Document:

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                                                                   Exhibit 10.24

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of October 8, 2002 (the "Effective Date") by and between HEALTH CARE PROPERTY
INVESTORS, INC., a Maryland corporation ("Corporation"), and JAMES F. FLAHERTY
III ("Officer").

                                    RECITALS

     A.  Corporation and Officer desire to enter into a new employment agreement
upon the terms set forth in this Agreement; and

     B.  Corporation desires to continue to employ Officer initially as its
President and Chief Operating Officer, and subsequently as its President and
Chief Executive Officer, and Officer is willing to accept such employment by
Corporation, on the terms and subject to the conditions set forth in this
Agreement.

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

                                    AGREEMENT

         THE PARTIES AGREE AS FOLLOWS:

     1.  Duties. During the term of this Agreement, Officer agrees to be
employed by and to serve Corporation as an executive officer, initially with the
title President and Chief Operating Officer. Corporation intends, at or about
the time of its annual meeting in 2003, to confer upon Officer the title of
Chief Executive Officer, subject to approval of such change by Corporation's
Board of Directors. Corporation agrees to employ and retain Officer in such
capacities. Officer shall devote such of his business time, energy, and skill to
the affairs of Corporation as shall be necessary to perform the duties of such
positions. Officer shall initially report to the Corporation's Chief Executive
Officer but upon being given such title, Officer shall report only to
Corporation's Board of Directors (the "Board") and at all times during the term
of this Agreement shall have powers and duties at least commensurate with his
position as President and Chief Operating Officer of Corporation, and
subsequently as Chief Executive Officer of Corporation.

     2.  Term of Employment.

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

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           (i)  "Termination For Cause" shall mean termination by Corporation of
Officer's employment by Corporation by reason of Officer's: (A) willful and
continued failure to substantially perform his duties with Corporation after a
written demand for substantial performance is delivered to Officer by the Board,
which demand specifically identifies the manner in which the Board believes that
Officer has not substantially performed his duties (except for any such failure
resulting from his incapacity due to physical or mental illness or any such
actual or anticipated failure after Officer's issuance of a Notice of
Termination (as defined in Section 2(a)(viii)) either (1) for Good Reason (as
defined in Section 2(a)(iii), or (2) in connection with a Covered Resignation
(as defined in Section 2(a)(iv)), (B) willful and continued failure to
substantially follow and comply with the specific and lawful directives of the
Board, as reasonably determined by the Board after a written demand for
substantial performance is delivered to Officer by the Board, which demand
specifically identifies the manner in which the Board believes that Officer has
not substantially performed his duties (except for any such failure resulting
from Officer's incapacity due to physical or mental illness or any such actual
or anticipated failure after his issuance of a Notice of Termination for Good
Reason or in connection with a Covered Resignation), (C) willful commission of
an act of fraud or dishonesty resulting in material economic or financial injury
to Corporation, or (D) willful engagement in illegal conduct or gross
misconduct, in each case which is materially and demonstrably injurious to
Corporation; provided, however, that Officer's employment shall not be deemed to
have been terminated in a Termination For Cause if such termination took place
as a result of any act or omission believed by Officer in good faith to have
been in the interest of Corporation. Notwithstanding the foregoing, Officer
shall not be deemed to have been terminated in a Termination for Cause pursuant
to clauses (A), (B) or (D) hereof unless and until there shall have been
delivered to Officer a copy of a resolution duly adopted by the affirmative vote
of not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to Officer, an opportunity for
Officer, together with Officer's counsel, to be heard before the Board and a
reasonable opportunity to cure), finding that in the Board's good faith opinion
Officer had engaged in conduct set forth above in this Section 2(a)(i) and
specifying the particulars thereof in reasonable detail;

           (ii) "Termination Other Than For Cause" shall mean termination by
Corporation of Officer's employment by Corporation before a Change in Control
(as defined in Section 2(a)(vii)), other than in a Termination For Cause, and
shall include constructive termination of Officer's employment by reason of
material breach of this Agreement by Corporation, such constructive termination
to be effective upon delivery of a Notice of Termination from Officer to
Corporation of such constructive termination.

           (iii)"Good Reason" shall mean shall mean, without Officer's express
written consent, the occurrence after a Change in Control of any of the
following circumstances unless, in the case of Sections 2(a)(iii)(A), (E), (F),
or (G), such circumstances are fully corrected (provided such circumstances are
capable of correction)

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prior to the Date of Termination (as defined in Section 2(a)(ix)) specified in
the Notice of Termination given in respect thereof:

             (A) the assignment to Officer of any duties inconsistent with the
position in Corporation that Officer held immediately prior to the Change in
Control, a significant adverse alteration in the nature or status of Officer's
responsibilities or the conditions of Officer's employment from those in effect
immediately prior to such Change in Control, or any other action by Corporation
that results in a material diminution in Officer's position, authority, duties
or responsibilities;

             (B) Corporation's reduction of Officer's annual base salary as in
effect on the Effective Date or as the same may be increased from time to time;

             (C) the relocation of Corporation's offices at which Officer is
principallyemployed immediately prior to the date of the Change in Control
(Officer's "Principal Location") to a location more than thirty (30) miles from
such location, or Corporation's requiring Officer, without Officer's written
consent, to be based anywhere other than Officer's Principal Location, except
for required travel on Corporation's business to an extent substantially
consistent with Officer's business travel obligations prior to the date of the
Change in Control;

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

             (E) Corporation's failure to continue in effect any material
compensation or benefit plan in which Officer participated immediately prior to
the Change in Control, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or
Corporation's failure to continue Officer'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 Officer's
participation relative to other participants, as existed at the time of the
Change in Control;

             (F) Corporation's failure to obtain a satisfactory agreement from
any successor to assume and agree to perform this Agreement, as contemplated in
Section 7(j) hereof; or

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

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Officer's right to terminate Officer's employment pursuant to this Section
2(a)(iii) shall not be affected by Officer's incapacity due to physical or
mental illness. Officer's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any circumstance constituting Good Reason
hereunder. Any good faith determination by Officer that Good Reason exists shall
be presumed correct and shall be binding upon Corporation.

