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                                                                   EXHIBIT 10.22


                            BEVERLY ENTERPRISES, INC.

                      EXECUTIVE DEFERRED COMPENSATION PLAN

                             AS AMENDED AND RESTATED
                             EFFECTIVE JULY 1, 2000

                                    * * * * *

         SECTION 1. PURPOSE. The purpose of the Plan is for the Company to
provide certain select executives of the Company with an opportunity to defer
receipt of compensation for services rendered to the Company. It is intended
that the Plan shall aid the Company in retaining and attracting employees whose
abilities, experience and judgment can contribute to the continued progress of
the Company. The Plan is intended to be a so-called "top hat plan" under ERISA,
i.e., an unfunded plan of deferred compensation for the benefit of a select
group of highly compensated or management employees. The Plan is also a
nonqualified deferred compensation arrangement under Internal Revenue Code
Section 3121(v).

         The Plan was originally effective on January 1, 1997. This Amendment
and Restatement is being effected to make various technical changes to the Plan.
The effective date of this Amendment and Restatement is January 1, 2000.

         SECTION 2. DEFINITIONS.

         (a) "Account(s)" means the Deferral Account, the Supplemental
Contributions Account and/or the Matching Contributions Account, as the context
requires.



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         (b) "Bonus" means any special and/or discretionary cash compensation
amounts in excess of Salary, determined by the Company to be payable to a
Participant with respect to services rendered.

         (c) A "Change of Control" shall be deemed to have taken place if: (i)
any person, corporation, or other entity or group, including any "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, other than
any employee benefit plan then maintained by the Company, becomes the beneficial
owner of shares of the Company having 30 percent or more of the total number of
votes that may be cast for the election of Directors of the Company; (ii) as the
result of, or in connection with, any contested election for the Board of
Directors of the Company, or any tender or exchange offer, merger or other
business combination or sale of assets, or any combination of the foregoing (a
"Transaction"), the persons who were Directors of the Company before the
Transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company or its assets, or (iii) at any time
(a) the Company shall consolidate or merge with any other Person and the Company
shall not be the continuing or surviving corporation, (b) any Person shall
consolidate or merge with the Company, and the Company shall be the continuing
or surviving corporation and in connection therewith, all or part of the
outstanding Company stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, (c) the Company
shall be a party to a statutory share exchange with any other Person after which
the Company is a subsidiary of any other Person, or (d) the Company shall sell
or otherwise transfer fifty percent (50%) or more of the assets or earning power
of the Company and its subsidiaries (taken as a whole) to any Person or Persons.


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         Notwithstanding anything to the contrary contained herein, a Change in
Control shall not include any transfer to a consolidated subsidiary,
reorganization, spin-off, split-up, distribution, or other similar or related
transaction(s) or any combination of the foregoing in which the core business
and assets of the Company and its subsidiaries (taken as a whole) are
transferred to another entity ("Controlled") with respect to which (1) the
majority of the Board of Directors of the Company (as constituted immediately
prior to such transaction(s)) also serve as directors of Controlled and
immediately after such transaction(s) constitute a majority of Controlled's
board of directors, and (2) more than 70% of the shareholders of the Company
(immediately prior to such transaction(s)) become shareholders or other owners
of Controlled and immediately after the transaction(s) control more than 70% of
the ownership and voting rights of Controlled.

         (d) "Committee" means the Compensation Committee of the Company's Board
of Directors.

         (e) "Company" means Beverly Enterprises, Inc., which shall mean "Old
Beverly" prior to the date of the Transaction, and shall mean New Beverly
Holdings, Inc. ("NBHI") (which has changed its name to Beverly Enterprises,
Inc.) subsequent to said date.

         (f) "Continuous Service" means a Participant's uninterrupted services
with the Company or any affiliate. Service shall not be deemed interrupted by a
leave of absence authorized by the Committee, an absence due to mandatory
military service or an absence due to disability while the Participant is
receiving benefits under any short-term or long-term disability plan or
arrangement maintained or sponsored by the Company.

         (g) "Deferred Compensation" means the sum of Salary and Bonus that are
the subject of an elective deferral under Section 5.

