EXHIBIT 10.4

Picture 1 [hcp20160930ex104feff3a001.jpg]

EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN

(As Amended and Restated as of May 6, 2016)

1.          Establishment and Purpose.  HCP, Inc. (the “Corporation”) considers
it essential to the best interests of its shareholders to foster the continuous
employment of key management personnel.  In connection with this, the
Corporation’s Board of Directors (the “Board”) recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control of
the Corporation may exist and that the uncertainty and questions that it may
raise among management could result in the departure or distraction of
management personnel to the detriment of the Corporation and its
shareholders.  The Board has decided to reinforce and encourage the continued
attention and dedication of selected members of the Corporation’s management to
their assigned duties without the distraction arising from the possibility of a
change in control of the Corporation.  In order to induce such members of
management to remain in its employ, the Corporation hereby agrees that on and
after the Effective Date (as defined in Section 2), subject to the terms and
conditions of the Plan (as defined in Section 2), Participants (as defined in
Section 3) shall be eligible to receive the severance benefits set forth in
Section 6 of the Plan in the event that the Participants’ employment with the
Corporation is terminated under the circumstances described in Section
5 subsequent to a Change in Control (as defined in Section 4).  Upon the
Effective Date, any prior severance agreement or letter between each Participant
and the Corporation shall terminate and be of no further effect.

2.          Term of Plan.  The Executive Change in Control Severance Plan was
originally established effective July 26, 2007 (the “Effective Date”), as
amended effective March 13, 2014, and is hereby amended and restated effective
May 6, 2016 (as so amended and restated, the “Plan”).  The Plan shall continue
in effect until such time as it is terminated by the Corporation (the period
during which the Plan is in effect, the “Term”); provided, however, that any
such termination of the Term will not become effective with respect to a
Participant until the 30th day following the date on which notice thereof is
given to the Participant; provided, further, that if a Change in Control occurs
during the Term, the Term shall continue in effect as to each Participant in the
Plan at the time of the Change in Control for a period of not less than 24
months beyond the month in which such Change in Control occurred (the “Change in
Control Term”).  For purposes of clarity, the Corporation may give notice of
termination of the Term to all or only certain Participants. If such notice is
given to only certain Participants, the Term shall continue as set forth above
as to all other Participants (subject to the Corporation’s rights to similarly
terminate the Term in accordance with the foregoing on some future date(s) as to
any such Participants).  A Participant shall cease to be eligible for benefits
under the Plan (and shall cease to be a Participant) at midnight Pacific Time on
the last day of the Term applicable to that Participant.  The termination or
expiration of the Term as to a Participant shall not affect the Participant’s
right to benefits (if any) pursuant to Section 6 as to any termination of
employment that occurred during such Term.

1

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

 

3.          Participation.    

(a)          Participation.    The Chief Executive Officer of the Corporation,
the Executive Chairman of the Corporation and each Executive Vice President and
Senior Vice President of the Corporation who holds such position as of May 6,
2016 and) each person who is hired or promoted to such a position, in each case,
unless otherwise determined by the Compensation Committee of the Board (the
“Committee”),  shall automatically participate in the Plan (each, an “Automatic
Participant”).  The Committee shall from time to time designate in writing other
employees of the Corporation who shall participate in the Plan (together with
Automatic Participants, “Participants”).  Notwithstanding anything else
contained herein to the contrary, the Committee shall limit the class of persons
selected to participate in the Plan to a select group of management or highly
compensated employees, as set forth in Sections 201, 301 and 401 of ERISA.  
 Unless otherwise determined by the Committee, the Severance Multiplier shall be
(i) 3 for the Chief Executive Officer of the Corporation and the Executive
Chairman of the Corporation, (ii) 2 for an Executive Vice President of the
Corporation and (iii) 1.5 for a Senior Vice President of the Corporation. The
Severance Multiplier for all other Participants shall be determined by the
Committee at the time they are selected to participate in the Plan.

(b)          Termination of Employment.  Notwithstanding anything else contained
in the Plan to the contrary, a Participant shall not be deemed to have
terminated employment with the Corporation if his or her employment by the
Corporation terminates but he or she otherwise continues, immediately after such
termination of employment, as an employee of a subsidiary of the Corporation (a
“Subsidiary”) or is offered employment (which, in either case, would not result
in Participant being able to terminate employment for Good Reason if
Participant’s terms of employment were similarly changed by the Corporation) by
any successor corporation or acquirer of the Corporation; provided that whether
the Participant has Good Reason to terminate employment shall be determined by
comparing the Participant’s authority, duties, responsibilities and other terms
of employment after giving effect to such change to the Participant’s authority,
duties, responsibilities and other terms of employment before giving effect to
such change (in each case relative to the Corporation and its Subsidiaries on a
consolidated basis, not simply with reference to the Participant’s employer).

(c)          Benefit Offset.  Notwithstanding the foregoing provisions, in the
event that  a Participant would be entitled to severance benefits pursuant to an
employment agreement entered into with the Corporation or any of its
Subsidiaries, in connection with a termination of the Participant's employment
as described in the Plan, the Participant will be entitled to receive the
benefits provided under the Plan only.  In no event will the Participant be
entitled to receive severance benefits under both the Plan and such employment
agreement.  Except as provided in the preceding sentence, any severance benefits
otherwise payable under the Plan to a Participant shall be offset or reduced by
(i) any severance benefits payable or deliverable to the Participant under any
other plan, program, or agreement of or with the Corporation or any of its
Subsidiaries and (ii) any other severance pay, termination indemnity, notice
pay, or similar payment that the Corporation or any of its Subsidiaries is
required by law to make to the Participant.

2

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

 

4.          Change in Control.  No benefits shall be payable under Section 6
unless there has been a Change in Control.  For purposes of the Plan, a “Change
in Control” shall be deemed to occur if any of the following take place on or
after the Effective Date:

(a)          The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
(the “Exchange Act”) (a “Person”)) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i)
the then-outstanding shares of common stock of the Corporation (the “Outstanding
Company Common Stock”) or (ii) the combined voting power of the then-outstanding
voting securities of the Corporation entitled to vote generally in the election
of directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this clause (a), the following acquisitions shall not
constitute a Change in Control: (A) any acquisition directly from the
Corporation, (B) any acquisition by the Corporation, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any affiliate of the Corporation or a successor, (D) any
acquisition by any entity pursuant to a transaction that complies with clauses
(c)(i), (ii) and (iii) below, and (E) any acquisition by a Person who owned at
least 30% of either the Outstanding Company Common Stock or the Outstanding
Company Voting Securities as of the Effective Date or an affiliate of any such
Person;

(b)          A change in the Board or its members such that individuals who, as
of the later of the Effective Date or the date that is two years prior to such
change (the later of such two dates is referred to as the “Measurement Date”),
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Measurement Date whose election, or
nomination for election by the Corporation’s stockholders, was approved by a
vote of at least two-thirds of the directors then comprising the Incumbent Board
(including for these purposes, the new members whose election or nomination was
so approved, without counting the member and his predecessor twice) shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;

