EMERITUS
CORPORATION
  AMENDED
AND RESTATED STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
  SECTION
1    PURPOSES
  The
purpose of the Emeritus Corporation Stock Option Plan for Nonemployee Directors
(this "Plan") is to attract and retain the services of experienced and
knowledgeable nonemployee directors for Emeritus Corporation (the "Company") and
to provide added incentive to such directors by providing an opportunity for
stock ownership in the Company.
  SECTION
2    ADMINISTRATION
  The
administrator of this Plan (the "Plan Administrator") shall be the Board of
Directors of the Company (the "Board").  Subject to the terms of this
Plan, the Plan Administrator shall have the power to construe the provisions of
this Plan, to determine all questions arising thereunder and to adopt and amend
such rules and regulations for the administration of this Plan as it may deem
desirable.  No member of the Plan Administrator shall participate in
any vote by the Plan Administrator on any matter materially affecting the rights
of any such member under this Plan.
  SECTION
3    SHARES SUBJECT TO THE PLAN
  Subject
to adjustment in accordance with Section 6 hereof, the total number of
shares of the Company's common stock (the "Common Stock") for which options may
be granted under this Plan is 350,000 as such Common Stock was constituted on
the effective date of this Plan (the "Shares").  The Shares shall be
shares currently authorized but unissued or subsequently acquired by the Company
and shall include shares representing the unexercised portion of any option
granted under this Plan which expires or terminates without being exercised in
full.
  SECTION
4    ELIGIBILITY
  Each
member of the Board elected or appointed who is not otherwise an employee of the
Company or any parent or subsidiary corporation (an "Eligible
Director").
  4.1
              New
      Director Grants
  Each
member of the Board who is an Eligible Director shall automatically receive a
nonqualified stock option to purchase 2,500 Shares immediately
following
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   his or
her initial election or appointment to the Board (each a "New Director
Grant").  New Director Grants shall be fully vested on the date of
grant.
  4.2
              Annual
      Grants
  Commencing
with the 1997 annual meeting of shareholders, each Eligible Director shall
automatically receive a nonqualified stock option to purchase 7,500 Shares
immediately following each year's annual meeting of shareholders (each an
"Annual Grant").  Annual Grants shall fully vest on the day
immediately prior to the next succeeding annual meeting of
shareholders.
  SECTION
5    TERMS AND CONDITIONS OF OPTIONS
  Each
option granted to an Eligible Director under this Plan and the issuance of
Shares thereunder shall be subject to the follow­ing terms:
  5.1
              Option
      Agreement
  Each
option shall be evidenced by an option agreement (an "Agreement") duly executed
on behalf of the Company.  Each Agreement shall comply with and be
subject to the terms and conditions of this Plan.  Any Agreement may
contain such other terms, provisions and conditions not inconsistent with this
Plan as may be determined by the Plan Administrator.
  5.2
              Option
      Exercise Price
  The
option exercise price for an option shall be the closing price, or if there is
no closing price, the mean between the high and the low sale price of shares of
Common Stock on the American Stock Exchange on the day the option is granted or,
if no Common Stock was traded on such date, on the next succeeding day on which
Common Stock is so traded.
  5.3
              Vesting
      and Exercisability
  Each
Initial Grant and New Director Grant shall be fully vested on the date of grant
and each Annual Grant shall fully vest on the day immediately prior to the first
annual shareholders meeting occurring after such Annual Grant; provided,
however, that the Plan Administrator shall have the authority, at any time
following the date of an Annual Grant, to allow such Annual Grant to vest at an
earlier date or to waive the vesting requirement of such Annual Grant
entirely.
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   5.4           Time
and Manner of Exercise of Option
  Each
option may be exercised in whole or in part at any time and from time to time,
subject to shareholder approval of this Plan; provided, however, that no
fewer than 100 of the Shares purchasable under the option (or the remaining
Shares then purchasable under the option, if less than 100) may be purchased
upon any exercise of any option hereunder and that only whole Shares will be
issued pursuant to the exercise of any option.
