Exhibit 10.1


APPENDIX A


HEALTH CARE PROPERTY INVESTORS, INC.

2006 PERFORMANCE INCENTIVE PLAN


NON-EMPLOYEE DIRECTORS STOCK-FOR-FEES PROGRAM


1.             Establishment.  The Corporation hereby establishes this
Health Care Property Investors, Inc. Non-Employee Directors Stock-for-Fees
Program, as set forth herein (this “Program”).  This Program is effective as of July 27, 2006
(the “Effective Date”).  This Program is an Appendix to, and any
shares of Common Stock issued under this Program on and after the Effective
Date shall be charged against the applicable share limits of, the Health Care
Property Investors, Inc. 2006 Performance Incentive Plan (the “Plan”).  Except as
otherwise expressly provided herein, the provisions of the Plan shall govern
all shares issued pursuant to this Program. 
Capitalized terms are defined in the Plan if not defined herein.


2.             Purpose.  The purpose of this Program is to promote the
success of the Corporation and the interests of its stockholders by providing
members of the Board who are not officers or employees of the Corporation or
one of its Subsidiaries (“Non-Employee Directors”)
an opportunity to elect to receive their Director Fees (as such term is defined
below) in the form of shares of the Corporation’s Common Stock and more closely
aligning the interests of Non-Employee Directors and stockholders.


3.     Election to Receive Stock in Lieu of Cash Payment of Fees.


(a)                                  A
Non-Employee Director may elect to exchange the right to receive payment of all
or a portion of his or her unpaid Director Fees for the right to receive
payment of such unpaid fees in the form of shares of the Corporation’s Common
Stock.  Such election shall be made by
completing the election form attached hereto as Exhibit 1 (or such other
form as the Board may prescribe from time to time) (an “Election
Form”).  Subject to Section 4,
such election shall apply to all Director Fees that would otherwise have been
paid (but for such election) in the Corporation’s fiscal quarter that commences
after the date the Election Form is filed with and received by the Corporation and
continuing for each fiscal quarter through and until the fiscal quarter that
commences after such time as the Non-Employee Director files a new Election
Form that is received by the Corporation modifying or terminating such prior
election.  Unless otherwise approved by
the Board, an election by a Non-Employee Director pursuant to this Section 3(a)
shall be made only in an open trading window pursuant to the Corporation’s
general policies for transactions in the Corporation’s Common Stock applicable
to Non-Employee Directors, as those policies are in effect from time to time.  Unless otherwise approved by the Board, a
Non-Employee Director should not make more than one election pursuant to this
Section 3(a) in any six-month period of time. 
(Any Director Fees that the Non-Employee Director elects to receive in
the form of shares of the Corporation’s Common Stock pursuant to this Section
3(a) are referred to herein as “Exchanged Fees”).



 1
 






 



 


(b)                                 Upon
any Exchange Date (as such term is defined below) that occurs after a
Non-Employee Director files an Election Form pursuant to Section 3(a) that is
received by the Corporation, the Non-Employee Director shall be entitled to
receive a number of shares of the Corporation’s Common Stock determined by
dividing (i) the amount of the Exchanged Fees that would otherwise have been
paid to the Non-Employee Director (after giving effect to any deferral election
pursuant to any deferred compensation program of the Corporation) but for such
election during the Corporation’s fiscal quarter last preceding such Exchange
Date (and, in the event an Exchange Date did not occur in such preceding fiscal
quarter, the amount of such Exchanged Fees that would otherwise have been paid
to the Non-Employee Director for all fiscal quarters preceding such fiscal
quarter through and including the last preceding fiscal quarter in which an
Exchange Date actually occurred), by (ii) the Fair Market Value (as defined
below) of a share of the Common Stock as of such Exchange Date, and rounding
down to the nearest whole share.  Any
fractional amount less than the Fair Market Value of a share of the Common
Stock as of such Exchange Date shall be paid in cash.   Any shares of Common Stock acquired by a
Non-Employee Director pursuant to this Program shall be fully vested at all
times.  As soon as administratively
practicable following the Exchange Date, the Corporation shall deliver such
shares (and any cash payable with respect to a fractional interest) to the
Non-Employee Director.  The Corporation
may deliver such shares either by delivering one or more certificates,
registered in the name of the Non-Employee Director, for such shares or by
entering such shares in the name of the Non-Employee Director in book-entry
form, as determined by the Corporation in its discretion.


