Document:

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                                                                   Exhibit 10.11

                             EMPLOYMENT AGREEMENT
                             --------------------

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
October 13, 2000 by and between HEALTH CARE PROPERTY INVESTORS, INC., a Maryland
corporation ("Corporation"), and KENNETH B. ROATH ("Officer").

                                    RECITAL
                                    -------

     WHEREAS, Corporation and Officer have entered into that certain Amended and
Restated Employment Agreement, dated as of January 31, 1991 (the "Original
Agreement");

     WHEREAS, Corporation and Officer desire to (i) enter into a new employment
agreement upon the terms set forth in this Agreement and (ii) terminate the
Original Agreement;

     WHEREAS, Corporation desires to continue to employ Officer as its Chairman,
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;

     WHEREAS, as of the Effective Date (defined below), the parties hereby
intend that the Original Agreement shall automatically terminate and be of no
further force and effect, and neither parties have any further rights or
obligations thereunder; and

     WHEREAS, the provisions of this Agreement shall be effective as of January
1, 2000 (the "Effective Date").

     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:

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     1.  Duties. During the term of this Agreement, Officer agrees to be
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employed by and to serve Corporation as its top executive Officer, including the
title Chairman, President and Chief Executive Officer, and 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 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 Chairman, President and Chief Executive Officer of Corporation.
Officer's principal place of business with respect to his services to
Corporation shall be within 20 miles of Newport Beach, California.

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

              (i)  "Termination For Cause" shall mean termination by Corporation
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of Officer's employment by Corporation by reason of Officer's: (A) willful and
continued failure to substantially perform his duties with Corporation (other
than any such failure resulting from his incapacity due to physical or mental
illness or any such actual or anticipated failure after his 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)), 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, (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 (other than 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), 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, (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 was
guilty of conduct set forth above in this Section 2(a)(i) and specifying the
particulars thereof in reasonable detail. willful dishonesty towards, fraud
upon, or deliberate injury or attempted injury to, Corporation or by reason of
Officer's willful material breach of this Agreement which has resulted in
material injury to Corporation;

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         (ii)  "Termination Other Than For Cause" shall mean termination by
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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
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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) 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
principally employed 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 present business travel obligations;

               (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 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 participate 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

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                 (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.

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
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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
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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:
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                (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 shall
constitute a Change in Control;

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                 (B) during any period of two consecutive years (not including
any period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a 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)) whose election by the Board or nomination for election by Corporation's
stockholders was approved by a vote of at least two-thirds (K) 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"), 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 corporation (or other entity), other
than 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-K% 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 shall indicate
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the specific termination provision in this Agreement relied upon and shall set
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 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

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in good faith and 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
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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").
Therefore, unless either party provides written notice to the other of its
intent not to extend the Employment Period at least sixty (60) days prior to
each anniversary of this Agreement, the Employment Period shall be extended by
an additional year, so that at all times the Employment Period shall be for a
period of at least three (3) years, unless earlier terminated as provided in
this Agreement; provided, further, that if a Change in Control occurs during the
Employment Period, the term of this Agreement shall continue in effect for a
period of not less than thirty-six (36) months beyond the month in which such
Change in Control occurred.

     (c) Termination For Cause. Termination For Cause may be effected by
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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
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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 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

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under Corporation's Stock Incentive Plan), 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
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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 Plan), 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 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.

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     3.  Salary, Benefits and Bonus Compensation
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         (a) Base Salary. As payment for the services to be rendered by Officer
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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 and ending on December 31, 2000 at the rate of $516,000 per
annum payable in equal semi-monthly installments. The Base Salary for each year
(or portion thereof) beginning January 1, 2001 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, 2000 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
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(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.

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

             (i)   Officer Benefits. Officer shall be eligible to participate in
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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 Stock Incentive Plan,
profit sharing plans, annual physical examination, dental and medical plans,
personal catastrophe and disability insurance, retirement plans and a
supplementary Executive Retirement Plan. For purposes of establishing the length
of service under any benefit plans or programs of Corporation, Officer's
employment with Corporation will be deemed to have commenced on April 1, 1985,
the date Officer commenced services as a director of Corporation, to the extent
permitted under applicable law and the terms of such plans or programs.

             (ii)  Automobile.  Officer shall be eligible to participate in
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Corporation's CEO Automobile Policy as in effect as of the Effective Date.

             (iii) Vacation. Officer shall be entitled to six weeks of
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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
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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,

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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 out-of-pocket business and/or entertainment expenses incurred by
Officer in connection with his duties under this Agreement.

          4. Accelerated Vesting Upon a Change in Control.
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             (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, unless it would adversely affect
Corporation's ability to use pooling of interest accounting in a Change in
Control transaction in which such accounting is intended to be used.

             (b) Stock Options. All outstanding options granted to Officer under
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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, unless it would adversely
affect Corporation's ability to use pooling of interest accounting in a Change
in Control transaction in which such accounting is intended to be used.

          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)(viii), (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)(viii), 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;

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                    (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 become re-employed
with another employer and 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 during the twelve (12) month period following
Officer's termination, and any such benefits actually received by Officer shall
be reported to Corporation. In the event Officer are ineligible under the terms
of such benefit plans or programs to continue to be so covered, in such event,
Corporation shall provide Officer with substantially equivalent coverage through
other sources or will 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 that 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)(viii) 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 were 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)  Any outstanding restricted stock purchase loans made
to Officer by Corporation in an amount not to exceed $2,000,000, and Officer's
obligation to repay all outstanding principal and accrued interest thereunder,
shall be forgiven and cancelled by Corporation. In addition, Corporation shall
pay Officer an additional payment (the "Tax Payment") in an amount required to
fully reimburse Officer with respect to all federal, state and local income
taxes and employment taxes with respect to the forgiveness of the loans and with
respect to such taxes, such that upon receipt of the Tax Payment Officer shall
have no remaining obligations with respect to such taxes.

                    (viii) (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)(viii), and taking into account any
lost or reduced tax deductions on account of the Gross-Up Payment, shall be
equal to the Payments;

                                       11
<PAGE>

                           (B) All determinations required to be made under this
Section 5(a)(viii), 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 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)(viii), the "Accountants"
shall mean Corporation's independent certified public accountants serving
immediately prior to the Change in Control. In the event that the Accountants
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 are 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.

                           (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)(viii) (the "Underpayment"). In the event that

                                       12
<PAGE>

Corporation exhausts its remedies pursuant to Section 5(a)(viii)(C) and Officer
are 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)(viii); 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 are 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:

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

                               (ii)   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;

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

                               (iv)   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)(viii),
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, 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 agree 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 advance the amount of such payment to Officer, on an interest-free basis,
and shall indemnify Officer for and hold Officer harmless from, on an after-tax
basis, any Excise Tax or

                                       13
<PAGE>

income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance (including as a result of any forgiveness by Corporation of such
advance); 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;

                    (ix)   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, 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).

                    (x)    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:

                    (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

                                       14
<PAGE>

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.

          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,

                                       15
<PAGE>

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
judgement, 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 commences
employment or engage as a consultant with a Competitor 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).

                                       16
<PAGE>

          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 three dining
                    --------------
clubs, country clubs, athletic clubs, or similar organizations and Corporation
shall acquire membership interests in such clubs and organizations which shall
be used by Officer for business purposes on behalf of Corporation; provided,
however, that if such clubs or organizations prohibit purchase of membership
interests by Corporation, then Corporation shall advance to Officer the amount
required to purchase membership interests in such clubs or organizations and
Officer shall hold such membership interests for the benefit of Corporation. In
the event Corporation has advanced to Officer the cost of the membership
interests for any of such clubs or organizations, then upon the termination of
Officer's employment with Corporation for any reason Officer shall promptly sell
such membership interests for the benefit of Corporation and shall deliver the
full amount of the proceeds to Corporation. Any gains or losses incurred upon
the sale by Officer of any membership interests held for the benefit of
Corporation shall be solely for Corporation's account.

               (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.

               (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:

                                       17
<PAGE>

          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:           Kenneth B. Roath
                                   One Harbor Island
                                   Newport Beach, California 92660-7201

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

               (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 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 14. 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

                                       18
<PAGE>

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, Officer shall promptly
refund 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 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
Officer agrees 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.

                                       19
<PAGE>

               (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.

               (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 _________________________________

                                        Title ______________________________

                                        ____________________________________
                                        Kenneth B. Roath

                                       20<PAGE>

                                                                   Exhibit 10.12

                                October 16, 2000

          Health Care Property Investors, Inc. (the "Corporation") considers it
essential to the best interests of its shareholders to foster the continuous
employment of key management personnel.  In connection with this, the
Corporation's Board of Directors (the "Board") recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control of
the Corporation may exist and that the uncertainty and questions that it may
raise among management could result in the departure or distraction of
management personnel to the detriment of the Corporation and its shareholders.

          The Board has decided to reinforce and encourage the continued
attention and dedication of members of the Corporation's management, including
yourself, to their assigned duties without the distraction arising from the
possibility of a change in control of the Corporation.

          In order to induce you to remain in its employ, the Corporation hereby
agrees that after this letter agreement (this "Agreement") has been fully
executed, you shall receive the severance benefits set forth in Section 5 of
this Agreement in the event your employment with the Corporation is terminated
under the circumstances described in Section 4 of this Agreement subsequent to a
Change in Control (as defined in Section 2).  Upon the full execution of this
Agreement, any prior severance agreement between you and the Corporation shall
terminate and be of no further effect.
          ----------------------------

          1. Term of Agreement. This Agreement shall commence on the date
             -----------------
hereof and shall continue in effect through December 31, 2003; provided,
however, that commencing on January 1, 2001 and on each January 1 thereafter,
the term of this Agreement shall automatically be extended for one additional
year unless, not later than September 30 of the preceding year, the Corporation
shall have given notice that it does not wish to extend this Agreement;
provided, further, that if a Change in Control (as defined in Section 2), occurs
during the original or any extended term of this Agreement, the term of this
Agreement shall continue in effect for a period of not less than thirty-six (36)
months beyond the month in which such Change in Control occurred.

          2. Change in Control.
             -----------------

                                       1
<PAGE>

          No benefits shall be payable under Section 4 of this Agreement unless
there has been a Change in Control.  For purposes of this Agreement, a 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 the Corporation representing 25% or more of the
combined voting power of the 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: (i) any acquisition by the Corporation or any corporation controlled by
the Corporation, (ii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation controlled
by the Corporation, or (iii) any acquisition by a Person of 25% of the
Outstanding Corporation Voting Securities as a result of an acquisition of
common stock of the Corporation by the Corporation which, by reducing the number
of shares of common stock of the 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 the
Corporation as described above and shall, after such share acquisition by the
Corporation, become the beneficial owner of any additional shares of common
stock of the Corporation, then such acquisition shall constitute a Change in
Control.

