Document:

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                                                                    EXHIBIT 10.1
                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement"), dated as of April 4,
         2002, between C. Christian Winkle (the "Executive") and Mariner
         Healthcare, Inc., a Delaware corporation (the "Company") and any
         successor resulting from consummation of the Joint Plan of
         Reorganization (the "Plan") of the Company.

         WHEREAS, the Company has employed the Executive as Chief Executive
Officer and wishes to redefine the terms of the Executive's employment with the
Company and the Executive desires to accept such employment, for the term and
upon the other conditions hereinafter set forth; and

         WHEREAS, as a condition of entering into this Agreement, the Executive
agrees to waive the Executive's rights, if any, against the Company and any
predecessor company or any affiliate of the foregoing under any employment
agreement between the Executive and the Company or any such predecessor company
or affiliate;

         WHEREAS, the Company is in the process of seeking confirmation of the
Plan and is currently operating as a debtor in possession under the United
States Bankruptcy laws; and

         WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company.

         NOW, THEREFORE, the parties agree as follows:

         1.       Employment. This Agreement shall constitute a binding
agreement between the parties as of the date hereof; provided that,
notwithstanding any other provision of this Agreement, the operative provisions
of this Agreement shall become effective only upon the date that the Plan is
declared consummated (the "Effective Date"). In the event the Plan is terminated
for any reason without the Effective Date having occurred or the Effective Date
does not occur prior to June 30, 2002, this Agreement shall be terminated
without further obligation or liability of either party.

         2.       Term. Subject to the provisions of Section 10 of this
Agreement, this Agreement shall commence on the Effective Date and shall
continue during the period in which the Executive remains employed by the
Company (the "Term"). The Executive shall be considered an at-will employee and
his employment may be terminated by either party subject to the obligations of
the parties upon such termination as are set forth hereinafter.

         3.       Position. During the Term, the Executive shall serve as Chief
Executive Officer of the Company or in such other executive position in the
Company as the Executive shall approve in writing.

         4.       Duties and Reporting Relationship. Subject to the terms and
conditions set forth herein, during the Term, the Executive shall, on a full
time basis, use the Executive's skills and render his services in supervising
the conduct of the Company's business and shall not engage in any other business
activities which interfere with such duties except with the prior written

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approval of the Board of Directors of the Company (the "Board"). The Executive
shall also perform such other executive and administrative duties (consistent
with the position of Chief Executive Officer) as may from time to time be
authorized or directed by the Board. The Executive shall report solely to the
Board. The Executive agrees to be employed by the Company in such capacities for
the Term, subject to all the covenants and conditions hereinafter set forth.
Executive shall perform his duties at the Company's principal executive offices,
either in Atlanta, Georgia, as currently located, or in such other location as
determined by the Board.

         5.       Salary and Annual Bonus.

                  (a)      Base Salary. The Executive's base salary hereunder
shall be $750,000 a year, payable no less frequently than monthly and prorated
for any partial year of employment. The Board shall review such base salary at
least annually and may increase, but not decease, such base salary as it may
deem advisable.

                  (b)      Annual Bonus. The Company shall provide the Executive
with an opportunity to earn upon achievement of target performance goals
determined by the Board or the compensation committee thereof, in consultation
with the Executive, an annual bonus equal to one hundred percent (100%) of the
Executive's base salary (the "Target Bonus"), with a minimum bonus of fifty
percent (50%) of Target Bonus upon achievement of threshold performance and an
opportunity to earn up to one hundred fifty percent (150%) of the Target Bonus
for performance in excess of the targets.

         6.       Vacation, Holidays and Sick Leave. During the Term, the
Executive shall be entitled to paid vacation, paid holidays and sick leave in
accordance with the Company's standard policies for its senior executive
officers.

         7.       Business Expenses. The Executive shall be reimbursed for all
business expenses incurred by the Executive in connection with the Executive's
employment upon timely submission by the Executive of receipts and other
documentation as required by the Internal Revenue Code and in conformance with
the Company's current practices.

         8.       Pension and Welfare Benefits. During the Term, the Executive
shall be eligible to participate fully in all health benefits, insurance
programs, pension and retirement plans and other employee benefit and
compensation arrangements, as in effect from time to time, available to senior
executive officers of the Company generally.

