EXHIBIT 10.2**ASSISTED LIVING CONCEPTS, INC.****TANDEM STOCK OPTION/STOCK APPRECIATION RIGHTS AWARD AGREEMENT**       **Employee:**      **Number of Stock Options/SARs:**      **Grant Date:** **March 30, 2007**  **Exercise Price:** **$ 11.80**         This Tandem Stock Option/Stock Appreciation Rights Award Agreement (the “**Award Agreement**”) isentered into as of March 30, 2007, between Assisted Living Concepts, Inc. (“**ALC**”) and Employee. Inconsideration of the mutual promises and covenants made in this Award Agreement and the mutualbenefits to be derived from this Award Agreement, ALC and the Employee agree as follows:     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 17 OF THISAWARD AGREEMENT. BY SIGNING YOUR NAME BELOW, YOU WILL HAVE CONFIRMED YOUR ACCEPTANCE OF THE TERMSAND CONDITIONS OF THIS AWARD AGREEMENT.1. Definitions. Capitalized terms used in this Award Agreement that are not defined inthis Award Agreement have the meanings as used or defined in the Assisted Living Concepts, Inc.2006 Omnibus Incentive Compensation Plan (the “Plan”) and is intended to be performancecompensation under Section 162(m) of the Internal Revenue Code. As used in this Award Agreement,the following terms have the meanings set forth below:     **“Board”**means the Board of Directors of ALC.     “**Business Day**” means a day that is not a Saturday, a Sunday or a day on which bankinginstitutions are legally permitted to be closed in the City of New York.     “**Committee**” means the Compensation/ Nominating/Governance Committee of the Board, or suchother committee of the Board as may be designated by the Board from time to time to administer thePlan.     “**Common Stock**” means Class A common stock of ALC, par value $0.01 per share.     “**Determination Date**” means the date during the first quarter of 2008, as determined by theCommittee, on which the Committee determines whether Performance Goals with respect to thePerformance Period have been achieved.     “**Fair Market Value**” means the closing market price per Share as reported on the New York StockExchange (or other relevant exchange) on the applicable date or, in the event there shall be nopublic market for the Shares on the applicable date, the fair market value of the Shares asdetermined in good faith by the Committee.     “**Performance Period**” means the period from January 1, 2007 through December 31, 2007.     “**Share**” means a share of Common Stock.2. Grant of Award. This Award Agreement sets forth the terms and conditions of an award(the “**Award**”) under the Plan to the Employee as of the Grant Date of:     a. Stock Options. The right and option (the “**Stock Options**”) to purchase up to Sharesat the Exercise Price per Share, the Fair Market Value on the date hereof. Each Stock Option is aNonqualified Stock Option. Unless earlier terminated pursuant to the terms of this AwardAgreement, the Stock Options shall expire on the fifth anniversary of the Grant Date.     b. Stock Appreciation Rights. Each Stock Option includes a stock appreciation right(“**SAR**”) at the price per Share equal to the Exercise Price. The SAR constitutes an unfunded andunsecured promise of ALC to deliver (or cause to be delivered) to Employee a whole number ofShares, cash or a combination of Shares and Cash at the time such SAR vests and is exercised, asprovided herein, equal in value to the excess, if any, of the Fair Market Value per Share over theExercise Price per Share of the SAR. Fractional shares will not be delivered and the number ofShares to be delivered upon any exercise by you of SARs subject to this Award shall be rounded downto the nearest whole Share. The Committee has sole discretion to deliver such value in Shares,cash, or a combination of Shares and cash. Until such delivery, Employee has only the rights of ageneral unsecured creditor and no rights as a stockholder of ALC. Unless earlier terminatedpursuant to the terms of this Award Agreement, the SARs shall expire on the fifth anniversary ofthe Grant Date.
