Exhibit 10.1

 

HCP, INC.

CHANGE IN CONTROL SEVERANCE PLAN

 

(As Amended and Restated as of March 13, 2014)

 

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 this Plan, Participants (as defined in Section 3) shall be
eligible to receive the severance benefits set forth in Section 6 of this Plan
in the event that the Participants’ employment with the Corporation is
terminated under the circumstances described in Section 5 of this Plan
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 Plan was originally
established effective July 26, 2007 (the “Effective Date”) and is hereby amended
effective March 13, 2014.  The Plan shall continue in effect through
December 31, 2014 (the “Term”); provided, however, commencing on January 1, 2015
and on each January 1 thereafter, the Term shall automatically be extended for
one additional year as to each Participant then in the Plan unless, not later
than November 30 of the preceding year, the Corporation shall have given notice
to the Participant that it does not wish to extend the Term, and if such notice
is timely given, the Plan will terminate at the end of the Term then in effect
as to each Participant who is timely given such notice (with no extension or
further notice, as the case may be); provided, further, that if a Change in
Control, occurs during the Term (or the extended Term, as the case may be), 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 twenty-four (24) months
beyond the month in which such Change in Control occurred.  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 this 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 obligations under Section 10 or
affect the Participant’s right to benefits (if any) pursuant to Section 6 as to
any termination of employment that occurred during such Term.

 

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3.                                    Participation.

 

(a)                               Participation.  The Compensation Committee of
the Board (the “Committee”) shall from time to time designate in writing those
employees of the Corporation (each, an “Eligible Person”) who are, subject to
Section 3(b), eligible to participate in the Plan (each, a “Participant”). 
Notwithstanding anything else contained herein to the contrary, the Committee
shall limit the class of persons selected to participate in this Plan to a
select group of management or highly compensated employees, as set forth in
Sections 201, 301 and 401 of ERISA.

 

(b)                              Participation Agreement.  To the extent the
Committee has designated an Eligible Person as being eligible to participate in
this Plan, the Eligible Person shall become a Participant only by promptly
completing, fully executing, and returning to the Corporation a participation
agreement in substantially the form attached hereto as Exhibit A (or such other
form as the Committee may require and provide for at the time it designates the
Eligible Person as being eligible to participate in this Plan).  The
Participation Agreement shall set forth the Participant’s applicable “Severance
Multiplier” for the purposes of calculating the Participant’s benefits under
Section 6.

 

(c)                               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”); 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).

 

(d)                             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 this Plan, the Participant will be
entitled to receive the benefits provided under this Plan only.  In no event
will the Participant be entitled to receive severance benefits under both this
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 the amount of 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.

 

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4.                                    Change in Control.  No benefits shall be
payable under Section 6 of this Plan unless there has been a Change in Control. 
For purposes of this 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 25% or
more of either (1) the then-outstanding shares of common stock of the
Corporation (the “Outstanding Company Common Stock”) or (2) 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)(1), (2) and (3) below, and (E) any acquisition by a
Person who owned at least 25% 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, (1) 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 entitled to

 

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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, (2) 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 25% 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
25% existed prior to the Business Combination, and (3) 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 (c) above.

 

Notwithstanding the foregoing, to the extent required to avoid the imposition of
additional taxes under Section 409A of 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 this 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 (2) 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

 

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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 this Plan if his
or her employment with the Corporation terminates for any reason before a Change
in Control occurs or more than two (2) 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 one hundred eighty (180)
continuous days, or for not less than two hundred ten (210) days during any
continuous twenty-four (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 (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 followed or complied with such Corporation
policies; (iv) upon the Participant’s willful commission of an act of fraud or
dishonesty resulting in material economic or financial injury to the
Corporation; (v) upon the Participant’s willful engagement in illegal conduct or
gross misconduct, in each case which is materially and demonstrably injurious to
the Corporation; 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 this 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:

 

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(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 that
results in a material diminution in the Participant’s position, authority,
duties or responsibilities;

 

(ii)                              the Corporation’s [material] 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 the Corporation’s offices at
which the Participant is principally employed immediately prior to the date of
the Change in Control (the Participant’s “Principal Location”) to a location
more than thirty (30) miles from such location, or the Corporation’s requiring
the Participant, without the Participant’s written consent, to be based anywhere
other than his or her Principal Location, provided that such relocation results
in a longer commute (measured by actual mileage) for the Participant from the
Participant’s primary residence to such new location and except for required
travel on the Corporation’s business to an extent substantially consistent with
the Participant’s current business travel obligations;

 

(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 an 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 this Plan, as
contemplated in Section 8 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) hereof (and, if applicable, the requirements of
Section 5(c) hereof), which purported termination shall not be effective for
purposes of this Agreement.

