Assisted Living Concepts. Inc. 

CODE OF BUSINESS 

CONDUCT AND ETHICS 

(Restated and approved May 3, 2010) 

Lishibd-32, 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 1 of 13 PageID #:1331
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

TABLE OF CONTENTS 

Section Paae 

1.00 Introduction from the Chief Executive Officer •• 1 

2.00 Scope 1 

3.00 General Principles 1 

4.00 Our Cornerstones 2 

5.00 Universal Rules 2 

6.00 Specific Rules 3 

6.01 Employee Responsibilities 3 

6.02 Supervisor Responsibilities 3 

6.03 Fair Treatment of Our Employees 4 

6.04 Diversity and Inclusion 4 

6.05 Prohibiting Harassment 4 

6.06 Safety and Health 4 

6.07 Resident Safety 5 

6.08 Gifts or Loans from Residents and Other Financial Dealings with Residents 5 

6.09 Protection and Proper Use of ALC Assets 5 

6.10 Conflicts of Interest 5 

6.11 Corporate Opportunities 6 

6.12 Exchanging Gifts and Entertainment with Vendors or Suppliers 6 

6.13 Related Party Transactions 7 

6.14 Business Partners 7 

6.15 Competitors 7 

6.16 Confidentiality 7 

6.17 Compliance with Laws, Rules and Regulations (including insider trading laws). 8 

6.18 Keeping Accurate Records 9 

6.19 Maintaining Corporate Records 9 

6.20 Complaint Procedures for Accounting and Auditing Matters 9 

6.21 Statements and Communications 10 

6.22 Fair Dealing 10 

6.23 Contributions 10 

6.24 Political Activities 10 

6.25 Encouraging the Reporting of any Illegal or Unethical Behavior 11 

6.26 Waiving Provisions of the Code 11 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 2 of 13 PageID #:1332
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

1.00 INTRODUCTION FROM THE CHIEF EXECUTIVE OFFICER 

Dear Fellow Employee, 

At Assisted Living Concepts, Inc., we are committed to operating ethically. Our 

Cornerstones — Teamwork, Compassion, Excellence, Success — reflect our commitment 

to acting ethically and within applicable laws and regulations. 

This Code of Business Conduct and Ethics is meant to help you recognize and 

deal with ethical issues. It is not the only place you can look for help. When in doubt, 

before you act, you should seek advice from your Divisional Director of Human 

Resources or Divisional Vice President, the Vice President of Human Resources, or a 

member of the Legal Department. You are encouraged to come forward with any 

questions or concerns. We will not tolerate any adverse action being taken against you 

for asking questions or raising concerns in good faith. 

Thank you for helping make ALC a company we can all be proud of. 

Sincerely, 

Laurie A. Bebo 

President & Chief Executive Officer 

2.00 SCOPE 

This Code of Business Conduct and Ethics ("Code") has been adopted by the 

Board of Directors of Assisted Living Concepts, Inc. ("ALC). It applies to all 

employees of ALC and its subsidiaries and to members of our Board of Directors. In 

addition to this Code, employees are required to comply with rules and procedures in the 

Employee Handbook and the Chief Executive Officer and senior fmancial officers are 

required to comply with a separate Code of Ethics for CEO and Senior Financial 

Officers. 

Employees who violate this Code will be subject to disciplinary action, up to and 

including termination of employment, as well as possible criminal prosecution. 

Employees who violate the law will be reported to prosecutors and licensing agencies. 

This Code is a statement of principles for business conduct and ethics. It does not 

constitute an employment contract. 

3.00 GENERAL PRINCIPLES 

Our Code starts with these general principles: 

Honesty is characterized by truthfulness and the absence of deception and fraud. 

These qualities are unchanging, not relative, and shall not vary within ALC. 

We should question and seek clarification on the Code when we are unclear about 

what to do. 

• There is no conflict between attention to profit and attention to conduct; the two 

can go hand-in-hand. 

- 1 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 3 of 13 PageID #:1333
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

4.00 OUR CORNERSTONES 

The ALC Cornerstones are four qualities we try to achieve everyday. 

• Compassion (Caring for Others) 

We emphasize compassion by providing personalized, quality care to our 

residents and support to our fellow employees. We are dedicated to making our 

residents' lives easier by recognizing that every ALC employee contributes to our 

residents' well being. 

• Teamwork (Working Together) 

We work together as a team to accomplish our overall objectives. We encourage 

open and honest communication. 

