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                                                                   EXHIBIT 10.37

                    SEVERANCE AGREEMENT AND RELEASE OF CLAIMS


         This Severance Agreement and Release of Claims ("Release") is entered
into between Beverly Enterprises, Inc., its officers, agents, directors,
employees, successors, subsidiaries, insurers, parents and/or affiliated
companies, and assigns (the "Company") and T. JERALD MOORE (the "Employee").

         WHEREAS, the Employee was employed by the Company in the capacity of
Executive Vice President; and

         WHEREAS, the Employee and the Company had entered into a Employment
Contract dated August 22, 1997, and it is the parties intent that all the terms
of such Agreement shall be superceded on the Effective Date of this Release and
the terms of this Release shall govern the rights and obligations of the parties
after the Employee's termination of employment except as otherwise set forth in
this Release; and

         WHEREAS, Employee retired from the Company on December 31, 2001; and

         WHEREAS, the Company and the Employee made special arrangements to
promote an orderly transition of the Employee's responsibilities, and the
Company had committed to Employee that he would receive certain benefits upon
his retirement in consideration of his years of service to the Company and his
decision to remain with the Company after a "Change of Control" had been
triggered under his Employment Contract;

         NOW, THEREFORE, in consideration of the mutual promises and other
consideration described herein, the Company and the Employee agree as follows.

              1. TERMINATION OF EMPLOYMENT. The Employee hereby tenders, and the
Company hereby accepts, the Employee's resignation, through retirement, under
the terms of his Employment Contract as an officer and employee of the Company
effective December 31, 2001 (the "Termination Date"). The parties agree that,
upon the Termination Date of this Release, the Employee shall have no further
right or duty to render services to or on behalf of the Company. The "Effective
Date" of this Release will be the eighth day following receipt by the Company of
an original of this Release executed by the Employee, provided that there has
been no revocation as specified in Section 4(d) by the Employee.

              2. SEVERANCE PAYMENT. The Company promises that on the Effective
Date unless otherwise stated below, Employee will receive the amounts or
benefits set forth in this Section 2, subject to the terms of this Release, and
in lieu of all other severance benefits:



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                  (a)      Severance Agreement. A single, lump-sum payment in
                           the amount of one million two hundred thirty one
                           thousand two hundred thirty dollars ($1,231,230)
                           (subject to this Section 2 and less all legally
                           required and authorized deductions and withholdings),
                           representing two (2) times the Employee's current
                           base salary and target bonus amounts, a relocation
                           package lump sum of one hundred fifty thousand
                           dollars ($150,000), and an additional payment of one
                           hundred thousand dollars ($100,000) for performance
                           meeting management's expectations, shall be paid to
                           Employee on the Effective Date. Employee shall be
                           eligible for a bonus for 2001 to the extent he met
                           his 2001 performance goals as determined by Bill
                           Floyd and to the extent authorized by the Company's
                           Board of Directors.

                  (b)      Continuation of Benefits.

                                    (i) For the period of two (2) years from the
                           Termination Date, the Employee shall be treated as if
                           he had continued to be an employee for all purposes
                           under the Company's Medical Plan, Executive Medical
                           Reimbursement Plan and Dental Plan. Following this
                           period, the Employee shall be entitled to receive
                           continuation coverage under Part Six of Title I of
                           ERISA ("COBRA Benefits") treating the end of this
                           period as a termination of the Employee's employment.

                                    (ii) The Company shall maintain in force, at
                           its own expense, for the remainder of the Employee's
                           life, the vested life insurance in effect under the
                           Company's Executive Split Dollar Life Insurance Plan
                           as of the Termination Date.

                  (c)      Executive Retirement Plan. For the year of the
                           Employee's Termination of Employment, the Company
                           will make the contribution to the Executive
                           Retirement Plan on behalf of the Employee that it
                           would have made if the Employee had not had a
                           Termination of Employment, but in no event less than
                           the percentage contribution it made for the Employee
                           in the immediately preceding year (and increased to
                           take account of the additional year of service), in
                           each case taking account of the Employee's annualized
                           rate of "Compensation" (as defined in the Executive
                           Retirement Plan) and the percentage of such
                           Compensation that the Employee is contributing to the
                           Executive Retirement Plan, as of the date of
                           Termination of Employment, and the Company's matching
                           contribution rate for such year (or, if greater, the
                           preceding year). The portion of the Company's


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                           matching contribution which is based on the preceding
                           year's contribution percentage shall be contributed
                           to the Executive Retirement Plan on behalf of the
                           Employee immediately upon the Employee's Termination
                           Date and any additional contribution required shall
                           be paid as soon as the amount is determined.