(c)                                  For
purposes of this Program, the following definitions shall apply:


·                                          “Director Fees” shall mean the annual retainer and meeting
fees, to the extent otherwise payable in cash, payable to a Non-Employee
Director for services as a member of the Board.


·                                          “Exchange Date” shall mean any date on which the Corporation
pays an ordinary cash dividend to holders of its Common Stock; provided,
however, that in the event the Corporation does not pay any such ordinary cash
dividend during January or February of a given year, an Exchange Date shall
automatically occur on the last trading day of February of such year.


·                                          “Fair Market Value” with respect to an Exchange Date shall
mean the average of the closing prices of a share of Common Stock as reported
on the composite tape for securities listed on the New York Stock Exchange for
the period of ten (10) trading days ending with the Exchange Date.


4.             Plan Provisions.  The issuance of shares of Common Stock under
this Program and any shares so issued shall otherwise be subject to the terms
of the Plan (including, without limitation, the provisions of Section 7 and
Section 8.1 of the Plan).


5.             Change in Control.  In the event of a Change in Control Event, an
Exchange Date shall be deemed to occur on the day preceding such Change in
Control Event and any shares of Common Stock deliverable in respect of such
Exchange Date shall be delivered prior to consummation of such Change in
Control Event.



 2
 






 



6.             Termination of Service.  A termination of a Non-Employee Director’s
service with the Corporation shall have no effect on the director’s rights as
to Common Stock issued or issuable under this Program as to his or her
Exchanged Fees for the period in which he or she served as a Non-Employee
Director (including any Common Stock issuable in accordance with the terms of
this Program with respect to the Exchange Date that coincides with or next
follows the date on which he or she ceases to be a Non-Employee Director).


7.             Share Limits.  Shares of Common Stock issued with respect to
this Program shall be charged against the Share Limit set forth in Section 4.2
of the Plan.  The Board has determined
that the shares issued with respect to this Program are shares issued in
respect of “compensation earned but deferred” for purposes of the definition of
Full-Value Award as set forth in the Plan and, accordingly, that the shares
issued with respect to this Program shall be counted against the Share Limit
under Section 4.2 of the Plan on a 1-for-1 basis (as opposed to 2.0 shares for
every one share actually issued).  If the
number of shares of Common Stock to be issued pursuant to this Program would
otherwise exceed the Share Limit, such shares shall be issued on a pro-rata
basis to Non-Employee Directors entitled to receive such shares (and any shares
otherwise deliverable but for such share limit shall be paid in cash equal to
the amount of the Exchanged Fees converted into such shares).


8.             Amendment; Administration.  The Board may at any time amend, modify,
suspend or terminate this Program without stockholder approval; provided that
no such amendment, modification or suspension shall materially and adversely
affect the rights of participants in this Program, without their consent, as to
Exchanged Fees for the period ending with the date of such amendment,
modification or suspension that have not theretofore been satisfied by the
delivery of Common Stock pursuant to this Program.  In the event that the Board terminates this
Program, the Board shall either declare that an Exchange Date occurs immediately
prior to such termination (and promptly deliver any Common Stock due with
respect to such Exchange Date) or return (in cash) the amount of Exchanged Fees
for the period beginning on the last preceding Exchange Date.  This Program does not limit the Board’s
authority to make other, discretionary award grants to Non-Employee Directors
pursuant to the Plan.  The Plan
Administrator’s power and authority to construe and interpret the Plan and
awards thereunder pursuant to Section 3.1 of the Plan shall extend to this
Program and any shares issued hereunder. 
As provided in Section 3.2 of the Plan, any action taken by, or inaction
of, the Administrator relating or pursuant to this Program and within its
authority or under applicable law shall be within the absolute discretion of
that entity or body and shall be conclusive and binding upon all persons.  The Board shall be the Plan Administrator as
to this Program; provided that if at the relevant time the Board has delegated
discretionary authority as to establishing director compensation to a committee
of the Board, that particular committee shall be the Plan Administrator.