          (b)  during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with
Corporation to effect a transaction described in Sections 2(a), (c) or (d))
whose election by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (K) 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"), cease for any reason to
constitute at least a majority thereof;

          (c)  the consummation by the Corporation of a merger or consolidation
of Corporation with any other corporation (or other entity), other than a merger
or consolidation which would result in the voting securities of the 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-K% of the combined voting power of the voting
securities of the 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 the Corporation (or
similar transaction) in which no Person

                                       2
<PAGE>

acquires more than 25% of the combined voting power of the Corporation's then
outstanding securities shall not constitute a Change in Control; or

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

          3.   Accelerated Vesting Upon a Change in Control.
               --------------------------------------------

          (a)  Restricted Stock.  Notwithstanding any provisions of the
               -----------------
Corporation's stock option plans, incentive plans, or other similar plans, the
restricted period with respect to any restricted stock granted to you thereunder
shall lapse and such shares shall be distributed to you immediately prior to the
Change in Control, unless it would adversely affect the Corporation's ability to
use pooling of interest accounting in a Change in Control transaction in which
such accounting is intended to be used.

          (b)  Stock Options.  All outstanding options ("Options"), if any,
               --------------
granted to you under any of the 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, unless it would adversely affect the Corporation's ability to use
pooling of interest accounting in a Change in Control transaction in which such
accounting is intended to be used.

          4.   Termination Following Change in Control.
               ---------------------------------------

          (a)  General.  During the term of this Agreement, if any of the events
               -------
described in Section 2 constituting a Change in Control shall have occurred, you
shall be entitled to the benefits provided in Section 5(c) upon the subsequent
termination of your employment, provided that such termination occurs during the
term of this Agreement and within the two (2) year period immediately following
the date of such Change in Control, unless such termination is (i) because of
your death, Disability (as defined in Section 4(b)) or pursuant to late, normal
or early retirement under a pension plan (which may include a defined benefit
plan or a defined contribution plan) sponsored by the Corporation, but only if
such retirement occurs prior to a termination by the Corporation without Cause
or by you for Good Reason (as defined in Section 4(d)),  (ii) by the Corporation
for Cause (as defined in Section 4(c)), or (iii) by you other than for Good
Reason.  In the event that you are entitled to such benefits, such benefits
shall be paid notwithstanding the subsequent expiration of the term of this
Agreement.

          (b)  Disability.  If, as a result of your incapacity due to physical
               ----------
or mental illness, you shall have been absent from the full-time performance of
your duties with the Corporation for six (6) consecutive months, and within
thirty (30) days after written notice of

                                       3
<PAGE>

termination is given you shall not have returned to the full-time performance of
your duties, your employment may be terminated for "Disability."

          (c)  Cause.  Termination by the Corporation of your employment for
               -----
"Cause" shall mean termination (i) upon your willful and continued failure to
substantially perform your duties with the Corporation (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after your issuance of a Notice of
Termination (as defined in Section 4(f)) for Good Reason, after a written demand
for substantial performance is delivered to you by the Board, which demand
specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, (ii) upon your willful and continued
failure to substantially follow and comply with the specific and lawful
directives of the Board, as reasonably determined by the Board (other than any
such failure resulting from your incapacity due to physical or mental illness or
any such actual or anticipated failure after your issuance of a Notice of
Termination for Good Reason), after a written demand for substantial performance
is delivered to you by the Board, which demand specifically identifies the
manner in which the Board believes that you have not substantially performed
your duties, (iii) upon your willful commission of an act of fraud or dishonesty
resulting in material economic or financial injury to the Corporation, or (iv)
upon your willful engagement in illegal conduct or gross misconduct, in each
case which is materially and demonstrably injurious to the Corporation.  For
purposes of this Section 4(c), no act, or failure to act, on your part shall be
deemed "willful" unless done, or omitted to be done, by you not in good faith.
Notwithstanding the foregoing, you shall not be deemed terminated for Cause
pursuant to Sections 4(c)(i), (ii) or (iv) hereof unless and until there shall
have been delivered to you 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 you, an
opportunity for you, together with your counsel, to be heard before the Board
and a reasonable opportunity to cure), finding that in the Board's good faith
opinion you were guilty of conduct set forth above in this Section 4(c) and
specifying the particulars thereof in reasonable detail.

          (d)  Good Reason.  You shall be entitled to terminate your
               -----------
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence after a Change in
Control of any of the following circumstances unless, in the case of Sections
4(d)(i), (v), (vi), or (vii), such circumstances are fully corrected (provided
such circumstances are capable of correction) prior to the Date of Termination
(as defined in Section 4(g)) specified in the Notice of Termination given in
respect thereof:

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

                                       4
<PAGE>

               (ii)    the Corporation's reduction of your annual base salary as
     in effect on the date hereof or as the same may be increased from time to
     time;

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

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

               (v)     the Corporation's failure to continue in effect any
     material compensation or benefit plan in which you participate 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 the Corporation's failure to continue your 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 your participation relative to other participants, as
     existed at the time of the Change in Control;

               (vi)    the Corporation's failure to obtain a satisfactory
     agreement from any successor to assume and agree to perform this Agreement,
     as contemplated in Section 6 hereof; or

               (vii)   any purported termination of your employment that is not
     effected pursuant to a Notice of Termination satisfying the requirements of
     Section 4(f) hereof (and, if applicable, the requirements of Section 4(c)
     hereof), which purported termination shall not be effective for purposes of
     this Agreement.

Your right to terminate your employment pursuant to this Section 4(d) shall not
be affected by your incapacity due to physical or mental illness.  Your
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 you that Good Reason exists shall be presumed correct and shall
be binding upon the Corporation.

          (e)  Voluntary Termination.  You shall be entitled to voluntarily
               ---------------------
terminate your employment for any reason or no reason at any time after a Change
in Control.

                                       5
<PAGE>

          (f)  Notice of Termination. Any purported termination of your
               ---------------------
employment by the Corporation or by you (other than termination due to death
which shall terminate your employment automatically) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 7. "Notice of Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.

          (g)  Date of Termination, Etc.  "Date of Termination" shall mean (a)
               -------------------------
if your employment is terminated due to your death, the date of your death; (b)
if your employment is terminated for Disability, thirty (30) days after Notice
of Termination is given (provided that you shall not have returned to the full-
time performance of your duties during such thirty (30)-day period), and (c) if
your employment is terminated pursuant to Section 4(c), Section 4(d) or Section
4(e) or for any other reason (other than death or Disability), 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 shall not
be less than fifteen (15) nor more than sixty (60) days from the date such
Notice of Termination is given). Notwithstanding anything to the contrary
contained in this Section 4(g), if within fifteen (15) days after any Notice of
Termination is given, the 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 the party giving such notice
pursues the resolution of such dispute with reasonable diligence.

          5.   Compensation Upon Termination or During Disability Following
               ------------------------------------------------------------
               A Change in Control.
               -------------------

          Following a Change in Control during the term of this Agreement, you
shall be entitled to the benefits described below during a period of disability,
or upon termination of your employment, as the case may be, provided that such
period or termination occurs during the term of this Agreement and within the
two (2) year period immediately following the date of such Change in Control.
The benefits to which you are entitled, subject to the terms and conditions of
this Agreement, are:

          (a)  During any period during which you fail to perform your full-time
duties with the Corporation as a result of incapacity due to physical or mental
illness, you shall continue to receive your base salary at the rate in effect at
the commencement of any such period, together with all compensation payable to
you under the Corporation's disability plan or program or other similar plan
during such period, until this Agreement is terminated pursuant to Section 4(b)
hereof.  Thereafter, or in the event your employment is terminated by reason of
your death, your

                                       6
<PAGE>

benefits shall be determined under the Corporation's retirement, insurance and
other compensation programs then in effect in accordance with the terms of such
programs.

          (b)  If your employment shall be terminated by the Corporation for
Cause or by you other than for Good Reason , the Corporation shall pay you (i)
your full base salary, when due, through the Date of Termination at the rate in
effect at the time Notice of Termination is given, (ii) the unpaid portion, if
any, of any annual bonus, plus an amount equal to your annual bonus, pro rated
from January 1 of the termination year through the Date of Termination, and
(iii) all other amounts to which you are entitled under any compensation plan of
the Corporation at the time such payments are due, and the Corporation shall
have no further obligations to you under this Agreement.

          (c)  If your employment by the Corporation shall be terminated by you
for Good Reason or by the Corporation other than for Cause or Disability, then
you shall be entitled to the benefits provided below:

                    (i)    the Corporation shall pay to you (1) your 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(d), (2) the unpaid portion, if any, of any
          annual bonus, plus an amount equal to your annual bonus, pro rated
          from January 1 of the termination year through the Date of
          Termination, and (2) all other amounts to which you are entitled under
          any compensation plan of the Corporation at the time such payments are
          due;

                    (ii)   in lieu of any further salary payments to you for
          periods subsequent to the Date of Termination, the Corporation shall
          pay as severance pay to you, at the time specified in Section 5(d), a
          lump sum severance payment equal to the sum of three (3) times your
          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 your targeted annual bonus as in effect as of the Date
          of Termination or the highest annual bonus received by you in the
          three (3) years immediately prior to the Change in Control, whichever
          is greater;

                    (iii)  for a period of three (3) years, the Corporation
          shall continue to provide you and your eligible family members, based
          on the cost sharing arrangement between you and the 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 you and them
          if your employment had not been terminated or, if more favorable to
          you, as in effect generally at any time thereafter, provided, however,
          that if you become re-employed with another employer and are eligible
          to receive medical and dental health benefits under another employer's
          plans, the Corporation's obligations under this Section

                                       7
<PAGE>

          5(c)(iii) shall be reduced to the extent comparable benefits are
          actually received by you during the twelve (12) month period following
          your termination, and any such benefits actually received by you shall
          be reported to the Corporation. In the event you are ineligible under
          the terms of such benefit plans or programs to continue to be so
          covered, in such event, the Corporation shall provide you with
          substantially equivalent coverage through other sources or will
          provide you with a lump sum payment in such amount that, after all
          taxes on that amount, shall be equal to the cost to you of providing
          yourself such benefit coverage. At the termination of the benefits
          coverage under the second preceding sentence, you, your spouse and
          your 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 you had terminated employment with
          the 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)   you shall be fully vested in your accrued benefits
          under any qualified or nonqualified pension, profit sharing, deferred
          compensation or supplemental plans maintained by the Corporation for
          your benefit, except to that the extent the acceleration of vesting of
          such benefits would violate any applicable law or require the
          Corporation to accelerate the vesting of the accrued benefits of all
          participants in such plan or plans, in which case the Corporation may
          elect to pay you a lump sum payment at the time specified in Section
          5(d) in an amount equal to the value of such unvested accrued benefits
          in lieu of accelerating the vesting of your benefits, plus the
          Corporation shall pay you an amount equal to the amount the
          Corporation would have contributed to your account under the
          Corporations 401(k) plan as a matching contribution had you remained
          employed by the Corporation for three (3) years after your Date of
          Termination and had you made the maximum elected deferral
          contributions.

