EXHIBIT 10.29

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of
October 1, 2003 (the “Effective Date”) by and between HEALTH CARE PROPERTY
INVESTORS, INC., a Maryland corporation (“HCPI”), and CHARLES A. ELCAN
(“Executive”).

 

RECITALS

 

A. HCPI and Executive desire to enter into an employment agreement upon the
terms set forth in this Agreement; and

 

B. HCPI desires to employ Executive as Chief Executive Officer of HCPI’s
subsidiary, Medcap Management Company (the “Management Company”), and Executive
is willing to accept such employment by HCPI, on the terms and subject to the
conditions set forth in this Agreement.

 

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

 

AGREEMENT

 

1. Duties. During the Employment Period (as defined below), Executive agrees to
be employed by and to serve HCPI as Executive Vice President of HCPI and Chief
Executive Officer of the Management Company. Executive shall report to the Chief
Executive Officer of HCPI (the “HCPI CEO”). HCPI agrees to employ and retain
Executive in such capacity. Executive will be responsible for the customary
management responsibilities expected of an individual holding such position and
such other responsibilities consistent with the position as may be assigned to
Executive from time to time by the Board of Directors of HCPI (the “Board”).
Subject to the oversight and control of the Board and the HCPI CEO, the
Executive will have responsibility for coordinating HCPI’s acquisition,
disposition, development and management of medical office buildings (“MOBs”) and
related properties. In addition, during the Employment Period, the Executive
will be one of the HCPI designated members of the executive committee of HCP
Medical Office Portfolio, LLC. Notwithstanding the foregoing, Executive’s
responsibility for the acquisition, development and management of MOBs may be
limited by (a) agreements currently in effect (as set forth on Schedule A
hereto), and (b) with respect to MOBs acquired after the Effective Date,
agreements or arrangements entered into in connection with the acquisition of
portfolios of MOBs.

 

2. Term of Employment.

 

(a) Definitions. For purposes of this Agreement the following terms shall have
the following meanings:

 

  (i) “Termination For Cause” shall mean termination by HCPI of Executive’s
employment with HCPI by reason of Executive’s:

 

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  A. willful and continued failure to perform his duties with HCPI after a
written demand for performance is delivered to Executive by the Board, which
demand specifically identifies the manner in which the Board believes that
Executive has not performed his duties;

 

  B. willful and continued failure to follow and comply with the specific and
lawful directives of the Board, as reasonably determined by the Board, after a
written demand for performance is delivered to Executive by the Board, which
demand specifically identifies the manner in which the Board believes that
Executive has not performed his duties;

 

  C. willful commission of an act of fraud or dishonesty resulting in economic
or financial injury to HCPI or injury to HCPI’s reputation;

 

  D. willful engagement in illegal conduct or gross misconduct, in each case
which is injurious to HCPI; or

 

  E. indictment for, conviction of or a plea of guilty or nolo contendre to, any
felony.

 

  (ii) “Termination Without Cause” shall mean termination by HCPI of Executive’s
employment by HCPI before a Change in Control (as defined in Section 2(a)(vi))
or more than two (2) years after a Change in Control, other than a Termination
For Cause, or due to Executive’s death or Disability.

 

  (iii) “Good Reason” shall mean, without Executive’s express written consent,
the occurrence of any of the following circumstances :

 

  A. the assignment to Executive of any duties inconsistent with the position in
HCPI that Executive held immediately prior to Notice of Termination, a
significant adverse alteration in the nature or status of Executive’s
responsibilities or the conditions of Executive’s employment from those in
effect immediately prior to such Notice of Termination, or any other action by
HCPI that results in a material diminution in Executive’s position, authority,
duties or responsibilities;

 

  B. HCPI’s reduction of Executive’s Base Salary (as defined below) as in effect
on the Effective Date or as the same may be increased from time to time;

 

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  C. the relocation of HCPI’s offices at which Executive is principally employed
immediately prior to the date of the Notice of Termination (Executive’s
“Principal Location”) to a location more than twenty-five (25) miles from such
location, or HCPI’s requiring Executive, without Executive’s written consent, to
be based anywhere other than Executive’s Principal Location, except for required
travel on HCPI’s business to an extent consistent with Executive’s business
travel obligations prior to the date of the Notice of Termination;

 

  D. HCPI’s failure to pay to Executive any portion of Executive’s current
compensation or to pay to Executive any portion of an installment of deferred
compensation due under any deferred compensation program of HCPI within seven
(7) days of the date such compensation is due;

 

  E. HCPI’s failure to continue in effect any material benefit plan in which
Executive participated immediately prior to the Notice of Termination, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or HCPI’s failure to continue
Executive’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 Executive’s participation relative to other
participants, as existed prior to the Notice of Termination;

 

  F. HCPI’s failure to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in Section 9(g)
hereof; or

 

  G. any purported termination of Executive’s employment that is not effected
pursuant to a Notice of Termination satisfying the requirements of Section 2(ix)
hereof (and, if applicable, the requirements of Section 2(a)(i) hereof), which
purported termination shall not be effective for purposes of this Agreement;

 

       provided, however, that no termination for Good Reason shall be effective
unless and until Executive gives a Notice of Termination (as described in
Section 2(a)(vii)) to HCPI specifying the reason(s) for such termination and
provides HCPI with at least sixty (60) days’ opportunity to cure or remedy such
reasons, and provided, further, that Executive’s continued

 

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       employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.

 

  (iv) “Voluntary Termination” shall mean termination by Executive of
Executive’s employment by HCPI without Good Reason.

 

  (v) “Termination Upon a Change in Control” shall mean (A) a termination by
Executive of Executive’s employment with HCPI for Good Reason following a Change
in Control (as defined below), or (B) a Termination Without Cause following a
Change in Control.

