any
interest herein, by operation of law or otherwise, without the prior written
consent of the other party; provided that the Company may assign its rights
under this Agreement without the consent of Executive to a successor to
substantially all of the business of the Company in the event that the Company
shall effect a reorganization, consolidate with or merge into any other
corporation, partnership, organization or other entity, or transfer all or
substantially all of its properties or assets to any other corporation,
partnership, organization or other entity.  This Agreement shall inure to the
benefit of and be binding upon the Company and Executive, their respective
successors, executors, administrators, heirs and permitted assigns.

 

14.                            Miscellaneous.  Headings herein are for
convenience of reference only and shall not define, limit or interpret the
contents hereof.

 

15.                            Amendment.  This Agreement may be amended,
modified or supplemented by the mutual consent of the parties in writing, but no
oral amendment, modification or supplement shall be effective.

 

16.                            Arbitration; Other Disputes.

 

(a)                               If any legally actionable dispute arises which
cannot be resolved by mutual discussion between the parties, each of Executive
and the Company agree to resolve that dispute by arbitration before an
arbitrator experienced in employment law.  Said arbitration will be conducted
pursuant to the JAMS Employment Arbitration Rules and Procedures then in
effect.  California substantive law and statues of limitations shall apply in
any such proceeding, and for limitations purposes, the arbitration shall be
deemed commenced when the matter is submitted to the arbitral forum.  The
Company and Executive agree that this arbitration agreement includes any such
disputes that the Company and its related entities may have against Executive,
or Executive may have against the Company and/or its related entities and/or
employees, arising out of or relating to Executive’s employment or its
termination including any claims of discrimination or harassment in violation of
applicable law and any other aspect of Executive’s compensation, training,
employment, or its termination.

 

(b)                              The Company and Executive further agree that
this arbitration provision is the exclusive and binding remedy for any such
dispute and will be used instead of any court action, which is hereby expressly
waived, except for any request by either the Company or Executive for temporary
or preliminary injunctive relief pending arbitration in accordance with
applicable law or an administrative claim with an administrative agency.  EACH
OF THE COMPANY AND EXECUTIVE  HEREBY WAIVES ANY RIGHTS IT OR SHE MAY HAVE TO
TRIAL BY JUDGE OR JURY.

 

(c)                               The Company and Executive agree that the
arbitration shall be conducted in Los Angeles County, California, unless
otherwise mutually agreed.

 

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(d)                             The provisions of Section 1281.8 of the
California Code of Civil Procedure with respect to provisional remedies will
apply to any such arbitration.  In any such arbitration proceeding, any hearing
must be transcribed by a certified court reporter and the arbitrator’s decision
must be set forth in writing, consistent with the law of California and
supported by essential findings of fact and conclusion of law.  The arbitrator
may issue any remedy or award available under applicable law but may not add to,
modify, change or disregard any lawful terms of this Agreement or issue an award
or remedy that is contrary to the law of California.  The Company and Executive
further agree that each party shall pay its own costs and attorneys’ fees, if
any; provided, however, the Company shall pay any costs and expenses that
Executive would not otherwise have incurred if the dispute had been adjudicated
in a court of law, rather than through arbitration, including the arbitrator’s
fee, any administrative fee, and any filing fee in excess of the maximum court
filing fee in the jurisdiction in which the arbitration is commenced.  If either
the Company or Executive prevails on a statutory claim that affords the
prevailing party an award of attorneys’ fees, then the arbitrator may award
reasonable attorneys’ fees to the prevailing party, consistent with applicable
law.

 

(e)                               Executive acknowledges that Executive has been
provided with a copy of the current JAMS Employment Arbitration Rules and
Procedures for Executive’s reference.

