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                                                                   EXHIBIT 10.29

                              EMPLOYMENT CONTRACT

         AGREEMENT made as of December 8, 1995 between BEVERLY ENTERPRISES,
INC., a Delaware corporation (the "Company"), and Boyd W. Hendrickson (the
"Executive").

         WHEREAS, the Company desires to assure itself of the management
services of the Executive by directly engaging the Executive as the President
and Chief Operating Officer of the Company;

         WHEREAS, the Company recognizes that the Executive's contribution to
the Company's growth and success has been and continues to be substantial;

         WHEREAS, the Company wishes to encourage the Executive to remain with
and devote full time and attention to the business affairs of the Company and
wishes to provide income protection to the Executive for a period of time in
the event of a Change in Control;

         NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, 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
         1.0 except that if Executive's Termination 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 Benefit Multiplier which follows the Executive's
         Termination of Employment.

                          (d)     "Cause" shall mean the Executive's (i)
         conviction of a crime involving moral turpitude or theft or
         embezzlement of property from the Company or (ii) willful misconduct or
         willful failure substantially to perform the duties of his position,
         but only if such has continued after receipt of notice from the
         Company's Board of Directors and such reasonable cure period as is set
         forth in such notice.

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

                          (f)     The "Change in Control Date" shall mean the
         date immediately prior to the effectiveness of the Change in Control.

                          (g)     The "Committee" shall mean the Compensation
         Committee of the Company's Board of Directors.

                          (h)     The "Competitive Businesses" shall mean any
         of the health care businesses in which the Company is engaged on the
         execution date of this Agreement.

                          (i)     The Executive shall have "Good Reason" to
         terminate employment if: (i) the Executive is not elected, reelected
         or otherwise continued in the office of the Company or any of its
         subsidiaries which he held immediately prior to the Change in Control
         Date, or he is removed as a member of the Board of Directors of the
         Company or any of its subsidiaries if the Executive was a director
         immediately prior to the Change in Control Date (ii) the Executive's
         duties, responsibilities or authority as an employee are materially
         reduced or diminished from those in effect on the Change in Control
         Date without the Executive's consent; (iii) the Executive's
         compensation or benefits are reduced; or (iv) the Company reduces the
         potential earnings of the Executive under any performance-based bonus
         or incentive plan of the Company in effect immediately prior to the
         Change in Control Date; (v) the Company requires that the Executive's
         employment be based other than at Fort Smith, Arkansas, without his
         consent; (vi) any purchaser, assign, surviving corporation, or
         successor of the Company or its business or assets (whether by
         acquisition, merger, liquidation, consolidation, reorganization, sale
         or transfer of assets or business, or otherwise) fails or refuses to
         expressly assume in writing this Agreement and all of the duties and
         obligations of the Company hereunder pursuant to Section 16 hereof, or
         (vii) 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).

                          (k)     "Target Bonus" shall mean the target bonus
         (100% level) established for the Executive for the year in question
         under the Company's "Annual Incentive Plan."

                          (l)     "Termination of Employment" shall mean the
         termination of the Executive's employment by the Company other than
         such a termination in connection with an offer of immediate
         reemployment by a successor or assign of the Company or purchaser of
         the Company or its assets under terms and conditions which would not
         permit the Executive to terminate his employment for Good Reason.





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                 2.       Term. Initial term of this Agreement shall be for the
period commencing on December 8, 1995 (the "Effective Date") and ending on
December 7, 1996. The Term shall be automatically extended by one additional
day for each day beyond the Effective Date of this Agreement that the Executive
remains employed by the Company until such time as the Company elects to cease
such extension by giving written notice of such to the Executive. (In such
event, the Agreement shall thus terminate on the first anniversary of the
effective date of such notice).

                 3.       Position and Duties. During the Term, the Executive
shall serve as an employee, as the President and Chief Operating Officer of the
Company and shall have such duties, functions, responsibilities and authority
as are consistent with the Executive's position as the senior executive officer
in charge of the general management, business and affairs of the Company.
Executive also currently serves on the Company's Board of Directors.

                 4.       Compensation and Related Matters.

                          (a)     Annual Base Salary. The Executive shall
         receive a Base Salary at a rate of $450,000 per annum through December
         31, 1995 and thereafter at any such greater rate as is determined by
         the Committee.

