Document:

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                                                                   EXHIBIT 10.14
                                  PLAN DOCUMENT

                             SUNRISE ASSISTED LIVING
                      EXECUTIVE DEFERRED COMPENSATION PLAN

SUNRISE ASSISTED LIVING, A VA corporation (the "Company"), hereby establishes
the Executive Deferred Compensation Plan (the "Plan"), effective June 1, 2001 to
enable Participants covered under the Plan to enhance their retirement security
by permitting them to enter into agreements with the Company to defer
compensation and receive benefits at retirement, death, separation from service,
and as otherwise provided under the Plan.

                             ARTICLE 1 - DEFINITIONS

1.1      ANNUAL DEFERRAL: shall mean the amount of Compensation, which the
         Participant elects to defer under the Deferral Commitment pursuant to
         Article 3 of the Plan.

1.2      BENEFICIARY: shall mean the person or persons or entity designated as
         such in accordance with Article 10 of the Plan.

1.3      COMPANY: shall mean Sunrise Assisted Living, its subsidiaries and
         divisions, and any successor(s) in interest.

1.4      COMPENSATION: shall mean a Participant's salary and bonuses, before
         reductions for deferral.

1.5      CREDITING RATE: shall mean certain investment alternatives designated
         by the Deferred Compensation Committee from time to time for
         determining adjustments of amounts credited to the Deferral Accounts of
         participants. The Deferred Compensation Committee, in its sole
         discretion, will establish administrative rules for applying the
         Crediting Rate.

1.6      DEFERRAL ACCOUNT: shall mean the bookkeeping device used by the Company
         to measure and determine the amounts to be paid to a Participant under
         the Plan.

1.7      DEFERRAL CONTRIBUTION PERIOD: shall mean the period of one (1) Plan
         Year, or such other period as the Deferred Compensation Committee may
         permit in its discretion, over which the Participant has elected to
         defer Compensation pursuant to Article 3 of the Plan.

1.8      DEFERRAL COMMITMENT OR DEFERRAL UNIT: shall mean a commitment made by a
         Participant to defer compensation pursuant to Articles 2 and 3 of the
         Plan for which a Deferral Election Form has been submitted by the
         Participant.

1.9      DEFERRED COMPENSATION COMMITTEE: shall mean Management's Benefits and
         Compensation Committee, appointed by the Company to administer the Plan
         pursuant to Article 10 of the Plan.
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1.10     DEFERRAL ELECTION FORM: shall mean a written agreement between the
         Company and the Participant, entered into pursuant to paragraph 2.1 of
         the Plan, by which the Participant elects to participate in the Plan
         and make a Deferral Commitment.

1.11     DISABILITY: shall mean a physical or mental condition that prevents a
         Participant from performing his or her normal duties of employment. If
         a Participant makes application for or is otherwise eligible for
         disability benefits under a long-term disability program sponsored by
         his Employer and qualifies for such benefits, the Participant shall be
         presumed to qualify as disabled under the Plan. In the event that a
         Participant is not covered by an Employer-sponsored long-term
         disability program, a Participant shall be presumed to be disabled if
         the Deferred Compensation Committee so determines upon review of one or
         more medical opinions acceptable to the Deferred Compensation
         Committee.

1.12     ELIGIBLE EMPLOYEE: shall mean Director level and above of the senior
         management of the Company as designated by the Deferred Compensation
         Committee to be eligible to participate in the Plan. New employees
         within this group are eligible to participate the first of the month
         following one month of service.

1.13     EMPLOYER: shall mean the Company or any of its subsidiaries or
         divisions.

1.14     ERISA: shall mean the Employee Retirement Income Security Act of 1974,
         as amended.

1.15     FINANCIAL HARDSHIP: shall mean a Participant's unexpected need for cash
         arising from an illness, casualty loss, sudden financial reversal, or
         other such unforeseeable occurrence as determined by the Deferred
         Compensation Committee. Cash needs arising from foreseeable events such
         as, for example, the purchase of a residence or education expenses for
         children shall not, alone, be considered a Financial Hardship.

1.16     PARTICIPANT: shall mean an Eligible Employee who is participating in
         the Plan as provided in Article 2, or a former Eligible Employee for
         whom a Deferral Account is being maintained under the Plan.

1.17     PLAN: shall mean this Executive Deferred Compensation Plan as set forth
         in this document and as the same may be amended, supplemented and/or
         restated from time to time and any successor plan. -

1.18     PLAN YEAR: shall mean the 12-month period from January 1 through
         December 31. Plan year in 2001 shall mean June 1 through December 31.

1.19     RETIREMENT: shall mean the date of the cessation of the Participant's
         employment with the Company for any reason whatsoever, whether
         voluntary or involuntary, other than as a result of the Participant's
         death, after the Participant attains age 55, or such other date as the
         Deferred Compensation Committee may determine in its discretion.
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1.20     TERMINATION OF EMPLOYMENT: shall mean the date of the cessation of the
         Participant's employment with the Company for any reason whatsoever,
         whether voluntary or involuntary, other than as a result of the
         Participant's Retirement, death, or, to the extent provided in Article
         7 of the Plan, Disability.

1.21     VALUATION DATE: shall mean the last day of each Plan Year calendar
         quarter, or such other dates as the Deferred Compensation Committee may
         determine in its discretion, which must be at least annually, for the
         valuation of a Participant's Deferral Account.

1.22     VESTING DATE: shall mean the date or dates, as determined by the
         Deferred Compensation Committee at the time Company Contributions are
         made to the Plan, that a Participant's interest in Company
         Contributions, and earnings allocable thereto, shall vest and not be
         subject to forfeiture.

                            ARTICLE 2 - PARTICIPATION

2.1      DEFERRAL ELECTION FORM. Any Eligible Employee may elect to participate
         in the Plan and to make a Deferral Commitment by submitting a Deferral
         Election Form to the Deferred Compensation Committee prior to the
         beginning of the Deferral Contribution Period. Except as otherwise
         provided in this Plan, the Participant's Deferral Commitment shall be
         irrevocable.

2.2      CONTINUATION OF PARTICIPATION. A Participant who has elected to
         participate in the Plan by making a Deferral Commitment shall continue
         as a Participant in the Plan for purposes of such Deferral Commitment
         even though in any Plan Year after such Deferral Commitment such
         Participant elects not to make a new Deferral Commitment or ceases to
         be an Eligible Employee. A Participant shall not be eligible to make a
         new Deferral Commitment unless the Participant is an Eligible Employee
         with respect to the Plan Year for which the election is made.

                    ARTICLE 3 - FORM OF DEFERRAL COMMITMENTS

3.1      MINIMUM DEFERRAL COMMITMENT. A participant may not elect to defer less
         than $3,500 in any one Plan Year. For the Plan Year beginning June 1,
         2001 the minimum deferral amount may not be less than $1,750.

3.2      MAXIMUM DEFERRAL COMMITMENT. The Deferred Compensation Committee, in
         its sole discretion, may establish maximum Deferral Commitment limits
         for the purpose of controlling the Company's financial obligations
         under the Plan or for any other reason deemed necessary.