 

  (vi) “Change in Control” shall be deemed to occur if:

 

  A. any Person (as defined in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) is or becomes the
Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of HCPI representing twenty-five percent (25%) or more
of the combined voting power of HCPI’s then outstanding securities (“Outstanding
HCPI Voting Securities”); provided, however, that for purposes of this
Subsection 2(a)(vi)(A), the following shall not constitute a Change in Control:
(1) any acquisition by HCPI or any corporation controlled by HCPI, (2) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by HCPI or any corporation controlled by HCPI, or (3) any acquisition
by a Person of twenty-five percent (25%) of the Outstanding HCPI Voting
Securities as a result of an acquisition of common stock of HCPI by HCPI which,
by reducing the number of shares of common stock of HCPI outstanding, increases
the proportionate number of shares beneficially owned by such Person to
twenty-five percent (25%) or more of the Outstanding HCPI Voting Securities; and
provided, further, that if a Person shall become the beneficial owner of
twenty-five percent (25%) or more of the Outstanding HCPI Voting Securities by
reason of a share acquisition by HCPI as described above and shall, after such
share acquisition by HCPI, become the beneficial owner of any additional shares
of common stock of HCPI, then such acquisition of additional shares shall
constitute a Change in Control;

 

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  B. during any period of two (2) consecutive years after the execution of this
Agreement, individuals who at the beginning of such period constitute the Board,
together with any new director(s) whose election by the Board or nomination for
election by HCPI’s stockholders was approved by a vote of at least two-thirds
( 2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved (hereinafter referred to as “Continuing Directors”)
(which shall not include any director designated by a person who has entered
into an agreement with HCPI to effect a transaction described in Sections
2(a)(vi)(A), (C) or (D)), cease for any reason to constitute at least a majority
thereof;

 

  C. the consummation by HCPI of a merger or consolidation of HCPI with any
other entity, except for a merger or consolidation which would result in the
voting securities of HCPI outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than sixty-six and two-thirds percent
(66 2/3%) of the combined voting power of the voting securities of HCPI or such
surviving entity outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to implement a
recapitalization of HCPI (or similar transaction) in which no Person acquires
more than twenty-five percent (25%) of the combined voting power of HCPI’s then
outstanding securities shall not constitute a Change in Control; or

 

  D. the stockholders of HCPI approve a plan of complete liquidation of HCPI or
an agreement for the sale or disposition by HCPI of all or substantially all of
HCPI’s assets.

 

  (vii) “Notice of Termination” shall mean a notice that indicates the specific
termination provision in this Agreement relied upon and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated.

 

  (viii) “Date of Termination” shall mean (A) if Executive’s employment is
terminated due to Executive’s death, the date of Executive’s death; (B) if
Executive’s employment is terminated due to Disability, five (5) days after
Notice of Termination is given

 

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       (provided that Executive shall not have returned to the full-time
performance of Executive’s duties during such five (5)-day period), and (C) if
Executive’s employment is terminated pursuant to Sections 2(a)(i), (ii), (iii),
(iv) or (v) for any other reason (other than death or Disability (as defined in
Section 2(e)), the date specified in the Notice of Termination (which, in the
case of a Termination Without Cause shall not be less than thirty (30) days from
the date such Notice of Termination is given, and in the case of a termination
for Good Reason shall not be less than sixty (60) days from the date such Notice
of Termination is given).

 

(b) Term of Employment. The initial term of employment hereunder shall commence
on the Effective Date and continue for a continuous period of three (3) years,
subject to any extension or termination as provided in this Agreement. The
Executive’s employment shall be extended automatically for additional one (1)
year periods at the end of the initial three (3) period, unless either party
gives notice to the other of its or his election not to extend not less than
three (3) months prior to the applicable expiration date. The initial term of
employment and any extensions thereof, unless sooner terminated, shall be
referred to as the “Employment Period.”

 

(c) Termination For Cause. Termination For Cause may be effected by HCPI at any
time during the Employment Period and shall be effected by written notification
to Executive. Upon a Termination For Cause, Executive shall immediately be paid
all accrued Base Salary, any annual incentive plan bonus compensation to the
extent awarded but unpaid, vested deferred compensation (other than pension plan
or profit sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of HCPI in which Executive is a
participant to the full extent of Executive’s rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by Executive in
connection with his duties hereunder, all to the Date of Termination, but
Executive shall not be paid any other compensation or reimbursement of any kind,
including without limitation, severance compensation.

 

(d) Termination Without Cause. Notwithstanding anything else in this Agreement,
HCPI may effect a Termination Without Cause at any time upon giving a Notice of
Termination to Executive of such termination. Upon any Termination Without
Cause, Executive shall immediately be paid all accrued Base Salary, any annual
incentive plan bonus compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
HCPI in which Executive is a participant to the full extent of Executive’s
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by Executive in connection with his duties hereunder, all to
the Date of Termination, and all severance compensation provided in Section
5(b), but no other compensation or reimbursement of any kind, including
severance compensation under any severance plan maintained by HCPI generally for
its employees.

 

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(e) Termination by Reason of Disability. If, during the Employment Period,
Executive has failed to perform his duties under this Agreement on account of
illness or physical or mental incapacity, and such illness or incapacity
continues for a period of more than one hundred twenty (120) days total in any
twelve (12) month period (a “Disability”), HCPI shall have the right to
terminate Executive’s employment hereunder by written Notice of Termination to
Executive and payment to Executive of all accrued Base Salary, any annual
incentive plan bonus compensation to the extent awarded but unpaid, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of HCPI in which Executive is a participant to the full extent of
Executive’s rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by Executive in connection with his duties hereunder,
all to the Date of Termination. In addition, HCPI shall continue Executive’s
group health and dental insurance through the expiration of the Employment
Period, but Executive shall not be paid any other compensation or reimbursement
of any kind, including without limitation, severance compensation. The term
“Disability” shall, for the purposes of this Agreement, be determined by either
of the following: (i) a licensed healthcare professional selected by HCPI; or
(ii) any disability insurance provided to the Executive pursuant to this
Agreement.

