Exhibit 10.88
EMPLOYMENT CONTRACT
          AGREEMENT made as of December 4, 2003 between BEVERLY ENTERPRISES, INC., a Delawarecorporation (the “Company”), and CINDY SUSIENKA (the “Executive”).
          WHEREAS, Executive is employed by the Company or by one of its wholly-owned consolidatedsubsidiaries; and
          WHEREAS, the Company desires to assure itself of the management services of the Executive bydirectly engaging the Executive as the Executive Vice President of the Company; and
          WHEREAS, the Company wishes to encourage the Executive to remain with and devote full time andattention to the business affairs of the Company and wishes to provide income protection to theExecutive for a period of time in the event of an involuntary Termination of Employment not forCause or a voluntary Termination of Employment for Good Reason within the Term of this Agreement;
          NOW, THEREFORE, in consideration of the mutual agreements and understandings set forth hereinand for other good and valuable consideration, the receipt and adequacy of which is herebyacknowledged, the Company and the Executive hereby agree as follows:
          1. Definitions.
          (a) “Base Salary” shall mean the Executive’s regular annual rate of base pay,as set forth in Paragraph 4(a), as of the date in question.
          (b) The “Benefit Multiplier” shall be equal to 2.0 except that if Executive’sTermination of Employment is pursuant to Paragraphs 6(b) or 6(c) it shall be equal to 3.0.
          (c) The Benefit Period” shall be the period of years equal to the BenefitMultiplier which follows the Executive’s Termination of Employment.
          (d) “Cause” shall mean the Executive’s (i) conviction of a crime involvingmoral turpitude or theft or embezzlement of property from the Company or (ii) willfulmisconduct or willful failure substantially to perform the duties of his position, but onlyif such has continued after receipt of notice from the Company’s Board of Directors andsuch reasonable cure period as is set forth in such notice.
          (e) A “Change in Control” shall be deemed to have taken place if: (i) anyperson, corporation, or other entity or group, including any “group” as defined in Sectionl3(d)(3) of the Securities Exchange Act of 1934, other than any employee benefit plan thenmaintained by the Company, becomes the beneficial owner of shares of the Company having 30percent or more of the total number of votes that may be cast for the election of Directorsof the Company; (ii) as the result of, or in connection with, any contested election forthe Board of Directors of the Company, or any tender or exchange offer, merger or otherbusiness combination or sale of assets, or any combination of the foregoing (a“Transaction”), the persons who were Directors of the Company before the Transaction shallcease to constitute a majority of the Board of Directors of the Company or any successor tothe Company or its assets, or (iii) at any time (a) the Company shall consolidate with, ormerge with, any other Person and the Company shall not be the continuing or survivingcorporation, (b) any Person shall consolidate with, or merge with the
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Company, and the Company shall be the continuing or surviving corporation and inconnection therewith, all or part of the outstanding Company stock shall be changed into orexchanged 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 afterwhich the Company is a subsidiary of any other Person, or (d) the Company shall sell orotherwise transfer 50% or more of the assets or earning power of the Company and itssubsidiaries (taken as a whole) to any Person or Persons; provided, however, thatnotwithstanding anything to the contrary herein, a Change in Control shall notinclude either any transfer to a consolidated subsidiary, reorganization, spin-off,split-up, distribution, or other similar or related transaction(s) or any combination ofthe 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 priorto such transaction(s)) also serve as directors of Controlled and immediately after suchtransaction(s) constitute a majority of Controlled’s board of directors, and (2) more than70% of the shareholders of the Company (immediately prior to such transaction(s)) becomeshareholders or other owners of Controlled and immediately after the transaction(s) controlmore than 70% of the ownership and voting rights of Controlled.
          (f) The “Change in Control Date” shall mean the date immediately prior to theeffectiveness of the Change in Control.
          (g) The “Committee” shall mean the Compensation Committee of the Company’sBoard of Directors.
          (h) The “Competitive Businesses” shall mean any of the health care businessesin which the Company is engaged on the Effective Date.