3.3      WITHHOLDING. The Deferred Compensation Committee, in its sole
         discretion, will make arrangements for satisfying any federal, state or
         local income tax withholding requirements and Social Security or other
         employee tax requirements applicable to deferral of compensation under
         the Plan.
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                          ARTICLE 4 - DEFERRAL ACCOUNTS

4.1      DEFERRAL ACCOUNTS. A Deferral Account shall be established for each
         Participant. The Deferral Account shall be credited with the applicable
         portion of the Annual Deferral as of the approximate date such amounts
         would otherwise have been paid to the Participant. Deferral Accounts
         shall, except as otherwise provided in the Plan, be credited with
         earnings, in effect for each Plan Year, from the approximate date such
         Deferrals would have been paid through the earlier of the Participant's
         date of death or the following Valuation Date. Notwithstanding anything
         in this paragraph to the contrary, the Deferred Compensation Committee
         may, in its sole discretion, establish administrative rules for the
         purpose of crediting Deferral Accounts.

4.2      STATEMENTS OF ACCOUNT. The Deferred Compensation Committee shall
         provide periodically (but no less frequently than annually) to each
         Participant a statement setting forth the balance of the Deferral
         Account maintained for such Participant.

4.3      VESTING OF DEFERRAL ACCOUNTS. Each Participant shall be one hundred
         percent (100%) vested at all times in the amount of Annual Deferrals
         and earnings actually credited to such Participant's Deferral Account.
         The Participant shall be zero percent (0%) vested in any contributions
         or interest credited to such Participant's Deferral Account for Company
         contributions until the Participant's Vesting Date is reached. If the
         Participant is still employed by the Company and continues to be
         eligible to participate in the Plan on the Vesting Date, the
         Participant shall immediately become one hundred percent (100%) vested
         in all interest credited to Company contributions in his/her Deferral
         Account. In the event the Participant dies prior to reaching the
         Vesting Date, the Benefits calculated under Article 6 of the Plan shall
         assume that the Participant became one hundred percent (100%) vested in
         any interest credited to his Deferral Account as of the day prior to
         his date of death.

                        ARTICLE 5 - COMPANY CONTRIBUTIONS

5.1      The Company reserves the right from time to time, in its discretion, to
         credit the Deferral Account of each Participant who is an Eligible
         Employee with an additional or matching contribution. The amount of the
         matching contribution, if any, shall be equal to such percentage of the
         Compensation deferred by the Participant under Section 4, as determined
         by the Company in its sole discretion.

5.2      Company Contributions held in the Deferral Account shall be distributed
         to a Participant only to the extent such amounts are vested. A
         Participant shall become vested in Company Contributions made on his or
         her behalf, and all earnings allocable thereunder, in accordance with
         the Vesting Date. The balance, if any, of such Company Contributions
         shall be forfeited upon termination of the Participant's employment to
         the extent not vested.
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                         ARTICLE 6 - PAYMENT OF BENEFITS

6.1      RETIREMENT BENEFITS. Upon Retirement or Early Retirement, the Company
         shall pay to the Participant a benefit in the form provided in
         paragraph 6.2 of the Plan, based on the balance of the Participant's
         Deferral Account.

6.2      FORM OF BENEFITS. The retirement benefit attributable to a Deferral
         Account shall be paid in accordance with the Participant's direction as
         found on a Deferral Election Form prescribed by the Deferred
         Compensation Committee for designation of form of payment; such payment
         election shall be made at the time the Deferral Commitment election is
         made. The available forms of payment after Retirement are as follows:

         (a)      Lump Sum. A lump sum payment equal to the balance of the
                  applicable Deferral Account as of the Valuation Date following
                  Retirement or Early Retirement. Payment is to commence no
                  earlier than the first month following his severance and no
                  later than the first month following his/her 70th birthday

         (b)      Installment Payments. Annual installment payments in
                  substantially equal amounts over a period of 5, 10, or 15
                  years. Installment payments shall be made in January of each
                  year following Retirement. Payments must commence no later
                  than the January following his/her 70th birthday. Interest
                  will be credited to the unpaid balance in the Deferral Account
                  at a rate in effect for each Plan Year. The Deferred
                  Compensation Committee, in its sole discretion, may establish
                  rules for making payments and crediting interest to the unpaid
                  Deferral Account balance.

         The participant may change this retirement benefit election to an
         allowable alternative payout period by submitting a new Deferral
         Election Form to the Committee, provided that any such Deferral
         Election Form is submitted at least one (1) year prior to the
         Participant's Retirement. Subject to the foregoing, the Election Form
         most recently accepted by the Committee shall govern the payout of the
         retirement benefit. If no election is submitted, payment will be made
         in a lump sum.

6.3      TERMINATION OF EMPLOYMENT BENEFITS. Upon Termination of Employment, the
         Company shall pay the Participant the vested account balances as
         adjusted for earnings a benefit in the form of a lump sum or in five
         annual installments or continue to accrue until retirement. Such
         payment shall be made within ninety (90) days of said Valuation Date as
         requested by the Participant, subject to the review and approval of the
         Deferred Compensation Committee, in its sole discretion.

6.4      IN-SERVICE DISTRIBUTIONS. A Participant can elect to receive a lump sum
         payment of benefits created and generated by the contribution for a
         Deferral Contribution Period without terminating employment. The
         benefit payment will be received by January of a chosen year at least
         four (4) years after the end of the Deferral Contribution Period which
         the contribution(s) was made.

6.5      SMALL BENEFIT EXCEPTION. Notwithstanding any of the foregoing, in the
         event the sum of all benefits payable to the Participant is less than
         or equal to ten thousand dollars
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         ($10,000), the Company may, in its sole discretion, elect to pay such
         benefits in a single lump sum payment on the date such benefits first
         become payable.

6.6      ACCELERATED DISTRIBUTION PRIOR TO RETIREMENT DATE. A Participant may
         request a distribution of all of the Participant's Compensation
         Deferral Account at any time in accordance with the following rules:

         (a)      The balance distributed to the Participant will be reduced by
                  a penalty amount equal to 10% of the amount of the
                  Participant's Compensation Deferral Account.

         (b)      No Compensation Deferrals will be made on behalf of the
                  Participant for a 12 month period from the date of the
                  requested distribution.

6.7      ACCELERATED DISTRIBUTION FOLLOWING RETIREMENT DATE. A Participant may
         request a distribution of all of the Participant's Compensation
         Deferral Account and Company Contribution Account at any time following
         retirement. The balance distributed to the Participant will be reduced
         by a penalty amount equal to 10% of the amount of the Participant's
         Account.

                          ARTICLE 7 - SURVIVOR BENEFITS

7.1      PRE-RETIREMENT SURVIVOR BENEFIT. If a Participant dies prior to
         Retirement or Termination of Employment the Company shall pay to the
         Participant's Beneficiary a lump sum benefit or equal to the balance of
         the Participant's Deferral Account as of the Valuation Date following
         the death of the Participant. As an alternative, the Participant's
         Beneficiary may also elect to receive the plan account balance over a
         5, 10 or 15 year period.

