UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.  )

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Assisted Living Concepts, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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ASSISTED LIVING CONCEPTS, INC.
W140 N8981 Lilly Road
Menomonee Falls, Wisconsin 53051

NOTICE OF ANNUAL MEETING

PROXY STATEMENT

ASSISTED LIVING CONCEPTS, INC.
W140 N8981 Lilly Road
Menomonee Falls, Wisconsin 53051

		Page
Notice of Annual Meeting
Proxy Statement
Introduction			1
Proxies			1
Record Date, Class A and Class B Shares Outstanding, and Voting			1
Proposal 1: Election of Directors			3
Nominees			3
Board Leadership Structure and Role of Board in Risk Oversight			8
Independence			8
Meetings			9
Committees			9
Governance Documents			12
Communications			12
Director Compensation			12
Stock Ownership of Management and Others			14
Proposal 2: Advisory Vote on Compensation of Our Named Executive Officers			18
Proposal 3: Advisory Vote on the Frequency of the Advisory Vote on Compensation of Our Named Executive Officers			19
Executive Compensation			19
Compensation Discussion and Analysis			19
Summary Compensation Table for Fiscal 2010			25
2010 Grants of Plan-Based Awards			27
Outstanding Equity Awards at Fiscal Year-End; Option Exercises and Stock Vested in 2010			28
Nonqualified Defined Contribution Plans			29
Employment Contracts and Termination of Employment and Change-in-Control Agreements			30
Compensation Committee Report			34
Securities Authorized for Issuance Under Equity Compensation Plans			34
Certain Business Relationships; Related Person Transactions			36
Audit Committee Report			37
Proposal 4: Ratification of Appointment of Independent Auditors			38
Fees Paid to Independent Auditors			38
Section 16(a) Beneficial Ownership Reporting Compliance			39
Other Matters			40
Additional Matters			40
Submission of Stockholder Proposals			40
Cost of Proxy Solicitation			40
Annual Report on Form 10-K			41

ASSISTED LIVING CONCEPTS, INC.
W140 N8981 Lilly Road
Menomonee Falls, Wisconsin 53051
(262) 257-8888

NOTICE OF ANNUAL MEETING

The annual meeting of stockholders of Assisted Living Concepts, Inc. (“ALC”) will be held at W140 N8981 Lilly Road, Menomonee Falls, Wisconsin on Monday, May 2, 2011 at 4:00 p.m. central time for the following purposes:

1.

To elect eight persons nominated by the Board of Directors to ALC’s Board of Directors;

2.

To approve, in an advisory vote, the compensation of ALC’s named executive officers as disclosed in the proxy statement;

3.

To conduct an advisory vote on the frequency of future advisory votes on the compensation of ALC’s named executive officers;

4.

To ratify the appointment of Grant Thornton LLP as ALC’s independent auditors; and

5.

To transact such other business as may properly come before the annual meeting or any adjournments or postponements of the annual meeting.

Stockholders of record of ALC’s Class A Common Stock and Class B Common Stock at the close of business on March 7, 2011 are entitled to notice of and to vote at the annual meeting and any adjournments or postponements of the annual meeting. A list of stockholders entitled to vote will be available at the annual meeting for inspection by any stockholder for any purpose germane to the annual meeting.

Whether or not you plan to attend the annual meeting, please take the time to vote your shares by promptly completing, signing, dating and mailing the proxy card in the postage-paid envelope provided (or, if applicable, by following the instructions supplied to you by your bank or brokerage firm for voting by telephone or via the Internet).

		By Order of the Board of Directors,
Menomonee Falls, Wisconsin		Mary T. Zak-Kowalczyk
March 21, 2011		Vice President and Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 2, 2011 — the Proxy Statement and 2010 Annual Report are available under the heading “Annual Reports and Proxy Statements” in the “Investor Relations” section at www.alcco.com

ASSISTED LIVING CONCEPTS, INC.
W140 N8981 Lilly Road
Menomonee Falls, Wisconsin 53051
(262) 257-8888

PROXY STATEMENT

INTRODUCTION

This proxy statement is furnished beginning on or about March 21, 2011 in connection with the solicitation of proxies by the Board of Directors of Assisted Living Concepts, Inc. (“ALC”), a Nevada corporation, for use at the annual meeting of stockholders to be held at W140 N8981 Lilly Road, Menomonee Falls, Wisconsin on Monday, May 2, 2011 at 4:00 p.m. central time and at any adjournments or postponements of the annual meeting.

On November 10, 2006, ALC became an independent, publicly traded company with its Class A Common Stock listed on the New York Stock Exchange following its separation from its parent company, Extendicare Inc. (now Extendicare Real Estate Investment Trust, a Canadian real estate investment trust).

Effective March 16, 2009, ALC implemented a one for five reverse stock split of its Class A common stock, par value $0.01 per share (“Class A Common Stock”), and Class B common stock, par value $0.01 per share (“Class B Common Stock”). All share amounts and per share prices in this proxy statement have been adjusted to reflect this reverse stock split.

Proxies

Properly signed and dated proxies received by ALC’s Secretary prior to or at the annual meeting will be voted as instructed on the proxies or, in the absence of such instruction, FOR the election to the Board of Directors of the persons nominated by the Board, FOR the advisory vote on the compensation of the Company’s named executive officers, FOR a frequency of every three years for future non-binding stockholder advisory votes on compensation of our named executive officers, FOR ratification of the appointment of Grant Thornton LLP as ALC’s independent auditors, and in accordance with the best judgment of the persons named in the proxy on any other matters which may properly come before the annual meeting.

The Board of Directors has appointed an officer of Computershare Trust Company N.A., transfer agent for the Class A Common Stock and Class B Common Stock, to act as an independent inspector at the annual meeting.

Record Date, Class A and Class B Shares Outstanding, and Voting

Stockholders of record of either Class A or Class B Common Stock at the close of business on the record date, March 7, 2011, are entitled to vote on all matters presented at the annual meeting. Each share of Class A Common Stock is entitled to one vote and each share of Class B Common Stock is entitled to ten votes. As of the record date, there were 10,003,069 shares outstanding of Class A Common Stock and 1,468,553 shares outstanding of Class B Common Stock.

Holders of a majority in total voting power of Class A Common Stock and Class B Common Stock entitled to vote at the annual meeting, voting together without regard to class and represented in person or by proxy, constitute a quorum. Under ALC’s bylaws, if a quorum is present, the election of directors is decided by a plurality of the votes cast. For this purpose, “plurality” means that the individuals receiving the largest number of votes are elected as directors, up to the maximum number of directors to be chosen at the election. Consequently, any shares not voted at the annual meeting, whether due to abstentions, broker non-votes or otherwise, will have no impact on the election of directors (assuming a quorum is present).

The approval of the advisory vote on compensation of our named executive officers is decided by the affirmative vote of the holders of at least a majority of the total number of votes cast. Since abstentions and broker non-votes are not considered votes cast, they will not have an effect on the voting for this proposal. Because your vote is advisory, it will not be binding on the Board or the Company. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.

The frequency of the advisory vote on compensation of our named executive officers — every three years, every two years or every one year — receiving the greatest number of votes will be the frequency that stockholders approve. Since abstentions and broker non-votes are not considered votes cast, they will not have an effect on the voting for this proposal. Because your vote is advisory, it will not be binding on the Board or the Company. However, the Board will review the voting results and take them into consideration when making future decisions regarding the frequency of the advisory vote on executive compensation.

The ratification of the appointment of Grant Thornton LLP as ALC’s independent auditors is decided by the affirmative vote of the holders of at least a majority of the total number of votes cast on the matter. Since abstentions and broker non-votes are not considered votes cast, they will not have an effect on the voting for this proposal.

The independent inspector will count the votes. Abstentions are considered as shares represented and entitled to vote. Broker or nominee “non-votes” on a matter are not considered as shares represented and entitled to vote on that matter, but do count toward the quorum requirement.

If less than a majority of voting power of the Class A Common Stock and the Class B Common Stock voting together without regard to class is represented at the annual meeting, the chairman of the meeting or holders of a majority of the votes entitled to be cast by the stockholders who are present in person or by proxy may adjourn the annual meeting from time to time without further notice.

If your shares are registered in your name, you may vote them by completing and signing the accompanying proxy card and returning it in the enclosed envelope before the annual meeting.

If your shares are registered in the name of a bank or brokerage firm (“street name”), you may be eligible to vote your shares electronically via the Internet or by telephone. A large number of banks and brokerage firms are participating in the Broadridge Financial Solutions, Inc. (formerly ADP Investor Communication Services) online program. This program provides eligible stockholders the opportunity to vote via the Internet or by telephone. If your bank or brokerage firm is participating in Broadridge’s program, your voting form will provide instructions.

Telephone and Internet voting procedures, if available, are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions, and to confirm that their instructions have been properly recorded. Stockholders voting via the Internet should understand that there might be costs that they must bear associated with electronic access, such as usage charges from Internet access providers and telephone companies.

Only stockholders of record as of March 7, 2011, or their duly appointed proxies, and our invited guests are permitted to attend the annual meeting. To gain admittance, you must bring valid photo identification to the meeting, and we will verify your name against our stockholder list. If you are not a stockholder as of the record date, you will be admitted to the annual meeting only if you have a legal proxy from a record date stockholder.

