Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”), is made as of May 10, 2005, by and
between Sunrise Senior Living, Inc., a Delaware corporation (“Sunrise”), and Michael B.
Lanahan (the “Executive”). Certain capitalized terms used herein are defined in Section 21
hereof.

WITNESSETH:

     WHEREAS, pursuant to a Securities Purchase Agreement dated as of May 2, 2005 by and among
Sunrise, Greystone Communities, Inc., a Texas corporation (the “Company”), and the
Executive, among others (the “Purchase Agreement”), Sunrise is acquiring, among other
things, all of the Company’s capital stock;

     WHEREAS, the execution and delivery of this Agreement is a condition to the closing under the
Purchase Agreement;

     WHEREAS, Sunrise desires to employ the Executive as Chairman of the Company; and

     WHEREAS, Sunrise and the Executive desire to state the terms and conditions of the Executive’s
employment with Sunrise.

     NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties
agree as follows:

     1. Employment and Duties.

     (a) Position.

     Sunrise, for itself and its Subsidiaries and their affiliates, including the Company
(collectively, the “Sunrise Entities” and individually, a “Sunrise Entity”), hereby
agrees to employ the Executive, and the Executive agrees to be employed by Sunrise upon the terms
and conditions hereinafter set forth as (i) through December 31, 2007, Chairman of the Company, or
(ii) on or after January 1, 2008, in any other position at a comparable level in light of the
Executive’s capacities, as may be assigned to him from time to time by the President of Sunrise,
including any such position with any Sunrise Entity. At any time on or after January 1, 2008, if
elected or appointed, the Executive shall also serve as a director of any Sunrise Entity for
additional compensation (if any) consistent with Sunrise’s employment practices.

     (b) Duties and Reporting.

     The Executive shall have all the powers, duties, and responsibilities of Chairman of the
Company, as the President of Sunrise may from time to time assign to the Executive consistent with
his status as Chairman of the Company, including but not limited to the general responsibilities
associated with being a senior representative of a Sunrise Entity. Executive shall devote his full
business time and attention to the affairs of Sunrise and the Company, perform his duties,
responsibilities and functions hereunder to the best of his abilities in a diligent,

 

 

trustworthy, professional and efficient manner, and shall comply with the lawful and good faith
directions and instructions given to him by the President of Sunrise and with the policies and
procedures of Sunrise and the Company. In his capacity as Chairman of the Company, the Executive
shall report directly to the President of Sunrise. If the Executive’s position is changed in a
manner consistent with the provisions of Section 1(a), the foregoing covenants in this Section 1(b)
shall apply equally to any such position and any such other Sunrise Entity.

     (c) Exclusive Services.

     For so long as the Executive is employed by a Sunrise Entity, and except as may otherwise be
contemplated by this Agreement, the Executive will not, without the prior written approval of
Sunrise, directly or indirectly, engage or participate in, or become employed by, or become a
director, officer or partner of, or render advisory services to, or provide other services in
connection with, any business activity other than that of the Sunrise Entities.

     This provision should not be interpreted to prevent the Executive from participating in
hobbies, other activities, and pursuits in his spare time (i.e., time not delegated to a Sunrise
Entity commitment or project), including normal charitable activities and passive investments in
family businesses that are not competitive with the business of any Sunrise Entity, so long as such
activities do not interfere with the Executive’s ability to perform his duties. In the event the
Executive pursues publication of any written material, Sunrise reserves the right to review any
written product relating to a Sunrise Entity or senior housing and reserves approval rights for any
portion of written product that relates to a Sunrise Entity or the Executive’s employment.

     (d) Certain Activities.

     The Executive during the term of this Agreement shall comply with the Special Ethics Rules
attached to this Agreement as Exhibit A and shall not (i) give or agree to give any gift or similar
benefit or more than nominal value to any customer, supplier, or governmental employee or official
or any other person who is or may be in a position to assist or hinder any Sunrise Entity in
connection with any proposed transaction, which gift or similar benefit, if not given or continued
in the future, might adversely affect the business or prospects of any Sunrise Entity, (ii) use any
corporate or other funds for unlawful contributions, payments, gifts or entertainment, (iii) make
any unlawful expenditures relating to political activity to governmental officials or others, (iv)
establish or maintain any unlawful or unrecorded funds in violation of Section 30A of the
Securities Exchange Act of 1934, as amended, or (v) accept or receive any unlawful contributions,
payments, gifts or expenditures.

     (e) Location of Services.

     For so long as the Executive is employed under this Agreement, his main focus of employment
will be in Irving, Texas, unless otherwise agreed to in writing by the Executive and Sunrise. This
provision does not limit Sunrise in requiring the Executive to perform business travel reasonably
necessary to perform his duties.

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     2. Term of Employment.

     The Executive’s employment under this Agreement will commence on the date hereof and will
terminate without the need for any written or verbal notice four (4) years from the date hereof
(the “Original Term”), subject to extension in accordance with the following sentence or
earlier termination in accordance with Section 4 hereof (the period from the date hereof until the
actual date of termination is hereinafter referred to as the “Term”). Sunrise and the
Executive agree to meet at least 90 days prior to the expiration of the Original Term to discuss
whether or not to extend the Term and, if so, on what terms.

     3. Compensation and Benefits.

     (a) Salary and Bonus.

     Subject to the approval of the Compensation Committee of the Board of Directors of Sunrise
(the “Compensation Committee”), Sunrise shall cause the Company to pay to the Executive an
annual base salary (the “Salary”) at the initial rate of $350,000, payable in accordance
with the Company’s normal payroll practices. The Salary shall be reviewed on an annual basis in
accordance with the policy of the Compensation Committee and may be adjusted, in the discretion of
the Compensation Committee, taking into account the Executive’s performance and any other factors
the Compensation Committee deems relevant. The Executive shall receive an annual full-time salary
no less than $350,000 during the Term.

     As of the end of 2005 and of each calendar year thereafter during which this Agreement is in
effect, the Executive shall be eligible to receive a discretionary bonus, which shall be earned as
of the end of each calendar year through 2008 and as of the end of the Original Term in 2009, in an
amount up to 100% of his Salary (which, for 2005, shall mean up to $350,000 even though the period
of the Executive’s employment in 2005 is less than one year, and which, for the portion of 2009
encompassed by the Original Term, shall mean up to a prorated amount based on the number of days
employed in 2009 which, when annualized, equals his Salary as of the end of the Original Term)
based upon meeting objectives established by the Compensation Committee. Notwithstanding the
foregoing, the Compensation Committee shall have the discretion to grant an additional bonus based
on Executive’s performance.

