Document:

Retention Agreement

 EXHIBIT 10.42 
 RETENTION BONUS AGREEMENT 
 THIS RETENTION BONUS AGREEMENT is made and
entered into as of December 20, 2011, by and between ADVOCAT INC., a Delaware corporation (hereinafter, the “Company”), and L. Glynn Riddle, Jr. (“Riddle”). 

WHEREAS, Riddle is employed by the Company pursuant to that certain employment agreement dated March 31, 2006 (the
“Employment Agreement”) pursuant to which Riddle is the Chief Financial Officer of the Company and is considered by the Company to be critical to its on-going business operations; and 

WHEREAS, the Company understands that Riddle desires to resign his position with the Company and has stated that he intends to
resign his position and employment with the Company on or before December 31, 2011 
 WHEREAS, pursuant to the
Employment Agreement between Riddle and the Company, upon Riddle’s voluntary termination, he would be entitled to his unpaid Base Salary and the Company would have no further obligation to him; and 

WHEREAS, the Company is presently in the process of replacing its Chief Financial Officer (“CFO”), and dealing with the
end of the year audit and other issues and desires Riddle stay through the audit period in order to have a better transition; and 
 WHEREAS, subject to Riddle’s continued satisfactory job performance, the Company is willing to enter into this agreement to induce Riddle to remain with the Company in order to assist the
Company with its 2011 fiscal year audit, preparation and filing of its Form 10-K for the year ended December 31, 2011 and ongoing operations during the period while the Company engages in a search for a replacement CFO and Riddle is willing to
remain employed by the Company during such time on the terms provided herein; 
 NOW, THEREFORE, in consideration of the
mutual promises, covenants and agreements made herein, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows: 

1. Retention. The Company hereby retains Riddle in the position of Chief Financial Officer and Riddle hereby accepts said
retention by the Company on the terms and conditions specified herein. 
 2. Term. The term of this Agreement shall
commence on the date hereof and, unless earlier terminated in accordance with the provisions set forth herein below, shall expire on March 31, 2012 (the “Retention Period”). Notwithstanding anything to the contrary in this
Section 2, the provisions of Section 9 will survive the expiration or earlier termination of this Agreement. 
 3.
Duties of Riddle. Riddle shall continue to perform the duties of CFO and those duties which are assigned to him by the Board of Directors or Chief Executive Officer of the Company through the Retention Period. Riddle agrees to devote his full
time, attention and skill to his duties hereunder throughout the Retention Period and to be in a position to sign the certifications required to be filed with the Form 10-K. In connection herewith, the Company agrees to ensure that Riddle remains
connected and has access to all information of the Company required to enable Riddle to be in a position to sign the certifications. 

 4. Compensation. 

(a) As compensation for the duties and services performed by Riddle, the Company will continue Riddle’s annual base salary as
provided in the Employment Agreement as such may be increased in the ordinary course by the Board of Directors, subject to federal and state withholding allowances and in accordance with the Company’s standard payroll practices. 

(b) The Company acknowledges that Riddle will be entitled to his full bonus for the 2011 fiscal year and that such bonus shall be paid at
the same time the other officers of the Company are paid their bonuses, but in any event, on or before March 15, 2012. 

(c) Upon the filing of the Company’s annual report on Form 10-K, with the CFO certifications signed by Riddle, the Company will pay
Riddle a bonus of Fifty Thousand Dollars ($50,000). 
 (d) In addition, the Company acknowledges that Riddle is performing his
job for the benefit of the Company at a time when he has expressed a desire to resign. Thus, the Company agrees that, in addition to, and without limitation of, any other compensation contemplated hereby, the Company will continue to pay Riddle his
annual base salary pursuant to the Company’s regular payroll periods, through December 31, 2012, if Riddle continues to work through the end of the Retention Period, and fulfills his other obligations under this agreement. 

