ASSISTED LIVING CONCEPTS INC
EX 10.2 AMENDMENT TO LINDA MARTIN'S EMPLOYMENT AGREEMENT
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<DESCRIPTION>EX 10.2 AMENDMENT TO LINDA MARTIN'S EMPLOYMENT AGREEMENT
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<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;10.2</B>



<P align="center" style="font-size: 10pt"><B>AMENDMENT TO EMPLOYMENT AGREEMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Amendment to Employment Agreement, dated August&nbsp;12, 2002 (the
&#147;Original Employment Agreement&#148;), dated as of July&nbsp;16, 2004, is entered into by
and between Assisted Living Concepts, Inc. (the &#147;Company&#148;) and Linda Martin
(the &#147;Employee&#148;).


<P align="center" style="font-size: 10pt"><B>RECITALS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whereas, the Employee is Senior Vice President and Chief Operating Officer
of the Company and is party to the Original Employment Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whereas, the Company desires to amend the Original Employment Agreement to
provide certain additional benefits to the Employee as provided herein.


<P align="center" style="font-size: 10pt"><B>AGREEMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Employee agree
as follows:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Sale of the Company Defined. A &#147;Sale of the Company&#148; shall mean the
occurrence of any of the following:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the sale of all or substantially all of the assets of the Company and
its subsidiaries, taken as a whole, to any individual or entity (a &#147;Person&#148;) or
group of Persons;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the consummation of any consolidation, liquidation, recapitalization,
stock sale or merger involving the Company:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;in which the Company is not the continuing or surviving corporation,
other than a consolidation or merger:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;with a wholly-owned subsidiary of the Company in which all of the
common stock of the Company outstanding immediately prior to the effectiveness
thereof is changed into or exchanged for the same consideration, or


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;in which the stockholders of the Company immediately prior to the
consummation of such consolidation or merger own greater than 50% of the total
voting power of all classes of capital shares of the continuing or surviving
corporation immediately following the consummation of such consolidation or
merger;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;pursuant to which the shares of common stock of the Company are
converted into cash, securities, or other property, unless the stockholders of
the Company immediately prior to the consummation of such consolidation or
merger own greater than 50% of the total voting power of all classes of capital
shares of the continuing or surviving corporation immediately following the
consummation of such consolidation, merger, liquidation, recapitalization or
sale of stock; or


<P align="left" style="font-size: 10pt">Page 1 &#151; AMENDMENT TO EMPLOYMENT AGREEMENT



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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;pursuant to which the stockholders immediately prior to the
consummation of such consolidation, merger, liquidation, recapitalization or
sale of stock hold 50% or less of the total voting power of all classes of
capital shares of the continuing or surviving corporation immediately following
the consummation of such consolidation, merger, liquidation, recapitalization
or sale of stock.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Sale Incentive Compensation. Upon the consummation of a Sale of the
Company, Employee shall receive a cash bonus (the &#147;Sale Incentive Bonus&#148;) equal
to &nbsp;&nbsp;&nbsp;% of the Bonus Pool. The Bonus Pool shall be equal to (a)&nbsp;the
applicable percentage (the &#147;Percentage&#148;) set forth below, multiplied by (b)&nbsp;the
final adjusted aggregate proceeds in excess of the Base Amount (currently
$71,235,520 as calculated and based on the assumptions described below)
distributed or distributable to the Company&#146;s stockholders and option holders
as a result of the Sale of the Company (the &#147;Excess Proceeds&#148;), determined as
follows:

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    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Excess Proceeds</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percentage</B><HR size="1" noshade></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px">Zero to $7,051,965</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">More than $7,051,965 but not more than $14,175,485</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">More than $14,175,485 but not more than $21,299,005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">More than $21,299,005 but not more than $28,422,525</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">6</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">More than $28,422,525</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">7</TD>
    <TD nowrap>%</TD>
</TR>

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Base Amount shall equal the final adjusted aggregate amount of the
Company&#146;s securities to be purchased in connection with a sale of the Company,
including the amount of issued and outstanding shares of the Company&#146;s common
stock (currently, 6,431,925 shares), all shares held in the reserve from the
bankruptcy (currently, 68,241 shares), and outstanding options (currently
623,354), the sum of which is currently 7,123,520 times $10 equals $71,235,520.
By way of example, if the Company received an offer of $11.80 per share for all
of its securities, the Excess Proceeds would be calculated as follows:
7,123,520 x $11.80 = $84,057,536 minus $71,235,520 (the Base Amount) =
$12,822,016. The applicable percentage would be 4% and the Bonus Pool would be
$12,822,016 x 4% = $512,880.64 of which Employee would receive $210,281.06.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sale Incentive Bonus shall terminate and be of no further force or
effect upon the earlier of the date that the Board adopts a resolution to cease
exploring strategic alternatives or dissolves the Special Committee established
by the Board on May&nbsp;14, 2004 to explore strategic alternatives.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Change in Control Severance Benefit. If within twelve (12)&nbsp;months
after the occurrence of a Change in Control (as defined below) (a)&nbsp;the Company
terminates the Employee&#146;s employment for any reason or (b)&nbsp;the Employee resigns
at any time after any diminution in the Employee&#146;s job title, duties or
compensation or the relocation of the Employee, without the Employee&#146;s consent,
to an office in a different geographic region than the region in which the
Employee resided as of the occurrence of the Change in Control, the Company
shall continue to pay to the Employee for twelve (12)&nbsp;months thereafter the
Employee&#146;s salary in effect as of the date of the Employee&#146;s termination or
resignation.


