Exhibit 10.37

HEALTH CARE PROPERTY INVESTORS, INC.
2006 PERFORMANCE INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT

THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”) dated
_____________________ by and between HEALTH CARE PROPERTY INVESTORS, INC., a
Maryland corporation (the “Corporation”), and ___________________________ (the
“Grantee”) evidences the nonqualified stock option (the “Option”) granted by the
Corporation to the Grantee as to the number of shares of the Corporation’s
Common Stock first set forth below.

Number of Shares of Common Stock:(1)

 

 

Award Date:

 

 

 

 

 

Exercise Price per Share:(1)

$

 

 

Expiration Date:(1),(2)

 

 

Vesting(1),(2) [The Option shall become vested as to 20% of the total number of
shares of Common Stock subject to the Option on each of the first, second,
third, fourth and fifth anniversaries of the Award Date.]

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(1)             Subject to adjustment under Section 7.1 of the Plan.

(2)             Subject to early termination under Section 4 of the Terms and
Section 7.4 of the Plan.

The Option is granted under the Health Care Property Investors, Inc. 2006
Performance Incentive Plan (the “Plan”) and subject to the Terms and Conditions
of Nonqualified Stock Option (the “Terms”) attached to this Option Agreement
(incorporated herein by this reference) and to the Plan.  The Option has been
granted to the Grantee in addition to, and not in lieu of, any other form of
compensation otherwise payable or to be paid to the Grantee.  Capitalized terms
are defined in the Plan if not defined herein.  The parties agree to the terms
of the Option set forth herein.  The Grantee acknowledges receipt of a copy of
the Terms, the Plan and the Prospectus for the Plan.

 

 

 

 “GRANTEE”

 

HEALTH CARE PROPERTY INVESTORS, INC.
a Maryland corporation

 

 

 

Signature

 

By:

 

 

 

 

Print Name

 

Print Name:

 

 

 

 

 

 

Title:

 

 

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TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION

1.                                      Vesting; Limits on Exercise; Incentive
Stock Option Status.

The Option shall vest and become exercisable in percentage installments of the
aggregate number of shares subject to the Option as set forth on the cover page
of this Option Agreement.  The Option may be exercised only to the extent the
Option is vested and exercisable.

·                  Cumulative Exercisability.  To the extent that the Option is
vested and exercisable, the Grantee has the right to exercise the Option (to the
extent not previously exercised), and such right shall continue, until the
expiration or earlier termination of the Option.

·                  No Fractional Shares.  Fractional share interests shall be
disregarded, but may be cumulated.

·                  Minimum Exercise.  No fewer than 100 shares of Common Stock
(subject to adjustment under Section 7.1 of the Plan) may be purchased at any
one time, unless the number purchased is the total number at the time
exercisable under the Option.

·                  Nonqualified Stock Option.  The Option is a nonqualified
stock option and is not, and shall not be, an incentive stock option within the
meaning of Section 422 of the Code.

2.                                      Continuance of Employment/Service
Required; No Employment/Service Commitment.

The vesting schedule requires continued employment or service through each
applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option
Agreement.  Employment or service for only a portion of the vesting period, even
if a substantial portion, will not entitle the Grantee to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or services as provided in Section 4 below
or under the Plan.

Nothing contained in this Option Agreement or the Plan constitutes a continued
employment or service commitment by the Corporation or any of its Subsidiaries,
affects the Grantee’s status, if he or she is an employee, as an employee at
will who is subject to termination without cause, confers upon the Grantee any
right to remain employed by or in service to the Corporation or any Subsidiary,
interferes in any way with the right of the Corporation or any Subsidiary at any
time to terminate such employment or service, or affects the right of the
Corporation or any Subsidiary to increase or decrease the Grantee’s other
compensation.

3.                                      Method of Exercise of Option.

The Option shall be exercisable by the delivery to the Secretary of the
Corporation (or such other person as the Administrator may require pursuant to
such administrative exercise procedures as the Administrator may implement from
time to time) of:

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·                  a written notice stating the number of shares of Common Stock
to be purchased pursuant to the Option or by the completion of such other
administrative exercise procedures as the Administrator may require from time to
time,

·                  payment in full for the Exercise Price of the shares to be
purchased in cash, check or by electronic funds transfer to the Corporation;

·                  any written statements or agreements required pursuant to
Section 8.1 of the Plan; and

·                  satisfaction of the tax withholding provisions of Section 8.5
of the Plan.