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         (h) "Deferred Compensation Plan" means the Beverly Enterprises, Inc.
Deferred Compensation Plan that was amended and restated effective July 17,
1991.

         (i) "Deferral Account" means the bookkeeping account established for a
Participant under the Plan and to which Deferred Compensation amounts with
respect to such Participant are credited from time to time, as adjusted from
time to time as provided in the Plan.

         (j) "Deferred Compensation Election Form" means the form pursuant to
which Eligible Executives elect to become Participants in the Plan and defer
compensation thereunder, in such form as the Committee determines from time to
time in its sole discretion.

         (k) "Disability" means total and permanent mental or physical
disability as determined by the Committee in its sole discretion in accordance
with standards and procedures similar to those under the Company's broad-based
regular long-term disability plan, if any. At any time that the Company does not
maintain such a long-term disability plan, Disability shall mean the inability
of a Participant, as determined by the Committee in its sole discretion,
substantially to perform such Participant's regular duties and responsibilities
due to a medically determinable physical or mental illness which has lasted (or
can reasonably be expected to last) for a period of three (3) consecutive
months.

         (l) "Eligible Executive" means any employee of the Company who is
selected for participation by the Committee.

         (m) "Matching Contributions Account" means the bookkeeping account
established for a Participant under the Plan and to which the Company's matching
contributions under Section 5(b) of the Plan are credited from time to time, as
adjusted from time to time under the Plan.


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         (n) "Participant" means an employee of the Company who has at any time
made elective Salary and/or Bonus deferrals to the Plan and for whom an Account
has been created under the Plan.

         (o) "Person" shall have the meaning ascribed to such term in section
3(a)(9) of the Securities Exchange Act of 1934 and used in Sections 13(d) and
14(d) thereof, including a "group" as defined in Section 13(d).

         (p) "Plan" means the Beverly Enterprises, Inc. Executive Deferred
Compensation Plan, as set forth herein and as amended from time to time.

         (q) "Plan Year"' means the calendar year.

         (r) "Retirement" means attainment of sixty (60) years of age and
termination of employment.

         (s) "Rollover Account" means the bookkeeping account established for a
Participant under the Plan and to which the Deferred Compensation Plan balance
is credited under Section 12.

         (t) "Salary" means the regular base compensation paid by the Company to
an employee (without regard to any reduction thereof pursuant to the Plan or any
other elective salary deferral arrangement under any other plan (e.g., Pre-Tax
Premium Plan, Dependent Care Assistance Plan, Health Care Spending Account)
maintained by the Company), exclusive of Bonus payments and any other incentive
payments made by the Company to such employee.

         (u) "Supplemental Contributions Account" means the bookkeeping account
established for the Participant under the Plan and to which the Company's
supplemental contributions under Section 5(c) of the Plan are credited from time
to time, as adjusted from time to time under the Plan.


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         (v) "Unforeseeable Emergency" means a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant, loss of the Participant's
property due to casualty, or other similar extraordinary unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. The circumstances that will constitute an "Unforeseeable Emergency"
would depend on the facts of each case, but, in any case, payment may not be
made in the event that such hardship is or may be relieved:

                           (1) through reimbursement or compensation by
                  insurance or otherwise,

                           (2) by liquidation of the Participant's assets, to
                  the extent that liquidation of such assets would not itself
                  cause severe financial hardship, or

                           (3) by cessation of Deferred Compensation under the
                  Plan (or cessation of elective deferrals under any other
                  Company Retirement or Savings Plan). The need to send a
                  Participant's child to college or the desire to purchase a
                  home shall not be an Unforeseeable Emergency.

         (w) "Transaction" means, collectively, those transactions which are
described in the Agreement and Plan of Distribution by and between Beverly
Enterprises, Inc. ("Old Beverly"), New Beverly Holdings, Inc. ("NBHI") and
Capstone Pharmacy Services, Inc. ("Capstone"), dated as of April 15, 1997, and
the Agreement and Plan of Merger by and between Old Beverly and Capstone dated
as of April 15, 1997.


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         (x) "Capstone Stock" means the common stock, par value $0.01 per share,
of Capstone Pharmacy Services, Inc., a Delaware corporation, (which has changed
its name to PharMerica, Inc.).