         9.       Stock Options As soon as practicable following the Effective
Date, the Company shall grant to the Executive, pursuant to the terms of the
Company's 2002 Omnibus Incentive Equity Plan (the "2002 Plan"), an option (the
"Stock Option") to purchase 439,560 shares of common stock of the Company (the
"Option Shares"). The Stock Option shall (1) have an exercise price per share
equal to $20.12 (the "Exercise Price"), (2) subject to the Executive's continued
employment with the Company, vest in equal quarterly installments over the three
(3) year period commencing on the Effective Date, (3) be exercisable for ten
(10) years, subject to earlier termination upon the Executive's termination of
employment, (4) shall contain provisions for a cashless exercises through a
broker transaction, (5) shall vest in full on a Change in Control and (6) have
such other terms and be subject to such other conditions as are set forth in the
2002

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Plan and the form of Stock Option Agreement promulgated under the 2002 Plan. The
intent of the grant of the Stock Option is to provide Executive with an option
to purchase two percent (2%) of the Company's fully diluted common stock as of
the Effective Date at an exercise price equal to the common stock's price per
share (as determined by the Plan) on the Effective Date. Prior to the grant of
the stock option, the Company shall make any necessary adjustment to the number
of Option Shares and to the Exercise Price to effectuate the intent of the
immediately preceding sentence. The Company agrees to file and maintain the
effectiveness of a registration statement under the Securities Act of 1933, as
amended, with respect to the shares underlying the Stock Option for so long as
such options remain exercisable. In addition, the Board or the Compensation
Committee thereof, may grant to the Executive such other and additional awards
under the 2002 Plan as may from time to time be deemed appropriate.

         10.      Termination of Employment.

                  (a)      Death or Disability.

                  (i)      The Executive's employment hereunder shall
         automatically terminate upon the death of the Executive.

                  (ii)     If, as a result of the Executive's incapacity due to
         physical or mental illness, the Executive is unable to perform the
         essential functions of his job for one hundred eighty (180) days
         (whether or not consecutive) during any period of twelve (12)
         consecutive months, and no reasonable accommodation can be made that
         will allow Executive to perform his essential functions, the Company
         may terminate the Executive's employment hereunder for any such
         incapacity (a "Disability").

                  (b)      Termination by the Company. The Company may terminate
the Executive's employment hereunder at any time, whether or not for Cause. For
purposes of this Agreement, "Cause" shall mean (i) continued failure by the
Executive to substantially perform the duties contemplated by Section 4 hereof,
which failure is not remedied within twenty (20) days after a written notice of
such failure is delivered to the Executive by the Company, which notice
identifies with particularity the manner in which the Company believes that the
Executive has failed to perform his duties under Section 4 of this Agreement;
(ii) the conviction (after exhausting all appeals) of the Executive of, or the
entering of a plea of nolo contendere by, the Executive with respect to a
felony; (iii) Executive's willful malfeasance or willful misconduct in
connection with Executive's duties hereunder or any willful act or willful
omission which is materially injurious to the financial condition or business
reputation of the Company or any significant subsidiary; (iv) Executive's breach
of the provisions of Section 14 of this Agreement; or (v) Executive's failure to
perform his duties at the Company's executive offices or one of the Company's
facilities at least four (4) weekdays per week (other than absences due to
business related travel, illness, vacation or other absences generally excused
for executive officers).

         Action or inaction by Executive shall not be considered "willful"
unless done or omitted by Executive intentionally and without Executive's
reasonable belief that Executive's action or inaction was in the best interest
of the Company, and shall not include failure to act by reason of total or
partial incapacity due to physical or mental illness. The cessation of
employment of the Executive shall not be deemed to be for Cause unless prior to
such termination there shall have

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been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the disinterested membership of
the Board at a meeting of such Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before such Board), finding,
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in clause (i), (ii), (iii), (iv) or (v) above, and specifying
the particulars thereof in detail.

                  (c)      Termination by the Executive. The Executive shall be
entitled to terminate his employment hereunder, (A) upon sixty (60) days' prior
written notice, for Good Reason or (B) if his health should become impaired to
an extent that makes his continued performance of his duties hereunder hazardous
to his physical or mental health, provided that the Executive shall have
furnished the Company with a written statement from a qualified doctor to such
effect and provided, further, that, at the Company's request, the Executive
shall submit to an examination by a doctor selected by the Company and such
doctor shall have concurred in the conclusion of the Executive's doctor.