          (i) The Executive shall have “Good Reason” to terminate employment if: (i) theExecutive is not elected, reelected, or otherwise continued in the office of the Company orany of its subsidiaries which he held immediately prior to the Change in Control Date, orhe is removed as a member of the Board of Directors of the Company or any of itssubsidiaries if the Executive was a director immediately prior to the Change in ControlDate; (ii) the Executive’s duties, responsibilities or authority as an employee arematerially reduced or diminished from those in effect on the Change in Control Date withoutthe Executive’s consent; (iii) the Executive’s duties, responsibilities, or authority as anemployee are materially reduced or diminished from those in effect on the Effective Datewithout the Executive’s consent; (iv) the Executive’s compensation or benefits are reducedwithout the Executive’s consent, unless all Executive-level officers have theircompensation or benefits reduced in the same percentage amount; (v) the Company reduces thepotential earnings of the Executive under any performance-based bonus or incentive plan ofthe Company in effect immediately prior to the Change in Control Date; (vi) the Companyrequires that the Executive’s employment be based other than at its location on theEffective Date without his consent; (vii) any purchaser, assign, surviving corporation, orsuccessor of the Company or its business or assets (whether by acquisition, merger,liquidation, consolidation, reorganization, sale or transfer of assets or business, orotherwise) fails or refuses to expressly assume in writing this Agreement and all of theduties and obligations of the Company hereunder pursuant to Section 16 hereof; or (viii)the Company breaches any of the provisions of this Agreement.
          (j) “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).
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          (k) “Target Bonus” shall mean the target bonus (100% level) established forthe Executive for the year in question under the Company’s “Annual Incentive Plan.”
          (l) “Termination of Employment” shall mean the termination of the Executive’semployment by the Company other than such a termination in connection with an offer ofimmediate reemployment by a successor or assign of the Company or purchaser of the Companyor its assets under terms and conditions which would not permit the Executive to terminatehis employment for Good Reason.
          2. Term. The initial term of this Agreement shall be for the period commencing on theEffective Date and ending on the third anniversary thereof. The Term shall be automaticallyextended by one additional day for each day beyond the Effective Date of this Agreement that theExecutive remains employed by the Company until such time as the Company elects to cease suchextension by giving written notice of such to the Executive. (In such event, the Agreement shallthus terminate on the third anniversary of the effective date of such notice).
          3. Position and Duties. During the Term, the Executive shall serve, as an employee,as the Executive Vice President of the Company and shall have such duties, functions,responsibilities and authority as are consistent with the Executive’s position.
          4. Compensation and Related Matters.
          (a) Annual Base Salary. The Executive shall receive a Base Salary at a rateof $385,000 per annum and thereafter at any such greater rate as is determined by theCommittee.
          (b) Benefits. During the Term, the Executive shall be entitled to all of thefollowing and any other benefits and prerequisites offered by the Company to executivesgenerally:
          (i) Participate in the Company’s present and future stock option, restrictedstock, phantom stock and other similar equity-based incentive plans, pursuant totheir terms.
          (ii) Participate in the Company’s Employee Stock Purchase Plan, pursuant toits terms;
          (iii) Participate in the Company’s Executive Deferred Compensation Plan,pursuant to its terms;
          (iv) Participate in the Company’s Executive Savings Plus Plan, pursuant to itsterms;
          (vi) Participate in the group term life insurance coverage as provided by theCompany;
          (vii) Participate in the business travel accident insurance coverage whentraveling on Company business;
          (viii) Participate in the Company’s Medical Plan, and Dental Plan, pursuant totheir terms, except that the premium cost for such shall be treated as a benefitunder the Company’s Executive Medical Reimbursement Plan, described below, (andtherefore at the present time, there shall be no payroll deduction as a conditionof coverage in the Medical Plan and Dental Plan);
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          (ix) Participate in the Company’s Executive Medical Reimbursement Planpursuant to its terms;
          (x) Participate in the Company’s group Long-Term Disability Plan, at themaximum benefit level, pursuant to its terms, and participate in the Company’sSupplemental Long-Term Disability Plan, according to its terms;
          (xi)4 weeks of paid vacation;
          (xii) Participate in or receive benefits under any other employee benefit planor other arrangement made available by the Company to any of its employees, subjectto and on a basis consistent with the terms, conditions and overall administrationof such plan or arrangement.
          (c) Annual Bonus. As additional compensation for services rendered, theExecutive shall be eligible to receive an annual bonus in cash pursuant to the Company’sAnnual Incentive Plan.
          (d) Expenses. The Company shall promptly reimburse the Executive for allreasonable travel and other business expenses incurred by the Executive in the performanceof his duties to the Company hereunder.