         SECTION 3. ELIGIBILITY. Individuals eligible to participate in the Plan
shall consist of the Eligible Executives of the Company, as determined from time
to time by the Committee. The Committee may terminate an individual's
designation as an Eligible Executive at any time which shall result in the
immediate termination of such individual's participation in the Plan and the
cancellation of such individual's Deferred Compensation Election Form with
respect to any Compensation which is unearned at such time. The Committee may
establish one or more criteria upon which eligibility to participate in the Plan
is based, and in such case, an Eligible Executive's failure to continue to meet
such criteria shall be deemed a termination of eligibility, whether or not
specifically so determined or considered by the Committee. Furthermore, unless
otherwise provided by the Committee, an individual's fulfillment of such
criteria shall not render such individual eligible to participate in the Plan
absent a specific designation of such individual as an Eligible Executive by the
Committee.

         SECTION 4. ADMINISTRATION.

         (a) The Plan shall be administered by the Committee. The Committee has
complete fiduciary discretion and authority to construe and interpret the Plan;
promulgate, amend and rescind rules and regulations relating to the
implementation, administration and maintenance of the Plan; decide all questions
of eligibility and benefits (including underlying factual determinations); and
adjudicate all claims and appeals. The Committee may designate persons other
than members of the Committee to carry out the day-to-day ministerial
administration of the Plan under such conditions and limitations as it may
prescribe; provided, however, that the


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Committee shall not delegate its authority with regard to the determination of
Eligible Employees. The Committee's determinations under the Plan need not be
uniform and may be made selectively among Participants, whether or not such
Participants are similarly situated. Any determination, decision or action of
the Committee in connection with the construction, interpretation,
administration, implementation or maintenance of the Plan shall be final,
conclusive and binding upon all Participants and any person(s) claiming under or
through any Participants.

         (b) The Company will indemnify and hold harmless the Committee and each
member thereof against any cost or expense (including without limitation
attorney's fees) or liability (including without limitation any sum paid in
settlement of a claim with the approval of the Company) arising out of any act
or omission to act, except in the case of willful misconduct or gross
negligence.


         SECTION 5. PARTICIPATION; ELECTIVE DEFERRALS: MATCHING CONTRIBUTIONS.

         (a) To elect to participate in the Plan for a particular Plan Year, an
Eligible Executive must execute a Deferred Compensation Election Form and file
such form with the Committee (or its designee) before the Commencement of such
Plan Year. To participate in the Plan during the year in which the Plan is first
implemented, the Eligible Executive must make an election to defer Salary
compensation for services to be performed subsequent to the election and/or to
defer Bonus compensation, in each case, within 30 days after the effective date
of the Plan. To participate in the Plan during the first year in which an
individual becomes eligible to participate in the Plan, the new Eligible
Executive must make an election to defer Salary compensation for services to be
performed subsequent to the election and/or to defer Bonus compensation, in each


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case, within 30 days after the date the new Eligible Executive becomes eligible.
Such election shall:

                           (i) contain a statement that the Eligible Executive
                  elects to defer a portion of the Eligible Executive's Salary
                  (up to 25% thereof, in increments of 1% or in fixed dollar
                  amounts per pay period) and/or Bonus (up to 100% thereof, in
                  increments of 1% or a fixed dollar amount) for a specified
                  Plan Year that becomes payable to the Eligible Executive after
                  the filing of such election;

                           (ii) apply only to the Salary otherwise payable to
                  the Eligible Executive during the Plan Year for which such
                  election is made and to any Bonus payment that is attributable
                  to the Eligible Executive's services rendered to the Company
                  during the Plan Year for which such election is made (whether
                  or not actually payable in such Plan Year); and

                           (iii) be irrevocable with respect to the Plan Year to
                  which it applies (unless canceled due to loss of Eligible
                  Executive status during the Plan Year pursuant to Section 3).
                  Upon receipt of an Eligible Executive's deferral election, the
                  Company shall establish as an accounting entry an individual
                  Deferral Account for such Eligible Executive and such Eligible
                  Executive shall become a Participant under the Plan.
                  Thereafter, the Company shall credit the Executive's Deferral
                  Account with all Deferred Compensation which would otherwise
                  have been payable to the Eligible Executive in the absence of
                  an election under the Plan. The Deferral Account shall be
                  credited monthly in an amount equal to the sum of the Deferred
                  Compensation that would otherwise have been paid by the
                  Company in accordance with the Company's normal payroll
                  practices for the immediately preceding month as soon as is
                  administratively feasible. The Company shall


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                  maintain such Account for each individual who has made any
                  contribution to the Plan until such Account is paid to the
                  Participant pursuant to Section 6 or 9, or forfeited pursuant
                  to Section 11.