(c)          Consummation of a reorganization, merger, statutory share exchange
or consolidation or similar corporate transaction involving the Corporation or
any of its Subsidiaries, a sale or other disposition of all or substantially all
of the assets of the Corporation, or the acquisition of assets or stock of
another entity by the Corporation or any of its Subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (i) all
or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 66-2/3% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities

3

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

 

entitled to vote generally in the election of directors, as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns the
Corporation or all or substantially all of the Corporation's assets directly or
through one or more subsidiaries (a “Parent”)) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any entity resulting
from such Business Combination or a Parent or any employee benefit plan (or
related trust) of the Corporation or such entity resulting from such Business
Combination or Parent) beneficially owns, directly or indirectly, more than 30%
of, respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such entity, except to the extent that the
ownership in excess of 30% existed prior to the Business Combination, and (iii)
at least a majority of the members of the board of directors or trustees of the
entity resulting from such Business Combination or a Parent were members of the
Incumbent Board (determined pursuant to clause (b) above using the date that is
the later of the Effective Date or the date that is two years prior to the
Business Combination as the Measurement Date) at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or

(d)          Approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation other than in the context of a
transaction that does not constitute a Change in Control under clause ‎0 above.

Notwithstanding the foregoing, to the extent required to avoid the imposition of
additional taxes under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), if a Change in Control does not constitute a “change in
control event,” as defined in Treasury Regulation 1.409A-3(i)(5) (or to the
extent otherwise required by Section 409A of the Code),  with respect to a
Participant's compensation which constitutes deferral of compensation subject to
Section 409A of the Code under an arrangement that must be aggregated with the
Plan for purposes of Treasury Regulations 1.409A-1(c)(2) (the "409A
Arrangement"), payments pursuant to the Plan that are not in excess of the
amount that would be payable to such Participant under such 409A Arrangement
shall be made at the time and in the manner provided by such 409A Arrangement
and the remaining amount, if any, shall be paid in accordance with the Plan.

 

5.          Termination Following Change in Control.

(a)          General.  During the Term, if any of the events described in
Section 4 constituting a Change in Control shall have occurred, each Participant
shall be entitled to the benefits provided in Section 6(b) upon the subsequent
termination of his or her employment, provided that such termination occurs
during the Term and within the two year period immediately following the date of
such Change in Control, unless such termination is (i) because of the
Participant’s death or Disability (as defined in Section 5 (b)), (ii) by the
Corporation for Cause (as defined in Section 5(c)), or (iii) by the Participant
other than for Good Reason (including a voluntary retirement when the

4

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

 

Participant otherwise does not have Good Reason to terminate employment).  In
the event that the Participant is entitled to such benefits, such benefits shall
be paid notwithstanding the subsequent expiration of the Term.  For purposes of
clarity, no Participant shall be entitled to any benefits under the Plan if his
or her employment with the Corporation terminates for any reason before a Change
in Control occurs or more than two years after a Change in Control occurs.

(b)          Disability.  As to any particular Participant, “Disability” means
the Participant’s inability, because of physical or mental illness or injury, to
perform the essential functions of his or her customary duties to the
Corporation, even with a reasonable accommodation, and the continuation of such
disabled condition for a period of 180 continuous days, or for not less than 210
days during any continuous 24 month period.

(c)          Cause.  Termination by the Corporation of a Participant’s
employment for “Cause” shall mean termination (i) upon the Participant’s willful
and continued failure to perform his or her duties with the Corporation (other
than any such failure resulting from his or her incapacity due to physical or
mental illness or any such actual or anticipated failure after the Participant’s
issuance of a Notice of Termination (as defined in Section 5(f)) for Good
Reason), after a written demand for performance is delivered to the Participant
by the Committee, which demand specifically identifies the manner in which the
Committee believes that the Participant has not performed his or her duties,
(ii) upon the Participant’s willful and continued failure to follow and comply
with the specific and lawful directives of the Committee, as reasonably
determined by the Committee (other than any such failure resulting from the
Participant’s incapacity due to physical or mental illness or any such actual or
anticipated failure after the Participant’s issuance of a Notice of Termination
for Good Reason), after a written demand for performance is delivered to the
Participant by the Committee, which demand specifically identifies the manner in
which the Committee believes that the Participant has not performed his or her
duties, (iii) upon the Participant’s willful and continued failure to follow and
comply with the policies of the Corporation as in effect from time to time
(other than any such failure resulting from the Participant’s incapacity due to
physical or mental illness or any such actual or anticipated failure after the
Participant’s issuance of a Notice of Termination for Good Reason), after a
written demand for performance is delivered to the Participant by the Committee,
which demand specifically identifies the manner in which the Committee believes
that the Participant has not followed or complied with such Corporation
policies; (iv) upon the Participant’s willful commission of an act of material
fraud or dishonesty; (v) upon the Participant’s willful engagement in illegal
conduct or gross misconduct; or (vi) upon the Participant’s indictment for,
conviction of, or a plea of guilty or nolo contendere to any felony.

(d)          Good Reason.  A Participant shall be entitled to terminate his or
her employment for Good Reason. For purposes of the Plan, “Good Reason” shall
mean, without the Participant’s express written consent, the occurrence after a
Change in Control and during the Term of any of the following:

5

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

 

(i)  the assignment to the Participant of any duties inconsistent with the
position in the Corporation that the Participant held immediately prior to the
Change in Control, a significant adverse alteration in the nature or status of
the Participant’s responsibilities or the conditions of the Participant’s
employment from those in effect immediately prior to such Change in Control, or
any other action by the Corporation or its successor or acquirer, that results
in a material diminution in the Participant’s position, authority, duties or
responsibilities;

(ii)  the reduction of the Participant’s annual base salary as in effect on the
Effective Date or as the same may be increased from time to time;

(iii)  the relocation of offices at which the Participant is principally
employed immediately prior to the date of the Change in Control to a location
more than 30 miles from such location;

(iv)  the Corporation’s failure to pay to the Participant any portion of his or
her current compensation or to pay to the Participant any portion of an
installment of deferred compensation under any deferred compensation program of
the Corporation reasonably promptly after the date such compensation is due;

(v)  the Corporation’s failure to continue in effect any material compensation
or benefit plan in which the Participant participates immediately prior to the
Change in Control, unless a substantially equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan,
or the Corporation’s failure to continue the Participant’s participation therein
(or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of the
Participant’s participation relative to other participants, as existed at the
time of the Change in Control;

(vi)  the Corporation’s failure to obtain a satisfactory agreement from any
successor to assume and agree to perform the Plan, as contemplated in Section
9 hereof; or

(vii)  any purported termination of the Participant’s employment that is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 5(f) (and, if applicable, the requirements of Section 5(c)), which
purported termination shall not be effective for purposes of the Plan.