5. Options, SARs and Restricted Stock. As a further inducement for Riddle to remain through the Retention Period, one hundred
percent (100%) of all unvested options, SOSARs, and restricted stock granted to Riddle under the Company’s 1994 Non-Qualified Stock Option Plan, 2005 Long Term Incentive Plan, or 2010 Long Term Incentive Plan or any other equity plan shall
be deemed vested as of the last day of the Retention Period, if Riddle continues to work through the end of the Retention Period, and fulfills his other obligations under this agreement. The Company shall cause the options and SOSARs vested prior to
the end of the Retention Period pursuant to the terms of the agreements under which they were granted and those vested pursuant to this Section 5 to remain exercisable until December 31, 2012 or such shorter period that does not constitute
an extension under Treasury Regulation Section 1.409A-1(b)(5)(v)(C)(1). All Restricted Stock that vests prior to the end of the Retention Period and those shares that vest as a result of this Section 5 shall be promptly issued to Riddle at
the end of the Retention Period. 
 6. Restricted Stock Units. All of the restricted share units in the account of Riddle
under the 2008 Stock Purchase Plan For Key Personnel (“2008 Stock Plan”), shall be deemed vested as of the last day of the Retention Period, if Riddle continues to work through the end of the Retention Period, and fulfills his other
obligations under this agreement. The delivery to Riddle by the Company of unrestricted shares of common stock of the Company equal to the number of restricted shares units held by Riddle under the 2008 Stock Plan adjusted for dividends through the
Delayed Payment Date (defined below), rounded down to the nearest whole share, shall be made six months from the end of the Retention Period (the “Delayed Payment Date”) and the Company will make a payment to Riddle in amount representing
the value of any remaining fractional restricted share units held by Riddle using the value per share as determined under Section 2(p) of the 2008 Stock Plan. 

 7. Benefits. Riddle shall also be entitled to participate in all benefit plans and
programs through the Retention Period that are available to Riddle as of the date of this Agreement, provided such are continued after the date hereof. If Riddle elects to continue COBRA benefits at the end of the Retention Period, each month
through December 31, 2012, the Company shall reimburse Riddle for the cost of group health and dental insurance premiums under COBRA, subject to any required withholding. In addition, should Riddle elect to continue any disability insurance or
life insurance under the Company’s plans, the Company shall reimburse Riddle through December 31, 2012, for the cost of such disability insurance premiums, and life insurance premiums, subject to any required withholding. Note that the
Company shall not continue EIRP payments to Riddle following the end of the Retention Period. Any reimbursements under this Section 7 shall be made to Riddle on a monthly basis, but in all events before the end of the limited period described
in Treasury Regulation Section 1.409A-1(b)(9)(v)(E). 
 8. Termination. 

(a) The Company shall have the right at any time, by written notice to Riddle to terminate this Agreement if one of the following events
occurs: 
 (i) a Termination for Cause as defined in the Employment Agreement; or 

(ii) Riddle’s disability as defined in Section 10 below; or 

(iii) Riddle’s death. 
 Notwithstanding the above, it is the intent of the Company at all times to comply with the Americans With Disabilities Act, the Family and Medical Leave Act and any other applicable federal and state
employment laws. This Agreement shall be terminable without cause by Riddle upon two (2) weeks written notice to the Company. In the case of termination under this Section 8 (a), all obligations of the parties under this Agreement shall
cease, except for the Company’s obligations under Sections 4, 5, and 7 herein through the date of Riddle’s separation, to the extent earned and vested as of the date of Riddle’s separation, and Riddle’s obligations under
Section 9 hereof. In addition, notwithstanding the above, if, prior to the end of the Retention Period, the Company should terminate Riddle’s employment due to a Without Cause Termination or Riddle should terminate his employment due to a
Constructive Discharge, each as defined in the Employment Agreement or his employment shall be terminated by Riddle’s death or disability, Riddle shall be entitled to the compensation provided in the Employment Agreement instead of the
provisions of this Agreement. 
 (b) This Agreement shall be terminable by Riddle upon thirty (30) days written notice to
the Company, if the Company breaches any material terms of this Agreement and provided such breach has not been cured by the Company within such thirty (30) day period after notice by Riddle. In the case of termination under this
Section 8(b), such termination shall be deemed a Constructive Discharge and Riddle shall be entitled to the compensation provided in the Employment Agreement in lieu of any payment that would otherwise have been due under this Agreement.