                  (d)      Executive Deferred Compensation Plan. For the year of
                           the Employee's Termination of Employment, the Company
                           will make the contribution to its Executive Deferred
                           Compensation Plan (the "EDC Plan") that it would have
                           made if the Employee had not had a Termination of
                           Employment determined based on the Employee's
                           deferral for such year. At Employee's election, the
                           Company contribution shall be paid to the Employee
                           immediately upon his Termination of Employment.

                  (e)      Plan Amendments. The Company shall adopt such
                           amendments to its employee benefit plans and
                           insurance policies as are necessary to effectuate the
                           provisions of this Agreement. If and to the extent
                           any benefits under this Paragraph 2 are not paid or
                           payable or otherwise provided to the Employee or his
                           dependents or beneficiaries under any such plan or
                           policy (whether due to the terms of the plan or
                           policy, the termination thereof, applicable law, or
                           otherwise), then the Company itself shall pay or
                           provide for such benefits.

                  (f)      Long-Term Incentive Award; Equity-Based Compensation.
                           Employee's interest under all of the Company's
                           long-term incentive plans shall be fully vested. Any
                           and all (i) options to purchase Company stock; and
                           (ii) restricted stock of the Company owned by the
                           Employee, shall either be fully vested, or, stock of
                           equivalent value shall be substituted therefore in
                           the event that early vesting is not permitted under
                           the applicable Company plan. Employee's stock-related
                           rights are set forth in Attachment 1 to this
                           Agreement.

                  (g)      Extent of Benefit Eligibility. Employee will cease to
                           be eligible to participate under any stock option,
                           bonus, incentive compensation, commission, medical,
                           dental, life insurance, retirement, and other
                           compensation or benefit plans of the Company or any
                           affiliate following the Termination Date except to
                           the extent described above and except where the
                           governing documents of those plans provide otherwise.
                           Any payment from these plans will be in accordance
                           with the election(s) previously made by the Employee.

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         In the event of any material breach by the Employee of the terms of
this Release, the Employee's right to receive any further payments or benefits
under the Release shall immediately end, and the Employee will forfeit and be
required to return to the Company any payments or benefits received. Any such
breach shall not relieve the Employee of any obligations under the Release, and
the cessation of any benefits on account of a breach shall not limit the
Company's right to any other relief it may have as a matter of law or equity.
Notwithstanding the foregoing, any challenge as to the validity of the ADEA
release contained in subsection 4(d) of this Release shall not be considered a
material breach, to the extent such treatment is mandated by applicable law.

         3. CONSIDERATION OF RELEASE. Employee acknowledges that, before signing
this Release, he was given at least 21 days in which to consider this Release.
Employee waives any right he might have to additional time within which to
consider this Release. Employee further acknowledges that: (1) he took advantage
of the time he was given to consider this Release before signing it; (2) he
carefully read this Release; (3) he fully understand it; (4) he is entering into
it voluntarily; (5) he is receiving valuable consideration in exchange for his
execution of this Release that he would not otherwise be entitled to receive;
and (6) the Company, in writing, encouraged him to discuss this Release with his
attorney (at his own expense) before signing it, and that he did so to the
extent he deemed appropriate.

         4. GENERAL RELEASE

         (a)      In General: Except for obligations established in this
                  Release, Employee irrevocably and unconditionally releases all
                  the Claims described in this Section 4 that he may now have
                  against the Released Parties listed in Section 4(b).

         (b)      Released Parties: The Released Parties are the Company, all
                  current and former parents, subsidiaries, related companies,
                  partnerships, or joint ventures, and, with respect to each of
                  them, their predecessors and successors; and, with respect to
                  each such entity, all of its past, present, and future
                  employees, officers, directors, stockholders, owners,
                  representatives, assigns, attorneys, agents, insurers,
                  employee benefit programs (and the trustees, administrators,
                  fiduciaries, and insurers of such programs), and any other
                  persons acting by, through, under or in concert with any of
                  the persons or entities listed in this subsection, and their
                  successors.

         (c)      Claims Released: The Claims Employee is releasing under this
                  Section 4 include all known and unknown claims, promises,
                  causes of action, or similar rights of any type that Employee
                  presently may have ("Claims") with respect to any Released
                  Party listed in Section 4(b). Employee understands that the
                  Claims Employee is

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<PAGE>

                  releasing might arise under many different foreign, domestic,
                  national, state, or local laws (including statutes,
                  regulations, other administrative guidance, and common law
                  doctrines), as set forth in this Section 4.