Notwithstanding the foregoing, no such condition shall constitute “Good Reason”
unless the Participant provides written notice of such condition to the
Corporation and the Corporation fails to remedy the condition claimed to
constitute Good Reason within 30 days of receiving written notice thereof; and
provided, further, that in all events the termination of the Participant’s
employment with the Corporation shall not be treated as a termination for “Good
Reason” unless such termination occurs not more than six months following the
initial existence of the condition claimed to constitute Good Reason.  A
Participant’s right to terminate his or her employment pursuant to this Section
5(d) shall

6

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

 

not be affected by his or her incapacity due to physical or mental illness.  A
Participant’s continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason hereunder.

(e)          Termination Generally.  For purposes of clarity, a Participant or
the Corporation shall be entitled to terminate the Participant’s employment for
any reason or no reason at any time after a Change in Control effective as of
the applicable date set forth in Section 5(a).

(f)          Notice of Termination. Any purported termination of a Participant’s
employment by the Corporation or by the Participant (other than termination due
to death which shall terminate the Participant’s employment automatically) shall
be communicated by written Notice of Termination to the Participant or the
Corporation, respectively, other party hereto in accordance with Section 13.
“Notice of Termination” shall mean a notice that shall indicate the specific
termination provision in the Plan relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Participant’s employment under the provision so indicated.

(g)          Date of Termination, Etc.  “Date of Termination” shall mean (i) if
a Participant’s employment is terminated due to the Participant’s death, the
date of the Participant’s death; (ii) if a Participant’s employment is
terminated for Disability, 30 days after Notice of Termination is given
(provided that the Participant shall not have returned to the full-time
performance of his or her duties during such 30-day period); and (iii) if a
Participant’s employment is terminated for any other reason, the date specified
in the Notice of Termination.

6.          Compensation Upon Termination Following a Change in Control.  If a
Participant’s employment is terminated following a Change in Control during the
Term and during the two year period immediately following the date of the Change
in Control, the Participant shall be entitled to the benefits described below,
subject to the other terms and conditions of the Plan:

(a)          If the Participant’s employment is terminated in such circumstances
by the Corporation for Cause or Disability or by the Participant other than for
Good Reason or due to the Participant’s death, the Corporation shall pay the
Participant (i) the Participant’s accrued and unpaid base salary and vacation
(if any) through the Date of Termination, and (ii) all other amounts to which
the Participant is entitled under any compensation plan of the Corporation at
the time such payments are due, and the Corporation shall have no further
obligations to the Participant under the Plan;    

(b)          If the Participant’s employment by the Corporation shall be
terminated by the Participant for Good Reason or by the Corporation other than
for Cause or Disability and in all cases other than due to the Participant’s
death, then, subject to the provisions of Section 7, the Participant shall be
entitled to the benefits provided below.      For purposes of this Section 6(b),
“Annual Bonus Amount” shall mean (A) with respect to each Participant who is
serving as the Chief Executive Officer of the Corporation, the

7

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

 

Executive Chairman of the Corporation, or a Named Executive Officer of the
Corporation (as defined for purposes of the proxy statement for the Annual
Meeting of Stockholders of the Corporation) immediately prior to the Change in
Control  or is otherwise designated by the Committee as a “potential named
executive officer” pursuant to a designation in effect immediately prior to the
Change in Control, the target annual bonus amount in effect for such Participant
immediately prior to the Change in Control, and (B) with respect to all other
Participants, the greater of (1) the last annual bonus actually paid to the
Participant prior to the Date of Termination (or if greater, prior to the Change
in Control) for a full fiscal year of employment with the Corporation and (2)
the average of the last three annual bonuses actually paid to the Participant
for the last three full fiscal years of employment with the Corporation prior to
the Date of Termination (or if greater, prior to the Change in Control) (or the
average of such lower number of bonuses that were actually paid for full fiscal
years of employment with the Corporation prior to the Date of Termination or the
Change in Control, whichever is greater), which shall, in each case of clause
(1) and (2), be determined without regard to the payment of any special bonuses
(e.g. transaction bonuses); provided, if the Participant, on the Date of
Termination, has never been paid an annual bonus with respect to one full fiscal
year, then the Participant’s Annual Bonus Amount shall equal (x) the amount of
the Participant’s guaranteed bonus in respect of the year of termination, if
applicable, or (y) if the Participant is not eligible to receive a guaranteed
bonus in respect of the year of termination, then the amount of the
Participant’s Annual Base Salary.  For purposes of this Section 6(b), a
Participant’s “Annual Base Salary” shall mean the greater of (I) the
Participant’s annual base salary as in effect as of the Date of Termination or
(II) the Participant’s annual base salary as in effect immediately prior to the
Change in Control;

(i)  The Corporation shall pay to the Participant (A) the Participant’s accrued
and unpaid base salary and vacation (if any) through the Date of Termination,
(B) the unpaid portion, if any, of any annual bonus, plus an amount equal to the
Participant’s applicable Annual Bonus Amount multiplied by a fraction, the
numerator of which is the number of calendar days that the Participant was
employed by the Corporation during the year of termination and the denominator
of which is 365, and (C) all other amounts to which the Participant is entitled
under any compensation plan of the Corporation at the time such payments are
due;

(ii)  A lump sum severance payment equal to the sum of: (A) the Participant’s
Severance Multiplier times the Participant’s Annual Base Salary; plus (B) the
Participant’s Severance Multiplier times the Participant’s Annual Bonus Amount;

(iii)  A cash payment equal to the expected aggregate cost of the premiums that
would be charged to the Participant to continue medical coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), at the same or
reasonably equivalent medical coverage for the Participant (and, if applicable,
the Participant’s eligible dependents) as in effect immediately prior to the
Participant’s Date of Termination, for a period of months after the
Participant’s Date of Termination equal to 12 multiplied by the Participant’s
Severance Multiplier;

8

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

 

(iv)  (A) Any stock options or equity or equity-related compensation or grants
that vest based on the passage of time and continued performance of services (to
the extent outstanding and not otherwise vested as of the Date of Termination,
and exclusive of any grants that include performance-based vesting criteria)
shall become fully vested immediately prior to such termination; (B) any stock
options or equity or equity-related compensation or grants that vest based on
the satisfaction of performance-based criteria (to the extent outstanding and
not otherwise vested as of the Date of Termination) shall continue to be
governed by the provisions of the applicable award agreement in the
circumstances; provided, however, that to the extent that any such
then-outstanding equity-based awards are subject to forfeiture and/or vesting
requirements based on the passage of time, such awards shall be fully
accelerated with respect to such time-based forfeiture and/or vesting
provisions; and (C) the Participant shall have until the date that is 12 months
after his or her Date of Termination (24 months for each individual serving as
Chief Executive Officer of the Corporation or Executive Chairman of the
Corporation) to exercise any stock option to the extent that it has become
vested as of the Date of Termination, subject to earlier termination of the
stock option upon the stock option’s original expiration date or the occurrence
of a change in control event or certain similar reorganization event under the
terms of the applicable award agreement.  Except as provided in this Section
6(b)(iv), the effect of a termination of employment on a Participant’s
equity-based awards shall be determined under the terms of the applicable award
agreement;

