Exhibit 10.1

 

HCP, INC.

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on October
25, 2012 (the “Effective Date”), by and between HCP, Inc. (the “Company”) and
James W. Mercer (“Executive”).  Where the context permits, references to “the
Company” shall include the Company and any successor of the Company.

 

W I T N E S S E T H:

 

WHEREAS, the Company and Executive mutually desire to set forth herein the terms
and conditions pursuant to which Executive will continue to serve as the
Executive Vice President, General Counsel and Corporate Secretary of the
Company, effective as of the Effective Date.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, together with other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
do hereby agree as follows:

 

1.             SERVICES AND DUTIES.  Subject to Section 2 hereof, from and after
the Effective Date, Executive shall, pursuant to the terms of this Agreement, be
employed by the Company as the Executive Vice President, General Counsel and
Corporate Secretary of the Company.  The principal location of Executive’s
employment with the Company shall be at the Company’s headquarters in Long
Beach, California, although Executive understands and agrees that Executive may
be required to travel from time to time for business reasons.  During the Term
(as defined in Section 2), Executive shall be a full-time employee of the
Company, shall dedicate substantially all of Executive’s working time to the
Company, and shall have no other employment or other business ventures which are
undisclosed to the Company or which conflict with Executive’s duties under this
Agreement.  Executive shall have such authorities, duties and responsibilities
as the Company’s chief executive officer (or his delegate) may from time to time
assign to him and reasonably consistent with those customarily performed by an
officer holding the position set forth above with a company having a similar
size and nature of the Company. Notwithstanding the foregoing, nothing herein
shall prohibit Executive from participating in trade associations or industry
organizations which are related to the business of the Company or engaging in
charitable, civic or political activities, so long as such interests do not
materially interfere, individually or in the aggregate, with the performance of
Executive’s duties hereunder.  Executive agrees that he shall comply with the
corporate policies of the Company as they are in effect from time to time
throughout the Term (including, without limitation, the Company’s business
conduct and ethics policies, as they may change from time to time).

 

2.             TERM.  Executive’s employment under the terms and conditions of
this Agreement shall commence on the Effective Date.  Such employment shall
continue for an initial term of three (3) years following the Effective Date
(the “Initial Term”), which will be automatically extended on the last day of
the Initial Term for an additional one (1)-year term and on each anniversary of
the last day of the Initial Term thereafter, unless either Executive or the
Company has given written notice to the other no less than sixty (60) days prior
to the expiration of the Term then in effect that the Term shall not be so
extended.  As used herein, the “Term”

 

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shall refer to the Initial Term and any extension thereof pursuant to the
preceding sentence.  Provision of notice that the Term shall not be extended or
further extended, as the case may be, shall not constitute a breach of this
Agreement and shall not constitute “Good Reason” for purposes of this
Agreement.  Notwithstanding the above, the Term shall earlier expire immediately
upon the termination of Executive’s employment pursuant to Section 5 hereof.

 

3.             COMPENSATION.

 

a)            Base Compensation.  The Company shall pay to Executive an initial
base salary in the amount of $500,000 per annum in accordance with the regular
payroll practices of the Company (the base salary as in effect from time to
time, the “Base Compensation”).  Payment of the Base Compensation is subject to
customary employee contributions to any benefit programs in which Executive is
enrolled.  The Base Compensation may be increased from time to time at the
Company’s sole discretion, but in no event shall the Base Compensation be
reduced without Executive’s approval.

 

b)            Annual Cash Bonus.  For each calendar year during the Term,
Executive shall be eligible to receive an annual cash incentive award (an
“Annual Bonus”), the actual amount of such bonus will be determined based on the
achievement of performance criteria relating to both Executive and the Company,
as determined each year in good faith by the Compensation Committee (the
“Compensation Committee”) of the Board of Directors (the “Board”) of the Company
(or any successor thereto).  The Annual Bonus, if any, shall be paid to
Executive by no later than March 15 of the year following the year to which such
Annual Bonus relates, so long as Executive is actively employed by the Company
and has not provided a notice of resignation to the Company or received a notice
of termination from the Company as of the date of payment.