 9. Confidential Information. In consideration of the covenants of the Company
contained herein, Riddle agrees that the provisions of Section IX of the Employment Agreement will remain in full force and effect during and after the Retention Period and that for purposes of Section IX of the Employment Agreement Riddle will be
deemed to have submitted his voluntary resignation at the end of the Retention Period. Provided Riddle maintains the confidentiality of Company information, the Company acknowledges that it will consent to Riddle’s employment as chief financial
officer, or other financial position with a company operating in the nursing home industry. 
 10. Section 409A
Compliance. 
 (a) This Agreement and any payments or benefits provided pursuant to the Employment Agreement shall be
interpreted, operated and administered in a manner intended to avoid the imposition of additional taxes under Section 409A of the Code. Further, the parties acknowledge and agree that the form and timing of the payments and benefits to be
provided pursuant to this Agreement are intended comply with Section 409A of the Code or to be exempt from, or to comply with, one or more exceptions to the requirements of Section 409A of the Code. Notwithstanding any provision of this
Agreement to the contrary, the Company, its affiliates, subsidiaries, successors, and each of their respective officers, directors, employees and representatives, neither represent nor warrant the tax treatment under any federal, state, local, or
foreign laws or regulations thereunder (individually and collectively referred to as the “Tax Laws”) of any payment or benefits contemplated by this Agreement including, but not limited to, when and to what extent such payments or benefits
may be subject to tax, penalties and interest under the Tax Laws. 
 (b) If and to the extent required to comply with
Section 409A, no payment or benefit required to be paid under this Agreement on account of termination of Riddle’s employment shall be made unless and until Riddle incurs a “separation from service” within the meaning of
Section 409A. 
 (c) Notwithstanding the applicable provisions of this Agreement entered into pursuant thereto regarding
the timing of payments in order for the Plan to comply with Section 409A, to the extent any such payment is subject to the provisions of Section 409A, the following special rules shall apply to any payment due under this Agreement as a
result of such separation from service: (a) to the extent Riddle is a “Specified Employee” (as defined under Section 409A at the time of Separation from Service and to the extent such applicable provisions of Section 409A of
the Code and the regulations thereunder require a delay of such payment for a six-month period after the date of such Riddle’s Separation from Service, no such payment shall be made prior to the earlier of (i) the death of Riddle or
(ii) the date that is six months after the date of Riddle’s separation from service, and (b) any delayed payment shall be paid to Riddle, as otherwise provided in this Agreement, promptly after the end of the applicable six-month
delay. 
 (d) Disability shall mean a medically determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve months, where such impairment causes Riddle to be unable to perform the duties under this Agreement or any substantially similar position of employment. 

 11. Assignments; Successors and Assigns. The rights and obligations of Riddle
hereunder are not assignable or delegable and any prohibited assignment or delegation will be null and void. The Company may assign and delegate this Agreement to a successor in interest to the Company’s business. Any such assignment shall
expressly include the obligations herein and shall not relieve the Company of same. The provisions hereof shall inure to the benefit of and be binding upon the permitted successors and assigns of the parties hereto. 

12. Governing Law/Arbitration. This Agreement shall be interpreted under, subject to and governed by the substantive laws of the
State of Tennessee without giving effect to provisions thereof regarding conflict of laws, and all questions concerning its validity, construction, and administration shall be determined in accordance thereby. 

13. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which will be deemed an
original but all of which will together constitute one and same instrument. 
 14. Invalidity. The invalidity or
unenforceability of any provision of this Agreement shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid and enforceable.

 15. Exclusiveness. This Agreement and the Employment Agreement constitute the entire understanding and agreement
between the parties with respect to the retention by the Company of Riddle and supersedes any and all other agreements, oral or written, between the parties. Except as otherwise provided herein, the Employment Agreement continues in full force and
effect. 
 16. Modification. This Agreement may not be modified or amended except in writing signed by the parties. No
term or condition of this Agreement will be deemed to have been waived except in writing by the party charged with waiver. A waiver shall operate only as to the specific term or condition waived and will not constitute a waiver for the future or act
on anything other than that which is specifically waived. 
 17. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been made when delivered or mailed first-class postage prepaid by registered mail, return receipt requested, or when delivered if by hand, overnight delivery service or
confirmed facsimile transmission, to the following: 
 (a) If to the Company, at 1621 Galleria Boulevard, Brentwood, TN 37027,
Attention: CEO, or at such other address as may have been furnished to Riddle by the Company in writing; or 
 (b) If to Riddle,
at the address stated below, or such other address as may have been furnished to the Company by Riddle in writing. 