(v)  The Participant shall be fully vested in his or her accrued benefits under
any nonqualified pension, profit sharing, deferred compensation or supplemental
plans maintained by the Corporation and the Corporation shall pay the
Participant a cash lump sum amount equal to the portion of the Participant’s
account under the Corporation’s 401(k) plan (including, without limitation, any
401(k) matching contributions), if any, that has not become vested under the
terms of such plan as of the Date of Termination;

(vi)  The Corporation shall furnish the Participant for six years following the
Date of Termination (without reference to whether the Term continues in effect)
with directors’ and officers’ liability insurance insuring the Participant
against insurable events which occur or have occurred while the Participant was
a director or officer of the Corporation, such insurance to have policy limits
aggregating not less than the amount in effect immediately prior to the Change
in Control, and otherwise to be in substantially the same form and to contain
substantially the same terms, conditions and exceptions as the liability
issuance policies provided for officers and directors of the Corporation in
force from time to time, provided, however, that such terms, conditions and
exceptions shall not be, in the aggregate, materially less favorable to the
Participant than those in effect on the Effective Date; provided, further, that
if the aggregate annual premiums for such insurance at any time during such
period exceed 150% of the per annum rate of premium currently paid by the
Corporation for such insurance, then the Corporation shall provide the

9

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

 

maximum coverage that will then be available at an annual premium equal to 150%
of such rate; and

(vii)    In any situation where under applicable law the Corporation has the
power to indemnify (or advance expenses to) the Participant in respect of any
judgments, fines, settlements, loss, cost or expense (including attorneys’ fees)
of any nature related to or arising out of the Participant’s activities as an
agent, employee, officer or director of the Corporation or in any other capacity
on behalf of or at the request of the Corporation, the Corporation shall
promptly on written request, indemnify (and advance expenses to) the Participant
to the fullest extent permitted by applicable law, including but not limited to
making such findings and determinations and taking any and all such actions as
the Corporation may, under applicable law, be permitted to have the discretion
to take so as to effectuate such indemnification or advancement.  Such agreement
by the Corporation shall not be deemed to impair any other obligation of the
Corporation respecting the Participant’s indemnification otherwise arising out
of this or any other agreement or promise of the Corporation or under any
statute.

(c)          The payments described in Sections 6(a)(i) and 6(b)(i)(A), as
applicable, shall be paid in cash to the Participant as soon as practicable
following the Date of Termination.    Subject to Sections  4, 7 and 21, the
payments described in Sections  6(b)(i)(B), 6(b)(ii),  6(b)(iii),  6(b)(iv) and
6(b)(v), as applicable, shall be paid in cash (or if so provided in an award
agreement relating to the grant of restricted stock units or other equity-based
awards other than stock options, in shares) to the Participant in a single lump
sum on (or with respect to payment in shares, as soon as practicable after) the
first regularly scheduled payroll date that occurs after the Participant’s
release contemplated by Section 7(a) becomes irrevocable by the Participant in
accordance with applicable law; provided that if the period during which the
Participant is permitted to consider the release in accordance with Section 7(a)
begins in one calendar year and ends in a second calendar year, such payment
shall in all events be made in the second calendar year.

(d)          The foregoing provisions of this Section 6 shall not affect: (i) a
Participant’s receipt of benefits otherwise due terminated employees under group
insurance coverage consistent with the terms of the applicable Corporation
welfare benefit plan; (ii) a Participant’s rights under COBRA to continue
participation in medical, dental, hospitalization and life insurance coverage;
or (iii) a Participant’s receipt of benefits otherwise due in accordance with
the terms of the Corporation’s 401(k) plan (if any).

7.          Release; Exclusive Remedy.    

(a)          This Section 7 shall apply notwithstanding anything else contained
in the Plan or any other stock option, restricted stock or other equity-based
award agreement to the contrary.  The Corporation’s obligation to make any
payment of benefits with respect to a Participant pursuant to Section 6(b) (if
the Participant is otherwise entitled to such benefits), other than those set
forth in Section 6(b)(i)(A), is subject to the condition precedent that (i) the
Participant has fully executed a valid and effective release

10

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

 

(in the form attached hereto as Exhibit A or such other form as the Committee
may reasonably require in the circumstances, which other form shall be
substantially similar to that attached hereto as Exhibit A but with such changes
as the Committee may determine to be required or reasonably advisable in order
to make the release enforceable and otherwise compliant with applicable laws),
(ii) such executed release is delivered by the Participant to the Corporation so
that it is received by the Corporation in the time period specified below, and
(iii) such release is not revoked by the Participant (pursuant to any revocation
rights afforded by applicable law).  In order to satisfy the requirements of
this Section 7(a), a Participant’s release referred to in the preceding sentence
must be delivered by the Participant to the Corporation so that it is received
by the Corporation no later than 25 calendar days after the Participant’s Date
of Termination (or such later date as may be required for an enforceable release
of the Participant’s claims under the United States Age Discrimination in
Employment Act of 1967, as amended (“ADEA”), to the extent the ADEA is
applicable in the circumstances, in which case the Participant will be provided
with either 21 or 45 days, depending on the circumstances of the termination, to
consider the release).  In addition, the Corporation may require that the
Participant’s release be executed no earlier than the date that the
Participant’s employment with the Corporation terminates.

(b)          Each Participant agrees that the general release agreement
described in Section 7(a) will require that the Participant acknowledge, as a
condition to the payment of any benefits under Section 6(b)  (other than those
set forth in Section 6(b)(i)(A)), that the payments contemplated by Section 6(b)
shall constitute the exclusive and sole remedy for any termination of the
Participant’s employment, and each Participant will be required to covenant, as
a condition to receiving any such payment, not to assert or pursue any other
remedies, at law or in equity, with respect to any termination of
employment.  No Participant shall be required to mitigate the amount of any
payment provided for in Section 6 by seeking other employment or otherwise nor
shall the amount of any payment or benefit provided for in Section 6 be reduced
by any compensation earned by the Participant as the result of employment by
another employer or self-employment, by retirement benefits, by offset against
any amount claimed to be owed by the Participant to the Corporation, or
otherwise.

8.          Section 280G.  Each Participant shall be covered by the provisions
set forth in Exhibit B hereto, incorporated herein by this reference.

9.          Successors; Assigns

(a)          The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to expressly
assume and agree to perform the obligations under the Plan in the same manner
and to the same extent that the Corporation would be required to perform it if
no such succession had taken place.  Failure of the Corporation to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be deemed a material breach of the Plan by the Corporation and shall entitle
each Participant to terminate his or her employment and receive compensation

11

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

 

from the Corporation in the same amount and on the same terms to which the
Participant would be entitled hereunder if the Participant terminates his or her
employment for Good Reason following a Change in Control, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.  Unless expressly
provided otherwise, “Corporation” as used herein shall mean the Corporation as
defined in the Plan and any successor to its business and/or assets as
aforesaid.