          (e) Reporting. The Executive shall report directly to the Chairman and ChiefExecutive Officer of the Company.
          5. Non-Solicitation.
          (a) Executive shall not at any time during the period of his employment with theCompany, or during the one (1) year period immediately following his Termination ofEmployment with the Company (“Non-Solicitation Period”), without the prior written consentof the Company, on behalf of himself or any other person, solicit for employment or employany of the current officers or employees of the Company; provided, however, that nothingcontained herein shall prohibit Executive from hiring employees of the Company when suchemployment results from general solicitations for employment.
          (b) Executive shall not at any time during the period of his employment with theCompany, or during the Non-Solicitation Period, without the prior written consent of theCompany, solicit for his own use, or for the use of any company or person by whom he isemployed, or for whom he may be acting, any of the current customers of the Company, norshall he divulge to any other person any information or fact relating to the management,business (including prospective business), finances, its customers or the terms of any ofthe contracts of the Company which has heretofore or which may hereafter come to theknowledge of Executive which is not freely available to the public.
          (c) Executive shall not, during the Non-Solicitation Period, in any way defame theCompany or disparage its business capabilities, products, plans or management to anycustomer, potential customer, vendor, supplier, contractor, subcontractor of the Company soas to affect adversely the goodwill or business of the Company.
          (d) Executive covenants and agrees that a breach of these subparagraphs (a), (b) or(c) would immediately and irreparably harm the Company and that a remedy at law would beinadequate to compensate the Company for its losses by reason of such breach and thereforethat the Company shall, in addition to any rights and remedies available under thisAgreement, at
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law or otherwise, be entitled to any injunction to be issued by any court of competentjurisdiction enjoining and restraining Executive from committing any violation of thesesubparagraphs (a), (b) or (c), and Executive hereby consent to the issuance of suchinjunction.
          (e) For purposes of this Section 5 and in consideration of this Agreement, thisnon-solicitation agreement has been separately negotiated and bargained for, andconstitutes a substantial portion of the consideration for this Agreement.
          6. Eligibility for Severance Benefits. The Executive shall be eligible for thebenefits described in Paragraph 7 (the “Severance Benefits”) if:
          (a) during the Term, the Executive has a Termination of Employment initiated (i) bythe Company without Cause, or (ii) by the Executive for Good Reason, and, in either case,subsections (b) or (c) do not apply,
          (b) during the Term there has been a Change in Control and during the 31 day periodcommencing on the first day of the 13th calendar month following the Change in Control Date(e.g. the period April 1, 1999 — May 1, 1999, inclusive, for a Change in Controlwhich is effective in the month of March, 1998), the Executive has a Termination ofEmployment initiated by the Executive without Good Reason, or
          (c) during the Term either (i) there has been a Change in Control and duringthe two year period commencing on the Change in Control Date the Executive has aTermination of Employment which is initiated by the Company without Cause or by theExecutive for Good Reason, or (ii) the Executive has a Termination of Employment initiatedby the Company without Cause or by the Executive for Good Reason following the commencementof any discussion with a third person that ultimately results in a Change in Control withsuch third person within 12 months of the commencement of such discussions (in which case,the date of such discussion shall be substituted for the Change in Control Date whereverappropriate, including in the definition of “Good Reason” and in Paragraph 7 hereof).
          7. Severance Benefit. Upon satisfaction of the requirements set forth in Paragraph 6,and subject to Paragraphs 8 and 11, the Executive shall be entitled to the following SeveranceBenefits:
          (a) Cash Payment. The Executive shall be entitled to receive an amount ofcash equal to the Benefit Multiplier times the greater of:
          (i) the sum of the Executive’s Base Salary as in effect upon the Terminationof Employment, and the greater of
          (A) the Executive’s Target Bonus as in effect upon the Termination ofEmployment or,
          (B) the Executive’s actual bonus under the Company’s “Annual IncentivePlan” for the year prior to the year of the Executive’s Termination ofEmployment; or
          (ii) the sum of the Executive’s Base Salary as in effect on the Change inControl Date, and the greater of
          (A) the Executive’s Target Bonus as in effect upon the Change inControl Date or,
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          (B) the Executive’s actual bonus under the Company’s “Annual IncentivePlan” for the year prior to the Change in Control Date.