  Any
option may be exercised by giving written notice, signed by the person
exercising the option, to the Company stating the number of Shares with respect
to which the option is being exercised, accompanied by payment in full for such
Shares, which payment may be in whole or in part (a) in cash or by check,
(b) in shares of Common Stock already owned for at least six months by the
person exercising the option, valued at fair market value at the time of such
exercise, or (c) to the extent permitted by law, by delivery of a properly
executed exercise notice, together with irrevocable instructions to a broker, to
properly deliver to the Company the amount of sale proceeds to pay the exercise
price, all in accordance with the regulations of the Federal Reserve
Board.
  5.5
              Term
      of Options
  Each
option shall expire ten years from the date of the granting thereof, but shall
be subject to earlier termination as follows:
  (a)           In
the event that an Optionee ceases to be a director of the Company for any reason
other than the death of the Optionee, the Optionee's vested options may be
exercised by him or her only within three months after the date such Optionee
ceases to be a director of the Company.
  (b)           In
the event of the death of an Optionee, whether during the Optionee's service as
a director or during the three-month period referred to in Section 5.5(a),
the Optionee's vested options shall be exercisable, and such options shall
expire unless exercised within twelve months after the date of the Optionee's
death, by the legal representatives or the estate of such Optionee, by any
person or persons whom the Optionee shall have designated in writing on forms
prescribed by and filed with the Company or, if no such designation has been
made, by the person or persons to whom the Optionee's rights have passed by will
or the laws of descent and distribution.
  5.6
              Transferability
  During an Optionee's lifetime, an option may be exercised only by the
Optionee.  Options granted under this Plan and the rights and
privileges conferred
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   thereby
shall not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or by the applicable laws of
descent and distribution except that, to the extent permitted by applicable law
and Rule 16b-3 promulgated under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Plan Administrator
may permit an Optionee to designate in writing during the Optionee's lifetime a
beneficiary to receive and exercise options in the event of the Optionee's death
(as provided in Section 5.5(b)).  Any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of any option under this Plan
or of any right or privilege conferred thereby, contrary to the provisions of
this Plan, or the sale or levy or any attachment or similar process upon the
rights and privileges conferred hereby, shall be null and void.
  5.7
              Participant's
      or Successor's Rights as
Shareholder
  Neither
an Optionee nor the Optionee's successor in interest shall have any rights as a
shareholder of the Company with respect to any Shares subject to an option
granted to such person until such person becomes a holder of record of such
Shares.
  5.8
              Limitation
      as to Directorship
  Neither
this Plan, nor the granting of an option, nor any other action taken pursuant to
this Plan shall constitute or be evidence of any agreement or understanding,
express or implied, that an Optionee has a right to continue as a director for
any period of time or at any particular rate of compensation.
  5.9
              Regulatory
      Approval and Compliance
  The
Company shall not be required to issue any certificate or certificates for
Shares upon the exercise of an option granted under this Plan, or record as a
holder of record of Shares the name of the individual exercising an option under
this Plan, without obtaining to the complete satisfaction of the Plan
Administrator the approval of all regulatory bodies deemed necessary by the Plan
Administrator, and without complying, to the Plan Administrator's complete
satisfaction, with all rules and regulations under federal, state or local law
deemed applicable by the Plan Administrator.
  SECTION
6    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
  6.1
              Recapitalization
  The
aggregate number and class of shares for which options may be granted under this
Plan, the number and class of shares covered by each outstanding
option
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   and the
exercise price per share thereof (but not the total price), and each such
option, shall all be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock of the Company resulting from a
split or consolidation of shares or any like capital adjustment, or the payment
of any stock dividend.