                  (b) the Company shall, if on the first day of any such month
         the Eligible Executive is employed by the Company, credit matching
         contributions to the Eligible Executive's Matching Contributions
         Account in an amount equal to 25% of the first 6% of Salary and Bonus
         actually deferred under the Plan by the Eligible Executive in respect
         to the preceding month as soon as is administratively feasible.
         Notwithstanding the foregoing, no further Company matching
         contributions will be made to the Plan with respect to any Salary
         and/or Bonus deferred to the Plan on or after July 1, 2000.

                  (c) From time to time, the Company may, in its sole
         discretion, credit supplemental contributions to the Eligible
         Executive's Supplemental and Matching Contributions Account in such
         amounts as the Company shall determine in its sole discretion.


                  (d) Those Eligible Executives who constitute Retained
         Employees, as that term is defined in the documents describing the
         Transaction, shall be entitled to receive a matching contribution with
         respect to their deferrals which were made during the month containing
         the date of the Transaction, regardless of whether such employees
         remain employed by the Company as of the first day of the month
         following the date of the Transaction.

                  SECTION 6. PAYMENT OF DEFERRED COMPENSATION. The vested
         accrued balances in a Participant's Accounts shall be paid to a
         Participant, or, in the case of any Participant's death prior to
         payment, the Participant's designated beneficiary(ies), in stock in one
         lump sum commencing as soon as it is administratively feasible after
         the month in which the termination of the Participant's employment
         occurs. However, if employment ends due to the Participant's


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         Retirement, then payment will be made or commence within the first
         fifteen (15) days of the following calendar year, in the form of either
         a single lump sum of company stock or in annual installments of company
         stock or with the Committee's consent in cash, up to fifteen (15)
         years, pursuant to the participant's advance written election received
         at least twenty four (24) months prior to said Retirement. Such
         election of distribution method shall be made at the time of deferral
         and may be changed at any time prior to the Participant's Retirement as
         long as it is made at least twenty four (24) months prior to the
         Participant's Retirement. Notwithstanding the foregoing, that portion
         of a Participant's Account balance which is deemed invested in Capstone
         Stock will be payable pursuant to the terms of this Section 6 in either
         cash or Capstone Stock, within the complete discretion of the
         Committee.

                  SECTION 7. INVESTMENT OF ACCOUNT BALANCES. During and for each
         Plan Year, the accrued balances in each Deferral Account, Supplemental
         Contributions Account and Matching Contributions Account will be deemed
         to be invested, as soon as is administratively feasible during the
         month following the month in which elective deferrals, supplemental
         contributions and matching contributions are credited to their
         respective Accounts under the Plan, in the Company's Common stock,
         including dividends. At the end of each Plan Year, the Accounts shall
         be adjusted and increased or decreased by the results of such deemed
         investment for such Plan Year pursuant to Section 8.

                  If a Participant elects to defer the distribution of his or
         her Account balance under the Plan pursuant the installment
         distribution election, the undistributed vested portion of the
         Participant's Account will continue to be credited with investment
         gains or losses as described under this Section 7 unless the
         Participant elects to have the undistributed vested Account balances
         deemed invested at a fixed rate of interest as determined by the
         Committee. Such an


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         investment election must be made in the same manner, and subject to the
         same restrictions, as the Participants Distribution Election described
         in Section 6.


