Document:

<PAGE>
                                                                   Exhibit 10.23

                              EMPLOYMENT AGREEMENT
                               (LOCATION SPECIFIC)

         This Employment Agreement (the "AGREEMENT") is entered into effective
January 1, 2001, by and between Assisted Living Concepts, Inc., a Nevada
corporation (the "COMPANY"), and Ron W. Kerr (the "EXECUTIVE").

                                    RECITALS:

         WHEREAS, the Company and Executive entered into an Employment
Agreement, dated December 8, 1998, which by its terms expired December 31, 2000
(the "EXPIRING EMPLOYMENT AGREEMENT").

         WHEREAS, the parties desire to enter into this Employment Agreement
(the "AGREEMENT"), which is to supersede and replace the Expiring Employment
Agreement, to be effective January 1, 2001 (the "EFFECTIVE DATE").

                                   AGREEMENTS:

         NOW, THEREFORE, in consideration of the foregoing recitals and the
respective covenants and agreements of the parties contained in this document,
the Company and Executive agree as follows:

         1. EMPLOYMENT AND DUTIES. Executive will serve in Executive's present
position as Vice President of the Eastern Region of the Company or in such other
capacity as the Board of Directors may request, so long as Executive shall have
the same or similar responsibilities at the Work Location (as defined in
PARAGRAPH 3). The duties and responsibilities of Executive shall include the
duties and responsibilities that the Board of Directors of the Company may from
time to time reasonably assign Executive, in all cases to be consistent with
Executive's corporate office and position at that time. Executive shall devote
full time to the business of the Company and shall faithfully perform Executive
duties assigned to Executive to the best of Executive's ability.

         2. EMPLOYMENT PERIOD.

                  (a) NORMAL TERM. This Agreement and Executive's employment
shall be for the initial term of one (1) year, with an automatic rollover at the
end of each year from and after the Effective Date for an additional year unless
terminated by the Company by its providing written notice of such termination to
Executive within 90 days prior to the anniversary of the Effective Date (in
which event Executive shall have one year of employment remaining until the
termination of this Agreement, unless Executive's employment and this Agreement
are terminated earlier pursuant to PARAGRAPHS 2(b-f) AND 11(a)(i)). For example,
in the event that Executive were an employee on January 1, 2002 and the Company
did not
<PAGE>
                                                                   Exhibit 10.23

provide written notice to Executive between October 3, 2001 and December 31,
2001, that this Agreement would expire on January 1, 2003, then the term of this
Agreement would automatically rollover an additional year to January 1, 2003,
from January 1, 2002. On the other hand, if the Company were to provide written
notice to Executive of the termination of this Agreement within 90 days prior to
the anniversary date of January 1, 2002, then this Agreement would terminate on
January 1, 2003 (unless terminated earlier pursuant to PARAGRAPHS 2(b-f) AND
11(a)(i)), and there would be no automatic rollover.

                  (b) INVOLUNTARY TERMINATION WITHOUT CAUSE. Subject to the
provisions of PARAGRAPH 11(A)(I), the Company may terminate Executive's
employment and this Agreement at any time without Cause by providing Executive
at least thirty (30) days advance notice in writing.

                  (c) INVOLUNTARY TERMINATION FOR CAUSE. The Company may
terminate Executive's employment and this Agreement for Cause by providing
Executive notice in writing. For all purposes under this Agreement, "CAUSE"
shall include, without limitation, the following, as determined by the Company
in its sole discretion and judgment: (i) Executive's material failure to perform
Executive's duties; (ii) Executive's failure to act in a professional manner if
such failure causes material damage to the Company; (iii) Executive's breach of
this Agreement; or (iv) Executive's engaging in fraud, breach of fiduciary duty,
or any other act of similar willful misconduct or gross negligence in the
performance of Executive's duties on behalf of the Company. No Severance Pay, as
defined in PARAGRAPH 11(a)(i), will be due Executive under this Agreement in the
event of a termination for Cause. Executive's rights under any applicable
benefit plans of the Company shall be determined under the provisions of those
plans.

                  (d) DEATH. Executive's employment and this Agreement will
terminate automatically in the event of Executive's death. No Severance Pay will
be due Executive's estate under this Agreement in the event of Executive's
death.

                  (e) DISABILITY. If Executive should be disabled for more than
three (3) consecutive months, this Agreement and Executive's employment may be
terminated by the Company. Solely for purposes of this PARAGRAPH 2(E), Executive
shall be considered disabled if, as a result of illness or injury he suffers
from a physical or mental condition that prevents the performance on a full-time
basis of Executive's duties under this Agreement. No Severance Pay will be due
Executive under this Agreement in the event of Executive's disability.