       (iv)  "Covered Resignation" shall mean a termination by Officer of
Officer's employment by Corporation which occurs within the thirty (30) day
period following the first anniversary of the occurrence of a Change in Control.

       (v)   "Voluntary Termination" shall mean termination by Officer of
Officer's employment by Corporation other than (i) constructive termination as
described in subsection 2(a)(ii), (ii) a "Termination Upon a Change in Control,"
and (iii) a termination by reason of Officer's death or disability as described
in Sections 2(e) and 2(f).

       (vi)  "Termination Upon a Change in Control" shall mean a termination by
Officer of Officer's employment with Corporation following a "Change in Control"
for Good Reason or pursuant to a Covered Resignation or a termination by
Corporation of Officer's employment with Corporation following a "Change in
Control" without Cause.

       (vii) "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 Corporation representing 25% or more of the
combined voting power of Corporation's then outstanding securities ("Outstanding
Corporation Voting Securities"); provided, however, that for purposes of this
subsection (A), the following shall not constitute a Change in Control: (1) any
acquisition by Corporation or any corporation controlled by Corporation, (2) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by Corporation or any corporation controlled by Corporation, or (3)
any acquisition by a Person of 25% of the Outstanding Corporation Voting
Securities as a result of an acquisition of common stock of Corporation by
Corporation which, by reducing the number of shares of common stock of
Corporation outstanding, increases the proportionate number of shares
beneficially owned by such Person to 25% or more of the Outstanding Corporation
Voting Securities; provided, however, that if a Person shall become the
beneficial owner of 25% or more of the Outstanding Corporation Voting Securities
by reason of a share acquisition by Corporation as described above and shall,
after such share acquisition by Corporation, become the beneficial owner of any
additional shares of common stock of Corporation, then such acquisition of
additional shares shall constitute a Change in Control;

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                   (B)  during any period of two 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 Corporation's stockholders was approved by a
vote of at least two-thirds (?) 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 Corporation to effect a transaction described in
Sections 2(a)(vii)(A), (C) or (D)), cease for any reason to constitute at least
a majority thereof;

                   (C)  the consummation by Corporation of a merger or
consolidation of Corporation with any other entity, except for a merger or
consolidation which would result in the voting securities of Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 66?% of the combined voting power of the voting
securities of Corporation or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of Corporation (or similar transaction)
in which no Person acquires more than 25% of the combined voting power of
Corporation's then outstanding securities shall not constitute a Change in
Control; or

                   (D)  the stockholders of Corporation approve a plan of
complete liquidation of Corporation or an agreement for the sale or disposition
by Corporation of all or substantially all of Corporation's assets.

           (viii)  "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 Officer's employment under the provision so indicated.

           (ix)    "Date of Termination" shall mean (A) if Officer's employment
is terminated due to Officer's death, the date of Officer's death; (B) if
Officer's employment is terminated for Disability, thirty (30) days after Notice
of Termination is given (provided that Officer shall not have returned to the
full- time performance of Officer's duties during such thirty (30)-day period),
and (C) if Officer's employment is terminated pursuant to Section 2(a)(i),
Section 2(a)(iii) or Section 2(a)(iv) or 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 for 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 or in connection with a Covered
Resignation shall not be less than sixty (60) days from the date such Notice of
Termination is given). Notwithstanding anything to the contrary contained in
this Section 2(a)(ix), if within fifteen (15) days after any Notice of
Termination is given, the

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party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, then the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, or otherwise; provided, however, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and if the party giving such notice pursues the resolution
of such dispute with reasonable diligence.

          (b)  Basic Term. The term of employment hereunder shall commence on
the Effective Date and continue for a continuous period of three (3) years,
subject to earlier termination as provided in this Section 2, (the "Employment
Period").

          (c)  Termination For Cause. Termination For Cause may be effected by
Corporation at any time during the term of this Agreement and shall be effected
by written notification to Officer. Upon Termination For Cause, Officer shall
immediately be paid all accrued salary, 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 Corporation in which Officer is a participant to the
full extent of Officer's rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by Officer in connection with his duties
hereunder, all to the Date of Termination, but Officer shall not be paid any
other compensation or reimbursement of any kind, including without limitation,
severance compensation.

          (d)  Termination Other Than For Cause. Notwithstanding anything else
in this Agreement, Corporation may effect a Termination Other Than For Cause at
any time upon giving a Notice of Termination to Officer of such termination.
Upon any Termination Other Than For Cause, Officer shall immediately be paid all
accrued salary, 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
Corporation in which Officer is a participant to the full extent of Officer's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by Officer 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.

          (e)  Termination by Reason of Disability. If, during the term of this
Agreement, Officer, in the reasonable judgment of the Board of Directors of
Corporation, 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 six (6) consecutive months ("Disability"),
Corporation shall have the right to terminate Officer's employment hereunder by
written notification to Officer and payment to Officer of all accrued salary,
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
Corporation in

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which Officer is a participant to the full extent of Officer's rights under such
plans (including accelerated vesting of any awards granted to Officer under
Corporation's stock incentive plans), accrued vacation pay and any appropriate
business expenses incurred by Officer in connection with his duties hereunder,
all to the Date of Termination, with the exception of medical and dental
benefits which shall continue through the expiration of the Agreement, but
Officer shall not be paid any other compensation or reimbursement of any kind,
including without limitation, severance compensation.