     (b) Restricted Stock Grant.

     Sunrise agrees, subject to the approval of its Board of Directors, to issue to the Executive
18,500 shares of its restricted common stock (the “Restricted Shares”), in accordance with
the terms of the form of Restricted Stock Agreement attached hereto as Exhibit B.

     (c) Reimbursed Business Expenses.

     Sunrise will cause the Company to reimburse the Executive for all reasonable business-related
expenses incurred by him in the performance of his duties during the Term consistent with the
Company’s policy as of the date of this Agreement. The Executive must file expense reports with
respect to such expenses in accordance with the Company’s policies.

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     (d) Participation in Benefit Plans.

     During the Term, the Executive shall be eligible to participate in each medical, dental,
disability, life insurance and other welfare or fringe benefit plan (i) through December 31, 2007,
sponsored by the Company (other than any such plans which terminate on or before closing under the
Purchase Agreement, provided that the Executive shall be eligible for replacement plans) and (ii)
on or after January 1, 2008, sponsored by Sunrise or the Company, in Sunrise’s discretion, in each
case in accordance with the generally applicable terms and conditions of each such plan.

     (e) Automobile.

     Sunrise shall cause (i) the Company to provide the Executive an annual automobile allowance of
$12,000 and to reimburse the Executive for business miles to the extent provided in the Company’s
policies as of the date of this Agreement and (ii) the Executive to be included in the Company’s
automobile allowance policy (if any). The Executive will use this annual allowance to own,
maintain and insure his own automobile for his business use in connection with his employment under
this Agreement. The Executive must file expense reports with respect to such automobile in
accordance with the Company’s policies. Any of the foregoing costs which are in excess of the
annual allowance shall be borne by the Executive.

     (f) Club Membership.

     Sunrise shall cause the Company to pay the monthly dues and locker fees (excluding
discretionary expenses and extraordinary assessments) for the Executive’s current membership at
each of the Dallas National Golf Club and the Four Seasons Sports Club and Resort.

     (g) Vacation.

     Executive shall be entitled to vacation consistent with the policy of the Company as of the
date of this Agreement.

     4. Termination of Employment Before the Expiration of the Original Term.

     Subject to the provisions of this Section 4, Sunrise shall have the right to terminate the
Executive’s employment at any time, for any reason or for no reason, and the Executive shall have
the right to resign only for Good Reason.

	 	(a)	 	Termination by Sunrise (Excluding For Cause Termination) or Resignation by
the Executive for Good Reason.

      (i) If (1) the Executive’s employment is terminated by Sunrise on or after January 1,
2008 for a reason other than for Cause, or (2) the Executive resigns for Good Reason before
the expiration of the Original Term, then the Executive shall be entitled to the following
payments:

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	 	(A)	 	any earned and unpaid Salary and bonus through and including
the date of such termination or resignation, payable as soon as practicable
after such termination or resignation;
	 
	 	(B)	 	a severance payment (the “Severance Payment”),
determined in the accordance with Section 4(a)(ii); and
	 
	 	(C)	 	payment of the Executive’s health insurance premiums (excluding
the premiums the Executive would have paid if still employed by Sunrise or a
Subsidiary) for COBRA coverage for the one-year period following the date of
such termination or resignation.

      (ii) Subject to the Executive’s compliance with Sections 4(e), 6 and 7 below, if the
Executive’s employment terminates under the circumstances set forth in subsection (i) above,
the Severance Payment shall equal the total of (A) the Executive’s remaining Salary payments
that would have been payable until the end of the Original Term, assuming his Salary rate
remained at the level in effect at the termination date, payable in accordance with the
Company’s normal payroll practices, and (B) 50 percent of the average of the annual bonus
payments paid to the Executive pursuant to Section 3(a) hereof, payable annually with
respect to each year remaining in the Original Term in accordance with the Company’s normal
payroll practices, with a prorated amount being payable with respect to any portion of the
balance of the Original Term which is not a full year.

      (iii) The Executive acknowledges and agrees that the Severance Payment and other
benefits provided for by this Section 4(a) represent the full and complete benefits in the
nature of severance pay to which he will be entitled from the Sunrise Entities in the event
his employment with Sunrise or any other Sunrise Entity terminates under the circumstances
contemplated by this Section 4(a).

     (b) Termination of Employment by Sunrise for Cause.

     If the Executive’s employment is terminated by Sunrise for Cause, the Executive shall be
entitled only to payment of (i) any unpaid Salary and any other amounts earned or accrued but not
paid through and including the date of such termination and (ii) any earned and unpaid bonus that
may be required as of the date of the termination by any bonus plan applicable to the Executive,
but shall not be entitled to any other severance payment. Such payment shall be made as soon as
practicable following the termination of the Executive’s employment.

     (c) Death or Permanent Disability.

     Upon the Executive’s death or termination of employment due to “permanent disability” (as
defined below), the Executive (or in the event of his death, the Executive’s beneficiary) shall be
entitled as severance only to payment of any unpaid Salary and any other amounts (including bonus)
earned but not paid through and including the date of such death or termination of employment, to
be paid as soon as practicable following such death or termination of employment. Other than
payments which may be due under separate Sunrise or Company plans

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or pensions, the Executive or his beneficiary shall not be entitled to any other severance payment
in the event of the Executive’s death or disability, although the Executive or his beneficiary (as
the case may be) shall be entitled to the appropriate benefits under any applicable disability or
life insurance programs then maintained for the Executive by Sunrise or the Company. “Permanent
disability” shall mean the inability, for a period of six consecutive months, to adequately perform
Executive’s regular duties, with reasonable accommodation, due to a physical or mental illness,
condition or disability.

     (d) Date of Termination or Resignation.

     The date of the Executive’s termination of employment pursuant to Section 4(a) or 4(b) shall
be the date specified in the written notice of termination from Sunrise or, if no date is specified
therein, ten days after receipt by the Executive of the written notice of termination from Sunrise.
The date of the Executive’s resignation of employment pursuant to Section 4(a) shall be the date
specified in the written notice of resignation from the Executive to Sunrise or, if no date is
specified therein, ten days after receipt by Sunrise of the written notice of resignation from the
Executive. The date of the Executive’s termination of employment under Section 4(c) shall be the
date of the Executive’s death or the date specified in the written notice of termination from
Sunrise or, if no date is specified therein, ten days after receipt by the Executive of the written
notice of termination from Sunrise.