The payment shall be made in a single lump sum within ten days following the Executive’sTermination of Employment.
          (b) Long-Term Incentive Award; Equity-Based Compensation. The Executive’sinterest under the Company’s long-term incentive plans shall be fully vested. Any and all(i) options, phantom units, and other awards granted to Executive to purchase Company stockor which is measured by the current market value of Company stock and (ii) restricted stockof the Company, owned by the Executive shall be fully vested.
          (c) Continuation of Benefits.
          (i) For the Benefit Period, the Executive shall be treated as if he hadcontinued to be an employee for all purposes under the Company’s Medical Plan,Executive Medical Reimbursement Plan and Dental Plan. Following this period, theExecutive shall be entitled to receive continuation coverage under Part Six ofTitle I of ERISA (“COBRA Benefits”) treating the end of this period as atermination of the Executive’s employment (other than for gross misconduct).
          (ii) The Company shall maintain in force, at its own expense, for theremainder of the Executive’s life, the vested life insurance in effect under theCompany’s Executive Split Dollar Life Insurance Plan (as described in Paragraph4(b)) as of the Change in Control Date or as of the date of Termination ofEmployment, whichever is greater.
          (d) Relocation Benefit. If, within the Benefit Period after the Executive’sTermination of Employment, the Executive gives the Company written notice that he desiresto relocate within the continental United States, the Company will reimburse the Executivefor any reasonable relocation expenses (in accordance with the Company’s general relocationpolicy for executives as then in effect, or, at the Executive’s election, as in effect onthe Change in Control Date) in connection with such relocation.
          (e) Executive Savings Plus Plan. For the year of the Executive’s Terminationof Employment, the Company will make the contribution to the Executive Savings Plus Plan onbehalf of the Executive that it would have made if the Executive had not had a Terminationof Employment, but in no event less than the percentage contribution it made for theExecutive in the immediately preceding year (and increased to take account of theadditional year of service), in each case taking account of the Executive’s annualized rateof “Compensation” (as defined in the Executive Savings Plus Plan) and the percentage ofsuch Compensation that the Executive is contributing to the Executive Savings Plus Plan, asof the date of Termination of Employment, and the Company’s matching contribution rate forsuch year (or, if greater, the preceding year). The portion of the Company’s matchingcontribution which is based on the preceding year’s contribution percentage shall becontributed to the Executive Savings Plus Plan on behalf of the Executive immediately uponthe Executive’s Termination of Employment and any additional contribution required shall bepaid as soon as the amount is determined.
          (f) Executive Deferred Compensation Plan. For the year of the Executive’sTermination of Employment, the Company will make the contribution to its Executive Deferred
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Compensation Plan (the “EDC Plan”) that it would have made if the Executive had nothad a Termination of Employment determined based on the Executive’s deferral for such year.At Executive’s election, the Company contribution shall be paid to the Executiveimmediately upon his Termination of Employment.
          (g) Disability. For the Benefit Period, the Company shall provide long-termdisability insurance benefits coverage to Executive equivalent to the coverage that theExecutive would have had had he remained employed under the Company’s Long-Term DisabilityPlan and Supplemental Long-Term Disability Plan applicable to Executive on the date ofTermination of Employment, or, at the Executive’s election, the plan or plans applicable toExecutive as of the Change in Control Date. Should Executive become disabled during suchperiod, Executive shall be entitled to receive such benefits, and for such duration, as theapplicable plan(s) provide.
          (h) Plan Amendments. The Company shall adopt such amendments to its employeebenefit plans and insurance policies as are necessary to effectuate the provisions of thisAgreement. If and to the extent any benefits under this Paragraph 7 are not paid orpayable or otherwise provided to the Executive or his dependents or beneficiaries under anysuch plan or policy (whether due to the terms of the plan or policy, the terminationthereof, applicable law, or otherwise), then the Company itself shall pay or provide forsuch benefits.