7.2      SMALL BENEFIT EXCEPTION. Notwithstanding any of the foregoing, in the
         event the sum of all benefits payable to the Beneficiary is less than
         or equal to ten thousand dollars ($10,000), the Company may, in its
         sole discretion, elect to pay such benefits in a single lump sum
         payment on the date such benefits first become payable.

                             ARTICLE 8 - DISABILITY

8.1      If a Participant is determined to have a Disability, the Participant
         shall, effective as of the date such Participant is no longer paid his
         Compensation by the Company, cease deferrals under the Plan except for
         any Deferral Commitment regarding any Compensation which is earned or
         payable subsequent to the Disability. The Participant's Deferral
         Account shall continue to be credited with interest at the Crediting
         Rate until such time as the Participant's benefits under the Plan are
         distributed in accordance with the Participant's election or as
         provided for in paragraph 9.2 of the Plan.
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                   ARTICLE 9 - CONDITIONS RELATED TO BENEFITS

9.1      NONASSIGNABILITY. The benefits provided under the Plan may not be
         alienated, assigned, transferred, pledged or hypothecated by or to any
         person or entity, at any time or in any manner whatsoever. These
         benefits shall be exempt from the claims of creditors or other
         claimants of any Participant and from all orders, decrees, levies,
         garnishment or executions against any Participant to the fullest extent
         allowed by law.

9.2      FINANCIAL HARDSHIP DISTRIBUTION. Upon finding that the Participant or
         the Beneficiary has suffered a Financial Hardship, the Deferred
         Compensation Committee may, in its sole discretion and upon written
         petition by the Participant or Beneficiary, accelerate distributions of
         benefits under the Plan in the amount reasonably necessary to alleviate
         such Financial Hardship or as requested by the Participant or the
         Beneficiary. If a distribution is to be made to a Participant on
         account of Financial Hardship, the Participant may not make subsequent
         Deferral Commitments under the Plan until the third Plan Year following
         the Plan Year in which a distribution based on Financial Hardship was
         made. Any Deferral Commitment in effect at the time such distribution
         is made under this section shall be canceled.

9.3      NO RIGHT TO COMPANY ASSETS. The benefits paid under the Plan shall be
         paid from the general funds of the Company, and the Participant and any
         Beneficiary shall be no more than unsecured general creditors of the
         Company with no special or prior right to any assets of the Company for
         payment of any obligations hereunder.

9.4      PROTECTIVE PROVISIONS. The Participant shall cooperate with the Company
         by furnishing any and all information requested by the Deferred
         Compensation Committee in order to facilitate the payment of benefits
         hereunder, taking such physical examinations as the Deferred
         Compensation Committee may deem necessary, and taking such other
         actions as may be requested by the Deferred Compensation Committee. If
         the Participant refuses to cooperate or makes any material misstatement
         or nondisclosure of information, then no benefits will be payable
         hereunder to such Participant or his Beneficiary and the amounts in the
         Participant's Deferral Account shall be distributed to the Participant
         without earning.

9.5      WITHHOLDING. The Participant or the Beneficiary shall make appropriate
         arrangements with the Company for satisfaction of any federal, state or
         local income tax withholding requirements and Social Security or other
         employee tax requirements applicable to the payment of benefits under
         the Plan. If no such arrangements are made, the Company may provide, at
         its discretion, for such withholding and tax payments as may be
         required.

                     ARTICLE 10 - ADMINISTRATION OF THE PLAN

10.1     The Deferred Compensation Committee shall administer the Plan and
         interpret, construe and apply its provisions in accordance with its
         terms. The Deferred Compensation Committee shall determine in its sole
         discretion those who are eligible to participate in the Plan and shall
         have the right to set guidelines for participation under the Plan
         including, but not limited to, the type, manner and level of Deferral
         Commitments. The
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         Deferred Compensation Committee shall further establish, adopt or
         revise such other rules and regulations as it may deem necessary or
         advisable for the administration of the Plan. All decisions of the
         Deferred Compensation Committee shall be final and binding. The
         individuals serving on the Deferred Compensation Committee shall,
         except as prohibited by law, be indemnified and held harmless by the
         Company from any and all liabilities, costs, and expenses (including
         legal fees), to the extent not covered by liability insurance, arising
         out of any action taken by any member of the Deferred Compensation
         Committee with respect to the Plan, unless such liability arises from
         the individual's own gross negligence or willful misconduct.

                      ARTICLE 11 - BENEFICIARY DESIGNATION

11.1     BENEFICIARY DESIGNATION. The Participant shall have the right, at any
         time, to designate any person or persons as a Beneficiary (both primary
         and contingent) to whom payment under the Plan shall be made in the
         event of the Participant's death. The Beneficiary designation shall be
         effective when it is submitted in writing and delivered to the Deferred
         Compensation Committee during the Participant's lifetime on a form
         prescribed by the Deferred Compensation Committee. If, however, the
         Participant is married, his spouse shall be required to join any such
         designation, or change or revocation thereof, to name a Beneficiary
         other than the spouse.

11.2     NEW BENEFICIARY DESIGNATION. The Participant shall have the right to
         change or revoke any such designation from time to time by filing a new
         designation or notice of revocation with the Company, and no notice to
         any Beneficiary nor consent by any Beneficiary shall be required to
         effect any such change or revocation. If, however, the Participant is
         married, his spouse shall be required to join in any such designation,
         or change or revocation thereof, to name a Beneficiary other than the
         spouse.

11.3     FAILURE TO DESIGNATE BENEFICIARY. If a Participant fails to designate a
         Beneficiary before his death, or if no designated Beneficiary survives
         the Participant, the Deferred Compensation Committee shall direct the
         Company to pay the balance of the Participant's Account in a lump sum
         to the executor or administrator for his estate; provided, however, if
         no executor or administrator shall have been appointed, and actual
         notice of the death was given to the Deferred Compensation Committee
         within sixty (60) days after the Participant's death, and if his
         Account balance does not exceed ten thousand dollars ($10,000), the
         Deferred Compensation Committee may direct the Company to pay the
         Account balance to such person or persons as the Deferred Compensation
         Committee determines may be entitled to it, and the Deferred
         Compensation Committee may require such proof of right and/or identity
         of such person or persons as the Deferred Compensation Committee may
         deem appropriate and necessary.

               ARTICLE 12 - AMENDMENT AND TERMINATION OF THE PLAN

12.1     AMENDMENT OF THE PLAN. The Company may at any time amend the Plan in
         whole or in part, provided however, that such amendment (i) shall not
         decrease the vested balance of the Participant's Deferral Account at
         the time of such amendment and (ii) shall not retroactively decrease
         the applicable crediting rates of the Plan prior to the time of such
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         amendment. The Company or Deferred Compensation Committee may amend the
         crediting rates of the Plan prospectively. If the Company and/or the
         Deferred Compensation Committee changes the formula for determining the
         Crediting Rate under the Plan, the Company or the Deferred Compensation
         Committee shall notify the Participant of such amendment in writing
         within thirty (30) days of such amendment. Within thirty (30) days of
         receipt of the notice of an amendment to the formula for determining
         the applicable Crediting Rate, the Participant may elect by written
         notice to the Deferred Compensation Committee to terminate an
         incomplete Deferral Commitment.

