Exhibit 10.1
FORM OF AWARD AGREEMENT
2007 Annual Cash Incentive Compensation
CASH INCENTIVE COMPENSATION AWARD AGREEMENT
     THIS CASH INCENTIVE COMPENSATION AWARD AGREEMENT (the “Award Agreement”) is
entered into as of March 30, 2007, between Assisted Living Concepts, Inc.
(“ALC”) and [EMPLOYEE NAME] (“Employee”). In consideration of the mutual
promises and covenants made in this Agreement and the mutual benefits to be
derived from this Agreement, ALC and Employee agree as follows.
     This Award Agreement sets forth the terms and conditions of a cash
incentive award of performance compensation (the “Award”) that is granted to you
under the 2006 Omnibus Incentive Compensation Plan (the “Plan”) and is a
Performance Compensation Award. This Award provides you with the opportunity to
earn, subject to the terms of this Award Agreement, cash compensation as set
forth in Section 3 below.
     THIS AWARD IS SUBJECT TO ALL TERMS AND CONDITIONS OF THE PLAN AND THIS
AWARD AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE DISPUTE RESOLUTION
PROVISIONS SET FORTH IN SECTION 10. BY SIGNING YOUR NAME BELOW, YOU WILL HAVE
CONFIRMED YOUR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AWARD AGREEMENT.
     1. The Plan. This Award is made pursuant to the Plan, all the terms of
which are hereby incorporated in this Award Agreement. In the event of any
conflict between the terms of the Plan and the terms of this Award Agreement,
the terms of this Award Agreement shall govern. In the event of any conflict
between the terms of this Award Agreement and the terms of any individual
employment agreement between you and ALC or any of its Affiliates (an
“Employment Agreement”), the terms of your Employment Agreement will govern.
     2. Definitions. Capitalized terms used in this Award Agreement that are not
defined in this Award Agreement have the meanings as used or defined in the
Plan. As used in this Award Agreement, the following terms have the meanings set
forth below:
     “Business Day” means a day that is not a Saturday, a Sunday or a day on
which banking institutions are legally permitted to be closed in the City of New
York.
     “Committee” means the Compensation/ Nominating/ Governance committee of the
Board of Directors of ALC (the “Board”) or such other committee of the Board as
may be designated by the Board from time to time to administer the Plan.

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     “Determination Date” means the date during the first quarter of 2008, as
determined by the Committee, on which the Committee determines whether
Performance Goals with respect to the Performance Period have been achieved.
     “Performance Goals” means the performance goals set forth on Exhibit A to
this Award Agreement.
     “Performance Period” means the period from January 1, 2007 through
December 31, 2007.
     3. (a) Performance-Based Right to Payment. The amount of cash compensation
payable pursuant to the Award shall be determined based on the achievement of
the Performance Goals. On the Determination Date, the Committee in its sole
discretion shall determine whether you are entitled to payment with respect to
all or a portion of your Award subject to this Award Agreement. Except as
otherwise provided in your Employment Agreement, the payment of cash
compensation with respect to your Award is contingent on the attainment of the
Performance Goals. Accordingly, unless otherwise provided in your Employment
Agreement, you will not become entitled to payment with respect to the Award
subject to this Award Agreement on the Determination Date unless the Committee
determines that the Performance Goals with respect to the Determination Date
have been attained. Upon such determination by the Committee and subject to the
provisions of the Plan and this Award Agreement, you shall have the right to
payment of the cash compensation as set forth on Exhibit A. Pursuant to
Section 4 and except as otherwise provided in your Employment Agreement, in
order to be entitled to payment with respect to any Award on the Determination
Date, you must be employed by ALC or an Affiliate on the Determination Date.
          (b) Payment of Award. Payments made pursuant to this Award Agreement
shall be payable in cash as soon as administratively practicable following the
Determination Date. The Committee and ALC shall use commercially reasonable
efforts to make such payments by March 15, 2008.
     4. Forfeiture of Award. Unless the Committee determines otherwise, and
except as otherwise provided in your Employment Agreement, if your rights with
respect to any Award awarded to you pursuant to this Award Agreement have not
become payable prior to the date on which your employment with ALC and its
Affiliates terminates, your rights with respect to such Award shall immediately
terminate, and you will be entitled to no further payments or benefits with
respect thereto. If pursuant to Section 3 the Committee determines in its sole
discretion that the Performance Goals with respect to the Determination Date
have not been attained, your rights with respect to such Award shall immediately
terminate, and you will be entitled to no further payments or benefits with
respect thereto.
     5. Non-Transferability of Award. Unless otherwise provided by the Committee
in its discretion, the Award may not be sold, assigned, alienated, transferred,
pledged, attached or otherwise encumbered except as provided in Section 9(a) of
the