 

(f) Death. In the event of Executive’s death during the Employment Period,
Executive’s employment shall be deemed to have terminated as of the last day of
the month during which his death occurs, and HCPI shall pay to his estate or
such beneficiaries as Executive may from time to time designate all accrued Base
Salary, any annual incentive plan bonus compensation to the extent awarded but
unpaid, vested deferred compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of HCPI in which Executive is a participant to the full
extent of Executive’s rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by Executive in connection with his
duties hereunder, all to the Date of Termination, but Executive’s estate shall
not be paid any other compensation or reimbursement of any kind, including
without limitation, severance compensation.

 

(g) Voluntary Termination. In the event of a Voluntary Termination, HCPI shall
immediately pay all accrued Base Salary, any annual incentive plan bonus
compensation to the extent awarded but unpaid, vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of HCPI in
which Executive is a participant to the full extent of Executive’s rights under
such plans, accrued vacation pay and any appropriate business expenses incurred
by Executive in connection with his duties hereunder, all to the Date of
Termination, but Executive shall not be paid any other compensation or
reimbursement of any kind, including without limitation, severance compensation.

 

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(h) Termination Upon a Change in Control. In the event of a Termination Upon a
Change in Control, Executive shall immediately be paid all accrued Base Salary,
annual incentive plan bonus compensation to the extent awarded but unpaid,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of HCPI in which Executive is a participant to the full
extent of Executive’s rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by Executive in connection with his
duties hereunder, all to the Date of Termination, and all severance compensation
provided in Section 5(a), but Executive shall not be paid any other compensation
or reimbursement of any kind, including severance compensation under any
severance plan maintained by HCPI generally for its employees.

 

3. Salary, Benefits and Bonus Compensation.

 

(a) Base Salary. As payment for the services to be rendered by Executive as
provided in Section 1 and subject to the terms and conditions of Section 2, HCPI
agrees to pay to Executive a base salary (the “Base Salary”) for the period
beginning on the Effective Date at the rate of $350,000 per annum, payable in
equal semi-monthly installments. Executive’s Base Salary shall be reviewed
annually for increase but not decrease by the Compensation Committee of the
Board of Directors (the “Compensation Committee”).

 

(b) Annual Incentive Plan Bonus.

 

  (i) Annually, the HCPI CEO will recommend to the Compensation Committee an
incentive compensation plan consisting of metrics that reward Management Company
financial performance and HCPI corporate-wide achievement of goals and that will
be based upon a multiple of the Base Salary and achievement of the goals.

 

  (ii) The plan metrics for the first full year of the Employment Period (2004)
will be determined no later than thirty (30) days after the Effective Date. The
parties anticipate that the 2004 plan parameters will be:

 

  A. Weighted seventy-five percent (75%) for Management Company performance and
twenty-five (25%) for HCPI overall performance.

 

  B. Management Company specific measures will be weighted thirty-seven and
five-tenths percent (37.5%) for Net Operating Income (“NOI”), thirty-seven and
five-tenths percent (37.5%) for NOI less leasing commissions and tenant
improvements (Cashflow”), ten percent (10%) for Tenant Satisfaction (as
described below), and fifteen percent (15%) for individual specific goals
established by the Compensation Committee, subject to the following:

 

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i. NOI and Cashflow will be measured annually.

 

ii. Target goals for NOI and Cashflow will be calculated as a percentage of
budget in the following increments: Low = ninety-five percent (95%) of budget;
Target = one hundred percent (100%) of budget and Maximum = one hundred and five
percent (105%) of budget.

 

iii. Tenant Satisfaction will be based upon achievement of predetermined
standards using an independent survey conducted annually. Satisfaction will be
determined as a percentage of respondents answering either “satisfied” or “very
satisfied” to the questions on the survey.

 

iv. Individual goals will include management, acquisition, disposition and
development activities relating to HCPI’s MOBs and other goals established from
time to time by the Compensation Committee.

 

v. Annual Incentive Plan Targets will be set at the following percentage of Base
Salary: Less than Low = zero percent (0%); Low = twenty percent (20%); Target =
eighty percent (80%), and Maximum or above = one hundred sixty percent (160%).

 

  (iii) Funding for the above shall be subject to audit by HCPI’s accountants
and approved by the HCPI CEO and the Compensation Committee. Awards will be
payable within ninety (90) days after the incentive compensation plan year end.
For purposes of this Section 3(b), the NOI and Cashflow budgets shall be based
on “same-store” NOI and Cashflows and will be subject to amendment from time to
time to reflect acquisitions and dispositions.

 

(c) Restricted Stock Grant. As an incentive to support corporate-wide
performance and as an additional reward for a smooth transition of the
businesses, HCPI will provide Executive with a one-time award of thirty-three
thousand five hundred (33,500) shares of restricted stock under HCPI’s 2000
Stock Incentive Plan (as amended and restated effective as of May 7, 2003) (the
“Stock Plan”), subject to all terms and conditions of the Plan and to the
following provisions:

 

  (i) Restrictions with respect to the award will lapse in one-fifth increments
on the first (1st), second (2nd), third (3rd), fourth (4th) and fifth (5th)
anniversaries of the grant date and will be subject to Executive’s continued
employment.

 

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  (ii) Restricted stock will be forfeited upon termination of Executive’s
employment, unless (A) Executive’s termination is due to a Termination Upon
Change in Control of HCPI, or (B) Executive has a qualified retirement defined
as age sixty (60) and fifteen (15) years of service or age sixty-five (65) and
five (5) years of service.

 

  (iii) Dividends on restricted stock awards will be paid to Executive.