                    (v)   the Corporation shall furnish you 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 you against insurable events
          which occur or have occurred while you were a director or officer of
          the 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 the
          Corporation in force from time to time, provided, however, that such
          terms, conditions and exceptions shall not be, in the aggregate,

                                       8
<PAGE>

          materially less favorable to you than those in effect on the date
          hereof; provided, further, that if the aggregate annual premiums for
          such insurance at any time during such period exceed one hundred and
          fifty percent (150%) of the per annum rate of premium currently paid
          by the Corporation for such insurance, then the 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 the
          Corporation has the power to indemnify (or advance expenses to) you in
          respect of any judgments, fines, settlements, loss, cost or expense
          (including attorneys' fees) of any nature related to or arising out of
          your activities as an agent, employee, officer or director of the
          Corporation or in any other capacity on behalf of or at the request of
          the Corporation, the Corporation shall promptly on written request,
          indemnify (and advance expenses to) you 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 the
          Corporation may, under applicable law, be permitted to have the
          discretion to take so as to effectuate such indemnification or
          advancement.  Such agreement by the Corporation shall not be deemed to
          impair any other obligation of the Corporation respecting your
          indemnification otherwise arising out of this or any other agreement
          or promise of the Corporation or under any statute;

                    (vii)  (1) anything in this Agreement to the contrary
          notwithstanding, if it shall be determined that any payment or
          distribution to you or for your 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 the 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 you
          shall be entitled to receive from the 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 you 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(c)(vii),
          and taking

                                       9
<PAGE>

          into account any lost or reduced tax deductions on account of the
          Gross-Up Payment, shall be equal to the Payments;

                    (2) all determinations required to be made under this
          Section 5(c)(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 you and the
          Corporation with detailed supporting calculations with respect to such
          Gross-Up Payment within fifteen (15) business days of the receipt of
          notice from you or the Corporation that there you have 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(c)(vii), the "Accountants" shall mean the
          Corporation's independent certified public accountants serving
          immediately prior to the Change in Control.  In the event that the
          Accountants are also serving as accountant or auditor for the
          individual, entity or group effecting the Change in Control, you 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 the Corporation.

                    (3)  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 you 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

                                       10
<PAGE>

          taxes if paid in such year (determined without regard to limitations
          on deductions based upon the amount of your 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 your adjusted gross
          income. To the extent practicable, any Gross-Up Payment with respect
          to any Payment shall be paid by the Corporation at the time you are
          entitled to receive the Payments and in no event will any Gross-Up
          Payment be paid later than five days after the receipt by you of the
          Accountant's determination. Any determination by the Accountants shall
          be binding upon the Corporation and you.

                    (4)  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 the Corporation should have
          paid pursuant to this Section 5(c)(vii) (the "Underpayment"). In the
          event that the Corporation exhausts its remedies pursuant to Section
          5(c)(vii)(3) and you are required to make a payment of any Excise Tax,
          the Underpayment shall be promptly paid by the Corporation to or for
          your benefit;

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

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

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

                                       11
<PAGE>

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

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

                         (D)  permit the Corporation to participate in any
               proceedings relating to such claims;

          provided, however, that the Corporation shall bear and pay directly
          all costs and expenses (including additional interest and penalties)
          incurred in connection with such contest and shall indemnify you for
          and hold you 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(c)(vii), the 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, hearings and
          conferences with the taxing authority in respect of such claim and
          may, at its sole option, either direct you to pay the tax claimed and
          sue for a refund or contest the claim in any permissible manner, and
          you agree 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 the Corporation shall determine;
          provided, however, that if the Corporation directs you to pay such
          claim and sue for a refund, the Corporation shall advance the amount
          of such payment to you, on an interest-free basis, and shall indemnify
          you for and hold you 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 advance or with respect to any
          imputed income with respect to such advance (including as a result of
          any forgiveness by the Corporation of such advance); provided,
          further, that any extension of the statute of limitations relating to
          the payment of taxes for the taxable year of you with respect to which
          such contested amount is claimed to be due is limited solely to such
          contested amount.  Furthermore, the Corporation's control of the
          contest shall be limited to issues with respect to which a Gross-Up
          Payment would be payable hereunder and you 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;

                                       12
<PAGE>

          (d)  The payments provided for in Sections 5(c)(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, the Corporation shall pay to you on such day
an estimate, as determined in good faith by the 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 the Corporation to you, payable on the fifth
day after demand by the Corporation (together with interest at the rate provided
in section 1274(b)(2)(B) of the Code).

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

          6.   Successors; Binding Agreement.
               -----------------------------

          (a)  The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place.  Failure of the Corporation to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to terminate your employment
and receive compensation from the Corporation in the same amount and on the same
terms to which you would be entitled hereunder if you terminate your employment
for Good Reason following a Change in Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.  Unless expressly provided
otherwise, "Corporation" as used herein shall mean the Corporation as defined in
this Agreement and any successor to its business and/or assets as aforesaid.

          (b)  This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.

                                       13
<PAGE>

          7.   Notice.  For the purpose of this Agreement, notices and all other
               ------
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Corporation shall be directed to the
attention of the Board with a copy to the Secretary of the Corporation, or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

          8.   Confidentiality, Noncompetition and Non-Solicitation Covenants.
               --------------------------------------------------------------

          (a)  Confidentiality.  You hereby agree that commencing on the Date of
               ---------------
Termination, you 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). You agree
that, upon termination of your employment with the Corporation, all Confidential
Information in your possession that is in written or other tangible form
(together with all copies or duplicates thereof, including computer files) shall
be returned to the Corporation and shall not be retained by you or furnished to
any third party, in any form except as provided herein; provided, however, that
you shall not be obligated to treat as confidential, or return to the
Corporation copies of any Confidential Information that (i) was publicly known
at the time of disclosure to you, (ii) becomes publicly known or available
thereafter other than by any means in violation of this Agreement or any other
duty owed to the Corporation by any person or entity, or (iii) is lawfully
disclosed to you by a third party. As used in this Agreement, the term
"Confidential Information" means: information disclosed to you or known by you
as a consequence of or through your relationship with the 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 the Corporation and its affiliates.

          (b)  Noncompetition.  You acknowledge and agree that your services
               --------------
pursuant to this Agreement are unique and extraordinary, and that you will have
access to and control of Confidential Information of the Corporation which is
vital to the success of the Corporation's business. You further acknowledge that
because of your knowledge of the Corporation's Confidential Information it is
unlikely that you could work for a competitor of the Corporation without
divulging such confidential information. You further acknowledge that the
business of the 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 the Corporation under this
Agreement, you hereby agree that (i) during the term of this Agreement and for a
twelve (12) month period, commencing with your Date of Termination
(collectively, the "Covenant Period"), you shall not accept employment nor
engage as a consultant with a competitor of the Corporation in the health care
real estate investment trust industry (a "Competitor") if such position would be
comparable to a position you held at any time with the

                                       14
<PAGE>

Corporation and where you cannot satisfy the Corporation, in its reasonable
judgement, that the new employer is prepared to and takes adequate steps to
preclude and prevent inevitable disclosure of the Corporation's Confidential
Information and (ii) that eligibility for severance payments and other benefits
under this Agreement are contingent upon your agreement and compliance with the
covenant as stated above in clause (i) of this Section 8(b). No further payments
nor eligibility for benefits continuation will be available to your as of the
date you commence employment/consulting in violation of these covenants. It is a
specific condition of the Agreement that if you commence employment or engage as
a consultant with a Competitor if such position would be comparable to a
position you held at any time with the Corporation, you shall advise Competitor
in writing of your obligations pursuant to this Agreement and specifically
disclose all covenants contained in this Section 8. It is also a specific
condition of this Agreement that so long as you are receiving any payments or
benefits under this Agreement with respect to any type of termination, you shall
be obligated to immediately notify the Corporation as to the specifics of the
new position that you are planning to commence as an employee or consultant for
a Competitor, and take affirmative steps to assure the Corporation that you will
not divulge any of the Corporation's Confidential Information in your new
employment or consulting arrangement.

          (c)  Non-Solicitation. You hereby agree that, for the period
               ----------------
commencing on the Date of Termination and terminating on the first anniversary
thereof, you shall not, either on your 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 the 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 the Corporation; provided, however,
that a general advertisement to which an employee of the Corporation responds
shall in no event be deemed to result in a breach of this Section 8(c).

          9.   Governing Law; Venue.  The validity, interpretation, construction
               --------------------
and performance of this Agreement shall be governed on a non-exclusive basis by
the laws of the State of California without giving effect to its conflicts of
laws rules. For purposes of jurisdiction and venue, the Corporation hereby
consents to jurisdiction and venue in any suit, action or proceeding with
respect to this Agreement in any court of competent jurisdiction in the state in
which you reside at the commencement of such suit, action or proceeding and
waives any objection, challenge or dispute as to such jurisdiction or venue
being proper.

          10.  Joint and Several Liability. Any successors or assigns shall be
               ---------------------------
jointly and severally liable with the Corporation under this Agreement.

          11.  Miscellaneous.  No provision of this Agreement may be modified,
               -------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party

                                       15
<PAGE>

hereto at any time of any breach by the other party hereto of or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. All references to sections of the Exchange Act or the
Code shall be deemed also to refer to any successor provisions to such sections.
Any payments provided for hereunder shall be paid net of any applicable
withholding required under federal, state or local law. Any obligations of the
Corporation under Sections 5 and 6 shall survive the expiration of the term of
this Agreement. The section headings contained in this Agreement are for
convenience only, and shall not affect the interpretation of this Agreement.

          12.  Severability.  The invalidity or unenforceability of any
               ------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

          13.  Counterparts.  This Agreement may be executed in several
               ------------
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

          14.  Arbitration; Dispute Resolution, Etc.
               ------------------------------------

          (a)  Arbitration Procedure. Any disagreement, dispute, controversy or
               ---------------------
claim arising out of or relating to this Agreement or the interpretation of this
Agreement or any arrangements relating to this Agreement or contemplated in this
Agreement or the breach, termination or invalidity thereof shall be settled by
final and binding arbitration 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, you and the Corporation shall select a mutually acceptable neutral
arbitrator from among the JAMS/Endispute panel of arbitrators. In the event you
and the Corporation cannot agree on an arbitrator, the Administrator of
JAMS/Endispute will appoint an arbitrator. Neither you nor the 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 14. 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

                                       16
<PAGE>

thereof. The Corporation shall pay all fees and expenses of the Arbitrator
regardless of the result and shall provide all witnesses and evidence reasonably
required by you to present your case.