 

c)             Tax Withholding.  All taxable compensation payable to Executive
pursuant to this Agreement shall be subject to any applicable withholding taxes
and such other taxes as are required under Federal law or the law of any state
or governmental body to be collected with respect to compensation paid by the
Company to Executive.

 

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. 
Nothing in this Section 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 24 days 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 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.             TERMINATION.  The Term and Executive’s employment hereunder may
be terminated (1) by the Company for “Cause” (as defined and determined below),
effective on the date on which a written notice to such effect (a “Cause
Termination Notice”) is delivered to Executive; (2) by the Company at any time
without Cause (which includes pursuant to an election by the Company not to
renew the Term, the written notice (pursuant to Section 2) of which shall be
deemed a notice of termination of Executive’s employment hereunder), effective
sixty (60) days following the date on which a written notice to such effect is
delivered to Executive; (3) by Executive for “Good Reason” (as defined and
determined below), in accordance with the notice, cure and termination periods
set forth in the definition of such term below; or (4) by Executive at any time
other than for Good Reason, effective sixty (60) days following the date on
which a written notice to such effect is delivered to the Company (or its
successors).  In the event that the Company provides Executive notice of
termination without Cause pursuant to clause (2) or Executive provides the
Company notice of termination pursuant to clause (3) or clause (4), the Company
will have the option to place the Executive on paid administrative leave during
the notice period.  Upon any termination of Executive’s employment hereunder,
Executive shall be entitled to receive the following:  (i) any accrued but
unpaid Base Compensation (to be paid as provided in Section 3(a));
(ii) reimbursement for expenses incurred by Executive prior to the date of
termination in accordance with Section 4(c) hereof; (iii) vested benefits, if
any, to which Executive may be entitled under the Company’s employee benefit
plans as of the date of termination; and (iv) 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 (i) through
(iv) above, collectively, the “Accrued Benefits”).  Accrued Benefits under this
Section 5 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.

 

a)            Termination by the Company for Cause or by Executive without Good
Reason.  If Executive’s employment hereunder is terminated during the Term by
the Company for Cause or by Executive without Good Reason, Executive shall not
be entitled to any further compensation or benefits other than the Accrued
Benefits.

 

b)            Termination by the Company without Cause or by Executive With Good
Reason.  Subject to Section 5(e) below, if Executive’s employment hereunder is
terminated during the Term (I) by the Company other than for Cause (and other
than due to Executive’s death or “Disability” (as defined below) or a decision
by the Company not to extend the Term as provided in Section 2), or (II) by
Executive with Good Reason, then Executive shall be entitled to (1) the Accrued
Benefits and (2) subject to Executive’s execution of a general release of claims
in the form attached hereto as Exhibit A (with such changes as may be reasonably
required to such form to help ensure its enforceability in light of any changes
in applicable law)

 

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(the “Release”) within twenty-one (21) days following such termination of
employment, and the expiration of any revocation period with respect to such
Release provided by applicable law, and provided that Executive does not
materially breach the restrictive covenants set forth in Section 6 hereof or in
any other agreement between Executive and the Company or to which Executive is a
party (collectively, “Restrictive Covenants”) or any other ongoing obligation to
which Executive is subject as of the date of termination:

 

(i)            an amount equal to one (1) times the sum of (x) Executive’s Base
Compensation, at the rate in effect on the date of Executive’s termination of
employment and (y) the greater of (I) Executive’s annual incentive bonus paid or
payable for the last fiscal year of the Company for which the Compensation
Committee has determined bonuses for the Company’s executives generally prior to
the date of such termination or (II) the average of the Executive’s annual
incentive bonuses for the three consecutive fiscal years of the Company ending
with the last fiscal year of the Company for which the Compensation Committee
has determined bonuses for the Company’s executives generally prior to the date
of such termination (or, if less, the average of Executive’s annual incentive
bonuses for the entire period of his employment with the Company), such amount
to be paid in a lump sum in the month following the month in which Executive’s
Separation from Service (as defined below) occurs; and