(b)          None of the benefits, payments, proceeds or claims of any
Participant shall be subject to any claim of any creditor and, in particular,
the same shall not be subject to attachment or garnishment or other legal
process by any creditor, nor shall any such Participant have any right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits or
payments or proceeds which he or she may expect to receive, contingently or
otherwise, under the Plan.  Notwithstanding the foregoing, benefits which are in
pay status may be subject to a court-ordered garnishment or wage assignment, or
similar order, or a tax levy.  The Plan shall inure to the benefit of and be
enforceable by each Participant’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees.  If a
Participant dies while any amount would still be payable to him or her hereunder
had he or she continued to live, all such amounts, unless otherwise provided
herein, shall be paid to the Participant’s estate in accordance with the terms
of the Plan.

10.          Claims Procedures.

(a)          Presentation of Claim. Any Participant (such Participant being
referred to below as a “Claimant”) may deliver to the Committee a written claim
for a determination with respect to the benefits payable to such Claimant
pursuant to the Plan.  If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within 60 days after such
notice was received by the Claimant.  All other claims must be made within 180
days of the date on which the event that caused the claim to arise
occurred.  The claim must state with particularity the determination desired by
the Claimant.

(b)          Notification of Decision.  The Committee shall consider a
Claimant’s claim within a reasonable time, but no later than 90 days after
receiving the claim.  If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the
extension shall be furnished to the Claimant prior to the termination of the
initial 90 day period.  In no event shall such extension exceed a period of 90
days from the end of the initial 90 day period.  The extension notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Committee expects to render the benefit determination.  The
Committee shall notify the Claimant in writing:

(i)  that the Claimant’s requested determination has been made, and that the
claim has been allowed in full; or

12

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

 

(ii)  that the Committee has reached a conclusion contrary, in whole or in part,
to the Claimant’s requested determination, and such notice must set forth in a
manner calculated to be understood by the Claimant:

A.          the specific reason(s) for the denial of the claim, or any part of
it;

B.          specific reference(s) to pertinent provisions of the Plan upon which
such denial was based;

C.          a description of any additional material or information necessary
for the Claimant to perfect the claim, and an explanation of why such material
or information is necessary;

D.          an explanation of the claim review procedure and the time limits
applicable to such procedures set forth in Section 10(c); and

E.          a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse determination on review.

(c)          Review of a Denied Claim.  On or before 60 days after receiving a
notice from the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant’s duly authorized representative) may file with the
Committee a written request for a review of the denial of the claim.  The
Claimant (or the Claimant’s duly authorized representative):

(i)  may, upon request and free of charge, have reasonable access to, and copies
of, all documents, records and other information relevant to the claim for
benefits;

(ii)  may submit written comments or other documents; and/or

(iii)  may request a hearing, which the Committee, in its sole discretion, may
grant.

(d)          Decision on Review.  The Committee shall render its decision on
review promptly, and no later than 60 days after the Committee receives the
Claimant’s written request for a review of the denial of the claim.  If the
Committee determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial 60 day period.  In no event
shall such extension exceed a period of 60 days from the end of the initial 60
day period.  The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to
render the benefit determination.  In rendering its decision, the Committee
shall take into account all comments, documents, records and other information
submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in

13

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

 

the initial benefit determination.  The decision must be written in a manner
calculated to be understood by the Claimant, and it must contain:

(i)  specific reasons for the decision;

(ii)  specific reference(s) to the pertinent Plan provisions upon which the
decision was based;

(iii)  a statement that the Claimant is entitled to receive, upon request and
free of charge, reasonable access to and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to the
Claimant’s claim for benefits; and

(iv)  a description of the Claimant's right to bring a civil action under
Section 502(a) of ERISA following an adverse benefit determination on review.

11.          Arbitration; Dispute Resolution, Etc.    

(a)          Notwithstanding anything to the contrary contained in the Plan, the
Participant, in his or her sole discretion, may elect to have any claim or
controversy arising out of or in connection with the Plan submitted to binding
arbitration and adjudicated in accordance with this Section 11 without first
having to exhaust the claims procedures set forth in Section 10.

(b)          The Corporation and, by accepting participation in the Plan, each
Participant hereby consent to the resolution by mandatory and binding
arbitration of all claims or controversies arising out of or in connection with
the Plan that the Corporation may have against the Participant, or that the
Participant may have against the Corporation or against any of its officers,
directors, employees or agents acting in their capacity as such, and which are
not resolved under the terms of Section 10 (or which are not required to be
resolved under the terms of Section 10, as the case may be).  Each party’s
promise to resolve all such claims or controversies by arbitration in accordance
with the Plan rather than through the courts is consideration for the other
party’s like promise.  It is further agreed that the decision of an arbitrator
on any issue, dispute, claim or controversy submitted for arbitration, shall be
final and binding upon the Corporation and the Participant and that judgment may
be entered on the award of the arbitrator in any court having proper
jurisdiction.

(c)          Except as otherwise provided in this procedure or by mutual
agreement of the parties, any arbitration shall be before a sole arbitrator (the
“Arbitrator”) selected from Judicial Arbitration & Mediation Services, Inc., Los
Angeles, California, or its successor (“JAMS”), or if JAMS is no longer able to
supply the Arbitrator, such Arbitrator shall be selected from the American
Arbitration Association, and shall be conducted in accordance with the
provisions of California Civil Procedure Code Sections 1280 et. seq. as the
exclusive remedy of such dispute.    

14

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

 

(d)          The Arbitrator shall interpret the Plan, any applicable Corporation
policy or rules and regulations, any applicable substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or applicable
federal law.  If arbitration is brought after the claim or controversy has been
submitted for review by the Committee in accordance with Section 10, the
Arbitrator shall limit his or her review to whether or not the Committee has
abused its discretion in its interpretation of the Plan and such policies,
rules, and regulations; provided, however, that the Arbitrator shall apply a de
novo standard of review with respect to any claim for benefits hereunder in
connection with a Change in Control.  In reaching his or her decision, the
Arbitrator shall have no authority to change or modify any lawful Corporation
policy, rule or regulation, or the Plan.  Except as provided in Section 11(e),
the Arbitrator, and not any federal, state or local court or agency, shall have
exclusive and broad authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of the Plan,
including but not limited to, any claim that all or any part of the Plan is
voidable.  The Arbitrator shall have the authority to decide dispositive
motions.  Following completion of the arbitration, the arbitrator shall issue a
written decision disclosing the essential findings and conclusions upon which
the award is based.

(e)          Notwithstanding the foregoing, provisional injunctive relief may,
but need not, be sought by the Participant or the Corporation in a court of law
while arbitration proceedings are pending, and any provisional injunctive relief
granted by such court shall remain effective until the matter is finally
resolved by the Arbitrator in accordance with the foregoing.  Final resolution
of any dispute through arbitration may include any remedy or relief which would
otherwise be available at law and which the Arbitrator deems just and
equitable.  The Arbitrator shall have the authority to award full damages as
provided by law.  Any award or relief granted by the Arbitrator hereunder shall
be final and binding on the parties hereto and may be enforced by any court of
competent jurisdiction.