          (f)  Death. In the event of Officer's death during the term of this
Agreement, Officer's employment shall be deemed to have terminated as of the
last day of the month during which his death occurs and Corporation shall pay to
his estate or such beneficiaries as Officer may from time to time designate all
accrued salary, 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
Corporation in which Officer is a participant to the full extent of Officer's
rights under such plans (including accelerated vesting of any awards granted to
Officer under Corporation's stock incentive plans), accrued vacation pay and any
appropriate business expenses incurred by Officer in connection with his duties
hereunder, all to the Date of Termination, but Officer'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,
corporation shall immediately pay all accrued salary, 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 corporation in which Officer is a
participant to the full extent of Officer's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by Officer in
connection with his duties hereunder, all to the Date of Termination, but no
other compensation or reimbursement of any kind, including without limitation,
severance compensation.

          (h)  Termination Upon a Change in Control. In the event of a
Termination Upon a Change in Control, Officer shall immediately be paid all
accrued salary, 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
Corporation in which Officer is a participant to the full extent of Officer's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by Officer in connection with his duties hereunder, all to the
Date of Termination, and all severance compensation provided in Section 5(a),
but no other compensation or reimbursement of any kind.

          (i)  Notice of Termination. Corporation may effect a termination of
this Agreement pursuant to the provisions of this Section 2 upon giving 30 days'
written

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notice to Officer of such termination. Officer may effect a termination of this
Agreement pursuant to the provisions of this Section 2 upon giving 60 days'
written notice to Corporation of such termination.

          (j) Resignation Rights Upon Certain Activity. If Corporation's Board
of Directors fails to approve granting to Officer the title Chief Executive
Officer by the date of the Corporation's 2003 annual meeting, Officer may
deliver a Notice of Resignation at any time during the six (6) months following
the date such meeting is held and his resignation shall become effective 30 days
thereafter. Such resignation shall entitle Officer to receive a payment equal to
eighteen months' base compensation and one and one-half times the annual bonus
which would have been paid for 2002 if no pro-rating had been applied, plus all
salary and benefits which would be due pursuant to Section 2(g) upon a voluntary
termination. Likewise, Officer and his eligible dependents shall receive the
health insurance benefits described in Section 2(d) at the Corporation's expense
for the lesser of eighteen (18) months or such time as Officer obtains
employment providing comparable benefits.

     3.   Salary, Benefits and Bonus Compensation

          (a) Base Salary. As payment for the services to be rendered by Officer
as provided in Section 1 and subject to the terms and conditions of Section 2,
Corporation agrees to pay to Officer a "Base Salary" for the period beginning on
the Effective Date at the rate of $475,000 per annum payable in equal
semi-monthly installments, which Base Salary shall increase to $560,000 per
annum payable in semi-monthly installments when Officer is appointed as Chief
Executive Officer. The Base Salary for each year (or portion thereof) beginning
January 1, 2004 shall be as determined by the Board of Directors which shall
authorize an increase in Officer's Base Salary in an amount which, at a minimum,
shall be equal to the cumulative cost-of-living increment on the Base Salary as
reported in the "Consumer Price Index, Los Angeles - Riverside - Orange County,
California, All Items," published by the U.S. Department of Labor (using January
1, 2003 as the base date for computation). Officer's Base Salary shall be
reviewed annually by the Compensation Committee of the Board of Directors (the
"Compensation Committee").

          (b) Bonuses. Officer shall be eligible to receive a bonus for each
year (or portion thereof) during the term of this Agreement and any extensions
thereof, with the actual amount of any such bonus to be determined in the sole
discretion of the Compensation Committee of the Board of Directors based upon
its evaluation of Officer's performance during such year. All such bonuses shall
be payable within 45 days after the end of the year to which such bonus relates.
All such bonuses shall be reviewed annually by the Compensation Committee. For
calendar year 2002, a pro-rata bonus shall be considered, based upon the
assumption that a full year bonus would not exceed $400,000.

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          (c) Stock Grant. Pursuant to the Corporation's 2000 Stock Incentive
Plan (the "Plan") the Corporation grants Officer 60,000 Shares, as an Incentive
Stock Award, subject to all terms and conditions of the Plan and to the
following provisions:

              (i) the shares granted shall vest ratably over a period of seven
(7) years from the Effective Date, and any unvested shares shall be forfeited to
the Corporation if Officer's employment is terminated, except that the
provisions of the Plan which accelerate vesting upon Retirement (as defined in
the Plan), death, disability or a Termination Upon a Change in Control shall
apply.

          (d) Additional Benefits. During the term of this Agreement, Officer
shall be entitled to the following fringe benefits:

              (i)   Officer Benefits. Officer shall be eligible to participate
in such of Corporation's benefits and deferred compensation plans as are now
generally available or later made generally available to executive Officers of
corporation, including, without limitation, Corporation's 2000 Stock Incentive
Plan, profit sharing plans, annual physical examination, dental and medical
plans (but Corporation shall separately pay any deductible or co-payment
amounts), personal catastrophe and disability insurance, and retirement plans.
However, in recognition of the stock grant in subsection (c) above, Officer
shall not be eligible for a stock grant or a grant of stock options in 2002.

              (ii)  Automobile. Officer shall be eligible to receive an
automobile allowance of $15,000 per year.

              (iii) Vacation. Officer shall be entitled to five weeks of
vacation during each year during the term of this Agreement and any extensions
thereof, prorated for partial years.