 18. Consolidation, Merger or Sale of Assets. Nothing in this Agreement shall preclude
the Company from consolidating or merging in to or with, or transferring all or substantially all of its assets to, another corporation which assumes this Agreement and all obligations and undertaking of the Company hereunder. No such consolidation,
merger or transfer shall affect the rights of Riddle or the obligations of the Company hereunder. 
 IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first above written. 
  

			
	“COMPANY”
	
	ADVOCAT INC.
		
	By:	 	/s/ Kelly Gill
	Title:	 	President & CEO

  

	
	“RIDDLE”
	
	/s/ L. Glynn Riddle, Jr.
	L. Glynn Riddle, Jr.
	
	Riddle’s Principal Address:
	
	1203 Signature Court
	Franklin, Tennessee 37064Employment Agreement

 EXHIBIT 10.43 
 EMPLOYMENT AGREEMENT 
 This Agreement made effective as of
January 1, 2012 by and between Advocat Inc., a Delaware corporation (the “Company”), and Sam Daniel (the “Executive”). 
 In consideration of the mutual covenants contained in this Agreement, the parties hereby agree as follows: 
 SECTION I 
 EMPLOYMENT 

The Company agrees to employ the Executive and the Executive agrees to be employed by the Company for the Period of Employment as
provided in Section III.A. below and upon the terms and conditions provided in the Agreement. 
 SECTION II 

POSITION AND RESPONSIBILITIES 
 From the Effective Date of this Agreement until the earlier of April 1, 2012 or the date that Glynn Riddle is no longer the Chief Financial Officer of the Company; the Executive agrees to serve as
Executive Vice President. Effective upon the resignation of Mr. Riddle as the Chief Financial Officer of the Company, the Executive agrees to serve as Chief Financial Officer of the Company and to be responsible for the typical management
responsibilities expected of an officer holding such positions and such other responsibilities as may be assigned to Executive from time to time by the Board of Directors of the Company. 

SECTION III 

TERMS AND DUTIES 
 A. Period of Employment 
 The period of Executive’s employment under
this Agreement will commence as of the date hereof and shall continue through March 31, 2013, subject to extension or termination as provided in this Agreement (“Period of Employment”). On March 31 of each year beginning
March 31, 2013, the period of Executive’s employment shall be extended for additional one (1) year periods, unless either party gives notice thirty (30) days in advance of the expiration of the then current period of employment
of such party’s intent not to extend the Period of Employment. 

 B. Duties 
 During the Period of Employment, the Executive shall devote all of his business time, attention and skill to the business and affairs of the Company and its subsidiaries. The Executive will perform
faithfully the duties which may be assigned to him from time to time by the Board of Directors. 
 SECTION IV 

COMPENSATION AND BENEFITS 
 A. Compensation 
 For all services rendered by the Executive in any
capacity during the Period of Employment, the Executive shall be compensated as follows: 
 1. Base Salary 

The Company shall pay the Executive a base salary (“Base Salary”) as follows: Two Hundred Fifty Thousand Dollars ($250,000)
per annum. 
 Base Salary shall be payable according to the customary payroll practices of the Company but in no event less
frequently than once each month. The base salary shall be reviewed annually and shall be subject to increase according to the policies and practices adopted by the Company from time to time. 

B. Annual Incentive Awards 
 The Company will pay the Executive annual incentive compensation awards as may be granted by the Board or a Compensation Committee to the Executive under any executive bonus or incentive plan in effect
from time to time. In all events, any such incentive bonuses or payments will be made on or before March 15 following the Executive’s taxable year in which such award is no longer subject to a substantial risk of forfeiture as defined by
Treasury Regulation Section 1.409A-1(d). 
 C. Additional Benefits 

The Executive will be entitled to participate in all compensation or employee benefit plans or programs and receive all benefits and
perquisites for which any salaried employees are eligible under any existing or future plan or program established by the Company for salaried employees. The Executive will participate to the extent permissible under the terms and provisions of such
plans or programs in accordance with program provisions. These may include group hospitalization, health, dental care, life or other insurance, tax qualified pension, car allowance, savings, thrift and profit sharing plans, termination pay programs,
sick leave plans, travel or accident insurance, disability insurance, and contingent compensation plans including capital accumulation programs, Restricted Stock programs, stock purchase programs and stock option plans. Nothing in this Agreement
will preclude the Company from amending or terminating any of the plans or programs applicable to salaried or senior executives as long as such amendment or termination is applicable to all salaried employees or senior executives. The Executive will
be entitled to an annual four-week paid vacation. 