         (d)      Employee acknowledges that a portion of the amounts or
                  benefits under this Release is being paid to induce him to
                  release any claims that he may have under the Age
                  Discrimination in Employment Act ("ADEA"). Employee
                  acknowledges that he has adequate and legally sufficient time
                  to review and seek legal guidance concerning this Release.
                  Specifically, Employee acknowledges that this Release was
                  provided to him on January 22, 2002, and that he has until
                  February 12, 2002 to consider this Release. If Employee
                  chooses to execute this Release prior to February 12, 2002, it
                  is solely his choice. Employee may revoke the waiver of the
                  ADEA claims in this Section of this Release (which Employee
                  acknowledges constitutes an entirely separate release from the
                  balance of this Release) within seven (7) days after signing
                  of this Release, in which case Employee will not be paid that
                  portion of the amounts or benefits that are being paid to
                  Employee for his release of ADEA claims. Employee agrees that
                  any revocation will be in writing and accompanied by all sums
                  received pursuant to this Release and received by the
                  Executive Vice President, General Counsel by the end of the
                  seven (7) day period. Employee has been advised to consult
                  with an attorney or advisor concerning this Release. Employee
                  understands the rights that have been waived by this Release,
                  including rights under the Age Discrimination in Employment
                  Act of 1967, 29 U.S.C. Section 62 1, et seq., as amended.
                  Employee further represents and warrants that he -- --- freely
                  negotiated the terms of this Release, and enters into it and
                  executes it voluntarily. He understands that this is a
                  voluntary waiver of any claims under the laws and orders
                  stated below, that relate in any way to his employment with,
                  complaints about, compensation due, or separation from the
                  Company.

                  Anti-discrimination statutes, such as the Age Discrimination
                  in Employment Act and Executive Order 11141, which prohibit
                  age discrimination in employment; Title VII of the Civil
                  Rights Act of 1964, Sections 1981 and 1983 of the Civil Rights
                  Act of 1866, and Executive Order 11246, which prohibit
                  discrimination based on race, color, national origin,
                  religion, or sex; the Equal Pay Act, which prohibits paying
                  men and women unequal pay for equal work; the Americans With
                  Disabilities Act and Sections 503 and 504 of the
                  Rehabilitation Act of 1973, which prohibit


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                  discrimination based on disability; and any other federal,
                  state, or local laws prohibiting employment discrimination,
                  such as the State of Arkansas.

                  Federal employment statutes, such as the WARN Act, which
                  requires that advance notice be given of certain work force
                  reductions; the Employee Retirement Income Security Act of
                  1974, which, among other things, protects employee benefits;
                  the Fair Labor Standards Act of 1938, which regulates wage and
                  hour matters; the Family and Medical Leave Act of 1993, which
                  requires employers to provide leaves of absence under certain
                  circumstances; and any other federal laws relating to
                  employment, such as veterans' reemployment rights laws.

                  Other laws, such as any federal, state, or local laws
                  providing workers' compensation benefits, mandating leaves of
                  absence, restricting an employer's right to terminate
                  employees, or otherwise regulating employment; any federal,
                  state, or local law enforcing express or implied employment
                  contracts or requiring an employer to deal with employees
                  fairly or in good faith; any other federal, state, or local
                  laws providing recourse for alleged wrongful discharge, tort,
                  physical or personal injury, emotional distress, fraud,
                  negligent misrepresentation, defamation, and similar or
                  related claims, and any other law, such as the State of
                  Arkansas.

                  Examples of released Claims include, but are not limited to
                  the following (except to the extent explicitly preserved by
                  Section 1 or 2(a) of this Release): (i) Claims that in any way
                  relate to Employee's employment with the Company, or the
                  termination of that employment, such as Claims for
                  compensation, bonuses, commissions, lost wages, or unused
                  accrued vacation or sick pay except as otherwise provided in
                  paragraph 2(a); (ii) Claims that in any way relate to the
                  design or administration of any employee benefit program;
                  (iii) Claims that Employee has irrevocable or vested rights to
                  severance or similar benefits or to post-employment health or
                  group insurance benefits; (iv) any Claims to attorneys' fees
                  or other indemnities (such as under the Civil Rights
                  Attorneys' Fees Act), with respect to Claims Employee is
                  releasing, or any Claims that Employee has under his
                  Employment and Severance Agreement.