12.2     TERMINATION OF THE PLAN. The Company may at any time terminate the Plan
         as to all or any group of Participants. If the Company terminates the
         Plan as to all or any group of Participants, the date of such
         termination shall be treated as the date of Retirement for the purpose
         of calculating Plan benefits. The Company shall pay to the Participant
         the benefits the Participant is entitled to receive under the Plan in
         annual installments over a three (3) year period or such shorter period
         of time as the Company may determine in its sole discretion. Interest
         at the Crediting Rate will be credited to the Participant's Deferral
         Account until distribution under this paragraph is completed, in
         accordance with the rules established under paragraph 6.2(b).

12.3     CONSTRUCTIVE RECEIPT TERMINATION. In the event the Deferred
         Compensation Committee determines that amounts deferred under the Plan
         have been constructively received by Participants and must be
         recognized as income for federal income tax purposes, the Plan shall
         terminate and distributions shall be made to Participants in accordance
         with the provisions of paragraph 12.2. The determination of the
         Deferred Compensation Committee under this paragraph 12.3 shall be
         binding and conclusive.

                           ARTICLE 13 - MISCELLANEOUS

13.1     SUCCESSORS OF THE COMPANY. The rights and obligations of the Company
         under the Plan shall inure to the benefit of, and shall be binding
         upon, the successors and assigns of the Company.

13.2     ERISA PLAN. The Plan is intended to be an unfunded plan maintained
         primarily to provide deferred compensation benefits for "a select group
         of management or highly compensated employees" within the meaning of
         Sections 201, 301, and 401 of ERISA and therefore to be exempt from
         Parts 2, 3, and 4 of Title I of ERISA. Notwithstanding any provisions
         of this Plan to the contrary, if any Participant is determined not to
         be a "management or highly compensated employee" within the meaning of
         ERISA or applicable regulations thereunder at the time a Deferral
         Commitment is elected, such Participant will not be eligible to
         complete such Deferral Commitment and shall receive an immediate lump
         sum payment equal to the unpaid balance of the Deferral Account as of
         the most recent Valuation Date. Upon such payment, no survivor benefit
         or other benefit shall thereafter be payable under this Plan either to
         the Participant or any Beneficiary of the Participant, with respect to
         said Deferral Account.
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13.3     EMPLOYMENT NOT GUARANTEED. Nothing contained in the Plan nor any action
         taken hereunder shall be construed as a contract of employment or as
         giving any Participant any right to continued employment with the
         Company.

13.4     GENDER, SINGULAR AND PLURAL. All pronouns and variations thereof shall
         be deemed to refer to the masculine or feminine, as the identity of the
         person or persons may require. As the context may require, the singular
         may be read as the plural and the plural as the singular.

13.5     CAPTIONS. The captions of the articles and paragraphs of the Plan are
         for convenience only and shall not control or affect the meaning or
         construction of any of its provisions.

13.6     VALIDITY. In the event any provision of the Plan is held invalid, void
         or unenforceable, the same shall not affect, in any respect whatsoever,
         the validity of any other provisions of the Plan.

13.7     WAIVER OF BREACH. The waiver by the Company of any breach of any
         provision of the Plan by the Participant shall not operate or be
         construed as a waiver of any subsequent breach by the Participant.

13.8     APPLICABLE LAW. The Plan shall be governed and construed in accordance
         with the laws of the Commonwealth of Virginia except where the laws of
         the Commonwealth of Virginia are preempted by ERISA.

13.9     NOTICE. Any notice or filing required or permitted to be given to the
         Company under the Plan shall be sufficient if in writing or
         hand-delivered, or sent by registered or certified mail, return receipt
         requested, to the principal office of the Company, directed to the
         attention of the Deferred Compensation Committee. Such notice shall be
         deemed given as of the date of delivery, or if delivery is made by
         mail, as of the date shown on the postmark on the receipt for
         registration or certification.

13.10    ARBITRATION. Any claim, dispute or other matter in question of any kind
         relating to this Plan shall be settled by arbitration in accordance
         with the Rules of the American Arbitration Association. Notice of
         demand for arbitration shall be made in writing to the opposing party
         and to the American Arbitration Association within a reasonable time
         after the claim, dispute or other matter in question has arisen. In no
         event shall a demand for arbitration be made after the date when the
         applicable statute of limitations would bar the institution of a legal
         or equitable proceeding based on such claim, dispute or other matter in
         question. The decision of the arbitrators shall be final and may be
         enforced in any court of competent jurisdiction.
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        IN WITNESS WHEREOF, the Company has caused this Plan to be executed and
effective as of the 1st day of June, 2001.

                                            SUNRISE ASSISTED LIVING

                                     By:    /s/ Jeffrey M. Jasnoff
                                        ________________________________________
                                    Title:  Senior Vice President
                                          ______________________________________

                                       By:  /s/ Julian S. Myers
                                          ______________________________________
                                    Title:  Vice President and Corporate Counsel
                                          ______________________________________<PAGE>   1

                                                                   EXHIBIT 10.15

                          SUNRISE ASSISTED LIVING, INC.
                             2001 STOCK OPTION PLAN

         SUNRISE ASSISTED LIVING, INC., a Delaware corporation (the
"Corporation"), sets forth herein the terms of this 2001 Stock Option Plan (the
"Plan") as follows:

1.      PURPOSE

               The Plan is intended to advance the interests of the Corporation
and any subsidiary thereof within the meaning of Rule 405 of Regulation C under
the Securities Act of 1933, as amended (the "Securities Act"), with the term
"person" as used in such Rule 405 being defined as in Section 2(2) of the
Securities Act (a "Subsidiary"), by providing eligible individuals (as
designated pursuant to SECTION 4 below) with incentives to improve business
results, by providing an opportunity to acquire or increase a proprietary
interest in the Corporation, which thereby will create a stronger incentive to
expend maximum effort for the growth and success of the Corporation and its
Subsidiaries, and will encourage such eligible individuals to continue to serve
the Corporation and its Subsidiaries, whether as an employee, as a director, as
a consultant or advisor or in some other capacity. To this end, the Plan
provides for the grant of stock options, as set out herein.

               This Plan provides for the grant of stock options (each of which
is an "Option") in accordance with the terms of the Plan. An Option may be an
incentive stock option (an "ISO") intended to satisfy the applicable
requirements under Section 422 of the Internal Revenue Code of 1986, as amended
from time to time, or the corresponding provision of any subsequently-enacted
tax statute (the "Code"), or a nonqualified stock option (an "NSO"). An Option
is an NSO to the extent that the Option would exceed the limitations set forth
in SECTION 7 below. An Option is also an NSO if either (i) the Option is
specifically designated at the time of grant as an NSO or not being an ISO or
(ii) the Option does not otherwise satisfy the requirements of Code Section 422
at the time of grant. Each Option shall be evidenced by a written agreement
between the Corporation and the recipient individual that sets out the terms and
conditions of the grant as further described in SECTION 8.