 SECTION V 
 BUSINESS EXPENSES 
 The Company will reimburse the Executive for all
reasonable travel and other expenses incurred by the Executive in connection with the performance of his duties and obligations under this Agreement. 
 SECTION VI 
 DISABILITY 

A. In the event of disability of the Executive during the Period of Employment, the Company will continue to pay the Executive according
to the compensation provisions of this Agreement during the period of his disability, until such time as Executive’s long term disability insurance benefits are available. Once the Executive’s long term disability insurance benefits are
available, the Company’s obligation to continue paying compensation shall cease unless the disability ends. In the event the Executive is disabled for a continuous period of six (6) months after the Executive first becomes disabled, the
Company may terminate the employment of the Executive. In this case, the Company’s obligation to make payments under this Agreement shall cease as of the date of termination, except for earned but unpaid Base Salary and Incentive Compensation
Awards which will be paid on a pro-rated basis for the year in which the disability occurred. In the event of such termination, all unvested stock options held by Executive shall be deemed fully vested on the date of such termination. 

B. During the period the Executive is receiving payments of either regular compensation or disability insurance described in this
Agreement and as long as he is physically and mentally able to do so, the Executive will furnish information and assistance to the Company and from time to time will make himself available to the Company to undertake assignments consistent with his
prior position with the Company and his physical and mental health. If the Company fails to make a payment or provide a benefit required as part of the Agreement, the Executive’s obligation to fulfill information and assistance will end.

 SECTION VII 
 DEATH 
 In the event of the death of the Executive during the Period of
Employment, the Company’s obligation to make payments under this Agreement shall cease as of the date of death, except for earned but unpaid Base Salary and Incentive Compensation Awards which will be paid on a pro-rated basis for that year.
The Executive’s designated beneficiary will be entitled to receive the proceeds of any life or other insurance or other death benefit programs provided in this Agreement. 

 SECTION VIII 
 EFFECT OF TERMINATION OF EMPLOYMENT 
 A. If the
Executive’s employment terminates after March 31, 2012 due to either a Without Cause Termination or a Constructive Discharge, as defined later in this Agreement, the Company will pay the Executive in a lump sum an amount equal to 100% of
his Base Salary as in effect at the time of the termination upon such Termination or Constructive Discharge, and subject to Section XII, will be paid at the time of termination of employment. Earned but unpaid Base Salary and Incentive Compensation
Awards will be paid in a lump sum upon such Termination or Constructive Discharge. The benefits and perquisites described in this Agreement as in effect at the date of termination of employment will be continued for twelve (12) months. If the
Executive’s employment terminates due to either a Without Cause Termination or a Constructive Discharge, or pursuant to Section XI, all stock options, SOSARs, restricted stock or other equity grants granted to the Executive under the
Company’s 2010 Long-Term Incentive Plan or other stock option program or plan (the “Plan”) shall be deemed vested, and the Company shall cause any options or SOSARs to remain exercisable until the earlier of (i) the latest date
upon which the option or SOSAR could have expired by its original terms under any circumstances or the tenth anniversary of the original date of grant of such option or SOSAR or (ii) the later of the fifteenth (15th) day of the third (3rd) month following the date on which the Options would have
expired or December 31 of the calendar year in which the Option would have expired. 
 B. If the Executive’s
employment terminates due to a Termination for Cause, earned but unpaid Base Salary will be paid on a pro-rated basis for the year in which the termination occurs. No other payments will be made or benefits provided by the Company. 

