EMPLOYMENT AGREEMENT
   EMPLOYMENT
  POSITION AND RESPONSIBILITIES
  TERMS AND DUTIES
 Period of Employment
  Duties




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COMPENSATION AND BENEFITS
 Compensation
  Base Salary
   Annual Incentive Awards
  Additional Benefits
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SARS
  BUSINESS EXPENSES
  DISABILITY
    DEATH
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EFFECT OF TERMINATION OF EMPLOYMENT
 th rd
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Stock Option Repurchase
  OTHER DUTIES OF THE EXECUTIVE DURING  AND AFTER THE PERIOD OF EMPLOYMENT
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INDEMNIFICATION, LITIGATION
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CHANGE IN CONTROL
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PROCEDURES FOR DETERMINING  THE APPLICATION OF CODE SECTION 409A
  WITHHOLDING TAXES
  EFFECTIVE PRIOR AGREEMENTS
  CONSOLIDATION, MERGER OR SALE OF ASSETS
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MODIFICATION
  GOVERNING LAW; ARBITRATION
   NOTICES
    BINDING AGREEMENT
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ADVOCAT INC.By:
    /s/ William R. Council, IIIWilliam R. Council, IIITitle:
    President and Chief Executive
OfficerEXECUTIVE:/s/ Kelly GillKelly Gill 10




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Advocat Inc.
1621 Galleria Boulevard
Brentwood, TN 37027
  
       /s/ William R. Council, III

William R. Council, III 
President and Chief Executive OfficerAdvocat Inc.Accepted February 21, 2010:/s/ Kelly Gill

Kelly Gill
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$300,000
    
    Base Salary$150,000
    
    Target Bonus at 50%$12,000
    
    EIRP at 4% of salary. Executive Incentive Retirement program 
basically is a taxable match of retirement investment done by employee,
up to 4% (at boards discretion). Definition of retirement investment
is very broad.$462,000
    
    Total target cash compensation$75,000
    
    Signing bonus  paid in cash or in restricted stock units$35,000
    
    SoSARS to be issued at employment, at market price on date of grant.
Three year vesting schedule. Annual grants at the discretion of the
board
of directors.Other benefits:$25,000
    
    Separation Expenses  Advocat will cover Kelly, up to $25,000 for
appropriate legal and other expenses in connection with separation from
current employer. Vacation  Kelly would receive the same vacation
package available to other officers  4 weeks per year, maximum
accumulation of 160 hours, which adjusts at calendar year end.Sick
    
    Kelly would receive same benefits as available to other.Benefits
    
    Kelly would be eligible for all benefits, including health, short and
long term disability, etc., subject to any required waiting period.401(K)
    
    Kelly would be eligible for participation in the 401 (k) at the first
quarter end following 1 year of service. The Company currently matches
25% of
all contributions. The Companys plan is Top Heavy and highly
compensated employees contributions are limited to approximately
$4,000 per year.Expenses
    
    Company pays all reasonable costs associated with the conduct of
business, pursuant to our travel and entertainment policies. In addition,
we cover expenses of appropriate professional associations, training, etc.Employment
    
    Contract/Separation benefits: one year following certain types of
termination, consistent with other executives. Proposed Employment
agreement form attached for review.
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