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Plan. Any purported sale, assignment, alienation, transfer, pledge, attachment
or other encumbrance of a Performance Award in violation of the provisions of
this Section 5 and Section 9(a) of the Plan shall be void.
     6. Withholding. The payment of cash compensation pursuant to Section 3(b)
is conditioned on satisfaction of any applicable withholding taxes in accordance
with Section 9(d) of the Plan.
     7. Successors and Assigns of ALC. The terms and conditions of this Award
Agreement shall be binding upon and shall inure to the benefit of ALC and its
successors and assigns.
     8. Committee Discretion. Subject to your Employment Agreement, the
Committee shall have full and plenary discretion with respect to any actions to
be taken or determinations to be made in connection with this Award Agreement,
and its determinations shall be final, binding and conclusive.
     9. Dispute Resolution. (a) Jurisdiction and Venue. Notwithstanding any
provision in your Employment Agreement, you and ALC irrevocably submit to the
exclusive jurisdiction of (i) the United States District Court for the Eastern
District of Wisconsin and (ii) the courts of the State of Wisconsin for the
purposes of any suit, action or other proceeding arising out of this Award
Agreement or the Plan. You and ALC agree to commence any such action, suit or
proceeding either in the United States District Court for the Eastern District
of Wisconsin or, if such suit, action or other proceeding may not be brought in
such court for jurisdictional reasons, in the courts of the State of Wisconsin.
You and ALC further agree that service of any process, summons, notice or
document by U.S. registered mail to the other party’s address set forth below
shall be effective service of process for any action, suit or proceeding in
Wisconsin with respect to any matters to which you have submitted to
jurisdiction in this Section 9(a). You and ALC irrevocably and unconditionally
waive any objection to the laying of venue of any action, suit or proceeding
arising out of this Award Agreement or the Plan in (A) the United States
District Court for the Eastern District of Wisconsin or (B) the courts of the
State of Wisconsin, and hereby and thereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
          (b) Waiver of Jury Trial. You and ALC hereby waive, to the fullest
extent permitted by applicable law, any right either of you may have to a trial
by jury in respect to any litigation directly or indirectly arising out of,
under or in connection with this Award Agreement or the Plan.
          (c) Confidentiality. You hereby agree to keep confidential the
existence of, and any information concerning, a dispute described in this
Section 9, except that you may disclose information concerning such dispute to
the court that is considering such dispute or to your legal counsel or other
advisors (provided that such

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counsel or other advisors agree not to disclose any such information other than
as necessary to the prosecution or defense of the dispute).
     10. Notice. All notices, requests, demands and other communications
required or permitted to be given under the terms of this Award Agreement shall
be in writing and shall be deemed to have been duly given when delivered by hand
or overnight courier or three Business Days after they have been mailed by U.S.
registered mail, return receipt requested, postage prepaid, addressed to the
other party as set forth below:

     
If to ALC:
  Assisted Living Concepts, Inc.
111 East Michigan Street
Milwaukee, WI 53203
Attn: Corporate Secretary
 
   
If to you:
  [NAME/ADDRESS OF EMPLOYEE]

The parties may change the address to which notices under this Award Agreement
shall be sent by providing written notice to the other in the manner specified
above.
     11. Headings. Headings are given to the Sections and subsections of this
Award Agreement solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of this Award Agreement or any provision thereof.
     12. Amendment of this Award Agreement. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate this Award Agreement prospectively or retroactively;
provided, however, that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would materially and adversely
impair your rights under this Award Agreement shall not to that extent be
effective without your consent.
     13. Counterparts. This Award Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
     IN WITNESS WHEREOF, the parties have duly executed this Award Agreement as
of the date first written above.

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