 

17.                            Severability.  If any provision of this Agreement
shall to any extent be held void or unenforceable (as to duration, scope,
activity, subject or otherwise) by a court of competent jurisdiction, such
provision shall be deemed to be modified so as to constitute a provision
conforming as nearly as possible to the original provision while still remaining
valid and enforceable.  In such event, the remainder of this Agreement (or the
application of such provision to persons or circumstances other than those in
respect of which it is deemed to be void or unenforceable) shall not be affected
thereby.  Each other provision of this Agreement, unless specifically
conditioned on the voided aspect of such provision, shall remain valid and
enforceable to the fullest extent permitted by law; any other provisions of this
Agreement that are specifically conditioned on the voided aspect of such invalid
provision shall also be deemed to be modified so as to constitute a provision
conforming as nearly as possible to the original provision while still remaining
valid and enforceable to the fullest extent permitted by law.

 

18.                            Governing Law.  This Agreement shall be construed
and regulated in all respects under the laws of the State of California without
reference to principles of conflict of laws.

 

19.                            Section 409A.

 

(a)                               Anything in this Agreement to the contrary
notwithstanding, if at the time of Executive’s separation from service within
the meaning of Section 409A of the Code, the Company determines that Executive
is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the
Code, then to the extent any payment or benefit that Executive becomes entitled
to under this Agreement on account of Executive’s separation from service would
be considered “non-qualified deferred compensation”

 

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otherwise subject to the twenty percent (20%) additional tax imposed pursuant to
Section 409A(a) of the Code as a result of the application of
Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such
benefit shall not be provided until the date that is the earlier of (A) six
months and one day after Executive’s separation from service, or (B) Executive’s
death.  If any such delayed cash payment is otherwise payable on an installment
basis, the first payment shall include a catch-up payment covering amounts that
would otherwise have been paid during the six-month period but for the
application of this provision, and the balance of the installments shall be
payable in accordance with their original schedule.

 

(b)                              All in-kind benefits provided and expenses
eligible for reimbursement under this Agreement shall be provided by the Company
or incurred by Executive during the time periods set forth in this Agreement. 
All reimbursements shall be paid as soon as administratively practicable, but in
no event shall any reimbursement be paid after the last day of the taxable year
following the taxable year in which the expense was incurred.  The amount of
in-kind benefits provided or reimbursable expenses incurred in one taxable year
shall not affect the in-kind benefits to be provided or the expenses eligible
for reimbursement in any other taxable year (except for any lifetime or other
aggregate limitation applicable to medical expenses).  Such right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit.

 

(c)                               To the extent that any payment or benefit
described in this Agreement constitutes “non-qualified deferred compensation”
under Section 409A of the Code, and to the extent that such payment or benefit
is payable upon Executive’s termination of employment, then such payments or
benefits shall be payable only upon Executive’s “separation from service.” The
determination of whether and when a separation from service has occurred shall
be made in accordance with the presumptions set forth in Treasury Regulation
Section 1.409A-1(h).

 

(d)                             The parties intend that this Agreement will be
administered in accordance with Section 409A of the Code.  To the extent that
any provision of this Agreement is ambiguous as to its compliance with
Section 409A of the Code, the provision shall be read in such a manner so that
all payments hereunder comply with Section 409A of the Code.  Each payment
pursuant to this Agreement is intended to constitute a separate payment for
purposes of Treasury Regulation Section 1.409A-2(b)(2).  The parties agree that
this Agreement may be amended, as reasonably requested by either party, and as
may be necessary to fully comply with Section 409A of the Code and all related
rules and regulations in order to preserve the payments and benefits provided
hereunder without additional cost to either party.

 

(e)                               The Company makes no representation or
warranty and shall have no liability to Executive or any other person if any
provisions of this Agreement are determined to constitute deferred compensation
subject to Section 409A of the Code but do not satisfy an exemption from, or the
conditions of, such Section.

 

20.                            Counterparts.  This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be taken to be an original; but such counterparts shall together constitute one
and the same document.

 

21.                            Advisor’s Fees.  The Company shall pay
Executive’s reasonable advisor fees (legal and tax) incurred in connection with
the contemplation, preparation, negotiation and execution of this Agreement up
to a maximum of $25,000.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, this Agreement is entered into as of the date and year first
above written.

 

 

 

 

 

HCP, INC.