The Administrator also may, but is not required to, authorize a non-cash payment
alternative by notice and third party payment in such manner as may be
authorized by the Administrator.

4.                                      Early Termination of Option.

4.1          Possible Termination of Option upon Change in Control.  The Option
is subject to termination in connection with a Change in Control Event or
certain similar reorganization events as provided in Section 7.4 of the Plan.

4.2          Termination of Option upon a Termination of Grantee’s Employment or
Services.  Subject to earlier termination on the Expiration Date of the Option
or pursuant to Section 4.1 above, if the Grantee ceases to be employed by or
ceases to provide services to the Corporation or a Subsidiary, the following
rules shall apply (the last day that the Grantee is employed by or provides
services to the Corporation or a Subsidiary is referred to as the Grantee’s
“Severance Date”):

·                  other than as expressly provided below in this Section 4.2,
(a) the Grantee will have until the date that is 8 months after his or her
Severance Date to exercise the Option (or portion thereof) to the extent that it
was vested on the Severance Date, (b) the Option, to the extent not vested on
the Severance Date, shall terminate on the Severance Date, and (c) the Option,
to the extent exercisable for the 8-month period following the Severance Date
and not exercised during such period, shall terminate at the close of business
on the last day of the 8-month period; provided, however, that in the event of
the Grantee’s death or Total Disability (as defined below) at any time during
the 8-month period, the Grantee (or his or her beneficiary or personal
representative, as the case may be) will have until the date that is 12 months
after the date of the Grantee’s death or Total Disability to exercise the
Option, and the Option, to the extent exercisable for the 12-month period and
not exercised during such period, shall terminate at the close of business on
the last day of the 12-month period;

·                  if the Grantee’s employment or services are terminated by the
Grantee for any reason or by the Corporation for Cause (as defined below), (a)
the Grantee will have until the date that is 3 months after his or her Severance
Date to exercise the Option (or portion thereof) to the extent that it was
vested on the Severance Date, (b) the Option, to the extent not vested on the
Severance Date, shall terminate on the Severance Date, and (c) the Option, to
the extent exercisable for the 3-month period following the Severance Date and
not exercised during such period, shall terminate at the close of business on
the last day of the 3-month period;

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·                  if the termination of the Grantee’s employment or services is
the result of the Grantee’s death or Total Disability, (a) the Option will
immediately become fully vested as of the Severance Date, (b) the Grantee (or
his or her beneficiary or personal representative, as the case may be) will have
until the date that is 3 years after the Grantee’s Severance Date to exercise
the Option, and (c) the Option, to the extent exercisable for the 3-year period
following the Severance Date and not exercised during such period, shall
terminate at the close of business on the last day of the 3-year period;

·                  if the termination of the Grantee’s employment or services is
the result of the Grantee’s Retirement (as defined below), (a) the Option will
immediately become fully vested as of the Severance Date, (b) the Grantee will
have until the date that is 3 years after the Grantee’s Severance Date to
exercise the Option, and (c) the Option, to the extent exercisable for the
3-year period following the Severance Date and not exercised during such period,
shall terminate at the close of business on the last day of the 3-year period;
provided, however, that in the event of the Grantee’s death or Total Disability
at any time during the 3-year period, the Grantee (or his or her beneficiary or
personal representative, as the case may be) will have until the date that is
the later of (i) 12 months after the date of the Grantee’s death or Total
Disability or (ii) 3 years after the Grantee’s Severance Date to exercise the
Option, and the Option, to the extent exercisable for the period ending on such
date and not exercised during such period, shall terminate at the close of
business on such date.

For purposes of the Option, “Total Disability” means a “permanent and total
disability” (within the meaning of Section 22(e)(3) of the Code or as otherwise
determined by the Administrator).  For purposes of the Option, “Retirement”
means the Grantee (1) has attained age 65 and completed at least five full years
of service as an employee of the Corporation and its Subsidiaries and/or a
member of the Board, or (2) has attained age 60 and completed at least fifteen
full years of service as an employee of the Corporation and its Subsidiaries
and/or a member of the Board.