              (iv)  Life Insurance. For the term of this Agreement and any
extensions thereof, Corporation shall at its expense procure and keep in effect
term life insurance on the life of Officer, payable to such beneficiaries as
Officer may from time to time designate, in the aggregate amount of $2,000,000.
Such policy shall be owned by Officer or by a member of his immediate family.

              (v)   Reimbursement for Expenses. During the term of this
Agreement, Corporation shall reimburse Officer for reasonable and properly
documented (in accordance with the Corporation's policies as in effect from time
to time) out-of-pocket business and/or entertainment expenses incurred by
Officer 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 Corporation's
stock option plans, incentive plans, or other similar plans, the restricted
period with respect to any restricted stock granted to Officer thereunder shall
lapse and such shares shall be distributed to Officer immediately prior to the
Change in Control.

          (b) Stock Options. All outstanding options granted to Officer under
any of Corporation's stock option plans, incentive plans or other similar plans
(or options substituted therefor covering the stock of a successor corporation)
shall become fully vested and exercisable immediately prior to the 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 Officer'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, Officer shall be entitled to the benefits
provided below:

              (i)    Corporation shall pay to Officer (A) Officer'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)(vii),
(B) the unpaid portion, if any, of any annual bonus, plus an amount equal to
Officer's annual bonus, pro rated from January 1 of the termination year through
the Date of Termination, and (C) all other amounts to which Officer is entitled
under any compensation plan of Corporation at the time such payments are due;

              (ii)   In lieu of any further salary payments to Officer for
periods subsequent to the Date of Termination, Corporation shall pay as
severance pay to Officer, at the time specified in Section 5(a)(vii), 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
Officer'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 Officer's targeted annual bonus as in effect as of the Date of Termination
or the highest annual bonus received by Officer in the three (3) years
immediately prior to the Change in Control, whichever is greater;

              (iii)  For a period of three (3) years, Corporation shall continue
to provide Officer and Officer's eligible family members, based on the cost
sharing arrangement between Officer and Corporation on the date of the Change in
Control, with medical and dental health benefits at least equal to those which
would have been provided to Officer and them if Officer's employment had not
been terminated or, if more favorable to Officer, as in effect generally at any
time thereafter, provided, however, that if Officer becomes re-employed with
another employer and he and his

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dependents are eligible to receive medical and dental health benefits under
another employer's plans, Corporation's obligations under this Section 5(a)(iii)
shall be reduced to the extent comparable benefits are actually received by
Officer following Officer's termination, and any such benefits actually received
by Officer shall be reported to Corporation. In the event Officer and his
dependents are ineligible under the terms of such benefit plans or programs to
continue to be so covered, in such event, Corporation shall provide Officer and
his dependents with substantially equivalent coverage through other sources or
shall provide Officer with a lump sum payment in such amount that, after all
taxes on that amount, shall be equal to the cost to Officer of providing Officer
such benefit coverage. At the termination of the benefits coverage under the
second preceding sentence, Officer, Officer's spouse and Officer'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 Officer had
terminated employment with Corporation on the date such benefits coverage
terminates. 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.

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

           (v)  Corporation shall furnish Officer 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
Officer against insurable events which occur or have occurred while Officer was
a director or officer of Corporation, such insurance to have policy limits
aggregating not less than the amount in effect immediately prior to the Change
in Control, and otherwise to be in substantially the same form and to contain
substantially the same terms, conditions and exceptions as the liability
issuance policies provided for officers and directors of Corporation in force
from time to time, provided, however, that such terms, conditions and exceptions
shall not be, in the aggregate, materially less favorable to Officer than those
in effect on the Effective Date; provided, further, that if the aggregate annual
premiums for such insurance at any time during such period exceed one hundred
and fifty

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percent (150%) of the per annum rate of premium currently paid by Corporation
for such insurance, then Corporation shall provide the maximum coverage that
will then be available at an annual premium equal to one hundred and fifty
percent (150%) of such rate;

           (vi) In any situation where under applicable law Corporation has the
power to indemnify (or advance expenses to) Officer in respect of any judgments,
fines, settlements, loss, cost or expense (including attorneys' fees) of any
nature related to or arising out of Officer's activities as an agent, employee,
officer or director of Corporation or in any other capacity on behalf of or at
the request of Corporation, Corporation shall promptly on written request,
indemnify (and advance expenses to) Officer to the fullest extent permitted by
applicable law, including but not limited to making such findings and
determinations and taking any and all such actions as Corporation may, under
applicable law, be permitted to have the discretion to take so as to effectuate
such indemnification or advancement. Such agreement by Corporation shall not be
deemed to impair any other obligation of Corporation respecting Officer's
indemnification otherwise arising out of this or any other agreement or promise
of Corporation or under any statute;

           (vii) (A) Anything in this Agreement to the contrary notwithstanding,
if it shall be determined that any payment or distribution to Officer or for
Officer'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 Corporation, 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 Officer shall be entitled to receive from Corporation an additional payment
(the "Gross-Up Payment") in an amount such that the net amount of the Payments
and the Gross-Up Payment retained by Officer after the calculation and deduction
of all Excise Taxes (including any interest or penalties imposed with respect to
such taxes) on the payment 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)(vii), 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) (vii), 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

                                       12

<PAGE>

Officer and Corporation with detailed supporting calculations with respect to
such Gross-Up Payment within fifteen (15) business days of the receipt of notice
from Officer or Corporation that Officer has received or will receive a Payment.
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 Accountant's 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)(vii), the "Accountants" shall mean Corporation'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, Officer 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 Corporation.