     (e) Release.

     In the event of a termination of the Executive’s employment, it is understood and agreed that
a principal condition to any commitment by Sunrise to pay to the Executive any Severance Payment
shall be the execution and delivery to Sunrise by the Executive of a full and unconditional release
and waiver of all claims and causes of action, known and unknown, in contract, law and equity, of
any kind whatsoever that the Executive has or may have against any Sunrise Entity or any of their
officers, directors, employees, agents and affiliates as of the Executive’s employment termination
date, provided that the foregoing shall not apply to any claim by the Executive under the
certificate of incorporation or bylaws or similar organizational document of any Sunrise Entity for
indemnification by reason of the fact that the Executive was an officer, director or manager of
such entity. Sunrise agrees to cause its executive officers (as defined in Rule 3b-7 under the
Securities Exchange Act of 1934, as amended) not to disparage the Executive after the Term.

     (f) Resignation Other Than for Good Reason is a Breach.

     In the event that the Executive resigns other than for Good Reason, then the Executive shall
be in material breach of this Agreement and Sunrise shall be entitled to all remedies available
therefor at law or in equity, including but not limited to monetary damages for lost profits. In
this connection, the parties acknowledge and agree that the Executive’s commitment to his continued
employment during the Original Term was a fundamental factor in the decision of Sunrise to acquire
the Company and that Sunrise would suffer substantial financial harm if the Executive resigned
other than for Good Reason. Nothing in this Section 4(f) shall affect Sunrise’s ability to obtain
injunctive or other equitable relief for other breaches of this Agreement.

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     (g) Termination of Employment by Sunrise Without Cause Prior to January 1, 2008.

     In the event that Sunrise terminates the Executive’s employment other than for Cause or
permanent disability prior to January 1, 2008, then Sunrise shall be in material breach of this
Agreement and the Executive shall be entitled to all remedies available therefor at law or in
equity, provided that the minimum amount of damages payable to the Executive in the event of such a
breach shall equal the amount of the Severance Payment that would have been payable had such
termination been permitted under Section 4(a). In this connection, the parties acknowledge and
agree that the Executive’s commitment to his continued employment during the Original Term was a
fundamental factor in his decision to agree to the Purchase Agreement and the Executive would
suffer substantial financial harm if he was terminated by Sunrise other than for Cause or permanent
disability prior to January 1, 2008.

     (h) Section 409A of the Internal Revenue Code.

     (i) Anything in this Agreement to the contrary notwithstanding, if (A) on the date of
termination of Executive’s employment with Sunrise or a Subsidiary, any of Sunrise’s stock
is publicly traded on an established securities market or otherwise (within the meaning of
Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as amended (the “Code”)) and (B) as a
result of such termination, the Executive would receive any payment that, absent the
application of this Section 4(h), would be subject to interest and additional tax imposed
pursuant to Section 409A(a) of the Code as a result of the application of Section
409A(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is
the earliest of (1) 6 months after the Executive’s termination date, (2) the Executive’s
death or (3) such other date as will cause such payment not to be subject to such interest
and additional tax.

     (ii) It is the intention of the parties that payments or benefits payable under this
Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Code.
To the extent such potential payments or benefits could become subject to such Section, the
parties shall cooperate to amend this Agreement with the goal of giving the Executive the
economic benefits described herein in a manner that does not result in such tax being
imposed.

     (i) Expiration of Term.

     No termination of employment shall be deemed to occur for purposes of the special payments
provided under Section 4(a) as a result of the expiration of the Term and the cessation of the
Executive’s employment on or after the date of such expiration.

     5. Tax Withholding.

     All amounts payable to the Executive pursuant to this Agreement shall be subject to all legal
requirements with respect to the withholding of taxes.

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     6. Non-Disclosure Covenant; Executive’s Inventions.

     Executive acknowledges that the information, observations and data (including trade secrets)
obtained by him (i) while employed by the Company prior to the date hereof and (ii) after the date
hereof from any Sunrise Entity concerning the business or affairs of the Sunrise Entities
(collectively, “Confidential Information”) are the property of the applicable Sunrise
Entity. Upon execution of this Agreement, the Executive shall be afforded access to Confidential
Information related to the Executive’s duties that Sunrise would not otherwise disclose to the
Executive in the absence of his agreements herein. The Executive acknowledges that (a) public
disclosure of such Confidential Information could have an adverse effect on the Sunrise Entities
and their businesses; (b) because the Executive possesses substantial technical expertise and skill
with respect to the Company’s business, and will obtain substantial technical expertise and skill
with respect to the businesses of other Sunrise Entities, Sunrise desires to obtain exclusive
ownership of each Employee Invention, and Sunrise will be at a substantial competitive disadvantage
if they fail to acquire exclusive ownership of each Employee Invention; and (c) the provisions of
this Section are reasonable and necessary to prevent the improper use or disclosure of Confidential
Information and to provide the Sunrise Entities with exclusive ownership of all Employee
Inventions.

     In consideration of the foregoing, the receipt and sufficiency of which the Executive
acknowledges, the Executive covenants as follows:

     (a) Confidentiality.

     (i) During and following the Term, the Executive will hold in confidence the
Confidential Information and will not disclose it to any person except with the specific
prior written consent of Sunrise or except as otherwise expressly permitted by the terms of
this Agreement, including in the normal course of the performance of his duties hereunder.

     (ii) Any trade secrets of any Sunrise Entity will be entitled to all of the protections
and benefits under Texas trade secret laws and any other applicable law. If any information
that Sunrise deems to be a trade secret is found by a court of competent jurisdiction not to
be a trade secret for purposes of this Agreement, such information will nevertheless be
considered Confidential Information for purposes of this Agreement. The Executive hereby
waives any requirement that Sunrise or any other Sunrise Entity submit proof of the economic
value of any trade secret or post a bond or other security.

     (iii) None of the foregoing obligations and restrictions applies to any part of the
Confidential Information that the Executive demonstrates was or became generally available
to the public other than as a result of a disclosure by the Executive.