2.      ADMINISTRATION

         (a)      BOARD

               The Plan shall be administered by the Board of Directors of the
Corporation (the "Board"), which shall have the full power and authority to take
all actions and to make all determinations required or provided for under the
Plan or any Option granted or Option Agreement (as defined in SECTION 8 below)
entered into hereunder and all such other actions and determinations not
inconsistent with the specific terms and provisions of the Plan deemed by the
Board to be necessary or appropriate to the administration of the Plan or any
Option granted or Option Agreement entered into hereunder. The interpretation
and construction by the Board of any provision of the Plan or of any Option
granted or Option Agreement entered into hereunder shall be final, binding and
conclusive.
<PAGE>   2
         (b) ACTION BY COMMITTEE

         The Board from time to time may appoint a Stock Option Committee
consisting of two or more members of the Board of Directors who, in the sole
discretion of the Board, may be the same Directors who serve on the Compensation
Committee, or may appoint the Compensation Committee to serve as the Stock
Option Committee (the "Committee"). The Board, in its sole discretion, may
provide that the role of the Committee shall be limited to making
recommendations to the Board concerning any determinations to be made and
actions to be taken by the Board pursuant to or with respect to the Plan, or the
Board may delegate to the Committee such powers and authorities related to the
administration of the Plan, as set forth in SECTION 2(a) above, as the Board
shall determine, consistent with the Restated Certificate of Incorporation and
By-Laws of the Corporation and applicable law. In the event that the Plan or any
Option granted or Option Agreement entered into hereunder provides for any
action to be taken by or determination to be made by the Board, such action may
be taken by or such determination may be made by the Committee if the power and
authority to do so has been delegated to the Committee by the Board as provided
for in this Section. Unless otherwise expressly determined by the Board, any
such action or determination by the Committee shall be final and conclusive.

         (c) NO LIABILITY

               No member of the Board or of the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option granted or Option Agreement entered into hereunder.

3.      STOCK

               The stock that may be issued pursuant to Options under the Plan
shall be shares of common stock, par value $.01 per share, of the Corporation
(the "Stock"), which shares may be treasury shares or authorized but unissued
shares. The number of shares of Stock that may be issued pursuant to Options
under the Plan shall not exceed, in the aggregate, Seven Hundred Fifty Thousand
(750,000) shares. If any Option expires or terminates, or is terminated or
canceled, for any reason prior to exercise, the shares of Stock that were
subject to the unexercised, forfeited, terminated or canceled portion of such
Option shall be available immediately for future grants of Options under the
Plan.

4.      ELIGIBILITY

         (a) DESIGNATED RECIPIENTS

               Subject to the next sentence, Options may be granted under the
Plan to (i) any director, officer or employee of the Corporation or any
Subsidiary as the Board shall determine and designate from time to time or (ii)
any consultant or advisor providing bona fide services to the Corporation or any
Subsidiary (provided that such services must not be in connection with the offer
or sale of securities in a capital-raising transaction) whose participation in
the Plan is determined by the Board to be in the best interests of the
Corporation and is so designated by the Board. Options granted to an employee of
the Corporation or a "subsidiary corporation" thereof within the meaning of
Section 424(f) of the Code shall be either ISOs or NSOs, as determined in

                                      A-2
<PAGE>   3
the sole discretion of the Board, and Options granted to any other eligible
individual shall be NSOs.

         (b) SUCCESSIVE GRANTS

               An individual may hold more than one Option, subject to such
restrictions as are provided herein.

5.      EFFECTIVE DATE AND TERM OF THE PLAN

         (a) EFFECTIVE DATE

               The Plan shall be effective as of the date of adoption by the
Board, subject to approval of the Plan within one year of such effective date by
the affirmative vote of stockholders who hold more than fifty percent (50%) of
the combined voting power of the outstanding shares of voting stock of the
Corporation present or represented and entitled to vote thereon at a duly
constituted stockholders' meeting, or by consent as permitted by law. Upon
approval of the Plan by the stockholders of the Corporation as set forth above,
however, all Options granted under the Plan on or after the effective date shall
be fully effective as if the stockholders of the Corporation had approved the
Plan on the Plan's effective date. If the stockholders fail to approve the Plan
within one year of such effective date, any Options granted hereunder shall be
null and void and of no effect.

         (b) TERM

               The Plan shall have no termination date, but no grant of an ISO
may occur after the date that is ten years after the effective date.

6.      GRANT OF OPTIONS

         (a) GENERAL

               Subject to the terms and conditions of the Plan, the Board may,
at any time and from time to time, grant to such eligible individuals as the
Board may determine (each of the whom is an "Optionee"), Options to purchase
such number of shares of Stock on such terms and conditions as the Board may
determine, including any terms or conditions that may be necessary to qualify
such Options as ISOs under Section 422 of the Code. Such authority specifically
includes the authority, in order to effectuate the purposes of the Plan but
without amending the Plan, to modify grants to eligible individuals who are
foreign nationals or are individuals who are employed outside the United States
to recognize differences in local law, tax policy or custom.

         (b) LIMITATION ON GRANTS OF OPTIONS

               During any time when the Corporation has a class of equity
security registered under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the maximum number of shares subject to Options
that can be granted under the Plan to any executive officer of the Company or a
Subsidiary, or to any other person eligible for a grant of an

                                      A-3
<PAGE>   4
Option under SECTION 4, is 250,000 shares per year (subject to adjustment as
provided in SECTION 16(a) hereof).

7.      LIMITATIONS ON INCENTIVE STOCK OPTIONS

         (a) PRICE AND DOLLAR LIMITATIONS

               An Option that is designated as being one that is intended to
qualify as an ISO shall qualify for treatment as an ISO only to the extent that
the aggregate fair market value (determined at the time the Option is granted)
of the Stock with respect to which all options that are intended to constitute
"incentive stock options," within the meaning of Code Section 422, are
exercisable for the first time by any Optionee during any calendar year (under
the Plan and all other plans of the Optionee's employer corporation and its
parent and subsidiary corporations within the meaning of Section 422(d) of the
Code) does not exceed $100,000.

         (b) PARACHUTE LIMITATIONS

               Notwithstanding any other provision of this Plan or of any other
agreement, contract or understanding heretofore or hereafter entered into by the
Optionee with the Corporation, except an agreement, contract or understanding
hereafter entered into that expressly modifies or excludes application of this
paragraph (an "Other Agreement"), and notwithstanding any formal or informal
plan or other arrangement for the direct or indirect provision of compensation
to the Optionee (including groups or classes of participants or beneficiaries of
which the Optionee is a member), whether or not such compensation is deferred,
is in cash, or is in the form of a benefit to or for the Optionee (a "Benefit
Arrangement"), if the Optionee is a "disqualified individual," as defined in
Section 280G(c) of the Code, any Option held by that Optionee and any right to
receive any payment or other benefit under this Plan shall not become
exercisable or vested (i) to the extent that such right to exercise, vesting,
payment or benefit, taking into account all other rights, payments or benefits
to or for the Optionee under this Plan, all Other Agreements and all Benefit
Arrangements, would cause any payment or benefit to the Optionee under this Plan
to be considered a "parachute payment" within the meaning of Section 280G(b)(2)
of the Code as then in effect (a "Parachute Payment") and (ii) if, as a result
of receiving a Parachute Payment, the aggregate after-tax amounts received by
the Optionee from the Corporation under this Plan, all Other Agreements and all
Benefit Arrangements would be less than the maximum after-tax amount that could
be received by him without causing any such payment or benefit to be considered
a Parachute Payment. In the event that the receipt of any such right to
exercise, vesting, payment or benefit under this Plan, in conjunction with all
other rights, payments or benefits to or for the Optionee under any Other
Agreement or any Benefit Arrangement would cause the Optionee to be considered
to have received a Parachute Payment under this Plan that would have the effect
of decreasing the after-tax amount received by the Optionee as described in
clause (ii) of the preceding sentence, then the Optionee shall have the right,
in the Optionee's sole discretion, to designate those rights, payments or
benefits under this Plan, any Other Agreements and any Benefit Arrangements that
should be reduced or eliminated so as to avoid having the payment or benefit to
the Optionee under this Plan be deemed to be a Parachute Payment.