  6.2
              Effect
      of Liquidation, Reorganization or Change in
  Control
  6.2.1
              Cash,
      Stock or Other Property for Stock
  Except as
provided in subsection 6.2.2, upon a merger (other than a merger of the
Company in which the holders of shares of Common Stock immediately prior to the
merger have the same proportionate ownership of shares of Common Stock in the
surviving corporation immediately after the merger), consolidation, acquisition
of property or stock, separation, reorganization (other than a mere
reincorporation or the creation of a holding company) or liquidation of the
Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for or in connection with their shares of
Common Stock, each option shall terminate, but the Optionee shall have the right
immediately prior to any such merger, consolidation, acquisition of property or
stock, reorganization or liquidation to exercise such option in whole or in part
whether or not the vesting requirements set forth in the option agreement have
been satisfied.
  6.2.2
              Conversion
      of Options on Stock for Stock
Exchange
  If the
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger, consolidation, acquisition of property or stock,
or reorganization, all options shall be converted into options to purchase
shares of Exchange Stock unless the Company and the corporation issuing the
Exchange Stock, in their sole discretion, determine that any or all such options
shall not be converted into options to purchase shares of Exchange Stock but
instead shall terminate in accordance with the provisions of
subsection 6.2.1.  The amount and price of converted options
shall be determined by adjusting the amount and price of the options granted
hereunder in the same proportion as used for determining the number of shares of
Exchange Stock the holders of shares of the Common Stock receive in such merger,
consolidation, acquisition of property or stock, or reorganization.
  6.3
              Fractional
      Shares
  In the
event of any adjustment in the number of shares covered by any option, any
fractional shares resulting from such adjustment shall be disregarded and each
such option shall cover only the number of full shares resulting from such
adjustment.
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   SECTION
7    EXPENSES
  All costs
and expenses of the adoption and administration of this Plan shall be borne by
the Company; none of such expenses shall be charged to any
Optionee.
  SECTION
8    COMPLIANCE WITH RULE 16b-3
  It is the
intention of the Company that this Plan comply in all respects with
Rule 16b-3 promulgated under Section 16(b) of the Exchange Act and
that Plan participants remain disinterested persons ("Disinterested Persons")
for purposes of administering other employee benefit plans of the Company and
having such other plans be exempt from Section 16(b) of the Exchange
Act.  Therefore, if any Plan provision is later found not to be in
compliance with Rule 16b-3 or if any Plan provision would disqualify Plan
participants from remaining Disinterested Persons, that provision shall be
deemed null and void, and in all events this Plan shall be construed in favor of
its meeting the requirements of Rule 16b-3.
  SECTION
9    AMENDMENT AND TERMINATION
  The Board
may amend, terminate or suspend this Plan at any time, in its sole and absolute
discretion; provided, however, that if
required to qualify this Plan under Rule 16b-3 under Section 16(b) of
the Exchange Act, no amendment may be made more than once every six months that
would change the amount, price, timing or vesting of the options, other than to
comply with changes in the Internal Revenue Code of 1986, as amended, or the
rules and regulations thereunder; provided further that if
required to qualify this Plan under Rule 16b-3, no amendment that
would
  (a) materially
increase the number of Shares that may be issued under this Plan,
 
 (b) materially
modify the requirements as to eligibility for participation in this
Plan,
 
 (c) materially
increase the benefits accru­ing to participants under this Plan,
or
 
 (d) otherwise
require shareholder approval under any applicable law or regulation
  shall be
made without the approval of the Company's shareholders.
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   SECTION
10    EFFECTIVE DATE AND DURATION
  This Plan
shall be effective on November 20, 1995, the effective date of the
Company’s registration statement filed by the Company under the Securities Act
of 1933, as amended, in connection with the Company’s initial underwritten
public offering.  This Plan shall continue in effect until it is
terminated by action of the Board or the Company's shareholders, but such
termination shall not affect the then-outstanding terms of any
options.
  Amended
and restated as of December 7, 2005.
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