          (b)  Compensation During Dispute, Etc.  Your 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 the Corporation followed by a Dispute as
to whether you are entitled to the payments and other benefits provided under
this Agreement, then, during the period of that Dispute the Corporation shall
pay you fifty percent (50%) of the amount specified in Sections 5(c)(i) and
5(c)(ii) hereof, and the Corporation shall provide you with the other benefits
provided in Section 5(c) of this Agreement, if, but only if, you agree in
writing that if the Dispute is resolved against you, you shall promptly refund
to the Corporation all payments you receive 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 your favor, promptly
after resolution of the dispute the Corporation shall pay you 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.

          (c)  Legal Fees. In addition to all other amounts payable to you under
               ----------
this Agreement, the Corporation shall pay to you all legal fees and expenses
incurred by you 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 your 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 you commence such action,
you shall not be entitled to recover such fees and costs if the court determines
that you brought the claim in bad faith or the claim was frivolous. Any
attorney's fees incurred by you shall be paid by the Corporation in advance of
the final disposition of such action or challenge, as such fees and expenses are
incurred; provided, however, that you agree to repay such amounts, net of any
income taxes paid or payable by you with respect to such amounts, if such
amounts are incurred in connection with an action commenced by you if it is
ultimately determined by the court that you brought such action in bad faith or
the claim was frivolous.

          15.  At-Will Employment.  Nothing in the foregoing diminishes or
               ------------------
alters the Corporation's policy of at-will employment for all employees, where
both the Corporation and you may terminate the employment relationship at any
time and for any reason, with or without cause or notice.

                                       17
<PAGE>

          16.  Entire Agreement.  This Agreement sets forth the entire agreement
               ----------------
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein,
including, without limitation, any prior severance agreements, is hereby
terminated and cancelled. Any of your rights hereunder shall be in addition to
any rights you may otherwise have under benefit plans or agreements of the
Corporation to which you are a party or in which you are a participant,
including, but not limited to, any Corporation sponsored employee benefit plans
and stock options plans. Provisions of this Agreement shall not in any way
abrogate your rights under such other plans and agreements.

          If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Corporation the enclosed copy of this letter,
which shall then constitute our agreement on this subject.

                                        Sincerely,

                                        HEALTH CARE PROPERTY INVESTORS, INC.

                                        By:______________________________
                                           Kenneth B. Roath
                                           Chairman, President and
                                           Chief Executive Officer

Agreed to this 16/th/ day
of October, 2000.

___________________________

                                       18
<PAGE>

                               October 16, 2000

          Health Care Property Investors, Inc. (the "Corporation") considers it
essential to the best interests of its shareholders to foster the continuous
employment of key management personnel.  In connection with this, the
Corporation's Board of Directors (the "Board") recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control of
the Corporation may exist and that the uncertainty and questions that it may
raise among management could result in the departure or distraction of
management personnel to the detriment of the Corporation and its shareholders.

          The Board has decided to reinforce and encourage the continued
attention and dedication of members of the Corporation's management, including
yourself, to their assigned duties without the distraction arising from the
possibility of a change in control of the Corporation.

          In order to induce you to remain in its employ, the Corporation hereby
agrees that after this letter agreement (this "Agreement") has been fully
executed, you shall receive the severance benefits set forth in Section 5 of
this Agreement in the event your employment with the Corporation is terminated
under the circumstances described in Section 4 of this Agreement subsequent to a
Change in Control (as defined in Section 2).  Upon the full execution of this
Agreement, any prior severance agreement between you and the Corporation shall
terminate and be of no further effect.
          ----------------------------

          17.  Term of Agreement.  This Agreement shall commence on the date
               -----------------
hereof and shall continue in effect through December 31, 2003; provided,
however, that commencing on January 1, 2001 and on each January 1 thereafter,
the term of this Agreement shall automatically be extended for one additional
year unless, not later than September 30 of the preceding year, the Corporation
shall have given notice that it does not wish to extend this Agreement;
provided, further, that if a Change in Control (as defined in Section 2), occurs
during the original or any extended term of this Agreement, the term of this
Agreement shall continue in effect for a period of not less than thirty-six (36)
months beyond the month in which such Change in Control occurred.

          18.  Change in Control.
               -----------------

          No benefits shall be payable under Section 4 of this Agreement unless
there has been a Change in Control.  For purposes of this Agreement, a Change in
Control shall be deemed to occur if:

                                       19
<PAGE>

          (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 the Corporation representing 25% or more of the
combined voting power of the 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: (i) any acquisition by the Corporation or any corporation controlled by
the Corporation, (ii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation controlled
by the Corporation, or (iii) any acquisition by a Person of 25% of the
Outstanding Corporation Voting Securities as a result of an acquisition of
common stock of the Corporation by the Corporation which, by reducing the number
of shares of common stock of the 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 the
Corporation as described above and shall, after such share acquisition by the
Corporation, become the beneficial owner of any additional shares of common
stock of the Corporation, then such acquisition shall constitute a Change in
Control.

          (b)  during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with
Corporation to effect a transaction described in Sections 2(a), (c) or (d))
whose election by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (K) 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"), cease for any reason to
constitute at least a majority thereof;

          (c)  the consummation by the Corporation of a merger or consolidation
of Corporation with any other corporation (or other entity), other than a merger
or consolidation which would result in the voting securities of the 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-K% of the combined voting power of the voting
securities of the 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 the Corporation (or
similar transaction) in which no Person acquires more than 25% of the combined
voting power of the Corporation's then outstanding securities shall not
constitute a Change in Control; or

                                       20
<PAGE>

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

          19.  Accelerated Vesting Upon a Change in Control.
               --------------------------------------------

          (a)  Restricted Stock.  Notwithstanding any provisions of the
               ----------------
Corporation's stock option plans, incentive plans, or other similar plans, the
restricted period with respect to any restricted stock granted to you thereunder
shall lapse and such shares shall be distributed to you immediately prior to the
Change in Control, unless it would adversely affect the Corporation's ability to
use pooling of interest accounting in a Change in Control transaction in which
such accounting is intended to be used.

          (b)  Stock Options.  All outstanding options ("Options"), if any,
               -------------
granted to you under any of the 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, unless it would adversely affect the Corporation's ability to use
pooling of interest accounting in a Change in Control transaction in which such
accounting is intended to be used.

          20.  Termination Following Change in Control.
               ---------------------------------------

          (a)  General.  During the term of this Agreement, if any of the events
               -------
described in Section 2 constituting a Change in Control shall have occurred, you
shall be entitled to the benefits provided in Section 5(c) upon the subsequent
termination of your employment, provided that such termination occurs during the
term of this Agreement and within the two (2) year period immediately following
the date of such Change in Control, unless such termination is (i) because of
your death, Disability (as defined in Section 4(b)) or pursuant to late, normal
or early retirement under a pension plan (which may include a defined benefit
plan or a defined contribution plan) sponsored by the Corporation, but only if
such retirement occurs prior to a termination by the Corporation without Cause
or by you for Good Reason (as defined in Section 4(d)), (ii) by the Corporation
for Cause (as defined in Section 4(c)), or (iii) by you other than for Good
Reason. In the event that you are entitled to such benefits, such benefits shall
be paid notwithstanding the subsequent expiration of the term of this Agreement.

          (b)  Disability. If, as a result of your incapacity due to physical or
               ----------
mental illness, you shall have been absent from the full-time performance of
your duties with the Corporation for six (6) consecutive months, and within
thirty (30) days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, your employment may be
terminated for "Disability."

                                       21
<PAGE>

          (c)  Cause. Termination by the Corporation of your employment for
               -----
"Cause" shall mean termination (i) upon your willful and continued failure to
substantially perform your duties with the Corporation (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after your issuance of a Notice of
Termination (as defined in Section 4(f)) for Good Reason, after a written demand
for substantial performance is delivered to you by the Board, which demand
specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, (ii) upon your willful and continued
failure to substantially follow and comply with the specific and lawful
directives of the Board, as reasonably determined by the Board (other than any
such failure resulting from your incapacity due to physical or mental illness or
any such actual or anticipated failure after your issuance of a Notice of
Termination for Good Reason), after a written demand for substantial performance
is delivered to you by the Board, which demand specifically identifies the
manner in which the Board believes that you have not substantially performed
your duties, (iii) upon your willful commission of an act of fraud or dishonesty
resulting in material economic or financial injury to the Corporation, or (iv)
upon your willful engagement in illegal conduct or gross misconduct, in each
case which is materially and demonstrably injurious to the Corporation. For
purposes of this Section 4(c), no act, or failure to act, on your part shall be
deemed "willful" unless done, or omitted to be done, by you not in good faith.
Notwithstanding the foregoing, you shall not be deemed terminated for Cause
pursuant to Sections 4(c)(i), (ii) or (iv) hereof unless and until there shall
have been delivered to you 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 you, an
opportunity for you, together with your counsel, to be heard before the Board
and a reasonable opportunity to cure), finding that in the Board's good faith
opinion you were guilty of conduct set forth above in this Section 4(c) and
specifying the particulars thereof in reasonable detail.

          (d)  Good Reason. You shall be entitled to terminate your employment
               -----------
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence after a Change in Control
of any of the following circumstances unless, in the case of Sections 4(d)(i),
(v), (vi), or (vii), such circumstances are fully corrected (provided such
circumstances are capable of correction) prior to the Date of Termination (as
defined in Section 4(g)) specified in the Notice of Termination given in respect
thereof:

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

               (ii) the Corporation's reduction of your annual base salary as in
     effect on the date hereof or as the same may be increased from time to
     time;

                                       22
<PAGE>

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

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

               (v)   the Corporation's failure to continue in effect any
     material compensation or benefit plan in which you participate 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 the Corporation's failure to continue your 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 your participation relative to other participants, as
     existed at the time of the Change in Control;

               (vi)  the Corporation's failure to obtain a satisfactory
     agreement from any successor to assume and agree to perform this Agreement,
     as contemplated in Section 6 hereof; or

               (vii) any purported termination of your employment that is not
     effected pursuant to a Notice of Termination satisfying the requirements of
     Section 4(f) hereof (and, if applicable, the requirements of Section 4(c)
     hereof), which purported termination shall not be effective for purposes of
     this Agreement.

Your right to terminate your employment pursuant to this Section 4(d) shall not
be affected by your incapacity due to physical or mental illness.  Your
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 you that Good Reason exists shall be presumed correct and shall
be binding upon the Corporation.

          (e)  Voluntary Termination. You shall be entitled to voluntarily
               ---------------------
terminate your employment for any reason or no reason at any time after a Change
in Control.

          (f)  Notice of Termination. Any purported termination of your
               ---------------------
employment by the Corporation or by you (other than termination due to death
which shall terminate your employment automatically) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 7. "Notice of Termination" shall mean a notice that shall

                                       23
<PAGE>

indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.