 

(d) Stock Options. As of the Effective Date, HCPI will grant to Executive under
the Stock Plan options to purchase a total of fifty thousand (50,000) shares of
common stock at a price per share (the “Strike Price”) equal to the closing
price on the Effective Date (the “Grant Date”), subject to all terms and
conditions of the Stock Plan. The options shall vest and shall become
exercisable in accordance with the Stock Plan in equal annual increments over a
period of five (5) years commencing on the first (1st) anniversary of the Grant
Date, and any unvested options shall be forfeited if Executive’s employment is
terminated, except that the provisions of the Stock Plan which accelerate
vesting upon Retirement (as defined in the Stock Plan), death, Disability or a
Termination Upon a Change in Control shall apply.

 

(e) Additional Benefits. During the Employment Period, Executive shall be
entitled to the following fringe benefits:

 

  (i) Executive Benefits. Executive shall be eligible to participate in such of
HCPI’s benefits and deferred compensation plans as are generally available as of
the Effective Date or later made generally available to executive of HCPI,
including, without limitation, HCPI’s 2000 Stock Incentive Plan, profit sharing
plans, annual physical examination, dental and medical plans (but HCPI shall
separately pay any deductible or co-payment amounts), personal catastrophe and
disability insurance and retirement plans.

 

  (ii) Vacation. Executive shall be entitled to four (4) weeks of vacation
during each year during the term of this Agreement and any extensions thereof,
prorated for partial years.

 

  (iii) Reimbursement for Expenses. During the Employment Term, HCPI shall
reimburse Executive for reasonable and properly documented (in accordance with
HCPI’s policies as in effect from time to time) out-of-pocket business and/or
entertainment expenses incurred by Executive in connection with his duties under
this Agreement.

 

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4. Accelerated Vesting Upon a Change in Control.

 

(a) Restricted Stock. Notwithstanding any provisions of HCPI’s stock option
plans, incentive plans, or other similar plans, in the event of a Change in
Control the restricted period with respect to any restricted stock granted to
Executive thereunder shall lapse and such shares shall be distributed to
Executive immediately prior to any Change in Control.

 

(b) Stock Options. All outstanding options granted to Executive under any of
HCPI’s stock option plans, incentive plans or other similar plans (or options
substituted therefor covering the stock of a successor corporation) shall in the
event of a Change in Control become fully vested and exercisable immediately
prior to any Change in Control as to all shares of stock covered thereby.

 

5. Severance Compensation.

 

(a) Severance Compensation in the Event of a Termination Upon a Change in
Control. In the event Executive’s employment is terminated in a Termination Upon
a Change in Control within the two (2) year period immediately following the
date of a Change in Control, Executive shall be entitled to the payments and
benefits provided below:

 

  (i) HCPI shall pay to Executive (A) Executive’s full Base Salary, when due,
through the Date of Termination at the rate in effect at the time Notice of
Termination is given, at the time specified in Section 5(a)(vi), (B) the unpaid
portion, if any, of any annual incentive plan bonus, plus an amount equal to
Executive’s annual incentive plan bonus, pro rated from January 1 of the
termination year through the Date of Termination, and (C) all other amounts to
which Executive is entitled under any compensation plan of HCPI at the time such
payments are due;

 

  (ii) In lieu of any further Base Salary payments to Executive for periods
subsequent to the Date of Termination, HCPI shall pay as severance pay to
Executive, at the time specified in Section 5(a)(vi), a lump sum severance
payment (together with the payments provided in Sections 5(a)(iii) and (iv)
below, the “Severance Payments”) equal to the sum of three (3) times Executive’s
annual Base Salary as in effect as of the Date of Termination or immediately
prior to the Change in Control, whichever is greater, and three (3) times
Executive’s targeted annual incentive plan bonus as in effect as of the Date of
Termination or the highest annual incentive plan bonus received by Executive in
the three (3) years immediately prior to the Change in Control, whichever is
greater;

 

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  (iii) For a period of three (3) years, HCPI shall continue to provide
Executive and Executive’s eligible family members, based on the cost sharing
arrangement between Executive and HCPI on the date of the Change in Control,
with medical and dental health coverage at least equal to those which would have
been provided to Executive and his eligible family members if Executive’s
employment had not been terminated or, if more favorable to Executive, as in
effect generally at any time thereafter, provided, however, that Executive shall
advise HCPI if Executive becomes re-employed with another employer, and he and
his eligible dependents are eligible to receive medical and dental health
benefits under another employer’s plans, and HCPI’s obligations under this
Section 5(a)(iii) shall cease. In the event Executive and his dependents are
ineligible under the terms of HCPI’s benefit plans or programs to continue
coverage under this Section 5(a)(iii), HCPI shall provide Executive and his
dependents with substantially equivalent coverage through other sources or shall
provide Executive with a lump sum payment in such amount that, after all taxes
on that amount, is equal to the cost to Executive of providing Executive such
benefit coverage. The lump sum shall be determined on a present value basis
using the interest rate provided in section 1274(b)(2)(B) of the Code on the
Date of Termination. Upon the termination of the benefits coverage under the
first sentence of this Section 5(a)(iii), Executive, Executive’s spouse and
Executive’s dependents shall be entitled to continuation coverage pursuant to
section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”),
sections 601-608 of the Employee Retirement Income Security Act of 1974, as
amended, and under any other applicable law, to the extent required by such
laws, as if Executive had terminated employment with HCPI on the date such
benefits coverage terminates.

 

  (iv) Executive shall be fully vested in Executive’s accrued benefits under any
qualified or nonqualified pension, profit sharing, deferred compensation or
supplemental plans maintained by HCPI for Executive’s benefit, except to the
extent the acceleration of vesting of such benefits would violate any applicable
law or require HCPI to accelerate the vesting of the accrued benefits of all
participants in such plan or plans, in which case HCPI may elect to pay
Executive a lump sum payment at the time specified in Section 5(a)(vii) in an
amount equal to the value of such unvested accrued benefits in lieu of
accelerating the vesting of Executive’s benefits, plus HCPI shall pay Executive
an amount equal to the amount HCPI would have contributed to Executive’s account
under HCPI’s 401(k) plan as a matching contribution had Executive remained
employed by HCPI for three (3) years after Executive’s Date of Termination and
had Executive made the maximum elected deferral contributions.