(f)          The Corporation shall pay the reasonable fees and expenses of the
Arbitrator and of a stenographic reporter, if employed.  Each party shall pay
its own legal fees and other expenses and costs incurred with respect to the
arbitration.

12.          Administration of the Plan.

(a)          General. The Corporation shall be the plan administrator (within
the meaning of Section 3(16)(A) of ERISA).  The Corporation delegates its duties
under the Plan to the Committee.  The Committee delegates the day-to-day
ministerial duties with respect to the Plan to the Corporation’s
management.  The Committee and its delegates shall be named fiduciaries of the
Plan to the extent required by ERISA.

(b)          Powers and Duties of the Committee. The Committee shall enforce the
Plan in accordance with its terms, shall be charged with the general
administration of the Plan, and shall have all powers necessary to accomplish
its purposes, including, but not by way of limitation, the power and authority
to do the following:

(i)  To determine eligibility for and participation in the Plan;

15

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

 

(ii)  To construe and interpret the terms and provisions of the Plan;

(iii)  To compute and certify to the amount and kind of benefits payable to
Participants and their beneficiaries, and to determine the amount of withholding
taxes to be deducted pursuant to Section 15;

(iv)  To maintain all records that may be necessary for the administration of
the Plan;

(v)  To provide for the disclosure of all information and the filing or
provision of all reports and statements to Participants, beneficiaries or
governmental agencies as shall be required by law;

(vi)To make and publish such rules for the regulation of the Plan and procedures
for the administration of the Plan as are not inconsistent with the terms
hereof; and

(vii)  To appoint a plan manager or any other agent, and to delegate to them
such powers and duties in connection with the administration of the Plan as the
Committee may from time to time prescribe.

(c)          Committee Action. Subject to Section 10, the Committee shall act
with respect to the Plan at meetings by affirmative vote of a majority of the
members of the Committee.  Any action permitted to be taken at a meeting with
respect to the Plan may be taken without a meeting if, prior to such action, a
written consent to the action is signed by all members of the Committee and such
written consent is filed with the minutes of the proceedings of the
Committee.  A member of the Committee shall not vote or act upon any matter
which relates solely to himself or herself as a Participant.  The Chairman or
any other member or members of the Committee designated by the Chairman may
execute any certificate or other written direction on behalf of the Committee.

(d)          Construction and Interpretation.  As to any event prior to a Change
in Control, the Committee shall have full discretion to construe and interpret
the terms and provisions of the Plan, which interpretation or construction shall
be final and binding on all parties, including but not limited to the
Corporation and any Participant, beneficiary or other person.

13.          Notice.  All notices under or with respect to the Plan shall be in
writing and shall be either personally delivered or mailed postage prepaid, by
certified mail, return receipt requested:

(a)if to the Corporation:

HCP, Inc.

Attention: Compensation Committee

1920 Main Street, Suite 1200
Irvine, California 92614

16

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

 

with a copy to:

HCP, Inc.

Attention: Secretary of the Corporation

1920 Main Street, Suite 1200
Irvine, California 92614

(b)          if to a Participant, to the Participant’s address most recently on
file in the payroll records of the Corporation.

Notice shall be effective when personally delivered, or five business days after
being so mailed.  Any party may change its address for purposes of giving future
notices pursuant to the Plan by notifying the other party in writing of such
change in address, such notice to be delivered or mailed in accordance with the
foregoing.

14.          Governing Law.   The Plan will be governed by and construed in
accordance with ERISA and, to the extent not preempted thereby, 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 the Plan, even if under such jurisdiction’s
choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.  Any statutory reference in the Plan shall
also be deemed to refer to all applicable final rules and final regulations
promulgated under or with respect to the referenced statutory provision.

15.          Miscellaneous.  The Committee may from time to time amend the Plan
in any way it deems to be advisable; provided that (i) no such amendment shall
materially and adversely affect the rights of any Participant (or former
Participant) under the Plan without that Participant’s (or former Participant’s,
as the case may be) consent and (ii) no amendment may be made to the Plan in any
respect during the Change in Control Term.  Neither the failure nor any delay on
the part of a party to exercise any right, remedy, power or privilege under the
Plan shall operate as a waiver thereof, nor shall any single or partial exercise
of any right, remedy, power or privilege preclude any other or further exercise
of the same or of any right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.  No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.  No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by the Corporation which are not expressly
set forth in the Plan. All references to sections of the Exchange Act or the
Code shall be deemed also to refer to any successor provisions to such
sections.  The Corporation may withhold (or cause there to be withheld, as the
case may be) from any amounts otherwise due or payable under or pursuant to the
Plan such federal, state and local

17

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

 

income, employment, or other taxes as may be required to be withheld pursuant to
any applicable law or regulation.  Any obligations of the Corporation under
Sections 4 and 6 shall survive the expiration of the Term. The section headings
contained in the Plan are for convenience only, and shall not affect the
interpretation of the Plan.

16.          Unsecured General Creditor.   Participants and their heirs,
successors, and assigns shall have no legal or equitable rights, claims, or
interest in any specific property or assets of the Corporation or any
Subsidiary.  No assets of the Corporation shall be held under any trust, or held
in any way as collateral security, for the fulfilling of the obligations of the
Corporation under the Plan.  Any and all of the Corporation’s assets shall be,
and remain, the general unpledged, unrestricted assets of the Corporation
(unless pledged or restricted with respect to the Corporation’s obligations
other than the Plan).  The Corporation’s obligation under the Plan shall be
merely that of an unfunded and unsecured promise of the Corporation to pay money
and benefits in the future, and the rights of the Participants and their heirs
or successors as to benefits under the Plan shall be no greater than those of
unsecured general creditors of the Corporation. 

17.          Other Benefit Plans.  All payments, benefits and amounts provided
under the Plan shall be in addition to and not in substitution for any pension
rights under any tax-qualified pension or retirement plan in which the
Participant participates, and any disability, workers’ compensation or other
Corporation benefit plan distribution that a Participant is entitled to (other
than severance benefits), under the terms of any such plan, at the time the
Participant ceases to be employed by the Corporation.  Notwithstanding the
foregoing, the Plan shall not create an inference that any duplicate payments
shall be required.  Payments received by a person under the Plan shall not be
deemed a part of the person’s compensation for purposes of the determination of
benefits under any other employee pension, welfare or other benefit plans or
arrangements, if any, provided by the Corporation, except where explicitly
provided under the terms of such plans or arrangements.

18.          Severability.   In the event any provision of the Plan 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 the Plan 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 the Plan,
as applicable, 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 the Plan or affecting the validity or enforceability of such
provision in any other jurisdiction.

19.          Employment Status.  Except as may be expressly provided under any
other written agreement between a Participant and the Corporation (other than
the Plan) signed

18

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

 

by a duly authorized officer thereof, the employment of each Participant by the
Corporation is “at will,” and may be terminated by either the Participant or the
Corporation at any time.