 

 
     c. Tandem Stock Option/Stock Appreciation Rights. An SAR with respect to a Shareshall vest, become exercisable, and terminate at the same times and under the same terms as theStock Option such Share is subject to. The exercise of a Stock Option with respect to any Shareshall cause the related SAR to automatically terminate and the exercise of an SAR with respect toany Share shall cause the related Stock Option to automatically terminate. Only one Stock Optionor one SAR, and not both, may be exercised with respect to any Share that is subject to a StockOption under this Award Agreement. The tandem Stock Option and SAR rights with respect to a Shareare referred to in this Award Agreement as the “**Stock Option/SAR**.”     d. Award Subject to Performance-Based Vesting. Except as otherwise provided in anyindividual employment agreement between you and ALC or any of its Affiliates (an “**EmploymentAgreement**”), the vesting of your rights with respect to Stock Options/SARs is contingent on theattainment of performance goals set forth on Exhibit A to this Award Agreement (the “**PerformanceGoals**”). Accordingly, unless otherwise provided in your Employment Agreement, your rights withrespect to Stock Options/SARs subject to this Award Agreement will not become vested on theDetermination Date unless the Committee determines that the Performance Goals with respect to thePerformance Period have been attained. Furthermore, pursuant to Section 14 and except as otherwiseprovided in your Employment Agreement, in order for your rights with respect to any Stock Option orSAR to become vested on the Determination Date, you must be employed by ALC or an Affiliate on theDetermination Date. If, on the Determination Date, the Committee determines in its sole discretionthat your rights with respect to any Stock Options/SARs under this Award Agreement remain unvested,your rights with respect to such Stock Options/SARs shall immediately terminate, and you will beentitled to no further payments or benefits with respect thereto.     e. Number of Vested Stock Options/SARs Dependent Upon Level of Performance. If theCommittee determines that the threshold level Performance Goal specified in Exhibit A has beenattained for the Performance Period, the Committee will then determine the whole number of StockOptions/SARs that vest on the Determination Date, up to the maximum number listed on the first pageof this Award Agreement, using the formula set forth in Exhibit A.     f. Exercisability Subject to Time Vesting. Unless earlier terminated, any StockOptions/SARs that the Committee determines to be vested as of the Determination Date shall becomeexercisable as follows: one-third of the Shares covered thereby (rounded up to the next wholeShare) on March 30, 2008, an additional one-third of such Shares (rounded up to the next wholeShare) on March 30, 2009, and the remainder of such Shares on March 30, 2010, subject in each caseto the prior termination of the Stock Option/SAR.     g. Exercisability Upon Death, Disability or Change of Control. Notwithstanding theforegoing, the Stock Options/SARs, to the extent outstanding, shall become immediately vested andfully exercisable upon (a) a Change of Control or (b) a Termination of Employment due to death orDisability. For purposes of this Award Agreement, **Disability**means (1) “Disability” as defined inyour Employment Agreement, or (2) if there is no such employment or similar agreement or it doesnot define “Disability,” permanent and total disability as determined under ALC’s long-termdisability plan applicable to Employee. For purposes of this Award Agreement, **Termination ofEmployment**means the termination of Employee’s employment with, or performance of services for, ALCand any of its Subsidiaries or Affiliates. A participant employed by, or performing services for,a Subsidiary or an Affiliate shall also be deemed to incur a Termination of Employment if theSubsidiary or Affiliate ceases to be such a Subsidiary or an Affiliate, as the case may be, and theparticipant does not immediately thereafter become an employee of, or service-provider for, ALC oranother Subsidiary or Affiliate. Temporary absences from employment because of illness, vacationor leave of absence and transfers among ALC and its Subsidiaries and Affiliates shall not beconsidered Terminations of Employment.     (h) Suspension or Termination of Stock Options/SARs. If at any time (including aftera notice of exercise has been delivered) the Committee, including any administrator authorizedpursuant to Section 3(e) of the Plan (any such person, an “Authorized Officer”), reasonablybelieves that Employee has committed an act of misconduct as described in this Section, theCommittee or Authorized Officer may suspend the Employee’s right to exercise any Stock Option/SARpending a determination of whether an act of misconduct has been committed. If the Committee or anAuthorized Officer determines Employee has committed an act of embezzlement, fraud, dishonesty,nonpayment of any obligation owed to ALC, breach of fiduciary duty or deliberate disregard of ALCrules resulting in loss, damage or injury to ALC, or if Employee makes an unauthorized disclosureof any ALC trade secret or confidential information, engages in any conduct constituting unfaircompetition, or induces a customer to breach a contract with ALC, neither Employee nor his or herestate shall be entitled to exercise any Stock Option/SAR whatsoever. In addition, if Employee isdesignated an “executive officer” by the Board and if the Committee determines that Employeeengaged in an act of embezzlement, fraud or breach of fiduciary duty during Employee’s employmentthat contributed to an obligation to restate ALC’s financial statements (“ContributingMisconduct”), Employee shall be required to repay ALC, in cash and upon demand, the Option Proceeds(as defined below) resulting from the sale or other disposition (including to ALC) of Shares issuedor issuable upon exercise of a Stock Option or SAR if the sale or disposition was effected duringthe twelve-month period following the first public issuance or filing with the Securities andExchange Commission of the financial statements required to be restated. The term “OptionProceeds” means,
 

 
with respect to any sale or other disposition (including to ALC) of Shares issued or issuable uponexercise of a Stock Option or SAR, an amount determined appropriate by the Committee to reflect theeffect of the restatement on ALC’s stock price, up to the amount equal to the number of Shares soldor disposed of multiplied by the difference between the market value per Share at the time of suchsale or disposition and the exercise price. The return of Option Proceeds is in addition to andseparate from any other relief available to ALC due to the executive officer’s ContributingMisconduct. Any determination by the Committee with respect to the foregoing shall be final,conclusive and binding on all interested parties.3. The Plan. This Award is made pursuant to the Plan, all the terms of which are herebyincorporated in this Award Agreement. In the event of any conflict between the terms of the Planand the terms of this Award Agreement, the terms of this Award Agreement shall govern;provided, however, that, notwithstanding the foregoing, it is understood that theprovisions of Section 6(i)(vi)(D) of the Plan, including but not limited to the concept of“negative discretion” shall not be applicable to the Stock Options/SARs. In the event of anyconflict between the terms of this Award Agreement and the terms of any Employment Agreement, theterms of your Employment Agreement will govern.4. Exercise of the Stock Options.     a. Stock Options as to which the Employee is vested, which have become exercisable, and whichhave not terminated may be exercised by delivery to the Secretary of ALC of a written or electronicnotice, complying with the applicable procedures established by the Committee or ALC, stating thenumber of whole Shares to be purchased pursuant to this Award Agreement and the date on which theEmployee wants to exercise the Stock Option and accompanied by payment of the full purchase priceof the Shares to be purchased.     b. The full purchase price of the Stock Option (the Exercise Price multiplied by the number ofStock Options exercised) shall be paid in cash, by wire transfer, or by certified check or bankdraft payable to the order of ALC, by exchange of Shares of unrestricted Common Stock of ALCalready owned by the Employee (that have been purchased on the open market by the Employee and heldfor at least six months prior to exercise) and having an aggregate Fair Market Value equal to thefull purchase price, or by any other procedure approved by the Committee, or by a combination ofthe foregoing.     