         (e)      Unknown Claims: Employee understands that he is releasing
                  Claims that he may not know about. That is his knowing and
                  voluntary intent even though he recognizes that someday he
                  might


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                  regret having signed this Release. Nevertheless, Employee is
                  assuming that risk and agrees that this Release shall remain
                  effective in all respects in any such case. Employee expressly
                  waives all rights he might have under any law that is intended
                  to protect him from waiving unknown claims (such as California
                  Civil Code Section 1542). Employee understands the
                  significance of doing so.

         (f)      Employee represents and covenants that Employee, his heirs,
                  representatives, executors, administrators, successors, and
                  assigns have not and will not file any claims, charges, or
                  complaints against the Company, with any Federal, State, or
                  local agency or court arising out of his employment and/or
                  separation from the Company. Employee further represents that
                  if any such agency or court ever assumes jurisdiction of or
                  otherwise pursues any such lawsuit, claim, charge, or
                  complaint and/or purports to bring any legal proceeding, in
                  whole or in part, on behalf of Employee, or Employee's heirs,
                  representatives, executors, administrators, successors, and/or
                  assigns, behalf against the Company, Employee, or Employee's
                  heirs, representatives, executors, administrators, successors,
                  and/or assigns, promptly, in writing, will request the agency
                  or court to withdraw from and/or dismiss the lawsuit, claim,
                  charge or complaint with prejudice and will take all available
                  legal action to be removed from any such legal proceeding
                  brought, in whole or in part, on behalf of Employee. This
                  subsection shall not apply to challenges to the ADEA release
                  in subsection 4(d) of this Release, to the extent, if any,
                  prohibited by applicable law.

         (g)      Employee understands and agrees that his employment with the
                  Company has terminated effective December 31, 2001, and he
                  will not apply for or otherwise seek re-employment with the
                  Company, or its successors, at any time. The Company shall
                  have the absolute right, without incurring liability of any
                  kind, to refuse Employee's consideration for employment and
                  Employee agrees that he shall not authorize any person or
                  agency to pursue any claim for such refusal of employment. The
                  Employee acknowledges that he has received no promise or
                  assurance that his employment will resume at any point in the
                  future or that he will ever be rehired by the Company or its
                  affiliates, parent, or subsidiaries.

         (h)      As further consideration for the covenants set forth herein,
                  Employee hereby agrees to cooperate fully with the Company's


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                  Legal Department and/or any lawyer, law firm, or consultant
                  that the Company designates with respect to any litigation,
                  deposition, hearing, arbitration, or other proceeding
                  (including, but not limited to, support of the Company's
                  position in defending any employment-related lawsuits or
                  claims concerning which Employee has knowledge or audits,
                  investigations, lawsuits, complaints or proceedings by
                  government entities of state or federal law compliance) where
                  the Company's legal or financial interests are at issue.
                  Employee further covenants that he will contact the Company's
                  Legal Department in the event that there is any subpoena,
                  notice or other instruction directing the Employee to appear
                  in any legal proceeding involving the Company.

         (i)      To the maximum extent permitted by law, the Company shall
                  indemnify Employee against all expenses (including reasonable
                  attorneys' fees), judgments, fines and amounts paid in
                  settlement actually incurred by himself in connection with any
                  claim, action, suit or proceeding, whether civil, criminal,
                  administrative or investigative, to which Employee becomes a
                  party or in which Employee becomes otherwise involved by
                  reason of the fact that Employee was a director, officer,
                  employee or agent of the Company or of any subsidiary or
                  affiliate of the Company. In addition, the Company shall
                  continue to include Employee among those individuals covered
                  by the Company's director and officer liability insurance, as
                  long as such insurance is available and the Company elects to
                  maintain such insurance; provided, however, that the
                  unavailability of such insurance coverage or the Company's
                  discontinuance of such insurance shall in no way limit, reduce
                  or otherwise affect Employee's rights to indemnification by
                  the Company under the first sentence of this subsection. This
                  subsection shall remain in full force and effect indefinitely
                  with respect to any claims based upon events occurring on or
                  prior to December 31, 2001.

         (j)      Employee also promises neither to contest the validity of this
                  Release, nor sue the Company concerning any claim he may have
                  relating to his employment with the Company or the termination
                  of that employment. This subsection shall not apply to
                  challenges to the ADEA release in subsection 4(d) of this
                  Release, to the extent, if any, prohibited by applicable law.