                          (b)     Benefits. During the Term, the Executive
         shall be entitled to all of the following and any other benefits and
         perquisites offered by the Company to executives generally:

                                  (i)      Participate in the Company's present
                 and future stock option, restricted stock, phantom stock and
                 other similar equity-based incentive plans, pursuant to their
                 terms;

                                  (ii)     Participate in the Company's
                 Employee Stock Purchase Plan, pursuant to its terms;

                                  (iii)    Participate in the Company's 
                 Executive Retirement Plan, pursuant to its terms;

                                  (iv)     $500,000 of individual life
                 insurance coverage under the Company's Executive Life
                 Insurance Plan, which coverage shall be 0% vested as of the
                 date hereof, and shall vest 10% on his fiftieth birthday and
                 shall vest an additional 10% each year thereafter on his
                 birthday while the Executive is employed by the Company;

                                  (v)      $ 100,000 (or such greater amount as
                 the Company may make available to its senior executives
                 generally) of group term life insurance coverage;

                                  (vi)     $100,000 (or such greater amount as
                 the Company may make available to its senior executives
                 generally) of business travel accident insurance coverage when
                 traveling on Company business;

                                  (vii)    Participate in the Company's Medical
                 Plan, and Dental Plan, pursuant to their terms, except that
                 the premium cost for such shall be treated as a benefit under
                 the Company's Executive Medical Reimbursement Plan, described
                 below, (and





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                 therefore at the present time, there shall be no-payroll
                 deduction as a condition of coverage in the Medical Plan and
                 Dental Plan);

                                  (viii)   Participate in the Company's
                 Executive Medical Reimbursement Plan (with a maximum annual
                 benefit of $11,500 (or such greater amount as the Company may
                 make available to its senior executives generally), a portion
                 of which shall be deemed applied to the payment of premiums
                 under the Company's Medical Plan and Dental Plan as described
                 above), pursuant to its terms;

                                  (ix)     Participate in the Company's group
                 Long-Term Disability Plan, at the maximum benefit level,
                 pursuant to its terms;

                                  (x)      4 weeks of paid vacation;
          
                                  (xi)     Participate in or receive benefits
                 under any other employee benefit plan or other arrangement
                 made available by the Company to any of its employees, subject
                 to and on a basis consistent with the terms, conditions and
                 overall administration of such plan or arrangement.

                          (c)     Annual Bonus. As additional compensation for
         services rendered, the Executive shall be eligible to receive an
         annual bonus in cash pursuant to the Company's Annual Incentive Plan.

                          (d)     Expenses. The Company shall promptly
         reimburse the Executive for all reasonable travel and other business
         expenses incurred by the Executive in the performance of his duties to
         the Company hereunder.

                          (e)     Reporting. The Executive shall report
         directly to the Chief Executive Officer of the Company.

                 5.       Competition.

                          (a)     Executive shall not, at any time during the
         period of his employment with the Company, or, if his Termination of
         Employment is for Cause, if initiated by the Company, or without Good
         Reason, if initiated by the Executive, during the one year period
         following his Termination of Employment with the Company ("Non-Compete
         Period"), without the prior written consent of the Board, directly or
         indirectly engage in, or have any interest in, or manage or operate
         any person, firm, corporation, partnership or business (whether as
         director, officer, employee, agent, representative, partner, security
         holder, consultant or otherwise) that engages in any of the
         Competitive Businesses in any State of the United States or any
         foreign country in which the Company is then engaged in any of such
         businesses; provided, however, that Executive shall be permitted to
         acquire a stock interest in such a corporation provided such stock is
         publicly traded and the stock so acquired is not more than one percent
         of the outstanding shares of such corporation, and provided further,
         that Executive may engage in a business that is a non-competitive
         supplier to the Company or that is a customer of Company products or
         services.

                          (b)     The Executive covenants that a breach of
         subparagraph (a) above would immediately and irreparably harm the
         Company and that a remedy at law would be inadequate to





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         compensate the Company for its losses by reason of such breach and
         therefore that the Company shall, in addition to any other rights and
         remedies available under this Agreement, at law or otherwise, be
         entitled to an injunction to be issued by any court of competent
         jurisdiction enjoining and restraining the Executive from committing
         any violation of subparagraph (a) above, and the Executive hereby
         consents to the issuance of such injunction.
        