C. Upon termination of the Executive’s employment for any reason prior to March 31, 2012 or at any time for reasons other than
due to death, disability, or pursuant to Paragraph A of this Section or Section XI, the Period of Employment and the Company’s obligation to make payments under this Agreement will cease as of the date of the termination except as expressly
defined in this Agreement. 
 D. For this Agreement, the following terms have the following meanings: 

1. “Termination for Cause” means termination of the Executive’s employment by the Company’s Board of Directors acting
in good faith by the Company by written notice to the Executive specifying the event relied upon for such termination, due to the Executive’s serious, willful misconduct with respect to his duties under this Agreement, including but not limited
to conviction for a felony or perpetration of a common law fraud, which has resulted or is likely to result in material economic damage to the Company. 

 2. “Constructive Discharge” means termination of the Executive’s employment
by the Executive as a result of any of the following: a material diminution of base salary of Executive; a material diminution in the Executive’s authority, duties or responsibilities; a material diminution in the budget over which the
Executive retains authority; a material change in geographic location at which the Executive must perform the services; or any other action or inaction that constitutes a material breach of the terms of this Agreement. Provided, however, that such
condition shall not constitute a reason for Constructive Discharge unless the Executive provides written notice of such condition within sixty (60) days of its occurrence and provides the Company with thirty (30) days to remedy the
condition. Further, any termination of employment by the Executive must occur within one hundred twenty (120) days from the initial existence of the condition giving rise to the Constructive Discharge. 

3. “Without Cause Termination” means termination of the Executive’s employment by the Company (a) other than due to
death, disability, Termination for Cause or pursuant to Section XI; or (b) upon expiration of the Period of Employment as a result of the giving of notice by the Company of its intent not to extend the Period of Employment as provided in
Section III.A. 
 SECTION IX 
 OTHER DUTIES OF THE EXECUTIVE DURING AND AFTER THE PERIOD OF EMPLOYMENT 

A. The Executive will, with reasonable notice during or after the Period of Employment, furnish information as may be in his possession
and cooperate with the Company as may reasonably be requested in connection with any claims or legal actions in which the Company is or may become a party. 
 B. The Executive recognizes and acknowledges that all information pertaining to the affairs, business, clients, customers or other relationships of the Company, as hereinafter defined, is confidential and
is a unique and valuable asset of the Company. Access to and knowledge of this information are essential to the performance of the Executive’s duties under this Agreement. The Executive will not during the Period of Employment or after except
to the extent reasonably necessary in performance of the duties under this Agreement, give to any person, firm, association, corporation or governmental agency any information concerning the affairs, business, clients, customers or other
relationships of the Company except as required by law. The Executive will not make use of this type of information for his own purposes or for the benefit of any person or organization other than the Company. The Executive will also use his best
efforts to prevent the disclosure of this information by others. All records, memoranda, etc. relating to the business of the Company whether made by the Executive or otherwise coming into his possession are confidential and will remain the property
of the Company. 
 C. During the Period of Employment and for a twelve (12) month period thereafter, the Executive will not
use his status with the Company to obtain loans, goods or services from another organization on terms that would not be available to him in the absence of his relationship to the Company. During the Period of Employment and for a twelve
(12) month period following termination of the Period of Employment, other than termination due to a Without Cause Termination, a Constructive Discharge or termination pursuant to Section XI: the Executive will not make any statements or
perform any acts intended to advance the interest of any existing or prospective competitors of the Company in any way that will injure the interest of the Company; the Executive without prior express written approval by the Board of Directors of
the Company will not directly or indirectly own or hold any proprietary interest in or be employed by or receive compensation from any party engaged in the same or any similar business in the same geographic areas the Company does business; and the
Executive without express prior written approval from the Board of Directors, will not solicit any members of the then current clients of the Company or discuss with any employee of the Company information or operation of any business intended to
compete with the Company. For the purposes of the Agreement, proprietary interest means legal or equitable ownership, whether through stock holdings or otherwise, of a debt or equity interest (including options, warrants, rights and convertible
interests) in a business firm or entity, or ownership of more than 5% of any class of equity interest in a publicly-held company. The Executive acknowledges that the covenants contained herein are reasonable as to geographic and temporal scope. For
a twelve (12) month period after termination of the Period of Employment for any reason, the Executive will not directly or indirectly hire any employee of the Company or solicit or encourage any such employee to leave the employ of the
Company. 

 D. The Executive acknowledges that his breach or threatened or attempted breach of any
provision of Section IX would cause irreparable harm to the Company not compensable in monetary damages and that the Company shall be entitled, in addition to all other applicable remedies, to a temporary and permanent injunction and a decree for
specific performance of the terms of Section IX without being required to prove damages or furnish any bond or other security. 