                                      A-4
<PAGE>   5
8.      OPTION AGREEMENTS

               All Options granted pursuant to the Plan shall be evidenced by
agreements ("Option Agreements"), to be executed by the Corporation and by the
Optionee, in such form or forms as the Board shall from time to time determine.
Option Agreements covering Options granted from time to time or at the same time
need not contain similar provisions; provided, however, that all such Option
Agreements shall comply with all terms of the Plan.

9.      OPTION PRICE

               The purchase price of each share of Stock subject to an Option
(the "Option Price") shall be fixed by the Board and stated in each Option
Agreement. The Option Price shall be not less than the greater of par value or
100 percent of the fair market value of a share of Stock on the date on which
the Option is granted (as determined in good faith by the Board); provided,
however, that in the event the Optionee would otherwise be ineligible to receive
an ISO by reason of the provisions of Sections 422(b)(6) and 424(d) of the Code
(relating to stock ownership of more than ten percent), the Option Price of an
Option that is intended to be an ISO shall not be less than the greater of par
value or 110 percent of the fair market value of a share of Stock at the time
such Option is granted. In the event that the Stock is listed on an established
national or regional stock exchange or The Nasdaq Stock Market, is admitted to
quotation on the National Association of Securities Dealers Automated Quotation
System, or is publicly traded in an established securities market, in
determining the fair market value of the Stock, the Board shall use the closing
price of the Stock on such exchange or system or in such market (the highest
such closing price if there is more than one such exchange or market) on the
trading date immediately before the Option is granted (or, if there is no such
closing price, then the Board shall use the mean between the highest bid and
lowest asked prices or between the high and low prices on such date), or, if no
sale of the Stock has been made on such day, on the next preceding day on which
any such sale shall have been made.

10.     TERM AND EXERCISE OF OPTIONS

         (a) TERM

               Upon the expiration of ten years from the date on which an ISO is
granted or on such date prior thereto as may be fixed by the Board and stated in
the Option Agreement relating to such Option, that ISO shall be ineligible for
treatment as an "incentive stock option," as defined in Section 422 of the Code,
and shall be exercisable only as an NSO. In the event the Optionee otherwise
would be ineligible to receive an "incentive stock option" by reason of the
provisions of Sections 422(b)(6) and 424(d) of the Code (relating to stock
ownership of more than 10 percent), such ten year restriction on exercisability
as an ISO shall be read to impose a five year restriction on such
exercisability. If an Optionee shall terminate employment prior to the ten-year
or five-year limitation described in the immediately preceding sentences, other
than due to death, any outstanding ISO shall be ineligible for treatment as an
"incentive stock option," as defined in Section 422 of the Code, and shall be
exercisable only as an NSO, unless exercised within three months after such
termination or, in the case of termination on account of "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code), within one
year after such termination.

                                      A-5
<PAGE>   6
         (b) OPTION PERIOD AND LIMITATIONS ON EXERCISE

               Each Option granted under the Plan shall be exercisable, in whole
or in part, at any time and from time to time, over a period commencing on or
after the date of grant and, to the extent that the Board determines and sets
forth a termination date for such Option in the Option Agreement (including any
amendment thereto), ending upon the stated expiration or termination date. The
Board in its sole discretion may specify events or circumstances, including the
giving of notice, which will cause an Option to terminate as set forth in the
Option Agreement or in this Plan. Without limiting the foregoing but subject to
the terms and conditions of the Plan, the Board may in its sole discretion
provide that an Option may not be exercised in whole or in part for any period
or periods of time during which such Option is outstanding and may condition
exercisability (or vesting) of an Option upon the attainment of performance
objectives, upon continued service, upon certain events or transactions, or a
combination of one or more of such factors, or otherwise, as set forth in the
Option Agreement. Subject to the parachute payment restrictions under SECTION
7(B), however, the Board, in its sole discretion, may rescind, modify or waive
any such limitation or condition on the exercise of an Option contained in any
Option Agreement, so as to accelerate the time at which the Option may be
exercised or extend the period during which the Option may be exercised.
Notwithstanding any other provisions of the Plan, no Option granted to an
Optionee under the Plan shall be exercisable in whole or in part prior to the
date on which the stockholders of the Corporation approve the Plan, as provided
in SECTION 5 above.

         (c) METHOD OF EXERCISE

               An Option that is exercisable hereunder may be exercised by
delivery to the Corporation on any business day, at the Corporation's principal
office, addressed to the attention of the President, of written notice of
exercise, which notice shall specify the number of shares with respect to which
the Option is being exercised and shall be accompanied by payment in full of the
Option Price of the shares for which the Option is being exercised. The minimum
number of shares of Stock with respect to which an Option may be exercised, in
whole or in part, at any time shall be the lesser of (i) 100 shares or such
lesser number set forth in the applicable Option Agreement and (ii) the maximum
number of shares available for purchase under the Option at the time of
exercise. Payment of the Option Price for the shares of Stock purchased pursuant
to the exercise of an Option shall be made (i) in cash or in cash equivalents;
(ii) to the extent permitted by applicable law and under the terms of the Option
Agreement with respect to such Option, through the tender to the Corporation of
shares of Stock, which shares shall be valued, for purposes of determining the
extent to which the Option Price has been paid thereby, at their fair market
value (determined in accordance with SECTION 9) on the date of exercise; (iii)
to the extent permitted by applicable law and under the terms of the Option
Agreement with respect to such Option, by the delivery of a promissory note of
the person exercising the Option to the Corporation on such terms as shall be
set out in such Option Agreement; (iv) to the extent permitted by applicable law
and under the terms of the Option Agreement with respect to such Option, by
causing the Corporation to withhold shares of Stock otherwise issuable pursuant
to the exercise of an Option equal in value to the Option Price or portion
thereof to be satisfied pursuant to this clause (iv); or (v) by a combination of
the methods described in (i), (ii), (iii) and (iv). An attempt to exercise any
Option granted hereunder other than as set forth above shall be invalid and of
no force and effect. Payment in full of the Option Price need not accompany the
written notice of exercise provided the notice directs that the Stock
certificate or certificates for

                                      A-6
<PAGE>   7
the shares for which the Option is exercised be delivered to a licensed broker
acceptable to the Corporation as the agent for the individual exercising the
Option and, at the time such Stock certificate or certificates are delivered,
the broker tenders to the Corporation cash (or cash equivalents acceptable to
the Corporation) equal to the Option Price. Promptly after the exercise of an
Option and the payment in full of the Option Price of the shares of Stock
covered thereby, the individual exercising the Option shall be entitled to the
issuance of a Stock certificate or Stock certificates evidencing his ownership
of such shares. A separate Stock certificate or separate Stock certificates
shall be issued for any shares purchased pursuant to the exercise of an Option
that is an ISO, which certificate or certificates shall not include any shares
that were purchased pursuant to the exercise of an Option that is an NSO. Unless
otherwise stated in the applicable Option Agreement, an individual holding or
exercising an Option shall have none of the rights of a stockholder (for
example, the right to receive cash or stock dividend payments attributable to
the subject shares or to direct the voting of the subject shares) until the
shares of Stock covered thereby are fully paid and issued to him. Except as
provided in SECTION 16 below, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date of such issuance.