 

(ii)           each equity-based award granted by the Company to Executive that
is outstanding on the date of termination will immediately vest as to any
portion of the award that is scheduled to vest with two (2) years following the
termination date; provided, however, that as to any such award that is subject
to performance-based vesting requirements for which the applicable performance
period is in progress on the termination date, such award shall remain open
until the end of such performance period and, upon a determination thereafter by
the Compensation Committee as to the relevant level of performance achieved and
the portion of the award eligible to vest based on such determination, Executive
will be credited with two (2) years of continued service, as measured from the
date of Executive’s termination of employment, for purposes of applying any
time-based vesting requirements applicable to the award.  Any portion of any
equity-based award granted by the Company to Executive that is not vested after
giving effect to the foregoing acceleration provisions shall terminate as of
Executive’s date of termination (or, in the case of a performance-based award,
as of the date of the Compensation Committee’s determination of the relevant
level of performance achieved).

 

c)             Termination Due to Death or Disability.  The Term and Executive’s
employment hereunder shall automatically terminate upon Executive’s death or
Disability.  If Executive’s employment hereunder terminates due to death or
Disability, then Executive shall not be entitled to any further compensation or
benefits other than the Accrued Benefits.

 

d)            Welfare Benefit Continuation.  Subject to Section 5(e) below, in
the event that Executive’s employment hereunder is terminated other than (i) by
the Company for Cause or (ii) by Executive without Good Reason, the Company
shall reimburse Executive for the full amount of the COBRA premiums incurred by
Executive during the 12 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 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).

 

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e)             Change in Control Plan.  Notwithstanding the foregoing
provisions, in the event that Executive would be entitled to severance benefits
under the Company’s Change in Control Severance Plan, or any successor plan
thereto (the “CIC Plan”), in connection with a termination of his employment
described in Section 5(b) or Section 5(d) above, Executive will be entitled to
receive the benefits provided under the CIC Plan.  In no event will Executive be
entitled to receive severance benefits under both the CIC Plan and this
Agreement.

 

f)             Definitions.  For purposes of this Agreement:

 

“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.

 

“Cause” means the occurrence of any of the following: (i) Executive’s willful
and continued failure to perform his duties with the Corporation (other than any
such failure resulting from his 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 his duties; (ii) 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; (iii) Executive’s
willful commission of an act of fraud or dishonesty resulting in material
economic or financial injury to the Company; (iv) Executive’s willful engagement
in illegal conduct or gross misconduct, in each case which is materially and
demonstrably injurious to the Company; (v) Executive’s breach of any provision
of Section 6 of this Agreement; or (vi) Executive’s indictment for, conviction
of, or a plea of guilty or nolo contendere to any felony.

 

For purposes of clarification, if the definition of “Cause” set forth above, and
the process associated with it, differs from the definition of cause (or similar
term) in any stock incentive plan or agreement of the Company or any of its
Affiliates, including the Company’s incentive stock award plan or any other such
plan or agreement under which a grant of restricted stock shall be made, the
definition set forth above shall control.

 

“Disability” means that Executive (i) 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 12 months, or (ii) 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 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan, or disability plan, covering
employees of the company or an Affiliate of the Company.

 

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“Good Reason” means the occurrence, without the express prior written consent of
Executive, of any of the following events: (i) the failure by the Company to pay
the Executive any portion of Executive’s Base Compensation within ten (10) days
of the date such compensation is due, (ii) the relocation of Executive’s
principal location of employment, to a location outside a fifty (50) mile radius
from Long Beach, California, (iii) any material diminution of Executive’s
duties, responsibilities or authorities hereunder, (iv) any material breach by
the Company of any of its material obligations to Executive, or (v) 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 reconstruction, 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 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 he is terminating his employment for Good Reason (“Good Reason
Termination Notice”), in which case his 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.