     (iv) The Executive will not remove from the premises of Sunrise or any other Sunrise
Entity (except to the extent such removal is for purposes of the performance of the
Executive’s duties at home or while traveling, or except as otherwise specifically
authorized by Sunrise) any document, record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or in any other form

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(collectively, the “Proprietary Items”). The Executive recognizes that, as
between the Sunrise Entities and the Executive, all of the Proprietary Items, whether or not
developed by the Executive, are the exclusive property of the applicable Sunrise Entity.
Upon termination of this Agreement by either party, or upon the request of Sunrise during
the Term, the Executive will return to the applicable Sunrise Entity all of the Proprietary
Items in the Executive’s possession or subject to the Executive’s control, and the Executive
shall not retain any copies, abstracts, sketches, or other physical embodiment of any of the
Proprietary Items.

     (b) Employee Inventions.

     Each Employee Invention will belong exclusively to the applicable Sunrise Entity. The
Executive acknowledges that all of the Executive’s writings, works of authorship, and other
Employee Inventions are works made for hire and are the property of the Company, including any
copyrights, patents or other intellectual property rights pertaining thereto. If it is determined
that any such works are not works made for hire, the Executive hereby assigns to the Company (and
agrees to execute and deliver any other documents deemed necessary to so assign) all of the
Executive’s right, title, and interest, including all rights of copyright, patent, and other
intellectual property rights, to or in such Employee Inventions. The Executive covenants that he
will promptly:

     (i) Disclose to Sunrise in writing any Employee Invention;

     (ii) Assign to Sunrise or to a party designated by Sunrise, at Sunrise’s request and
without additional compensation, all of the Executive’s right to the Employee Invention for
the United States and all foreign jurisdictions;

     (iii) Execute and deliver to Sunrise such applications, assignments, and other
documents as Sunrise may request in order to apply for and obtain patents or other
registrations with respect to any Employee Invention in the United States and any foreign
jurisdictions;

     (iv) Sign all other papers necessary to carry out the above obligations; and

     (v) Give testimony and render any other assistance in support of the rights of Sunrise
or any other Sunrise Entity to any Employee Invention.

     7. Non-Competition and Non-Interference.

     The Executive acknowledges that (i) the services to be performed by him under this Agreement
are of a special, unique, unusual, extraordinary, and intellectual character; (ii) the business of
the Company is national in scope and its services are marketed throughout the United States, and
the business of the other Sunrise Entities is international in scope, and their services are
marketed throughout the United States and in certain countries outside the United States; (iii) the
Company and the other Sunrise Entities compete with other businesses that are or could be located
in any part of the United States and in certain countries outside the United States; (iv) Sunrise
has required that the Executive make the covenants set forth in this Section 7 as a condition to
Sunrise’s acquisition of the Company pursuant to the Purchase Agreement; (v)

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Sunrise has required that the Executive make the covenants set forth in this Section 7 as a
condition of providing the Executive with its Confidential Information; and (vi) the provisions of
this Section 7 are reasonable and necessary to protect the business of the Sunrise Entities.

     In consideration of the mutual promises made by the parties hereto, the Executive covenants
that he will not, directly or indirectly:

     (a) In light of the fact that the Executive shall have access to certain Confidential
Information related to the business of the Sunrise Entities which would make the Executive a
formidable competitor in all aspects of the business of the Sunrise Entities in any location where
the Sunrise Entities do business as of the date of the Executive’s termination of employment,
during the Term (except in the course of his employment hereunder or as otherwise agreed by
Sunrise) and during the Post-Employment Period, engage or invest in, own, manage, operate, finance,
control, or participate in the ownership, management, operation, financing, or control of, be
employed by, associated with, or in any manner connected with, lend the Executive’s name or any
similar name to, lend Executive’s credit to or render services or advice to, any business whose
services or activities compete in whole or in part with the services or activities of any Sunrise
Entity anywhere within the specific states of the United States or in any other country in which
any Sunrise Entity operates during the Term; provided, however, that (i) the Executive may purchase
or otherwise acquire up to (but not more than) one percent of (A) any class of securities of any
enterprise (but without otherwise participating in the activities of such enterprise) if such
securities are listed on any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934, and (B) any tax-exempt debt securities issued
under the authority of a municipality or other governmental entity; (ii) nothing in this Section
7(a) shall preclude the Executive during the Post-Employment Period from performing work in a role
that does not compete with the business of any Sunrise Entity; and (iii) in the case of activities
unrelated to senior living or senior housing, Sunrise will consider in good faith any request by
the Executive for an exception to the foregoing restrictions.

     (b) Whether for the Executive’s own account or for the account of any other person, at any
time during the Term and the Post-Employment Period, solicit business of the same or similar type
being carried on by any Sunrise Entity, from any person known by the Executive to be a customer of
a Sunrise Entity or to have been a customer of a Sunrise Entity at any time within the six months
prior to the end of the Term, and about whom the Executive received Confidential Information,
whether or not the Executive had personal contact with such person during and by reason of the
Executive’s employment with Sunrise;

     (c) Whether for the Executive’s own account or the account of any other person (i) at any time
during the Term and the Post-Employment Period, solicit, employ, or otherwise engage as an
employee, independent contractor, or otherwise, any person who is or was an employee of a Sunrise
Entity at any time during the Term or in any manner induce or attempt to induce any employee of a
Sunrise Entity to terminate such employment; or (ii) at any time during the Term and the
Post-Employment Period, interfere with the relationship of any Sunrise Entity with any person,
including any person who at any time during the Term was an employee, contractor, supplier, or
customer of a Sunrise Entity; provided that nothing in this Section 7(c) shall preclude the
Executive during the Post-Employment Period from working with a former employee of a Sunrise Entity
in a business that does not compete with the business of any Sunrise Entity if such

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former employee did not terminate his or her employment with such Sunrise Entity as a direct
or indirect result of the Executive’s actions; or

     (d) At any time during or after the Term, disparage any Sunrise Entity or any of their
shareholders, directors, officers, employees, agents or affiliates.

     For purposes of this Section 7, the term “Post-Employment Period” means the two (2)
year period beginning on the date of termination or expiration of the Executive’s employment with
Sunrise.

     If any covenant in this Section 7 is held to be unreasonable, arbitrary, or against public
policy, such covenant will be considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of
competent jurisdiction may determine to be reasonable, not arbitrary, and not against public
policy, will be effective, binding, and enforceable against the Executive. The Executive agrees
that the covenants set forth in Section 7(a) shall be deemed to be a series of separate covenants
not to compete for each month within the applicable period of non-competition and separate
covenants not to compete for each state within the United States and for each country outside of
the United States.

