Exhibit 10.5


                               THIRD AMENDMENT TO
                         AMERICAN RETIREMENT CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN

    The American Retirement Corporation Employee Stock Purchase Plan is hereby
amended, effective September 19, 2003, as follows:

 1.  By deleting the last sentence of Section 1.1 in its entirety and
     substituting therefore the following:

     "This Plan shall be known as the American Retirement Corporation Associate
     Stock Purchase Plan."

 2.  By deleting Section 2.15 in its entirety and substituting therefore
     the following:

     "2.15 Plan: American Retirement Corporation Associate Stock Purchase Plan."
           ----

 3.  By deleting the first sentence of Section 4.1 in its entirety and
     substituting therefore the following:

     "Each  Employee  shall  become  eligible to become a  Participant  for each
     Option Period on its  Commencement  Date if such Employee has been employed
     by the Employer for a continuous  period of at least three (3) months prior
     to the Commencement Date."

 4.  By  deleting  the  second  sentence  of  Section  4.4 in its  entirety  and
     substituting therefore the following:

     "In the case of an  acquisition,  credit shall be given to Employees of the
     acquired  Subsidiary  for  service  with  such  corporation  prior  to  the
     acquisition  for purposes of satisfying  the  requirement of Section 4.1 of
     three (3) months continuous employment."