                 (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
Officer 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 Officer'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 Officer's adjusted gross income. To the extent practicable,
any Gross-Up Payment with respect to any Payment shall be paid by Corporation at
the time Officer is entitled to receive the Payments and in no event will any
Gross-Up Payment be paid later than five days after the receipt by Officer of
the Accountant's determination. Any determination by the Accountants shall be
binding upon Corporation and Officer.

                                       13

<PAGE>

                 (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 Corporation should have paid pursuant to this Section 5(a)(vii)
(the "Underpayment"). In the event that Corporation exhausts its remedies
pursuant to Section 5(a)(vii)(C) and Officer is required to make a payment of
any Excise Tax, the Underpayment shall be promptly paid by Corporation to or for
Officer's benefit;

                 (E) Officer and Corporation shall each provide the Accountants
access to and copies of any books, records and documents in the possession of
Corporation or Officer, 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)(vii); and

                 (F) Officer shall notify Corporation in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
Corporation of the Gross-Up Payment. Such notification shall be given as soon as
practicable after Officer is informed in writing of such claim and shall apprise
Corporation of the nature of such claim and the date on which such claim is
requested to be paid. Officer shall not pay such claim prior to the expiration
of the 30-day period following the date on which Officer give such notice to
Corporation (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
Corporation notifies Officer in writing prior to the expiration of such period
that it desires to contest such claim, Officer shall:

           (viii) give Corporation any information reasonably requested by
Corporation relating to such claim;

           (ix)   take such action in connection with contesting such claim as
Corporation 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 Corporation;

           (x)    cooperate with Corporation in good faith in order to
effectively contest such claim; and

           (xi)   permit Corporation to participate in any proceedings relating
to such claims; provided, however, that Corporation shall bear and pay directly
all costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify Officer for and hold Officer
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)(vii), Corporation 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,

                                       14

<PAGE>

hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct Officer to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner, and Officer 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
Corporation shall determine; provided, however, that if Corporation directs
Officer to pay such claim and sue for a refund, Corporation shall make such
payment on behalf of Officer, and shall indemnify Officer for and hold Officer
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 Officer
because of the claim corporation 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 Officer with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, Corporation's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and Officer
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority;

           (xii) The payments provided for in Sections 5(a)(i), (ii) and (iii)
shall be made not later than the fifth day following the Date of Termination;
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, Corporation shall pay to Officer on such day
an estimate, as determined in good faith by Corporation, 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
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
Officer becomes entitled to a refund of any such amount paid, such excess or
refund shall be paid to Corporation by Officer on the fifth day after demand by
Corporation (together with interest at the rate provided in section
1274(b)(2)(B) of the Code).

           (xiii) Officer shall not be required to mitigate the amount of any
payment provided for in this Section 5(a) by seeking other employment or
otherwise nor, except as provided in Section 5(a)(iii), shall the amount of any
payment or benefit provided for in this Section 5(a) be reduced by any
compensation earned by Officer as the result of employment by another employer
or self-employment, by retirement benefits, by offset against any amount claimed
to be owed by Officer to Corporation, or otherwise.

     (b) Severance Compensation in the Event of a Termination Other Than for
Cause. In the event Officer's employment is terminated in a Termination Other
than for Cause, Officer shall be entitled to the benefits provided below:

                                       15

<PAGE>

           (i)   Corporation shall pay to Officer (A) Officer'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 bonus, plus an amount equal to
Officer's annual bonus, pro rated from January 1 of the termination year through
the Date of Termination, and (C) all other amounts to which Officer is entitled
under any compensation plan of Corporation at the time such payments are due;

           (ii ) In lieu of any further salary payments to Officer for periods
subsequent to the Date of Termination, Corporation shall pay as severance pay to
Officer, at the time specified in Section 5(b)(iv), a lump sum severance payment
(together with the payments provided in Sections 5(b)(iii) below, the "Severance
Payments") equal to the sum of two (2) times Officer's annual base salary as in
effect as of the Date of Termination, and two (2) times Officer's targeted
annual bonus as in effect as of the Date of Termination or the highest annual
bonus received by Officer in the three (3) years immediately prior to the Date
of Termination, whichever is greater; and

           (iii) Officer shall be entitled to accelerated vesting of any awards
granted to Officer under Corporation's stock incentive plans.

           (iv)  The payments provided for in Sections 5(b)(i) and (ii) shall be
made not later than the fifth day following the Date of Termination; provided,
however, that if the amounts of such payments cannot be finally determined on or
before such day, Corporation shall pay to Officer on such day an estimate, as
determined in good faith by Corporation, 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 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 Corporation to Officer, payable on the fifth day after demand by
Corporation (together with interest at the rate provided in section
1274(b)(2)(B) of the Code).

           (v)   Officer shall not be required to mitigate the amount of any
payment provided for in this Section 5(b) by seeking other employment or
otherwise nor shall the amount of any payment or benefit provided for in this
Section 5(b) be reduced by any compensation earned by Officer as the result of
employment by another employer or self-employment, by retirement benefits, by
offset against any amount claimed to be owed by Officer to Corporation, or
otherwise.

     (c)   No Severance Compensation Upon Other Termination. In the event of a
Voluntary Termination, Termination For Cause, termination by reason of Officer's
Disability pursuant to Section 2(e), or termination by reason of Officer's death
pursuant to Section 2(f), Officer or his estate shall not be paid any severance
compensation.