          (g)  Date of Termination, Etc. "Date of Termination" shall mean (a) if
               ------------------------
your employment is terminated due to your death, the date of your death; (b) if
your employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such thirty (30)-day period), and (c) if your
employment is terminated pursuant to Section 4(c), Section 4(d) or Section 4(e)
or for any other reason (other than death or Disability), 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 shall not be less than
fifteen (15) nor more than sixty (60) days from the date such Notice of
Termination is given). Notwithstanding anything to the contrary contained in
this Section 4(g), if within fifteen (15) days after any Notice of Termination
is given, the 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 the party giving such notice pursues the
resolution of such dispute with reasonable diligence.

          21.  Compensation Upon Termination or During Disability Following A
               --------------------------------------------------------------
               Change in Control.
               -----------------

          Following a Change in Control during the term of this Agreement, you
shall be entitled to the benefits described below during a period of disability,
or upon termination of your employment, as the case may be, provided that such
period or termination occurs during the term of this Agreement and within the
two (2) year period immediately following the date of such Change in Control.
The benefits to which you are entitled, subject to the terms and conditions of
this Agreement, are:

          (a)  During any period during which you fail to perform your full-time
duties with the Corporation as a result of incapacity due to physical or mental
illness, you shall continue to receive your base salary at the rate in effect at
the commencement of any such period, together with all compensation payable to
you under the Corporation's disability plan or program or other similar plan
during such period, until this Agreement is terminated pursuant to Section 4(b)
hereof. Thereafter, or in the event your employment is terminated by reason of
your death, your benefits shall be determined under the Corporation's
retirement, insurance and other compensation programs then in effect in
accordance with the terms of such programs.

                                       24
<PAGE>

          (b)       If your employment shall be terminated by the Corporation
for Cause or by you other than for Good Reason , the Corporation shall pay you
(i) your full base salary, when due, through the Date of Termination at the rate
in effect at the time Notice of Termination is given, (ii) the unpaid portion,
if any, of any annual bonus, plus an amount equal to your annual bonus, pro
rated from January 1 of the termination year through the Date of Termination,
and (iii) all other amounts to which you are entitled under any compensation
plan of the Corporation at the time such payments are due, and the Corporation
shall have no further obligations to you under this Agreement.

          (c)       If your employment by the Corporation shall be terminated by
you for Good Reason or by the Corporation other than for Cause or Disability,
then you shall be entitled to the benefits provided below:

                    (i)    the Corporation shall pay to you (1) your 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(d), (2) the unpaid portion, if any, of any
          annual bonus, plus an amount equal to your annual bonus, pro rated
          from January 1 of the termination year through the Date of
          Termination, and (2) all other amounts to which you are entitled under
          any compensation plan of the Corporation at the time such payments are
          due;

                    (ii)   in lieu of any further salary payments to you for
          periods subsequent to the Date of Termination, the Corporation shall
          pay as severance pay to you, at the time specified in Section 5(d), a
          lump sum severance payment equal to the sum of two and a half (2.5)
          times your annual base salary as in effect as of the Date of
          Termination or immediately prior to the Change in Control, whichever
          is greater, and two and a half (2.5) times your  targeted annual bonus
          as in effect as of the Date of Termination or the highest annual bonus
          received by you in the three (3) years immediately prior to the Change
          in Control, whichever is greater;

                    (iii)  for a period of two and a half (2.5) years, the
          Corporation shall continue to provide you and your eligible family
          members, based on the cost sharing arrangement between you and the
          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 you and them if your employment had not been terminated
          or, if more favorable to you, as in effect generally at any time
          thereafter, provided, however, that if you become re-employed with
          another employer and are eligible to receive medical and dental health
          benefits under another employer's plans, the Corporation's obligations
          under this Section 5(c)(iii) shall be reduced to the extent comparable
          benefits are actually received by you during the twelve (12) month
          period following your termination, and any such benefits actually
          received by you shall be reported to the Corporation.  In the

                                       25
<PAGE>

          event you are ineligible under the terms of such benefit plans or
          programs to continue to be so covered, in such event, the Corporation
          shall provide you with substantially equivalent coverage through other
          sources or will provide you with a lump sum payment in such amount
          that, after all taxes on that amount, shall be equal to the cost to
          you of providing yourself such benefit coverage. At the termination of
          the benefits coverage under the second preceding sentence, you, your
          spouse and your 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 you had
          terminated employment with the 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)   you shall be fully vested in your accrued benefits
          under any qualified or nonqualified pension, profit sharing, deferred
          compensation or supplemental plans maintained by the Corporation for
          your benefit, except to that the extent the acceleration of vesting of
          such benefits would violate any applicable law or require the
          Corporation to accelerate the vesting of the accrued benefits of all
          participants in such plan or plans, in which case the Corporation may
          elect to pay you a lump sum payment at the time specified in Section
          5(d) in an amount equal to the value of such unvested accrued benefits
          in lieu of accelerating the vesting of your benefits, plus the
          Corporation shall pay you an amount equal to the amount the
          Corporation would have contributed to your account under the
          Corporations 401(k) plan as a matching contribution had you remained
          employed by the Corporation for two and a half (2.5) years after your
          Date of Termination and had you made the maximum elected deferral
          contributions.

                    (v)    the Corporation shall furnish you 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 you against insurable events
          which occur or have occurred while you were a director or officer of
          the 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 the
          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 you than those in effect on the date
          hereof; provided, further, that if the aggregate annual premiums for
          such insurance at any time during such period exceed one hundred and
          fifty percent (150%) of the per annum

                                       26
<PAGE>

          rate of premium currently paid by the Corporation for such insurance,
          then the 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 the
          Corporation has the power to indemnify (or advance expenses to) you in
          respect of any judgments, fines, settlements, loss, cost or expense
          (including attorneys' fees) of any nature related to or arising out of
          your activities as an agent, employee, officer or director of the
          Corporation or in any other capacity on behalf of or at the request of
          the Corporation, the Corporation shall promptly on written request,
          indemnify (and advance expenses to) you 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 the
          Corporation may, under applicable law, be permitted to have the
          discretion to take so as to effectuate such indemnification or
          advancement.  Such agreement by the Corporation shall not be deemed to
          impair any other obligation of the Corporation respecting your
          indemnification otherwise arising out of this or any other agreement
          or promise of the Corporation or under any statute;

                    (vii)  (1) anything in this Agreement to the contrary
          notwithstanding, if it shall be determined that any payment or
          distribution to you or for your 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 the 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 you
          shall be entitled to receive from the 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 you 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(c)(vii),
          and taking into account any lost or reduced tax deductions on account
          of the Gross-Up Payment, shall be equal to the Payments;

                                       27
<PAGE>

                           (2) all determinations required to be made under this
          Section 5(c)(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 you and the
          Corporation with detailed supporting calculations with respect to such
          Gross-Up Payment within fifteen (15) business days of the receipt of
          notice from you or the Corporation that there you have 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(c)(vii), the "Accountants" shall mean the
          Corporation's independent certified public accountants serving
          immediately prior to the Change in Control. In the event that the
          Accountants are also serving as accountant or auditor for the
          individual, entity or group effecting the Change in Control, you 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 the Corporation.

                           (3) 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 you 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 your
          adjusted gross income); and to have otherwise allowable deductions for
          Federal, state and local income tax purposes at least

                                       28
<PAGE>

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

                           (4) 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 the Corporation should have
          paid pursuant to this Section 5(c)(vii) (the "Underpayment"). In the
          event that the Corporation exhausts its remedies pursuant to Section
          5(c)(vii)(3) and you are required to make a payment of any Excise Tax,
          the Underpayment shall be promptly paid by the Corporation to or for
          your benefit;

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

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

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

                               (B) take such action in connection with
               contesting such claim as the Corporation shall reasonably request
               in writing from time to time, including, without limitation,
               accepting legal

                                       29
<PAGE>

               representation with respect to such claim by an attorney
               reasonably selected by the Corporation;

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

                               (D) permit the Corporation to participate in any
               proceedings relating to such claims;

          provided, however, that the Corporation shall bear and pay directly
          all costs and expenses (including additional interest and penalties)
          incurred in connection with such contest and shall indemnify you for
          and hold you 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(c)(vii), the 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, hearings and
          conferences with the taxing authority in respect of such claim and
          may, at its sole option, either direct you to pay the tax claimed and
          sue for a refund or contest the claim in any permissible manner, and
          you agree 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 the Corporation shall determine;
          provided, however, that if the Corporation directs you to pay such
          claim and sue for a refund, the Corporation shall advance the amount
          of such payment to you, on an interest-free basis, and shall indemnify
          you for and hold you 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 advance or with respect to any
          imputed income with respect to such advance (including as a result of
          any forgiveness by the Corporation of such advance); provided,
          further, that any extension of the statute of limitations relating to
          the payment of taxes for the taxable year of you with respect to which
          such contested amount is claimed to be due is limited solely to such
          contested amount.  Furthermore, the Corporation's control of the
          contest shall be limited to issues with respect to which a Gross-Up
          Payment would be payable hereunder and you 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;

          (d)       The payments provided for in Sections 5(c)(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, the Corporation shall pay to you on
such day an estimate, as determined in good faith by the

                                       30
<PAGE>

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 the
Corporation to you, payable on the fifth day after demand by the Corporation
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code).

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

          22.  Successors; Binding Agreement.
               -----------------------------

          (a)  The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place.  Failure of the Corporation to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to terminate your employment
and receive compensation from the Corporation in the same amount and on the same
terms to which you would be entitled hereunder if you terminate your employment
for Good Reason following a Change in Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.  Unless expressly provided
otherwise, "Corporation" as used herein shall mean the Corporation as defined in
this Agreement and any successor to its business and/or assets as aforesaid.

          (b)  This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.

          23.  Notice. For the purpose of this Agreement, notices and all other
               ------
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first

                                       31
<PAGE>

page of this Agreement, provided that all notices to the Corporation shall be
directed to the attention of the Board with a copy to the Secretary of the
Corporation, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.

          24.  Confidentiality, Noncompetition and Non-Solicitation Covenants.
               --------------------------------------------------------------

          (a)  Confidentiality.  You hereby agree that commencing on the Date of
               ---------------
Termination, you 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).  You agree
that, upon termination of your employment with the Corporation, all Confidential
Information in your possession that is in written or other tangible form
(together with all copies or duplicates thereof, including computer files) shall
be returned to the Corporation and shall not be retained by you or furnished to
any third party, in any form except as provided herein; provided, however, that
you shall not be obligated to treat as confidential, or return to the
Corporation copies of any Confidential Information that (i) was publicly known
at the time of disclosure to you, (ii) becomes publicly known or available
thereafter other than by any means in violation of this Agreement or any other
duty owed to the Corporation by any person or entity, or (iii) is lawfully
disclosed to you by a third party.  As used in this Agreement, the term
"Confidential Information" means:  information disclosed to you or known by you
as a consequence of or through your relationship with the 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 the Corporation and its affiliates.