 

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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 thirty (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
(6) 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 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 14. “Notice of Termination” shall mean a
notice that shall indicate the specific termination provision in this 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 (a) if a Participant’s employment is terminated due to
the Participant’s death, the date of the Participant’s death; (b) if a
Participant’s employment is terminated for Disability, thirty (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 thirty
(30)-day period), and (c) 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 (2) 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
this 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 this Agreement.

 

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(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), a Participant’s “Annual Bonus Amount” shall mean the greater
of (i) one-third (1/3) of the Participant’s annual base salary as in effect as
of the Date of Termination or (ii) the average annual bonus received by the
Participant in the three (3) years immediately prior to the Change in Control
for each full year of employment with the Corporation, which shall be determined
without regard to the payment of any special bonuses (e.g. transaction
bonuses).  For purposes of this Section 6(b), a Participant’s “Annual Base
Salary” shall mean the greater of (x) the Participant’s annual base salary as in
effect as of the Date of Termination or (y) the Participant’s annual base salary
as in effect immediately prior to the Change in Control.

 

(i)                                  The Corporation shall pay to the
Participant (1) the Participant’s accrued and unpaid base salary and vacation
(if any) through the Date of Termination, (2) 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 (3) 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 twelve (12)
multiplied by the Participant’s Severance Multiplier.

 

(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 Severance
Date) shall continue to be governed by the provisions of the applicable award

 

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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 twelve
(12) months after his or her Date of Termination to exercise any stock option to
the extent that it has become vested on 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 (6) 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 one hundred and fifty percent (150%) of the
per annum rate of premium currently paid by the Corporation for such insurance,
then the Corporation shall provide the maximum coverage that will then be
available at an annual premium equal to one hundred and fifty percent (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

 

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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)                               Subject to Section 7 and Section 22, the
payments described in Sections 6(a)(i), 6(b)(i)(1), 6(b)(i)(2), 6(b)(ii),
6(b)(iii) and 6(b)(iv), as applicable, shall be paid in cash to the Participant
in a single lump sum as soon as practicable following the Date of Termination,
but in no event beyond seventy four (74) days from such date (or, if earlier,
the (10) business days after the Participant’s release contemplated by
Section 7(a) becomes irrevocable by the Participant in accordance with
applicable law.

 

(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 this Plan or any other stock option, restricted stock
or other equity-based award agreement to the contrary.  Notwithstanding anything
to the contrary contained in this Plan, the Corporation’s obligation to make any
payment of benefits with respect to a Participant pursuant to Section 6(b) of
this Plan (if the Participant is otherwise entitles to such benefits) is subject
to the condition precedent that (i) the Participant has fully executed a valid
and effective release (in the form attached hereto as Exhibit B 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 B 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 twenty five
(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 twenty one (21) or forty five
(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.

 

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(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),
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 C 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 this 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 this Plan by the Corporation and
shall entitle each Participant to terminate his or her employment and receive
compensation 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 this Plan and any successor to its business and/or
assets as aforesaid.

 

(b)                              None of the benefits, payments, proceeds or
claims of any Eligible Person or 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 Eligible
Person or 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.