• Excellence (Setting High Standards) 

We are committed to achieving high standards. We encourage each other to go 

above and beyond to address challenges and solve problems. 

• Success (Achieving Results) 

We are an occupancy driven organization that believes that results make 

everything else possible. We believe that each individual contributes to our 

success. We set high expectations and recognize individuals who achieve results. 

5.00 UNIVERSAL RULES 

This Code helps us recognize and deal with ethical issues and provides ways for 

us to report unethical conduct, with the goal of fostering a culture of honesty and 

accountability. The Code, however, cannot address every challenging situation that may 

occur. Therefore, when in doubt, we should ask ourselves: 

• Would my action be legal? 

The answer must be "Yes." Breaking the law, any law, is never the right course 

of action. This is true even if the stakes are high, it seems no one would get hurt, 

or we believe no one would find out. There are no exceptions to this rule and no 

excuse will justify breaking it. 

• Is my action the "right thing to do"? 

While legal compliance is a great start, our actions must also be right and fair, not 

just legally defensible. Consistently doing the right thing earns us the continuing 

trust of others. We must consider not only what we do but also how we do it. 

Are we being honest, fair and respectful? Are we playing by the rules? Would 

this behavior protect ALC's reputation as an ethical company? 

▪ Would I perform this action if I knew it would be reported in the local or national 

media? 

Because our business involves serving senior citizens, our actions often are 

scrutinized by the media, regulators, customers and consumer groups. We take 

our responsibilities as a corporate citizen seriously. Would our actions be 

described as honest, respectful and responsible? 

- 2 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 4 of 13 PageID #:1334
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

• Would I feel comfortable explaining my decision or action to my family and to 

the senior management of ALC? 

Each of us wants to be proud of the work we do. We want to be respected as 

important contributors to our communities. We should avoid any decision or 

action that we do not feel we could discuss openly and honestly with others. How 

would we explain our decision or action? If we could not explain it without 

getting angry, defensive or evasive, we probably need to make a different decision 

or take another action. 

Remember — if in doubt, ASK BEFORE ACTING. You can ask questions or raise 

concerns with your Divisional Director of Human Resources or Divisional Vice 

President, the Vice President of Human Resources, or a member of the Legal 

Department. 

You can also raise concerns by calling the ALC Whistleblower Hotline 1 -888- 

612-4252. The Whistleblower Hotline is available 24 hours a day, seven days a week. 

You may use the Whistleblower Hotline to anonymously report suspected wrongdoing 

but be aware that, if you choose to remain anonymous, it may significantly limit our 

ability to investigate your concerns. 

All reports received will be investigated and appropriate action taken. For 

reasons of confidentiality, you may not be told what action, if any, is taken. You should 

feel free to report any suspected violation of the law, the Code or other ALC policy 

without fear of your employment being affected. ALC strictly prohibits retaliation 

against you for asking questions or raising concerns in good faith. 

6.00. SPECIFIC RULES 

6.01. Employee Responsibilities 

We are each responsible for following the standards in this Code. If you become 

aware of a situation that may violate this Code or any applicable law, you have a duty to 

report it to your Divisional Director of Human Resources or Divisional Vice President, 

the Vice President of Human Resources, a member of the Legal Department or the 

Whistleblower Hotline. 

Failure to comply with this Code can have severe consequences for both ALC and 

the people involved. In addition to damaging our good name, conduct that violates this 

Code may also violate the law. This can subject those involved to civil suits or criminal 

prosecution. 

ALC will impose disciplinary action for violations of this Code up to and 

including termination of employment. ALC will also refer cases to government 

authorities if appropriate. 

6.02. Supervisor Responsibilities 

Employees who supervise other employees are expected to set an example. They 

must make sure that all those who work for them receive appropriate training on this 

Code. 

Where possible, supervisors should discuss ethical conduct, difficult decisions, or 

other challenging situations with employees and work to create an environment that 

encourages employees to come forward with any questions or concerns. If you do not 

- 3 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 5 of 13 PageID #:1335
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

know or are unsure of the answer to an employee's question, then you should refer the 

question to the appropriate person or department and ensure that the matter gets resolved. 

6.03. Fair Treatment of Our Employees 

ALC is committed to the fair and equitable treatment of all employees. 

Employees and applicants for employment are judged by their individual qualifications 

and skills, and without regard to race, color, gender, sexual orientation, national origin, 

age, religion, disability, veteran status or marital status. 