Written ballots will be available from ALC’s Secretary before the annual meeting commences. A stockholder whose shares are held in the name of a bank, broker or other holder of record must obtain a proxy, executed in such stockholder’s favor, from the record holder in order for such stockholder to vote such shares in person at the annual meeting. Stockholders who send in their proxy cards and also attend the annual meeting do not need to vote again unless they wish to revoke their proxies.

Any stockholder (other than stockholders holding shares in “street name”) giving a proxy may revoke it at any time before it is exercised by delivering notice of such revocation to ALC’s Secretary in open meeting or in writing by filing with ALC’s Secretary either a notice of revocation or a duly executed proxy bearing a later date. Presence at the annual meeting by a stockholder who has returned a proxy does not itself revoke the proxy. If you have given voting instructions to a broker, nominee, fiduciary or other custodian that holds your shares in “street name,” you may revoke those instructions by following the directions given by the broker, nominee, fiduciary or other custodian.

PROPOSAL 1: ELECTION OF DIRECTORS

Nominees

The following table shows certain information, including principal occupation, recent business experience, and relevant qualifications to serve as a director, for each of the individuals nominated by the Board of Directors for election at the annual meeting. All of the nominees are presently ALC directors whose current terms expire in 2011 and who have been nominated to serve as directors until the 2012 annual meeting and until their respective successors are elected and qualified. Effective at the time of the 2011 annual meeting of stockholders, Jesse C. Brotz will complete his term as a director and he will not be standing for re-election. As a result, the size of the Board will be reduced to consist of a total of eight directors. Mr. Brotz has served as a director since 2007 and we thank him for his service and commitment to the company.

If any of the nominees becomes unable or unwilling to serve, then the proxies will have discretionary authority to vote for substitute nominees chosen by the Board of Directors. The Board of Directors has no reason to believe that any of the nominees will be unable or unwilling to serve.

“Other public company directorships” include companies with a class of securities registered pursuant to section 12 of the Securities Exchange Act of 1934 or subject to the requirements of Section 15(d) of such Act and companies registered as an investment company under the Investment Company Act of 1940.

				Director
Name		Principal Occupation, Experience and Qualifications		Since
Laurie A. Bebo		President and Chief Executive Officer of ALC since 2006. From 1999 to 2006, Ms. Bebo held a variety of management positions with Extendicare Health Services, Inc., a wholly owned subsidiary of Extendicare Inc. (now Extendicare Real Estate Investment Trust) (“Extendicare”), including: Chief Operating Officer, Senior Vice President, Vice President Sales & Marketing; Vice President Assisted Living Operations; and Area Vice President. Prior to her career with Extendicare she worked in similar roles at other long-term care providers. Ms. Bebo has been a director of High Liner Foods Incorporated (a Canadian public value added food processing company) since May 2010 and serves as a member of the Human Resources and Corporate Governance Committee of the board of directors of High Liner Foods Incorporated. She is 40.			2007
		Other public company directorships in the last five years: none Ms. Bebo’s position as President and Chief Executive Officer of ALC and her extensive experience at ALC and other long-term care providers led the Board to conclude, as of the time of this proxy statement, that she should continue to serve as a director of ALC.
Alan Bell		Corporate partner of the Canadian law firm Bennett Jones LLP specializing in mergers and acquisitions, private and public financing, and corporate governance, since 2004. Prior to 2004, Mr. Bell was a corporate partner in the Canadian law firm Blake, Cassels & Graydon LLP. He is 62.			2006
		Other public company directorships in the last five years: none
		Mr. Bell’s knowledge, experience and expertise in the areas of corporate governance and corporate finance led the Board to conclude, as of the time of this proxy statement, that he should continue to serve as a director of ALC.
Derek H.L.Buntain		President of The Dundee Merchant Bank, a Cayman Islands private bank offering banking services to international clients, President, Chief Executive Officer of Dundee Offshore Services Ltd. (investment counsel), and Chairman of the Dundee Leeds Group of Companies (hedge fund administrators). Prior to November 10, 2006, Mr. Buntain was a director of Extendicare Inc. (now Extendicare Real Estate Investment Trust). Mr. Buntain also serves as a director of the following companies: CencoTech Inc., Dundee Precious Metals Inc., Eurogas Corporation, Eurogas International Inc., and High Liner Foods Incorporated. He is 70.			2006

				Director
Name		Principal Occupation, Experience and Qualifications		Since
		Other public company directorships in the last five years: prior to November 2006, Extendicare Inc. (now Extendicare Real Estate Investment Trust).
		Mr. Buntain’s knowledge and insight into financial markets and his experience advising long-term care providers led the Board to conclude, as of the time of this proxy statement, that he should continue to serve as a director of ALC.
David J. Hennigar		Chairman of the Board of Directors. Prior to November 10, 2006, he was Chairman of Extendicare Inc. (now Extendicare Real Estate Investment Trust). Mr. Hennigar is Chairman of Annapolis Group Inc. (a private holding company in real estate development and environmental collections and remediation), High Liner Foods Incorporated, and Aquarius Coatings Inc. (a Canadian public company engaged in paint manufacturing), and Chairman and CEO of Landmark Global Financial Corporation (a Canadian public investment and management company). Mr. Hennigar serves as lead trustee of Crombie Real Estate Investment Trust and as a director of the following Canadian public companies: MedX Health Corp., SolutionInc Technologies Limited, and VR Interactive Corporation. He is a registered representative with Jennings Capital Inc. and a director of a number of private companies, as well as Chairman and CEO of Thornridge Holdings Limited. He is 71.			2006
		Other public company directorships in the last five years: prior to November 2006, Extendicare Inc. (now Extendicare Real Estate Investment Trust).
		Mr. Hennigar’s extensive experience with the board of Scotia Investments Limited group of companies and boards of directors of other companies, his knowledge of securities industries, and his familiarity with the long-term care industry led the Board to conclude, as of the time of this proxy statement that he should continue to serve as a director of ALC.
Malen S. Ng		Chief Financial Officer of the Workplace Safety and Insurance Board of Ontario from 2003 until her retirement in November 2008. Prior to November 10, 2006, she was a director of Extendicare Inc. (now Extendicare Real Estate Investment Trust). From 1975 to 2002, Ms. Ng was employed by Ontario Hydro and Hydro One Inc. (the largest electricity delivery company in Ontario), where she occupied several executive positions. Ms. Ng is a director of Empire Company Limited (a Canadian company whose key businesses include food retailing and related real estate), Sobeys Inc. (a retail food distribution company in Canada), and Sunnybrook Health Sciences Centre (one of Canada’s largest hospitals). She is 59.			2006

				Director
Name		Principal Occupation, Experience and Qualifications		Since
		Other public company directorships in the last five years:
		prior to November 2006, Extendicare Inc. (now Extendicare Real Estate Investment Trust).
		Ms. Ng’s significant experience as a chief financial officer, her distinguished service to the Board and ALC as chair of the Audit Committee, and the familiarity she has gained of the long-term care industry since joining the Board in 2006 led the Board to conclude, as of the time of this proxy statement, that she should continue to serve as a director of ALC.
Melvin A. Rhinelander		Vice Chair of the Board of Directors. Prior to November 10, 2006, he was the President and Chief Executive Officer of Extendicare Inc. (now Extendicare Real Estate Investment Trust) as well as the Chairman and Chief Executive Officer of Extendicare Health Services, Inc., a wholly-owned subsidiary of Extendicare Inc. Following November 10, 2006, Mr. Rhinelander ceased being an employee of Extendicare Inc. and Extendicare Health Services, Inc., but remained on the Board of Trustees of Extendicare Real Estate Investment Trust as Vice Chairman until December 2008 and Chairman thereafter. He also serves as a director of Empire Company Limited (a Canadian company whose key businesses include food retailing and related real estate) and Sobeys, Inc.. Mr. Rhinelander joined the Extendicare group of companies in 1977 and served in a number of senior positions. He was appointed President of Extendicare Inc. in 1999 and Chief Executive Officer in 2000. He is 61.			2006
		Other public company directorships in the last five years: prior to November 2006, Extendicare Inc. (now Extendicare Real Estate Investment Trust).
		Mr. Rhinelander’s extensive experience in the long-term care industry and as a human resources executive led the Board to conclude, as of the time of this proxy statement, that he should continue to serve as a director of ALC.
Charles H. Roadman II, MD		Retired President and Chief Executive Officer of the American Health Care Association (1999 to 2004) and former Surgeon General of the U.S. Air Force (1996 to 1999). Prior to November 10, 2006, he was a director of Extendicare Inc. (now Extendicare Real Estate Investment Trust). Dr. Roadman serves as a director and advisor on a number of private corporate boards and associations. He is 67.			2006
		Other public company directorships in the last five years: prior to November 2006, Extendicare Inc. (now Extendicare Real Estate Investment Trust).
		Dr. Roadman’s medical background, his experience as chief executive officer of a major health care association, and his continuing involvement in public and private health care issues led the Board to conclude, as of the time of this proxy statement, that he should continue to serve as a director of ALC.