                                       16

<PAGE>

    6. Covenants

       (a) Confidentiality. Officer hereby agrees that commencing on the Date of
Termination, Officer shall not, 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).
Officer agrees that, upon termination of Officer's employment with Corporation,
all Confidential Information in Officer's possession that is in written or other
tangible form (together with all copies or duplicates thereof, including
computer files) shall be returned to Corporation and shall not be retained by
Officer or furnished to any third party, in any form except as provided herein;
provided, however, that Officer shall not be obligated to treat as confidential,
or return to Corporation copies of any Confidential Information that (a) was
publicly known at the time of disclosure to Officer, (b) becomes publicly known
or available thereafter other than by any means in violation of this Agreement
or any other duty owed to Corporation by any person or entity, or (c) is
lawfully disclosed to Officer by a third party. As used in this Agreement, the
term "Confidential Information" means: information disclosed to Officer or known
by Officer as a consequence of or through Officer's relationship with
Corporation, about the customers, employees, business methods, public relations
methods, organization, procedures or finances, including, without limitation,
information of or relating to customer lists, of Corporation and its affiliates.

       (b) Noncompetition. Officer acknowledges and agrees that Officer's
services pursuant to this Agreement are unique and extraordinary, and that
Officer will have access to and control of Confidential Information of
Corporation which is vital to the success of Corporation's business. Officer
further acknowledges that because of Officer's knowledge of Corporation's
Confidential Information it is unlikely that Officer could work for a competitor
of Corporation without divulging such Confidential Information. Officer further
acknowledges that the business of Corporation is national in scope and cannot be
confined to any particular geographic area of the United States. For the
foregoing reasons, and in consideration for the benefits offered by Corporation
under this Agreement, Officer hereby agrees that (i) during the term of this
Agreement and for a twelve month period, commencing with Officer's Date of
Termination (collectively, the "Covenant Period"), Officer shall not accept
employment nor engage as a consultant with a competitor of Corporation in the
health care real estate investment trust industry (a "Competitor") if such
position would be comparable to a position Officer held at any time with
Corporation and where Officer cannot satisfy Corporation, in its reasonable
judgment, that the new employer is prepared to and takes adequate steps to
preclude and prevent inevitable disclosure of Corporation's Confidential
Information and (ii) that eligibility for severance payments and other benefits
under this Agreement are contingent upon Officer's agreement and compliance with
the covenant as stated above in clause (i) of this Section 6(b). No further
payments nor eligibility for benefits continuation will be available to Officer
as of the date Officer commences employment/consulting in violation of these
covenants. It is a specific condition of the Agreement that if Officer

                                       17

<PAGE>

commences employment or engage as a consultant with a Competitor and if such
position would be comparable to a position Officer held at any time with
Corporation, Officer shall advise Competitor in writing of Officer's obligations
pursuant to this Agreement and specifically disclose all covenants contained in
this Section 6. It is also a specific condition of this Agreement that so long
as Officer is receiving any payments or benefits under this Agreement with
respect to any type of termination, Officer shall be obligated to immediately
notify Corporation as to the specifics of the new position that Officer is
planning to commence as an employee or consultant for a Competitor, and take
affirmative steps to assure Corporation that Officer will not divulge any of
Corporation's Confidential Information in Officer's new employment or consulting
arrangement.

       (c) Non-Solicitation. Officer hereby agrees that, for the period
commencing on the Date of Termination and terminating on the first anniversary
thereof, Officer 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 Corporation any
of its 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 Corporation; provided, however, that a
general advertisement to which an employee of Corporation responds shall in no
event be deemed to result in a breach of this Section 6(c).

    7. Miscellaneous.

       (a) Payment Obligations. Corporation's obligation to pay Officer the
compensation and to make the arrangements provided herein shall be
unconditional, and Officer shall have no obligation whatsoever to mitigate
damages hereunder. If litigation after a Change in Control shall be brought to
enforce or interpret any provision contained herein, Corporation, to the extent
permitted by applicable law and Corporation's Certificate of Incorporation and
Bylaws, hereby indemnifies Officer for Officer's reasonable attorneys' fees and
disbursements incurred in such litigation.

       (b) Business Clubs. Officer may designate up to two dining clubs, country
clubs, athletic clubs, or similar organizations in which Officer has membership
interests, and Corporation shall reimburse Officer for the monthly dues and for
all charges for use of such clubs or organizations for business purposes on
behalf of Corporation.

       (c) Confidentiality. Officer agrees that all confidential and proprietary
information relating to the business of Corporation shall be kept and treated as
confidential both during and after the term of this Agreement, except as may be
permitted in writing by Corporation's Board of Directors or as such information
is within the public domain or comes within the public domain without any breach
of this Agreement.

                                       18

<PAGE>

       (d) 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.

       (e) 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 Officer from
Corporation. All modifications to the Agreement must be in writing and signed by
the party against whom enforcement of such modification is sought.

       (f) 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 12 hours after transmission of
a telegram to the respective persons named below:

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

If to Officer:                 James F. Flaherty III
                               211 South Bristol Street
                               Los Angeles, California 90049

       Any party may change such party's address for notices by notice duly
given pursuant to this Section 7(f).

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

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

       (i) Arbitration; Dispute Resolution, Etc.

           (i) Arbitration Procedure. Any disagreement, dispute, controversy or
claim arising out of or relating to this Agreement or the interpretation of

                                       19

<PAGE>

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 administered by the JAMS/Endispute in Los
Angeles, California in accordance with its then existing JAMS/Endispute
Arbitration Rules and Procedures for Employment Disputes. In the event of such
an arbitration proceeding, Officer and Corporation shall select a mutually
acceptable neutral arbitrator from among the JAMS/Endispute panel of
arbitrators. In the event Officer and Corporation cannot agree on an arbitrator,
the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Officer
nor Corporation nor the arbitrator shall disclose the existence, content, or
results of any arbitration hereunder without the prior written consent of all
parties. Except as provided herein, the Federal Arbitration Act shall govern the
interpretation, enforcement and all proceedings under this Section 7 (i). The
arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the state of California, or federal law, or both, as applicable
and the arbitrator is without jurisdiction to apply any different substantive
law. The arbitrator 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
arbitrator 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. Corporation shall pay all fees and expenses of the Arbitrator
regardless of the result and shall provide all witnesses and evidence reasonably
required by Officer to present Officer's case.