         5. TRANSFER OF DUTIES. During the period preceding the Termination Date
and for two (2) years thereafter, the Employee will act at all times with
complete loyalty and good faith in promoting the best interests of the Company.
To this end, the


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Employee will: (a) fully inform the Company and the Employee's successor (if
any) of all material activities performed by the Employee and of progress on
assigned duties; and (b) transfer or otherwise make available to the Company and
the Employee's successor (if any), to the extent reasonably possible, the
Employee's knowledge and experience regarding his activities on behalf of the
Company. Employee will also promote the goodwill, reputation, and ongoing
business of the Company, and take all steps necessary to maintain, and in no way
act to hinder, the foregoing interests.

         6. COMPANY PROPERTY: By Employee's last day of work, Employee will
return to the Company all files, memoranda, documents, records, copies of the
foregoing, credit cards, keys, and any other property of the Company or its
affiliates in his possession.

         7. OWNERSHIP OF CLAIMS: Employee has not assigned or transferred any
Claim he is purporting to release, nor has he attempted to do so.

         8. OTHER REPRESENTATIONS: In addition to Employee's other
representations in this Release, Employee has made the following representations
to the Company, on which he acknowledges it also has relied in entering into
this Release with Employee: (a) Employee has not suffered any discrimination on
account of his age, sex, race, national origin, marital status, sexual
orientation, or any other protected status, and none of these ever has been an
adverse factor used against Employee by any Released Party; (b) Employee has not
suffered any job-related wrongs or injuries for which he might still be entitled
to compensation or relief, such as an injury for which Employee might receive a
workers' compensation award in the future; (c) Employee has no knowledge of any
wrongdoing by the Company that would subject the Company to any harm, civil or
criminal; and (d) Employee has provided no information, oral or in writing, to
anyone - individual, corporation or any other organization, private, public or
governmental - that involves any wrongdoing, civil or criminal, by the Company.

         9. FALSE CLAIMS REPRESENTATIONS AND PROMISES: Employee has disclosed to
the Company any information he has concerning any conduct involving the Company
or any affiliate that he has any reason to believe may be unlawful or that
involves any false claims to the United States. Employee promises to cooperate
fully in any investigation the Company or any affiliate undertakes into matters
occurring during Employee's employment with the Company or any affiliate.
Employee understands that nothing in this Release prevents him from cooperating
with any U.S. government investigation. In addition, to the fullest extent
permitted by law, Employee hereby irrevocably assign to the U.S. government any
right he might have to any proceeds or awards in connection with any false
claims proceedings against the Company or any affiliate.

         10. COOPERATION REQUIRED: Employee agrees that, as requested by the
Company, he will fully cooperate with the Company or any affiliate in effecting
a smooth transition of his responsibilities to others.


                                       9
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         11. NON-SOLICITATION. Employee agrees to the following prohibitions on
solicitation of the Company's employees, customers, and business interests, to
wit:

         (a)      Employee shall not at any time during the period of his
                  employment with the Company, or during the two (2) year period
                  immediately following the effective date of his termination
                  (the "Non-Solicitation Period"), without the prior written
                  consent of the Company, on behalf of himself or any other
                  person or entity, solicit for employment or employ any of the
                  current officers or employees of the Company; provided,
                  however, that nothing contained herein shall prohibit the
                  Employee from hiring employees of the Company when such
                  employment results from general solicitations for employment.

         (b)      Employee shall not at any time during the period of his
                  employment with the Company, or during the Non-Solicitation
                  Period, without the prior written consent of the Company,
                  solicit for his own benefit, or for the benefit of any company
                  or persons by whom he is employed, or for whom he may be
                  acting, any of the current customers of the Company, nor shall
                  he divulge to any other person any information or fact
                  relating to the management, business (including prospective
                  business), finances, or customers of the Company or the terms
                  of any contracts of the Company which is not freely available
                  to the public.

         (c)      Employee covenants and agrees that a material breach of the
                  foregoing subsections would immediately and irreparably harm
                  the Company and that a remedy at law would be inadequate to
                  compensate the Company for its losses by reason of such breach
                  and therefore that the Company shall, in addition to any
                  rights and remedies available under this Release, at law or
                  otherwise, be entitled to an injunction to be issued by any
                  court of competent jurisdiction enjoining and restraining the
                  Employee from committing any violation of the foregoing
                  subsections.

