Exhibit 10.396

FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

THIS FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
(this "Amendment") is made and entered into as of the 25th day of March, 2015,
by and among ADCARE HEALTH SYSTEMS, INC., a Georgia corporation (the "Company"),
and WILLIAM MCBRIDE, III ("Executive").

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into that certain Employment
Agreement dated as of October 10, 2014 (the "Employment Agreement");

WHEREAS, the Company and Executive desire to amend the Employment Agreement as
set forth herein; and

WHEREAS, capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Employment Agreement;

NOW, THEREFORE, in consideration of the terms and conditions of this Amendment,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto each agree as set forth below.

1.Amendments to the Employment Agreement. The Employment Agreement is hereby
amended as set forth below.

(a)Amendment to Section 5(a) of the Employment Agreement. The first (1st)
sentence of Section 5(a) of the Employment Agreement is hereby amended and
restated as follows:

During the Employment Period, the Company will pay to Executive a base salary at
the rate of at least $300,000 per year less normal withholdings, payable in
equal monthly or more frequent installments as are customary under the Company's
payroll procedures from time to time.

(b)Amendment to the 8th and 9th Sentences of Section 5(c) of the Employment
Agreement. The eighth (8th) and ninth (9th) sentences of Section S(c) of the
Employment Agreement are hereby amended and restated as follows:

Executive shall make an I.R.C. Section 83(b) election (the "Election") in 2015
with regard to the Subsequent Restricted Stock Award to accelerate Executive's
recognition of the income from the Subsequent Restricted Stock Award such that
it is treated as income to Executive in the year of grant for state and federal
income tax purposes. In addition to all other compensation due to Executive

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hereunder, the Company shall also pay Executive a bonus, with respect to each
applicable year, in an amount equal to the tax liability Executive incurs as a
result of the vesting of the Initial Restricted Stock Award and making the
Election with respect to the Subsequent Restricted Stock Award (regardless of
whether such vesting occurs as result of the passage of time or pursuant to
Section 7(b)(iii) of this Agreement) (each, a "Tax Payment Bonus"), which
payment shall be "grossed up" to compensate for the additional tax liability
Executive incurs as a result of receiving the Tax Payment Bonus such that the
Company fully and completely reimburses Executive for any state and federal
income tax liability Executive incurs as a result of the vesting of the Initial
Restricted Stock Award and making the Election with respect to the Subsequent
Restricted Stock Award.

(c)Amendment to Section 5(c) of the Employment Agreement by Adding a New Final
Sentence. The following sentence is added to the end of Section 5(c) and
constitutes Section 5(c)'s final sentence:

Unless required to be paid earlier pursuant to Section 7(d) of this Agreement,
the Tax Payment Bonus shall be payable on the date on which annual bonuses are
paid to senior executives generally, but in no event later than two-and-one-half
(2½) months following the end of the fiscal year in which the vesting of the
Restricted Stock Award occurs.

(d)Amendment to Section 7(b)(iii) of the Employment Agreement. Section 7(b)(iii)
is hereby amended and restated as follows:

To the extent any portion of the Restricted Stock Awards and the Common Stock
underlying the Warrant are not fully vested as of the Termination Date: (A) such
vesting periods shall automatically accelerate such that the Restricted Stock
Awards and the Warrant shall be fully vested as of the Termination Date; and (B)
Executive shall receive a lump sum amount equal to the Tax Payment Bonus in
connection with the vesting of the Restricted Stock Awards; and

2.Existing Terms. The existing terms and conditions of the Employment Agreement
shall remain in full force and effect except as such terms and conditions are
specifically amended by, or in conflict with, the terms of this Amendment.

3.Governing Law. Except to the extent preempted by federal law, the laws of the
State of Georgia shall govern this Amendment in all respects, whether as to its
validity, construction, capacity, performance or otherwise.

4.Amendment and Modification. This Amendment may be amended or modified only by
a writing signed by all parties hereto that makes specific reference to this
Amendment.

5.Counterparts. This Amendment may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same

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instrument.

6.Entire Agreement. Except as provided herein, this Amendment contains the
entire agreement between the Company and Executive with respect to the subject
matter hereof. No representations, inducements, promises or agreements, oral or
otherwise, which are not embodied herein shall be of any force or effect.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first set forth above.

ADCARE HEALTH SYSTEMS, INC.

                            
 
 
By:
/s/ David A. Tenwick
Name:
David A. Tenwick
Title:
Director

            

 
/s/ William McBride, III
WILLIAM MCBRIDE, III
 

                                
                            

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