 

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10.                            Confidentiality, Noncompetition and
Non-Solicitation Covenants.  Each Participant by accepting participation in the
Plan expressly agrees to each of the foregoing provisions of this Section 10:

 

(a)                               Confidentiality.  Each Participant shall not
at any time (whether during or after the Participant’s employment with the
Corporation and whether or not the Participant subsequently ceases to
participate in this Plan or is ever entitled to the benefits provided in
Section 6) directly or indirectly, other than in the course of the Participant’s
duties hereunder, 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 10(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 Participant to
disclose or make available such information (provided, however, that the
Participant 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 Plan, including but not limited to
enforcement of this Plan.  Upon termination of a Participant’s employment with
the Corporation, all Confidential Information in the Participant’s possession
that is in written, digital or other tangible form (together with all copies or
duplicates thereof, including computer files) shall be returned to the
Corporation and shall not be retained by the Participant or furnished to any
third party, in any form except as provided herein; provided, however, that the
Participant 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 Participant, (y) becomes publicly known or
available thereafter other than by any means in violation of this Plan or any
other duty owed to the Corporation by any person or entity, or (z) is lawfully
disclosed to the Participant by a third party.  As used in this Plan, the term
“Confidential Information” means: information disclosed to a Participant or
known by a Participant as a consequence of or through the Participant’s
relationship with the Corporation, about the 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”).

 

(b)                              Noncompetition.  Each Participant acknowledges
that the nature of the Company Group’s business and the Participant’s position
with the Corporation is such that if the Participant were to become employed by,
or substantially involved in, the business of a competitor of the Company Group
during the twelve (12) months following the termination of the Participant’s
employment with the Corporation, it would be very difficult for the Participant
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

 

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customers, during the Participant’s employment with the Corporation and for a
period of twelve (12) months after the Date of Termination for any reason (the
“Restricted Period”), the Participant 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
Participant may purchase and hold only for investment purposes less than 2% 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 a Participant 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
Participant’s employment by or service to the Service Recipient shall not
constitute a breach by that Participant of his or her obligations pursuant to
this Section 10(b) so long as each of the following conditions is satisfied at
all times during the Restricted Period and while the Participant 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 Participant’s services for the Service Recipient, a material
portion of the Participant’s services are not directly involved in or
responsible for any Competing Business.  The foregoing covenants in this
Section 10(b) shall continue in effect through the entire Restricted Period
regardless of whether the Participant is then entitled to receive any severance
payments from the Corporation.

 

(c)          Non-Solicitation of Employees. During the Restricted Period, each
Participant shall not to 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 Participant or for any other entity or person.  The foregoing covenants
in this Section 10(c) shall continue in effect through the entire Restricted
Period regardless of whether the Participant is then entitled to receive any
severance payments from the Corporation.

 

(d)          Non-Solicitation of Customers.  During the Restricted Period, each
Participant shall not to 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
Participant agrees not to otherwise interfere with, disrupt or attempt to
disrupt the business relationships, contractual or otherwise, between

 

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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 10(d) shall continue in effect through the entire Restricted
Period regardless of whether the Participant is then entitled to receive any
severance payments from the Corporation.

 

(e)          Understanding of Covenants. Each Participant, by accepting
participation in this Plan represents as follows: the Participant (i) is
familiar with the foregoing covenants set forth in this Section 10, (ii) is
fully aware of the Participant’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 10, (iv) agrees that the Company
Group currently conducts business throughout the Restricted Area, (v) agrees
that such covenants are necessary to protect the Company Group’s confidential
and proprietary information, good will, stable workforce, and customer
relations, (vi) agrees that the Participant’s coverage by this Plan for the Term
applicable to the Participant is good, valid and sufficient consideration for
(among other things) the Participant’s agreement to such covenants, and
(vii) agrees that such covenants shall continue in effect as to the Participant
even if the Participant ceases at any time in the future to participate in the
Plan (i.e., the Participant ceases to be a “Participant”) and even if the
Participant is never entitled to the benefits set forth in Section 6 (and
accordingly, the term “Participant” includes a former “Participant” to the
extent necessary to effect such covenants).

 

(f)           Right to Injunctive and Equitable Relief.  Each Participant’s
obligations not to disclose or use Confidential Information and to refrain from
the solicitations described in this Section 10 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
a Participant 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, each Participant’s obligations
and the rights and remedies of the Corporation under this Section 10 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.