                 6.       Eligibility for Severance Benefits. The Executive
shall be eligible for the benefits described in Paragraph 7 (the "Severance
Benefits") if:

                          (a)     during the Term, the Executive has a
         Termination of Employment initiated (i) by the Company without Cause
         or (ii) by the Executive for Good Reason, and, in either case,
         subsection (c) does not apply,

                          (b)     during the Term there has been a Change in
         Control and during the 31 day period commencing on the first day of
         the 13th calendar month following the Change in Control Date (e.g. the
         period April 1, 1996 - May 1, 1996, inclusive, for a Change in Control
         which is effective in the month of March, 1995), the Executive has a
         Termination of Employment initiated by the Executive without Good
         Reason, or

                          (c)     during the Term there has been a Change in
         Control and during the two year period commencing on the Change in
         Control Date the Executive has a Termination of Employment which is
         initiated by the Company without Cause or by the Executive for Good
         Reason.

                 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 Severance Benefits:

                          (a)     Cash Payment. The Executive shall be entitled
         to receive an amount of cash equal to the Benefit Multiplier times the
         greater of

                                  (i)      the sum of the Executive's Base
                 Salary as in effect upon the Termination of Employment, and
                 the greater of

                                           (A)     the Executive's Target Bonus
                          as in effect upon the Termination of Employment or,

                                           (B)     the Executive's actual bonus
                          under the Company's "Annual Incentive Plan" for the
                          year prior to the year of the Executive's Termination
                          of Employment,

                                  (ii)     the sum of the Executive's Base
                 Salary as in effect on the Change in Control Date, and the
                 greater of

                                           (A)     the Executive's Target Bonus
                          as in effect upon the Change in Control Date or,

                                           (B)     the Executive's actual bonus
                          under the Company's "Annual Incentive Plan" for the
                          year prior to the Change in Control Date.





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         The payment shall be made in a single lump sum within ten days 
         following the Executive's Termination of Employment.

                          (b)     Long-Term Incentive Award; Equity-Based
         Compensation. The Executive'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 Executive shall be fully vested.

                          (c)     Continuation of Benefits.

                                  (i)      For the Benefit Period, or for two
                 (2) years, whichever is longer, the Executive shall be treated
                 as if he had continued to be an executive employee for all
                 purposes under the Company's Medical Plan, Executive Medical
                 Reimbursement Plan and Dental Plan (as described in Paragraph
                 4(b). Following this period the Executive 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 Executive's employment (other than for
                 gross misconduct).

                                  (ii)     The Company shall fully vest and
                 maintain in force, at its own expense, for the remainder of
                 the Executive's life, the life insurance in effect under the
                 Company's Executive Life Insurance Plan (as described in
                 Paragraph 4(b)) as of the Change in Control Date or as of the
                 date of Termination of Employment, whichever is greater.

                          (d)     Relocation Benefit. If, within one year after
         the Executive's Termination of Employment with the Company, the
         Executive gives the Company written notice that he desires to relocate
         within the continental United States, the Company will reimburse the
         Executive for any reasonable relocation expenses (in accordance with
         the Company's general relocation policy for executives as then in
         effect, or, at the Executive's election, as in effect on the Change in
         Control Date) in connection with such relocation.

                          (e)     Executive Retirement Plan. For the year of
         the Executive's Termination of Employment, the Company will make the
         contribution to the Retirement Plan on behalf of the Executive that it
         would have made if the Executive had not had a Termination of
         Employment, but in no event less than the percentage contribution it
         made for the Executive in the immediately preceding year (and
         increased to take account of the additional year of service), in each
         case taking account of the Executive's annualized rate of
         "Compensation" (as defined in the Retirement Plan) and the percentage
         of such Compensation that the Executive is contributing to the
         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 matching
         contribution which is based on the preceding year's contribution
         percentage shall be contributed to the Retirement Plan on behalf of
         the Executive immediately upon the Executive's Termination of
         Employment and any additional contribution required shall be paid as
         soon as the amount is determined.

                          (f)     Disability. For the Benefit Period, the
         Company shall provide long-term disability insurance benefits coverage
         to Executive equivalent to the coverage that the Executive would have
         had had he remained employed under the Company's Long-Term Disability
         Plan as described in Paragraph 4(b) applicable to Executive on the
         date of Termination of Employment, or, at the Executive's election,
         the plan applicable to Executive as of the Change in Control Date.
         Should





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         Executive become disabled during such period, Executive shall be
         entitled to receive such benefits, and for such duration, as the
         applicable plan provides.

