X0303 4 2010-05-17 0 0001011064 SUNRISE SENIOR LIVING INC SRZ 0001031191 KLAASSEN PAUL J & TERESA M 7900 WESTPARK DRIVE SUITE T-900 MCLEAN VA 22102 1 0 1 0 0001345825 Klaassen Teresa Merritt 7900 WESTPARK DRIVE SUITE T-900 MCLEAN VA 22102 0 0 1 0 Common Stock 2006-12-22 4 G 0 19600 0.00 D 5103106 D Common Stock 2010-05-17 4 J 1 300000 D 4803106 D Variable Prepaid Forward Contract (Put Equivalent Position) 2010-05-17 4 J 1 300000 0.00 D 2010-05-17 2010-05-17 Common Stock 300000 0 D On May 17, 2010, the reporting persons settled the first tranche of a prepaid variable forward contract (the "Contract") that was entered into on May 24, 2005 relating to the forward sale of up to an aggregate of 1,500,000 shares of common stock in 5 tranches. Under the first tranche of the Contract, the reporting persons received $5,902,893.75, and pledged 300,000 shares of common stock to secure their obligations thereunder. The reporting persons retained dividends and voting rights in the pledged shares during the term of the pledge. The terms of the first tranche provided that three business days after May 12, 2010 (the "Maturity Date"), the reporting persons would deliver to the counterparty to the Contract a number of shares of common stock (or, at the election of the reporting persons, the cash equivalent) based on the following: (continued in footnote 2) (a) If the closing price per share on the Maturity Date (the "Final Price") was equal to or less than $25.805 (the "Floor Price"), the reporting persons would deliver 300,000 shares; (b) If the Final Price was greater than the Floor Price but less than $38.7075 (the "Cap Price"), the reporting persons would deliver a number of shares equal to the Floor Price/Final Price x 300,000 shares; or (c) If the Final Price was equal to or greater than the Cap Price, the reporting persons would deliver a number of shares equal to the product of (i) 300,000 x (ii) the sum of (Floor Price/Final Price) + (Final Price - Cap Price/Final Price). On the Maturity Date, the Final Price was $5.11. Accordingly, the reporting persons transferred to the counterparty to the Contract the 300,000 pledged shares. /s/ Paul J. Klaassen 2010-06-16 /s/ Teresa M. Klaassen 2010-06-16