              (ii)  Compensation During Dispute, Etc. Officer's compensation
during 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 shall be as follows: If there is a termination
by Corporation followed by a Dispute as to whether Officer is entitled to the
payments and other benefits provided under this Agreement, then, during the
period of that Dispute Corporation shall pay Officer fifty percent (50%) of the
amount specified in Sections 5(c)(i) and 5(c)(ii) hereof, and Corporation shall
provide Officer with the other benefits provided in Section 5(c) of this
Agreement, if, but only if, Officer agrees in writing that if the Dispute is
resolved against Officer, the award against Officer shall include a requirement
that Officer shall promptly pay to Corporation all payments Officer receives
under Sections 5(c)(i) and 5(c)(ii) of this Agreement plus interest at the rate
provided in Section 1274(d) of the Code, compounded quarterly. If the Dispute is
resolved in Officer's favor, promptly after resolution of the dispute
Corporation shall pay Officer the sum that was withheld during the period of the
Dispute plus interest at the rate provided in Section 1274(d) of the Code,
compounded quarterly.

              (iii) Legal Fees. In addition to all other amounts payable to
Officer under this Agreement, Corporation shall pay to Officer all legal fees
and expenses incurred by Officer in connection with any Dispute arising out of
or relating to this Agreement or the interpretation thereof (including, without
limitation, all such fees and expenses, if any, incurred in contesting or
disputing any termination of Officer's

                                       20

<PAGE>

employment or in seeking to obtain or enforce any right or benefit provided by
this Agreement, or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder), regardless of the outcome of such proceeding;
provided, however, that in the event Officer commences such action, Officer
shall not be entitled to recover such fees and costs if the court determines
that Officer brought the claim in bad faith or the claim was frivolous. Any
attorney's fees incurred by Officer shall be paid by Corporation in advance of
the final disposition of such action or challenge, as such fees and expenses are
incurred; provided, however, that any award against Officer shall require him to
repay such amounts, net of any income taxes paid or payable by Officer with
respect to such amounts, if such amounts are incurred in connection with an
action commenced by Officer if it is ultimately determined by the court that
Officer brought such action in bad faith or the claim was frivolous.

       (j) 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.

       (k) Survival of Corporation's Obligations. Corporation's obligations
hereunder shall not be terminated by reason of any liquidation, dissolution,
bankruptcy, cessation of business, or similar event relating to Corporation.
This Agreement shall not be terminated by any merger or consolidation or other
reorganization of Corporation. 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 Corporation (except to an affiliate of Corporation in which event
Corporation shall remain liable if the affiliate fails to meet any obligations
to make payments or provide benefits or otherwise) or by Officer. The provisions
of Section 5(a) shall survive the expiration of non-renewal of this Agreement,
and the provisions of Section 5(b) shall apply to any Termination Other Than for
Cause within twelve (12) months following the expiration of this Agreement.

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

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

                                       21

<PAGE>

       (n) Indemnification. In addition to any rights to indemnification to
which Officer is entitled to under Corporation's Certificate of Incorporation
and Bylaws, Corporation shall indemnify Officer at all times during and after
the term of this Agreement to the maximum extent permitted under Section 2-418
of the General Corporation Law of the State of Maryland or any successor
provision thereof and any other applicable state law, and shall pay Officer's
expenses in defending any civil or criminal action, suit, or proceeding in
advance of the final disposition of such action, suit, or proceeding, to the
maximum extent permitted under such applicable state laws.

       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 _________________________________
                                               Kenneth B. Roath
                                               Chairman of the Board and
                                               Chief Executive Officer

                                            ____________________________________
                                            James F. Flaherty III

                                       22<PAGE>

                                                                   Exhibit 10.25

                        AMENDMENT TO EMPLOYMENT AGREEMENT

     THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") is made and entered
into as of October 8, 2002 by and between HEALTH CARE PROPERTY INVESTORS, INC.,
a Maryland corporation ("Corporation"), and KENNETH B. ROATH ("Officer").

                                    RECITALS

     A.   Corporation and Officer are presently parties to a certain Employment
Agreement entered into as of October 13, 2001 and effective as of January 1,
2000 (the "Employment Agreement").

     B.   Corporation and Officer desire to amend the Employment Agreement in
certain respects and wish to set forth their agreements in this regard in this
Amendment. Capitalized terms used in this Amendment are used as defined in the
Employment Agreement unless otherwise indicated.

                                    AGREEMENT

     The parties agree as follows:

     1.   Duties and Title. Officer presently serves Corporation as its most
senior executive officer and has the titles Chairman, President and Chief
Executive Officer. Corporation desires Officer to continue to serve it in an
executive capacity but desires to implement an orderly succession plan. As part
of this, Corporation and Officer have agreed that Corporation shall employ a
President and Chief Operating Officer. Accordingly:

          (a)   Effective October 8, 2002, Officer's title shall be Chairman and
Chief Executive Officer. Officer shall remain the most senior executive officer
of the Corporation, and the other officers of the Corporation shall continue to
report to Officer.

          (b)   Effective upon the determination of the Board of Directors to
elect James F. Flaherty III ("Flaherty") as Chief Executive Officer, Officer
agrees to resign such title and thereafter his title shall be Chairman.
Corporation and Officer expect that this change will occur on or about the time
of the Corporation's annual meeting in May 2003, but the Corporation shall have
the right to cause the election of Flaherty as Chief Executive Officer at an
earlier or later date as its Board of Directors may determine.