     The period of time applicable to any covenant in this Section 7 will be extended by the
duration of any violation by the Executive of such covenant.

     The Executive will, while the covenant under this Section 7 is in effect, give notice to
Sunrise, within ten days after accepting any other employment, of the identity of the Executive’s
employer. Sunrise may notify such employer that the Executive is bound by this Agreement and, at
Sunrise’s election, furnish such employer with a copy of this Agreement or relevant portions
thereof.

     8. Injunctive Relief and Additional Remedy.

     The Executive acknowledges that the injury that would be suffered by the Sunrise Entities as a
result of a breach of the provisions of this Agreement (including any provision of Sections 6 and
7) would be irreparable.

     9. Covenants of Sections 6 and 7 are Essential and Independent Covenants.

     The covenants by the Executive in Sections 6 and 7 are essential elements of this Agreement,
and without the Executive’s agreement to comply with such covenants, Sunrise would not have
acquired the Company and entered into this Agreement or employed the Executive. Sunrise and the
Executive have independently consulted their respective counsel and have been advised in all
respects concerning the reasonableness and propriety of such covenants, with specific regard to the
nature of the business conducted by the Sunrise Entities.

     10. Notices.

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     All notices, request, consents or other communications required or permitted to be given
hereunder shall be in writing by personal delivery, facsimile, or certified or registered mail
return receipt requested, to the applicable address set forth below, or such other address as
either party shall furnish in writing to the other:

	 	 	 	 	 
	(i)

	 	To Sunrise
	 	Jeffrey M. Jasnoff
	 

	 	 	 	Sunrise Senior Living, Inc.
	 

	 	 	 	Suite T-900
	 

	 	 	 	7900 Westpark Drive
	 

	 	 	 	McLean, Virginia 22102
	 
	 	 	 	 
	(ii)

	 	To the Executive
	 	Michael B. Lanahan
	 

	 	 	 	5222 Farquhar
	 

	 	 	 	Dallas, TX 75209

     11. Representations and Warranties by the Executive.

     The Executive represents and warrants to Sunrise that the execution and delivery by the
Executive of this Agreement do not, and the performance by the Executive of the Executive’s
obligations hereunder will not, with or without the giving of notice or the passage of time, or
both: (a) violate any judgment, writ, injunction, or order of any court, arbitrator, or
governmental agency applicable to the Executive; or (b) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under, any agreement to which the
Executive is a party or by which the Executive is or may be bound.

     12. Obligations Contingent on Performance.

     The obligations of Sunrise hereunder, including Sunrise’s obligation to cause the payment of
the compensation provided for herein, are contingent upon the Executive’s performance of the
Executive’s obligations hereunder.

     13. Binding Effect.

     This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto
and their respective successors, permitted assigns, heirs, and legal representatives.

     14. Entire Understanding.

     This Agreement constitutes the entire understanding between Sunrise and the Executive relating
to the employment of the Executive by Sunrise and supersedes and cancels all prior negotiations,
understandings, and agreements.

     15. Assignment and Delegation.

     Neither this Agreement nor any right, duty, or obligation hereunder shall be assignable or
delegable by the Executive. This Agreement and all the rights and obligations of Sunrise hereunder
may be assigned, delegated, or transferred to (i) any other Sunrise Entity or (ii) any

- 12 -

 

business entity which at any time by merger, consolidation, or other business combination acquires,
directly or indirectly, all or substantially all of the stock or assets of Sunrise or to which
Sunrise transfers all or substantially all of its assets. Upon any such assignment, delegation, or
transfer, any such successor shall be deemed to be substituted for all purposes as Sunrise
hereunder and this Agreement shall be binding upon any such successor.

     16. Amendment and Waiver.

     This Agreement may not be modified, amended, or waived in any manner except by an instrument
in writing signed by the Executive and Sunrise. The waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed as a waiver of any
other provision of this Agreement or of any subsequent breach by such party of a provision of this
Agreement.

     17. Counterparts.

     This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the same instrument.

     18. Headings.

     The headings of the Sections of this Agreement are included solely for convenience of
reference and shall not be construed or interpreted in any way as affecting the meaning of such
Sections.

     19. Governing Law.

     This Agreement shall be governed by, construed, and interpreted in accordance with, the laws
of the state of Texas.

     20. Severability; Interpretation.

     Each provision hereof is severable from this Agreement, and if one or more of the provisions
herein are declared invalid, the remaining provisions shall nevertheless remain in full force and
effect. This Agreement has been negotiated between the parties and will not be deemed to be
drafted by, or the product of, any party. As such, this Agreement will not be interpreted in favor
or, or against, any party.

     21. Definitions.

     For purposes of this Agreement, the following terms shall have the meanings set forth below:

     (a) “Cause” means the Executive, in Sunrise’s discretion, engages in any of the
following:

- 13 -

 

	 	(i)	 	A material breach by the Executive of any of his obligations
hereunder;
	 
	 	(ii)	 	Willful failure by the Executive to comply with the reasonable
directions of the President of Sunrise in achieving the objectives of any
Sunrise Entity to which the Executive is assigned pursuant to Section 1 hereof;
	 
	 	(iii)	 	The Executive’s failure to adhere to any written policy of a
Sunrise Entity if the Executive has been given a reasonable opportunity to
comply with such policy or cure his failure to comply;
	 
	 	(iv)	 	The appropriation (or attempted appropriation) of a material
business opportunity of a Sunrise Entity, including attempting to secure or
securing any personal profit in connection with any transaction entered into on
behalf of a Sunrise Entity;
	 
	 	(v)	 	The misappropriation (or attempted misappropriation) of any of
the funds or property of a Sunrise Entity;
	 
	 	(vi)	 	(A) reporting to work under the influence of alcohol or illegal
drugs or (B) using alcohol or illegal drugs, whether or not at the workplace,
in such fashion as to cause economic harm to any Sunrise Entity;
	 
	 	(vii)	 	A willful act by the Executive which has a materially
detrimental effect on the reputation or business of any Sunrise Entity;
	 
	 	(viii)	 	Any breach of fiduciary duty, gross negligence or willful misconduct with
respect to any Sunrise Entity which (if capable of cure) is not cured to the
reasonable satisfaction of Sunrise within 15 days after notice thereof to the
Executive; or
	 
	 	(ix)	 	The Executive’s conviction of, the indictment for (or its
procedural equivalent), pleading guilty to, agreeing to deferred adjudication
with respect to, entering a plea of no contest with respect to, or being
charged with (where such charge is not dismissed or otherwise resolved
favorably to the Executive in six months) any felony, the equivalent of a
felony, or any charge of fraud, embezzlement, theft, offense involving moral
turpitude, any crime related to the Executive’s duties hereunder or a violation
of any federal or state securities or tax law.