 

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  (v) HCPI shall furnish Executive for six (6) years following the Date of
Termination (without reference to whether the term of this Agreement continues
in effect) with directors’ and officers’ liability insurance insuring Executive
against insurable events which occur or have occurred while Executive was a
director or officer of HCPI, 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 HCPI in force from time to time,
provided, however, that such terms, conditions and exceptions shall not be, in
the aggregate, materially less favorable to Executive than those in effect on
the Effective Date; and 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 HCPI for such
insurance, then HCPI 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.

 

  (vi) Gross-Up Payment.

 

  A. Anything in this Agreement to the contrary notwithstanding, if it shall be
determined that any payment or distribution to Executive or for Executive’s
benefit (whether paid or payable or distributed or distributable) pursuant to
the terms of this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without limitation
any stock option, stock appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or exercisability of any of the
foregoing (the “Payments”) would be subject to the excise tax imposed by section
4999 of the Code by reason of being “contingent on a change in the ownership or
control” of HCPI, within the meaning of Section 280G of the Code or to any
similar tax imposed by state or local law, or any interest or penalties with
respect to such excise tax (such tax or taxes, together with any such interest
or penalties, are collectively referred to as the “Excise Tax”), then Executive
shall be entitled to receive from HCPI an additional payment (the “Gross-Up
Payment”) in an

 

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     amount such that the net amount of the Payments and the Gross-Up Payment
retained by Executive after the calculation and deduction of all Excise Taxes
(including any interest or penalties imposed with respect to such taxes) on the
Payments and all federal, state and local income tax, employment tax and Excise
Tax (including any interest or penalties imposed with respect to such taxes) on
the Gross-Up Payment provided for in this Section 5(a)(vi), and taking into
account any lost or reduced tax deductions on account of the Gross-Up Payment,
shall be equal to the Payments.

 

  B. All determinations required to be made under this Section 5(a)(vi),
including whether and when the Gross-Up Payment is required and the amount of
such Gross-Up Payment, and the assumptions to be utilized in arriving at such
determinations shall be made by the Accountants (as defined below) which shall
provide Executive and HCPI with detailed supporting calculations with respect to
such Gross-Up Payment within fifteen (15) business days of the receipt of notice
from Executive or HCPI that Executive has received or will receive Payments. For
purposes of making the determinations and calculations required herein, the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Section 280G and 4999 of the Code, provided that
the Accountants’ determinations must be made on the basis of “substantial
authority” (within the meaning of Section 6662 of the Code). For the purposes of
this Section 5(a)(v), the “Accountants” shall mean HCPI’s independent certified
public accountants serving immediately prior to the Change in Control to the
extent they may lawfully perform such services. In the event that the
Accountants are prohibited from providing such services or are also serving as
accountant or auditor for the individual, entity or group effecting the Change
in Control, HCPI shall appoint another nationally recognized public accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accountants hereunder). All fees and expenses of the
Accountants shall be borne solely by HCPI.

 

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  C. For the purposes of determining whether any of the Payments will be subject
to the Excise Tax and the amount of such Excise Tax, such Payments will be
treated as “parachute payments” within the meaning of section 280G of the Code,
and all “parachute payments” in excess of the “base amount” (as defined under
section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax,
unless and except to the extent that in the opinion of the Accountants such
Payments (in whole or in part) either do not constitute “parachute payments” or
represent reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4) of the Code) in excess of the “base amount,” or
such “parachute payments” are otherwise not subject to such Excise Tax. For
purposes of determining the amount of the Gross-Up Payment Executive shall be
deemed to pay Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Gross-Up Payment is
to be made and to pay any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in Federal income taxes
which could be obtained from the deduction of such state or local taxes if paid
in such year (determined without regard to limitations on deductions based upon
the amount of Executive’s adjusted gross income), and to have otherwise
allowable deductions for Federal, state and local income tax purposes at least
equal to those disallowed because of the inclusion of the Gross-Up Payment in
Executive’s adjusted gross income. To the extent practicable, any Gross-Up
Payment with respect to any Payments shall be paid by HCPI at the time Executive
is entitled to receive the Payments and in no event will any Gross-Up Payment be
paid later than five (5) days after the receipt by Executive of the Accountants’
determination. Any determination by the Accountants shall be binding upon HCPI
and Executive.

 

  D. As a result of uncertainty in the application of section 4999 of the Code
at the time of the initial determination by the Accountants hereunder, it is
possible that the Gross-Up Payment made will have been an amount less than HCPI
should have paid pursuant to this Section 5(a)(v) (the “Underpayment”). In the
event that HCPI exhausts its remedies pursuant to Section 5(a)(vi)(F) and
Executive is required to make a payment of any Excise

 

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     Tax, the Underpayment shall be promptly paid by HCPI to or for Executive’s
benefit. In the event that HCPI provides Executive with a Gross-Up Payment in an
amount that is greater than the amount that HCPI should have paid pursuant to
this Section 5(a)(vi) (the “Overpayment”), the Overpayment shall be promptly
repaid by Executive to HCPI.

 

  E. Executive and HCPI shall each provide the Accountants access to and copies
of any books, records and documents in the possession of HCPI or Executive, as
the case may be, reasonably requested by the Accountants, and otherwise
cooperate with the Accountants in connection with the preparation and issuance
of the determination contemplated by this Section 5(a)(vi).