E. The Executive shall not be bound by the provisions of Section IX in the event of the default by the Company in its obligations under
this Agreement which are to be performed upon or after termination of this Agreement. 
 SECTION X 

INDEMNIFICATION, LITIGATION 
 The Company will indemnify the Executive to the fullest extent permitted by the laws of the state of incorporation in effect at that time, or certificate of incorporation and by-laws of the Company
whichever affords the greater protection to the Executive. The Executive will be entitled to any insurance proceeds related to any award, or any fees or expenses incurred in connection with any action, suit or proceeding to which he may be made a
party by reason of being a director or officer of the Company. 
 SECTION XI 

CHANGE IN CONTROL 
 In the event there is a Change in Control of the ownership of the Company and within the six (6) month period following such event, the Executive elects to resign upon written notice to the Company,
the Company shall pay to the Executive on such resignation in a lump sum an amount equal to 100% of his Base Salary as in effect at the time of such resignation, and subject to Section XII, will be paid at the time of termination of employment. In
addition, earned but unpaid Base Salary and Incentive Compensation Awards will be paid on a pro-rated basis for the year in which resignation occurs. Any stock options granted to the Executive prior to termination pursuant to the Plan, but subject
to vesting restrictions, will be fully vested upon a Change in Control whether or not the Executive resigns. The benefits and perquisites described in this Agreement as in effect at the date of termination of employment will also be continued for
twelve (12) months from the effective date of termination pursuant to Change of Control. 

 A “Change in Control” shall be deemed to have occurred if (i) a tender offer
shall be made and consummated for the ownership of more than 50% of the outstanding voting securities of the Company, (ii) the Company shall be merged or consolidated with another corporation and as a result of such merger or consolidation less
than 75% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the former shareholders of the Company, as the same shall have existed immediately prior to such merger or consolidation,
(iii) the Company shall sell all or substantially all of its assets to another corporation which is not a wholly-owned subsidiary, (iv) a person, within the meaning of Section 3(a)(9) or of Section 13(d)(3) (as in effect on the
date hereof) of the Securities and Exchange Act of 1934 (“Exchange Act”), shall acquire more than 50% of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record) ) or (v) the
individuals who, as of the date hereof, constitute the Board of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a person or group other than the Board. For purposes hereof, ownership of voting securities shall take into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange Act. 
 SECTION XII 

CODE SECTION 409A COMPLIANCE 
 A. This Agreement and any payments or benefits provided hereunder shall be interpreted, operated and administered in a manner intended to avoid the imposition of additional taxes under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”). Further, the parties acknowledge and agree that the form and timing of the payments and benefits to be provided pursuant to this Agreement are intended comply with
Section 409A of the Code or to be exempt from, or to comply with, one or more exceptions to the requirements of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, the Company, its affiliates,
subsidiaries, successors, and each of their respective officers, directors, employees and representatives, neither represent nor warrant the tax treatment under any federal, state, local, or foreign laws or regulations thereunder (individually and
collectively referred to as the “Tax Laws”) of any payment or benefits contemplated by this Agreement including, but not limited to, when and to what extent such payments or benefits may be subject to tax, penalties and interest under the
Tax Laws. 

 B. If and to the extent required to comply with Section 409A of the Code, no payment or
benefit required to be paid under this Agreement on account of termination of the Executive’s employment shall be made unless and until the Executive incurs a “separation from service” within the meaning of Section 409A of the
Code. 
 C. Delayed Payments. 
 1. Notwithstanding any other payment schedule provided herein or any provision herein regarding the timing of payments in this Agreement to the contrary, if, and only if, the Executive is deemed on the
date of termination of employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then the terms of this Section XII.C. shall apply as required by Section 409A of the Code so
as to avoid the imposition of additional tax under Section 409A of the Code. Any payment that is considered deferred compensation under Section 409A of the Code payable on account of a “separation from service” shall be made on
the date which is the earlier of (a) the expiration of the six (6) month period measured from the date of such “separation from service” of Executive or (b) the date of Executive’s death (the “Delay Period”)
to the extent required under Section 409A of the Code. Upon the expiration of the Delay Period, all payments delayed pursuant to the immediately preceding sentence (whether they otherwise would have been payable in a single sum or in
installments in the absence of such delay) shall be paid to Executive in a lump sum by the Company at the end of the Delay Period, and all remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment
dates specified for them herein; and 
 2. To the extent that any benefits to be provided during the Delay Period are considered
deferred compensation under Section 409A of the Code provided on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A of the Code, Executive shall pay the cost of such benefits
during the Delay Period, and the Company shall reimburse Executive, to the extent that such costs otherwise would have been paid by the Company or to the extent that such benefits otherwise would have been provided by the Company at no cost to
Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein. 