          (c)   Upon the determination by the Corporation, acting through its
Board of Directors, to elect Flaherty to the title of Chief Executive Officer as
part of an orderly transition plan, Officer shall have such duties and
responsibilities as the Board shall reasonably request and appoint and agrees to
perform such duties to the best of his

<PAGE>

ability and devote so much of his business time, energy and skill as shall be
required to carry out the duties reasonably assigned by the Corporation.

          (d) Officer agrees to continue to serve as a director of Corporation,
if nominated and elected, through at least the Employment Period.

     2.   Adjustments to Compensation.

          (a) On May 1, 2003, or, if later, the date of the Corporation's
annual meeting for the year 2003 (the later of such dates being the "Change in
Compensation Date"), Officer agrees that his base salary shall be reduced to
$350,000 per year, provided that or before such date Corporation has elected
Flaherty to be its Chief Executive Officer as part of the orderly transition
plan contemplated by this Amendment. If Flaherty is elected to the position of
Chief Executive Officer at some later date, such later date shall be the Change
in Compensation Date. On the one-year anniversary of the Change in Compensation
Date, Officer's base salary shall be further reduced to $250,000 per year. After
the Change in Compensation Date, if Corporation assigns duties to Officer
pursuant to paragraph 1(c) above, which require Officer to perform on a
substantially full-time basis for an extended period, Officer may request the
Corporation to increase his base salary to a level commensurate with his former
base salary and the duties being requested.

          (b) Officer shall continue to remain eligible for benefits and bonuses
throughout the Employment Period, and Corporation agrees that Officer's bonus
for the year 2002 shall not be negatively impacted by reason of the
implementation of a transition plan and the election of a new Chief Operating
Officer. Officer recognizes that his bonus for the year 2002 and for any
subsequent year remains at the discretion of the Corporation and its Nominating
and Compensation Committee, and that the Corporation will not, absent
extraordinary or unanticipated circumstances, expect to pay Officer a bonus for
periods after he ceases to serve as Chief Executive Officer.

     3.   Term of Agreement. Unless extended by a written agreement of both
parties, Officer and the Corporation agree that the Employment Period shall
terminate on the second anniversary of the Change in Compensation Date without
any requirement for a Notice of Termination by either party. Such date shall be
a Date of Termination but shall not be deemed a Termination Other Than For Cause
for purposes of Section 5(b) (ii) or (iii) of the Employment Agreement.

     4.   Officer Benefits.

          (a) For the duration of the Employment Period, Officer shall continue
to receive the benefits described in the Employment Agreement. Further, during
the period following the expiration of the Employment Period, Officer and his
eligible dependents shall continue to receive the medical benefits currently
available to Officer and such eligible dependents, at the Corporation's expense,
for five years. The

                                       2

<PAGE>

Corporation may, however, reduce the level of medical benefits provided after
the Employment Period expires to the extent such benefits cannot be made
available at a reasonable cost.

          (b) Officer shall no longer receive automobile benefits following
December 31, 2003 or, if later, the Change in Compensation Date.

          (c) Corporation shall, after the Change in Compensation date, provide
Officer appropriate office space and secretarial support to perform the duties
requested pursuant to Section 1(c) above.

          (d) Corporation shall continue to pay Officer's club dues for the
clubs contemplated by Section 7(b) of the Employment Agreement. Upon the
expiration of the Employment Period, as amended by this Amendment, Officer shall
be entitled to purchase from the Corporation the membership interest in the club
commonly known as The Reserve at the Corporation's cost. Corporation
acknowledges that this membership is currently held in Officer's name, and
Officer acknowledges that the Corporation provided the funds to purchase this
membership interest.

          (e) For purposes of the Corporation's stock incentive plans, the
officer shall be deemed to retire at the end of the Employment Period.

     5.   Executive Retirement Plan.

          (a) Corporation has established, and Officer participates in, an
Amended and Restated Executive Retirement Plan (the "Plan"). Corporation
confirms that Officer continues to accrue an increased percentage of his Final
Average Earnings (as defined in the Plan), notwithstanding the fact that Officer
has exceeded the age of 65 years and shall continue to accrue such increased
percentage through the end of calendar year 2003. Officer agrees, that
notwithstanding the fact that he shall continue to receive a salary from the
Corporation during 2004 pursuant to the terms of the Employment Agreement as
amended by this Amendment, he shall no longer continue to receive an increased
percentage of earnings for any year after 2003, provided that a Change in
Compensation Date has occurred by December 31, 2003. Corporation agrees,
provided the Change in Compensation Date has occurred, that Officer may begin to
receive his accrued benefits in calendar year 2004, although Officer will
continue to receive a salary from Corporation during such year. Corporation
agrees to make, prior to December 31, 2002, such amendments to the Plan as are
necessary to permit Officer to receive such benefits. However, Officer agrees
that such amendments and such eligibility to receive benefits beginning in
calendar year 2004 shall not confer upon Officer the right to require in 2004
the establishment of a trust pursuant to any terms of the Plan providing for
such a trust.

     6.   Agreement Otherwise Confirmed. Except for the specific changes made by
this Amendment, the Employment Agreement shall remain in full force and effect.

                                       3

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Amendment to
Employment Agreement this ____ day of October, 2002, to be effective as of
October 8, 2002.

                              "Corporation"

                              HEALTH CARE PROPERTY INVESTORS, INC.,
                              a Maryland corporation

                              By: ____________________________________
                              Name:  Michael McKee
                              Title: Director signing at direction of the Board

                              "Officer"

                              _________________________________________
                              KENNETH B. ROATH

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