				Director
Name		Principal Occupation, Experience and Qualifications		Since
Michael J. Spector		Retired Chair and Managing Partner, Quarles & Brady LLP, a Milwaukee Wisconsin headquartered law firm with more than 425 attorneys in eight cities. Mr. Spector joined Quarles & Brady in 1966 and served as a member of its Executive Committee from 1976 to 2002, as Chair of the Executive Committee from 1987 to 2002, and as Managing Partner from 1999 to 2002. His practice focused primarily on business counseling and general school law representation, including related litigation and collective bargaining. Mr. Spector is Vice President of the University of Wisconsin System Board of Regents, Executive Director of the United States Law Firm Group, Inc. (a network of 18 American law firms), a Robert E. Boden Visiting Professor of Law at Marquette University Law School, a board member and chair of the audit committee of the University of Wisconsin Hospital and Clinics, a major hospital located in Madison, Wisconsin with annual revenues of approximately one billion dollars, and a board member and a member of the audit and facilities committee of the Bradley Center Sports & Entertainment Corporation, Milwaukee, WI. He is 71.			2007
		Other public company directorships in the last five years: none.
		Mr. Spector’s experience managing a large professional services organization, advising businesses, and working with regulated organizations led the Board to conclude, as of the time of this proxy statement, that he should continue to serve as a director of ALC.

ALC’s bylaws require that any nominations by stockholders of persons for election to the Board of Directors at the annual meeting must have been received by the Secretary by March 14, 2011. As no notice of such other nomination was received, no other nominations for election to the Board of Directors may be made by stockholders at the annual meeting.

Information about Mr. Brotz, who is not standing for reelection, is set forth below.

Jesse C. Brotz		Director of Scotia Investments Limited. Mr. Brotz has a Bachelor of Science in Economics and Psychology from Brown University. From 1996 to 1998, he was a Senior Research Analyst for The Economics Research Group, Inc. (now Lexecon, Inc.), a Cambridge, Massachusetts consulting firm that uses economic theory and analysis in litigation support, public policy and business strategy. Since leaving Lexecon, Mr. Brotz has been building custom furniture in Vancouver, British Columbia, working as a Journeyman Cabinetmaker for companies including Angela James and The Joint Woodworking Studio. Mr. Brotz has been a director of Scotia Investments Limited, since 2004 and is currently a member of the Audit and Corporate Governance/Human Resources committees of the board of directors of Scotia Investments Limited. Mr. Brotz is currently enrolled in the Directors’ Education Program (“DEP”) offered through the Institute of Corporate Directors. He is 37 and has been a director of ALC since 2007.
		Other public company directorships in the last five years: none
		Mr. Brotz has brought to the Board a background in economics, his experience as a director and audit committee and corporate governance and human resources committee member with Scotia Investments Limited, and the understanding he has acquired since joining the Board in 2007 of issues facing ALC.

Board Leadership Structure and Role of Board in Risk Oversight

The positions of principal executive officer and board chair at ALC have been separate since 2006 when ALC became a public company. In the Board’s view, the separation of these roles has served ALC well and continues to be in the best interest of ALC and its stockholders.

The Board is responsible for the stewardship of ALC, including understanding ALC’s risk profile and monitoring its risk management programs. The Board fulfills these oversight responsibilities by understanding and monitoring ALC’s business, industry conditions, and related ALC and industry risks. The Board has overall responsibility for approving procedures for the identification, assessment and management of the principal risks facing ALC, including material legal and regulatory matters relating to ALC.

The Audit Committee is responsible for reviewing independently with each of management and the auditors the impact of significant risks that may be material to financial reporting. The scope of the responsibilities of the Audit Committee includes: (i) reviewing with management and with the external and internal auditors the presentation and impact of significant risks and uncertainties; (ii) reviewing with management issues of operational risk management, including insurance coverages maintained by ALC, legal exposure (including legal claims or other contingencies) and tax assessments that could have a material effect upon ALC’s financial position or operating results; and (iii) reviewing the reports of the internal auditor with respect to control and financial risk.

Independence

ALC’s Board of Directors has affirmatively determined that all of ALC’s directors other than Ms. Bebo are “independent” as defined in the corporate governance standards of the New York Stock Exchange. Ms. Bebo is not considered to be independent because Ms. Bebo is currently ALC’s President and Chief Executive Officer.

The Board considered the relationship of Mr. Spector and the law firm of Quarles & Brady LLP, which provides legal services to ALC, and determined that Mr. Spector’s relationship as a retired partner of that firm does not interfere with the exercise of his independent judgment and independence from the management of ALC.

The Board also considered the relationship of Mr. Hennigar to ALC through his association with Thornridge Holdings Limited, which owns the majority of the Class B Common Stock and controls 55.8% of the voting power of stockholders, and determined that the association with Thornridge Holdings Limited does not interfere with the exercise by Mr. Hennigar of his independent judgment and independence from the management of ALC.

The Board also considered the relationship of Mr. Hennigar and Mr. Brotz to ALC through their association with Scotia Investments Limited, which formerly owned the majority of the Class B Common Stock and controlled the majority of the voting power of stockholders, as well as the familial relationship between Mr. Hennigar and Mr. Brotz as members of the Jodrey family, the members of which held substantially all of the outstanding voting shares of Scotia Investments Limited, and determined that neither the association with Scotia Investments Limited nor the familial relationship interferes with the exercise by either Mr. Hennigar or Mr. Brotz of his independent judgment and independence from the management of ALC.

The Board considered the relationship of Mr. Rhinelander to Extendicare Real Estate Investment Trust (formerly Extendicare Inc.) (“Extendicare”). Prior to November 10, 2006, ALC was wholly-owned by Extendicare and Mr. Rhinelander served as ALC’s Chairman and Chief Executive Officer. Following that date, none of ALC’s voting stock was owned by Extendicare and Mr. Rhinelander ceased being an executive officer of ALC. In connection with the separation of ALC from Extendicare, the two companies entered into agreements in respect of certain services to be provided by Extendicare to ALC on an arms length basis and which are subject to a formal arbitration process if disputes arise. Until July 1, 2010, Extendicare provided services to ALC primarily related to payroll and benefit services. Mr. Rhinelander is a trustee and Chairman of Extendicare. In his role as Vice Chair of the Board of Directors of ALC, from time to time Mr. Rhinelander provides advice and counsel to the Chairman and senior management of ALC. The Board determined that these relationships do not interfere with the exercise of Mr. Rhinelander’s independent judgment and independence from the management of ALC.

Meetings

ALC’s Board of Directors held five in-person meetings in 2010. Each director attended at least 75% of the meetings of the Board of Directors and committees on which he or she serves. It is ALC’s policy that directors use their best efforts to attend (either in person or by telephone) all Board of Directors, committee, and annual and special stockholders’ meetings. All of ALC’s directors attended the 2010 annual stockholders’ meeting.

ALC directors have an opportunity to meet in executive session without management at the end of each regularly scheduled Board of Directors meeting. The Chairman presides at executive sessions. ALC’s Board of Directors annually conducts an assessment of its performance and effectiveness.

Committees

The Board of Directors has three standing committees: an Audit Committee, a Compensation/ Nomination/Governance Committee, and an Executive Committee. The committee charters are available on ALC’s website, www.alcco.com. Committee members have an opportunity to meet in executive session without management at the end of each regularly scheduled Committee meeting.

Audit Committee and Audit Committee Financial Expert. The Audit Committee met four times in 2010. Current members are Ms. Ng (Chair), Mr. Bell, Mr. Brotz, Mr. Buntain and Dr. Roadman. The Board of Directors has determined that each of the members of the Audit Committee is “independent,” as defined in the corporate governance listing standards of the New York Stock Exchange and Rule 10A-3 under the Securities Exchange Act of 1934 relating to audit committees. In considering Mr. Brotz’s “independence” under Rule 10A-3, the Board of Directors noted that Mr. Brotz neither received compensation for services (other than normal director’s fees) from nor was he a 10% owner of either ALC or Scotia Investments Limited. The Board also has determined that all members of the Audit Committee are financially literate and that Ms. Ng qualifies as an “audit committee financial expert” as defined by the Securities and Exchange Commission.

The Audit Committee exercises the powers of the Board of Directors in connection with ALC’s accounting and financial reporting practices, and provides a channel of communication between the Board of Directors and ALC’s internal audit function and independent registered public accountants. The Audit Committee annually reviews its charter and performs an evaluation of its performance and effectiveness.

Compensation/Nomination/Governance Committee. The Compensation/Nomination/ Governance Committee met four times in 2010. Current members are Mr. Buntain (Chair), Mr. Bell and Mr. Spector. The Committee recommends nominees for ALC’s Board of Directors and reviews qualifications, compensation and benefits for the Board of Directors and other matters relating to the Board. The Committee also establishes compensation for the officers of ALC, oversees the administration of ALC’s benefit plans for officers and employees, reviews and recommends officer selection, responds to SEC requirements on Compensation Committee reports, and performs other functions relating to officer succession and compensation. The Committee annually reviews its charter and performs an evaluation of its performance and effectiveness.

The Compensation/Nomination/Governance Committee has full authority to consider and determine executive compensation and to evaluate and to make recommendations to the full Board with respect to the appropriate level of director compensation. The Committee may form subcommittees for any purpose and may delegate to such subcommittees such power and authority as the Committee deems appropriate, provided that each subcommittee has at least two members and that no subcommittee is granted any power or authority that by law is required to be exercised by the Committee as a whole. As of the date of this proxy statement, the Committee had not formed subcommittees. The Chair of the Committee confers with the Board Chair and Vice Chair with regard to executive compensation matters. In addition, the Chief Executive Officer makes recommendations to the Chair of the Committee from time to time regarding executive compensation (other than the compensation of the Chief Executive Officer).