6.04. Diversity and Inclusion 

We respect and value the diversity reflected in the backgrounds, experiences and 

ideas of our fellow employees. We are committed to providing a work environment that 

fosters respect for all employees, our residents and their friends and families, and our 

suppliers and contractors. 

6.05. Prohibiting Harassment 

We do not tolerate harassment or any conduct which creates a work environment 

that is intimidating, hostile or offensive. Unwelcome sexual flirtations, advances or 

propositions, graphic or lewd comments about an individual, sexually explicit or 

offensive jokes, unnecessary touching, and any other unwelcome verbal or physical 

conduct of a sexual nature is prohibited. 

Harassment will not be tolerated, regardless of whether on ALC premises or at an 

approved off-hours business-related function, such as holiday parties or business travel. 

Harassment may be grounds for immediate dismissal, and it can subject both you 

and ALC to severe legal penalties. We should each help foster a harassment-free work 

environment by speaking out when a co-worker's conduct makes us uncomfortable. We 

strictly prohibit retaliation against employees who report discrimination or harassment in 

good faith. 

6.06. Safety and Health 

We want to maintain a safe, secure and healthy working environment. We must 

follow safe working procedures at all times and actively work to prevent accidents. We 

must observe posted safety-related requirements and use prescribed safety and protective 

equipment. If we become aware of any threat to the safety of a co-worker, resident or 

visitor, we must report it immediately to our Residence Director, Regional Director of 

Operations or Divisional Vice President. 

Residences may not hold off-premises business-related parties or other functions 

without the prior written approval of their Divisional Vice President. 

We are required to report to work free from the influence of any substance that 

could impair our work performance or create an unsafe working environment. 

Workplace violence, including threats or intimidation, is prohibited. We are prohibited 

from bringing weapons onto ALC property, or any other property while performing 

duties on behalf of ALC. Any behavior that risks the safety and health of fellow 

employees or residents or visitors must be reported immediately to our Residence 

Director, Regional Director of Operations, or Divisional Vice President. 

- 4 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 6 of 13 PageID #:1336
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

6.07. Resident Safety 

We are strongly committed to ensuring that our residences are safe and healthy 

for our residents and their friends and families. We comply with all applicable safety 

laws in the states in which we operate. We must immediately report to the appropriate 

Divisional Vice President or a member of the Legal Department any risks to employee, 

resident or visitor safety so that appropriate action can be taken. 

6.08. Gifts or Loans from Residents and Other Financial Dealings with Residents 

It is our job to give efficient, courteous and friendly service to our residents and 

their families and friends. On occasion we may be offered a gift in appreciation of 

something we have done. ALC employees are not allowed to accept any gifts, tips, 

gratuities or loans from or have other financial dealings with an unrelated resident or an 

unrelated resident's family member or friend. We should courteously decline to accept 

any individual gift. Bequests left to employees in a will from a resident violate this 

policy. Any such bequests must be disclosed to the Chief Executive Officer. Gifts 

offered to a residence or the entire staff of a residence may only be accepted with the 

prior approval of the appropriate Division Vice President. 

We are never permitted to borrow money or personal items from any resident or 

resident's family member or friend. We may not make arrangements with residents or 

family members to provide additional services for residents (such as private care or 

laundry service). 

Any financial exploitation of a resident or family member or misappropriation of 

resident property is grounds for immediate dismissal. 

Employees who violate this rule will be subject to disciplinary action, up to and 

including termination of employment, as well as possible criminal prosecution. 

6.09. Protection and Proper Use of ALC Assets 

We must protect ALC property and ensure its efficient use. Theft, carelessness 

and waste have a direct impact on our profitability. Our facilities, equipment, materials, 

supplies, technology and information have been acquired through the hard work of 

employees and at significant expense. We must see that ALC property is only used for 

proper business or other purposes approved in advance by the appropriate Division Vice 

President. Employees may not reside at an ALC residence without the prior approval of 

the appropriate Division Vice President. 

Employees who engage in theft, fraud, embezzlement or misappropriation of 

ALC's property will be subject to disciplinary action, up to and including termination of 

employment as well as possible criminal prosecution. 

6.10. Conflicts of Interest 

Conflicts of interest arise when your interests are inconsistent with the best 

interests of ALC or when you take actions, or fail to take actions, under circumstances 

where your interests interfere with the performance of your obligations to ALC. The best 

interests of ALC include your faithful adherence to this Code and your good faith, skilled 

and honest performance of your duties as an ALC employee, including the treatment of 

and attitude towards residents and other employees. Conflicts of interest that interfere 

with the performance of your obligations to ALC are prohibited. 