         For purposes of this Agreement, "Good Reason" shall mean any one of the
following acts by the Company, or failures by the Company to act, unless, in the
case of any act or failure to act described below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:

                  (i)      any material diminution in the Executive's
         authorities or responsibilities (including reporting responsibilities)
         or from his title or position without the Executive's express written
         consent to accept any such change; the assignment to him of any duties
         or work responsibilities which are materially inconsistent with such
         title, position or work responsibilities; or any removal of the
         Executive from, or failure to reappoint or reelect him to any of such
         positions, except if any such changes are because of Disability,
         resignation, death or a termination by the Company for Cause;

                  (ii)     the failure by the Company to continue to provide the
         Executive with benefits substantially similar in value to the Executive
         in the aggregate to those enjoyed by the Executive under any of the
         Company's pension, life insurance, medical, health and accident, or
         disability plans in which the Executive was participating immediately
         prior to the Effective Date, unless the Executive participates after
         the Effective Date in employee benefit plans generally available to
         senior executives of the Company or any of its subsidiaries;

                  (iii)    without the Executive's express written consent, any
         failure by the Company to comply with any material provision of this
         Agreement, which failure has not been cured within twenty (20) days
         after notice of such noncompliance has been given by the Executive to
         the Company;

                  (iv)     any purported termination of the Executive's
         employment which is not effected pursuant to a Notice of Termination
         satisfying the requirements of Section 10(e) below; for purposes of
         this Agreement, no such purported termination shall be effective;

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                  (v)      without the Executive's express written consent, the
         Executive is not nominated by the Board for reelection as a director of
         the Company;

                  (vi)     the Company fails to obtain the full assumption of
         this Agreement by a successor entity in accordance with Section 13(a)
         of this Agreement; or

                  (vii)    the Company fails to maintain directors and officers
         liability insurance coverage for the Executive as provided in Section
         12(d) of this Agreement.

         The Executive's continued employment for ninety (90) days following his
knowledge of any act or failure to act constituting Good Reason hereunder
without the delivery of a Notice of Termination shall constitute consent to, and
a waiver of rights with respect to, such act or failure to act.

                  (d)      Voluntary Resignation. Should the Executive wish to
resign from his position with the Company or terminate his employment for other
than Good Reason during the Term, the Executive shall give sixty (60) days prior
written notice to the Company ("Notice Period"), specifying the date as of which
his resignation is to become effective. During the Notice Period, the Executive
shall cooperate fully with the Company in achieving a smooth transition of the
Executive's duties and responsibilities to such person(s) as may be designated
by the Company. The Company reserves the right to accelerate the Date of
Termination by giving the Executive prior written notice.

                  (e)      Notice of Termination. Any purported termination of
the Executive's employment by the Company or by the Executive shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 18. "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.

                  (f)      Date of Termination. "Date of Termination" shall mean
(i) if the Executive's employment is terminated because of death, the date of
the Executive's death, (ii) if the Executive's employment is terminated for
Disability or by the Company for Cause, the date Notice of Termination is given,
(iii) if the Executive's employment is terminated pursuant to Subsection (c),
(d) or (e) hereof or for any other reason (other than by the Company for Cause,
death or Disability), the date specified in the Notice of Termination which
shall not be less than sixty (60) days from the date such Notice of Termination
is given.

                  (g)      Change in Control. For purposes of this Agreement, a
Change in Control of the Company shall have occurred if:

                  (i)      any "Person" (as defined in Section 3(a)(9) of the
         Securities Exchange Act of 1934 (the "Exchange Act") as modified and
         used in Sections 13(d) and 14(d) of the Exchange Act) other than (1)
         the Company or any of its subsidiaries, (2) any trustee or other
         fiduciary holding securities under an employee benefit plan of the
         Company or any of its subsidiaries, (3) an underwriter temporarily
         holding securities pursuant to an offering of such securities, (4) any
         corporation owned, directly or indirectly, by the stockholders of the
         Company in substantially the same proportions as their ownership of

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         the Company's common stock or (5) any of Oaktree Capital Management,
         LLC, Goldman Sachs Credit Partners, LP, Foothill Partners, LP, Highland
         Capital Management, L.P. or their respective affiliates (each a "Bank
         Permitted Holder" and (1) through (5), collectively, the "Permitted
         Holders") becomes the "beneficial owner" (as defined in Rule 13d-3
         under the Exchange Act), directly or indirectly, of securities of the
         Company representing more than 25% of the combined voting power of the
         Company's then outstanding voting securities;