The Board of Directors has delegated the identification, recruitment and screening of director candidates for stockholder election to the Compensation/Nomination/Governance Committee. In identifying and evaluating nominees for director, the Committee seeks to ensure that the Board of Directors possesses, in the aggregate, the strategic, managerial, and financial skills and experience necessary to fulfill its duties and to achieve its objectives, and seeks to ensure that the Board of Directors is composed of directors who have broad and diverse backgrounds and possess knowledge in areas that are of importance to ALC. The Committee evaluates each candidate on a case-by-case basis, regardless of who recommended the candidate, based on the director expectations and qualifications set forth in ALC’s Corporate Governance Guidelines which are available on ALC’s web site at: www.alcco.com. Through adoption of the Corporate Governance Guidelines, the Board has established a diversity policy that endeavors to have a Board representing diverse experience at policy-making levels in areas that are relevant to ALC’s business. The Board implements this policy through its annual review and nomination of director candidates and assesses its effectiveness as part of its annual evaluation of the appropriateness of the Board’s composition.

In looking at the qualifications of each candidate to determine if his or her election would further the goals described above, the Committee assesses a candidate’s independence, as well as the candidate’s background and experience and the current Board’s composition. As noted above, ALC endeavors to have a Board representing diverse experience at policy-making levels in areas that are relevant to ALC’s business. With respect to incumbent directors selected for reelection, the Committee also assesses the director’s contributions, attendance record, and the suitability of continued service. In addition, individual directors and any person nominated to serve as a director must possess the following minimum qualifications and devote an adequate amount of time to the effective performance of director duties:

(i) Integrity. — Directors should demonstrate high ethical standards and integrity in their personal and professional dealings and be willing to act on their decisions.

(ii) Informed Judgment. — Directors should take care that they are fully informed and that they act at all times in a prudent, timely and reasonable manner.

(iii) Financial Literacy. — Directors should be financially literate. They should know how to read a balance sheet, income statement and cash flow statement and understand the use of financial ratios and other indices for evaluating ALC’s performance.

(iv) Cooperative Approach. — Directors should approach each other assertively, responsibly and supportively and raise difficult questions in a manner that encourages open discussion.

(v) Record of Achievement. — Directors should have a record of attainment that reflects high standards for themselves and others and should have background and experience that adds value to the skill set of the Board as a whole.

(vi) Loyalty. — Directors must not have any undisclosed conflicts of interest with ALC and must act in good faith and consistent with their duties of due care, loyalty, and candor.

(vii) Independent Oversight. — Directors must act at all times with the cooperative independence of thought and action and with the leadership skills needed to fulfill their oversight responsibilities.

The Committee assesses the performance of each director whose term is expiring to determine whether he or she should be nominated for re-election. The Committee may retain resources including director search firms to assist in the identification, recruitment and screening of director candidates. The Committee will consider persons recommended by stockholders to become nominees for election as directors. Stockholders should send their written recommendations for director nominees to the Committee in care of the Secretary of ALC, together with appropriate biographical information concerning each proposed nominee.

ALC’s bylaws set forth certain requirements for stockholders wishing to nominate director candidates directly for consideration by the stockholders. With respect to an election of directors to be held at an annual meeting, a stockholder must, among other things, give notice of the intent to make such a nomination to the Secretary of ALC in advance of the meeting in compliance with the terms and within the time period specified in ALC’s bylaws. Pursuant to these requirements, a stockholder must give a written notice of intent to the Secretary of ALC not less than 50 days or more than 75 days prior to the first annual anniversary of the immediately preceding annual meeting. Accordingly, to bring a nomination before the 2012 Annual Meeting, the nomination must be received by the Secretary between February 16, 2012, and March 13, 2012.

Executive Committee. There were no meetings of the Executive Committee held in 2010. Current members are Mr. Hennigar (Chair), Mr. Rhinelander, Mr. Buntain and Mr. Spector. The Executive Committee may exercise the full authority of the Board of Directors in the management of the business affairs of ALC to the extent permitted by law or not otherwise limited by the Board of Directors.

Governance Documents

ALC’s Code of Business Conduct; Code of Ethics for CEO and Senior Financial Officers; Corporate Governance Guidelines; and Audit Committee, Compensation/Nomination/Governance Committee, and Executive Committee charters are available on ALC’s web site in the “Investor Relations” section at: www.alcco.com.

Communications

Stockholders and other interested parties may communicate with the Board of Directors (or a specific director) by writing to: Board of Directors, c/o Secretary, Assisted Living Concepts, Inc., W140 N8981 Lilly Road, Menomonee Falls, Wisconsin 53051. The Secretary will ensure that these communications (assuming they are properly marked to the Board of Directors or to a specific director) are delivered to the Board of Directors or the specified director, as the case may be.

Director Compensation

The following table sets forth information regarding compensation paid by ALC to our non-employee directors during 2010. The “Stock Awards”, “Non-Equity Incentive Plan Compensation” and “Change in Pension Value and Nonqualified Deferred Compensation Earnings” columns of the table have been deleted from the table because there were no stock awards, non-equity incentive plan compensation, pension values, or deferred compensation earnings for directors during 2010. Ms. Bebo receives no additional compensation for her service as a director.

Director Compensation for Fiscal 2010

		Fees Earned or				Option				All Other
		Paid in Cash				Awards				Compensation				Total
Name		($)				($)(1)(2)				($)				($)
Alan Bell			36,500				89,500				*				126,000
Jesse C. Brotz			33,500				89,500				*				123,000
Derek H.L. Buntain			54,000				89,500				*				143,500
David J. Hennigar			101,500				89,500				*				191,000
Malen S. Ng			48,500				89,500				*				138,000
Melvin A. Rhinelander			66,500				89,500				*				156,000
Charles H. Roadman II, MD			29,500				89,500				*				119,000
Michael J. Spector			31,500				89,500				*				121,000

Directors who are not employees of ALC are paid an annual retainer of $15,000 per year, a fee of $2,500 for each Board or committee meeting they attend, and $500 for each telephonic Board or committee meeting they attend. In addition, the annual retainer for the Board Chairman is $50,000 and the annual retainer for the Vice Chairman is $25,000. The annual retainer for the Chairs of the Audit Committee and the Compensation, Nomination and Governance Committee is an additional $15,000 and the annual retainer for the Executive Committee Chair is an additional $10,000.

On May 3, 2010, grants were approved to each non-employee director of 5,000 tandem stock options/stock appreciation rights that become exercisable in annual one third increments beginning May 3, 2011, and which have an exercise price of $33.13, the closing price of our Class A Common Stock on the New York Stock Exchange on May 6, 2010, the second business day following release of quarterly financial results. Non-employee directors may receive yearly grants of additional stock-based awards, as determined by the full Board of Directors, and are reimbursed for expenses incurred in connection with attending Board and committee meetings. Directors who are also employees of ALC receive no additional compensation for their service as directors.

STOCK OWNERSHIP OF MANAGEMENT AND OTHERS

The following table lists beneficial ownership of Class A Common Stock and Class B Common Stock by: any person known to ALC to own beneficially more than 5% of either class; each of our directors; the individuals named in the “Summary Compensation Table” contained in this proxy statement (collectively, the “named executive officers”); and all of our current executive officers and directors as a group. Except as otherwise indicated below, each stockholder listed below has sole voting and investment power with respect to the shares beneficially owned by such person. The rules of the Securities and Exchange Commission consider a person to be the “beneficial owner” of any securities over which the person has or shares voting power or investment power, or any securities as to which the person has the right to acquire, within sixty days, such sole or shared power. The number of shares set forth for directors, director nominees, and named executive officers are reported as of March 7, 2011. Amounts for 5% stockholders are as of the date such stockholders reported such holdings in filings under the Securities Exchange Act of 1934 unless more recent information was provided prior to the printing of this proxy statement.

																						Percent of
		Number of								Assuming Full				Percentage of								Total Votes
Name of		Shares Owned								Conversion(1)				Outstanding Shares								No				If Fully
Beneficial Owner		Class A				Class B				Class A				Class A				Class B				Conversion				Converted(1)
5% Beneficial Holders:
Morgan Stanley Investment Management Inc., 522 Fifth Avenue, New York, NY 10036 (2)			1,767,941				—				1,767,941				17.7	%			—				7.2	%			15.3	%
Thornridge Holdings Limited, 165 Hammonds Plains Road, Bedford, Nova Scotia, Canada B4A 4C7(3)			172,658				1,361,000				1,635,733				1.7	%			92.7	%			55.8	%			14.1	%
Advisory Research, Inc., 180 North Stetson St., Suite 5500, Chicago, IL 60601(4)			1,345,557				—				1,345,557				13.5	%			—				5.5	%			11.6	%
Bandera Partners LLC, Gregory Bylinsky, Jefferson Gramm & Andrew Shpiz, 50 Broad Street, Suite 1820, New York, NY 10004(5)			916,226				—				916,226				9.2	%			—				3.7	%			7.9	%

Continued...