                  (f) RESIGNATION WITHOUT CAUSE. Executive may terminate
Executive's employment and this Agreement by providing the Company at least
thirty (30) days advance written notice; provided that in such event, Executive
will cease performing any duties and responsibilities immediately or at any time
during such thirty (30) day period, if so requested by the Company.
<PAGE>
                                                                   Exhibit 10.23

In the event Executive's employment terminates for any reason during the term of
this Agreement, then this Agreement shall likewise terminate on the same date;
provided, however, that PARAGRAPHS 11, 12, 14 and 16 of this Agreement shall
survive its termination.

         3. PLACE OF EMPLOYMENT. Executive's services shall be performed at
Executive's present place of business (the "WORK LOCATION"), as described below
Executive's signature to this Agreement. Notwithstanding the foregoing,
Executive understands that Executive is expected to travel extensively in
carrying out Executive's duties with the Company.

         4. BASE SALARY. For all services to be rendered by Executive pursuant
to this Agreement, the Company agrees to pay Executive an annual salary (the
"BASE SALARY") of $130,000. The Base Salary shall be paid in accordance with the
Company's regular payroll practices.

         5. BONUS. For each fiscal year during Executive's employment with the
Company under this Agreement, Executive will be eligible to receive an annual
bonus (the "BONUS") based upon an Executive Incentive Compensation Plan (the
"PLAN"). The Plan for fiscal year 2001 is set forth in EXHIBIT "A," which is
attached hereto and incorporated herein by this reference. Executive shall be
eligible to receive a prorata share of any Bonus under the Plan attributable to
any year during the Term hereof. In the event Executive's employment is
terminated by the Company, as described in PARAGRAPH 11(a)(i), then Executive
shall be entitled to receive a portion of the Bonus only as provided in
PARAGRAPH 11(b).

         6. EXPENSES. Executive shall be entitled to reimbursement by the
Company for all reasonable, ordinary and necessary travel, entertainment and
other expenses incurred by Executive during the term of this Agreement (in
accordance with the policies and procedures established by the Company for its
senior executive officers) in the performance of his/her duties and
responsibilities under this Agreement; provided, however, that Executive shall
properly account for such expenses in accordance with the Company's policies and
procedures.

         7. BENEFITS. Executive shall be entitled to participate in employee
benefit plans or programs of the Company, if any, to the extent that his/her
position, tenure, salary, age, health and other qualifications make him/her
eligible to participate, subject to the rules and regulations applicable
thereto.

         8. VACATIONS AND HOLIDAYS. In accordance with the Company's policies in
effect from time to time, Executive shall be entitled to paid vacation time of
at least 20 days and Company holidays. Executive's right to carryover accrued
unused vacation shall be governed by the Company's policy then in effect.

         9. STOCK OPTIONS. Executive shall be eligible as an officer of the
Company to receive grants of nonqualified stock options under the 1994 Amended
and Restated Stock Option Plan as may be determined by the Board of Directors.
<PAGE>
                                                                   Exhibit 10.23

         10. [INTENTIONALLY DELETED.]

         11. TERMINATION BENEFITS. In the event Executive's employment
terminates, then Executive shall be entitled to only that compensation and those
benefits earned and accrued as of the date of termination and further shall be
entitled to receive Severance Pay, if any, and other benefits only as follows:

                  (a) SEVERANCE.

                           (i) INVOLUNTARY TERMINATION WITHOUT CAUSE. The
Company may terminate this Agreement and Executive's employment without cause at
any time by providing Executive at least thirty (30) days advance notice in
writing. For purposes of this Agreement, "INVOLUNTARY TERMINATION WITHOUT
CAUSE," shall be deemed to have occurred: if the Company substantially changes
the duties and responsibilities of Executive and Executive has resigned within
three (3) months of the effective date of such changes; or if the Company
changes Executive's Work Location to a work location 20 miles or more farther
from Executive's present Work Location and Executive has resigned within three
(3) months of the effective date of such change in Work Location; or if there is
a Change of Control (defined below) and Executive is involuntarily terminated
for any reason within six (6) months of the Change in Control; or, if the
Company terminates Executive's employment other than for Cause, death or
disability. In the event of an Involuntary Termination Without Cause, if
Executive has executed, delivered and abided by a Separation Agreement and
Release, substantially in the form attached hereto as EXHIBIT "B" and
incorporated herein by this reference, then Executive shall be entitled to
receive $130,000, less applicable withholding ("SEVERANCE PAY"), which Company
shall pay to Executive in periodic installments in accordance with the Company's
regular payroll practices over a period of twelve (12) months; provided,
however, that even if Executive executes, delivers and abides by the Separation
Agreement and Release, the Company's obligations hereunder shall cease upon a
breach by Executive of his obligations under PARAGRAPHS 12, 14 AND 16 hereof.
For purposes of this Agreement, "CHANGE OF CONTROL" shall mean the occurrence of
any of the following events subsequent to the Effective Date:

                                    (1) Any "person" (such as the term is used
in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities; or

                                    (2) Any merger or consolidation of the
Company with any other corporation, other than a merger or consolidation that
would result in the voting securities of the Company immediately prior thereto
continuing to represent fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities (either by
remaining outstanding or by being converted into voting securities
<PAGE>
                                                                   Exhibit 10.23

of the Company or such other surviving entity outstanding immediately after such
merger or consolidation); or

                                    (3) A majority of the directors of the
Company which were not nominated by the Company's management (or were nominated
by management pursuant to an agreement with person that acquired sufficient
voting securities of the Company to de facto control it) are elected to the
Board of Directors by the Company's shareholders; or

                                    (4) The shareholders of the Company approve
a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.

                           (ii) OTHER TERMINATION. In the event of termination
on any basis or for any reason other than those stated in PARAGRAPH 11(a)(i),
then Executive shall not be entitled to receive any Severance Pay or any other
benefits, except as may be provided in the Company's severance and benefit plans
and policies at the time of such termination.

                  (b) BONUSES. In the event Executive's employment is terminated
by the Company as described in PARAGRAPH 11(a)(i) above, then Executive shall be
entitled to receive a portion of the Bonus, computed under the Company's
Executive Incentive Compensation Plan referred to in PARAGRAPH 5, which Bonus
will be determined, after the end of the fiscal year, by multiplying the amount
of the Bonus which would have become payable to Executive had he remained
employed until the end of the fiscal year, by a fraction, the numerator of which
will be the number of days Executive was employed by the Company in such fiscal
year, and the denominator of which shall be the number of days in the fiscal
year. In the event Executive's employment terminates for any other reason, then
Executive shall not be entitled to any Bonus which has not accrued as of such
date.

         12. PROPRIETARY INFORMATION. Executive shall not, without the prior
written consent of the Company, disclose or use for any purpose (except in the
course of his employment under this Agreement and in furtherance of the business
of the Company) any confidential information or proprietary data of the Company.

         13. MEDIATION. Except as provided in PARAGRAPH 16(b)(1), any dispute or
controversy of any kind arising under or in connection with this Agreement that
is not resolved through mutual discussions between Executive and the Company
shall be submitted to confidential non-binding mediation with a neutral mediator
agreed upon by the parties. The mediation fees shall be borne equally by the
parties. Each party shall pay his/her or its own attorneys fee and expenses.

         14. ARBITRATION. Except as provided in PARAGRAPH 16(b)(1), any dispute
or controversy of any kind arising under or in connection with this Agreement
not resolved in Mediation pursuant to PARAGRAPH 13 shall be settled exclusively
by binding arbitration in Portland, Oregon, in accordance with the rules of the
American Arbitration Association then in effect by an arbitrator selected by
both parties within ten (10) days after either party has
<PAGE>
                                                                   Exhibit 10.23

notified the other in writing that it desires a dispute between them to be
settled by arbitration. In the event the parties cannot agree on such arbitrator
within such ten (10) day period, each party shall select an arbitrator and
inform the other party in writing of such arbitrator's name and address within
five (5) days after the end of such ten (10) day period and the two arbitrators
so selected shall select a third arbitrator within fifteen (15) days thereafter;
provided, however, that in the event of a failure by either party to select an
arbitrator and notify the other party of such selection within the time period
provided above, the arbitrator selected by the other party shall be the sole
arbitrator of the dispute. Each party shall pay his/her or its own attorneys fee
and expenses associated with such arbitration, including the expense of any
arbitrator selected by such party and the Company will pay the expenses of the
jointly selected arbitrator. The decision of the arbitrator or a majority of the
panel of arbitrators shall be binding upon the parties and judgment in
accordance with that decision may be entered in any court having jurisdiction
there over. Punitive damages shall not be awarded.