                          (g)     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 7 are not paid or payable
         or otherwise provided to the Executive 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.

                 8.       Golden Parachute Gross-Up. If, in the written opinion
of a Big 6 accounting firm engaged by either the Company or the Executive for
this purpose (at the Company's expense), or if so alleged by the Internal
Revenue Service, the aggregate of the benefit payments under Paragraph 7 would
cause the payment of one or more of such benefits to constitute an "excess
parachute payment" as defined in Section 280G(b) of the Internal Revenue Code
("Code"), then the Company will pay to the Executive an additional amount in
cash (the "Gross-Up Payment") equal to the 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 the
Gross-Up Payment, and (iii) excise tax on the Gross-Up Payment, to be equal to
the aggregate remuneration 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 the Code (and any successor
provisions thereto) had not been enacted into law. The Gross-Up Payment
provided for in this Paragraph shall be made within ten (10) days after the
termination of Executive's employment, provided however that if the amount of
the payment cannot be finally determined at the time, the Company shall pay to
Executive an estimate as determined in good faith by the Company of such
payments (together with interest at the rate provided in section 1274(b)(2)(B)
of the Code) as soon as the amount thereof can be determined but in no event
later than the thirtieth (30th) day after the date of termination. Any dispute
concerning the application of this Paragraph shall be resolved pursuant to
Paragraph 10, and if Paragraph 11 applies, any reference in this Paragraph to
Paragraph 7 shall also be deemed to include a reference to Paragraph 11 as
well.

                 9.       Waiver of Other Severance Benefits. The benefits
payable pursuant to this Agreement are in lieu of any other severance benefits
which may otherwise be payable to the Executive upon termination following a
Change in Control (including, without limitation, any benefits to which
Executive might otherwise have been entitled under the "Agreement Concerning
Benefits Upon Severance" dated as of September 1, 1990 to which Executive and
the Company are parties), except those benefits which are to be made available
to the Executive as required by applicable law.

                 10.      Disputes. Any dispute or controversy arising under,
out of, in connection with or in 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, using a
single arbitrator, in accordance with the Labor Arbitration rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court having jurisdiction 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. The
Company shall pay all costs of the arbitration and all reasonable attorney's
and accountant's fees of the Executive in connection therewith.

                 11.      Additional Payments Due to Dispute. Notwithstanding
anything to the contrary herein, and without limiting the Executive's rights at
law or in equity, if the Company fails or refuses to





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timely pay to the Executive the benefits due under Paragraphs 7 and/or 8
hereof, then the benefits under Paragraph 7(a) shall be increased and the
benefits under Paragraphs 7(c), 7(d), and 7(f) shall each be continued by one
additional day for each day of any such failure or refusal of the Company to
pay. in addition, any Gross-Up Payment due under Paragraph 8 shall be increased
to 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 any claim, debt, or obligation against any payment
to or benefit for the Executive provided for in this Agreement.

                 13.      No Mitigation Obligation. The parties hereto
expressly agree that the payment of the benefits by the Company to the
Executive in accordance with the terms of this Agreement will be liquidated
damages, and that the Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall any profits, income, earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of the Executive hereunder or otherwise.

                 14.      Trust. Any payments or installments that may be
required to be made to Executive under this Agreement shall be funded
immediately prior to any Change of Control Date (or, if earlier, within ten
(10) days after any Termination of Employment) by a contribution by the Company
of the necessary amount of cash, as determined by independent actuaries
acceptable to both Executive and the Company, to the irrevocable grantor trust
created for such purpose by the Company, with Chemical Bank as Trustee dated
July 18, 1995, a copy of which Trust Agreement may be obtained from the Company
or the Trustee.

                 15.      Letter of Credit for Legal Fees. In order to ensure
the benefits intended to be provided to the Executive hereunder, immediately
prior to any Change of Control Date the Company shall establish and hereby
agrees to maintain throughout the remaining Term an irrevocable standby Letter
of Credit in favor of the Executive and each other person who is named an
Executive under similar agreements, drawn on a bank selected by the Company
(the "Letter of Credit") which provides for a credit amount of $250,000 being
made available to the Executive against presentation at any time and from time
to time of his clean sight drafts, accompanied by statements of his counsel for
fees and expenses, in an aggregate amount not to exceed $250,000, unless a
larger amount is authorized by either the Chief Executive Officer, General
Counsel, Chief Financial Officer, or a Senior Vice President of the Company.