 

As used herein, a “Separation from Service” occurs when Executive dies, retires,
or otherwise has a termination of employment with the Company that constitutes a
“separation from service” within the meaning of Treasury Regulation
Section 1.409A-1(h)(1), without regard to the optional alternative definitions
available thereunder.

 

g)             Resignation as Officer or Director.  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 their Affiliates.

 

h)            Section 409A.  The intent of the parties is that payments and
benefits under this Agreement shall not result in the imputation of any tax,
penalty or interest pursuant to Section 409A of the Code, and accordingly, to
the maximum extent permitted, this Agreement shall be construed and interpreted
consistent with that intent.  Notwithstanding anything contained herein to the
contrary, Executive shall not be considered to have terminated employment with
the Company for purposes of any payments under this Agreement which are subject
to Section 409A of the Code until the Executive has incurred a “separation from
service” from the Company within the meaning of Section 409A of the Code.  Each
amount to be paid or benefit to be provided under this Agreement shall be
construed as a separate identified payment for purposes of Section 409A of the
Code.  Without limiting the foregoing and notwithstanding

 

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anything contained herein to the contrary, to the extent required in order to
avoid the imputation of any tax, penalty or interest pursuant to Section 409A of
the Code, amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to this Agreement during the six-month period
immediately following an Executive’s separation from service shall instead be
paid on the first business day after the date that is six months following the
Executive’s separation from service (or, if earlier, the Executive’s date of
death).  To the extent required in order to avoid the imputation of any tax,
penalty or interest pursuant to Section 409A of the Code, amounts reimbursable
to Executive under this Agreement shall be paid to Executive on or before the
last day of the year following the year in which the expense was incurred and
the amount of expenses eligible for reimbursement (and in kind benefits provided
to Executive) during one year may not affect amounts reimbursable or provided in
any subsequent year.  The Company makes no representation that any or all of the
payments described in this Agreement will be exempt from or comply with
Section 409A of the Code and makes no undertaking to preclude Section 409A of
the Code from applying to any such payment.

 

6.             COVENANTS.  Executive acknowledges that during the period of his
employment with the Company or any Affiliate, he 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 Section 6 (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).

 

a)            Noncompetition.

 

(i)            Executive agrees that during the period of his employment with
the Company, Executive shall not:  (A) directly or indirectly, engage in,
manage, operate, control, supervise, or participate in the management,
operation, control or supervision of any business or entity which competes with
(any such action individually and in the aggregate, to compete 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 the
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; any or all of which,
without first obtaining written approval of the chief executive officer of the
Company.  Executive also agrees that as long as he is employed by the Company,
he 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 his employment with the Company and for twelve (12) months thereafter,
Executive shall not, directly or indirectly, other than in connection with
carrying out his duties during the period of his 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 the
Executive or any competitor of the Company Group.

 

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c)             Solicitation of Clients, Etc.  Executive agrees that during the
period of his employment with the Company and for twelve (12) months thereafter,
he 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
his 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 with, or had written or telephonic communications with, 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 way with respect to any third party claims
pursued against the Company Group.  Nothing in this Section 6(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 the Executive acknowledge that:

 

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

 

(ii)           The essence of that portion of the Company’s business in which
the 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 good will of the
Company, all of which are and will be the exclusive property of the Company,
protected and kept secret by the Company; and

 

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(iii)          Without limiting Executive’s obligations under the foregoing, the
Executive agrees that during the period of his employment with the Company and
at all times thereafter, Executive shall keep secret and retain in strictest
confidence and shall not use for his 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 and the contemplated
business strategies and/or investments of any member of the Company Group),
(B) all corporations or other business organizations in which the Company Group
has or has had an investment and (C) third parties 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
restriction 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 Company’s express written consent.