BY AGREEING TO SUBMIT A DISPUTE OR CONTROVERSY TO ARBITRATION, THE PARTIES
UNDERSTAND THAT THEY WILL NOT ENJOY THE BENEFITS OF A JURY TRIAL. ACCORDINGLY,
THE PARTIES HERETO EXPRESSLY AGREE TO WAIVE THE RIGHT TO A JURY TRIAL.

         15. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oregon as applied to agreements
between Oregon residents entered and to be performed entirely within Oregon.

         16. CERTAIN COVENANTS OF EXECUTIVE.

                  (a) COVENANTS. Executive acknowledges that (i) the principal
business of the Company and its affiliates involves the operation of
free-standing assisted living residences, primarily located in small-to-middle
market rural and suburban communities, the provision of personal care and
support services to meet the needs of its residents, and other related
businesses which the Company and its affiliates currently operate and which the
Company and its affiliates may become involved with during Executive's
employment under this Agreement (collectively, the "COMPANY BUSINESS"); (ii) the
Company Business is national in scope; (iii) Executive's work for the Company
will bring Executive into close contact with many confidential affairs not
readily available to the public; and (iv) the Company would not enter into this
Agreement but for the agreements and covenants of Executive contained herein. In
order to induce the Company to enter into this Employment Agreement, Executive
covenants and agrees that:

                           (1) CONFIDENTIAL INFORMATION. During and after the
Restricted Period, Executive shall keep secret and retain in strictest
confidence, and shall not use for the benefit of Executive or others except in
connection with the business and affairs of the Company, all confidential
matters of the Company and its affiliates. Such confidential matters include,
without limitation, trade secrets, customer lists, subscription lists, details
of consultant contracts, pricing policies, operational methods, marketing plans
or strategies, product development techniques or plans, business acquisition
plans, new personnel acquisition plans,
<PAGE>
                                                                   Exhibit 10.23

designs and design projects, inventions and research projects of the Company and
its affiliates, learned by Executive heretofore or hereafter that are
sufficiently secret to have the possibility, whether or not realized, of
deriving economic value from not being generally known to other persons who can
obtain economic value from their disclosure or use, and Executive shall not
disclose them to anyone outside of the Company and its affiliates, either during
or after employment, by the Company or any of its affiliates, except as required
in the course of performing duties hereunder or with the Company's express
written consent. Executive's obligations pursuant to this Employment Agreement
shall not extend to matters which are within the public domain or hereafter
enter the public domain through no fault or action or failure to act, whether
directly or indirectly, on the part of Executive.

                           (2) PROPERTY OF THE COMPANY. All memoranda, notes,
lists, records and other documents (and all copies thereof) made or compiled by
Executive or made available to Executive concerning the business of the Company
or any of its affiliates shall be the Company's property and shall be delivered
to the Company promptly upon the termination of Executive's employment with the
Company or any of its affiliates or at any other time on request.

                           (3) EMPLOYEES OF THE COMPANY. During the 12-month
period following the termination of Executive's employment with the Company (the
"RESTRICTED PERIOD"), Executive shall not, directly or indirectly, hire, solicit
or encourage to leave the employment of the Company or any of its affiliates,
any employee of the Company or its affiliates or hire any such employee who has
left the employment of the Company or any of its affiliates within twelve (12)
months of the termination of such employee's employment with the Company or any
of its affiliates.

                           (4) RESIDENTS OF THE COMPANY'S RESIDENCES. During the
Restricted Period, Executive shall not, directly, or indirectly, solicit or
encourage any of the residents or prospective residents (whose identity
Executive learned of through the Company Business and whose names appear on
lists of persons who have expressed an interest in residing at a Company or
affiliate residence) to move out of a Company residence or to refrain from
moving into a Company or affiliate residence.

                           (5) CONSULTANTS AND INDEPENDENT CONTRACTORS OF THE
COMPANY. During the Restricted Period, Executive shall not, directly or
indirectly, hire, solicit or encourage to cease to work with the Company or any
of its affiliates, any consultant, sales representative or other person then
under contract with the Company or any of its affiliates.

                           (6) NO DISPARAGEMENT. Upon termination of Executive's
employment with the Company or its affiliates, Executive shall make no
disparaging or derogatory remarks of any nature whatsoever either publicly or
privately about the Company, the Company's affiliates and each of their
respective directors, officers and employees or each of their respective
services, products (if any), unless requested to do so by law.
<PAGE>
                                                                   Exhibit 10.23

                  (b) RIGHTS AND REMEDIES UPON BREACH. If Executive breaches, or
threatens to commit a breach of, any of the provisions of paragraph 16(A) (the
"RESTRICTIVE COVENANTS"), the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity.