          8. Golden Parachute Gross-Up. If, in the written opinion of a Big 6 accountingfirm engaged by either the Company or the Executive for this purpose (at the Company’s expense), orif so alleged by the Internal Revenue Service, the aggregate of the benefit payments underParagraph 7 would cause the payment of one or more of such benefits to constitute an “excessparachute payment” as defined in Section 280G(b) of the Internal Revenue Code (“Code”), then theCompany will pay to the Executive an additional amount in cash (the “Gross-Up Payment”) equal tothe amount necessary to cause the net amount retained by the Executive, after deduction of any (i)excise tax on the payments under Paragraph 7, (ii) federal, state or local income tax on theGross-Up Payment, and (iii) excise tax on the Gross-Up Payment, to be equal to the aggregateremuneration the Executive would have received under Section 7, excluding such Gross-Up Payment(net of all federal, state and local excise and income taxes), as if Sections 280G and 4999 of theCode (and any successor provisions thereto) had not been enacted into law. The Gross-Up Paymentprovided for in this Paragraph shall be made within ten (10) days after the termination ofExecutive’s employment, provided however that if the amount of the payment cannot be finallydetermined at the time, the Company shall pay to Executive an estimate as determined in good faithby the Company of such payments (together with interest at the rate provided in section1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event laterthan the thirtieth (30th) day after the date of termination. Any dispute concerning theapplication of this Paragraph shall be resolved pursuant to Paragraph 10, and if Paragraph 11applies, any reference in this Paragraph and to Paragraph 7 shall also be deemed to include areference to Paragraph 11 as well.
          9. Waiver of Other Severance Benefits. The benefits payable pursuant to thisAgreement are in lieu of any other severance benefits which may otherwise be payable to theExecutive upon termination of employment with the Company, whether or not in connection with aChange in Control (including without limitation, any benefits to which Executive might otherwisehave been entitled under any employment, change in control, or severance agreement or othercompensation or employee benefit plan to which the Company was a party or which was assumed by theCompany), except those benefits which are to be made available to the Executive as required byapplicable law.
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          10. Disputes. Any dispute or controversy arising under, out of, in connection with orin relation to this Agreement shall, at the election and upon written demand of either party,be finally determined and settled by binding arbitration in the city of Fort Smith, Arkansas, usinga single arbitrator, in accordance with the Labor Arbitration rules and procedures of the AmericanArbitration Association, and judgment upon the award may be entered in any court havingjurisdiction thereof. The arbitrator shall have the power to order specific performance, mandamus,or other appropriate legal or equitable relief to enforce the provisions of this Agreement. TheCompany shall pay all costs of the arbitration and all reasonable attorney’s and accountant’s feesof the Executive in connection therewith.
          11. Additional Payments Due to Dispute. Notwithstanding anything to the contraryherein, and without limiting the Executive’s rights at law or in equity, if the Company fails orrefuses to timely pay to the Executive the benefits due under Paragraphs 7 and/or 8 hereof, thenthe benefits under Paragraph 7(a) shall be increased and the benefits under Paragraphs 7(c), 7(d),and 7(g) shall each be continued by one additional day for each day of any such failure or refusalof the Company to pay. In addition, any Gross-Up Payment due under Paragraph 8 shall be increasedto take into account any increased benefits under this Paragraph.
          12. No Set-Off. There shall be no right of set-off or counterclaim in respect of anyclaim, debt, or obligation against any payment to or benefit for the Executive provided for in thisAgreement.
          13. No Mitigation Obligation. The parties hereto expressly agree that thepayment of the benefits by the Company to the Executive in accordance with the terms of thisAgreement will be liquidated damages, and that the Executive shall not be required to mitigate theamount of any payment provided for in this Agreement by seeking other employment or otherwise, norshall any profits, income, earnings or other benefits from any source whatsoever create anymitigation, offset, reduction or any other obligation on the part of the Executive hereunder orotherwise.
          14. Waiver of Rights. Executive hereby waives any rights against the Company,including without limitation any rights under any employment, change in control, or severanceagreement; under any stock option or long-term incentive plan or any other compensation or employeebenefit plan.
