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EXHIBIT 10.3
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is made and
entered into and is effective as of April 23, 1997, by and between ARV ASSISTED
LIVING, INC., a California corporation (the "Company"), and XXXXXX X.
XXXXXX-XXXXX, an individual (the "Employee"), the parties to the certain
Employment Agreement dated and effective as of October 1, 1995 (the "Employment
Agreement").
RECITAL
Whereas, the parties to the Employment Agreement desire to amend the
Employment Agreement as set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. Paragraph 7.3 of the Employment Agreement shall be amended and
restated as follows:
7.3 CHANGE IN CONTROL. Notwithstanding anything to the contrary
contained in Section 7.2 hereof, following a change in the ownership, or
effective control of the Company or in the ownership of a substantial
portion of the Company's assets (any one of which shall be referred to
herein as "Change in Control"), in the event Employee's employment is
terminated either voluntarily or involuntarily within three (3) months of
the Change in Control, the Company shall immediately pay to Employee the
Base Salary, that portion of Employee's Minimum Bonus which shall have
been earned but unpaid as of the Change in Control (assuming that the
Minimum Bonus shall have been earned on a daily basis and, but for a
Change in Control, payable only on a quarterly basis), Employee's accrued
vacation and reimbursable expenses through the date of Change in Control,
and an amount equal to three (3) times the total compensation received by
Employee during the immediately preceding calendar year (the "Change in
Control Bonus"); provided, however, that, if applicable, the amount of the
Change in Control Bonus shall be reduced so that no portion of the Change
in Control Bonus shall be deemed to be an "excess parachute payment" under
Section 280G of the Internal Revenue Code of 1986, as amended, or any
replacement statute. The determination of the existence of an "excess
parachute payment" shall be made by the Company's independent accountants
who prepare and file the federal income tax returns for the Company. In
addition, any options to purchase the common stock of the Company
previously granted to Employee and not otherwise vested shall be fully
vested as of the date of the Change in Control. The Company shall pay the
expenses incurred by such
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accountants pursuant to this Section. Generally, for the purposes of this
Section: (i) "change in the ownership of the Company" shall mean the date
that any person or persons acting as a group, acquires ownership of the
capital stock of the Company and the acquired capital stock together with
capital stock held by such person or group, gives the acquiring person or
group possession of more than fifty percent (50%) of the total fair market
value or the total voting power of the capital stock of the Company; (ii)
"change in effective control of the Company" shall mean that either: (A)
any one person, or more than one person acting as a group, would acquire
(or had acquired during the twelve (12) - month period ending on the date
of the most recent acquisition by such person or persons) ownership of the
capital stock of the Company possessing fifty percent (50%) or more of the
total voting power of the capital stock of the Company; or (B) a majority
of the members of the Board was replaced during any twelve (12) - month
period by directors whose appointment or election was not endorsed by a
majority of the members of the Board prior to the date of such appointment
or election; and (iii) "change in ownership of a substantial portion of
the Company's assets" shall mean the date on which one person, or more
than one person acting as a group, would acquire (or had acquired during
the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a
total fair market value equal to, or more than, thirty three and one-third
percent (33-1/3%) of the total fair market value of all of the assets of
the Company immediately prior to such acquisitions. All determinations of
the applicability of this Section shall be made consistent with the
Proposed Regulations Section 1.280G-1 promulgated by the Internal Revenue
Service, or any successor regulations.
3. Paragraph 9 of the Employment Agreement shall be amended by adding
the following clause:
This Section 9 shall not apply in the event of a Change in Control
under Section 7.3. Further, this Section 9 shall not apply in the event of
termination of employment as described in Section 7.2.1 or Section 7.2.2;
provided, however, that Employee shall first waive in writing all rights
to receive severance pay other than amounts due by law.
The remaining provisions of the Employment Contract shall remain
unmodified and in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
to Employment Agreement as of the date first written above.
THE COMPANY
ARV Assisted Living, Inc., a
California Corporation
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Its: President
EMPLOYEE
/s/ Xxxxxx X. Xxxxxx-Xxxxx
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Xxxxxx X. Xxxxxx-Xxxxx