                           (1) SPECIFIC PERFORMANCE. The right and remedy to
have the Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and its
affiliates and that money damages will not provide an adequate remedy to the
Company. The Parties further agree that the Company's claim for specific
performance shall not be a claim which is covered by the parties' agreement to
arbitrate as set forth in PARAGRAPH 15.

                           (2) ACCOUNTING. The right and remedy to require
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits (collectively, "BENEFITS")
derived or received by Executive as a result of any transactions constituting a
breach of any of the Restrictive Covenants, and Executive shall account for and
pay over such Benefits to the Company.

                  (c) SEVERABILITY OF COVENANTS. If any court determines that
any of the Restrictive Covenants, or any parts thereof, are invalid or
unenforceable, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.

                  (d) "BLUE-PENCILING". If any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration or area of such provision and, in its reduced
form, such provision shall then be enforceable and shall be enforced.

                  (e) ENFORCEABILITY IN JURISDICTIONS. The parties intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographical scope of such Restrictive Covenants.
If the courts of any one or more of such jurisdictions hold the Restrictive
Covenants wholly unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of the parties that such determination not bar or
in any way affect the Company's right to the relief provided above in the courts
of any other jurisdiction within the geographical scope of such Restrictive
Covenants, as to breaches of such Restrictive Covenants in such other respective
jurisdictions, such Restrictive Covenants as they relate to each jurisdiction
being, for this purpose, severable into diverse and independent covenants.

         17. SUCCESSORS. The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the
<PAGE>
                                                                   Exhibit 10.23

business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption agreement prior to the effectiveness of any
such succession shall entitle Executive to the Severance Pay described in
PARAGRAPH 11(a)(i), subject to the terms and conditions therein.

         18. ASSIGNMENT. This Agreement and all rights under this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective personal or legal representatives,
executors, administrators, heirs, distributees, devisees, legatees, successors
and assigns. This Agreement is personal in nature, and, except as provided in
PARAGRAPH 17 hereof, neither of the parties to this Agreement shall, without the
written consent of the other, assign or transfer this Agreement or any right or
obligation under this Agreement to any other person or entity. If Executive
should die while any amounts are still payable to Executive hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Executive's devisee, legatee, or other designee or,
if there be no such designee, to Executive's estate.

         19. NOTICES. For purposes of this Agreement, notices and other
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:

         If to Executive:        6479 Reflections Drive
                                 Suite 220
                                 Dublin, OH 43017

         If to the Company:      Assisted Living Concepts, Inc.
                                 11835 NE Glenn Widing Drive, Bldg. E.
                                 Portland, Oregon 97220-9057
                                 Attention:  Sandra Campbell
                                 Senior Vice President and General Counsel

         with a copy to:         Wm. James Nicol
                                 Chairman, Chief Executive Officer and President

or to such other address or the attention of such other person as the recipient
party has previously furnished to the other party in writing in accordance with
this paragraph. Such notices or other communications shall be effective upon
delivery or, if earlier, three (3) days after they have been mailed as provided
above.

         20. WAIVER. Failure or delay on the part of either party hereto to
enforce any right, power or privilege hereunder shall not be deemed to
constitute a waiver thereof. Additionally, a waiver by either party of a breach
of any promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent breach by such other party.
<PAGE>
                                                                   Exhibit 10.23

         21. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective, valid and enforceable
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

         22. RIGHT TO ADVICE OF COUNSEL. Executive acknowledges that Executive
has consulted with counsel and is fully aware of Executive's rights and
obligations under this Agreement.

         23. COUNTERPARTS. This Agreement 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 all of which
together shall constitute a single agreement,

         24. FACSIMILE TRANSMISSION AND SIGNATURES. Facsimile transmission of
any signed original document, and retransmission of any signed facsimile
transmission, shall be the same as delivery of an original document. At the
request of either party, the parties will confirm facsimile transmitted
signatures by signing an original documents.

         25. INTEGRATION. This Agreement represents the final and entire
agreement and understanding between the parties as to the subject matter hereof
and supersedes all prior or contemporaneous agreements whether written or oral.
No waiver, alteration or modification of any of the provisions of this Agreement
shall be binding unless in writing and signed by duly authorized representatives
of the parties hereto.

                         [SIGNATURES ON FOLLOWING PAGE]
<PAGE>
                                                                   Exhibit 10.23

         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, on the day set opposite
its name below.