20.          Payments on Behalf of Persons Under Incapacity.  In the event that
any amount becomes payable under the Plan to a person who, in the sole judgment
of the Committee, is considered by reason of physical or mental condition to be
unable to give a valid receipt therefor the Committee may direct that such
payment be made to any person found by the Committee, in its sole judgment, to
have assumed the care of such person.  Any payment made pursuant to such
determination shall constitute a full release and discharge of the Committee and
the Corporation.

21.          Code Section 409A.   The intent of the parties is that payments and
benefits under the Plan comply with Section 409A of the Code, to the extent
subject thereto, and accordingly, to the maximum extent permitted, the Plan
shall be interpreted and administered to be in compliance
therewith.  Notwithstanding anything contained herein to the contrary, a
Participant shall not be considered to have terminated employment with the
Corporation for purposes of any payments under the Plan which are subject to
Section 409A of the Code until the Participant has incurred a “separation from
service” from the Corporation within the meaning of Section 409A of the
Code.  Each amount to be paid or benefit to be provided under the Plan shall be
construed as a separate identified payment for purposes of Section 409A of the
Code.  Without limiting the foregoing and notwithstanding anything contained
herein to the contrary, to the extent required in order to avoid an accelerated
or additional tax under Section 409A of the Code, amounts that would otherwise
be payable and benefits that would otherwise be provided pursuant to the Plan
during the six-month period immediately following a Participant’s separation
from service shall instead be paid on the first business day after the date that
is six months following the Participant’s separation from service (or, if
earlier, the Participant’s date of death).  To the extent required to avoid an
accelerated or additional tax under Section 409A of the Code, (a) amounts
reimbursable to a Participant shall be paid 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 a
Participant) during one year may not affect amounts reimbursable or provided in
any subsequent year, and (b) any tax gross-up payments (and related
reimbursements) payable to a Participant under the Plan shall be paid no later
than the end of the calendar year following the year in which the tax resulting
in the gross-up is paid.  The Corporation makes no representation that any or
all of the payments described in the Plan 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.

***

 

 

19

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

 

IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to
execute the Plan on the date first set forth above.

 

HCP, INC.
a Maryland corporation.

By:

/s/ Troy E. McHenry

 

Troy E. McHenry

Its:

Executive Vice President and

 

 

Corporate Secretary

 

 

20

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

 

 

EXHIBIT A

FORM OF RELEASE AGREEMENT1

This Release Agreement (this “Release Agreement”) is entered into this ___ day
of _________ 20__, by and between _____________________, 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 Company’s Executive Change in Control Severance Plan (the “Plan”), 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 Plan, 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

1The Company reserves the right to modify this form as to any Participant
employed outside of California.

A-1

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

 

Fair Employment and Housing Act, the California Family Rights Act, or any 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:  (a)
any obligation created by or arising out of the Plan for which receipt or
satisfaction has not been acknowledged; (b) 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; (c) 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; (d) 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; (e) any rights to continued
medical or dental coverage that Executive may have under COBRA; (f) 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 (g) 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 Release Agreement.

3.          Waiver of Unknown and Unsuspected Claims.  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 ("Section 1542"), as well as any other similar statute or common law
doctrine that may apply, 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-2

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

 

“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 and any similar applicable statute or doctrine of law.

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 [21/ 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 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; and

A-3

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

 

(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

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.          Covenants.  Executive by executing this release expressly agrees to
each of the foregoing provisions of this Section 6:

(a)          Confidentiality. Executive shall not at any time directly or
indirectly, disclose or make available to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, any
Confidential Information (as defined below); provided, however, that this
Section 6(a) shall not apply when (i) disclosure is required by law or by any
court, arbitrator, mediator or administrative or legislative body (including any
committee thereof) with apparent jurisdiction to order the Executive to disclose
or make available such information (provided, however, that the Executive shall
promptly notify the Corporation in writing upon receiving a request for such
information), or (ii) with respect to any other litigation, arbitration or
mediation involving this Release Agreement, including but not limited to
enforcement of this Release Agreement.  As of the date of this Release
Agreement, all Confidential Information in the Executive’s possession that is in
written, digital or other tangible form (together with all copies or duplicates
thereof, including computer files) has been returned to the Corporation and has
not been retained by the Executive or furnished to any third party, in any form
except as provided herein; provided, however, that the Executive shall not be
obligated to treat as confidential, or return to the Corporation copies of any
Confidential Information that (x) was publicly known at the time it was
disclosed to the Executive, (y) becomes publicly known or available thereafter
other than by any means in violation of the Plan or any other duty owed to the
Corporation by any person or entity, or (z) is lawfully disclosed to the
Executive by a third party.  As used in this Release Agreement, the term
“Confidential Information” means: information disclosed to the Executive or
known by the Executive as a consequence of or through the Executive’s
relationship with the Corporation, about the

2Except as noted below, Section 4 will be included if the Executive is age 40 or
older as of the date that the Executive’s employment by the Company terminates
or in such other circumstances (if any) as the Executive may have claims under
the ADEA.  In the event Section 4 is included, 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 determinations referred to in
the preceding two sentences shall be made by the Company in its sole
discretion.  In any event (regardless of the applicability of the ADEA in the
circumstances) the Release Agreement will include the Executive’s
acknowledgements and agreements set forth in clauses 4(a),  4(b), and 4(c).

A-4

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

 

suppliers, customers, employees, business methods, public relations methods,
organization, procedures or finances, including, without limitation, information
of or relating to supplier lists or customer lists, of the Corporation and its
affiliates (collectively, the “Company Group”). Notwithstanding anything set
forth in this Release Agreement to the contrary, Executive shall not be
prohibited from reporting possible violations of federal or state law or
regulation to any governmental agency or entity or making other disclosures that
are protected under the whistleblower provisions of federal or state law or
regulation, nor is Executive required to notify the Corporation regarding any
such reporting, disclosure or cooperation with the government.

(b)          Noncompetition.  Executive acknowledges that the nature of the
Company Group’s business and the Executive’s position with the Corporation is
such that if the Executive were to become employed by, or substantially involved
in, the business of a competitor of the Company Group during the 12 months
following the termination of the Executive’s employment with the Corporation, it
would not be possible, or would be very difficult, for the Executive not to rely
on or use the Company Group’s trade secrets and Confidential Information.  Thus,
to avoid the inevitable disclosure of the Company Group’s trade secrets and
Confidential Information, and to protect such trade secrets and Confidential
Information and the Company Group’s relationships and goodwill with customers,
for a period of 12 months after the termination date (the “Restricted Period”),
the Executive will not directly or indirectly engage in (whether as an employee,
consultant, agent, proprietor, principal, partner, stockholder, corporate
officer, director or otherwise), nor have any ownership interest in, or
participate in the financing, operation, management or control of, any person,
firm, corporation or business anywhere in the United States and Mexico (the
“Restricted Area”) that competes with any member of the Company Group in the
healthcare real estate acquisition, development, management, investment or
financing industry (a “Competing Business”); provided, that the Executive may
purchase and hold only for investment purposes less than two percent of the
shares of any corporation in competition with the Company Group whose shares are
regularly traded on a national securities exchange.  Notwithstanding the
preceding sentence, in the event Executive accepts employment with or provides
services to a business (the “Service Recipient”) that is affiliated with another
business that engages in a Competing Business or which derives a de minimis
portion of its gross revenues from Competing Businesses, the Executive’s
employment by or service to the Service Recipient shall not constitute a breach
by Executive of his or her obligations pursuant to this Section 6(b) so long as
each of the following conditions is satisfied at all times during the Restricted
Period and while the Executive is employed by or providing service to the
Service Recipient: (i) no more than 10% of the gross revenues of the Service
Recipient are derived from Competing Businesses; (ii) no more than 10% of the
gross revenues of the Service Recipient and those entities that (directly or
through one or more intermediaries) are controlled by, control, or are under
common control with such Service Recipient, together on a consolidated basis,
are derived from Competing Businesses; and (iii) in the course of the
Executive’s services for the Service Recipient, a material portion (no more than
10%) of the Executive’s services are not directly involved in or responsible for
any Competing Business.  The foregoing covenants in this Section 6(b) shall
continue in effect through the entire Restricted Period regardless of whether
the Executive is then entitled to receive any severance payments