     (b) “Good Reason” means:

	 	(i)	 	A material failure by Sunrise to perform its obligations under
this Agreement which shall be continuing and uncured for 15 days after written
notice thereof has been given to Sunrise by the Executive; or
	 
	 	(ii)	 	A material and adverse change in the Executive’s duties and
responsibilities not agreed to by the Executive (other than termination for
Cause);

- 14 -

 

provided that, except as stated below, the Executive shall not be entitled to invoke Good Reason as
a result of any action of the board of directors of Sunrise or any administrator or committee
provided for under any employee benefit plan or program in applying or administering such plan or
program generally or taking any generally applicable discretionary action.

     (c) “Employee Invention” means:

     Any idea, invention, technique, modification, process, or improvement (whether patentable or
not), any industrial design (whether registerable or not), any mask work, however fixed or encoded,
that is suitable to be fixed, embedded or programmed in a semiconductor product (whether recordable
or not), and any work of authorship (whether or not copyright protection may be obtained for it)
created, conceived, or developed by the Executive, either solely or in conjunction with others,
during the Term, or a period that includes a portion of the Term, that relates in any way to, or is
useful in any manner in, the business then being conducted or proposed to be conducted by any
Sunrise Entity, and any such item created by the Executive, either solely or in conjunction with
others, following termination of the Executive’s employment with Sunrise, that is based upon or
uses Confidential Information.

     (d) “Subsidiary” means any corporation or other entity of which the securities or
other ownership interests having the voting power to elect a majority of the board of directors or
other governing body are, at the time of determination, owned by Sunrise, directly or through one
or more Subsidiaries.

     22. Executive’s Cooperation.

     During the Term and thereafter, the Executive shall cooperate with the Sunrise Entities in any
internal investigation or administrative, regulatory or judicial proceeding as reasonably requested
by Sunrise (including, without limitation, the Executive being available to Sunrise upon reasonable
notice for interviews and factual investigations, appearing at the request of Sunrise to give
testimony without requiring service of a subpoena or other legal process, volunteering to Sunrise
all pertinent information and turning over to Sunrise all relevant documents which are or may come
into the Executive’s possession, all at times and on schedules that are reasonably consistent with
the Executive’s other permitted activities and commitments). In the event Sunrise requires the
Executive’s cooperation in accordance with this paragraph, Sunrise shall cause the Company promptly
to reimburse the Executive solely for reasonable travel expenses (including lodging and meals) upon
submission or receipts.

     23. Mandatory Arbitration.

     Except as provided below, any dispute, controversy or claim between or among the parties
hereto arising out of or relating to this Agreement, a breach hereof, or Executive’s employment
with Sunrise shall first be submitted to mediation by and through JAMS in Dallas, Texas, and if
such dispute is not settled, it will be submitted to binding arbitration in accordance with the
provisions of this Section 23. However, Sunrise is not required to submit to mediation or
arbitration any claim, allegation, or cause of action for breach of Sections 6 or 7 of this
Agreement, and Sunrise may file suit and seek any relief it is entitled with regard to such claim,
allegation, or cause of action from a court with jurisdiction.

- 15 -

 

     Any arbitration pursuant to this Section 23 shall be conducted by a panel consisting of three
arbitrators, and in accordance with the Dispute Resolution Rules of the American Arbitration
Association upon the request of any party hereto. The panel may proceed to resolution
notwithstanding the failure of either party to participate in the arbitration proceeding. The
parties agree that the arbitrator selection process shall consist of each party selecting a single
arbitrator of their own choice from the American Arbitration Association’s panel of neutrals; and,
then the two selected arbitrators deciding on a third neutral to serve as the final arbitrator on
the panel.

     The parties also agree that the Panel shall have the authority to dispose of any claims
summarily, and prior to the final arbitration hearing, if the Panel deems any asserted claims to be
without merit or without adequate support in fact or law. Accordingly, the parties agree that each
party may, by motion to the Panel, seek to summarily dispose of claims, which it believes to be
meritless.

     The parties shall share equally in the fees and expenses of the arbitration panel. The
parties hereto agree that any arbitration conducted in accordance with this Section 23 shall occur
in Dallas, Texas, and (i) will be final and binding among the parties, and (ii) may be entered in
any court having jurisdiction.

- 16 -

 

     IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be duly
executed by their respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	             /s/ Michael B. Lanahan 	 
	 	MICHAEL B. LANAHAN 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	SUNRISE:

SUNRISE SENIOR LIVING, INC.,

a Delaware corporation

 	 
	 	By:  	     /s/ Bradley B. Rush
 	 
	 	Name:  	Bradley B. Rush 	 
	 	Title:  	Chief Investment Officer 	 
	 

- 17 -exv10w2

 

Exhibit 10.2

SUNRISE SENIOR LIVING, INC.

2003 STOCK OPTION AND RESTRICTED STOCK PLAN

RESTRICTED STOCK AGREEMENT

     Sunrise Senior Living, Inc., a Delaware corporation (the “Company”), hereby grants shares of
its common stock, $0.01 par value (the “Stock”), to the Grantee named below, subject to the vesting
conditions set forth in the attachment. Additional terms and conditions of the grant are set forth
in this cover sheet, in the attachment and in the Company’s 2003 Stock Option and Restricted Stock
Plan (the “Plan”).

Grant Date: ____May 10, 2005

Name of Grantee: Michael B. Lanahan

Number of Shares of Stock Covered by Grant: 18,500

Purchase Price per Share of Stock: $0.01

     By signing this cover sheet, you agree to all of the terms and conditions described in the
attached Agreement and in the Plan, a copy of which is available from the Company upon request.
You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in
the event any provision of this Agreement should appear to be inconsistent.

	 	 	 
	Grantee:

	 	                          /s/ Michael B. Lanahan
	 

	 	 
	 

	 	Print
Name:           Michael B. Lanahan
	 
	 	 
	Company:

	 	                         /s/ Thomas B. Newell
	 

	 	 
	 

	 	Print Name:          Thomas B. Newell
	 

	 	Title:                     President

Attachment

This is not a stock certificate or a negotiable instrument.