 

  F. Executive shall notify HCPI in writing of any claim by the Internal Revenue
Service (the “IRS”) that, if successful, would require the payment by HCPI of
the Gross-Up Payment. Such notification shall be given as soon as practicable
after Executive is informed in writing of such claim and shall apprise HCPI of
the nature of such claim and the date on which such claim is requested to be
paid. Executive shall not pay such claim prior to the expiration of the thirty
(30)-day period following the date on which Executive gives such notice to HCPI
(or such shorter period ending on the date that any payment of taxes, interest
and/or penalties with respect to such claim is due). If HCPI notifies Executive
in writing prior to the expiration of such period that it desires to contest
such claim, Executive shall:

 

i. give HCPI any information reasonably requested by HCPI relating to such
claim;

 

ii. take such action in connection with contesting such claim as HCPI shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by HCPI;

 

iii. cooperate with HCPI in good faith in order to effectively contest such
claim; and

 

iv. permit HCPI to participate in any proceedings relating to such claims;
provided, however, that HCPI shall bear and pay directly all costs and expenses

 

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     (including additional interest and penalties) incurred in connection with
such contest and shall indemnify Executive for and hold Executive harmless from,
on an after-tax basis, any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of all related costs and expenses. Without limiting the foregoing
provisions of this Section 5(a)(vi, HCPI shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as HCPI shall determine;
provided, however, that if HCPI directs Executive to pay such claim and sue for
a refund, HCPI shall make such payment on behalf of Executive, and shall
indemnify Executive for and hold Executive harmless from, on an after-tax basis,
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such payment, but shall be entitled to any
refund received by or on behalf of Executive because of the claim HCPI has
directed him to pay; provided, further, that any extension of the statute of
limitations relating to the payment of taxes for the taxable year of Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, HCPI’s control of the contest
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the IRS or any other taxing authority.

 

  (vii) The payments provided for in Sections 5(a)(i), (ii) and (iii) shall be
made not later than the fifth (5th) day following the Date of Termination;
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, HCPI shall pay to Executive on such day an
estimate, as determined in good faith by HCPI, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be

 

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     determined but in no event later than the thirtieth (30th) day after the
Date of Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, or that Executive
becomes entitled to a refund of any such amount paid, such excess or refund
shall be paid to HCPI by Executive on the fifth (5th) day after demand by HCPI
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code).

 

(b) Severance Compensation in the Event of a Termination Without Cause or for
Good Reason Unrelated to a Change in Control. In the event Executive’s
employment is terminated in a Termination Without Cause or a Termination for
Good Reason prior to a Change in Control or more than two (2) years thereafter,
Executive shall be entitled to the benefits provided below:

 

  (i) HCPI shall pay to Executive (A) Executive’s full Base Salary, when due,
through the Date of Termination at the rate in effect at the time Notice of
Termination is given, at the time specified in Section 5(b)(iv), (B) the unpaid
portion, if any, of any annual incentive compensation bonus, plus an amount
equal to Executive’s annual incentive compensation bonus, pro rated from January
1 of the termination year through the Date of Termination, and (C) all other
amounts to which Executive is entitled under any compensation plan of HCPI at
the time such payments are due.

 

  (ii) In lieu of any further Base Salary payments to Executive for periods
subsequent to the Date of Termination, HCPI shall pay as severance pay to
Executive, at the time specified in Section 5(b)(iv), a lump sum severance
payment (together with the payments provided in Section 5(b)(iii) below, the
“Severance Payments”) equal to the sum of two (2) times Executive’s Base Salary
as in effect as of the Date of Termination, and two (2) times Executive’s
targeted annual incentive plan bonus as in effect as of the Date of Termination
or the highest annual incentive plan bonus received by Executive in the three
(3) years immediately prior to the Date of Termination, whichever is greater;
and

 

  (iii) Executive shall be entitled to be paid for any accrued but unused
vacation.

 

  (iv) For a period of two (2) years, HCPI shall continue to provide Executive
and Executive’s eligible family members, based on the cost sharing arrangement
between Executive and HCPI on the date immediately prior to the Date of
Termination, with medical and dental health coverage at least equal to those
which would

 

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     have been provided to Executive and his eligible family members if
Executive’s employment had not been terminated or, if more favorable to
Executive, as in effect generally at any time thereafter, provided, however,
that Executive shall advise HCPI if Executive becomes re-employed with another
employer, and he and his eligible dependents are eligible to receive medical and
dental health benefits under another employer’s plans, and HCPI’s obligations
under this Section 5(b)(iv) shall cease. In the event Executive and his
dependents are ineligible under the terms of HCPI’s benefit plans or programs to
continue coverage under this Section 5(b)(iv), HCPI shall provide Executive and
his dependents with substantially equivalent coverage through other sources or
shall provide Executive with a lump sum payment in such amount that, after all
taxes on that amount, is equal to the cost to Executive of providing Executive
such benefit coverage. The lump sum shall be determined on a present value basis
using the interest rate provided in section 1274(b)(2)(B) of the Code on the
Date of Termination. Upon the termination of the benefits coverage under the
first sentence of this Section 5(b)(iv), Executive, Executive’s spouse and
Executive’s dependents shall be entitled to continuation coverage pursuant to
section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”),
sections 601-608 of the Employee Retirement Income Security Act of 1974, as
amended, and under any other applicable law, to the extent required by such
laws, as if Executive had terminated employment with HCPI on the date such
benefits coverage terminates.

 

  (v) The payments provided for in Sections 5(b)(i) and (ii) shall be made not
later than the fifth (5th) day following the Date of Termination; provided,
however, that if the amounts of such payments cannot be finally determined on or
before such day, HCPI shall pay to Executive on such day an estimate, as
determined in good faith by HCPI, of the minimum amount of such payments and
shall pay the remainder of such payments (together with interest at the rate
provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth (30th) day after the Date
of Termination. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by HCPI to Executive, payable on the fifth (5th) day after
demand by HCPI (together with interest at the rate provided in section
1274(b)(2)(B) of the Code).