                  (ii)     during any period of not more than two (2)
         consecutive years, not including any period prior to the Effective
         Date, individuals who at the beginning of such period constitute the
         Board, and any new director (other than a director designated by a
         person who has entered into an agreement with the Company to effect a
         transaction described in clause (i), (iii), or (iv) of this Section
         10(g)) whose election by the Board or nomination for election by the
         Company's stockholders was approved by a vote of a majority of the
         directors then still in office who either were directors at the
         beginning of the period or whose election or nomination for election
         was previously so approved, cease for any reason to constitute at least
         a majority thereof;

                  (iii)    the consummation of a merger or consolidation of the
         Company with any other corporation, other than (A) a merger or
         consolidation which would result in the voting securities of the
         Company outstanding immediately prior thereto continuing to represent
         (either by remaining outstanding or by being converted into voting
         securities of the surviving or parent entity) 50% or more of the
         combined voting power of the voting securities of the Company or such
         surviving or parent entity outstanding immediately after such merger or
         consolidation or (B) a merger or consolidation in which no persons
         (other than the Permitted Holders) acquire 25% or more of the combined
         voting power of the Company's or such surviving or parent entity's then
         outstanding securities; or

                  (iv)     the consummation of a plan of complete liquidation of
         the Company or an agreement for the sale or disposition by the Company
         of a majority or more of the assets of the Company and its
         subsidiaries, taken as a whole (or any transaction having a similar
         effect), or the Board approves the entering into of an agreement with
         one or more unrelated third parties under which one or more unrelated
         third parties is given the power to control the management or
         operations of at least a majority of the assets of the Company and its
         subsidiaries, taken as a whole.

                  (v)      in the event of the occurrence of a Potential Change
         of Control described in Section 11(f)(5) or (6), the subsequent
         occurrence during the pendency of such Potential Change of Control of
         any of the following events:

                           (A)      the consummation of a merger or
                  consolidation of the Company or its affiliates with any other
                  Competitive Business (as defined in Section 14 hereof) having
                  gross revenues in excess of 50% of the gross revenues of the
                  Company and following such merger or consolidation, the Bank
                  Permitted Holder whose acquisition of securities triggered
                  such Potential Change of Control pursuant to Section 11(f)(5)
                  or (6) hereof, owns at least 25% of the outstanding voting
                  securities of the entity resulting from such combination; or

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                           (B)      the acquisition by the Company or its
                  affiliates of substantially all of the assets or securities of
                  any Competitive Business (as defined in Section 14 hereof)
                  having gross revenues in excess of 50% of the gross revenues
                  of the Company and (i) in the case of an acquisition of
                  securities, the securities acquired represent more than 50% of
                  the combined voting power of the Competitive Business's then
                  outstanding voting securities and (ii) following such
                  acquisition the Bank Permitted Holder whose acquisition of
                  securities triggered such Potential Change of Control pursuant
                  to Section 11(f)(5) or (6) hereof, owns at least 25% of the
                  outstanding voting securities of the Company.

         11.      Compensation During Disability; Death or Upon Termination.
Notwithstanding any other provision of this Agreement, the provisions of this
Section 11 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates.

                  (a)      During any period that the Executive fails to perform
his duties hereunder as a result of incapacity due to a Disability ("Disability
Period"), the Executive shall continue to receive his base salary at the rate
then in effect for such period until his employment is terminated pursuant to
Section 10(a)(ii) hereof, provided that payments so made to the Executive during
the Disability Period shall be reduced by the sum of the amounts, if any,
payable to the Executive with respect to such period under disability benefit
plans of the Company or under the Social Security disability insurance program,
and which amounts were not previously applied to reduce any such payment.

                  (b)      If the Executive's employment is terminated by his
death or Disability, the Company shall pay (i) any base salary due to the
Executive under Section 5(a) through the Date of Termination and (ii) an amount
equal to the Target Bonus he would have received for the fiscal year that ends
on or immediately after the Date of Termination, assuming the Company achieved
the target level for which a bonus is paid under the plan described in Section
5(b), prorated for the period beginning on the first day of the fiscal year in
which occurs the Date of Termination through the Date of Termination.

                  (c)      If the Executive's employment is terminated by the
Company for Cause or by the Executive voluntarily for other than Good Reason,
the Company shall pay the Executive his base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given and
all other unpaid amounts, if any, to which the Executive is entitled as of the
Date of Termination under any compensation plan or program of the Company, at
the time such payments are due (the "Accrued Benefits").