A-5

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

 

from the Corporation.  The foregoing provision shall not apply to any Executive
who was employed by the Corporation in California on the termination date.

(c)          Non-Solicitation of Employees. During the Restricted Period,
Executive shall not directly or indirectly solicit, induce, attempt to hire,
recruit, encourage, take away, or hire any employee or independent contractor of
the Company Group whose annual rate of compensation is then $50,000 or more or
cause any such Company Group employee or contractor to leave his or her
employment or engagement with the Company Group either for employment with the
Executive or for any other entity or person.  The foregoing covenants in this
Section 6(c) shall continue in effect through the entire Restricted Period
regardless of whether the Executive is then entitled to receive any severance
payments from the Corporation.

(d)          Non-Solicitation of Customers. During the Restricted Period,
Executive shall not directly or indirectly influence or attempt to influence
customers, vendors, suppliers, licensors, lessors, joint venturers, associates,
consultants, agents, or partners of the Company Group to divert their business
away from the Company Group to any Competing Business, and each Executive agrees
not to otherwise interfere with, disrupt or attempt to disrupt the business
relationships, contractual or otherwise, between any member of the Company Group
and any of its customers, suppliers, vendors, lessors, licensors, joint
venturers, associates, officers, employees, consultants, managers, partners,
members or investors.  The foregoing covenants in this Section 6(d) shall
continue in effect through the entire Restricted Period regardless of whether
the Executive is then entitled to receive any severance payments from the
Corporation.

(e)          Understanding of Covenants. Executive, by accepting participation
in the Plan represents as follows: the Executive (i) is familiar with the
foregoing covenants set forth in this Section 6; (ii) is fully aware of the
Executive’s obligations hereunder; (iii) agrees to the reasonableness of the
length of time, scope and geographic coverage of the foregoing covenants set
forth in this Section 6; (iv) agrees that the Company Group currently conducts
business throughout the Restricted Area; and (v) agrees that such covenants are
necessary to protect the Company Group’s confidential and proprietary
information, goodwill, stable workforce, and customer relations.

(f)          Right to Injunctive and Equitable Relief.  Executive’s obligations
not to disclose or use Confidential Information and to refrain from the
solicitations described in this Section 6 are of a special and unique character,
which gives them a peculiar value.  The Corporation cannot be reasonably or
adequately compensated in damages in an action at law in the event the Executive
breaches such obligations, and the breach of such obligations would cause
irreparable harm to the Corporation.  Therefore, the Corporation shall be
entitled to injunctive and other equitable relief without bond or other security
in the event of such breach in addition to any other rights or remedies which
the Corporation may possess.  Furthermore, the Executive’s obligations and the
rights and remedies of the Corporation under this Section 6 are cumulative and
in addition to, and not in lieu of, any obligations, rights, or remedies created
by applicable law relating to misappropriation or theft of trade secrets or
confidential information.

A-6

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

 

(g)          Cooperation. Executive shall respond to all reasonable inquiries of
the Corporation about any matters concerning the Corporation or its affairs that
occurred or arose during the Executive’s employment by the Corporation, and the
Executive shall reasonably cooperate with the Corporation in investigating,
prosecuting and defending any charges, claims, demands, liabilities, causes of
action, lawsuits or other proceedings by, against or involving the Corporation
relating to the period during which the Executive was employed by the
Corporation or relating to matters of which the Executive had or should have had
knowledge or information.  Further, except as required by law, the Executive
will at no time voluntarily serve as a witness or offer written or oral
testimony against the Corporation in conjunction with any complaints, charges or
lawsuits brought against the Corporation by or on behalf of any current or
former employees, or any governmental or administrative agencies related to the
Executive’s period of employment and will provide the Corporation with notice of
any subpoena or other request for such information or testimony.

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

A-7

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

 

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 Release Agreement shall be submitted to arbitration in accordance with
the arbitration provision set forth in the Plan.

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.

***

[The remainder of this page is left blank intentionally.]

 

A-8

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

 

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 ___________, ___________. 

Executive

 

 

Print Name:

 

 

 

HCP, INC.,

a Maryland corporation

 

 

By:

 

Name:

 

Title:

 

 

 

A-9

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

 

ENDORSEMENT

I, _______________________, 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 ____________________ that the foregoing is true and correct.

EXECUTED this ________ day of ________ 20__, at ___________, ___________. 

 

 

 

Print Name:

 

 

A-10

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

 

 

EXHIBIT B

SECTION 280G PROVISIONS

The provisions of this Exhibit B shall apply to each Participant in the HCP,
Inc. Executive Change in Control Severance Plan (the “Plan”).  Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to
such terms in the Plan.

In the event that any of the payments and other benefits provided under the Plan
or otherwise payable to Participant (i) constitute “parachute payments” within
the meaning of Section 280G of the Code and (ii) but for this Exhibit B, would
be subject to the excise tax imposed by Section 4999 of the Code (“Excise Tax”),
then Participant’s payments and benefits under the Plan or otherwise shall be
payable either:

 

(A) in full (with the Participant paying any excise taxes due), or

 

(B) in such lesser amount which would result in no portion of such payments or
benefits being subject to the Excise Tax, whichever of the foregoing amounts,
taking into account the applicable federal, state and local income taxes and the
Excise Tax, results in the receipt by Participant, on an after-tax basis, of the
greatest amount of payments and benefits under the Plan or otherwise,
notwithstanding that all or some portion of such payments or benefits may be
taxable under Section 4999 of the Code.  Subject to Section 409A of the Code,
any reduction in the payments and benefits required by this Exhibit B will be
made in the following order: (i) reduction of cash payments; (ii) reduction of
accelerated vesting of equity awards other than stock options; (iii) reduction
of accelerated vesting of stock options; and (iv) reduction of other benefits
paid or provided to Participant.

***

[The remainder of this page is left blank intentionally.]

 

 

 

B-1

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