 

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(c) No Severance Compensation Upon Other Termination. In the event of a
Voluntary Termination, Termination For Cause, termination by reason of
Executive’s Disability pursuant to Section 2(e), or termination by reason of
Executive’s death pursuant to Section 2(f), Executive or his estate shall not be
paid any Severance Payments pursuant to this Section 5 or any other termination
payments under any other plan maintained by HCPI.

 

(d) Executive shall not be required to mitigate the amount of any Severance
Payments provided for in this Section 5 by seeking other employment or
otherwise, nor shall the amount of any Severance Payment or benefit provided for
in this Section 5 be reduced by any compensation earned by Executive as the
result of employment by another employer or by self-employment, by retirement
benefits, by offset against any amount claimed to be owed by Executive to HCPI,
or otherwise.

 

(e) Waiver and Release. No payments and benefits will be provided to the
Executive pursuant to this Section 5 unless and until the Executive executes a
waiver and release of all claims he may have against HCPI, any of its affiliates
or Management Company and any of their officers, directors, employees,
stockholder, members, partners, agents, representatives and successors and
assigns in a form reasonably satisfactory to HCPI.

 

6. Covenants.

 

(a) Confidentiality. Executive will not, during the Employment Period, except to
the extent reasonably necessary in performance of the duties under this
Agreement, or at any time after termination of his employment, directly or
indirectly, disclose or make available to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, any
Confidential Information (as defined below). Executive agrees that, upon
termination of Executive’s employment with HCPI, all Confidential Information in
Executive’s possession that is in written or other tangible form (together with
all copies or duplicates thereof, including computer files) shall be returned to
HCPI and shall not be retained by Executive or furnished to any third party, in
any form except as provided herein; provided, however, that Executive shall not
be obligated to treat as confidential, or return to HCPI copies of any
Confidential Information that (i) was publicly known at the time of disclosure
to Executive, (ii) becomes publicly known or available thereafter other than by
any means in violation of this Agreement or any other duty owed to HCPI by any
person or entity, or (iii) is lawfully disclosed to Executive by a third party.
As used in this Agreement, the term “Confidential Information” means: all trade
secrets and proprietary or confidential information disclosed to Executive or
known by Executive as a consequence of or through Executive’s relationship with
HCPI, about the customers, employees, business methods, public relations
methods, organization, procedures or finances, including, without limitation,
information of or relating to customer lists, of HCPI and its affiliates.

 

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(b) Noncompetition.

 

  (i) Executive acknowledges and agrees that: (A) Executive’s services pursuant
to this Agreement are unique and extraordinary, and that Executive will have
access to and control of Confidential Information of HCPI which is vital to the
success of HCPI’s business, (B) because of Executive’s knowledge of HCPI’s
Confidential Information it is unlikely that Executive could work for a
Competitor of HCPI (as defined below) without divulging such Confidential
Information; and (C) the business of HCPI is national in scope and cannot be
confined to any particular geographic area of the United States.

 

  (ii) For the foregoing reasons, and in consideration for the payments and
benefits offered by HCPI under this Agreement, Executive hereby agrees to the
following:

 

  A. During the Employment Period and for a twelve (12) month period commencing
with Executive’s Date of Termination (collectively, the “Covenant Period”),
Executive shall not, either on his own account or jointly with or as a manager,
agent, officer, employee, consultant, partner, joint venturer, owner or
shareholder or otherwise on behalf of any other person, firm or corporation,
directly or indirectly, engage in any activity with a competitor of HCPI in the
health care real estate acquisition, development, management, investment or
financing industry (a “Competitor”). Notwithstanding the foregoing, the parties
agree that Executive will serve as a Governor and Chief Manager of MedCap
Holding IX L.L.C. for the purpose of owning the Sparks properties in Arkansas
with intention of selling the same, oversight of that certain Swap Agreement
with Wachovia and certain interest rate caps, and other limited business
activities related to post closing adjustments and claims and other matters
directly related to the foregoing and that such service will not be deemed to be
a violation of the foregoing.

 

  B. Eligibility for Severance Payments and other benefits under this Agreement
is contingent upon Executive’s agreement and compliance with the covenant as
stated in this Section 6(b). No further payments or eligibility for benefits
continuation will be available to Executive if Executive violates the covenants
stated herein, and Executive shall be required to repay any Severance Payments
and benefits previously provided by HCPI, in addition to any other remedies that
HCPI may have.

 

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  C. It is a specific condition of this Agreement that Executive shall advise in
writing any person or entity whom a reasonable person would believe to be a
Competitor and with whom Executive is contemplating entering into a business
relationship of Executive’s obligations pursuant to this Agreement and
specifically to disclose all covenants contained in this Section 6. It is also a
specific condition of this Agreement that so long as Executive is receiving any
Severance Payments or benefits under this Agreement with respect to any type of
termination, Executive shall be obligated to immediately notify HCPI as to the
specifics of any new position or business venture that Executive is planning to
commence as an employee or consultant or otherwise, and to take affirmative
steps to assure HCPI that Executive will not divulge any of HCPI’s Confidential
Information or otherwise violate the covenants in this Section 6 in such
position or business venture.

 

(c) Non-Solicitation. Executive hereby agrees that during the Employment Period
and for the period commencing on the Date of Termination and terminating on the
first (1st) anniversary thereof, Executive shall not, either on his own account
or jointly with or as a manager, agent, officer, employee, consultant, partner,
joint venturer, owner or shareholder or otherwise on behalf of any other person,
firm or corporation, directly or indirectly, solicit or attempt to solicit away
from HCPI or hire any of HCPI’s officers or employees or offer employment to any
person who, on or during the six (6) months immediately preceding the date of
such solicitation or offer, is or was an officer or employee of HCPI; provided,
however, that a general advertisement to which an employee of HCPI responds
shall not be deemed to result in a breach of this Section 6(c).

