ex10_5.htm


    
      

    


    RESTATED
      AMENDMENT

    TO
      EMPLOYMENT AGREEMENT

    


    THIS
      RESTATED AMENDMENT is made
      effective as of May 7, 2007 (the “Restated Amendment Effective Date”), by and
      among Omega Healthcare Investors, Inc., a Maryland corporation (the “Company”)
      and Robert O. Stephenson (the “Executive”).

    


    RECITALS:

    


    The
      Company and the Executive are
      parties to an employment agreement effective as of September 1, 2004 (the
“Employment Agreement”);

    


    The
      parties amended the Employment
      Agreement, effective May 7, 2007, to extend the term of the Employment
      Agreement, update the base salary payable to the Executive, and remove the
      gross-up feature for payments made to the Executive that result in an excise
      tax
      in connection with a change in control (the “Original Amendment”).

    


    The
      Original Amendment contained a
      drafter’s error which reduced the time period over which severance will be paid
      to the Executive if he terminates employment for Good Reason or the Company
      terminates his employment without Cause.  The parties intended for the
      period over which severance will be paid under the aforementioned conditions
      to
      remain as first expressed in the Employment Agreement.

    


    In
      consideration of the mutual promises
      herein contained and other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the parties hereto agree to rescind
      the Original Amendment and replace it with this Restated Amendment to the
      Employment Agreement, effective as of the date first set forth above, as
      follows:

    


    1.  By
      deleting the first sentence of Section 2(a) and substituting therefor the
      following:

    


    “The
      Company shall pay the Executive base salary of $262,650 per annum, which base
      salary will be subject to review effective as of January 1, 2008, and at least
      annually thereafter by the Company for possible increases.”

    


    2.  By
      deleting the first sentence of Section 2(b) and substituting therefor the
      following:

    


    “The
      Executive shall be eligible for an
      annual bonus of up to 50% of the Executive’s annual base salary (“Bonus”), which
      Bonus, if any, shall be payable (i) promptly following the availability to
      the Company of the required data to calculate the Bonus for the year for which
      the Bonus is earned (which data may in the Company’s discretion include audited
      financial statements), and (ii) by no later than March 15 of the year
      following the year for which the Bonus is earned.”

    


    3.  By
      deleting the year “2007” where it appears in Section 2(b) and substituting
      therefor the year “2010.”

    


    4.  By
      deleting in its entirety Section 2(e) and substituting therefor the
      following:

    


    “(e)           Paid
      Time Off.  The Executive shall be entitled to paid time off in
      accordance with the terms of Company policy in effect at the Restated Amendment
      Effective Date.”

    


    5.  By
      deleting in its entirety Section 3(a) and substituting therefor the
      following:

    


    “(a)           Term.  The
      term of this Agreement shall begin as of the Restated Amendment Effective
      Date.  It shall continue through December 31, 2010, unless sooner
      terminated pursuant to Section 3(b) hereof (the ‘Term’).”

    


    6.  By
      deleting the last three sentences of Section 3(c)(i) and replacing therefor
      the
      following:

    


    “Such
      amount shall be paid in
      substantially equal annual installments not less frequently than twice per
      month
      over the eighteen (18) month period commencing as of the date of termination
      of
      employment; provided, however, if the Executive is a "specified employee" within
      the meaning of Section 409A of the Internal Revenue Code, as amended (the
“Code”), at the date of his termination of employment then, to the extent
      required to avoid a tax under Code Section 409A, payments which would otherwise
      have been made during the first six (6) months after termination of employment
      shall be withheld and paid to the Executive during the seventh month following
      the date of his termination of employment.  Notwithstanding the
      foregoing, if the total payments to be paid to the Executive hereunder, along
      with any other payments to the Executive, would result in the Executive being
      subject to the excise tax imposed by Code Section 4999, the Company shall reduce
      the aggregate payments to the largest amount which can be paid to the Executive
      without triggering the excise tax, but only if and to the extent that such
      reduction would result in the Executive retaining larger aggregate after-tax
      payments.  The determination of the excise tax and the aggregate
      after-tax payments to be received by the Executive will be made by the
      Company.  If payments are to be reduced, the payments made latest in
      time will be reduced first.”

    


    7.  By
      deleting the first sentence of Section 5(a) and substituting therefor the
      following:

    


    “The
      Executive agrees that during the
      Applicable Period, the Executive will not (except on behalf of or with the
      prior
      written consent of the Company, which consent may be withheld in Company’s sole
      discretion), within the Area either directly or indirectly, on his own behalf,
      or in the service of or on behalf of others, provide managerial services or
      management consulting services substantially similar to those Executive provides
      for the Company to any Competing Business.”

    


    8.  By
      deleting in its entirety Section 5(b) and substituting therefor the
      following:

    


    “(b)           The
      Executive agrees that during the Applicable Period, he will not, either directly
      or indirectly, on his own behalf or in the service of or on behalf of others
      solicit any individual or entity which is an actual or, to his knowledge,
      actively sought prospective client of the Company or any of its Affiliates
      (determined as of date of termination of employment) with whom he had material
      contact while he was an Executive of the Company, for the purpose of offering
      services substantially similar to those offered by the Company.”

    


    9.  By
      deleting the first sentence of Section 5(c) and substituting therefor the
      following:

    


    “The
      Executive agrees that during the
      Applicable Period, he will not, either directly or indirectly, on his own behalf
      or in the service of or on behalf of others, solicit for employment with a
      Competing Business any person who is a management level employee of the Company
      or an Affiliate with whom Executive had contact during the last year of
      Executive’s employment with the Company.”

    


    10.  By
      deleting the year “2007” where it appears in Section 5(f) and substituting
      therefor the year “2010.”

    


    11.  By
      deleting in its entirety Section 9(c) and substituting therefor the
      following:

    


    “(c)           ‘Area’
      means Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida,
      Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts,
      Missouri, New Hampshire, North Carolina, Ohio, Pennsylvania, Rhode Island,
      Tennessee, Texas, Utah, Vermont, Washington, and West Virginia.”

    


    12.  By
      adding
      the word “Restated Amendment” immediately preceding the term “Effective Date”
where it appears in the head language of Section 9(f).

    


    In
      all remaining respects, the terms of
      the Employment Agreement shall remain in full force and effect as prior to
      this
      Restated Amendment.

    


    IN
      WITNESS WHEREOF, the parties have
      caused this Restated Amendment to be executed this 24th day of
      July,
      2007.

    


    OMEGA
      HEALTHCARE INVESTORS, INC.:

    


    By:
      _______________________________________

    


    Print
      Name:
      ________________________________

    


    Title:
      _____________________________________

    


    


    


    ROBERT
      O.
      STEPHENSON:

    


    


    __________________________________________