		Number of								Assuming Full				Percentage of
Name of		Shares Owned								Conversion(1)				Outstanding Shares								No				If Fully
Beneficial Owner		Class A				Class B				Class A				Class A				Class B				Conversion				Converted(1)
5% Beneficial Holders:
BlackRock, Inc. 40 East 52nd Street, New York, NY 10022(6)			546,738				—				546,738				5.5	%			—				2.2	%			4.7	%
Dimensional Fund Advisors LP Palisades West Building One 6300 Bee Cave Road, Austin, TX 78746(7)			518,148				—				518,148				5.2	%			—				2.1	%			4.5	%
Directors, Director Nominees and Named Executive Officers:
Laurie A. Bebo			31,988	(8)			—				31,988				*				*				*				*
Alan Bell			9,335	(9)			—				9,335				*				*				*				*
Jesse C Brotz			9,735	(9)			1,000				10,810				*				*				*				*
Derek H.L. Buntain			31,515	(9)			40				31,558				*				*				*				*
David J. Hennigar (3)			8,335	(9)			3,080	(10)			11,646				*				*				*				*
Malen S. Ng			9,033	(9)			—				9,033				*				*				*				*
Melvin A. Rhinelander			10,765	(11)			—				10,765				*				*				*				*
Charles H. Roadman II, MD			8,935	(9)			—				8,935				*				*				*				*
Michael J. Spector			8,868	(9)							8,868
John Buono			10,668	(12)			—				10,668				*				*				*				*
Eric B. Fonstad			400				—				400				*				*				*				*
Walter A. Levonowich			3,735	(13)			—				3,735				*				*				*				*
Mary T. Zak-Kowalczyk			1,668	(14			—				1,668
All directors & executive officers as a group (13 persons)			144,980	(15)			4,120				149,409	(16)			1.4	%			*				*				1.3	%

Notes

Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 for purposes of this Proxy Statement. It is not necessarily to be construed as beneficial ownership for other purposes.

On December 6, 2010, Thornridge Holdings Limited, a Nova Scotia limited company, (“Thornridge Holdings”), filed a statement on Schedule 13D with the Securities and Exchange Commission (the “Schedule 13D”) reporting that on November 5, 2010, it had acquired 172,658 shares of the Class A Common Stock and 1,361,000 shares of the Class B Common Stock formerly owned by Scotia Investments Limited (“Scotia Investments”) and its subsidiaries. According to the Schedule 13D, Blomidon Investments Limited (“Blomidon”), the ultimate parent corporation of Scotia Investments, and three holding companies of Blomidon that owned all of the common shares of Blomidon, including Thornridge Holdings, completed a reorganization pursuant to which, among other things, Thornridge Holdings acquired all of the ALC shares formerly held by Scotia Investments and its subsidiaries. The aggregate purchase price for the ALC shares acquired by Thornridge Holdings in the reorganization, as reported in the Schedule 13D, was Cdn$53,241,407, representing Cdn$32.55 per share of ALC’s Class A Common Stock and Cdn$34.99 per share of ALC’s Class B Common Stock. Thornridge Holdings reported that the purchase price for the assets it acquired in the reorganization, including but not limited to the ALC shares, was paid for by Thornridge Holdings by a combination of the proceeds of the sale of its shares of Blomidon to Blomidon and the payment of a cash amount. In connection with the reorganization, Thornridge Holdings further reported that it and certain of the private companies acquired in the reorganization entered into credit facilities with The Canadian Imperial Bank of Commerce (“CIBC”) for loans that were used or will be used for working capital, capital expenditures, possible expansions and acquisitions and the payment of approximately twenty-five percent of the aggregate purchase price of all assets acquired in the reorganization.

The Schedule 13D indicates that as of December 6, 2010: (i) all of the outstanding voting shares of Thornridge Holdings are held by fourteen private holding companies owned by members of the extended family of Mrs. Jean Hennigar, a daughter of the late R.A. Jodrey, including her son David J. Hennigar, who is chairman of ALC’s Board of Directors, Chairman and President of Thornridge Holdings and one of Thornridge Holdings’ ten directors; (ii) none of the ten directors of Thornridge Holdings individually has the power to vote or dispose of the ALC shares held by Thornridge Holdings; (iii) matters relating to the voting and disposition of ALC shares held by Thornridge Holdings are determined exclusively by its board of directors; and (iv) Mr. Hennigar and each of the other directors of Thornridge Holdings disclaims beneficial ownership of the ALC shares held by Thornridge Holdings.

Following completion of the reorganization, Thornridge Holdings held directly 172,658 shares of ALC’s Class A Common Stock and 1,361,000 shares of ALC’s Class B Common Stock. Thornridge Holdings has the right to acquire 1,463,075 shares of Class A Common Stock upon conversion of the 1,361,000 shares of Class B Common Stock which it holds, pursuant to the conversion feature which allows each share of Class B Common Stock to be converted into 1.075 shares of Class A Common Stock at the option of the holder. Furthermore, because generally each share of Class B Common Stock entitles the holder to ten votes with respect to all matters upon which stockholders are entitled to vote, while each share of Class A Common Stock entitles the holder to one vote on such matters, with the holders of Class A Common Stock and Class B Common Stock voting together on such matters without regard to class, Thornridge Holdings may be deemed to have acquired in the reorganization approximately 54.7% of the total voting power of ALC based on shares outstanding as of November 1, 2010.

In its Schedule 13D, Thornridge Holdings reported that it has pledged all of the 172,658 shares of ALC’s Class A Common Stock and 1,361,000 shares of ALC’s Class B Common Stock acquired by it in the reorganization described above as security for loans from CIBC, subject to pledge arrangements. If a default on the pledge arrangements were to occur, another person (or persons) may obtain voting or investment power over the pledged shares. Any transfers of ALC’s Class B Common Stock to any person or persons other than a permitted holder, as provided in ALC’s Amended and Restated Articles of Incorporation, would result in the automatic conversion of each such share of ALC’s Class B Common Stock into 1.075 shares of ALC’s Class A Common Stock. Upon such a default, CIBC would not be such a permitted holder.

PROPOSAL 2: ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934 (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the related rules of the SEC), the Company seeks your advisory vote on the compensation of our named executive officers. As described in “Compensation Discussion and Analysis” below, we design our executive compensation program to reward the achievement of specific annual and long-term strategic goals and align executives’ interests with the interests of stockholders by rewarding performance above established goals, with the ultimate objective of increasing stockholder value. We believe the Company’s compensation program as a whole is well-suited to promote the Company’s objectives in both the short and long term.

Accordingly, the Board of Directors recommends that stockholders support the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this proxy statement by approving the following advisory resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

Because your vote is advisory, it will not be binding on the Board or the Company. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2.

PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934 (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the related rules of the SEC), the Company also seeks your input with regard to the frequency of future stockholder advisory votes on our executive compensation programs. In particular, we are asking whether the advisory vote should occur every three years, every two years or every year.

The Board asks that you support a frequency period of every three years (a triennial vote) for future non-binding stockholder votes on compensation of our named executive officers. Due to the periodic volatility in the economy and in the stock market, we believe a vote every three years will allow our stockholders to gain a more meaningful perspective on our compensation program than would occur with more frequent votes. Additionally, the Company’s executive compensation program is designed to promote the achievement of stockholder returns, especially in the long-term; therefore, the Board believes that holding an advisory vote on executive compensation every three years is sufficient to assess whether this program is appropriately motivating executives and driving such returns. We believe that an advisory vote every three years will also be the most effective timeframe for the Company to respond to stockholders’ feedback and provide the Company with sufficient time to engage with stockholders to understand and respond to the vote results.

Because your vote is advisory, it will not be binding on the Board or the Company. However, the Board will review the voting results and take them into consideration when making future decisions regarding the frequency of the advisory vote on executive compensation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR A FREQUENCY OF “THREE YEARS” FOR FUTURE NON-BINDING STOCKHOLDER VOTES ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview of Compensation Programs

The compensation programs for executive officers consist principally of annual base salaries, annual performance-based cash bonus awards, long-term equity-based compensation awards, a defined contribution retirement program, an executive retirement program, a deferred compensation plan, and employment agreements.

The Compensation/Nomination/Governance Committee of the Board of Directors is responsible for establishing, implementing and monitoring adherence to ALC’s compensation philosophy. The Committee oversees ALC’s compensation plans and practices, including its executive officer compensation plans and practices.

The Committee feels that base salary levels should be restrained with above average opportunities for incentive compensation as ALC’s strategic goals are met. Accordingly, the Committee has focused on developing short- and long-term incentive compensation programs that reward the achievement of ALC’s strategic objectives.

Compensation Philosophy and Objectives

The Committee believes ALC’s compensation programs should reward the achievement of specific annual and long-term strategic goals and align executives’ interests with the interests of stockholders by rewarding performance above established goals, with the ultimate objective of increasing stockholder value. The Committee evaluates both performance and compensation to ensure that ALC has the ability to attract and retain superior employees and that compensation levels remain competitive. It is the policy of the Committee to include provisions in performance-based compensation awards that provide for the recovery or repayment of awards if the relevant performance measure is restated or otherwise adjusted in a manner that would reduce the size of the award.

Role of Management in Compensation Decisions. The Committee makes decisions regarding compensation for ALC’s executive officers. The Committee considers recommendations from the Chief Executive Officer on annual base salaries, annual performance-based compensation, and equity-based compensation awards to executive officers (other than the Chief Executive Officer). The Committee can exercise its discretion in modifying any recommended compensation or awards to executive officers.

Benchmarking. In connection with its review of ALC’s executive compensation programs in 2010, the Committee reviewed the compensation practices of selected companies as disclosed in their proxy statements. The Committee requested that management prepare comparisons of compensation practices of five peer companies (Brookdale Senior Living, Inc., Capital Senior Living Corporation, Emeritus Corporation, Five Star Quality Care, Inc. and Sunrise Senior Living, Inc.) and one Wisconsin-based public company in a related industry and with a similar-sized market capitalization (The Marcus Corporation).

Equity Ownership Guidelines. The Board has not established equity ownership guidelines for ALC’s management.