 

(g)          Cooperation.  During each Participant’s employment with the
Corporation and thereafter, the Participant shall respond to all reasonable
inquiries of the Corporation about any matters concerning the Corporation or its
affairs that occurred or arose during the Participant’s employment by the
Corporation, and each Participant 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
Participant was employed by the Corporation or relating to matters of which the
Participant had or should have had knowledge or information.  Further, except as
required by law, each Participant 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

 

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against the Corporation by or on behalf of any current or former employees, or
any governmental or administrative agencies related to the Participant’s period
of employment and will provide the Corporation with notice of any subpoena or
other request for such information or testimony.

 

11.         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 this Plan.  If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within sixty (60) days after
such notice was received by the Claimant.  All other claims must be made within
one hundred eighty (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 ninety (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 ninety (90) day period.  In no event shall such
extension exceed a period of ninety (90) days from the end of the initial ninety
(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

 

(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:

 

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

 

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

 

(3)        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;

 

(4)        an explanation of the claim review procedure and the time limits
applicable to such procedures set forth in Section 11(c); and

 

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(5)        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 sixty (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 sixty (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 sixty (60) day period.  In no
event shall such extension exceed a period of sixty (60) days from the end of
the initial sixty (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 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.

 

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12.         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 and/or a Participation
Agreement submitted to binding arbitration and adjudicated in accordance with
this Section 12 without first having to exhaust the claims procedures set forth
in Article 11.

 

(b)          The Corporation and, by accepting participation in this 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 and/or the Participant’s Participation Agreement 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
Article 11 (or which are not required to be resolved under the terms of
Article 11, 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.

 

(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 Article 11, 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 12(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.

 

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(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.

 

13.         Administration of the Plan.

 

(a)          Administration - 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;

 

(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 16;

 

(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;

 

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(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 11, 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 and any and all Participation Agreements,
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.

 

14.         Notice.  All notices under or with respect to this Plan or any
Participation Agreement 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

3760 Kilroy Airport Way, Suite 300
Long Beach, California 90806

 

with a copy to:

 

HCP, Inc.

Attention: James W. Mercer

3760 Kilroy Airport Way, Suite 300
Long Beach, California 90806

 

(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 (5) business days
after being so mailed.  Any party may change its address for purposes of giving
future notices pursuant to the Plan and any Participation Agreement by notifying
the other party in writing of such change in address, such notice to be
delivered or mailed in accordance with the foregoing.

 

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15.         Governing Law.  The Plan and any Participation Agreement hereunder
will be governed by and construed in accordance with ERISA and, to the extent
not preempted thereby, the laws of the State of California (unless otherwise
expressly provided in the Participant’s Participation Agreement, in which case
the law of the state specified in the Participant’s Participation Agreement
shall apply instead of the law of the State of California as to that
Participant), 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 (or other state, as applicable) 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 (or other state, as applicable), will control the interpretation and
construction of the Plan and any Participation Agreement hereunder, 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 or any Participation Agreement shall also be
deemed to refer to all applicable final rules and final regulations promulgated
under or with respect to the referenced statutory provision.

 

16.         Miscellaneous.  The Committee may from time to time amend the Plan
or any Participation Agreement in any way it deems to be advisable; provided
that no such amendment shall materially and adversely affect the rights of any
Participant (or former Participant) under the Plan or Participation Agreement,
as applicable, without that Participant’s (or former Participant’s, as the case
may be) consent.  Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under the Plan or any
Participation Agreement 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 this 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
this Plan such federal, state and local 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 of this Agreement. The section headings contained in this
Agreement are for convenience only, and shall not affect the interpretation of
this Agreement.

 

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17.         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 this 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.

 

18.         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 the 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.

 

19.         Severability.  In the event any provision of the Plan or any
Participation 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 the Plan or Participation
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 the Plan or
Participation Agreement, 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 Participation Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

20.         Employment Status.  Except as may be provided under any other
written agreement between a Participant and the Corporation (other than the Plan
and the Participation Agreement entered into with respect to this Plan), 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.

 

21

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21.         Payments on Behalf of Persons Under Incapacity.  In the event that
any amount becomes payable under this 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.

 

22.         Code Section 409A.  The intent of the parties is that payments and
benefits under this Plan comply with Section 409A of the Code, to the extent
subject thereto, and accordingly, to the maximum extent permitted, this 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 this 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 this 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 this 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, (i) 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
(ii) any tax gross-up payments (and related reimbursements) payable to a
Participant under this 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
this 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.