         12. NON-DISCLOSURE, RETURN OF PROPRIETARY INFORMATION, AND INVENTIONS
AND PATENTS. The Company and the Employee agree that during his employment with
the Company, the Employee has received and become acquainted with confidential,
proprietary, and trade secret information of the Company including, but not
limited to, information regarding Company business programs, plans, and
strategies; finances; customers and prospective customers; suppliers and
vendors; marketing plans and results; personnel matters regarding Company
employees, officers, directors, and owners; manners of operation and services
provided; negotiating positions and strategies; legal arguments, theories,
claims, and defenses; pending, threatened, or potential legal


                                       10
<PAGE>

actions, claims, investigations, and audits; or information which could lead to
the same; and similar sensitive information regarding the operation and business
of the Company. The Employee acknowledges that such information has been
developed or acquired by the Company through the expenditure of substantial
time, effort, and money, that such information provides the Company with
strategic and business advantages over others who do not know or use such
information, and that the Company has implemented specific policies and
practices to keep such information secret. Accordingly, the Employee agrees as
follows:

         (a)      The Employee shall not during the term of employment or at any
                  time thereafter directly or indirectly use for his own purpose
                  or for the benefit of any person or entity other than the
                  Company, or otherwise disclose or permit others to obtain
                  access to, any proprietary of confidential information to any
                  individual or entity unless such disclosure has been
                  authorized in writing by the Company or is otherwise required
                  by law. For purposes of this provision, the Company's
                  proprietary information shall include, but is not limited to,
                  information and material identified in this section and that
                  identified in Section 17 of Employee's August 22, 1997
                  Employment Contract. Information or material that is not novel
                  or copyrighted or patented may nonetheless be proprietary
                  information. Proprietary information shall not include,
                  however, any information that is or becomes generally known to
                  the industries in which the Company competes through sources
                  independent of the Company or the Employee or through
                  authorized publication by the Company to persons other than
                  Company employees.

         (b)      The Employee shall not during his employment or at any time
                  thereafter, except as required by law, directly or indirectly
                  give or disclose any records containing confidential
                  information or material to, or permit any inspection or
                  copying of such records by, any individual or entity other
                  than in the authorized course and scope of such individual's
                  or entity's employment or retention by the Company. In
                  addition, the Employee shall promptly return to the Company
                  all such records upon his resignation hereunder and shall not
                  use or retain any such records thereafter. Records subject to
                  this subsection shall include, but not be limited to, all
                  correspondence, memoranda, files, analyses, studies, reports,
                  notes, documents, manuals, books, lists, financial, operating,
                  or marketing records, computer software, magnetic tape, or
                  electronic or other media or equipment of any kind that may be
                  in the Employee's possession or under his control or
                  accessible to his which contain or may be derived from
                  proprietary or confidential

                                       11
<PAGE>

                  information covered by this section or by Section 17 of
                  Employee's August 22, 1997 Employment Contract. All such
                  records are and will remain the sole property of the Company.

         (c)      Employee acknowledges his responsibilities with respect to
                  inventions, patents, and copyrights as set forth in Section 17
                  of his August 22, 1997 Employment Contract. Employee
                  acknowledges that there are no inventions, innovations or
                  improvements that should be disclosed as required by Section
                  17(c).

         13. CONFIDENTIALITY. The Employee agrees that he will keep confidential
the existence and terms of this Release; provided, however, that nothing herein
shall prevent the Employee from disclosing the fact and terms of this Release
with his attorney, accountant, or financial advisor for the purposes of
receiving professional advice from such individual in that capacity. The
Employee will advise those individuals that the existence and terms of this
Release shall be kept confidential.

         14. PUBLIC STATEMENTS. Except as necessary to secure other employment
or for other necessary reasons, Employee agrees that he will make no public
statements concerning his employment or the termination thereof with the
Company. Employee also agrees that he will make no disparaging remarks to any
third parties concerning the Company, its employees, agents, representatives,
subsidiaries, parents, affiliates, and shareholders. Employee further agrees
that he will not disparage the Company's business capabilities, products, plans,
or management to any customer, potential customer, vendor, supplier, contractor
or subcontractor of the Company so as to affect adversely the good will or
business of the Company.

         15. CONSEQUENCES OF VIOLATING PROMISES:

         (a)      GENERAL CONSEQUENCES: In addition to any other remedies or
                  relief that may be available, Employee agrees to pay the
                  reasonable attorneys' fees and any damages Released Parties
                  may incur as a result of his breaching a promise he made in
                  this Release (such as by suing a Released Party over a
                  released Claim) or if any representation he made in this
                  Release was false when made. Employee further agrees that the
                  Company would be irreparably harmed by any actual or
                  threatened violation of Sections 11 and 12 that involves
                  Release-related disclosures or disclosure or use of
                  confidential information or trade secrets or solicitation of
                  employees, customers, or suppliers, and that the Company will
                  be entitled to an injunction prohibiting Employee from
                  committing any such violation.