Equity-Based Compensation Grant Policy. It is the policy of the Board that no director or member of ALC’s management shall backdate any equity award or manipulate the timing of any equity award or of the public release of material information with the intent of benefiting a grantee under an equity-based award. The Compensation/Nomination/Governance Committee has adopted written equity-based compensation grant policies and procedures.

The Committee expects to consider equity-based compensation grants to ALC employees annually under the terms of the 2006 Omnibus Incentive Compensation Plan. In addition to consideration of annual grants, the Committee recognizes that situations may arise during the course of the year that warrant equity-based compensation grants (off-cycle grants), including situations where ALC is seeking to hire new senior level employees or recognize employees for certain achievements.

Annual grants are considered by the Committee during the first quarter of each year. The grant date is the date on which the Committee approved the grants. The exercise price is the closing market price of the stock on the second business day following the release of financial results.

Off-cycle grants may be granted as of the fifth business day of June, September or December, whichever next follows the date the grant is approved, provided that the grant date of any off-cycle grants made by the Committee at a meeting held on or after the fifth business day in December but before the Board’s first quarter meeting shall be determined as if approved on the date of such Committee meeting. The vesting schedule of an off-cycle grant award can relate to the date of the commitment to make the grant (e.g., the date of hire or promotion) instead of the grant date.

2010 Compensation

Base Salary. ALC provides executive officers and other employees with a base salary to compensate them for services rendered during the fiscal year. Base salary ranges for executive officers are determined for each executive based on his or her position and responsibility. Base salary ranges are designed so that salary opportunities for a given position will be between 80% and 125% of the midpoint of the base salary established for each salary range.

During its review of base salaries for executives, the Committee primarily considers the executive’s compensation, both individually and relative to other officers, and individual performance of the executive.

Salary levels are typically considered annually as part of ALC’s performance review process as well as upon a promotion or other change in job responsibility. Merit-based increases to salaries of executives are based on the Committee’s assessment of the individual’s performance.

Cash Incentive Compensation. ALC’s performance-based cash incentive compensation program is an annual cash award program for ALC senior corporate and divisional management members based on annual operating results. For 2010, awards for senior corporate management members were conditioned on ALC as a whole achieving (1) budgeted net income from continuing operations before income taxes, interest expense net of interest income, depreciation and amortization, non-cash equity-based compensation expense, transaction costs, non-cash, non-recurring gains and losses, including disposal of assets and impairment of goodwill and other long-lived assets and impairment of investments, and rent expenses incurred for leased assisted living properties (“Adjusted EBITDAR”) targets while awards for divisional management members were based on achievement of a combination of corporate and divisional Adjusted EBITDAR targets and (2) budgeted Adjusted EBITDAR margin percentage (defined as total revenues divided by Adjusted EBITDAR). Adjusted EBITDAR and Adjusted EBITDAR margin are reported in ALC’s publicly disclosed financial information and were selected as a performance measure for this program because it indicates earnings at residences. Targets ranged from 20% to 75% of base salary for the named executive officers. An additional incentive (stretch targets) of up to 10% of base salary may be awarded for exceeding budgeted Adjusted EBITDAR and Adjusted EBITDAR margin targets. Achievement of 90% of the performance targets entitled participants to awards equal to 90% of target amounts. No awards are made under ALC’s performance-based cash incentive compensation program for performance below the 90% level.

The performance-based cash incentive compensation program gives ALC the ability to design cash incentives to promote high performance and achieve corporate goals, encourage growth of stockholder value, and allow managers to share in ALC’s growth and profitability. For 2010, thirteen employees (including the officers included in the Summary Compensation Table) were eligible to receive awards under this performance-based cash incentive compensation program.

During the first quarter of each year, the Committee determines whether target levels for the previous year were achieved and sets target levels for corporate and divisional financial objectives and base salary percentages for the current year. For 2010, the performance targets for executive officers under the performance-based cash incentive compensation program were $79.6 million of Adjusted EBITDAR and an adjusted EBITDAR margin percentage of 33.0%. Both threshold targets must be achieved in order to qualify for an award. The Committee determined that, based upon ALC financial results for 2010, corporate results for purposes of the performance-based cash compensation program for 2010 were $79.4 million and 34.0%. Accordingly, the Committee determined that the corporate performance targets under the 2010 Cash Incentive Compensation Program were achieved at 99.75% of the Target level. The Committee has discretion to reduce but not to increase any awards under the performance-based cash incentive compensation program whenever the Committee determines that particular circumstances so warrant. The Committee also has discretion to grant additional bonuses that do not qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code.

Long-term Incentive Compensation. The Committee believes that long-term incentive compensation programs are important elements of an overall compensation package because they encourage participants to focus on long-term ALC performance. Equity-based long-term incentive compensation programs also can increase the stake of executives in ALC and further align the interests of executives with the interests of stockholders.

On March 3, 2010, the Committee approved a total of 96,250 tandem options and stock appreciation rights to senior ALC managers, including the officers named in the summary compensation table. The tandem options and stock appreciation rights have both time vesting and performance vesting features. The grants provided that two-elevenths (2/11) of the awards vested March 3, 2011 and up to nine-elevenths (9/11) of the grants would vest in 2011 if specific performance goals related to increasing private pay occupancy were attained in 2010. The performance targets for the performance-based portion of the 2010 equity-based compensation awards were based on increasing private pay occupancy. The number of tandem options and stock appreciation rights granted to each of the officers named in the summary compensation table was determined by the Committee based on each individual’s role in achieving the performance targets and the relative retention value of the grants as recommended by the Chair of the Committee. Two-elevenths of the award would vest if average private pay occupancy for the month of December 2010 equaled 5,540 and all of the

performance-based portion of the awards would vest if average private pay occupancy for the month of December 2010 equaled or exceeded 5,675. Achievement of defined performance targets between 5,540 and 5,675 would result in vesting from two-elevenths (2/11) to nine-elevenths (9/11) of the award. The Committee has determined that the threshold target for the performance-based portion of the awards was achieved. The average private-pay occupancy for the month of December 2010 equaled 5,542. As a result, a total of four-elevenths (4/11) of the tandem options and stock appreciation rights awarded to ALC employees in 2010 vested and seven-elevenths (7/11) expired without becoming exercisable. The vested tandem options and stock appreciation rights become exercisable in one-third annual increments beginning March 3, 2011 and expire March 3, 2015. Once exercisable, the awards may be exercised either by exercising the stock option and purchasing shares of Class A Common Stock at the exercise price or exercising the related stock appreciation right. The Committee has sole discretion to determine whether stock appreciation rights are settled in shares of Class A Common Stock, cash or a combination of Class A Common Stock and cash.

The Committee will continue to discuss the design of long-term incentive compensation programs and expects that future awards will include multi-year programs tied to ALC’s long-term strategic objectives as those objectives are further refined.

Discretionary Bonus Compensation. As noted above, the Committee determined that the corporate performance targets under the 2010 Cash Incentive Compensation Program were achieved. The Committee, which has discretion to grant additional bonuses, elected to award one discretionary bonus for 2010 to Mr. Fonstad. Mr. Fonstad did not receive a payout with respect to the 2010 Cash Incentive Compensation Program since he retired prior to the date that the Committee determined whether the performance goals under the program were satisfied.

Retirement and Deferred Compensation Benefits. ALC maintains an Executive Retirement Program and a Deferred Compensation Plan for the named executive officers and certain other key employees. ALC also provides a 401(k) plan to which ALC contributes 25% on a matching basis of employee contributions up to the first 6% of the employees’ pretax contributions. For highly compensated employees (as defined in the 401(k) plan), the match is limited to 4% of up to $225,000 of annual earnings. ALC matching contributions vest according to the number of years of employment with ALC as follows: 20% after two years; 40% after three years; 70% after four years; and 100% after five years. ALC provides the 401(k) plan, the Executive Retirement Program and the Deferred Compensation Plan because it believes that these programs help attract and retain key employees.

Under the Executive Retirement Program, ALC makes a book entry to an account each month equal to 10% of the participant’s base monthly salary. Participants are not allowed to make contributions to the Executive Retirement Program. Accounts are credited with deemed earnings as if it were invested in investment funds designated by the participant from a list of funds determined by the plan administrator. Participants’ interests in the accounts vest according to the number of years of employment with ALC as follows: 20% after two years; 40% after three years; 70% after four years; and 100% after five years. A participant’s interest in an account also vests upon the death or disability of the participant. Withdrawals or distributions are not allowed while the executive remains an ALC employee. Following a participant’s separation from ALC for any reason, the participant’s vested interest in the account is paid to the participant (or the participant’s beneficiary in the event of the participant’s death) either in a lump sum or in five, ten or twenty annual installments, as elected by the participant. Payments for reasons other than death are not started until at least six months after separation.

ALC also offers a Deferred Compensation Plan which allows designated key employees to elect annually to defer up to 10% of their base salaries. Compensation deferred is retained by ALC and credited to participants’ deferral accounts. ALC credits participants’ accounts with matching contributions equal to 50% of participants’ elective deferrals. Participants are fully vested in their deferral accounts as to amounts they elect to defer. Participants’ interests in amounts ALC credits to their accounts as matching contributions vest according to the number of years of employment with ALC as follows: 20% after two years; 40% after three years; 70% after four years; and 100% after five years. The deferral and matching accounts are credited with interest at the prime rate. During employment, amounts are payable from an executive’s account only in the case of financial hardship due to unforeseen emergency. Following a participant’s separation from ALC for any reason, the participant’s vested interest in the account is paid to the participant (or the participant’s beneficiary in the event of the participant’s death) either in a lump sum or in five, ten or twenty annual installments, as elected by the participant. Payments for reasons other than death are not started until at least six months after separation.