For purposes of the Option, “Cause” means that the Grantee:

(1)                                  has been negligent in the discharge of his
or her duties to the Corporation or any of its Subsidiaries, has refused to
perform stated or assigned duties or is incompetent in or (other than by reason
of a disability or analogous condition) incapable of performing those duties;

(2)                                  has been dishonest or committed or engaged
in an act of theft, embezzlement or fraud, a breach of confidentiality, an
unauthorized disclosure or use of inside information, customer lists, trade
secrets or other confidential information; has breached a fiduciary duty, or
willfully and materially violated any other duty, law, rule, regulation or
policy of the Corporation, any of its Subsidiaries or any affiliate of the
Corporation or any of its Subsidiaries; or has been convicted of a felony or
misdemeanor (other than minor traffic violations or similar offenses);

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(3)                                  has materially breached any of the
provisions of any agreement with the Corporation, any of its Subsidiaries or any
affiliate of the Corporation or any of its Subsidiaries; or

(4)                                  has engaged in unfair competition with, or
otherwise acted intentionally in a manner injurious to the reputation, business
or assets of, the Corporation, any of its Subsidiaries or any affiliate of the
Corporation or any of its Subsidiaries; has improperly induced a vendor or
customer to break or terminate any contract with the Corporation, any of its
Subsidiaries or any affiliate of the Corporation or any of its Subsidiaries; or
has induced a principal for whom the Corporation, any of its Subsidiaries or any
affiliate of the Corporation or any of its Subsidiaries acts as agent to
terminate such agency relationship.

In all events the Option is subject to earlier termination on the Expiration
Date of the Option or as contemplated by Section 4.1.  The Administrator shall
be the sole judge of whether the Grantee continues to render employment or
services for purposes of this Option Agreement.

5.                                      Non-Transferability.

The Option and any other rights of the Grantee under this Option Agreement or
the Plan are nontransferable and exercisable only by the Grantee, except as set
forth in Section 5.7 of the Plan.

6.                                      Notices.

Any notice to be given under the terms of this Option Agreement shall be in
writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Grantee at the address last reflected on
the Corporation’s payroll records, or at such other address as either party may
hereafter designate in writing to the other.  Any such notice shall be delivered
in person or shall be enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.  Any such notice shall be given only
when received, but if the Grantee is no longer employed by the Corporation or a
Subsidiary, shall be deemed to have been duly given five business days after the
date mailed in accordance with the foregoing provisions of this Section 6.

7.                                      Plan.

The Option and all rights of the Grantee under this Option Agreement are subject
to the terms and conditions of the Plan, incorporated herein by this reference. 
The Grantee agrees to be bound by the terms of the Plan and this Option
Agreement (including these Terms).  The Grantee acknowledges having read and
understanding the Plan, the Prospectus for the Plan, and this Option Agreement. 
Unless otherwise expressly provided in other sections of this Option Agreement,
provisions of the Plan that confer discretionary authority on the Board or the
Administrator do not and shall not be deemed to create any rights in the Grantee
unless such rights are expressly set forth herein or are otherwise in the sole
discretion of the Board or the Administrator so conferred by appropriate action
of the Board or the Administrator under the Plan after the date hereof.

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8.                                      Entire Agreement.

This Option Agreement (including these Terms) and the Plan together constitute
the entire agreement and supersede all prior understandings and agreements,
written or oral, of the parties hereto with respect to the subject matter
hereof.  The Plan and this Option Agreement may be amended pursuant to
Section 8.6 of the Plan.  Such amendment must be in writing and signed by the
Corporation.  The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Grantee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.

9.                                      Governing Law.

This Option Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland without regard to conflict of
law principles thereunder.

10.                               Effect of this Agreement.

Subject to the Corporation’s right to terminate the Option pursuant to Section
7.4 of the Plan, this Option Agreement shall be assumed by, be binding upon and
inure to the benefit of any successor or successors to the Corporation.

11.                               Counterparts.

This Option Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

12.                               Section Headings.

The section headings of this Option Agreement are for convenience of reference
only and shall not be deemed to alter or affect any provision hereof.

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