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FORM OF RESTRICTED SHARE AWARD AGREEMENT
THIS AGREEMENT (the "Agreement") is made, effective as of (the "Date of Grant"), between KKR
Financial Holdings LLC, a Delaware limited liability company (hereinafter called the "Company"),
and (hereinafter called the "Participant").
R E C I T A L S:
WHEREAS, the Company has adopted the 2007 Share Incentive Plan for KKR Financial Holdings LLC (the "Plan"), which
Plan is incorporated herein by reference and made a part of this Agreement; capitalized terms not otherwise defined herein shall
have the same meanings as in the Plan; and
WHEREAS, the Committee has determined that it would be in the best interests of the Company and its Members to grant
the restricted share award provided for herein to the Participant pursuant to the Plan and the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Grant of the Restricted Shares. Subject to the terms and conditions of the Plan and the additional terms and
conditions set forth in this Agreement, the Company hereby grants to the Participant a restricted share award (the "Restricted
Share Award") consisting of Shares (hereinafter called the "Restricted Shares"). The Restricted Shares shall vest and
become nonforfeitable in accordance with Section 2 hereof.
(a) Subject to the Participant's continued service with the Company and its Affiliates, the Restricted Shares shall vest and
become nonforfeitable with respect to 100% of the Shares initially granted hereunder on the third anniversary of the Date of
Grant. Notwithstanding the foregoing, in the event the above vesting schedule results in the vesting of any fractional Shares,
such fractional Shares shall not be d