          (b)  Noncompetition. You acknowledge and agree that your services
               --------------
pursuant to this Agreement are unique and extraordinary, and that you will have
access to and control of Confidential Information of the Corporation which is
vital to the success of the Corporation's business. You further acknowledge that
because of your knowledge of the Corporation's Confidential Information it is
unlikely that you could work for a competitor of the Corporation without
divulging such confidential information. You further acknowledge that the
business of the 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 the Corporation under this
Agreement, you hereby agree that (i) during the term of this Agreement and for a
twelve (12) month period, commencing with your Date of Termination
(collectively, the "Covenant Period"), you shall not accept employment nor
engage as a consultant with a competitor of the Corporation in the health care
real estate investment trust industry (a "Competitor") if such position would be
comparable to a position you held at any time with the Corporation and where you
cannot satisfy the Corporation, in its reasonable judgement, that the new
employer is prepared to and takes adequate steps to preclude and prevent
inevitable disclosure of the Corporation's Confidential Information and (ii)
that eligibility for severance payments and other benefits under this Agreement
are contingent upon your agreement and

                                       32
<PAGE>

compliance with the covenant as stated above in clause (i) of this Section 8(b).
No further payments nor eligibility for benefits continuation will be available
to your as of the date you commence employment/consulting in violation of these
covenants. It is a specific condition of the Agreement that if you commence
employment or engage as a consultant with a Competitor if such position would be
comparable to a position you held at any time with the Corporation, you shall
advise Competitor in writing of your obligations pursuant to this Agreement and
specifically disclose all covenants contained in this Section 8. It is also a
specific condition of this Agreement that so long as you are receiving any
payments or benefits under this Agreement with respect to any type of
termination, you shall be obligated to immediately notify the Corporation as to
the specifics of the new position that you are planning to commence as an
employee or consultant for a Competitor, and take affirmative steps to assure
the Corporation that you will not divulge any of the Corporation's Confidential
Information in your new employment or consulting arrangement.

          (c)  Non-Solicitation. You hereby agree that, for the period
               ----------------
commencing on the Date of Termination and terminating on the first anniversary
thereof, you shall not, either on your 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 the 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 the Corporation; provided, however,
that a general advertisement to which an employee of the Corporation responds
shall in no event be deemed to result in a breach of this Section 8(c).

          25.  Governing Law; Venue. The validity, interpretation, construction
               --------------------
and performance of this Agreement shall be governed on a non-exclusive basis by
the laws of the State of California without giving effect to its conflicts of
laws rules. For purposes of jurisdiction and venue, the Corporation hereby
consents to jurisdiction and venue in any suit, action or proceeding with
respect to this Agreement in any court of competent jurisdiction in the state in
which you reside at the commencement of such suit, action or proceeding and
waives any objection, challenge or dispute as to such jurisdiction or venue
being proper.

          26.  Joint and Several Liability. Any successors or assigns shall be
               ---------------------------
jointly and severally liable with the Corporation under this Agreement.

          27.  Miscellaneous. No provision of this Agreement may be modified,
               -------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject

                                       33
<PAGE>

matter hereof have been made by either party which are not expressly set forth
in this Agreement. All references to sections of the Exchange Act or the Code
shall be deemed also to refer to any successor provisions to such sections. Any
payments provided for hereunder shall be paid net of any applicable withholding
required under federal, state or local law. Any obligations of the Corporation
under Sections 5 and 6 shall survive the expiration of the term of this
Agreement. The section headings contained in this Agreement are for convenience
only, and shall not affect the interpretation of this Agreement.

          28.  Severability. The invalidity or unenforceability of any provision
               ------------
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

          29.  Counterparts. This Agreement may be executed in several
               ------------
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

          30.  Arbitration; Dispute Resolution, Etc.
               ------------------------------------

          (a)  Arbitration Procedure. Any disagreement, dispute, controversy or
               ---------------------
claim arising out of or relating to this Agreement or the interpretation of this
Agreement or any arrangements relating to this Agreement or contemplated in this
Agreement or the breach, termination or invalidity thereof shall be settled by
final and binding arbitration 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, you and the Corporation shall select a mutually acceptable neutral
arbitrator from among the JAMS/Endispute panel of arbitrators. In the event you
and the Corporation cannot agree on an arbitrator, the Administrator of
JAMS/Endispute will appoint an arbitrator. Neither you nor the 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 14. 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. The Corporation
shall pay all fees and expenses of the Arbitrator regardless of the result and
shall provide all witnesses and evidence reasonably required by you to present
your case.

          (b)  Compensation During Dispute, Etc.  Your compensation during any
               --------------------------------
disagreement, dispute, controversy, claim, suit, action or proceeding
(collectively, a "Dispute")

                                       34
<PAGE>

arising out of or relating to this Agreement or the interpretation of this
Agreement shall be as follows:

          If there is a termination by the Corporation followed by a Dispute as
to whether you are entitled to the payments and other benefits provided under
this Agreement, then, during the period of that Dispute the Corporation shall
pay you fifty percent (50%) of the amount specified in Sections 5(c)(i) and
5(c)(ii) hereof, and the Corporation shall provide you with the other benefits
provided in Section 5(c) of this Agreement, if, but only if, you agree in
writing that if the Dispute is resolved against you, you shall promptly refund
to the Corporation all payments you receive 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 your favor, promptly
after resolution of the dispute the Corporation shall pay you 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.

          (c)  Legal Fees. In addition to all other amounts payable to you under
               ----------
this Agreement, the Corporation shall pay to you all legal fees and expenses
incurred by you 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 your 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 you commence such action,
you shall not be entitled to recover such fees and costs if the court determines
that you brought the claim in bad faith or the claim was frivolous. Any
attorney's fees incurred by you shall be paid by the Corporation in advance of
the final disposition of such action or challenge, as such fees and expenses are
incurred; provided, however, that you agree to repay such amounts, net of any
income taxes paid or payable by you with respect to such amounts, if such
amounts are incurred in connection with an action commenced by you if it is
ultimately determined by the court that you brought such action in bad faith or
the claim was frivolous.

          31.  At-Will Employment. Nothing in the foregoing diminishes or alters
               ------------------
the Corporation's policy of at-will employment for all employees, where both the
Corporation and you may terminate the employment relationship at any time and
for any reason, with or without cause or notice.

          32.  Entire Agreement. This Agreement sets forth the entire agreement
               ----------------
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein,
including,

                                       35
<PAGE>

without limitation, any prior severance agreements, is hereby terminated and
cancelled. Any of your rights hereunder shall be in addition to any rights you
may otherwise have under benefit plans or agreements of the Corporation to which
you are a party or in which you are a participant, including, but not limited
to, any Corporation sponsored employee benefit plans and stock options plans.
Provisions of this Agreement shall not in any way abrogate your rights under
such other plans and agreements.

          If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Corporation the enclosed copy of this letter,
which shall then constitute our agreement on this subject.

                                       Sincerely,

                                       HEALTH CARE PROPERTY INVESTORS, INC.

                                       By:______________________________
                                          Kenneth B. Roath
                                          Chairman, President and
                                          Chief Executive Officer

Agreed to this 16/th/ day
of October, 2000.

___________________________

                                       36
<PAGE>

                               October 16, 2000

          Health Care Property Investors, Inc. (the "Corporation") considers it
essential to the best interests of its shareholders to foster the continuous
employment of key management personnel.  In connection with this, the
Corporation's Board of Directors (the "Board") recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control of
the Corporation may exist and that the uncertainty and questions that it may
raise among management could result in the departure or distraction of
management personnel to the detriment of the Corporation and its shareholders.

          The Board has decided to reinforce and encourage the continued
attention and dedication of members of the Corporation's management, including
yourself, to their assigned duties without the distraction arising from the
possibility of a change in control of the Corporation.

          In order to induce you to remain in its employ, the Corporation hereby
agrees that after this letter agreement (this "Agreement") has been fully
executed, you shall receive the severance benefits set forth in Section 5 of
this Agreement in the event your employment with the Corporation is terminated
under the circumstances described in Section 4 of this Agreement subsequent to a
Change in Control (as defined in Section 2).  Upon the full execution of this
Agreement, any prior severance agreement between you and the Corporation shall
terminate and be of no further effect.
          ----------------------------

          33.  Term of Agreement. This Agreement shall commence on the date
               -----------------
hereof and shall continue in effect through December 31, 2003; provided,
however, that commencing on January 1, 2001 and on each January 1 thereafter,
the term of this Agreement shall automatically be extended for one additional
year unless, not later than September 30 of the preceding year, the Corporation
shall have given notice that it does not wish to extend this Agreement;
provided, further, that if a Change in Control (as defined in Section 2), occurs
during the original or any extended term of this Agreement, the term of this
Agreement shall continue in effect for a period of not less than thirty-six (36)
months beyond the month in which such Change in Control occurred.

          34.  Change in Control. No benefits shall be payable under Section 4
               -----------------
of this Agreement unless there has been a Change in Control. For purposes of
this Agreement, a Change in Control shall be deemed to occur if:

                                       37
<PAGE>

               (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 the Corporation representing 25% or more of the
combined voting power of the 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: (i) any acquisition by the Corporation or any corporation controlled by
the Corporation, (ii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation controlled
by the Corporation, or (iii) any acquisition by a Person of 25% of the
Outstanding Corporation Voting Securities as a result of an acquisition of
common stock of the Corporation by the Corporation which, by reducing the number
of shares of common stock of the 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 the
Corporation as described above and shall, after such share acquisition by the
Corporation, become the beneficial owner of any additional shares of common
stock of the Corporation, then such acquisition shall constitute a Change in
Control.

               (b) during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with
Corporation to effect a transaction described in Sections 2(a), (c) or (d))
whose election by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (K) 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"), cease for any reason to
constitute at least a majority thereof;

               (c) the consummation by the Corporation of a merger or
consolidation of Corporation with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the 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-K% of the combined voting power of the voting
securities of the 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 the Corporation (or
similar transaction) in which no Person acquires more than 25% of the combined
voting power of the Corporation's then outstanding securities shall not
constitute a Change in Control; or

                                       38
<PAGE>

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

          35.  Accelerated Vesting Upon a Change in Control.
               --------------------------------------------

          (a)  Restricted Stock.  Notwithstanding any provisions of the
               -----------------
Corporation's stock option plans, incentive plans, or other similar plans, the
restricted period with respect to any restricted stock granted to you thereunder
shall lapse and such shares shall be distributed to you immediately prior to the
Change in Control, unless it would adversely affect the Corporation's ability to
use pooling of interest accounting in a Change in Control transaction in which
such accounting is intended to be used.