 

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

 

(v)           Executive agrees that during the period of his 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 Company, or (B) as required by law, provided,
however, that Executive will give 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 his 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 his
employment by the Company, the Company will honor, and proceed in accordance
with, its bylaws as in effect from time to time.

 

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g)             No Limitation.  Nothing contained in this Section 6 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 Section 6, 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 Section 6 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
under this Agreement will be paid in consideration of the covenants contained in
this Section 6, the sufficiency of which consideration is hereby acknowledged. 
If any provision of this Section 6 as applied to Executive or to any
circumstance is adjudged by a court with jurisdiction upon short notice 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 Section 6.  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 Section 6
will cause irreparable injury to the Company and upon breach of any provision of
this Section 6, 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 Section 6 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.

 

7.             ASSIGNMENT.  This Agreement, and all of the terms and conditions
hereof, shall bind the Company and its successors and assigns and shall bind
Executive and Executive’s heirs, executors and administrators.  Neither this
Agreement, nor any of the Company’s rights or obligations hereunder, may be
assigned or otherwise subject to hypothecation by Executive, and any such
attempted assignment or hypothecation shall be null and void.  The Company may
assign the rights and obligations of the Company hereunder, in whole or in part,
to any of the Company’s Affiliates or parent corporations, or to any other
successor or assign in connection with the sale of all or substantially all of
the Company’s assets or stock or in connection with any merger, acquisition
and/or reorganization, provided the assignee assumes the obligations of the
Company hereunder.

 

10

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8.             GENERAL.

 

a)            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:

 

Chief Executive Officer

HCP, Inc.

3760 Kilroy Airport Way, Suite 300

Long Beach, CA 90806

 

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.

 

b)            Severability.  Any provision of this Agreement which is deemed by
a court of competent jurisdiction to be invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction and subject to this paragraph be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction.  If any covenant
should be deemed invalid, illegal or unenforceable by a court of competent
jurisdiction because its scope is considered excessive, such covenant shall be
modified so that the scope of the covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal and enforceable.

 

c)             Entire Agreement.  This document, together with the CIC Plan and
the other documents referred to herein and all restrictive covenants in any and
all agreements between Executive and the Company or to which Executive is a
party (the “Integrated Document”), constitutes the final, complete, and
exclusive embodiment of the entire agreement and understanding between the
parties related to the subject matter hereof and except as otherwise explicitly
set forth in the Integrated Document, supersedes and preempts any prior or
contemporaneous understandings, agreements, or representations by or between the
parties, written or oral.  Without limiting the generality of the foregoing, the
Integrated Document supersedes in its entirety Executive’s previous Employment
Agreement, dated May 31, 2011, with the Company.

 

d)            Counterparts.  This Agreement may be executed on separate
counterparts, any one (1) of which need not contain signatures of more than one
(1) party, but all of which taken together will constitute one and the same
agreement.  Signatures delivered by facsimile or “pdf” shall be effective for
all purposes.

 

11

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e)             Amendments.  No amendments or other modifications to this
Agreement may be made except by a writing signed by all parties.  No amendment
or waiver of this Agreement requires the consent of any individual, partnership,
corporation or other entity not a party to this Agreement.  Nothing in this
Agreement, express or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement.

 

f)             Choice of Law.  All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by the laws of
the State of California without giving effect to principles of conflicts of law
of such state.

 

g)             Survivorship.  The provisions of this Agreement necessary to
carry out the intention of the parties as expressed herein shall survive the
termination or expiration of this Agreement.