 

7. Indemnification. HCPI will indemnify Executive to the fullest extent
permitted by applicable law and the certificate of incorporation and by-laws of
HCPI, whichever affords the greater protection to Executive.

 

8. Arbitration; Dispute Resolution. Any disagreement, dispute, controversy,
claim, suit, action or proceeding (collectively, a “Dispute”) arising out of or
relating to this Agreement or the interpretation of this Agreement or any
arrangements relating to this Agreement or contemplated in this Agreement or the
breach, termination or invalidity thereof shall be settled by final and binding
arbitration in accordance with the following:

 

(a) The arbitration shall be administered by the JAMS/Endispute in New York, New
York, in accordance with its then existing JAMS/Endispute Arbitration Rules and
Procedures for Employment Disputes.

 

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(b) In the event of such an arbitration proceeding, Executive and HCPI shall
each select an arbitrator from among the JAMS/Endispute panel of arbitrators,
and the two party-appointed arbitrators shall select a neutral third arbitrator.

 

(c) Neither Executive nor HCPI nor the arbitration tribunal shall disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of all parties.

 

(d) Except as provided herein, the Federal Arbitration Act shall govern the
interpretation, enforcement and all proceedings under this Section 8.

 

(e) The arbitration tribunal shall apply the substantive law (and the law of
remedies, if applicable) of the State of Tennessee, or federal law, or both, as
applicable, and the arbitration tribunal is without jurisdiction to apply any
different substantive law.

 

(f) The arbitration tribunal shall have the authority to entertain a motion to
dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure. The
arbitration tribunal shall render an award and a written, reasoned opinion in
support thereof. Judgment upon the award may be entered in any court having
jurisdiction thereof.

 

(g) HCPI shall pay all fees and expenses of the arbitration tribunal regardless
of the result.

 

9. Miscellaneous.

 

(a) Waiver. The waiver of the breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach of the same or
other provision hereof.

 

(b) Entire Agreement; Modifications. Except as otherwise provided herein, this
Agreement represents the entire understanding among the parties with respect to
the subject matter hereof, and this Agreement supersedes any and all prior
understandings, agreements, plans and negotiations, whether written or oral,
with respect to the subject matter hereof, including without limitation, any
understandings, agreements or obligations respecting any past or future
compensation, bonuses, reimbursements or other payments to Executive from HCPI.
All modifications to the Agreement must be in writing and signed by the party
against whom enforcement of such modification is sought.

 

(c) Notices. All notices and other communications under this Agreement shall be
in writing and shall be given by telegraph or first class mail, certified or
registered with return receipt requested, and shall be deemed to have been duly
given three days after mailing or twelve (12) hours after transmission of a
telegram to the respective persons named below:

 

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If to HCPI:

   Health Care Property Investors, Inc.      4675 MacArthur Court, 9th Floor,
Suite 900      Newport Beach, California 92660      Attention: Chairman of the
Board

If to Executive:                    

   Charles A. Elcan      508 Belle Meade Blvd.      Nashville, TN 37205

 

Any party may change such party’s address for notices by notice duly given
pursuant to this Section 9(c).

 

(d) Headings. The Section headings herein are intended for reference and shall
not by themselves determine the construction or interpretation of this
Agreement.

 

(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee applicable to contracts
entered into and wholly to be performed within the State of Tennessee by
residents of Tennessee.

 

(f) Severability. Should a court or other body of competent jurisdiction
determine that any provision of this Agreement is excessive in scope or
otherwise invalid or unenforceable, such provision shall be adjusted rather than
voided, if possible, and all other provisions of this Agreement shall be deemed
valid and enforceable to the extent possible.

 

(g) Survival of HCPI’s Obligations. HCPI’s obligations hereunder shall not be
terminated by reason of any liquidation, dissolution, bankruptcy, cessation of
business, or similar event relating to HCPI. This Agreement shall not be
terminated by any merger or consolidation or other reorganization of HCPI. In
the event any such merger, consolidation or reorganization shall be accomplished
by transfer of stock or by transfer of assets or otherwise, the provisions of
this Agreement shall be binding upon and inure to the benefit of the surviving
or resulting corporation or person. This Agreement shall be binding upon and
inure to the benefit of the executors, administrators, heirs, successors and
assigns of the parties; provided, however, that except as herein expressly
provided, this Agreement shall not be assignable either by HCPI (except to an
affiliate of HCPI in which event HCPI shall remain liable if the affiliate fails
to meet any obligations to make payments or provide benefits or otherwise) or by
Executive. The provisions of Section 5(a) shall survive the expiration or
non-renewal of this Agreement, and the provisions of Section 5(b) shall apply to
any Termination Without Cause within twelve (12) months following the expiration
of this Agreement.

 

(h) Counterparts. This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one and the same Agreement.

 

(i) Withholdings. All compensation and benefits to Executive hereunder shall be
reduced by all federal, state, local and other withholdings and similar taxes
and payments required by applicable law.

 

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10. Acknowledgement. Executive represents and acknowledges the following:

 

(a) He has carefully read this Agreement in its entirety;

 

(b) He understands the terms and conditions contained herein;

 

(c) He has had the opportunity to review this Agreement with legal counsel of
his own choosing and has not relied on any statements made by HCPI or its legal
counsel as to the meaning of any term or condition contained herein or in
deciding whether to enter into this Agreement; and

 

(d) He is entering into this Agreement knowingly and voluntarily.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

HEALTH CARE PROPERTY INVESTORS, INC.

By:

 

/s/ EDWARD J. HENNING

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

   

Edward J. Henning

   

Senior Vice President, General Counsel

and Corporate Secretary

EXECUTIVE

   

/s/ CHARLES A. ELCAN

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

   

CHARLES A. ELCAN

 

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