- 5 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 7 of 13 PageID #:1337
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

We must report any potential conflicts to our Divisional Vice President or a 

member of the Legal Department so that they can be evaluated, regardless of whether or 

not we derive a benefit from the situation. A conflict of interest may be permitted if it is 

fully disclosed in advance and approved by an ALC officer. 

Examples of conflicts of interest are: 

• Hiring a family member as a vendor for ALC without disclosing the relationship, 

without going through the appropriate bidding process, or without removing 

yourself from the decision-making process. 

• Working for another company or organization where the hours or demands of the 

job or organization interfere with your ALC job duties. A full time salaried ALC 

employee who receives compensation for working at another job will almost 

always be in violation of this policy. 

• Working for or having an interest in any business or organization which has or 

may have dealings with ALC or which may compete with ALC. Residence 

employees may not work in the residence for a home health care agency. 

• Influencing negotiations.or transactions between ALC and another person or 

business when you have a personal interest in the outcome of the negotiations. 

We must avoid having personal relationships at work that interfere with making 

sound, objective business decisions. No employee should be assigned a job that places 

him or her in a position that has direct decision-making authority over another family 

member or another person with whom he or she has a personal relationship. Even 

indirect reporting relationships that appear to result in preferential treatment or favoritism 

should be avoided. 

6.11. Corporate Opportunities 

We must not compete with ALC or take an ALC business opportunity for 

personal gain. We are prohibited from: 

• Taking for ourselves personally opportunities that are discovered through the use 

of ALC property, information or position; 

• Using ALC property, information, or position for personal gain; or 

• Competing with ALC. 

Personal gain means all direct or indirect benefits that are made available to you 

or any person with whom you have a personal relationship, including through family, 

socially or otherwise. Fees received for public speaking engagements or a radio or 

television appearances to which you are invited as a result of your position at ALC or 

because of knowledge you obtained from working at ALC must be paid to ALC. 

6.12. Exchanging Gifts and Entertainment with Vendors or Suppliers 

Business gifts and entertainment are courtesies designed to build good working 

relationships and goodwill. However, gifts and entertainment are not appropriate if they 

create an obligation, put you in a situation where you appear to be biased, or are received 

so that it would or would be perceived to be with the intent to influence a business 

decision. 

Gifts and entertainment are permitted if they are: 

- 6 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 8 of 13 PageID #:1338
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

• Reasonable; 

• Infrequent; 

In good taste; 

Unsolicited; and 

Not cash or cash equivalents. 

As a general guideline, entertainment must not include expenses paid for travel or 

overnight lodging and the cost must not be excessive. The rules for gifts and 

entertainment apply year round, even during the holidays, and they apply not only to 

employees but also to our family members. 

If you are offered a gift or entertainment that is inappropriate, you should decline. 

If you find yourself in a situation where refusing a gift would embarrass or hurt the 

person offering it, you may accept the gift on behalf of ALC and then report it to your 

Divisional Vice President or a member of the Legal Department, who will determine next 

steps. The important thing to remember is that you cannot offer, give or receive anything 

that would compromise — or even appear to compromise — your ability to make fair, 

impartial and balanced business decisions. 

6.13 Related Party Transactions 

A "related party transaction" is a transaction between an officer or director or 

members of their immediate families and entities ALC does business with or which own 

a significant amount of ALC's voting stock. Related party transactions may raise 

questions as to whether the transactions are consistent with the best interests of ALC and 

its stockholders. ALC will only enter into or ratify a related party transaction if the 

Board of Directors, acting through the Audit Committee, determines that the transaction 

is in, or is not inconsistent with, the best interests of ALC and its stockholders. 

6.14 Business Partners 

We must exercise good judgment in selecting suppliers and other business 

partners. We will not knowingly use suppliers who operate unethically, violate 

applicable laws, compete unfairly or use unfair business practices. 

6.15 Competitors 

We compete vigorously but fairly. Certain practices should be avoided, 

including: 

• Discussing prices, pricing policies, costs, supplier arrangements, marketing, 

territories or other sensitive marketing information with competitors; or 

• Entering into formal or informal agreements or arrangements with competitors 

that result in fixing prices, allocating customers or suppliers, or dividing sales 

territories. 

6.16. Confidentiality 

We must maintain the confidentiality of information entrusted to us by ALC. 

Confidential information includes all non-public information that might be of use to 

competitors or otherwise harmful to ALC if disclosed. 