IDENTIFICATION OF WORK LOCATION BELOW MUST BE COMPLETED, OR ALL REFERENCES IN
THIS AGREEMENT TO WORK LOCATION SHALL BE NULL AND VOID AND AGREEMENT SHALL BE
INTERPRETED WITHOUT REFERENCE TO IT.

Date Agreement Executed                "COMPANY"

January 26, 2001                       By: /s/ WM. JAMES NICOL
                                           -------------------------------------
                                           Wm. James Nicol, Chairman,
                                           Chief Executive Officer and President

                                       "EXECUTIVE"

January 26 , 2001                          /s/ RON W. KERR
                                           -------------------------------------
                                           Ron W. Kerr, as an individual

                                       "WORK LOCATION"

                                       6479 Reflections Drive
                                       Suite 220
                                       Dublin, OH 43017
<PAGE>
                                                                   Exhibit 10.23

                                   EXHIBIT "A"
                                FISCAL YEAR 2001
                      EXECUTIVE INCENTIVE COMPENSATION PLAN

         The Fiscal Year 2001 Executive Incentive Compensation Plan is based
upon objective and subjective factors.

Objective Factors.

         Executive's eligibility for a Bonus shall be determined by the extent
to which the Houses in Executive's Region meet or exceed their budgeted
operating margins (no management fee included in the calculation) for Fiscal
Year 2001 (the "REGION'S FORECAST")

<TABLE>
<CAPTION>
% of Region's Forecast Met              Bonus Earned                Additional Bonus Eligible to Receive*
--------------------------              ------------                -------------------------------------
<S>                                     <C>                         <C>
Less than 95%                           None                        None
95% - 99.9%                             5% of Base Salary           Up to additional 5% of Base Salary
100% - 109.9%                           10% of Base Salary          Up to additional 10% of Base Salary
110% - 124.9%                           15% of Base Salary          Up to additional 15% of Base Salary
125% +                                  20% of Base Salary          Up to additional 20% of Base Salary
</TABLE>

*Executive shall be eligible to receive up to the additional amounts of Bonus
for achieving material progress in meeting or achieving one or more major
initiatives (the "SUBJECTIVE FACTORS") in Executive's Region's operations.

Subjective Factors.

         The Subjective Factors shall include: (a) resident/family satisfaction;
(b) program director retention; (c) succession planning; (d) regulatory
compliance; (e) innovation in services, products and procedures and such other
factors as Executive and the President and Chief Executive Officer shall agree
upon. Specific goals for the year-end assessment of these factors ("STANDARDS OF
PERFORMANCE") will be proposed by Executive not later than January 10, 2001, for
review and appraisal of the President and Chief Executive Officer. Executive's
monthly management report shall highlight progress or problems encountered in
their pursuit.

         The determination of Executive's achievement of the Subjective Factors
shall be made at the discretion of the President and Chief Executive Officer
based upon his assessment of Executive's accomplishments regarding these
Factors. In performing this review, the President and Chief Executive Officer
will include Executive's self-appraisal of Executive's performance as
communicated in the regular monthly management reports and a year-end report
which shall be due by January 30, 2002.

                                      A-1
<PAGE>
                                                                   Exhibit 10.23

                                   EXHIBIT "B"

                    FORM OF SEPARATION AGREEMENT AND RELEASE

         This Separation Agreement and Release ("AGREEMENT") is made and entered
into as of this _____ day of ______________, ______, by and between Assisted
Living Concepts, Inc. and one or more of its Affiliates (collectively,
"COMPANY"), and ______________________ ("EMPLOYEE") in order to provide the
terms and conditions of Employee's termination of employment, to fully and
completely resolve any and all issues that Employee may have in connection with
Employee's employment with Company or the termination of that employment, and to
promote an amicable long-term relationship between Company and Employee.

         In consideration of the mutual promises and conditions contained
herein, the parties agree as follows:

         1. Separation. Employee has been [is currently] employed at Company as
Employee. Employee shall have no further job responsibilities at Company
_______________ and Employee's employment shall be terminated effective as of
such date.

         2. Payment to Employee. Pursuant to the Employment Agreement entered
into between the parties and subject to certain conditions precedent set forth
therein, Company agrees to provide a Severance Amount to Employee as set forth
in PARAGRAPH 11(a)(i) of the Employment Agreement; provided, however, that
Employee must execute and not revoke this Agreement.