                 16.      Successors; Binding Agreement. (a) This Agreement
shall not be terminated by the voluntary or involuntary dissolution of the
Company or by any merger or consolidation where the Company is not the
surviving corporation, or upon any transfer of all or substantially all of the
Company's assets, or any other Change in Control.  The Company shall require
any purchaser, assign, surviving corporation or successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken
place. This Agreement shall 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 persons acquiring directly or
indirectly all or substantially all of the business and/or assets of the
Company whether by purchase, merger, consolidation, reorganization, transfer of
all or substantially all of the business or assets of the Company, or otherwise
(and such purchaser, assign, surviving corporation or successor shall
thereafter be deemed the "Company" for the purposes of this Agreement), but
this Agreement shall not otherwise be assignable, transferable or delegable by
the Company.





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                          (b)     This Agreement shall inure to the benefit of
         and be enforceable by the Executive's personal 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 rights or
         obligations hereunder except as expressly provided in this Section 16.
         Without limiting the generality of the foregoing, the Executive's
         right to receive payments hereunder shall not be assignable,
         transferable or delegable, whether by pledge, creation of a security
         interest or otherwise, or otherwise subject to anticipation,
         alienation, sale, encumbrance, charge, hypothecation, or set-off in
         respect of any claim, debt, or obligation, or to execution,
         attachment, levy or similar process, or assignment by operation of
         law, other than 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 be null, void, and of no
         effect.

                 17.      Notices. Any notice, request, claim, demand, document
and other communication hereunder to any party shall be effective upon receipt
(or refusal of receipt) and shall be writing 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 attention of its Secretary;

                          (b)     If to the Executive, to him at the address
         set forth below under the Executive's signature, or at any such other
         address as either party shall have specified by notice in writing to
         the other.

                 18.      Amendments; Waivers. This Agreement may not be
modified, amended, or terminated except by an instrument in writing, signed by
the Executive and by a duly authorized representative of the Board of
Directors. By an instrument in writing similarly executed, either party may
waive compliance by the other party with any provision of this Agreement that
such other party was or is obligated to comply with or perform; provided,
however, that such waiver shall not operate as a waiver of, or estoppel with
respect to, any other or subsequent failure. No failure to exercise and no
delay in exercising any right, remedy, or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, or power provided herein or by law or in
equity.

                 19.      Entire Agreement. This Agreement sets forth the
entire agreement of the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto. The
parties further intend that this Agreement shall constitute the complete and
exclusive statement of its terms and that no extrinsic evidence whatsoever may
be introduced in any judicial, administrative, or other legal proceeding
involving this Agreement.

                 20.      Severability: Enforcement. If any provision of this
Agreement, or the application thereof to any person, place, or circumstance
shall be held by a court of competent jurisdiction to be invalid, unenforceable
or void, the remainder of this Agreement and such provisions as applied to
other persons, places and circumstances shall remain in full force and effect.





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                 21.      Indemnification. The Company shall indemnify, defend,
and hold the Executive harmless from and against any liability, damages, costs,
or expenses (including attorney's fees) in connection with any claim, cause of
action, investigation, litigation, or proceeding involving him by reason of his
having been an officer, director, employee, or agent of the Company, unless it
is Judicially determined, in a final, nonappealable order that the Executive
was guilty of gross negligence or willful misconduct. The Company also agrees
to maintain adequate directors and officers liability insurance for the benefit
of Executive for the term of this Agreement and for at least three years
thereafter.

                 22.      Governing Law. This Agreement shall be interpreted,
administered and enforced in accordance with the law of the State of Arkansas,
except to the extent pre-empted by Federal law.

                 The parties have duly executed this Agreement as of the date
first written above.
                                        
BEVERLY ENTERPRISES, INC.                      EXECUTIVE

By:
    ------------------------------------       ---------------------------------
    David R. Banks                             Boyd W. Hendrickson
    Chairman and Chief Executive Officer       3816 Spring Mountain Road
                                               Fort Smith, AR 72903


By: ------------------------------------
    Robert W. Pommerville
    Executive Vice President,
    General Counsel and Secretary

5111 Rogers Avenue, Suite 40A
Fort Smith, AR 72919

Attention: Secretary





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