D. Disability shall mean a medically determinable physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve months, where such impairment causes the Executive to be unable to perform the duties under this Agreement or any substantially similar position of employment. 

E. The Executive and the Company shall cooperate to determine the application of Section 409A of the Code to the provisions of this
Agreement. If the Executive and the Company are unable to agree on the application of Section 409A of the Code within ten (10) business days after the Executive’s separation from service with the Company, then the application of
Section 409A of the Code to any provision of this Agreement in dispute shall be determined by an accounting firm of recognized national standing acceptable to the Executive and the Company. The accounting firm shall be instructed to use every
reasonable effort to make its determination within ten (10) business days after it is retained. The parties will cooperate fully with the accounting firm. The costs and expenses for the services of the accounting firm shall be borne equally by
the Executive and the Company. 

 SECTION XIII 
 WITHHOLDING TAXES 
 The Company may directly or indirectly withhold from
any payments under this Agreement all federal, state, city or other taxes that shall be required pursuant to any law or governmental regulation. 
 SECTION XIV 
 EFFECTIVE PRIOR AGREEMENTS 

This Agreement contains the entire understanding between the Company and the Executive with respect to the subject matter and supersedes
any prior employment or severance agreements between the Company and its affiliates, and the Executive. 
 SECTION XV 

CONSOLIDATION, MERGER OR SALE OF ASSETS 
 Nothing in this Agreement shall preclude the Company from consolidating or merging into or with, or transferring all or substantially all of its assets to, another corporation which assumes this Agreement
and all obligations and undertakings of the Company hereunder. Upon such a Consolidation, Merger or Sale of Assets, the term “the Company” as used will mean the other corporation and this Agreement shall continue in full force and effect.
This Section XV is not intended to modify or limit the rights of the Executive hereunder, including without limitation, the rights of Executive under Section XI. 
 SECTION XVI 
 MODIFICATION 

This Agreement may not be modified or amended except in writing signed by the parties. No term or condition of this Agreement will be
deemed to have been waived except in writing by the party charged with waiver. A waiver shall operate only as to the specific term or condition waived and will not constitute a waiver for the future or act on anything other than that which is
specifically waived. 

 SECTION XVII 
 GOVERNING LAW; ARBITRATION 
 This Agreement has been executed and delivered
in the State of Tennessee and its validity, interpretation, performance and enforcement shall be governed by the laws of that state. 
 Any dispute among the parties hereto shall be settled by arbitration in Nashville, Tennessee, in accordance with the rules then obtaining of the American Arbitration Association and judgment upon the
award rendered may be entered in any court having jurisdiction thereof. 
 SECTION XVIII 

NOTICES 

All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first-class postage prepaid by registered mail, return receipt requested, or if delivered by hand, overnight delivery service or confirmed facsimile transmission, to the following: 

(a) If to the Company, at 1621 Galleria Boulevard, Brentwood, TN 37027-2926, Attention: President or Chief Executive Officer, or at such
other address as may have been furnished to the Executive by the Company in writing; or 
 (b) If to the Executive, at 528 Grand
Oaks Dr., Brentwood, TN 37027, or such other address as may have been furnished to the Company by the Executive in writing. 

SECTION XIX 

BINDING AGREEMENT 
 This Agreement shall be binding on the parties’ successors, heirs and assigns. 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written. 
  

			
	ADVOCAT INC.
		
	By:	 	 /s/ Kelly Gill

		 	Kelly Gill
	Title:	 	President and Chief Executive Officer
	
	EXECUTIVE:
	
	 /s/ Sam Daniel

	Sam Daniel

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