<P align="left" style="font-size: 10pt">Page 2 &#151; AMENDMENT TO EMPLOYMENT AGREEMENT



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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Change in Control shall mean:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Sale of the Company; or


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the acquisition by any Person individually or any Persons acting
together that would constitute a &#147;group&#148; for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), together with
any affiliates thereof, of beneficial ownership (as defined in Rule&nbsp;13d-3 under
the Exchange Act) of greater than 50% of the total voting power of all classes
of capital shares of the Company entitled to vote generally in the election of
directors of the Company; or


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the first day on which a majority of the members of the Board of
Directors of the Company (the &#147;Board&#148;) are not Continuing Directors. A
Continuing Director shall mean, as of the date of determination, any member of
the Board who was a member of the Board on June&nbsp;18, 2004 or was nominated for
election by, or elected to the Board with the approval of, a majority of the
persons who were members of the Board on June&nbsp;18, 2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding clause (a)&nbsp;of Section&nbsp;1, a Change in Control cannot be
deemed to have occurred as a result of a transaction in which the holders of
the shares of common stock of the Company immediately prior to the sale of all
or substantially all of the Company&#146;s assets have immediately after such asset
sale, directly or indirectly, more than 50% of the total voting power of all
classes of capital shares of the corporation to which such assets were sold.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding clause (b)&nbsp;of this Section&nbsp;3, a Change in Control will not
be deemed to have occurred solely by virtue of any of the following Persons
filing or becoming obligated to file a report under or in response to Schedule
13D or Schedule&nbsp;14D-1 (or any successor schedule, form, or report) under the
Exchange Act disclosing beneficial ownership by it of shares or securities of
the Company, of greater than 50% of the total voting power of all classes of
capital stock of the Company or otherwise: (1)&nbsp;the Company; (2)&nbsp;any subsidiary
of the Company; (3)&nbsp;any employee share purchase plan, share option plan, or
other share incentive plan or program; (4)&nbsp;any retirement plan or automatic
dividend reinvestment plan; or (5)&nbsp;any substantially similar plan of the
Company or any subsidiary of the Company or any Person holding securities of
the Company for or pursuant to the terms of any such employee benefit plan.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the severance benefits provided for in this Section&nbsp;3 are available
pursuant to the terms contained herein, such severance benefits shall be in
lieu of the severance benefits associated with termination without cause
currently provided in Section 7(d) of the Original Employment Agreement. The
change in control severance benefits provided in this Section&nbsp;3 shall terminate
and be of no further legal force or effect on the 180th calendar day after the
earlier of the date that the Board adopts a resolution to cease exploring
strategic alternatives or dissolves the Special Committee established by the
Board on May&nbsp;14, 2004 to explore strategic alternatives. Severance benefits
currently provided in Section 7(d) of the Original Employment Agreement
associated with death and disability shall remain unchanged.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Governing Law; Arbitration. The Original Employment Agreement, as
amended by this Amendment, shall be governed by and construed in accordance
with the laws of the State


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<P align="left" style="font-size: 10pt">of Texas as applied to agreements between Texas residents entered and to
be performed entirely within Texas. Any dispute between the Employee and the
Company arising under or related to this Agreement or otherwise concerning the
employment of the Employee by the Company or the termination of such employment
shall be resolved by submitting the matter to binding arbitration in accordance
with this Section&nbsp;5. Arbitration shall be conducted in Dallas, Texas pursuant
to the procedural rules then in effect of the American Arbitration Association
and shall be heard by a single arbitrator, reasonably agreed to by the parties,
who shall be an attorney at law licensed to practice and in good standing in
the State of Texas and knowledgeable in employment matters. If the parties
cannot agree to an arbitrator within 30&nbsp;days of the date either party initiates
the arbitration, the American Arbitration Association shall appoint an
arbitrator. The decision of such arbitrator shall be final and binding on the
parties and may be entered for enforcement in any court or tribunal of
competent jurisdiction and authority. The arbitrator shall award such damages
or other relief as the arbitrator deems appropriate and may, but shall not be
required to, award legal fees and costs to the prevailing party. All costs of
such arbitration (excluding fees, disbursements and expenses of counsel,
advisors, witnesses and experts) shall be borne equally by the parties, subject
to the arbitrator&#146;s award of costs and legal fees, if any.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Counterparts. This Amendment may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and both of which
together shall constitute a single Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Original Employment Agreement. Except as expressly amended hereby, all
terms and conditions of the Original Employment Agreement are unchanged and
shall remain in full force and effect.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Headings. The various headings in this Amendment are inserted for
convenience only and are not part of this Amendment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In Witness Whereof, the Company and Employee have duly executed this
Amendment as of the day and year first written above.

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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">COMPANY:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">EMPLOYEE:</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Assisted Living Concepts, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By /s/ LEONARD TANNENBAUM
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ LINDA MARTIN</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leonard Tannenbaum, Chairman of
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Linda Martin, Senior Vice President</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Compensation Committee
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">and Chief Operating Officer</TD>
</TR>

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