8446-1

 

SUNRISE SENIOR LIVING, INC.

2003 STOCK OPTION AND RESTRICTED STOCK PLAN

RESTRICTED STOCK AGREEMENT

	 	 	 
	Restricted Stock/ Nontransferability

	 	This grant is an award of Stock in
the number of shares set forth on
the cover sheet, at the purchase
price set forth on the cover
sheet, and subject to the vesting
conditions described below (the
“Restricted Stock”). The purchase
price for the Restricted Stock is
deemed paid by your services to
the Company. To the extent not
yet vested, your Restricted Stock
may not be transferred, assigned,
pledged or hypothecated, whether
by operation of law or otherwise,
nor may the Restricted Stock be
made subject to execution,
attachment or similar process.
	 
	 	 
	Issuance and Vesting

	 	The Company will issue your
Restricted Stock in your name as
of the Grant Date. Your
Restricted Stock is being issued
in accordance with Section 3(b) of
your Employment Agreement dated
May 10, 2005 with the Company (the
“Employment Agreement”).
Capitalized terms used below in
this “Issuance and Vesting”
section but not defined in this
Restricted Stock Agreement or the
Plan will have the meanings given
to them in the Securities Purchase
Agreement dated as of May 2, 2005
by and among the Company,
Greystone Communities, Inc. and
you, among others (the “Purchase
Agreement”).
	 
	 	 
	 

	 	Your right to the Stock under this
Restricted Stock grant becomes
fully vested on the eighth
anniversary of the Grant Date if
you have been continuously
providing services to the Company
or a Subsidiary (either in your
current employment capacity or in
any subsequent full-time or
part-time employment capacity)
from the Grant Date until the
eighth anniversary of the Grant
Date; provided, however, that
vesting shall accelerate under the
following circumstances:
	 
	 	 
	 

	 	If either (A) the 2005 fiscal year
Pre-Tax Net Income of the Acquired
Companies is greater than $5.7
million and their 2006 fiscal year
Pre-Tax Net Income is greater than
$9.5 million, or (B) the Acquired
Companies’ cumulative Pre-Tax Net
Income for fiscal years 2005 and
2006 is greater than $15.2
million, then 12,333 shares of
Restricted Stock shall vest at the
time such Pre-Tax Net Income
amounts have been conclusively
determined in accordance with
Section 2.05(d) of the Purchase
Agreement.
	 
	 	 
	 

	 	If either (A) the 2007 fiscal year
Pre-Tax Net Income of the Acquired
Companies is greater than $11.3
million, or (B) the Acquired
Companies’ cumulative Pre-Tax Net
Income for fiscal

8446-1

 

	 	 	 
	 

	 	years 2005, 2006
and 2007 is greater than $26.5
million, then 6,167 shares of
Restricted Stock shall vest at the
time such Pre-Tax Net Income
amounts have been conclusively
determined in accordance with
Section 2.05(d) of the Purchase
Agreement.
	 
	 	 
	 

	 	Notwithstanding the foregoing, if
you are restricted from selling
Company stock on a vesting date
pursuant to the Company’s policy
on insider trading, your shares
that would have vested on that
date will vest on the first date
that is during a window period in
which Company insiders are not
restricted from selling Company
stock.
	 
	 	 
	 

	 	Notwithstanding the vesting
schedule, to the extent not
previously vested, your right to
the Stock under this Agreement
becomes 100% vested upon the
earliest of (i) your termination
of employment with the Company or
a Subsidiary due to your death or
disability, (ii) your termination
of employment by the Company or a
Subsidiary other than for Cause
(as defined in the Employment
Agreement), or (iii) termination
of employment by you for Good
Reason (as defined in the
Employment Agreement), in each
case if you have been continuously
employed by the Company or a
Subsidiary from the Grant Date.
For purposes of clause (ii) of the
foregoing sentence, with respect
to the period after the expiration
of the Original Term (as defined
in the Employment Agreement) and
before the eighth anniversary of
the Grant Date, your employment
with the Company or a Subsidiary
shall be deemed to have been
terminated by the Company or such
Subsidiary without Cause if (a)
your employment has not been
terminated by the Company or a
Subsidiary for Cause (as defined
in the Employment Agreement) and
(b) the Company or a Subsidiary
does not offer annually to extend
the Term (as defined in the
Employment Agreement) in one-year
increments, on the same terms and
conditions set forth in the
Employment Agreement, provided
that such offered terms may differ
from the terms of the Employment
Agreement by providing for no less
than (1) a minimum of 15 working
hours per week and (2) a prorated
salary which, when annualized
based on full time status, would
at least be equal to your highest
Salary (as defined in the
Employment Agreement) on an
annualized basis during the Term
of the Employment Agreement,
including any extensions of such
Employment Agreement.
	 
	 	 
	 

	 	No additional shares of Stock will
vest after you have ceased to be
employed by the Company or any
Subsidiary for any reason.
	 
	 	 
	Forfeiture of Unvested Stock

	 	In the event that your employment with the Company or a

8446-1

 

	 	 	 
	 

	 	Subsidiary
terminates, you shall forfeit all
of the shares of Stock subject to
this grant that have not yet
vested.
	 
	 	 
	Book Entry Restrictions

	 	The Restricted Stock will be
issued in book entry form. The
Company shall cause the transfer
agent for the shares of Common
Stock to make a book entry record
showing ownership for the shares
of Restricted Stock in your name
subject to the terms and
conditions of this Agreement. You
shall be issued an account
statement acknowledging your
ownership of the shares of
Restricted Stock.
	 
	 	 
	 

	 	The shares of Restricted Stock
subject to restrictions hereunder
shall be subject to the following
terms and conditions relating to
their release from restrictions or
their cancellation:

	 
	As your interest in the Restricted
Stock vests as described above,
your vested Stock shall be
released from restrictions and
delivered to you, at your request.

	 

	Should you forfeit any unvested
Restricted Stock held subject to
restrictions hereunder, then such
unvested Restricted Stock shall be
cancelled without payment, and you
shall have no further rights with
respect to such shares.

	 	 	 
	 

	 	You authorize the Company to issue
such instructions to the transfer
agent as the Company may deem
necessary or proper to comply with
the intent and purposes of this
Agreement. This paragraph shall
be deemed to constitute the stock
power contemplated by the Plan.
	 