Perquisites and Other Personal Benefits. ALC provides the named executive officers with perquisites and other personal benefits that ALC and the Compensation/Nomination /Governance Committee believe are reasonable and consistent with the overall compensation program to allow ALC to attract and retain key employees. The Committee periodically reviews the levels of perquisites and other personal benefits of the named executive officers and currently feels that perquisites and other personal benefits for ALC executives should be limited. Accordingly, ALC executives are not given perquisites or other personal benefits that are not made available to ALC employees generally except for the rental of an automobile in the case of the Chief Executive Officer, a monthly automobile allowance in the case of other executives, and long-term care and supplemental long-term disability insurance for certain of the executives.

Employment Agreements. In connection with ALC becoming an independent, publicly traded company in 2006, ALC entered into employment agreements with certain key employees, including the named executive officers. The agreements were modified in 2008. Termination benefits under the agreements are triggered if ALC terminates an agreement without cause or if a covered employee terminates his or her employment after the employee’s work location is shifted more than 50 miles or if the employee’s base salary is reduced by 5% or more (or, in the case of Ms. Bebo and Mr. Buono, if the employee’s duties and responsibilities are materially diminished), in each instance, if the employee notifies ALC in writing within 30 days of the change that he or she objects to the change and ALC does not rescind the change within 30 days of receiving the employee’s notice. These trigger events were chosen to help retain these key employees and to assure key employees that they could apply their full attention to ALC’s business. The employment agreements were designed to promote stability and continuity of senior management.

Termination benefits under the employment agreements include: (i) any earned but unpaid salary; (ii) one year base salary (two years in the case of Ms. Bebo); (iii) 150% of target bonus (225% of base salary in the case of Ms. Bebo); (iv) one year auto allowance (two years of auto lease payments in the case of Ms. Bebo); (v) one year (two years in the case of Ms. Bebo) company contributions to deferred compensation plans; and (vi) up to one year (eighteen months in the case of Ms. Bebo) COBRA premiums. Except for any earned but unpaid salary at the time of termination, benefits under the employment agreements would be paid out monthly over a one-year (two-year in the case of Ms. Bebo) period. Information regarding potential payments under the agreements for the named executive officers is provided under the heading “Employment Contracts and Termination of Employment and Change-in Control Agreements.” Payment of termination benefits is contingent on the employee executing a release and complying with non-disclosure, non-competition and non-solicitation covenants for a period of two years following termination of employment.

Section 162(m) Limitations. Section 162(m) of the Internal Revenue Code limits the tax deductibility of certain executive officers’ compensation that exceeds $1 million per year unless certain requirements are met. The Compensation/Nomination/Governance Committee intends to qualify a sufficient amount of compensation to ALC’s executive officers so that Section 162(m) of the Code will not adversely impact ALC.

Summary Compensation Table for Fiscal 2010

The following table summarizes the compensation in the fiscal years noted for the Company’s principal executive officer, principal financial officer, and its other three most highly-compensated executive officers, which are collectively referred to in this section as the “named executive officers.” The Board of Directors determined that the executive officers at the end of 2010 were Ms. Bebo, Mr. Buono, Mr. Fonstad, Mr. Levonowich and Ms. Zak-Kowalczyk.

Summary Compensation Table

																						Change in
																						Pension
																		Non-Equity				Value and
																		Incentive				Nonqualified
																		Plan				Deferred				All Other
														Option				Compen-				Compensation				Compen-
Name and Principal						Salary				Bonus				Awards				sation				Earnings				sation				Total
Position		Year				($)				($)				($)(1)				($)				($)(2)				($)(3)				($)
Laurie A. Bebo			2010				500,000				—				384,560				374,063				—				101,249				1,359,872
President & Chief Executive			2009				424,400				—				171,000				340,185				—				93,387				1,028,972
Officer			2008				410,000				—				258,000				—				—				77,289				745,289
John Buono			2010				290,000				—				192,280				144,638				25,550				55,354				707,822
Senior Vice President, Chief			2009				259,600				—				85,500				138,724				16,764				54,754				555,342
Financial Officer & Treasurer			2008				250,000				—				129,000				—				—				58,473				437,473
Eric B. Fonstad (4)			2010				162,200				30,000				96,140				—				—				34,343				322,683
Former Senior Vice President,			2009				162,200				—				42,750				60,673				—				37,948				303,571
General Counsel & Secretary			2008				156,250				—				64,500				—				5				37,930				258,685
Walter A. Levonowich			2010				168,499				—				96,140				50,424				4,542				37,244				356,849
Vice President & Controller			2009				163,600				—				42,750				52,455				1,946				38,100				298,851
			2008				157,230				—				64,500				—				—				9,255				230,985
Mary T. Zak-Kowalczyk (5)			2010				150,250				—				48,070				29,160				—				9,006				236,486
Vice President & Corporate Secretary

						ALC				ALC								Long-Term Care
						Contributions				Contributions								& Supplemental
		Car				to Executive				to Deferred				ALC				Long-Term				Tax Gross
		Rental/				Retirement				Compensation				Contributions				Disability				Up on
Name		Allowance				Program				Plan				to 401(k) Plan				Insurance				Insurance				Total
Laurie A. Bebo			24,832				48,740				23,601				2,450				1,626				—				101,249
John Buono			7,800				28,545				13,801				2,450				2,758				—				55,354
Eric B. Fonstad			7,800				16,220				8,110				2,213				—				—				34,343
Walter A. Levonowich			7,800				16,768				8,125				2,150				2,401				—				37,244
Mary T. Zak-Kowalczyk			—				—				7,245				1,761				—				—				9,006

2010 Grants of Plan-Based Awards

The following table provides information regarding awards during 2010 under ALC’s annual performance-based cash incentive compensation program (“ACI”) and long-term incentive compensation program (“LTI”) to the individuals named in the Summary Compensation Table.

Compensation Table.

Grants of Plan-Based Awards

						Type of																												All Other								Grant
						Award:																												Option								Date
						Annual				Estimated Possible Future												Estimated Possible Future												Awards:				Exercise				Fair
						Cash				Payouts												Payouts												Number of				or Base				Value of
						Incentive				Under Non-Equity												Under Equity												Securities				Price of				Stock
						or Long-				Incentive Plan Awards												Incentive Plan Awards												Underlying				Option				And
		Grant				Term				Threshold				Target				Maximum				Threshold				Target				Maximum				Options				Awards				Option
Name		Date				Incentive				$				$				$				#				#				#				(#)				($/Sh)				Awards
Laurie A. Bebo			3/3/10			ACI LTI					337,500				375,000				412,500				4,000				16,000				18,000				4,000				31.71			$	384,560
John Buono			3/3/10			ACI LTI					130,500				145,000				159,500				2,000				8,000				9,000				2,000				31.71			$	192,280
Eric B. Fonstad			3/3/10			ACI LTI					51,093				56,770				62,447				1,000				4,000				4,500				1,000				31.71			$	96,140
Walter A. Levonowich			3/3/10			ACI LTI					45,495				50,550				55,605				1,000				4,000				4,500				1,000				31.71			$	96,140
Mary T. Zak-Kowalczyk			3/3/10			ACI LTI					27,045				30,050				33,055				500				2,000				2,250				500				31.71			$	48,070

The “Grant Date Fair Value of Stock and Option Awards” represents the aggregate grant date fair value of tandem stock options/stock appreciation rights granted during the year computed in accordance with Accounting Standards Codification Topic 718. The assumptions made in these valuations can be found in the Long-Term Equity-Based Compensation Program footnote to the financial statements in ALC’s Annual Report on Form 10-K. The Compensation/Nomination/Governance Committee of the Board has determined that four-elevenths (4/11) of the grants vested become exercisable in one-third annual increments beginning March 3, 2011. The remaining seven-elevenths (7/11) expired. The actual value, if any, that a recipient will realize upon exercise of an option/stock appreciation right will depend on the excess of the market price of our common stock over the exercise price on the date the option/stock appreciation right is exercised, which cannot be forecasted with reasonable accuracy. The tandem stock options/stock appreciation rights listed above for Mr. Fonstad were forfeited, following his retirement, without being exercised.

Outstanding Equity Awards at Fiscal Year-End; Option Exercises and Stock Vested in 2010

The following table provides information about equity awards that were outstanding at fiscal year-end. There were no option exercises or stock vesting for any of the named executive officers during 2010.

Outstanding Equity Awards at Fiscal Year-End⁽¹⁾

		Number of				Number of
		Securities				Securities				Equity Incentive Plan
		Underlying				Underlying				Awards: Number of
		Unexercised				Unexercised				Securities Underlying								Option
		Options				Options				Unexercised Unearned								Exercise
		(#)				(#)				Options (#)(2)								Price				Option Expiration
Name		Exercisable(1)				Unexercisable (1)				Threshold				Maximum				($)				Date
Laurie A. Bebo			5,334				10,666											$	15.35			2/22/2014
							4,000				4,000				18,000				31.71			3/3/2015
John Buono			2,667				5,333												15.35			2/22/2014
							2,000				2,000				9,000				31.71			3/3/2015
Eric B. Fonstad (3)			1,334				2,666												15.35			2/22/2014
											1,000				4,500				31.71			3/3/2015
Walter A. Levonowich			1,334				2,666												15.35			2/22/2014
							1,000				1,000				4,500				31.71			3/3/2015
Mary T. Zak-Kowalczyk			667				1,333												15.35			2/22/2014
							500				500				2,250				31.71			3/3/2015

Nonqualified Defined Contribution Plans

The following table provides information regarding ALC’s defined contribution retirement plans, the Executive Retirement Program (“ERP”) and the Deferred Compensation Plan (“DCP”). ALC does not maintain defined benefit retirement plans.