          15. Non-disclosure of Proprietary Information, Surrender of Records; Inventionsand Patents.
          (a) Proprietary Information. Executive shall not during the term ofemployment or at any time thereafter (irrespective of the circumstances under whichExecutive’s employment terminates), directly or indirectly use for his own purpose or forthe benefit of any person or entity other than Company, nor otherwise disclose, anyproprietary information, as defined below, to any individual or entity, unless suchdisclosure has been authorized in writing by the Company or is otherwise required by law.For purposes of this Agreement, the term “proprietary information” shall include, but isnot limited to: (a) the name or address of any client or affiliate of Company or anyinformation concerning the transactions or relations of any client or affiliate of Companywith Company or any of its shareholders; (b) any information concerning any product,service, methodology, analysis, presentation, technology or procedure employed by Companybut not generally known to its clients or competitors, or under development by or beingtested by Company but not at the time offered generally to clients; (c) any informationrelating to Company’s computer software, computer systems, pricing or marketing methods,capital structure, operating results, borrowing arrangements or business plans; (d) anyinformation which is generally regarded as confidential or proprietary in any line ofbusiness engaged in by Company;
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(e) any information contained in any of Company’s written or oral policies andprocedures or employee manuals; (f) any information belonging to clients or affiliates ofCompany which Company has agreed to hold in confidence; (g) any inventions, innovations orimprovements covered by subsection 15(c) below; (h) any other information which Company hasreasonably determined to be confidential or proprietary; and (i) all written, graphic,electronic and other material relating to any of the foregoing. Information that is notnovel or copyrighted or patented may nonetheless be proprietary information. Proprietaryinformation, however, shall not include any information that is or becomes generally knownto the industries in which Company competes through sources independent of Company orExecutive or through authorized publication by Company to persons other than Company’semployees.
          (b) Confidentiality and Surrender of Records. Executive shall not during theterm of employment or at any time thereafter (irrespective of the circumstances under whichExecutive’s employment terminates), except as required by law, directly or indirectly giveor disclose any “confidential records” (as hereinafter defined) to, or permit anyinspection or copying of confidential records by, any individual or entity other than inthe ordinary course and scope of such individual’s or entity’s employment or retention byCompany, nor shall he use or retain any of the same following termination of hisemployment. Executive shall promptly return to Company all “confidential records” upon thetermination of Executive’s employment with Company. For purposes hereof, “confidentialrecords” means all correspondence, memoranda, files, analyses, studies, reports, notes,documents, manuals, books, lists, financial, operating or marketing records, computersoftware, magnetic tape, or electronic or other media or equipment of any kind which may bein Executive’s possession or under his control or accessible to him which contain anyproprietary information as defined in subsection 15(a) above. All confidential recordsshall be and remain the sole property of Company during the term of employment andthereafter.
          (c) Inventions, Patents, and Copyrights. All inventions, innovationsor improvements in Company’s method of conducting its business (including policies,procedures, products, improvements, software, ideas and discoveries, whether or notpatentable or copyrightable) conceived or made by Executive, either alone or jointly withothers, during the term of employment belong to Company. Executive will promptly disclosein writing such inventions, innovations or improvements to Company and perform all actionsreasonably requested by Company to establish and confirm such ownership by Company,including, but not limited to, cooperating with and assisting Company in obtaining patentsand copyrights for Company in the United States and in foreign countries. Any patent orcopyright application filed by Executive within a year after termination of his employmenthereunder shall be presumed to relate to an invention or work of authorship which was madeduring the term of employment unless Executive can provide conclusive evidence to thecontrary.
          16. Successors; Binding Agreement.
          (a) This Agreement shall not be terminated by the voluntary or involuntary dissolutionof the Company or by any merger or consolidation where the Company is not the survivingcorporation, or upon any transfer of all or substantially all of the Company’s assets, orany other Change in Control. The Company shall require any purchaser, assign, survivingcorporation or successor (whether direct or indirect, by purchase, merger, consolidation,reorganization or otherwise) to all or substantially all of the business and/or assets ofthe Company, by agreement in form and substance satisfactory to the Executive, expressly toassume
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and agree to perform this Agreement in the same manner and to the same extent theCompany would be required to perform if no such succession had taken place. This Agreementshall be binding upon and inure to the benefit of the Company and any purchaser, assign,surviving corporation or successor to the Company, including without limitation any personsacquiring directly or indirectly all or substantially all of the business and/or assets ofthe Company whether by purchase, merger, consolidation, reorganization, transfer of all orsubstantially all of the business or assets of the Company, or otherwise (and suchpurchaser, assign, surviving corporation or successor shall thereafter be deemed the“Company” for the purposes of this Agreement), but this Agreement shall not otherwise beassignable, transferable or delegable by the Company.
          (b) This Agreement shall inure to the benefit of and be enforceable by the Executive’spersonal or legal representatives, executors, administrators, successors, heirs,distributees and/or legatees.