         3. Release of Claims. In return for the benefits conferred under the
Employment Agreement and this Agreement (which Employee acknowledges Company has
no legal obligation to provide if Employee does not enter into this Agreement),
Employee, to the fullest extent permitted by applicable law and on behalf of
Employee and Employee's heirs, executors, administrators, successors and
assigns, hereby releases and forever discharges Company and its past, present
and future affiliates, future parent companies, subsidiaries, predecessors,
successors and assigns, and each of their past, present and future shareholders,
officers, directors, employees, agents and insurers, from any and all claims,
actions, causes of action, disputes, liabilities or damages, of any kind, which
may now exist or hereafter may be discovered, specifically including, but not
limited to, any and all claims, disputes, actions, causes of action, liabilities
or damages, arising from or relating to Employee's employment with Company, or
the termination of such employment, except for any claim for payment or
performance pursuant to the terms of this Agreement. This release includes, but
is not limited to, any claims that Employee might have for reemployment or
reinstatement or for additional compensation or benefits and applies to claims
that Employee might have under either federal, state or local law dealing with
employment, contract, tort, wage and hour, or civil rights matters, including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the
Family and Medical Leave Act, similar state laws, and any regulations under such
laws. This release shall not affect any accrued rights Employee

                                      B-1
<PAGE>
                                                                   Exhibit 10.23

may have under any medical insurance, workers compensation, unemployment
compensation or retirement plan because of Employee's prior employment with
Company. EMPLOYEE ACKNOWLEDGES AND AGREES THAT THROUGH THIS RELEASE EMPLOYEE IS
GIVING UP ALL RIGHTS AND CLAIMS OF EVERY KIND AND NATURE WHATSOEVER, KNOWN OR
UNKNOWN, CONTINGENT OR LIQUIDATED, THAT EMPLOYEE MAY HAVE AGAINST COMPANY AND
THE OTHER PERSONS NAMED ABOVE, EXCEPT FOR THE RIGHTS SPECIFICALLY EXCLUDED
ABOVE.

         4. Confidentiality. Employee agrees to keep this Agreement and each of
its terms, including without limitation the Severance Amount, and the fact that
Employee has received such Amount, strictly confidential. Employee may only
disclose the terms of this Agreement only to Employee's attorney or accountant,
or as required by law. Employee understands that Company may be required to
publicly disclose the terms of this Agreement.

         5. No Disparagement. Employee shall not make any disparaging or
derogatory remarks of any nature whatsoever about Company, its officers,
directors or employees, or its services and/or products (if any), either
publicly or privately, unless required to do so by law.

         6. No Admission of Liability. This Agreement shall not be construed as
an admission of liability or wrongdoing by Company because no admission is
intended. Employee understands and agrees that this Agreement and any
information about its terms shall not be offered as evidence by Employee in any
proceeding, whether administrative or otherwise.

         7. Employment Agreement. Employee reaffirms Employee's continuing
acknowledgements and obligations under PARAGRAPHS 12, 14 AND 16 of the
Employment Agreement executed by Employee in conjunction with Employee's
employment at Company. The terms of such Employment Agreement are incorporated
herein by this reference. Employee agrees to strictly comply with the surviving
terms of the Employment Agreement.

         8. Return of Property. Employee agrees to and hereby represents that
Employee has returned to Company all of Company's property and all materials
containing confidential information of Company that were in Employee's
possession or under Employee's control.

         9. Miscellaneous.

                  9.1 Final and Entire Agreement. This document constitutes the
entire, final, and complete agreement and understanding of the parties with
respect to the subject matter hereof and supersedes and replaces all written and
oral agreements and understandings heretofore made or existing by and between
the parties or their representatives with respect thereto, other than the
Employment Agreement executed between the parties. There have been no
representations or commitments by Company to make any payment or perform any act
other than those expressly stated herein.

                  9.2 Waiver. No waiver of any provision of this Agreement shall
be deemed, or shall constitute a wavier of any other provision, whether or not
similar, nor shall any waiver

                                      B-2
<PAGE>
                                                                   Exhibit 10.23

constitute a continuing waiver. No waiver shall be binding unless executed in
writing by the parties making the waiver.

                  9.3 Binding Effect. All rights, remedies, and liabilities
herein given to or imposed upon the parties shall extend to, inure to the
benefit of and bind, as the circumstances may require, the parties and their
representative heirs, personal representatives, administrators, successors and
assigns.

                  9.4 Amendment. No supplement, modification or amendment of
this Agreement shall be valid, unless the same is in writing and signed by both
parties.

                  9.5 Attorneys Fees. If it becomes necessary to enforce this
Agreement, or any part hereof, the prevailing party shall be entitled to recover
its reasonable attorney fees and costs incurred therein, including all attorneys
fees and costs on appeal and otherwise.