2010 Nonqualified Deferred Compensation

				Executive				Registrant				Aggregate				Aggregate				Aggregate
				Contributions				Contributions				Earnings				Withdrawals/				Balance
				in Last FY				in Last FY(1)				in Last FY(2)				Distributions				at Last FYE(3)
Name		Plan		($)				($)				($)				($)				($)
Laurie A. Bebo		ERP			—				48,740				185				—				349,273
		DCP			47,202				23,601				13,132				—				431,835
John Buono		ERP			—				28,545				30,613				—				137,819
		DCP			27,601				13,801				5,090				—				174,547
Eric B. Fonstad		ERP			—				16,220				34				—				66,964
		DCP			16,220				8,110				3,169				—				101,024
Walter A. Levonowich		ERP			—				16,768				7,545				—				76,357
		DCP			16,250				8,125				18,573				—				570,874
Mary T. Zak-Kowalczyk		ERP			—				—				—				—				—
		DCP			14,490				7,245				2,848				—				96,785

ALC’s defined contribution retirement plan for executives, the Executive Retirement Program, provides for a book entry to an account each month equal to 10% of the participant’s base monthly salary. Executives are not allowed to make contributions to the Executive Retirement Program. Accounts are credited with deemed earnings as if it were invested in investment funds designated by the participant from a list of funds determined by the plan administrator. Participants may prospectively elect to reallocate their accounts among investment funds at times established by the plan administrator, which shall be no less frequently than quarterly. Participants’ interests in the accounts vest according to the number of years of employment with ALC as follows: 20% after two years; 40% after three years; 70% after four years; and 100% after five years. A participant’s interest in an account also vests upon the death or disability of the participant. The individuals listed in the summary compensation table are vested in their plan accounts as follows: Ms. Bebo 100%; Mr. Buono 70%; Mr. Fonstad 70%; Mr. Levonowich 100%; and Ms. Zak-Kowalczyk 100%. Withdrawals or distributions are not allowed while the executive remains an ALC employee. Following a participant’s separation from ALC for any reason, the participant’s vested interest in the account is paid to the participant (or the participant’s beneficiary in the event of the participant’s death) either in a lump sum or in five, ten or twenty annual installments, as elected by the participant. Payments for reasons other than death do not begin until at least six month after separation.

ALC also sponsors a Deferred Compensation Plan that allows participating executives to elect to defer up to 10% of their base salaries. Compensation deferred is retained by ALC and credited to the participant’s deferral account. The Deferred Compensation Plan credits participants’ accounts with matching contributions equal to 50% of participants’ elective deferrals. Participants’ are fully vested in their deferral accounts as to amounts they elect to defer. Participants’ interests in amounts ALC credits to their accounts as matching contributions vest according to the number of years of employment with ALC as follows: 20% after two years; 40% after three years; 70% after four years; and 100% after five years. The individuals listed in the summary compensation table are vested in their plan accounts as follows: Ms. Bebo 100%; Mr. Buono 70%; Mr. Fonstad 70%; Mr. Levonowich 100%; and Ms. Zak-Kowalczyk 100%. Withdrawals or distributions are not allowed while the executive remains an ALC employee other than the case of financial hardship due to unforeseen emergency. Following a participant’s separation from ALC for any reason, the participant’s interest in the account is paid to the participant (or the participant’s beneficiary in the event of the participant’s death) either in a lump sum or in five, ten or twenty annual installments, as elected by the participant. Payments for reasons other than death do not begin until at least six month after separation. The deferral and matching accounts are bookkeeping accounts only and are credited with interest at the prime rate.

Employment Contracts and Termination of Employment and Change-in-Control Agreements

Please see the Compensation Discussion and Analysis above for a discussion of the terms of employment agreements entered into between ALC and the individuals listed in the summary compensation table. The approximate dollar amounts that would have been payable to the individuals listed in the summary compensation table under the provisions of the employment agreements if the respective executive’s employment had been terminated as of December 31, 2010 are listed below.

In the event of a change of control of ALC, unless provision is made in connection with the change of control for assumption, or substitution of, awards previously granted and unless otherwise provided in an award agreement: (i) any options and stock appreciation rights outstanding as of the date the change of control become fully exercisable and vested immediately prior to such change of control; (ii) all performance units and cash incentive awards are paid out as if the date of the change of control were the last day of the applicable performance period and “target” performance levels had been attained; and (iii) all other outstanding awards are automatically deemed vested and exercisable and all restrictions and forfeiture provisions lapse.

Unless otherwise provided pursuant to an award agreement, a change of control is defined to mean any of the following events, generally:

•

the consummation of a merger, reorganization or consolidation or sale or other disposition of all or substantially all of our assets;

•

the approval by our stockholders of a plan of our complete liquidation or dissolution; or

•

an acquisition by any individual, entity or group of beneficial ownership of 20% or more of the combined voting power of our then outstanding voting securities entitled to vote generally in the election of directors.

The acquisition in fiscal 2010 by Thornridge Holdings Limited of all of the ALC shares formerly held by Scotia Investments and its subsidiaries did not constitute a change of control under the terms of the 2006 Omnibus Incentive Compensation Plan.

The following table and footnotes present potential payments to each named executive officer under various circumstances as if the officer’s employment had been terminated on December 31, 2010, or if a change-in-control had occurred on such date. Please see the Compensation Discussion and Analysis above for a discussion of the terms of employment agreements entered into between ALC and the individuals listed in the summary compensation table.

										Payment
										of
										Cash
						Accelerated				Incentive
		Severance				Unvested				Award				Benefits and
		Pay(1)($)				Equity(2)($)				(3)($)				Perquisites(4)($)				Other($)				Total($)
Laurie A. Bebo
Death or Disability			—				201,282				—				—				—				201,282
Voluntary Termination (for Good Reason)/Involuntary Termination (without cause)			1,000,000				—				1,125,000				199,664				—				2,324,664

Continued...

										Payment
										of
										Cash
						Accelerated				Incentive
		Severance				Unvested				Award				Benefits and
		Pay(1)($)				Equity(2)($)				(3)($)				Perquisites(4)($)				Other($)				Total($)
Voluntary Termination (not for Good Reason)/Involuntary Termination (for cause)			—				—				—				—				—				—
Termination if Change-in-Control			1,000,000				201,282				1,125,000				199,664				—				2,525,946
Change in Control (no termination)			—				201,282				1,125,000				—				—				1,326,282
John Buono
Death or Disability			—				100,641				—				—				—				100,641
Voluntary Termination (for Good Reason)/Involuntary Termination (without cause)			290,000				—				217,500				51,300				—				558,800
Voluntary Termination (not for Good Reason)/Involuntary Termination (for cause)			—				—				—				—				—				—
Termination if Change-in-Control			290,000				100,641				217,500				51,300				—				659,441
Change-in-Control (no termination)			—				100,641				217,500				—				—				318,141
Eric B. Fonstad
Death or Disability			—				50,312				—				—				—				50,312
Voluntary Termination (for Good Reason)/Involuntary Termination (without cause)			162,200				—				85,155				32,130				—				279,485
Voluntary Termination (not for Good Reason)/Involuntary Termination (for cause)			—				—				—				—				—				—
Termination if Change-in-Control			162,200				50,312				85,155				32,130				—				329,797
Change-in-Control (no termination)			—				50,312				85,155				—				—				135,467

Continued...

										Payment
										of
										Cash
						Accelerated				Incentive
		Severance				Unvested				Award				Benefits and
		Pay(1)($)				Equity(2)($)				(3)($)				Perquisites(4)($)				Other($)				Total($)
Walter A. Levonowich
Death or Disability			—				50,312				—				—				—				50,312
Voluntary Termination (for Good Reason)/Involuntary Termination (without cause)			168,499				—				75,825				33,075				—				277,399
Voluntary Termination (not for Good Reason)/Involuntary Termination (for cause)			—				—				—				—				—				—
Termination if Change-in-Control			168,499				50,312				75,825				33,075				—				327,710
Change-in-Control (no termination)			—				50,312				75,825				—				—				126,136
Mary T. Zak-Kowalczyk
Death or Disability			—				25,156				—				—				—				25,156
Voluntary Termination (for Good Reason)/Involuntary Termination (without cause)			150,250				—				45,075				7,513				—				202,838
Voluntary Termination (not for			—				—				—				—				—				—
Good Reason)/Involuntary Termination (for cause) Termination if Change-in-Control			150,250				25,156				45,075				7,513				—				227,994
Change-in-Control (no termination)			—				25,156				45,075				—				—				70,231

Notes

COMPENSATION COMMITTEE REPORT

In accordance with its written Charter adopted by the Board of Directors, the Compensation/Nomination/Governance Committee has oversight responsibility for compensation matters. The Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement and, based on that review and discussion, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

The foregoing report has been approved by all members of the Committee.

Derek H.L. Buntain, Chair
Alan Bell
Michael J. Spector