         (d) DATE OF GRANT

               The date of grant of an Option under this Plan shall be the date
as of which the Board approves the grant or such date as is specified by the
Board.

11.     TRANSFERABILITY OF OPTIONS

               During the lifetime of an Optionee, only such Optionee (or, in
the event of legal incapacity or incompetence, the guardian or legal
representative of the Optionee) may exercise the Option, except as otherwise
specifically permitted by this SECTION 11. No Option shall be assignable or
transferable other than by will or in accordance with the laws of descent and
distribution; provided, however, subject to the terms of the applicable Option
Agreement, and to the extent the transfer is in compliance with any applicable
restrictions on transfers, an Optionee may transfer an NSO to a family member of
the Optionee (defined as an individual who is related to the Optionee by blood,
adoption, or marriage) or to a trust established and maintained for the benefit
of the Optionee or a family member of the Optionee (as determined under
applicable state law and the Code).

12.     TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP OF OPTIONEE

               In the Board's sole discretion, the Board may include language in
an Option Agreement providing for the termination of any unexercised Option in
whole or in part upon or at any time after the termination of employment or
other relationship of the Optionee with the Corporation or a Subsidiary (whether
as an employee, a director, a consultant or advisor providing bona fide services
to the Corporation or a Subsidiary, or otherwise). Whether a leave of absence or
leave on military or government service shall constitute a termination of
employment or other relationship of the Optionee with the Corporation or a
Subsidiary for purposes of the Plan shall be determined by the Board, which
determination shall be final and conclusive.

                                      A-7
<PAGE>   8
13.     USE OF PROCEEDS

               The proceeds received by the Corporation from the sale of Stock
pursuant to the exercise of Options granted under the Plan shall constitute
general funds of the Corporation.

14.     REQUIREMENTS OF LAW

               The Corporation shall not be required to sell or issue any shares
of Stock under any Option if the sale or issuance of such shares would
constitute a violation by the Optionee, the individual exercising the Option or
the Corporation of any provisions of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or
regulations. If at any time the Corporation shall determine, in its discretion,
that the listing, registration or qualification of any shares subject to the
Option upon any securities exchange or under any state or federal law, or the
consent or approval of any government regulatory or self-regulatory body is
necessary or desirable as a condition of, or in connection with, the issuance or
purchase of shares, the Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Corporation,
and any delay caused thereby shall in no way affect the date of termination of
the Option. Specifically in connection with the Securities Act, upon the
exercise of any Option, unless a registration statement under the Securities Act
is in effect with respect to the shares of Stock covered thereby, the
Corporation shall not be required to sell or issue such shares unless the Board
has received evidence satisfactory to it that the holder of such Option may
acquire such shares pursuant to an exemption from registration under the
Securities Act. Any determination in this connection by the Board shall be
final, binding and conclusive. The Corporation may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities
Act. The Corporation shall not be obligated to take any affirmative action in
order to cause the exercisability or vesting of an Option or to cause the
exercise of an Option or the issuance of shares pursuant thereto to comply with
any law or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable unless
and until the shares of Stock covered by such Option are registered or are
subject to an available exemption from registration, the exercise of such Option
(under circumstances in which the laws of such jurisdiction apply) shall be
deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.

15.     AMENDMENT, FORFEITURES AND TERMINATION OF THE PLAN

               The Board may, at any time and from time to time, amend, suspend
or terminate the Plan as to any shares of Stock as to which Options have not
been granted. The Corporation may retain the right in an Option Agreement to
convert an ISO into an NSO. The Corporation may also retain the right in an
Option Agreement to cause a forfeiture of the shares of Stock or gain realized
by a holder of an Option (a) if the holder violates any agreement covering
non-competition with the Corporation or any Subsidiary or nondisclosure of
confidential information of the Corporation or any Subsidiary, (b) if the
holder's employment is terminated for cause or (c) if the Board determines that
the holder committed acts or omissions which would have been the basis for a
termination of holder's employment for cause had such acts or omissions been
discovered prior to termination of holder's employment. Furthermore, the
Corporation may, in the Option Agreement, retain the right to annul the grant of
an Option, if the holder of such grant was an employee of the Corporation or a
Subsidiary and the holder's employment is terminated

                                      A-8
<PAGE>   9
for cause, as defined in the applicable Option Agreement. Except as permitted
under this SECTION 15 or SECTION 16 hereof, no amendment, suspension or
termination of the Plan shall, without the consent of the holder of the Option,
alter or impair rights or obligations under any Option theretofore granted under
the Plan.

16.     EFFECT OF CHANGES IN CAPITALIZATION

         (a) CHANGES IN STOCK

               If the number of outstanding shares of Stock is increased or
decreased or the shares of Stock are changed into or exchanged for a different
number or kind of shares or other securities of the Corporation on account of
any recapitalization, reclassification, stock split-up, combination of shares,
exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of
consideration by the Corporation, occurring after the effective date of the
Plan, the number and kind of shares for the acquisition of which Options may be
granted under the Plan, and the limitations on the maximum number of shares
subject to Options that can be granted to any individual under the Plan as set
forth in SECTION 6(b) hereof, shall be adjusted proportionately and accordingly
by the Corporation. In addition, the number and kind of shares for which Options
are outstanding shall be adjusted proportionately and accordingly so that the
proportionate interest of the holder of the Option immediately following such
event shall, to the extent practicable, be the same as immediately before such
event. Any such adjustment in outstanding Options shall not change the aggregate
Option Price payable with respect to shares that are subject to the unexercised
portion of the Option outstanding but shall include a corresponding
proportionate adjustment in the Option Price per share.

