EXHIBIT 10.23
AMENDMENT NO. 1 TO AGREEMENT
This Amendment No. 1 to Agreement dated as of December 6,
1994 (this "Amendment"), between The Hillhaven Corporation, a
Nevada corporation (the "Company"), and _____________ (the
"Executive").
WITNESSETH:
WHEREAS, the Company and the Executive are parties to that
certain Agreement dated as of May 24, 1994 (the "Agreement"); and
WHEREAS, the Agreement provides for certain payments by the
Company to the Executive in the event that a Change of Control,
as defined in the Agreement, occurs; and
WHEREAS, the Board of Directors of the Company has
authorized the Company to amend all compensation, incentive and
benefit plans and other employment arrangements which contain a
"Change of Control" provision in the manner set forth below; and
WHEREAS, the Employee also desires to amend the Agreement in
the manner set forth below.
NOW, THEREFORE, for and in consideration of the premises,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Amendment. The Agreement is hereby amended by deleting
Section 1 in its entirety and substituting the following in lieu
thereof:
"1. Definitions. For purposes of this Agreement, the
terms set forth in this Section shall have the
following meanings:
A. A "Change of Control" shall be deemed to
occur if any of the following events has
occurred:
i. A Person, alone or together with its
Affiliates and Associates, or "group",
within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934,
becomes, after the date hereof, the
beneficial owner of 20% or more of the
general voting power of the Company.
Notwithstanding the preceding sentence,
a Change of Control shall not be deemed
to occur if the "Person" described in
the preceding sentence has acquired 20%
or more of the general voting power of
the Company as consideration in a
transaction or series of related
transactions involving the Company's
acquisition (by stock acquisition,
merger, asset purchase or otherwise) of
one or more businesses approved prior to
such transactions or series of
transactions by the Incumbent Board (as
defined in (ii) below), and, provided
that, if such transaction or series of
transactions results in the merger,
consolidation or reorganization of the
Company and such Person, the Company is
the surviving entity following such
merger, consolidation or reorganization.
ii. Individuals who, as of the date hereof,
constitute the Board (the "Incumbent
Board"), cease for any reason to
constitute at least a majority of the
Board, provided that any person becoming
a director subsequent to the date hereof
whose election, or nomination for
election by the Company's stockholders,
was approved by a vote of at least a
majority of the directors then
comprising the Incumbent Board (other
than an election or nomination of an
individual whose initial assumption of
office is in connection with an actual
or threatened election contest relating
to the election of the directors of the
Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated
under the Securities Exchange Act of
1934) shall be considered as though such
person were a member of the Incumbent
Board.
iii. Consummation or effectiveness of:
a. a merger, consolidation or reorganization
involving the Company (a "Business
Combination"), unless
1. the stockholders of the Company,
immediately before the Business
Combination, own, directly or indirectly
immediately following the Business
Combination, at least fifty-one percent
(51%) of the combined voting power of
the outstanding voting securities of the
corporation resulting from the Business
Combination (the "Surviving
Corporation") in substantially the same
proportion as their ownership of the
voting securities immediately before the
Business Combination, and
2. the individuals who were members of
the Incumbent Board immediately prior to
the execution of the agreement providing
for the Business Combination constitute
at least a majority of the members of
the Board of Directors of the Surviving
Corporation, and
3. no Person (other than any Person
who, immediately prior to the Business
Combination, had beneficial ownership of
twenty percent (20%) or more of the then
outstanding Voting Securities) has
Beneficial Ownership of twenty percent
(20%) or more of the combined voting
power of the Surviving Corporation's
then outstanding voting securities;
b. a complete liquidation or dissolution of
the Company; or
c. the sale or other disposition of all or
substantially all of the assets of the
Company to any Person.
B. "Affiliate or Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the
Securities Exchange Act of 1934.
C. "Person," for the purpose of this Section, means
an individual, firm, corporation or other entity
or any successor to such entity, but "Person"
shall not include the Company, any subsidiary of
the Company, any employee benefit plan or employee
stock plan (including a trust relating thereto) of
the Company or any subsidiary of the Company, or
any Person organized, appointed, established or
holding Voting Stock by, for or pursuant to the
terms of such a plan. "Person" shall also not
include National Medical Enterprises, Inc.
("NME"), any subsidiary of NME, any Affiliate or
Associate of NME, any employee benefit plan or
employee stock plan of NME or any subsidiary of
NME to the extent that such entities, individually
or collectively, own any or all of (x) the
8,878,147 shares of the Company's common stock
(approximately 31% of the general voting power of
the Company as of the date hereof) registered in
the name of NME or any subsidiary of NME as of the
date of this Agreement, or (y) such additional
number of shares of the Company's common stock
issued to NME or any subsidiary of NME in exchange
for shares of the Company's Series C Preferred
Stock or Series D Preferred Stock so long as such
exchange has been approved in advance by the
Incumbent Board.
D. "Voting Stock" means shares of the Company's capital
stock having general voting power, with "voting power"
meaning the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in
the election of directors.
E. "Cause" shall mean: the willful, substantial,
continued and unjustified refusal of the Executive to
perform the duties of his or her office to the extent
of his or her ability to do so; any conduct on the part
of the Executive which constitutes a breach of any
statutory or common law duty of loyalty to the Company;
any illegal or publicly immoral act by the Executive
which materially and adversely affects the business of
the Company; the physical or mental disability of the
Executive as determined by the Board of Directors of
the Company and resulting in his or her inability to
perform his or her duties hereunder; or the death of
the Executive."
2. Effect on Agreement. Except as expressly amended by
this Amendment, all of the terms and conditions of the Agreement
shall remain in full force and effect.
3. Captions. The captions and headings used herein are
for convenience of reference only and shall not be construed in
any manner to limit or modify any of the terms hereof.
4. Counterparts. This Amendment may be executed in
counterparts, each of which shall be an original, but all of
which together shall constitute but one and the same instrument.
5. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Washington.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Amendment as of the date first set forth above.
THE HILLHAVEN CORPORATION
By:____________________________________
Its:___________________________________
______________________________________
Executive