                  Notwithstanding the foregoing, as of the date of the
         Transaction, the balances of each Participant's Deferral Account,
         Rollover Account, Supplemental Contributions Account and Matching
         Account shall be deemed invested in shares of New Beverly Holdings,
         Inc. ("NBHI") and Capstone Pharmacy Services, Inc. ("Capstone") common
         stock in the ratio of .44 shares of Capstone common stock and one (1)
         share of NBHI common stock for each share of Old Beverly Common Stock
         in which said Accounts were previously deemed invested under this
         Section 7. Such adjusted Account balances shall be further adjusted
         based upon the fluctuations in value of NBHI and Capstone Stock until
         distributed to the Participant pursuant to the terms of the Plan.


                  Subsequent to the date of the Transaction, all further
         additions to a Participant's Deferral Account, Supplemental
         Contributions Account, Rollover Account, and Matching Account shall be
         deemed invested solely in shares of NBHI common stock, in accordance
         with the terms of this Section 7. Therefore, at the end of each Plan
         Year, each Participant's total account value shall be the sum of (i)
         the value of each of his accounts as of the date of the Transaction, as
         adjusted for the performance of NBHI and Capstone common stock, plus
         (ii) the value of all contributions made subsequent to the date of the
         Transaction, as adjusted for the change in the value of NBHI common
         stock.

                  SECTION 8. VALUATION. At the end of each Plan Year, the vested
         and unvested balances in the Deferral Account, Supplemental
         Contributions Account and the Matching Contributions Account of each
         Participant shall be determined by the Company, taking into account any
         increase or decrease therein for such Plan Year under Section 7,
         including


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         dividends. The balance determined, as of the end of each Plan Year,
         shall be communicated in writing to each Participant as soon as
         practicable after the end of the Plan Year. In the case of any
         distribution under Section 6 above, the vested and unvested balances in
         the Deferral Account, Supplemental Contributions Account and the
         Matching Contributions Account of any affected Participant shall be
         determined by the Company immediately prior to the date of any such
         distribution or otherwise as close to such date as administratively
         practicable.

                  SECTION 9. DISTRIBUTION IN CASES OF HARDSHIP. The Committee
         may make distributions to a Participant from the vested balances in
         such Participant's Deferral Account, Supplemental Contributions Account
         or Matching Contributions Account upon a showing by such Participant
         that an Unforeseeable Emergency has occurred. Such distributions shall
         be limited to the amount shown to be necessary to meet the
         Unforeseeable Emergency.

                  SECTION 10. VESTING. Notwithstanding anything contained herein
         to the contrary, a Participant's accrued balance in such Participant's
         Deferral Account (and the amounts payable with respect thereto) shall
         be fully vested at all times. A Participant's accrued balance in such
         Participant's Matching Contributions Account (and the amounts payable
         with respect thereto) and in such Participant's Supplemental
         Contributions Account (and the amounts payable with respect thereto)
         shall, in each case, become 100% vested after a Participant completes
         five years of continuous service with the Company. Notwithstanding the
         immediately preceding sentence, if (a) the Participant dies, (b) the
         Participant's employment with the Company is terminated due to
         Disability or (c) a Change of Control occurs, such Participant's
         accrued balance in the Matching Contributions Account and Supplemental
         Contributions Account shall be fully vested as of the date of death,
         the date of such termination or the date of any such Change of Control,
         as the case may be.


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                  SECTION 11. FORFEITURE. If a Participant's employment with the
         Company is terminated for any reason (other than death) prior to such
         Participant's vesting under Section 10, such unvested Participant's
         accrued balance in such Participant's Matching Contributions Accounts
         (and the amounts payable with respect thereto) and in such
         Participant's Supplemental Contributions Account (and the amounts
         payable with respect thereto) shall, in each case, be forfeited by such
         Participant. Any amounts so forfeited under the Plan shall be used to
         offset other Plan liabilities or to pay administrative expenses under
         the Plan.

                  SECTION 12. ROLL OVER OF DEFERRED COMPENSATION PLAN BALANCES.
         Those Participants in this Plan who also have balances in the Deferred
         Compensation Plan can elect to have the value of their Deferred
         Compensation Plan credited to this Plan at any time. The amount
         credited will not be eligible for the Matching Contributions under
         section 5 (b). The balance of the Participant's Deferred Compensation
         Plan will be credited to the Participants Rollover Account as soon as
         is administratively feasible during the month following the month in
         which the election to roll over the balance is made, at the same time
         as other contributions are credited pursuant to Section 7.

