EXECUTION COPY

 
RESTRICTED STOCK UNIT AGREEMENT
UNDER THE BROOKDALE SENIOR LIVING INC.
OMNIBUS STOCK INCENTIVE PLAN
 
This Restricted Stock Unit Agreement (this “Agreement”), dated as of June 23,
2009, is made by and between Brookdale Senior Living Inc., a Delaware
corporation (the “Company”), and W. E. Sheriff (the “Participant”).  Capitalized
terms not defined herein shall have the meaning ascribed to them in the
Brookdale Senior Living Inc. Omnibus Stock Incentive Plan (as amended and/or
restated from time to time, the “Plan”).  Where the context permits, references
to the Company shall include any successor to the Company.
 
1.             Grant of Restricted Stock Units.  The Company hereby grants to
the Participant 500,000 restricted stock units (the “RSUs”), subject to all of
the terms and conditions of this Agreement and the Plan.
 
2.             Vesting and Forfeiture.
 
(a)           Vesting.  Subject to the provisions set forth in this Section 2
below, the RSUs shall vest at such times and in the amounts set forth below, and
shares of Common Stock with respect to such RSUs shall be delivered to the
Participant within forty-five (45) days following each such date, subject to the
Participant’s continued employment or service as a “Consultant” (each as defined
in the employment agreement between the Company and the Participant, dated as of
June 23, 2009 (the “Employment Agreement”)) on each date:
 
 
Vesting Date
 
Number of RSUs
Vesting on Such Vesting Date
December 15, 2009
 
100,000 RSUs
December 15, 2010
 
100,000 RSUs
December 15, 2011
 
100,000 RSUs
December 15, 2012
 
100,000 RSUs
December 15, 2013
 
100,000 RSUs

 
(b)           Accelerated Vesting.  Notwithstanding anything to the contrary in
Section 2(a), all outstanding RSUs which have not previously been forfeited
pursuant to the provisions of Section 2(e) below shall vest upon, and shares of
Common Stock shall be delivered to the Participant within forty-five (45) days
following, the earliest to occur of (i) a Change in Control (but only if such
Change in Control constitutes a change in the ownership or effective control of
the Company or in the ownership of a substantial portion of the assets of the
Company under Section 409A of the Code); (ii) the Participant’s death; or (iii)
the Participant’s Disability.
 
(c)           Participant’s Termination of Employment Prior to December 31,
2010.
 
(i)           If the Participant’s employment is terminated (and such
termination constitutes a separation from service under Section 409A of the
Code) (1) by the

 
 

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Company without “Cause” (as defined in the Employment Agreement) or (2) by the
Participant for “Good Reason” (as defined in the Employment Agreement), in
either case prior to December 31, 2010, all outstanding RSUs shall vest and
shares of Common Stock with respect to such RSUs will be delivered in accordance
with the schedule set forth in Section 2(a) above.
 
(ii)           If the Participant resigns from employment without Good Reason
prior to December 31, 2010, but continues serving as a Consultant, the RSUs
which are scheduled to vest on each of December 15, 2012 and December 15, 2013
shall be forfeited and shares of Common Stock with respect to the remaining
outstanding RSUs will be delivered in accordance with the schedule set forth in
Section 2(a) above; provided, that the Participant either continues serving as a
Consultant on each such date or his service as a Consultant is terminated either
by the Company without Cause or by the Participant for Good Reason.
 
(d)           Participant’s Termination of Employment On or After December 31,
2010.  If the Participant’s employment is terminated (and such termination
constitutes a separation from service under Section 409A of the Code) (i) by the
Company without Cause or (ii) voluntarily by the Participant for any reason
(whether or not the Participant becomes a Consultant), in either case on or
after December 31, 2010, shares of Common Stock with respect to all outstanding
RSUs will be delivered to the Participant within forty-five (45) days following
such termination of employment.
 
(e)           Forfeiture.  Notwithstanding anything in this Section 2 to the
contrary, all outstanding RSUs shall be forfeited upon (i) the termination of
the Participant’s employment or service as a Consultant for Cause; (ii) the
voluntary termination (without Good Reason) of the Participant’s employment
(without becoming a Consultant) prior to December 31, 2010; or (iii) the
voluntary termination (without Good Reason) of the Participant’s service as a
Consultant.
 
3.             Shares of Common Stock.  Upon vesting, each RSU granted hereunder
shall represent the right to receive one (1) share of Common Stock in accordance
with the applicable schedule set forth in Section 2.
 