c. Employees who are not Executive Officers (as such term is defined the by Securities andExchange Commission) may also give notice and make payment through a brokerage firm pursuant to anarrangement approved by ALC in advance.5. Exercise of Stock Appreciation Rights. SARs as to which the Employee is vested, whichhave become exercisable, and which have not terminated may be exercised by delivery to theSecretary of ALC of a written or electronic notice, complying with the applicable proceduresestablished by the Committee or ALC, stating the whole number of SARs that are thereby exercised.Upon exercise, ALC shall deliver to Employee or Employee’s legal representative, at the absolutediscretion of the Committee, either (i) the number of Shares (rounded down to the nearest wholeShare) (the “**Number of Equivalent Shares**”) equal to (x) (A) the excess, if any, of the Fair MarketValue per Share on the exercise date over the Exercise Price per Share of the SAR, multiplied by(B) the number of SARs being exercised pursuant to such notice, divided by (y) the Fair MarketValue per Share on the exercise date, (ii) cash equal to the Fair Market Value per Share on theexercise date multiplied by the Number of Equivalent Shares, or (iii) any combination of cash andShares with an aggregate value equal to the Fair Market Value per Share on the exercise datemultiplied by the Number of Equivalent Shares.6. Expiration of Stock Options/SARs. Unless the Committee determines otherwise and exceptas otherwise provided in Section 7 or in your Employment Agreement unexercised Options/SARs expire(i) automatically on the date of your Termination of Employment for Cause (as defined in yourEmployment Agreement or, if your Employment Agreement does not contain a definition of Cause) or(ii) 90 days after the effective date of your Termination of Employment for any reason other thanCause; provided that any portion of the Stock Options/SARs that is not vested as of sucheffective date ceases vesting and terminates immediately; and provided further that allOptions/SARs will automatically expire on the fifth anniversary of this Award Agreement.7. Termination of Employment.     a. If the Employee incurs a Termination of Employment due to Disability, the StockOptions/SARs, to the extent outstanding at the time of such Termination of Employment, shall becomeimmediately vested and fully exercisable and may be exercised by the Employee at any time prior tothe first to occur of (i) one year after such Termination of Employment or (ii) the expiration dateof the Stock Options/SARs, and shall thereafter expire.     b. If the Employee incurs a Termination of Employment due to death, the Stock Options/SARs, tothe extent outstanding at the time of such Termination of Employment, shall become immediatelyvested and fully exercisable and may
 

 
be exercised by the Employee’s estate or by a person who acquired the right to exercise suchStock Options/SARs by bequest or inheritance or otherwise by reason of the death of the Employee atany time prior to the first to occur of (i) one year after such Termination of Employment or (ii)the expiration date of the Stock Options/SARs, and shall thereafter expire.          c. If the Employee incurs a Termination of Employment due to retirement at or after age 65,the portion of the Stock Options/SARs, if any, which is exercisable at the time of such Terminationof Employment may be exercised at any time prior to the first to occur of (i) three years aftersuch Termination of Employment or (ii) the expiration date of the Stock Options/SARs, and shallthereafter expire. Any portion of the Stock Options/SARs that is not exercisable at the time ofsuch Termination of Employment due to retirement at or after age 65 shall expire as of suchTermination of Employment.          d. If the Employee incurs a voluntary Termination of Employment by the Employee (other thanretirement at or after age 65), the portion of the Stock Options/SARs, if any, which is exercisableat the time of such Termination of Employment may be exercised at any time prior to the first tooccur of (i) 30 days after such Termination of Employment or (ii) the expiration date of the StockOptions/SARs, and shall thereafter expire. Any portion of the Stock Option/SAR that is notexercisable at the time of such Termination of Employment shall expire as of such Termination ofEmployment.     e. If the Employee incurs a Termination of Employment by ALC without Cause, the portion of theStock Options/SARs, if any, which is exercisable at the time of such Termination of Employment maybe exercised at any time prior to the first to occur of (i) 90 days after such Termination ofEmployment or (ii) the expiration date of the Stock Option/SAR, and shall thereafter expire. Anyportion of the Stock Options/SARs that is not exercisable at the time of such Termination ofEmployment shall expire as of such Termination of Employment. For purposes of this AwardAgreement, **Cause**means, unless otherwise provided by the Committee, (1) “Cause” as defined in anyEmployment Agreement, or (2) if there is no such Employment Agreement or if it does not defineCause: (A) conviction of Employee for committing a felony under federal law or the law of the statein which such action occurred, (B) dishonesty in the course of fulfilling Employee’s employmentduties, (C) willful and deliberate failure on the part of