         (b)      REORGANIZATION IN WHICH THE CORPORATION IS THE SURVIVING
                  CORPORATION

               Subject to SUBSECTION ((c))(iv) hereof, if the Corporation shall
be the surviving corporation in any reorganization, merger or consolidation of
the Corporation with one or more other corporations, any Option theretofore
granted pursuant to the Plan shall pertain to and apply to the securities to
which a holder of the number of shares of Stock subject to such Option would
have been entitled immediately following such reorganization, merger or
consolidation, with a corresponding proportionate adjustment of the Option Price
per share so that the aggregate Option Price thereafter shall be the same as the
aggregate Option Price of the shares remaining subject to the Option immediately
prior to such reorganization, merger or consolidation. In the event of any
distribution to the Corporation's stockholders of securities of any other entity
or other assets (other than dividends payable in cash or stock of the
Corporation) without receipt of consideration by the Corporation, the
Corporation may, in such manner as the Corporation deems appropriate, adjust (i)
the number and kind of shares subject to the outstanding awards and/or (ii) the
exercise price of outstanding Options to reflect such distribution.

         (c)      DISSOLUTION, LIQUIDATION, SALE OF ASSETS, REORGANIZATION IN
                  WHICH THE CORPORATION IS NOT THE SURVIVING CORPORATION, ETC.

               The Plan and all Options outstanding hereunder shall terminate
(i) upon the dissolution or liquidation of the Corporation, (ii) upon a merger,
consolidation or reorganization of the Corporation with one or more other
corporations in which the Corporation is not the

                                      A-9
<PAGE>   10
surviving corporation, (iii) upon a sale of substantially all of the assets of
the Corporation to another person or entity or (iv) upon a merger, consolidation
or reorganization (or other transaction if so determined by the Board in its
sole discretion) in which the Corporation is the surviving corporation, that is
approved by the Board and that results in any person or entity (other than
persons who are holders of Stock of the Corporation at the time the Plan is
approved by the stockholders and other than an Affiliate) owning 80 percent or
more of the combined voting power of all classes of stock of the Corporation,
except to the extent provision is made in writing in connection with any such
transaction covered by clauses (i) through (iv) for the continuation of the Plan
or the assumption of such Options theretofore granted, or for the substitution
for such Options of new options covering the stock of a successor corporation,
or a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and exercise prices, in which event the Plan and Options
theretofore granted shall continue in the manner and under the terms so
provided. In the event of any such termination of the Plan and Options, each
individual holding an Option shall have the right (subject to the general
limitations on exercise set forth in SECTION 10(b) above), during such period
occurring before such termination as the Board in its sole discretion shall
determine and designate, and in any event immediately before the occurrence of
such termination, to exercise such Option in whole or in part, to the extent
that such Option was otherwise exercisable at the time such termination occurs,
except that, by inclusion of appropriate language in an Option Agreement, the
Board may provide that the Option may be exercised before termination without
regard to any installment limitation or other condition on exercise imposed
pursuant to SECTION 10(b) above. The Corporation shall send written notice of a
transaction or event that will result in such a termination to all individuals
who hold Options not later than the time at which the Corporation gives notice
thereof to its stockholders.

         (d) ADJUSTMENTS

               Adjustments under this SECTION 16 related to stock or securities
of the Corporation shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. No fractional shares of Stock or
units of other securities shall be issued pursuant to any such adjustment, and
any fractions resulting from any such adjustment shall be eliminated in each
case by rounding downward to the nearest whole share or unit.

         (e) NO LIMITATIONS ON CORPORATION

               The grant of an Option pursuant to the Plan shall not affect or
limit in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.

17.     DISCLAIMER OF RIGHTS

               No provision in the Plan or in any Option granted or Option
Agreement entered into pursuant to the Plan shall be construed to confer upon
any individual the right to remain in the employ or service of or to maintain a
relationship with the Corporation or any Subsidiary, or to interfere in any way
with any contractual or other right or authority of the Corporation or any
Subsidiary either to increase or decrease the compensation or other payments to
any individual at any time, or to terminate any employment or other relationship
between any individual and the Corporation or any Subsidiary. The obligation of
the Corporation to pay any benefits pursuant to

                                      A-10
<PAGE>   11
this Plan shall be interpreted as a contractual obligation to pay only those
amounts described herein, in the manner and under the conditions prescribed
herein. The Plan shall in no way be interpreted to require the Corporation to
transfer any amounts to a third party trustee or otherwise hold any amounts in
trust or escrow for payment to any participant or beneficiary under the terms of
the Plan.

18.     NONEXCLUSIVITY OF THE PLAN

               Neither the adoption of the Plan nor the submission of the Plan
to the stockholders of the Corporation for approval shall be construed as
creating any limitations upon the right and authority of the Board to adopt such
other incentive compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or specifically to a
particular individual or particular individuals) as the Board in its discretion
determines desirable, including, without limitation, the granting of stock
options otherwise than under the Plan.

19.     CAPTIONS

               The use of captions in this Plan or any Option Agreement is for
the convenience of reference only and shall not affect the meaning of any
provision of the Plan or such Option Agreement.

20.     DISQUALIFYING DISPOSITIONS

               If Stock acquired by exercise of an ISO granted under this Plan
is disposed of within two years following the date of grant of the ISO or one
year following the transfer of the subject Stock to the Optionee (a
"disqualifying disposition"), the holder of the Stock shall, immediately prior
to such disqualifying disposition, notify the Corporation in writing of the date
and terms of such disposition and provide such other information regarding the
disposition as the Corporation may reasonably require.

21.     WITHHOLDING TAXES

               The Corporation shall have the right to deduct from payments of
any kind otherwise due to an Optionee any federal, state or local taxes of any
kind required by law to be withheld with respect to any shares issued upon the
exercise of an Option under the Plan or in connection with the purchase of an
Option by the Corporation. At the time of exercise, the Optionee shall pay to
the Corporation any amount that the Corporation may reasonably determine to be
necessary to satisfy such withholding obligation. The Board in its sole
discretion may provide in the Option Agreement that, subject to the prior
approval of the Corporation, which may be withheld by the Corporation in its
sole discretion, the Optionee may elect to satisfy such obligations, in whole or
in part, (i) by causing the Corporation to withhold shares of Stock otherwise
issuable pursuant to the exercise of an Option or (ii) by delivering to the
Corporation shares of Stock already owned by the Optionee. The shares so
delivered or withheld shall have a fair market value equal to such withholding
obligations. The fair market value of the shares used to satisfy such
withholding obligation shall be determined by the Corporation as of the date
that the amount of tax to be withheld is to be determined. An Optionee who has
made an election pursuant to this SECTION 21 may only satisfy his or her
withholding obligation with

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<PAGE>   12
shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements.

22.     OTHER PROVISIONS

               Each Option granted under the Plan may be subject to, and the
Option Agreement relating to such Option may contain, such other terms and
conditions not inconsistent with the Plan as may be determined by the Board, in
its sole discretion. Notwithstanding the foregoing, each ISO granted under the
Plan shall include those terms and conditions that are necessary to qualify the
ISO as an "incentive stock option" within the meaning of Section 422 of the Code
or the regulations thereunder and shall not include any terms or conditions that
are inconsistent therewith.

23.     NUMBER AND GENDER

               With respect to words used in this Plan, the singular form shall
include the plural form, the masculine gender shall include the feminine gender,
etc., as the context requires.

24.     SEVERABILITY

               If any provision of the Plan or any Option Agreement shall be
determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.

25.     GOVERNING LAW

               The validity and construction of this Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of Delaware (excluding its choice of law rules).

                                      * * *

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