4.             Execution of Release.  The delivery of shares of Common Stock to
the Participant as a result of, or following, termination of employment or
service as a Consultant for any reason shall only be made upon the Participant’s
execution and non-revocation of a general release of claims in a form
satisfactory to the Company.
 
5.             Restrictions.  Until the delivery of shares of Common Stock with
respect to the RSUs in accordance with Section 2, no transfer of the RSUs or any
of the Participant’s rights with respect to the RSUs, whether voluntary or
involuntary, by operation of law or otherwise, shall be permitted.  Unless the
Administrator determines otherwise, upon any attempt to transfer RSUs or any
rights in respect of RSUs before the delivery of shares of Common Stock with
respect to the RSUs in accordance with Section 2, such RSUs, and all of the
rights related thereto, shall be immediately forfeited by the Participant and
transferred to, and reacquired by, the Company without consideration of any
kind.
 
6.             Dividend Equivalents; Rights as a Stockholder.  Any cash
dividends or distributions declared by the Company with respect to the shares of
Common Stock subject to

 
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the RSUs shall be paid in cash to the Participant at the same time such
dividends or distributions are paid to the Company’s stockholders generally,
provided that the Participant is then employed by or a Consultant to the
Company.  Except as set forth in the immediately preceding sentence, the
Participant shall have no rights of a stockholder until shares of Common Stock
are delivered to the Participant pursuant to the terms of this Agreement.
 
7.             Adjustments.  Pursuant to Section 5 of the Plan, in the event of
a change in capitalization as described therein, the Administrator shall make
such equitable changes or adjustments, as it deems necessary or appropriate, in
its discretion, to the number and kind of securities or other property
(including cash) issued or issuable in respect of outstanding RSUs.
 
8.             Notices.  All notices and other communications under this
Agreement shall be in writing and shall be given by facsimile or first class
mail, certified or registered with return receipt requested, and shall be deemed
to have been duly given three days after mailing or 24 hours after transmission
by facsimile to the respective parties, as follows:  (i) if to the Company, at
Brookdale Senior Living Inc., 111 Westwood Place, Suite 200, Brentwood, TN
37027, Facsimile: (615) 564-8204, Attn:  General Counsel and (ii) if to the
Participant, using the contact information on file with the Company.  Either
party hereto may change such party’s address for notices by notice duly given
pursuant hereto.
 
9.             Securities Laws Requirements.  The Company shall not be obligated
to transfer any Common Stock to the Participant if such transfer, in the opinion
of counsel for the Company, would violate the Securities Act of 1933, as amended
(the “Securities Act”) (or any other federal or state statutes having similar
requirements as may be in effect at that time).  The Company shall take
appropriate reasonable actions to ensure that the delivery of Common Stock
hereunder will be in compliance with the Securities Act or an applicable
exemption from registration under the Securities Act.
 
10.             Protections Against Violations of Agreement.  No purported sale,
assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation of a
security interest in or lien on, any of the RSUs by any holder thereof in
violation of the provisions of this Agreement will be valid, and the Company
will not transfer any of said RSUs on its books nor will any of such RSUs be
entitled to vote, nor will any distributions be paid thereon, unless and until
there has been full compliance with said provisions to the satisfaction of the
Company.  The foregoing restrictions are in addition to and not in lieu of any
other remedies, legal or equitable, available to enforce said provisions.
 
11.             Tax Withholding.  The Company shall be entitled to require a
cash payment by or on behalf of the Participant and/or to deduct from RSUs
granted hereunder or other compensation payable to the Participant any sums
required by federal, state or local tax law to be withheld or to satisfy any
applicable payroll deductions with respect to the vesting of, lapse of
restrictions on, or payment with respect to any RSU.
 
12.             Failure to Enforce Not a Waiver.  The failure of the Company to
enforce at any time any provision of this Agreement shall in no way be construed
to be a waiver of such provision or of any other provision hereof.
 
 
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13.             Governing Law.  This Agreement shall be governed by and
construed according to the laws of the State of Delaware without regard to its
principles of conflict of laws.
 
14.             Incorporation of Plan.  The Plan is hereby incorporated by
reference and made a part hereof, and the RSUs and this Agreement shall be
subject to all terms and conditions of the Plan.
 
