EXHIBIT 4.2
FORM OF
BROOKDALE LIVING COMMUNITIES, INC.
STOCK OPTION AGREEMENT
(Non-Qualified Option)
This Stock Option Agreement dated as of ____________, _____ (the "Date
of Grant"), by and between ____________, an individual (the "Optionee"), and
Brookdale Living Communities, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, as used herein the term "Shares" shall mean shares of the
Company's common stock, par value $0.01 per share (the "Common Stock");
WHEREAS, the Optionee is a key employee of the Company;
WHEREAS, the Company desires to grant to the Optionee an option to
purchase from the Company ____________ Shares for a purchase price per share of
$______, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the parties
hereto agree as follows:
1. Option. In accordance with the provisions of the Brookdale
Living Communities, Inc. Stock Incentive Plan (the "Plan"), the Company hereby
grants to the Optionee the right to purchase (the "Option"), subject to the
terms, conditions and restrictions stated herein, from the Company __________
Shares (the "Option Shares") at a price per share of $_______.
2. Vesting. Except as may otherwise be provided in the Plan or this
Stock Option Agreement, this Option shall vest only on the dates and to the
extent hereinafter set forth; provided, however, that the Optionee continuously
remains a full-time employee of Company through each such date:
(i) no part of the Option shall vest prior to the first anniversary
of the Date of Grant;
(ii) on the first anniversary of the Date of Grant, the right to
purchase one-fourth of the Option Shares shall vest;
(iii) on the second anniversary of the Date of Grant, the right to
purchase an additional one-fourth of the Option Shares shall
vest;
(iv) on the third anniversary of the Date of Grant, the right to
purchase an additional one-fourth of the Option Shares shall
vest; and
(v) on the fourth anniversary of the Date of Grant, the right to
purchase the remaining one-fourth of the Option Shares shall
vest.
Notwithstanding clauses (i) through (v) above, in the event of a "Change in
Control" of the Company (as that term is defined in the Plan) on or before the
date the Optionee ceases to be a full-time employee of the Company, all rights
to purchase Option Shares not theretofore vested shall immediately vest on the
date of such event. If the Optionee ceases to be a full-time employee of the
Company prior to such a Change in Control, all rights to purchase Option Shares
not theretofore vested shall be forfeited as of the date the Optionee ceases to
be so employed.
3. Exercise Period. The Optionee (or in the event of the death of
the Optionee, the Optionee's successor in interest) may exercise the Option as
to those Option Shares which have theretofore vested as herein provided at any
time prior to the first to occur of the following events:
(i) the expiration of ten years from the Date of Grant;
(ii) the expiration of one year from the date the Optionee ceases to
be an employee of the Company, unless the Optionee dies within
said one-year period; or
(iii) the expiration of one year from the date of the Optionee's
death.
4. Manner of Exercise. An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery to the Secretary of the
Company or the Secretary's office of all of the following prior to the time as
of which such Option ceases to be exercisable:
(a) notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that
such Option or portion is exercised, such notice complying with
all applicable rules set forth in the Plan or otherwise
established by the committee appointed to administer the Plan
(the "Committee");
(b) (i) full payment (in cash or by check) for the Option Shares
with respect to which such Option is thereby exercised; or
(ii) with the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed
for transfer to the Company, or (B) shares of the Company's
Common Stock issuable to the Optionee upon exercise of the
Option, with a "Fair Market Value" (as that term is defined
in the Plan) on the date of Option exercise equal to the
aggregate Option price of the Option Shares with respect to
which this Option or portion is thereby exercised; or
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(iii) with the consent of the Committee, a full recourse
promissory note bearing interest and payable upon such
terms as are prescribed by the Committee; or
(iv) with the consent of the Committee, any combination of the
consideration provided in the foregoing subsections (i),
(ii) and (iii);
(c) the payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the
exercise of the Option; provided that, with the consent of the
Committee, (i) shares of the Company's Common Stock owned by the
Optionee duly endorsed for transfer, or (ii) shares of the
Company's Common Stock issuable to the Optionee upon exercise of
the Option, valued at Fair Market Value as of the date of Option
exercise, may be used to make all or part of such payment;
(d) such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act
of 1933 and any other federal or state securities laws or
regulations; and
(e) in the event that the Option or a portion thereof shall be
exercised by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
5. Transferability. This Option is personal to the Optionee and the
same may not in any manner or in any respect be assigned or transferred, other
than by will or the laws of descent and distribution.
6. Miscellaneous.
(a) The rights herein granted are in all respects subject to the
provisions set forth in the Plan to the same extent and with the same effect as
if set forth fully herein.
(b) The granting of this Option shall not be construed as giving to
the Optionee any right to be retained in the employ of the Company. For the
purposes of this Stock Option Agreement, employment with a "Subsidiary" of the
Company (as that term is defined in the Plan) shall be considered employment
with the Company.
(c) This Option shall not be treated as an incentive stock option
under the Internal Revenue Code of 1986, as amended.
(d) The validity, interpretation and effect of this Stock Option
Agreement shall be governed by the laws of the State of Delaware, excluding the
"conflicts of laws" rules thereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Option Agreement on the day and year first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
__________________________________________
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