                  (d)      If the Company terminates the Executive's employment
without Cause, or the Executive terminates his employment for Good Reason (A)
prior to a Change in Control or (B) following the second anniversary of a Change
in Control, then

                  (i)      the Company shall pay the Executive the Accrued
         Benefits;

                  (ii)     subject to the Executive's continued compliance with
         Section 14 of this Agreement, in lieu of any further salary payments to
         the Executive for periods subsequent to the Date of Termination, the
         Executive shall, for a period of twenty-four (24) months

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         (the "Severance Period"), be entitled to continued payment of the
         Executive's base salary at the rate in effect as of the Date of
         Termination; provided, however, that in the event that Executive
         engages in a Competitive Business, provides services for pay
         (including, without limitation, deferred compensation, equity awards or
         other property) to a Competitive Business or obtains a financial
         interest in a Competitive Business from the date Executive's employment
         hereunder is terminated until the end of the Severance Period, the
         Executive shall no longer to be entitled to any further payments of
         Executive's base salary;

                  (iii)    the Company shall pay the Executive a lump sum
         payment, not later than the thirtieth (30th) day following the Date of
         Termination, equal to the sum of (A) the prorated Target Bonus that
         would have been paid for the period beginning on the first day of the
         fiscal year in which the Date of Termination occurs and (B) two times
         the greater of (1) the average of the annual bonus actually paid to the
         Executive by the Company with respect to the two (2) fiscal years which
         immediately precede the year in which the Date of Termination occurs
         (provided if there was an annual bonus paid to the Executive with
         respect only to one (1) fiscal year that immediately precedes the year
         in which the Date of Termination occurs, then such single year's annual
         bonus shall be utilized in the calculation pursuant to this subclause
         (1)) and (2) the Target Bonus applicable for the year of termination;

                  (iv)     the Company shall continue coverage for the
         Executive, on the same terms and conditions as would be applicable if
         the Executive were an active Employee, under the Company's life
         insurance, medical, health and similar welfare benefit plans (other
         then group disability benefits) during the Severance Period; provided,
         however, that in the event that Executive engages in a Competitive
         Business, provides services for pay (including, without limitation,
         deferred compensation, equity awards or other property) to a
         Competitive Business or obtains a financial interest in a Competitive
         Business from the date Executive's employment hereunder is terminated
         until the end of the Severance Period, the Executive shall no longer to
         be entitled to such continued coverage. Benefits otherwise receivable
         by the Executive pursuant to this Section 11(d)(iv) shall be reduced to
         the extent comparable benefits are actually received by the Executive
         from a subsequent employer during the period during which the Company
         is required to provide such benefits, and the Executive shall report to
         the Company any such benefits actually received by him; and

                  (v)      all options, shares of restricted stock, performance
         shares and any other equity based awards shall be and become fully
         vested as of the Date of Termination and Executive shall have until the
         earlier of (A) one (1) year following the Date of Termination and (B)
         the expiration date of the Stock Option, to exercise the Stock Option.

                  (e)      If, the Company terminates the Executive's employment
without Cause, or the Executive terminates his employment for Good Reason during
the 24 month period following a Change in Control, then

                  (i)      the Company shall pay the Executive the Accrued
         Benefits;

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                  (ii)     in lieu of any further salary payments to the
         Executive for periods subsequent to the Date of Termination, the
         Company shall pay to the Executive an aggregate amount equal to the
         product of (A) the sum of (1) the Executive's base salary at the rate
         in effect of the Date of Termination and (2) the greater of (I) the
         average of the annual bonuses actually paid to the Executive by the
         Company with respect to the two (2) fiscal years which immediately
         precede the year in which the Date of Termination occurs (provided if
         there was an annual bonus paid to the Executive with respect only to
         one (1) fiscal year that immediately precedes the year in which the
         Date of Termination occurs, then such single year's annual bonus shall
         be utilized in the calculation pursuant to this subclause (I)) and (II)
         the Target Bonus applicable for the year of termination and (B) 2.99;

                  (iii)    the Company shall pay the Executive an amount equal
         to the prorated Target Bonus that would have been paid for the period
         beginning on the first day of the fiscal year in which the Date of
         Termination occurs;