                  SECTION 13. AMENDMENT. The Plan may be amended, modified or
         terminated at any time, for any reason, without notice, by the
         Committee except that no such amendment, modification or termination
         shall have a material adverse effect on the vested accrued balance of
         any Participant's Deferral Account, Supplemental Contributions Account
         and/or Matching Contributions Account as of the effective date of any
         such amendment, modification or termination, without the consent of the
         Participant, or, if the Participant is dead, his or her
         beneficiary(ies).


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                  SECTION 14. PARTICIPANT'S RIGHT UNSECURED; NO DUTY TO INVEST.
         The right of a Participant to receive any distribution hereunder shall
         be an unsecured claim against the general assets of the Company. No
         Company assets shall in any way be subject to any prior claim by any
         Participant. The Company shall have no duty whatsoever to set aside or
         invest any amounts credited to any Deferral Account, Supplemental
         Contributions Account or Matching Contributions Account established
         under the Plan. Nothing in the Plan shall confer upon any employee of
         the Company any right to continued employment with the Company, nor
         shall it interfere in any way with the right of the Company to
         terminate the employment of any employee at any time for any reason. A
         Participant shall have no right, title, or interest whatsoever in or to
         any specific assets of the Company, nor any investments, if any, which
         the Company may make to aid it in meeting its obligations hereunder.
         Nothing contained in this Plan, and no action taken pursuant to its
         provisions, shall create or be construed to create a trust of any kind,
         or a fiduciary relationship, between the Company and any Participant or
         any other person. The Company will maintain a "rabbi" trust agreement
         to provide for a source of funds out of which all or any portion of the
         benefits under the Plan may be satisfied.

                  SECTION 15. RESTRICTIONS ON ALIENATION. No amount deferred or
         credited to any Account under the Plan shall be subject in any manner
         to anticipation, alienation, sale, transfer, assignment, pledge,
         encumbrance, levy or charge. Any attempt to so anticipate, alienate,
         sell, transfer, assign, pledge, encumber, levy or charge the same shall
         be void; nor shall any amount in any manner be subject to any claims
         for the debts, contracts, liabilities, engagements or torts of the
         Participant (or the Participant's beneficiary or personal
         representative) entitled to such benefit. No Participant shall be
         entitled to borrow at any time any portion of the Participant's Account
         balances under the Plan.


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                  Notwithstanding the foregoing, a Participant's interest in the
         Plan may be transferred pursuant to a domestic relations order which is
         entered by a court of competent jurisdiction incident to a divorce,
         however, the person claiming any share of a Participant's interest
         pursuant to such an order shall not be entitled to receive a
         distribution from the Plan until such time as distributions commence or
         could have commenced to the affected Participant. Furthermore, such
         transferred interest shall be subject to the same terms, conditions,
         and restrictions of the Plan as were applicable to the Participant.

                  SECTION 16. WITHHOLDING. The Participants, their
         beneficiaries, personal representatives and any transferee pursuant to
         a domestic relations order ("Recipient") shall bear any and all
         federal, foreign, state or local income or any other tax imposed on
         amounts paid under the Plan. Employment taxes on amounts allocated to
         Participant's Accounts will be withheld when services are rendered or
         later, when such amounts vest. All distributions from the Plan are
         subject to applicable withholding taxes. Each Recipient is responsible
         for satisfying his or her withholding obligations (whether by cash
         payments to the Company, broker assisted sales under Federal Reserve
         Regulation T whereby the broker forwards the required withholding to
         the Company, or otherwise) prior to the Plan making any distributions.
         In the absence of the Recipient satisfying such withholding
         obligations, the Company shall deduct and withhold all required taxes
         from any distribution hereunder and shall reduce and offset a
         Recipient's distribution accordingly.