 

 

 

By:

/s/ Michael D. McKee

 

Name: Michael D. McKee

 

Title: Chairman of the Board

 

 

 

 

 

 

 

/s/ Lauralee E. Martin

 

Lauralee E. Martin

 

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EXHIBIT A

 

Kaiser Aluminum Corporation

 

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Exhibit B

 

FORM OF RELEASE AGREEMENT

 

This Release Agreement (this “Release Agreement”) is entered into this       
day of                    20    , by and between Lauralee E. Martin, an
individual (“Executive”), and HCP, Inc., a Maryland corporation (the “Company”).

 

WHEREAS, Executive has been employed by the Company; and

 

WHEREAS, Executive’s employment by the Company has terminated and, in connection
with the Employment Agreement between the Company and Executive dated [_____]
(the “Employment Agreement”), the Company and Executive desire to enter into
this Release Agreement upon the terms set forth herein;

 

NOW, THEREFORE, in consideration of the covenants undertaken and the releases
contained in this Release Agreement, and in consideration of the obligations of
the Company (or one of its subsidiaries) to pay severance benefits (conditioned
upon this Release Agreement) under and pursuant to the Employment Agreement,
Executive and the Company agree as follows:

 

1.            Release.  Executive, on behalf of himself or herself, his or her
descendants, dependents, heirs, executors, administrators, assigns, and
successors, and each of them, hereby acknowledges full and complete satisfaction
of and covenants not to sue and fully releases and discharges the Company and
each of its parents, subsidiaries and affiliates, past and present, as well as
its and their trustees, directors, officers, members, managers, partners,
agents, attorneys, insurers, employees, stockholders, representatives, assigns,
and successors, past and present, and each of them, hereinafter together and
collectively referred to as the “Releasees,” with respect to and from any and
all claims, wages, demands, rights, liens, agreements or contracts (written or
oral), covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys’ fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, and whether or not concealed or hidden (each,
a “Claim”), which he or she now owns or holds or he or she has at any time
heretofore owned or held or may in the future hold as against any of said
Releasees (including, without limitation, any Claim arising out of or in any way
connected with Executive’s service as an officer, director, employee, member or
manager of any Releasee, Executive’s separation from his or her position as an
officer, director, employee, manager and/or member, as applicable, of any
Releasee, or any other transactions, occurrences, acts or omissions or any loss,
damage or injury whatever), whether known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Releasees, or any
of them, committed or omitted prior to the date of this Release Agreement
including, without limiting the generality of the foregoing, any Claim under
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act, the Family and Medical Leave
Act of 1993, the California Fair Employment and Housing Act, the California
Family Rights Act, or any

 

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other federal, state or local law, regulation, or ordinance, or any Claim for
severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, workers’ compensation
or disability; provided however, that the foregoing release shall not apply to
any obligation of the Company to Executive pursuant to any of the forgoing: 
(1) any obligation created by or arising out of the Section 8 of the Employment
Agreement for which receipt or satisfaction has not been acknowledged, (2) any
equity-based awards previously granted by the Company to Executive, to the
extent that such awards continue after the termination of Executive’s employment
with the Company in accordance with the applicable terms of such awards; (3) any
right to indemnification that Executive may have pursuant to the Fourth Amended
and Restated Bylaws of the Company, its corporate charter or under any written
indemnification agreement with the Company (or any corresponding provision of
any subsidiary or affiliate of the Company) with respect to any loss, damages or
expenses (including but not limited to attorneys’ fees to the extent otherwise
provided) that Executive may in the future incur with respect to his service as
an employee, officer or director of the Company or any of its subsidiaries or
affiliates; (4) with respect to any rights that Executive may have to insurance
coverage for such losses, damages or expenses under any Company (or subsidiary
or affiliate) directors and officers liability insurance policy; (5) any rights
to continued medical or dental coverage that Executive may have under COBRA;
(6) any rights to payment of benefits that Executive may have under a retirement
plan sponsored or maintained by the Company that is intended to qualify under
Section 401(a) of the Internal Revenue Code of 1986, as amended, or (7) any
deferred compensation or supplemental retirement benefits that Executive may be
entitled to under a nonqualified deferred compensation or supplemental
retirement plan of the Company.  In addition, this release does not cover any
Claim that cannot be so released as a matter of applicable law.  Executive
acknowledges and agrees that he or she has received any and all leave and other
benefits that he or she has been and is entitled to pursuant to the Family and
Medical Leave Act of 1993.