         (b)      CHALLENGES TO VALIDITY: Should Employee attempt to challenge
                  the enforceability of this Release, Employee agrees first: (1)
                  to deliver


                                       12
<PAGE>

                  a certified check to the Company for all amounts he has
                  received because he signed this Release, plus 10 percent
                  interest per annum; (2) to direct in writing that all future
                  benefits or payments Employee is to receive because he signed
                  this Release be suspended; and (3) to invite the Company to
                  cancel this Release. If the Company accepts Employee's offer,
                  this Release will be canceled. If it rejects Employee's offer,
                  the Company will notify Employee and deposit the amount
                  Employee repaid, plus all suspended future benefits and
                  payments, in an interest-bearing account pending a
                  determination of the enforceability of this Release. If the
                  Release is determined to be enforceable, the Company is to pay
                  Employee the amount in the account, less any amounts Employee
                  owes the Company. If the Release is determined to be
                  unenforceable, the amount credited to the account shall be
                  paid to the entities that paid the consideration for this
                  Release in proportion to their payments, and the suspension of
                  future benefits or payments shall become permanent.

         (c)      ADEA CLAIMS: This section shall not apply to a challenge to
                  the ADEA release in subsection 4(b) of this Release to the
                  extent, if any, prohibited by applicable law.

         16. NO ADMISSION OF LIABILITY. This Release shall not in any way be
construed as an admission by the Company that it has acted wrongfully with
respect to Employee or any other person, entity or agency, or that Employee has
any rights whatsoever against the Company. The Company further specifically
disclaims and denies any liability to or wrongful acts against Employee or any
other person, entity or agency, on the part of itself, its employees and its
agents.

         17. SUCCESSORS AND ASSIGNS. This Release shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, successors,
legal representatives, and assigns. However, neither this Release nor any right
or interest hereunder shall be assignable by Employee, his beneficiaries, or
legal representatives, except as provided by law or pursuant to referenced
benefit plan documents.

         18. SEVERABILITY AND REFORMATION. The provisions of this Release are
severable. If any provision of this Release shall be determined to be invalid,
illegal, or unenforceable, in whole or in part, neither the validity of the
remaining parts of such provision nor the validity of any other provision of
this Release shall in any way be affected thereby. In lieu of such invalid,
illegal, or unenforceable provision, there shall be added automatically as part
of this Release a provision as similar in terms to such invalid, illegal, or
unenforceable provision as may be possible and be valid, legal, and enforceable.
Each party also agrees that, without receiving further consideration, it will

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<PAGE>

sign and deliver such documents and do anything else necessary in the future to
make the provisions of this Release effective.

         19. TAXES. Employee understands that he will be responsible for paying
all taxes that may become due on any of the severance benefits provided herein.
If he fails to pay these payments, or any taxing authority alleges that he has
failed to do so or that the Company is responsible for the payment of these
taxes, for any reason, Employee agrees to be fully responsible for any judgments
or orders, fines and penalties, and that he will indemnify the Company
including, but not limited to, the satisfaction of judgments, orders, fines or
penalties in the payment of the Company's defense by counsel of its choice in
such proceedings. The taxability of the amounts contained herein shall not
affect the validity of this Release.

         20. GOVERNING LAW. This Release shall be governed by the law of the
State of Arkansas.

         21. ARBITRATION OF DISPUTES:

         (a)      In the event the Company believes that Employee has breached
                  this Release in any way, prior to seeking any remedy,
                  including arbitration, the Company's General Counsel will
                  first contact Employee and inform him of the claimed breach.
                  Employee will then have seven (7) days within which to address
                  the Company's claim before it may take any action under this
                  Release.

         (b)      ARBITRABLE DISPUTES: The Company and Employee agree to resolve
                  any claims they may have with each other (except, if either
                  Employee or the Company so elects, any dispute for which
                  injunctive relief is a principal remedy) through final and
                  binding arbitration in accordance with this section. Employee
                  also agrees to resolve in accordance with this section any
                  claim between him and any other Released Party who offers or
                  agrees to arbitrate the claim in this manner. This arbitration
                  requirement applies to, among other things, disputes about the
                  validity, interpretation, or effect of this Release or alleged
                  violations of it, claims of discrimination under federal or
                  state law, or other statutory violation claims.

