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.]






(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:

  	
   

  
						



 









 



 


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:









 



 


·                  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;









 



·                  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);









 



(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.









 



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.