	 	 
	Withholding Taxes

	 	You agree, as a condition of this
grant, that you will make
acceptable arrangements to pay any
withholding or other taxes that
may be due as a result of the
vesting of Stock acquired under
this grant. In the event that the
Company determines that any
federal, state, local or foreign
tax or withholding payment is
required relating to the vesting
of shares arising from this grant,
the Company shall have the right
to require such payments from you,
or withhold such amounts from
other payments due to you from the
Company or any Affiliate.
	 
	 	 
	Section 83(b) Election

	 	Under Section 83 of the Internal
Revenue Code of 1986, as amended
(the “Code”), the difference
between the purchase price paid
for the shares of Stock and their
fair market value on the date any
forfeiture restrictions applicable
to such shares lapse will be
reportable as ordinary income at
that time. For this purpose,
“forfeiture restrictions” include
the Company’s Repurchase Right as
to unvested Stock described above.
You

8446-1

 

	 	 	 
	 

	 	may elect to be taxed at the
time the shares in restricted form
are acquired rather than when such
shares cease to be subject to such
forfeiture restrictions by filing
an election under Section 83(b) of
the Code with the Internal Revenue
Service within thirty (30) days
after the Grant Date. You will
have to make a tax payment to the
extent the purchase price ($0.01
per share) is less than the fair
market value of the shares on the
Grant Date. The form for making
this election is attached as
Exhibit A hereto. Failure to make
this filing within the thirty (30)
day period will result in the
recognition of ordinary income by
you (in the event the fair market
value of the shares increases
after the date of purchase) as the
forfeiture restrictions lapse.
	 
	 	 
	 

	 	YOU ACKNOWLEDGE THAT IT IS YOUR
SOLE RESPONSIBILITY, AND NOT THE
COMPANY’S, TO FILE A TIMELY
ELECTION UNDER SECTION 83(b), EVEN
IF YOU REQUEST THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS
FILING ON YOUR BEHALF. YOU ARE
RELYING SOLELY ON YOUR OWN
ADVISORS WITH RESPECT TO THE
DECISION AS TO WHETHER OR NOT TO
FILE ANY 83(b) ELECTION.
	 
	 	 
	Retention Rights

	 	This Agreement does not give you
the right to be retained by the
Company in any capacity. Subject
to the terms of the Employment
Agreement, the Company reserves
the right to terminate your
service with the Company at any
time and for any reason.
	 
	 	 
	Shareholder Rights

	 	You shall have the right to vote
the Restricted Stock and, subject
to the provisions of this
Agreement, to receive any
dividends declared or paid on such
stock. Any distributions you
receive as a result of any stock
split, stock dividend, combination
of shares or other similar
transaction shall be deemed to be
a part of the Restricted Stock and
subject to the same conditions and
restrictions applicable thereto.
The Company may in its sole
discretion require any dividends
paid on the Restricted Stock to be
reinvested in shares of Stock,
which the Company may in its sole
discretion deem to be a part of
the shares of Restricted Stock and
subject to the same conditions and
restrictions applicable thereto.
Except as described in the Plan,
no adjustments are made for
dividends or other rights if the
applicable record date occurs
before your stock certificate is
issued.
	 
	 	 
	Adjustments

	 	In the event of a stock split, a
stock dividend or a similar change
in the Stock, the number of shares
covered by this grant may be

8446-1

 

	 	 	 
	 

	 	adjusted (and rounded down to the
nearest whole number) pursuant to
the Plan. Your Restricted Stock
shall be subject to the terms of
the agreement of merger,
liquidation or reorganization in
the event the Company is subject
to such corporate activity.
	 
	 	 
	Applicable Law

	 	This Agreement will be interpreted
and enforced under the laws of the
State of Delaware, other than any
conflicts or choice of law rule or
principle that might otherwise
refer construction or
interpretation of this Agreement
to the substantive law of another
jurisdiction.
	 
	 	 
	The Plan

	 	The text of the Plan is
incorporated in this Agreement by
reference. Certain capitalized
terms used in this Agreement are
defined in the Plan, and have the
meaning set forth in the Plan.
	 
	 	 
	 

	 	This Agreement and the Plan
constitute the entire
understanding between you and the
Company regarding this grant of
Restricted Stock. Any prior
agreements, commitments or
negotiations concerning this grant
are superseded.

     By signing the cover sheet of this Agreement, you agree to all of the terms and conditions
described above and in the Plan.

8446-1

 

EXHIBIT A

ELECTION UNDER SECTION 83(b) OF

THE INTERNAL REVENUE CODE

     The undersigned hereby makes an election pursuant to Section 83(b) of the Internal
Revenue Code with respect to the property described below and supplies the following information in
accordance with the regulations promulgated thereunder:

	1.	 	The name, address and social security number of the undersigned:

	 	 	 	 	 
	Name:

	 	 	 	 
	 

	 	 	 	 
	 
	Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	Social Security No.:
	 	 	 	 
	 

	 	 	 	 

	2.	 	Description of property with respect to which the election is being made:

                    shares of common stock, par value $0.01 per share, of Sunrise Senior Living, Inc., a
Delaware corporation (the “Company”).

	3.	 	The date on which the property was transferred is: ______, 200___.
	 
	4.	 	The taxable year to which this election relates is calendar year: 200___.
	 
	5.	 	Nature of restrictions to which the property is subject:

The shares of stock are subject to the provisions of a Restricted Stock Agreement between the
undersigned and the Company. The shares of stock are subject to forfeiture under the terms of
the Agreement.

	6.	 	The fair market value of the property at the time of transfer (determined without regard to
any lapse restriction) was: $___ per share, for a total of $___.
	 
	7.	 	The amount paid by taxpayer for the property was: $___.
	 
	8.	 	A copy of this statement has been furnished to the Company.

Dated: _____________, 200___

	 	 	 
	 
	Print Name:
	 	 
	 

	 	 

8446-1

 

PROCEDURES FOR MAKING ELECTION

UNDER INTERNAL REVENUE CODE SECTION 83(b)

     The following procedures must be followed with respect to the attached form for making an
election under Internal Revenue Code section 83(b) in order for the election to be effective:

          1. You must file one copy of the completed election form with the IRS Service Center where you
file your federal income tax returns within thirty (30) days after the Grant Date of your
Restricted Stock.

          2. At the same time you file the election form with the IRS, you must also give a copy of the
election form to the Stock Plan Administrator of the Company.

          3. You must file another copy of the election form with your federal income tax return
(generally, Form 1040) for the taxable year in which the stock is transferred to you.

8446-1

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