                  SECTION 17. PARTICIPANTS BOUND BY TERMS OF THE PLAN. By
         electing to become a Participant, each Eligible Executive shall be
         deemed conclusively to have accepted and consented to all terms of the
         Plan and all actions or decisions made by the Company with regard to
         the Plan. Such terms and consent shall also apply to and be binding
         upon the beneficiaries,

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         personal representatives and other successors in interest of each
         Participant. Each Participant shall receive a copy of the Plan. SECTION

                  18. DESIGNATION OF BENEFICIARY(IES). Each Participant under
         the Plan may designate a beneficiary or beneficiaries to receive any
         payment which under the terms of the Plan becomes payable on, after or
         as a result of the Participant's death. At any time, and from time to
         time, any such designation may be changed or canceled by the
         Participant without the consent of any such beneficiary. Any such
         designation, change or cancellation must be on a form provided for that
         purpose by the Committee and shall not be effective until received by
         the Committee. If no beneficiary has been designated by a deceased
         Participant, the beneficiary shall be the Participant's estate. If the
         Participant designates more than one beneficiary, any payments under
         the Plan to such beneficiaries shall be made in equal shares unless the
         Participant has expressly designated otherwise, in which case the
         payments shall be made in the shares designated by the Participant.

                  SECTION 19. SEVERABILITY OF PROVISIONS. In the event any
         provision of the Plan would serve to invalidate the Plan, that
         provision shall be deemed to be null and void, and the Plan shall be
         construed as if it did not contain the particular provision that would
         make it invalid. the Plan shall be binding upon and inure to the
         benefit of (a) the Company and its respective successors and assigns,
         and (b) each Participant, his or her designees and estate. Nothing in
         the Plan shall preclude the Company from consolidating or merging into
         or with, or transferring all or substantially all of its assets to,
         another corporation, or engaging in any other corporate transaction.

                  SECTION 20. GOVERNING LAW AND INTERPRETATION. The Plan shall
         be construed and enforced in accordance with, and the rights of the
         parties hereto shall be governed by, the laws of

        Beverly Enterprises, Inc. Executive Deferred Compensation Plan
                 AS AMENDED AND RESTATED EFFECTIVE JULY 1, 2000
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<PAGE>   18


         the State of Delaware. This Plan shall not be interpreted as either an
         employment or trust agreement.

                  SECTION 21. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS.
         Payments and other benefits received by a Participant under the Plan
         shall not be deemed a part of a Participant's compensation for purposes
         of the determination of benefits under any other employee benefit plans
         or arrangements, if any, provided by the Company or any affiliate of
         the Company. The existence of the Plan notwithstanding, the Company may
         adopt such other compensation plans or programs and additional
         compensation arrangements as it deems necessary to attract, retain and
         motivate employees. The Committee is authorized to cause to be
         established a trust agreement or several trust agreements or similar
         arrangements from which the Committee may make payments of amounts due
         or to become due to any Participants under the Plan.

                  SECTION 22. ARBITRATION. Except as otherwise provided in this
         Plan, any controversy between the parties arising out of this Plan
         shall be submitted to the American Arbitration Association under its
         Commercial Arbitration Rules for binding arbitration. The arbitration
         shall be held in Fort Smith, Arkansas or such other location where the
         Company may have its corporate headquarters, using a single arbitrator.
         The costs of the arbitration, including any American Arbitration
         Association administration fee, the arbitrator's fee, and costs for the
         use of facilities during the hearings, shall be borne equally by the
         parties to the arbitration. Each side shall bear its own attorney's
         fees. The arbitrator shall not have any power to alter, amend, modify
         or change any of the terms of this Plan nor to grant punitive, special,
         extracontractual, on consequential damages or any other remedy which is
         either prohibited by the terms of this Plan,


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<PAGE>   19


         or not available in a court of law. Judgment on the award rendered by
         the arbitrator may be entered in any court having jurisdiction thereof.

                  SECTION 23. EFFECTIVE DATE OF THE PLAN. The Plan shall be
         effective as of January 1, 1997 upon its adoption by the Company.


                  IN WITNESS WHEREOF, the Plan is hereby adopted by the Company
         on this ____ day of _______________, 199___.


                                                   BEVERLY ENTERPRISES, INC.



                                                   By:
                                                      ------------------------
                                                   Title:
                                                         ---------------------


        Beverly Enterprises, Inc. Executive Deferred Compensation Plan
                 AS AMENDED AND RESTATED EFFECTIVE JULY 1, 2000
                                    Page 19