 

 

 

[Remainder of page intentionally left blank.]

 

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

 

 

HCP, INC.

 

a Maryland corporation.

 

 

 

 

 

 

 

By:

/s/ James W. Mercer

 

 

 

 

 

 

James W. Mercer,

 

 

Executive Vice President,

 

 

Chief Administrative Officer,

 

 

General Counsel & Secretary

 

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EXHIBIT A

 

FORM OF PARTICIPATION AGREEMENT

 

[Date]

 

 

 

 

 

 

 

 

 

 

 

 

Dear                             :

 

You have been selected to participate in the HCP, Inc. Change in Control
Severance Plan (the “Plan”), subject to your execution and return of this letter
agreement (this “Participation Agreement”) to HCP, Inc. (the “Corporation”).

 

For purposes of calculating any severance benefits you may become entitled to
under Section 6 of the Plan, the following multiplier will apply:

 

 

Severance Multiplier:

[      ]

 

 

Note that the agreements you make by executing this Participation Agreement will
be enforceable against you, regardless of whether or not your employment
terminates in circumstances that entitle you to severance benefits under the
Plan.   Nevertheless, you agree that your participation in the Plan (even if you
never become entitled to severance benefits pursuant to the Plan), as well as
your continued employment by the Corporation, each in and of itself and without
the other constitutes good and adequate consideration for the agreements you
make in this Participation Agreement.

 

By signing this Participation Agreement you specifically agree that you have
received and read the Plan and agree to be bound by its terms.  The Plan is
incorporated into (made a part of) this Participation Agreement by this
reference.  You acknowledge and agree that the Corporation has not made any
promises or representations to you concerning the Plan other than as set forth
in the Plan and this Participation Agreement.

 

As to your participation in the Plan, the Plan and this Participation Agreement
will be governed by and construed in accordance with ERISA and, to the extent
not preempted thereby, the laws of the State of [                          ],
without giving effect to any choice of law or conflicting provision or
rule (whether of the State of [                            ] 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 [                              ]
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 [                            ], will control the interpretation and
construction of the Plan and this Participation Agreement, even if under such
jurisdiction’s choice of law

 

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or conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily apply.

 

Please note that you are not required to participate in the Plan, and may
decline participation in the Plan by not returning this Participation
Agreement.  If you want to accept participation in the Plan, you must execute
this Participation Agreement and see that it is returned in person or via
facsimile to the Corporation’s [                      ] at (      )
      -        so that it is received no later than [                        ]. 
This Participation 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.

 

 

 

 

HCP, INC.,

 

a Maryland corporation

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

ACCEPTED AND AGREED:

 

 

 

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

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EXHIBIT B

 

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 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

 

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

 

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

 

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

 

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

 

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

 

2

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

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

 

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

 

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

 

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

 

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

 

2  Except as noted below, Section 3 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 3 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 3.A, 3.B, and
3.C.

 

4

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

 

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

 

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

 

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

 

13.                            Arbitration.  Any claim or controversy arising
out of or relating to this Agreement shall be submitted to arbitration in
accordance with the arbitration provision set forth in the 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 Agreement
completely, is entering into it freely and voluntarily, and has been advised to
seek counsel prior to entering into this Agreement and he has had ample
opportunity to do so.

 

5

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

 

EXECUTED this                  day of                  20    , at
                      , California.

 

 

“Executive”

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

HCP, INC.,

 

a Maryland corporation,

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

6

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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 California that the foregoing is true and correct.

 

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

 

 

 

 

 

Print Name:

 

 

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EXHIBIT C

 

SECTION 280G PROVISIONS

 

The provisions of this Exhibit C shall apply to each Participant in the HCP,
Inc. 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 this
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 C,
would be subject to the excise tax imposed by Section 4999 of the Code (“Excise
Tax”), then Participant’s payments and benefits under this 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 this Agreement or
otherwise, notwithstanding that all or some portion of such payments or benefits
may be taxable under Section 4999 of the Code.  Any reduction in the payments
and benefits required by this Exhibit C 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.

 

1

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