 

2.            Acknowledgment of Payment of Wages.  Except for accrued vacation
(which the parties agree totals approximately [        ] days of pay) and salary
for the current pay period, Executive acknowledges that he/she has received all
amounts owed for his or her regular and usual salary (including, but not limited
to, any bonus, severance, or other wages), and usual benefits through the date
of this Agreement.

 

3.            1542 Waiver.  It is the intention of Executive in executing this
Release Agreement that the same shall be effective as a bar to each and every
Claim hereinabove specified.  In furtherance of this intention, Executive hereby
expressly waives any and all rights and benefits conferred upon him or her by
the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly
consents that this Release Agreement shall be given full force and effect
according to each and all of its express terms and provisions, including those
related to unknown and unsuspected Claims, if any, as well as those relating to
any other Claims hereinabove specified. SECTION 1542 provides:

 

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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

 

Executive acknowledges that he may hereafter discover Claims or facts in
addition to or different from those which Executive now knows or believes to
exist with respect to the subject matter of this Release Agreement and which, if
known or suspected at the time of executing this Release Agreement, may have
materially affected this settlement.  Nevertheless, Executive hereby waives any
right, Claim or cause of action that might arise as a result of such different
or additional Claims or facts.  Executive acknowledges that he or she
understands the significance and consequences of such release and such specific
waiver of SECTION 1542.

 

4.            ADEA Waiver.  Executive expressly acknowledges and agrees that by
entering into this Release Agreement, Executive is waiving any and all rights or
Claims that he or she may have arising under the Age Discrimination in
Employment Act of 1967, as amended (the “ADEA”), which have arisen on or before
the date of execution of this Release Agreement.  Executive further expressly
acknowledges and agrees that:

 

A.           In return for this Release Agreement, the Executive will receive
consideration beyond that which the Executive was already entitled to receive
before entering into this Release Agreement;

 

B.           Executive is hereby advised in writing by this Release Agreement to
consult with an attorney before signing this Release Agreement;

 

C.           Executive has voluntarily chosen to enter into this Release
Agreement and has not been forced or pressured in any way to sign it;

 

D.           Executive was given a copy of this Release Agreement on
[                                  , 20    ] and informed that he or she had
[twenty one (21)/forty five (45)] days within which to consider this Release
Agreement and that if he or she wished to execute this Release Agreement prior
to expiration of such [21-day/45-day] period, he or she should execute the
Endorsement attached hereto;

 

E.           Executive was informed that he or she had seven (7) days following
the date of execution of this Release Agreement in which to revoke this Release
Agreement, and this Release Agreement will become null and void if Executive
elects revocation during that time.  Any revocation must be in writing and must
be received by the Company during the seven-day revocation period.  In the event
that Executive exercises his or her right of revocation, neither the Company nor
Executive will have any obligations under this Release Agreement;

 

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F.            Nothing in this Release Agreement prevents or precludes Executive
from challenging or seeking a determination in good faith of the validity of
this waiver under the ADEA, nor does it impose any condition precedent,
penalties or costs from doing so, unless specifically authorized by federal
law.2

 

--------------------------------------------------------------------------------

2  Whether the Executive has 21 days, 45 days, or some other period in which to
consider the Release Agreement will be determined with reference to the
requirements of the ADEA in order for such waiver to be valid in the
circumstances.  The determination referred to in the preceding sentence shall be
made by the Company in its sole discretion.  In any event, the Release Agreement
will include the Executive’s acknowledgements and agreements set forth in
clauses 4.A, 4.B, and 4.C.