 

h)            Waiver.  The waiver by either party of the other party’s prompt
and complete performance, or breach or violation, of any provision of this
Agreement shall not operate nor be construed as a waiver of any subsequent
breach or violation, and the failure by any party hereto to exercise any right
or remedy which it may possess hereunder shall not operate nor be construed as a
bar to the exercise of such right or remedy by such party upon the occurrence of
any subsequent breach or violation.  No waiver shall be deemed to have occurred
unless set forth in a writing executed by or on behalf of the waiving party.  No
such written waiver shall be deemed a continuing waiver unless specifically
stated therein, and each such waiver shall operate only as to the specific term
or condition waived and shall not constitute a waiver of such term or condition
for the future or as to any act other than that specifically waived.

 

i)              Headings.  The subject heading of this Agreement are for
convenience and reference only and in no way define, describe, extend or limit
the scope or intent of this Agreement or the intent of any provision hereof.

 

j)             Construction.  The parties acknowledge that this Agreement is the
result of arm’s-length negotiations between sophisticated parties, each afforded
representation by legal counsel.  Each and every provision of this Agreement
shall be construed as though both parties participated equally in the drafting
of the same, and any rule of construction that a document shall be construed
against the drafting party shall not be applicable to this Agreement.

 

9.             ARBITRATION.

 

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 and applicable California law.  The
parties 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.

 

12

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b)            The parties 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 party for temporary or preliminary injunctive relief pending arbitration
in accordance with applicable law or an administrative claim with an
administrative agency.  THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO
TRIAL BY JUDGE OR JURY.

 

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

 

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 parties 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 Employee 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 party
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.

 

10.          REPRESENTATIONS.  Each party represents and warrants that (a) such
party is not subject to any contract, arrangement, agreement, policy or
understanding, or to any statute, governmental rule or regulation, that in any
way limits such party’s ability to enter into and fully perform such party’s
obligations under this Agreement; (b) such party is not otherwise unable to
enter into and fully perform such party’s obligations under this Agreement; and
(c) upon the execution and delivery of this Agreement by both parties, this
Agreement shall be such party’s valid and binding obligation, enforceable
against such party in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally.

 

11.          INCONSISTENCIES.  In the event of any inconsistency between any
provision of this Agreement and any provision of any other Company arrangement,
the provisions of this Agreement shall control to the extent more favorable to
Executive unless Executive otherwise agrees in a writing that expressly refers
to the provision of this Agreement whose control he is waiving.

 

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12.          BENEFICIARIES/REFERENCES.  Executive shall be entitled, to the
extent permitted under applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit hereunder following
Executive’s death by giving written notice thereof.  In the event of Executive’s
death or a judicial determination of his incompetence, references in this
Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.

 

[Remainder of page is left blank intentionally]

 

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IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto
have executed and delivered this Agreement as of the year and date first above
written.

 

THIS AGREEMENT CONTAINS AN ARBITRATION PROVISION WHEREBY EACH PARTY AGREED TO
SUBMIT DISPUTES TO BINDING ARBITRATION.

 

 

HCP, INC.

 

 

 

 

 

/s/ James F. Flaherty III

 

By:

James F. Flaherty III

 

 

Chairman and Chief Executive Officer

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ James W. Mercer

 

James W. Mercer

 

15

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Exhibit A

 

FORM OF RELEASE AGREEMENT1

 

This Release Agreement (this “Release Agreement”) is entered into this       
day of                    20    , by and between James W. Mercer, 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  
January 26, 2012 (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 other federal, state or local law, regulation, or
ordinance, or any Claim

 

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1  The Company may modify this form as to any individual employed outside of
California.

 

A-1

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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 5 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:

 

“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.”

 

A-2

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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;

 

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

 

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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.

 

A-3

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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.

 

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.

 

A-4

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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.

 

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.

 

A-5

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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”

 

 

 

 

 

James W. Mercer

 

 

 

 

 

HCP, INC.,

 

a Maryland corporation,

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

A-6

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ENDORSEMENT

 

I, James W. Mercer, 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.

 

 

 

 

 

James W. Mercer

 

A-7

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