- 7 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 9 of 13 PageID #:1339
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

We will not disclose ALC's systems, operations, records, strategies, or business 

plans to any person other than as directed by ALC. Confidential information obtained as 

a result of employment with ALC is not to be used for the purpose of furthering any 

private interest or as a means of making personal gains. Use or disclosure of such 

information can result in civil or criminal penalties. 

We will return to ALC all materials which contain confidential ALC information 

immediately upon the termination of our employment or upon request by ALC at any 

time. 

Care must be taken to safeguard the confidentiality of internal information. For 

example, sensitive documents are not to be left lying on desks. Visitors are not to be left 

unattended in offices containing internal ALC documents. Confidential material should 

not be discussed in common places where one may be overheard. 

We have a commitment to respect the privacy of our employees and residents and 

to protect employment and resident data in accordance with applicable legal 

requirements. We are expressly prohibited from accessing, without prior authorization, 

any system or database containing confidential information, such as personnel or resident 

records, and the personal electronic mail, pager and voicemail messages of our fellow 

employees. 

Clinical information about our residents must be treated with strict confidentiality. 

Employees who have access to such information must use and disclose it only in 

accordance with applicable legal requirements. 

6.17 Compliance with Laws, Rules and Regulations (including insider trading laws) 

We must act as responsible corporate citizens and comply with the different laws, 

rules and regulations applicable in the states where we work and live. We cannot tolerate 

any illegal activity from our employees, suppliers or vendors for any reason. 

"Insider trading" is trading of a company's stock or other securities (e.g. bonds or 

puts, calls or other derivative securities) by individuals who have access to non-public 

information about ALC. Insider trading is both unethical and illegal. At ALC, we have 

access to information about ALC and its operations. Often, that non-public or "inside" 

information is the kind of information that would motivate an investor to buy or sell 

stock. We must never share confidential or non-public information with anyone outside 

ALC, including friends, relatives or business contacts. We must never use ALC's 

confidential information for our own benefit. Even within ALC, we must not share 

confidential or non-public information with anyone who does not need to know. 

Speculative or short-term transactions in ALC stock by employees are also 

prohibited, regardless of whether you have any inside information at the time. These 

include frequent trading, short sales, or buying or selling options (puts or calls) on ALC 

stock. 

If you have any question about whether information is material, or whether you 

can trade ALC stock at a particular time, you should contact a member of the legal 

department. Violations of insider trading laws may involve significant civil or criminal 

penalties for both ALC and the individual. 

- 8 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 10 of 13 PageID #:1340
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

6.18. Keeping Accurate Records 

We are all responsible for documenting and recording ALC information honestly 

and properly. For example, make sure that all entries are accurate on profit and loss 

statements and expense reports. No entry may be made on ALC's books and records that 

intentionally hides or disguises the true nature of any transaction. We must be sure to 

cooperate fully with both internal and external audit teams in order to ensure a full, 

timely and accurate audit process. Any accounting or auditing irregularities must be 

reported to the Chief Executive Officer, a member of the Legal Department or the ALC 

Whistleblower Hotline. 

6.19. Maintaining Corporate Records 

Corporate records and documents must be maintained for normal business 

processes. Our records may be subject to disclosure in litigation or government 

investigations. We are all responsible for maintaining ALC documents, files and all other 

corporate records, including records maintained in electronic form, carefully as long as 

they serve a business purpose. We must also comply with all laws relating to records 

preservation, and must not alter, conceal or destroy any documents or records that are 

subject to an ongoing investigation or litigation matter. Any questions about whether a 

document should be retained should be addressed to a member of the legal department. 

6.20. Complaint Procedures for Accounting and Auditing Matters 

The Audit Committee of ALC's Board of Directors has established procedures for 

handling complaints from shareholders or employees regarding accounting or auditing 

matters. Any employee may submit a good faith complaint regarding accounting or 

auditing matters to management without fear of dismissal or retaliation of any kind. 

Employees may report their concerns to ALC's Director of Internal Audit by 

addressing them to: "Director of Internal Audit, Assisted Living Concepts, Inc., W140 

N8981 Lilly Road, Menomonee Falls, WI 53051." 

In addition, employees may forward complaints on a confidential or anonymous 

basis by addressing correspondence to: "Chair of the Audit Committee, c/o Assisted 

Living Concepts, Inc., W140 N8981 Lilly Road, Menomonee Falls, WI 53051" and 

marking the envelope "CONFIDENTIAL." 