 

5.            No Transferred Claims.  Executive warrants and represents that the
Executive has not heretofore assigned or transferred to any person not a party
to this Release Agreement any released matter or any part or portion thereof and
he or she shall defend, indemnify and hold the Company and each of its
affiliates harmless from and against any claim (including the payment of
attorneys’ fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.

 

6.            Compliance With Employment Agreement.  Executive warrants and
represents that Executive has complied fully with his or her obligations
pursuant to the Employment Agreement.  Executive covenants that he or she will
continue to abide by the applicable provisions of such Employment Agreement.

 

7.            Severability.  It is the desire and intent of the parties hereto
that the provisions of this Release Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought.  Accordingly, if any particular provision of this
Release Agreement shall be adjudicated by a court of competent jurisdiction to
be invalid, prohibited or unenforceable under any present or future law, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Release Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction; furthermore, in lieu
of such invalid or unenforceable provision there will be added automatically as
a part of this Release Agreement, a legal, valid and enforceable provision as
similar in terms to such invalid or unenforceable provision as may be possible. 
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Release Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

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8.            Counterparts.  This Release Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

 

9.            Governing Law.  THIS RELEASE AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH UNITED STATES FEDERAL LAW AND, TO THE EXTENT NOT
PREEMPTED BY UNITED STATES FEDERAL LAW, THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE
(WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE LAWS OF ANY JURISDICTION OTHER THAN UNITED STATES FEDERAL LAW AND THE LAW OF
THE STATE OF CALIFORNIA TO BE APPLIED.  IN FURTHERANCE OF THE FOREGOING,
APPLICABLE FEDERAL LAW AND, TO THE EXTENT NOT PREEMPTED BY APPLICABLE FEDERAL
LAW, THE INTERNAL LAW OF THE STATE OF CALIFORNIA, WILL CONTROL THE
INTERPRETATION AND CONSTRUCTION OF THIS RELEASE AGREEMENT, EVEN IF UNDER SUCH
JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF
SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

 

 

10.         Amendment and Waiver.  The provisions of this Release Agreement may
be amended and waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Release Agreement shall be construed as a waiver of such
provisions or affect the validity, binding effect or enforceability of this
Release Agreement or any provision hereof.

 

11.         Descriptive Headings.  The descriptive headings of this Release
Agreement are inserted for convenience only and do not constitute a part of this
Release Agreement.

 

12.         Construction.  Where specific language is used to clarify by example
a general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates.  The language used in this Release Agreement
shall be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction shall be applied against any party.

 

13.         Arbitration.  Any claim or controversy arising out of or relating to
this Agreement shall be submitted to arbitration in accordance with the
arbitration provision set forth in the Employment Agreement.

 

14.         Nouns and Pronouns.  Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and
vice-versa.

 

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15.         Legal Counsel.  Each party recognizes that this is a legally binding
contract and acknowledges and agrees that they have had the opportunity to
consult with legal counsel of their choice.  Executive acknowledges and agrees
that he has read and understands this Release Agreement completely, is entering
into it freely and voluntarily, and has been advised to seek counsel prior to
entering into this Release Agreement and he has had ample opportunity to do so.

 

 

The undersigned have read and understand the consequences of this Release
Agreement and voluntarily sign it.  The undersigned declare under penalty of
perjury under the laws of the State of California that the foregoing is true and
correct.

 

EXECUTED this                  day of                  20    , at
                      , California.

 

 

“Executive”

 

 

 

 

 

Lauralee E. Martin

 

 

 

 

 

HCP, INC.,

 

a Maryland corporation,

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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ENDORSEMENT

 

I, Lauralee E. Martin, hereby acknowledge that I was given [21/45] days to
consider the foregoing Release Agreement and voluntarily chose to sign the
Release Agreement prior to the expiration of the [21-day/45-day] period.

 

I declare under penalty of perjury under the laws of the United States and the
State of California that the foregoing is true and correct.

 

EXECUTED this  [        ] day of [                           20        ], at
                          , California.

 

 

 

 

 

Lauralee E. Martin

 

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