 3
















 


EXHIBIT 1


HEALTH CARE PROPERTY INVESTORS, INC.

NON-EMPLOYEE DIRECTORS STOCK-FOR-FEES PROGRAM

ELECTION FORM


Director: 
__________________________________________________________________
                                (Print Full Name)


I, the Director named
above, hereby make the election set forth below pursuant to the Health Care
Property Investors, Inc. Non-Employee Directors Stock-for-Fees Program (the “Program”)
adopted under the Health Care Property Investors, Inc. 2006 Performance
Incentive Plan (the “Plan”).  I
understand that my election will apply to all of my Director Fees (as such term
is defined in the Program) that would otherwise be paid commencing with the
fiscal quarter after this election is received by Health Care Property
Investors, Inc. (the “Company”) until I file a new Program election with the
Company that become effective pursuant to the terms of the Plan.


Election


Check
one of the following options to indicate whether you wish to receive
your Director Fees in the form of cash payments or shares of the Company’s common
stock.  Please note that your “Director
Fees” is the amount of annual retainer and meeting fees, to the extent
otherwise payable in cash, payable for your services as a member of the Company’s
board of directors.


If
you choose not to receive any portion of your Director Fees in the form of
stock pursuant to the Program, you do not need to return this form - your
Director Fees will be paid to you all in cash. 
If you previously made a Program election to receive stock and you want
to cancel or change that election as to Director Fees payable to you commencing
with the fiscal quarter after your new election is received by the Company,
make your new election below and return this form to the Company.  Elections may be made only during open
trading windows pursuant to the Company’s trading policies applicable to
directors.


I hereby make the
following election with respect to my Director Fees:


o  _____                           All cash.  I elect to receive my Director Fees in the
form of cash payments.


o  _____                           All stock, or part stock and part cash.  I elect to receive         
% of my Director Fees (maximum 100%) in
the form of shares of the Company’s common stock.  I understand that, in lieu of cash payment of
this amount, I will receive a number of shares of common stock determined in
accordance with the Program.  In general,
shares will generally be delivered promptly following each date that the
Company pays a cash dividend.









 



 


Your Director Fees will be
determined after giving effect to any deferral election that you may have made
(that is, if you elect to defer payment of your directors fees, the portion of
your fees that you may elect to convert into Common Stock under the Program
will first be reduced by the amount of the fees that you have elected to
defer).  The Program is not a deferred
compensation plan - you will realize ordinary income at the time shares are
delivered to you with respect to the Program. 
The ordinary income will be based on the market value of the shares at
the time they are delivered to you, which may not be precisely the same as the
value used to convert fees into shares pursuant to the Program (since the
conversion is based on a 10-trading day average of closing prices).


Note that the offer and sale of
shares of Common Stock with respect to the Plan has been registered with the
Securities and Exchange Commission. 
However, each person who acquires shares of Common Stock with respect to
the Program will nevertheless be subject to all applicable securities laws
governing the subsequent sale or transfer of the shares (including, without
limitation,  any restrictions imposed on
directors as “affiliates” of the Company, Section 16 considerations, insider
trading considerations, Rule 144 re-sale considerations) and all applicable
Company insider trading policies.


I have read and
understand this form.  I have received,
read and understand the Plan document and the Program document.  I agree to be bound by the terms and
conditions of the Plan and the Program. 
If there is any inconsistency between this form and either the Plan
document or the Program document, the Plan document or the Program document, as
applicable, controls.


	
   

  	
   

  	
   

  
	
  (Signature of Participant)

  	
   

  	
  (Date)

  



 


ACKNOWLEDGEMENT
OF DELIVERY OF ELECTION


On behalf of the Company,
I hereby acknowledge that the above election was received on the date indicated
below.


HEALTH CARE PROPERTY
INVESTORS, INC.


By______________________________________


Date____________________________________