         (c)      THE ARBITRATION: Except as otherwise provided in any other
                  enforceable arbitration agreement between Employee and the
                  Company (Another Arbitration Agreement), which the Company and
                  Employee hereby reaffirm if one exists, the arbitration shall
                  be in accordance with the then-current arbitration rules and
                  procedures for employment disputes governing arbitrations
                  administered by the Judicial Arbitration and Mediation Service


                                       14
<PAGE>

                  (JAMS), except as provided in this section. Arbitration shall
                  take place before a panel of three arbitrators experienced in
                  employment law licensed to practice in the state of Arkansas
                  selected in accordance with subsection (c). The arbitrators
                  may not modify or change this Release in any way. Employee,
                  the Company, and any Released Party who agrees to arbitrate an
                  Arbitrable Dispute under this section agree to submit to
                  personal jurisdiction in the state listed in the first Section
                  of this Release for such arbitration and in any jurisdiction
                  necessary for the enforcement of any arbitration award.

         (d)      SELECTION OF THE ARBITRATORS: The arbitrators shall be
                  selected as follows: JAMS shall give each party a list of 11
                  arbitrators drawn from its panel of employment dispute
                  arbitrators from the state of Arkansas. Each party may strike
                  all names on the list it deems unacceptable. If only three
                  common names remain on the lists of both parties, those
                  individuals shall be designated as the Arbitrators. If more
                  than three common names remain on the lists of both parties,
                  the parties shall strike names alternately from the list of
                  common names until only three remain. The party who did not
                  initiate the claim shall strike first. If no common name
                  exists on the lists of both parties, JAMS shall furnish an
                  additional list and the process shall be repeated. If the
                  arbitrators have been selected after two lists have been
                  distributed, then the parties shall strike alternately from a
                  third list, with the party initiating the claim striking
                  first, until only three names remain. Those persons shall be
                  designated as the arbitrators. Striking decisions must be made
                  and communicated to the other party and JAMS within 10
                  calendar days after the date of the transmittal communication
                  relaying the arbitrators remaining for selection. In the event
                  a party does not make a timely strike, the other party may
                  select the arbitrators from the names remaining.

         (e)      EXCLUSIVE REMEDY: Arbitration in this manner shall be the
                  exclusive remedy for any claim that must be arbitrated
                  pursuant to this section. Should Employee or the Company
                  attempt to resolve such a claim by any method other than
                  arbitration pursuant to this section, the responding party
                  will be entitled to recover from the initiating party all
                  damages, expenses, and attorneys' fees incurred as a result of
                  that breach.

         (f)      FEES AND EXPENSES: Each party shall pay the fees of his or her
                  attorneys, the expenses of his or his witnesses, and any other
                  expenses that party incurs in connection with the arbitration,
                  but all

                                       15
<PAGE>

                  other costs of the arbitration, including the fees of the
                  arbitrator, the cost of any record or transcript of the
                  arbitration, administrative fees, and other fees and costs
                  shall be paid in equal shares by the Employee and Company.
                  Except as provided in Another Arbitration Agreement, the party
                  losing the arbitration shall reimburse the party who prevailed
                  for all attorneys' fees and expenses the prevailing party paid
                  pursuant to the preceding sentence.

         22. ENTIRE RELEASE. This Release constitutes the entire Release between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, oral and written, between the parties hereto to the extent such
agreements are inconsistent herewith, including but not limited to, any prior
agreements with respect to severance benefits. This Release may be modified or
amended only by an instrument in writing signed by both parties hereof.

READ THIS RELEASE, AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS BEFORE SIGNING
IT: IT INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS, AND ITS
ARBITRATION-OF-CLAIMS REQUIREMENT WAIVES EMPLOYEE'S RIGHT TO A JURY TRIAL. IF
EMPLOYEE WISHES, HE SHOULD TAKE ADVANTAGE OF THE FULL CONSIDERATION PERIOD
AFFORDED BY SECTION 3 AND YOU SHOULD CONSULT AN ATTORNEY.

         Employee represents that as of December 31, 2001, he has not filed any
lawsuits, charges, complaints, or claims relating to his employment or any other
matters that involve the Company. Employee agrees to cause the withdrawal or
dismissal with prejudice of all of these matters unless otherwise stated by the
Company, to the extent still pending within five (5) days after this Release
becomes irrevocable, and until such withdrawal or dismissal is accepted or
ordered, no amounts otherwise due Employee under this Release shall become
payable.


                                       16
<PAGE>

         IN WITNESS WHEREOF, the Company and the Employee have executed this
Release as of the day and year indicated below.

                                             Beverly Enterprises, Inc.


Dated:                                       By:
       -------------------------------          -------------------------------
                                             William R. Floyd
                                             Chairman, President and
                                             Chief Executive Officer



                                             Employee


Dated:
      --------------------------------       ----------------------------------
                                             T. Jerald Moore



                                       17