          (b)  Stock Options.  All outstanding options ("Options"), if any,
               --------------
granted to you under any of the 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, unless it would adversely affect the Corporation's ability to use
pooling of interest accounting in a Change in Control transaction in which such
accounting is intended to be used.

          36.  Termination Following Change in Control.
               ---------------------------------------

          (a)  General.  During the term of this Agreement, if any of the events
               -------
described in Section 2 constituting a Change in Control shall have occurred, you
shall be entitled to the benefits provided in Section 5(c) upon the subsequent
termination of your employment, provided that such termination occurs during the
term of this Agreement and within the two (2) year period immediately following
the date of such Change in Control, unless such termination is (i) because of
your death, Disability (as defined in Section 4(b)) or pursuant to late, normal
or early retirement under a pension plan (which may include a defined benefit
plan or a defined contribution plan) sponsored by the Corporation, but only if
such retirement occurs prior to a termination by the Corporation without Cause
or by you for Good Reason (as defined in Section 4(d)),  (ii) by the Corporation
for Cause (as defined in Section 4(c)), or (iii) by you other than for Good
Reason.  In the event that you are entitled to such benefits, such benefits
shall be paid notwithstanding the subsequent expiration of the term of this
Agreement.

          (b)  Disability. If, as a result of your incapacity due to physical or
               ----------
mental illness, you shall have been absent from the full-time performance of
your duties with the Corporation for six (6) consecutive months, and within
thirty (30) days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, your employment may be
terminated for "Disability."

                                       39
<PAGE>

          (c)  Cause. Termination by the Corporation of your employment for
               -----
"Cause" shall mean termination (i) upon your willful and continued failure to
substantially perform your duties with the Corporation (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after your issuance of a Notice of
Termination (as defined in Section 4(f)) for Good Reason, after a written demand
for substantial performance is delivered to you by the Board, which demand
specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, (ii) upon your willful and continued
failure to substantially follow and comply with the specific and lawful
directives of the Board, as reasonably determined by the Board (other than any
such failure resulting from your incapacity due to physical or mental illness or
any such actual or anticipated failure after your issuance of a Notice of
Termination for Good Reason), after a written demand for substantial performance
is delivered to you by the Board, which demand specifically identifies the
manner in which the Board believes that you have not substantially performed
your duties, (iii) upon your willful commission of an act of fraud or dishonesty
resulting in material economic or financial injury to the Corporation, or (iv)
upon your willful engagement in illegal conduct or gross misconduct, in each
case which is materially and demonstrably injurious to the Corporation.  For
purposes of this Section 4(c), no act, or failure to act, on your part shall be
deemed "willful" unless done, or omitted to be done, by you not in good faith.
Notwithstanding the foregoing, you shall not be deemed terminated for Cause
pursuant to Sections 4(c)(i), (ii) or (iv) hereof unless and until there shall
have been delivered to you 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 you, an
opportunity for you, together with your counsel, to be heard before the Board
and a reasonable opportunity to cure), finding that in the Board's good faith
opinion you were guilty of conduct set forth above in this Section 4(c) and
specifying the particulars thereof in reasonable detail.

          (d)  Good Reason. You shall be entitled to terminate your employment
               -----------
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence after a Change in Control
of any of the following circumstances unless, in the case of Sections 4(d)(i),
(v), (vi), or (vii), such circumstances are fully corrected (provided such
circumstances are capable of correction) prior to the Date of Termination (as
defined in Section 4(g)) specified in the Notice of Termination given in respect
thereof:

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

               (ii) the Corporation's reduction of your annual base salary as in
     effect on the date hereof or as the same may be increased from time to
     time;

                                       40
<PAGE>

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

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

               (v)    the Corporation's failure to continue in effect any
     material compensation or benefit plan in which you participate 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 the Corporation's failure to continue your 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 your participation relative to other participants, as
     existed at the time of the Change in Control;

               (vi)   the Corporation's failure to obtain a satisfactory
     agreement from any successor to assume and agree to perform this Agreement,
     as contemplated in Section 6 hereof; or

               (vii)  any purported termination of your employment that is not
     effected pursuant to a Notice of Termination satisfying the requirements of
     Section 4(f) hereof (and, if applicable, the requirements of Section 4(c)
     hereof), which purported termination shall not be effective for purposes of
     this Agreement.

Your right to terminate your employment pursuant to this Section 4(d) shall not
be affected by your incapacity due to physical or mental illness.  Your
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 you that Good Reason exists shall be presumed correct and shall
be binding upon the Corporation.

          (e)  Voluntary Termination. You shall be entitled to voluntarily
               ---------------------
terminate your employment for any reason or no reason at any time after a Change
in Control.

          (f)  Notice of Termination. Any purported termination of your
               ---------------------
employment by the Corporation or by you (other than termination due to death
which shall terminate your employment automatically) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 7. "Notice of Termination" shall mean a notice that shall

                                       41
<PAGE>

indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.

          (g)  Date of Termination, Etc. "Date of Termination" shall mean (a) if
               ------------------------
your employment is terminated due to your death, the date of your death; (b) if
your employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such thirty (30)-day period), and (c) if your
employment is terminated pursuant to Section 4(c), Section 4(d) or Section 4(e)
or for any other reason (other than death or Disability), 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 shall not be less than
fifteen (15) nor more than sixty (60) days from the date such Notice of
Termination is given). Notwithstanding anything to the contrary contained in
this Section 4(g), if within fifteen (15) days after any Notice of Termination
is given, the 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 the party giving such notice pursues the
resolution of such dispute with reasonable diligence.

          5.   Compensation Upon Termination or During Disability Following
               ------------------------------------------------------------
               A Change in Control.
               -------------------

          Following a Change in Control during the term of this Agreement, you
shall be entitled to the benefits described below during a period of disability,
or upon termination of your employment, as the case may be, provided that such
period or termination occurs during the term of this Agreement and within the
two (2) year period immediately following the date of such Change in Control.
The benefits to which you are entitled, subject to the terms and conditions of
this Agreement, are:

          (a)  During any period during which you fail to perform your full-time
duties with the Corporation as a result of incapacity due to physical or mental
illness, you shall continue to receive your base salary at the rate in effect at
the commencement of any such period, together with all compensation payable to
you under the Corporation's disability plan or program or other similar plan
during such period, until this Agreement is terminated pursuant to Section 4(b)
hereof.  Thereafter, or in the event your employment is terminated by reason of
your death, your benefits shall be determined under the Corporation's
retirement, insurance and other compensation programs then in effect in
accordance with the terms of such programs.

                                       42
<PAGE>

          (b)  If your employment shall be terminated by the Corporation for
Cause or by you other than for Good Reason , the Corporation shall pay you (i)
your full base salary, when due, through the Date of Termination at the rate in
effect at the time Notice of Termination is given, (ii) the unpaid portion, if
any, of any annual bonus, plus an amount equal to your annual bonus, pro rated
from January 1 of the termination year through the Date of Termination, and
(iii) all other amounts to which you are entitled under any compensation plan of
the Corporation at the time such payments are due, and the Corporation shall
have no further obligations to you under this Agreement.

          (c)  If your employment by the Corporation shall be terminated by you
for Good Reason or by the Corporation other than for Cause or Disability, then
you shall be entitled to the benefits provided below:

               (i)    the Corporation shall pay to you (1) your 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(d), (2) the unpaid portion, if any, of any
          annual bonus, plus an amount equal to your annual bonus, pro rated
          from January 1 of the termination year through the Date of
          Termination, and (2) all other amounts to which you are entitled under
          any compensation plan of the Corporation at the time such payments are
          due;

               (ii)   in lieu of any further salary payments to you for periods
          subsequent to the Date of Termination, the Corporation shall pay as
          severance pay to you, at the time specified in Section 5(d), a lump
          sum severance payment equal to the sum of three (3) times your 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 your targeted annual bonus as in effect as of the Date of
          Termination or the highest annual bonus received by you in the three
          (3) years immediately prior to the Change in Control, whichever is
          greater;

               (iii)  for a period of three (3) years, the Corporation shall
          continue to provide you and your eligible family members, based on the
          cost sharing arrangement between you and the 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 you and them if
          your employment had not been terminated or, if more favorable to you,
          as in effect generally at any time thereafter, provided, however, that
          if you become re-employed with another employer and are eligible to
          receive medical and dental health benefits under another employer's
          plans, the Corporation's obligations under this Section 5(c)(iii)
          shall be reduced to the extent comparable benefits are actually
          received by you during the twelve (12) month period following your
          termination, and any

                                       43
<PAGE>

          such benefits actually received by you shall be reported to the
          Corporation. In the event you are ineligible under the terms of such
          benefit plans or programs to continue to be so covered, in such event,
          the Corporation shall provide you with substantially equivalent
          coverage through other sources or will provide you with a lump sum
          payment in such amount that, after all taxes on that amount, shall be
          equal to the cost to you of providing yourself such benefit coverage.
          At the termination of the benefits coverage under the second preceding
          sentence, you, your spouse and your 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
          you had terminated employment with the 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)   you shall be fully vested in your accrued benefits under
          any qualified or nonqualified pension, profit sharing, deferred
          compensation or supplemental plans maintained by the Corporation for
          your benefit, except to that the extent the acceleration of vesting of
          such benefits would violate any applicable law or require the
          Corporation to accelerate the vesting of the accrued benefits of all
          participants in such plan or plans, in which case the Corporation may
          elect to pay you a lump sum payment at the time specified in Section
          5(d) in an amount equal to the value of such unvested accrued benefits
          in lieu of accelerating the vesting of your benefits, plus the
          Corporation shall pay you an amount equal to the amount the
          Corporation would have contributed to your account under the
          Corporations 401(k) plan as a matching contribution had you remained
          employed by the Corporation for three (3) years after your Date of
          Termination and had you made the maximum elected deferral
          contributions.