Employee to perform his or her employmentduties in any material respect, or (D) prior to a Change in Control, such other events as shall bedetermined by the Committee. The Committee shall, unless otherwise provided in any employment orsimilar agreement between Employee and ALC, have the sole discretion to determine whether “Cause”exists, and its determination shall be final.8. Voting Rights; Dividend Equivalents. Prior to the date on which your rights withrespect to Options/SARs have become vested and you exercise such Options/SARs, you shall not beentitled to exercise any voting rights with respect to such Options/SARs or any Shares with respectthereto, and shall not be entitled to receive dividends or other distributions with respectthereto.9. Non-Transferability of Options/SARs. Unless otherwise provided by the Committee in itsdiscretion, Options/SARs may not be sold, assigned, alienated, transferred, pledged, attached orotherwise encumbered except as provided in Section 9(a) of the Plan. Any purported sale,assignment, alienation, transfer, pledge, attachment or other encumbrance of Options/SARs inviolation of the provisions of this Section 9 and Section 9(a) of the Plan shall be void.10. Adjustment in the Event of Change in Stock. In the event of any change in corporatecapitalization (including, but not limited to, a change in the number of shares of Common Stockoutstanding), such as a stock split or a corporate transaction, such as any merger, consolidation,separation, including a spin-off, or other distribution of stock or property of ALC, anyreorganization (whether or not such reorganization comes within the definition of such term inSection 368 of the Code), or any partial or complete liquidation of ALC, the number and kind ofshares subject to the Stock Option/SAR and/or the exercise price per share shall be adjusted by theBoard or Committee as the Board or Committee may determine to be appropriate in its solediscretion; provided, however, that the number of shares subject to the Stock Options/SARs shallalways be a whole number. The determination of the Board or Committee regarding any adjustmentwill be final and conclusive.11. Payment of Transfer Taxes, Fees and Other Expenses. ALC agrees to pay any and alloriginal issue taxes and stock transfer taxes that may be imposed on the issuance of Sharesacquired pursuant to exercise of the Stock Options/SARs, together with any and all other fees andexpenses necessarily incurred by ALC in connection therewith.12. Other Restrictions on Exercisability. The exercise of the Stock Options/SARs and thedelivery of share certificates upon such exercise shall be subject to the requirement that, if atany time the Committee shall determine that (a) the listing, registration or qualification of theshares of Common Stock subject or related thereto upon any securities exchange or under any stateor federal law or (b) the consent or approval of any government regulatory body is, in the case or(a) or (b), necessary or desirable as a condition of, or in connection with, such exercise or thedelivery or purchase of shares pursuant
 

 
thereto, then in any such event such exercise shall not be effective unless such listing,registration, qualification, consent, or approval shall have been effected or obtained free of anyconditions not acceptable to the Committee.13. Taxes and Withholdings. No later than the date of exercise of the Stock Options/SARsgranted hereunder, the Employee shall pay to ALC or make arrangements satisfactory to the Committeeregarding payment of any federal, state and local taxes, and any non-U.S. taxes applicable to theEmployee, of any kind required by law to be withheld upon the exercise of such Stock Options/SARs.In the event that there is withholding tax liability in connection with the exercise ofOptions/SARs, you may satisfy, in whole or in part, any withholding tax liability by having ALCwithhold from the number of Shares you would be entitled to receive pursuant to the exercise of theOptions/SARs, a number of Shares having a Fair Market Value equal to such withholding taxliability. ALC shall, to the extent permitted or required by law, have the right to deduct fromany payment of any kind otherwise due to the Employee federal, state, local and applicable non-U.S.taxes of any kind required by law to be withheld upon the exercise of such Stock Options/SARs.14. Consents and Legends.     a. Consents. Your rights in respect of the Options/SARs that are subject to thisAward are conditioned on the receipt to the full satisfaction of the Committee of any requiredconsents that the Committee may reasonably determine to be necessary or advisable (including,without limitation, your consenting to ALC’s supplying to any third-party record keeper of the Plansuch personal information as ALC or the Committee deems advisable to administer the Plan).     