15.             Amendments; Construction.  The Administrator may amend the terms
of this Agreement prospectively or retroactively at any time, but no such
amendment shall impair the rights of the Participant hereunder without his or
her consent.  Headings to Sections of this Agreement are intended for
convenience of reference only, are not part of this Agreement and shall have no
effect on the interpretation hereof.
 
16.             Survival of Terms.  This Agreement shall apply to and bind the
Participant and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.
 
17.             Compliance with Stock Ownership Guidelines.  The Participant
hereby agrees to comply with the Company’s Stock Ownership Guidelines (as
amended from time to time, the “Guidelines”), to the extent such Guidelines are
applicable, or become applicable, to the Participant.  The Participant further
acknowledges that, if he or she is not in compliance with such Guidelines (if
applicable), the Administrator may refrain from issuing additional equity awards
to the Participant and/or elect to pay the Participant’s annual bonus in the
form of vested or unvested Common Stock.
 
18.             Agreement Not a Contract for Services.  Neither the Plan, the
granting of the RSUs, this Agreement nor any other action taken pursuant to the
Plan shall constitute or be evidence of any agreement or understanding, express
or implied, that the Participant has a right to continue to provide services as
an officer, director, employee, consultant or advisor of the Company or any
Subsidiary or Affiliate for any period of time or at any specific rate of
compensation.
 
19.             Authority of the Administrator.  The Administrator shall have
full authority to interpret and construe the terms of the Plan and this
Agreement.  The determination of the Administrator as to any such matter of
interpretation or construction shall be final, binding and conclusive.
 
20.             Representations.  The Participant has reviewed with the
Participant’s own tax advisors the Federal, state, local and foreign tax
consequences of the transactions contemplated by this Agreement.  The
Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents.  The Participant
understands that he (and not the Company) shall be responsible for any tax
liability that may arise as a result of the transactions contemplated by this
Agreement.
 
21.             Severability.  Should any provision of this Agreement be held by
a court of competent jurisdiction to be unenforceable, or enforceable only if
modified, such holding shall not affect the validity of the remainder of this
Agreement, the balance of which shall continue to be binding upon the parties
hereto with any such modification (if any) to become a part hereof

 
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and treated as though contained in this original Agreement.  Moreover, if one or
more of the provisions contained in this Agreement shall for any reason be held
to be excessively broad as to scope, activity, subject or otherwise so as to be
unenforceable, in lieu of severing such unenforceable provision, such provision
or provisions shall be construed by the appropriate judicial body by limiting or
reducing it or them, so as to be enforceable to the maximum extent compatible
with the applicable law as it shall then appear, and such determination by such
judicial body shall not affect the enforceability of such provision or
provisions in any other jurisdiction.
 
22.             Acceptance.  The Participant hereby acknowledges receipt of a
copy of the Plan and this Agreement.  The Participant has read and understands
the terms and provisions of the Plan and this Agreement, and accepts the RSUs
subject to all the terms and conditions of the Plan and this Agreement.  The
Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under this Agreement.
 
23.           Section 409A Compliance.  The intent of the parties is that
payments and benefits under this Agreement comply with Section 409A of the Code
to the extent subject thereto, and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted and be administered to be in
compliance therewith.  Notwithstanding anything contained herein to the
contrary, to the extent required in order to avoid accelerated taxation and/or
tax penalties under Section 409A of the Code, the Participant shall not be
considered to have terminated employment with the Company for purposes of this
Agreement and no payment shall be due to the Participant under this Agreement
until the Participant would be considered to have incurred a “separation from
service” from the Company within the meaning of Section 409A of the Code.  Any
payments described in this Agreement or the Plan that are due within the
“short-term deferral period” as defined in Section 409A of the Code shall not be
treated as deferred compensation unless applicable law requires
otherwise.  Notwithstanding anything to the contrary in this Agreement or the
Plan, to the extent that any RSUs are payable upon a separation from service and
such payment would result in the imposition of any individual excise tax and
late interest charges imposed under Section 409A of the Code, the settlement and
payment of such awards shall instead be made on the first business day after the
date that is six (6) months following such separation from service (or death, if
earlier).

[Signature page to follow.]

 
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

 
BROOKDALE SENIOR LIVING INC.
         
By:
   /s/ T. Andrew Smith
     
Name:
T. Andrew Smith
     
Title:
Executive Vice President
 

 
W.E. SHERIFF
     
   /s/ W.E. Sheriff
   
Participant
 

 
 

 
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