These procedures apply to employee complaints relating to any questionable 

accounting or auditing matters, including, without limitation, the following: 

fraud or deliberate error in the preparation, evaluation, review or audit of any 

financial statement; 

fraud or deliberate error in the recording and maintaining of financial records; 

deficiencies in or noncompliance with ALC's internal accounting controls; 

misrepresentations or false statements to or by a senior officer or accountant 

regarding a matter contained in the financial records, financial reports or audit 

reports; or 

deviation from full and fair reporting of ALC's financial condition. 

Complaints marked "CONFIDENTIAL" and addressed to the Chair of the Audit 

Committee will be delivered initially to the Director of Internal Audit to be recorded in a 

- 9 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 11 of 13 PageID #:1341
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

log and then forwarded to the Chair of the Audit Committee. The Chair of the Audit 

Committee will determine the appropriate handling of such complaints. 

Upon receipt of any other complaint, the Director of Internal Audit will (i) 

determine whether the complaint actually pertains to concerns regarding accounting, 

internal accounting controls, or auditing matters and (ii) when possible, acknowledge 

receipt of the complaint to the sender. 

Complaints relating to concerns regarding accounting, internal accounting 

controls, or auditing matters will be reviewed under Audit Committee direction and 

oversight by the Director of Internal Audit or such other persons as the Audit Committee 

determines to be appropriate. Confidentiality will be maintained to the fullest extent 

possible, consistent with the need to conduct an adequate review. 

Prompt and appropriate corrective action will be taken when and as warranted in 

the judgment of the Audit Committee. 

Neither ALC nor any of its subsidiaries shall discharge, demote, suspend, 

threaten, harass or in any manner discriminate against any employee in the terms and 

conditions of employment based upon any lawful actions of such employee with respect 

to good faith reporting of complaints regarding accounting, internal accounting controls 

or auditing matters or otherwise as specified in Section 806 of the Sarbanes-Oxley Act of 

2002. 

6.21 Statements and Communications 

All inquiries relating to ALC from the media, securities analysts, or investors 

must be referred to the Chief Executive Officer or the Chief Financial Officer. 

Communication on behalf of ALC with the media, securities analysts, and investors must 

be made only by specifically designated representatives of ALC and in accordance with 

ALC's Disclosure Policy which is available in the Investor Relations section of ALC's 

website, www.alcco.com . 

6.22 Fair Dealing 

We are the face of ALC to the communities in which we live and work, to our 

residents and their friends and families, and to our vendors, suppliers and business 

partners. We are committed to dealing fairly with others. No one should take unfair 

advantage of another through manipulation, concealment, abuse of privileged 

information, misrepresentation of material facts, or any other unfair-dealing practice. 

6.23 Contributions 

Contributions to charitable organizations, political parties, candidates or 

campaigns (including dinners, donations and all other fundraising activities) shall not be 

made on behalf of ALC unless approved by the Chief Executive Officer. 

624 Political Activities 

ALC encourages us to participate in the political process to the extent we wish to 

do so. However, the laws and regulations governing political activities by corporations 

can be complex. We may not do anything that would make it appear that ALC is 

supporting a candidate or an initiative without pre-approval by the general counsel. We 

must use our own time and resources and not ALC's when participating in political 

- 10 - 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 12 of 13 PageID #:1342
ASSISTED LIVING CONCEPTS, INC. CODE OF BUSINESS CONDUCT AND ETHICS 

activities. For example, we may not make fundraising calls from the office or hang 

political posters in ALC workspaces. 

6.25 Encouraging the Reporting of any Illegal or Unethical Behavior 

ALC promotes ethical behavior and encourages employees to talk to supervisors 

or other members of management when in doubt about the best course of action. 

Violations of laws, rules, regulations or the Code must be reported. ALC will not allow 

retaliation for reports made in good faith. You can also raise concerns by calling the 

ALC Whistleblower Hotline 1-888-612-4252. 

6.26 Waiving Provisions of the Code 

In extremely limited circumstances, ALC may find it appropriate to waive a 

provision of this Code. All waivers require a pre-approval of the general counsel. 

Only the Board of Directors may waive compliance with this Code for executive 

officers or directors. The Board does not intend to grant waivers of these guidelines. 

However, if such a waiver is given, it will be promptly disclosed to shareholders, as 

required by law or the rules of the New York Stock Exchange. 

Changes to this Code or other ALC policies or procedures may be made from 

time to time. ALC reserves the right to make these changes without notice. 

# # # # # 

Case: 1:12-cv-03107 Document #: 45 Filed: 06/06/12 Page 13 of 13 PageID #:1343