b. Legends. ALC may affix to certificates for Shares issued pursuant to this AwardAgreement any legend that ALC or the Committee determines to be necessary or advisable (includingto reflect any restrictions to which you may be subject under any applicable securities laws). ALCmay advise the transfer agent to place a stop order against any legended Shares.15. Successors and Assigns of ALC. The terms and conditions of this Award Agreement shallbe binding upon and shall inure to the benefit of ALC and its successors and assigns.16. Committee Discretion. Subject to the terms of your Employment Agreement, the Committeeshall have full and plenary discretion with respect to any actions to be taken or determinations tobe made in connection with this Award Agreement, and its determinations shall be final, binding andconclusive.17. Dispute Resolution.     a. Jurisdiction and Venue. Notwithstanding any provision in your EmploymentAgreement, you and ALC irrevocably submit to the exclusive jurisdiction of (i) the United StatesDistrict Court for the Eastern District of Wisconsin and (ii) the courts of the State of Wisconsinfor the purposes of any suit, action or other proceeding arising out of this Award Agreement or thePlan. You and ALC agree to commence any such action, suit or proceeding either in the UnitedStates District Court for the Eastern District of Wisconsin or, if such suit, action or otherproceeding may not be brought in such court for jurisdictional reasons, in the courts of the Stateof Wisconsin. You and ALC further agree that service of any process, summons, notice or documentby U.S. registered mail to the other party’s address set forth below shall be effective service ofprocess for any action, suit or proceeding in Wisconsin with respect to any matters to which youhave submitted to jurisdiction in this Section 17(a). You and ALC irrevocably and unconditionallywaive any objection to the laying of venue of any action, suit or proceeding arising out of thisAward Agreement or the Plan in (A) the United States District Court for the Eastern District ofWisconsin or (B) the courts of the State of Wisconsin, and hereby and thereby further irrevocablyand 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 byapplicable law, any right either of you may have to a trial by jury in respect to any litigationdirectly or indirectly arising out of, under or in connection with this Award Agreement or thePlan.     c. Confidentiality. You hereby agree to keep confidential the existence of, and anyinformation concerning, a dispute described in this Section 17, except that you may discloseinformation concerning such dispute to the court that is considering such dispute or to your legalcounsel or other advisors (provided that such counsel or other advisors agree not to disclose anysuch information other than as necessary to the prosecution or defense of the dispute).     18. Notice. All notices, requests, demands and other communications required orpermitted to be given under the terms of this Award Agreement shall be in writing and shall bedeemed 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 West Michigan Street  Milwaukee, WI 53203  Attention: Corporate Secretary   If to Employee:       The parties may change the address to which notices under this Award Agreement shall be sentby providing written notice to the other in the manner specified above.19. Headings. Headings are given to the Sections and subsections of this Award Agreementsolely as a convenience to facilitate reference. Such headings shall not be deemed in any waymaterial or relevant to the construction or interpretation of this Award Agreement or any provisionthereof.20. Amendment of this Award Agreement. The Committee may waive any conditions or rightsunder, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Award Agreementprospectively or retroactively; provided, however, that any such waiver, amendment,alteration, suspension, discontinuance, cancellation or termination that would materially andadversely impair your rights under this Award Agreement shall not to that extent be effectivewithout your consent (it being understood, notwithstanding the foregoing proviso, that this AwardAgreement and the Options/SARs shall be subject to the provisions of Section 7(c) of the Plan).21. Counterparts. This Award Agreement may be signed in counterparts, each of which shallbe an original, with the same effect as if the signatures thereto and hereto were upon the sameinstrument.     IN WITNESS WHEREOF, the parties have duly executed this Award Agreement as of the date firstwritten above.