          (c) This Agreement is personal in nature and neither of the parties hereto shall,without the consent of the other, assign, transfer or delegate this Agreement or any rightsor obligations hereunder except as expressly provided in this Section 16. Without limitingthe generality of the foregoing, the Executive’s right to receive payments hereunder shallnot be assignable, transferable or delegable, whether by pledge, creation of a securityinterest or otherwise, or otherwise subject to anticipation, alienation, sale, encumbrance,charge, hypothecation, or set-off in respect of any claim, debt, or obligation, or toexecution, attachment, levy or similar process, or assignment by operation of law, otherthan by a transfer by his will or by the laws of descent and distribution. Any attempt,voluntarily or involuntarily, to effect any action prohibited by this Paragraph shall benull, void, and of no effect.
          17. Notices. Any notice, request, claim, demand, document and other communicationhereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be inwriting and delivered personally or sent by telex, telecopy, or certified or registered mail,postage prepaid, or other similar means of communication, as follows:
          (a) If to the Company, addressed to its principal executive offices to the attentionof its Secretary;
          (b) If to the Executive, to him at the address set forth below under theExecutive’s signature, or at any such other address as either party shall have specified bynotice in writing to the other.
          18. Amendments; Waivers. This Agreement may not be modified, amended, or terminatedexcept by an instrument in writing, signed by the Executive and by a duly authorized representativeof the Company. By an instrument in writing similarly executed, either party may waive complianceby the other party with any provision of this Agreement that such other party was or is obligatedto comply with or perform; provided, however, that such waiver shall not operate as a waiver of, orestoppel with respect to, any other or subsequent failure. No failure to exercise and no delay inexercising any right, remedy, or power hereunder shall operate as a waiver thereof, nor shall anysingle or partial exercise of any right, remedy, or power hereunder preclude any other or furtherexercise thereof or the exercise of any other right, remedy, or power provided herein or by law orin equity.
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          19. Entire Agreement. This Agreement sets forth the entire agreement of the partieshereto in respect of the subject matter contained herein and supersedes all prior agreements,promises, covenants, arrangements, communications, representations or warranties, whether oral orwritten, by any officer, employee or representative of any party hereto. The parties furtherintend that this Agreement shall constitute the complete and exclusive statement of its terms andthat no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or otherlegal proceeding involving this Agreement.
          20. Severability; Enforcement. If any provision of this Agreement, or the applicationthereof to any person, place, or circumstance shall be held by a court of competent jurisdiction tobe invalid, unenforceable or void, the remainder of this Agreement and such provisions as appliedto other persons, places and circumstances shall remain in full force and effect.
          21. Indemnification. The Company shall indemnify, defend, and hold the Executiveharmless from and against any liability, damages, costs, or expenses (including attorney’s fees) inconnection with any claim, cause of action, investigation, litigation, or proceeding involving himby reason of his having been an officer, director, employee, or agent of the Company, unless it isjudicially determined, in a final, nonappealable order that the Executive was guilty of grossnegligence or willful misconduct. The Company also agrees to maintain adequate directors andofficers liability insurance for the benefit of Executive for the term of this Agreement and for atleast three years, thereafter, to the extent such insurance is reasonably available and provided toall executives of the Company.
          22. ERISA. This Agreement is pursuant to the Company’s Severance Plan for Executives(the “Plan”) which is unfunded and maintained by the Company primarily for the purpose of providingdeferred compensation for a select group of management or highly compensated employees. The Planconstitutes an employee welfare benefit plan (“Welfare Plan”) within the meaning of Section 3(1) ofthe Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Any payments pursuantto this Agreement which could cause the Plan not to constitute a Welfare Plan shall be deemedinstead to be made pursuant to a separate “employee pension benefit plan” within the meaning ofSection 3(2) of ERISA as to which the applicable portions of the document constituting the Planshall be deemed to be incorporated by reference. None of the benefits hereunder may be assigned inany way.
          23. Governing Law. This Agreement shall be interpreted, administered and enforced inaccordance with the law of the State of Arkansas, except to the extent pre-empted by Federal law.
          The parties have duly executed this Agreement to be effective as of the date first writtenabove.
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     BEVERLY ENTERPRISES, INC. EXECUTIVE    By:         William R. Floyd Cindy Susienka Chairman and Chief Executive Officer  
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