               (v)    the Corporation shall furnish you 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 you against insurable events
          which occur or have occurred while you were a director or officer of
          the 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 the
          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 you than those in effect on the date
          hereof; provided, further, that if the aggregate annual premiums for
          such insurance at any time

                                       44
<PAGE>

          during such period exceed one hundred and fifty percent (150%) of the
          per annum rate of premium currently paid by the Corporation for such
          insurance, then the 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 the
          Corporation has the power to indemnify (or advance expenses to) you in
          respect of any judgments, fines, settlements, loss, cost or expense
          (including attorneys' fees) of any nature related to or arising out of
          your activities as an agent, employee, officer or director of the
          Corporation or in any other capacity on behalf of or at the request of
          the Corporation, the Corporation shall promptly on written request,
          indemnify (and advance expenses to) you 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 the
          Corporation may, under applicable law, be permitted to have the
          discretion to take so as to effectuate such indemnification or
          advancement.  Such agreement by the Corporation shall not be deemed to
          impair any other obligation of the Corporation respecting your
          indemnification otherwise arising out of this or any other agreement
          or promise of the Corporation or under any statute;

                    (vii)  if by reason of section 280G of the Code any payment
          or benefit received or to be received by you in connection with a
          Change in Control or the termination of your employment (whether
          payable pursuant to the terms of this Agreement ("Contract Payments")
          or any other plan, arrangements or agreement with the Corporation or
          an Affiliate (as defined below) (collectively with the Contract
          Payments, "Total Payments") would not be deductible (in whole or part)
          by the Corporation, an Affiliate or other person making such payment
          or providing such benefit, then the Severance Payment shall be reduced
          (to zero if necessary) and, if the Severance Payment is reduced to
          zero, other Contract Payments shall be reduced (to zero if necessary)
          and, if Contract Payments are reduced to zero, other Total Payments
          shall be reduced (to zero if necessary) until no portion of the Total
          Payments is not deductible by reason of section 280G of the Code.  For
          purposes of this limitation, (a) no portion of the Total Payments the
          receipt or enjoyment of which you shall have effectively waived in
          writing prior to the date of payment of the Severance Payment shall be
          taken into account; (b) no portion of the Total Payments shall be
          taken into account which in the opinion of tax counsel selected by the
          Corporation's independent auditors and acceptable to you does not
          constitute a "parachute payment" within the meaning of section
          280G(b)(2) of the Code (without regard to subsection (A)(ii) thereof);
          (c) the Severance Payment (and, thereafter, other Contract Payments
          and other Total Payments) shall be reduced only to the extent
          necessary so that the Total Payments in their entirety constitute
          reasonable compensation for services actually

                                       45
<PAGE>

          rendered within the meaning of section 280G(b)(4) of the Code, in the
          opinion of the tax counsel referred to in clause (b), and (d) the
          value of any noncash benefit or any deferred payment or benefit
          included in the Total Payments shall be determined by the
          Corporation's independent auditors in accordance with the principles
          of sections 280G(d)(3) and (4) of the Code. For purposes of this
          Section 5(c)(vii), the term "Affiliate" means the Corporation's
          successors, any Person whose actions result in a Change in Control or
          any corporation affiliated (or which, as a result of the completion of
          the transactions causing a Change in Control shall become affiliated)
          with the Corporation within the meaning of section 1504 of the Code.

          (d)       The payments provided for in Sections 5(c)(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, the Corporation shall pay to you on
such day an estimate, as determined in good faith by the 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 the Corporation to you, payable on
the fifth day after demand by the Corporation (together with interest at the
rate provided in section 1274(b)(2)(B) of the Code).

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

          38.  Successors; Binding Agreement.
               -----------------------------

          (a)  The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place.  Failure of the Corporation to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to terminate your employment
and receive compensation from the Corporation in the same amount and on the same
terms to which you would be entitled hereunder if you terminate your employment
for Good Reason following a Change in Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be

                                       46
<PAGE>

deemed the Date of Termination. Unless expressly provided otherwise,
"Corporation" as used herein shall mean the Corporation as defined in this
Agreement and any successor to its business and/or assets as aforesaid.

          (b)  This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.

          39.  Notice.  For the purpose of this Agreement, notices and all other
               ------
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Corporation shall be directed to the
attention of the Board with a copy to the Secretary of the Corporation, or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

          40.  Confidentiality, Noncompetition and Non-Solicitation Covenants.
               --------------------------------------------------------------

          (a)  Confidentiality.  You hereby agree that commencing on the Date of
               ---------------
Termination, you 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).  You agree
that, upon termination of your employment with the Corporation, all Confidential
Information in your possession that is in written or other tangible form
(together with all copies or duplicates thereof, including computer files) shall
be returned to the Corporation and shall not be retained by you or furnished to
any third party, in any form except as provided herein; provided, however, that
you shall not be obligated to treat as confidential, or return to the
Corporation copies of any Confidential Information that (i) was publicly known
at the time of disclosure to you, (ii) becomes publicly known or available
thereafter other than by any means in violation of this Agreement or any other
duty owed to the Corporation by any person or entity, or (iii) is lawfully
disclosed to you by a third party.  As used in this Agreement, the term
"Confidential Information" means:  information disclosed to you or known by you
as a consequence of or through your relationship with the 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 the Corporation and its affiliates.

          (b)  Noncompetition.  You acknowledge and agree that your services
               --------------
pursuant to this Agreement are unique and extraordinary, and that you will have
access to and control of

                                       47
<PAGE>

Confidential Information of the Corporation which is vital to the success of the
Corporation's business. You further acknowledge that because of your knowledge
of the Corporation's Confidential Information it is unlikely that you could work
for a competitor of the Corporation without divulging such confidential
information. You further acknowledge that the business of the 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 the Corporation under this Agreement, you hereby agree that
(i) during the term of this Agreement and for a twelve (12) month period,
commencing with your Date of Termination (collectively, the "Covenant Period"),
you shall not accept employment nor engage as a consultant with a competitor of
the Corporation in the health care real estate investment trust industry (a
"Competitor") if such position would be comparable to a position you held at any
time with the Corporation and where you cannot satisfy the Corporation, in its
reasonable judgement, that the new employer is prepared to and takes adequate
steps to preclude and prevent inevitable disclosure of the Corporation's
Confidential Information and (ii) that eligibility for severance payments and
other benefits under this Agreement are contingent upon your agreement and
compliance with the covenant as stated above in clause (i) of this Section 8(b).
No further payments nor eligibility for benefits continuation will be available
to your as of the date you commence employment/consulting in violation of these
covenants. It is a specific condition of the Agreement that if you commence
employment or engage as a consultant with a Competitor if such position would be
comparable to a position you held at any time with the Corporation, you shall
advise Competitor in writing of your obligations pursuant to this Agreement and
specifically disclose all covenants contained in this Section 8. It is also a
specific condition of this Agreement that so long as you are receiving any
payments or benefits under this Agreement with respect to any type of
termination, you shall be obligated to immediately notify the Corporation as to
the specifics of the new position that you are planning to commence as an
employee or consultant for a Competitor, and take affirmative steps to assure
the Corporation that you will not divulge any of the Corporation's Confidential
Information in your new employment or consulting arrangement.

          (c)  Non-Solicitation.  You hereby agree that, for the period
               ----------------
commencing on the Date of Termination and terminating on the first anniversary
thereof, you shall not, either on your 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 the 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 the Corporation; provided, however,
that a general advertisement to which an employee of the Corporation responds
shall in no event be deemed to result in a breach of this Section 8(c).

          41.  Governing Law; Venue.  The validity, interpretation, construction
               --------------------
and performance of this Agreement shall be governed on a non-exclusive basis by
the laws of the State of California without giving effect to its conflicts of
laws rules. For purposes of

                                       48
<PAGE>

jurisdiction and venue, the Corporation hereby consents to jurisdiction and
venue in any suit, action or proceeding with respect to this Agreement in any
court of competent jurisdiction in the state in which you reside at the
commencement of such suit, action or proceeding and waives any objection,
challenge or dispute as to such jurisdiction or venue being proper.

          42.  Joint and Several Liability.  Any successors or assigns shall be
               ---------------------------
jointly and severally liable with the Corporation under this Agreement.

          43.  Miscellaneous.  No provision of this Agreement may be modified,
               -------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. All references to
sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal, state or local
law. Any obligations of the Corporation under Sections 5 and 6 shall survive the
expiration of the term of this Agreement. The section headings contained in this
Agreement are for convenience only, and shall not affect the interpretation of
this Agreement.

          44.  Severability.  The invalidity or unenforceability of any
               ------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

          45.  Counterparts.  This Agreement may be executed in several
               ------------
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

          46.  Arbitration; Dispute Resolution, Etc.
               ------------------------------------

          (a)  Arbitration Procedure.  Any disagreement, dispute, controversy or
               ---------------------
claim arising out of or relating to this Agreement or the interpretation of this
Agreement or any arrangements relating to this Agreement or contemplated in this
Agreement or the breach, termination or invalidity thereof shall be settled by
final and binding arbitration 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, you and the Corporation shall select a mutually acceptable neutral
arbitrator from among the JAMS/Endispute panel of arbitrators. In the event you
and the Corporation cannot agree on an arbitrator, the Administrator of
JAMS/Endispute will appoint an

                                       49
<PAGE>

arbitrator. Neither you nor the 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 14. 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. The Corporation shall pay all fees and expenses of the
Arbitrator regardless of the result and shall provide all witnesses and evidence
reasonably required by you to present your case.

          (b)  Compensation During Dispute, Etc.  Your 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 the Corporation followed by a Dispute as
to whether you are entitled to the payments and other benefits provided under
this Agreement, then, during the period of that Dispute the Corporation shall
pay you fifty percent (50%) of the amount specified in Sections 5(c)(i) and
5(c)(ii) hereof, and the Corporation shall provide you with the other benefits
provided in Section 5(c) of this Agreement, if, but only if, you agree in
writing that if the Dispute is resolved against you, you shall promptly refund
to the Corporation all payments you receive 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 your favor, promptly
after resolution of the dispute the Corporation shall pay you 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.

          (c)  Legal Fees.  In addition to all other amounts payable to you
               ----------
under this Agreement, the Corporation shall pay to you all legal fees and
expenses incurred by you 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 your 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,

                                       50
<PAGE>

however, that in the event you commence such action, you shall not be entitled
to recover such fees and costs if the court determines that you brought the
claim in bad faith or the claim was frivolous. Any attorney's fees incurred by
you shall be paid by the Corporation in advance of the final disposition of such
action or challenge, as such fees and expenses are incurred; provided, however,
that you agree to repay such amounts, net of any income taxes paid or payable by
you with respect to such amounts, if such amounts are incurred in connection
with an action commenced by you if it is ultimately determined by the court that
you brought such action in bad faith or the claim was frivolous.

          47.  At-Will Employment.  Nothing in the foregoing diminishes or
               ------------------
alters the Corporation's policy of at-will employment for all employees, where
both the Corporation and you may terminate the employment relationship at any
time and for any reason, with or without cause or notice.

          48.  Entire Agreement.  This Agreement sets forth the entire agreement
               ----------------
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein,
including, without limitation, any prior severance agreements, is hereby
terminated and cancelled. Any of your rights hereunder shall be in addition to
any rights you may otherwise have under benefit plans or agreements of the
Corporation to which you are a party or in which you are a participant,
including, but not limited to, any Corporation sponsored employee benefit plans
and stock options plans. Provisions of this Agreement shall not in any way
abrogate your rights under such other plans and agreements.

          If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Corporation the enclosed copy of this letter,
which shall then constitute our agreement on this subject.

                                   Sincerely,

                                   HEALTH CARE PROPERTY INVESTORS, INC.

                                   By:______________________________
                                      Kenneth B. Roath
                                      Chairman, President and
                                      Chief Executive Officer

Agreed to this 16/th/ day
of October, 2000.

___________________________

                                       51

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