                  9.6 Governing Law. This Agreement and the rights of the
parties hereunder shall be governed, construed and enforced in accordance with
the laws of the State of Oregon, without regard to its conflict of law
principles. Any suit or action arising out of or in connection with this
Agreement, or any breach hereof, shall be brought and maintained in the Circuit
Court of the State of Oregon for the County of Multnomah. The parties hereby
irrevocably submit to the jurisdiction of such court for the purpose of such
suit or action and hereby expressly and irrevocably waive, to the fullest extent
permitted by law, any claim that any such suit or action has been brought in an
inconvenient forum.

                  9.7 Employee Given 21 Days to Consider Agreement. Employee
acknowledges that Company advised Employee in writing to consult with an
attorney before signing this Agreement and that Employee has had at least 21
days to consider whether to execute this Agreement.

                  9.8 Revocation. Employee may revoke this Agreement by written
notice delivered to the President or Chief Executive Officer of the Company
within seven (7) days following the date Employee signed the Agreement. If not
revoked under the preceding sentence, this Agreement becomes effective and
enforceable after the seven-day period has expired.

                                      B-3
<PAGE>
                                                                   Exhibit 10.23

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS FREELY AND VOLUNTARILY EXECUTED THIS
AGREEMENT, WITH A COMPLETE UNDERSTANDING OF ITS TERMS AND PRESENT AND FUTURE
EFFECTS.

"EMPLOYEE"                             ASSISTED LIVING CONCEPTS, INC. on behalf
                                       of itself, and the Affiliated Companies

                                       By:
------------------------------            --------------------------------------

                                       Title:
                                             -----------------------------------

Date:                                  Date:
     -------------------------              ------------------------------------

                                      B-4<PAGE>
                                                                   Exhibit 10.24

                                November 29, 2001

VIA HAND DELIVERY

Mr. Ron W. Kerr
6479 Reflections Drive, Suite 220
Dublin, Ohio 43017

Dear Ron:

         As you know, on October 1, 2001, Assisted Living Concepts, Inc. (the
"Company") commenced a case under Chapter 11 of the United States Bankruptcy
Code (the "Bankruptcy Case"). In connection with the Bankruptcy Case, you and
the Company have agreed to amend that certain Employment Agreement, dated as of
January 1, 2001, between you and the Company (the "Employment Agreement").
Unless otherwise indicated, all capitalized terms used in this letter (this
"Letter") without definition shall have the meanings given to them in the
Employment Agreement.

         This Letter shall become effective as of the effective date of the
Company's plan of reorganization in the Bankruptcy Case (the "Effective Date").
Notwithstanding the prior execution of this Letter, the Employment Agreement
shall remain in full force and effect until the Effective Date, and prior to the
Effective Date, the Company reserves its rights under the United States
Bankruptcy Code with respect to the Employment Agreement. As of the Effective
Date, the Employment Agreement shall be amended by adding the following language
to the end of the definition of "Change of Control" set forth in paragraph
11(a)(i) of the Employment Agreement:

         "provided, however, that notwithstanding the foregoing, none of the
         following events shall constitute a Change of Control for purposes of
         this Agreement: (a) the implementation by the Company (including,
         without limitation, a change in the composition of the Board of
         Directors and/or the issuance of new securities by the Company) of its
         plan of reorganization in connection with the case commenced on October
         1, 2001 by the Company under Chapter 11 of the United States Bankruptcy
         Code (the "Bankruptcy Case"); or (b) the issuance of a final court
         order approving the plan of reorganization filed by the Company in
         connection with the Bankruptcy Case."
<PAGE>
Mr. Ron W. Kerr                                                    Exhibit 10.24
November 29, 2001
Page 2 of 2

         In addition, you hereby agree that notwithstanding anything contained
in the Employment Agreement, if your Work Location is relocated to your
residence in connection with the Bankruptcy Case and you subsequently resign
your employment with the Company, such termination of employment will not
constitute an Involuntary Termination Without Cause under the Employment
Agreement.

         Except as set forth herein, the Employment Agreement shall remain in
full force and effect.

                  Please confirm your agreement to the foregoing by signing
below where indicated and return the executed Letter to the Company.

                                         Sincerely,

                                         ASSISTED LIVING CONCEPTS, INC.

                                         /s/ Wm. James Nicol
                                         -------------------------------------
                                         Wm. James Nicol
                                         Chief Executive Officer and President

ACCEPTED, ACKNOWLEDGED AND AGREED

As of this 29 day of November, 2001

/s/ Ron W. Kerr
-------------------------------------
Ron W. Kerr

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