                  (iv)     the Company shall continue coverage for the
         Executive, on the same terms and conditions as would be applicable if
         the Executive were an active Employee, under the Company's life
         insurance, medical, health and similar welfare benefit plans (other
         then group disability benefits) for a period of thirty-six (36) months;
         provided, however, that in the event that Executive engages in a
         Competitive Business, provides services for pay (including, without
         limitation, deferred compensation, equity awards or other property) to
         a Competitive Business or obtains a financial interest in a Competitive
         Business from the date Executive's employment hereunder is terminated
         until the end of the Severance Period, the Executive shall no longer to
         be entitled to such continued coverage. Benefits otherwise receivable
         by the Executive pursuant to this Section 11(e)(iv) shall be reduced to
         the extent comparable benefits are actually received by the Executive
         from a subsequent employer during the period during which the Company
         is required to provide such benefits, and the Executive shall report to
         the Company any such benefits actually received by him;

                  (v)      all options, shares of restricted stock, performance
         shares and any other equity based awards shall be and become fully
         vested as of the Date of Termination and Executive shall have until the
         earlier of (A) one (1) year following the Date of Termination and (B)
         the expiration date of the Stock Option, to exercise the Stock Option;
         and

                  (vi)     the payments provided for in this Section 11(e)
         (other than Section 11(e)(iv)) shall be made in a lump sum not later
         than the thirtieth (30th) day following the Date of Termination.

                  (f)      If during the Term, the Company (i) terminates the
Executive's employment without Cause, or the Executive terminates his or her
employment for Good Reason and (ii) the Date of Termination occurs during the
pendency of a Potential Change in Control, and if a Change in Control occurs
before the expiration of the pendency of the Potential Change in Control during
which the Date of Termination occurred, the Executive shall be entitled to upon
such Change in Control to:

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                  (i)      the cash payments under Section 11(e) hereof, reduced
         by any other severance, salary continuation or similar payments
         previously made to the Executive under Section 11(d) hereof or
         otherwise, if any;

                  (ii)     benefit continuation provided for under Section
         11(e)(iv);

         The payments provided for in this Section 11(f) shall be made not later
         than the thirtieth (30th) day following the date of the Change in
         Control.

                  As used in this Subsection (f), a "Potential Change in
         Control" shall be deemed to have occurred if:

                           (1)      the commencement of a tender or exchange
                  offer by any third person (other than a tender or exchange
                  offer which, if consummated, would not result in a Change in
                  Control) for twenty percent (20%) or more of the then
                  outstanding shares of common stock or combined voting power of
                  the Company's then outstanding voting securities;

                           (2)      the execution of an agreement by the
                  Company, the consummation of which would result in the
                  occurrence of a Change in Control;

                           (3)      the public announcement by any person
                  (including the Company) of an intention to take or to consider
                  taking actions which if consummated would constitute a Change
                  in Control other than through a contested election for
                  directors of the Company; or

                           (4)      the adoption by the Board, as a result of
                  other circumstances, including circumstances similar or
                  related to the foregoing, of a resolution to the effect that,
                  for purposes of this Agreement, a Potential Change in Control
                  has occurred.

                           (5)      an acquisition by a Bank Permitted Holder of
                  securities of the Company representing more than 30% of the
                  combined voting power of the Company's then outstanding voting
                  securities; or

                           (6)      the consummation of a merger or
                  consolidation of the Company with any other corporation which
                  is not a Change of Control, but in which a Bank Permitted
                  Holder acquires 30% or more of the combined voting power of
                  the Company's or such surviving entity's then outstanding
                  securities.

         A Potential Change in Control will be deemed to be pending from the
         occurrence of the event giving rise to the Potential Change in Control
         until the earlier of the first anniversary thereof or the date the
         Board determines in good faith that such events will not result in the
         occurrence of a Change in Control. Notwithstanding the foregoing, a
         Potential Change in Control described in Subsection (5) or (6) hereof
         will not end earlier than two (2) years from the occurrence of the
         event giving rise to the Potential Change in Control.

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                  (g)      Upon termination of Executive's employment for any
reason, Executive agrees to resign, as of the date of such termination and to
the extent applicable, from the Board (and any committees thereof) and the Board
of Directors (and any committees thereof) of any of the Company's affiliates.

                  (h)      The Executive shall not be required to mitigate the
amount of any payment provided for in this Section 11 by seeking other
employment or otherwise, and, except as otherwise set forth in this Section 11,
the amount of any payment or benefit provided for in this Section 11 shall not
be reduced by any compensation earned by the Executive as the result of
employment by another employer or by retirement benefits.

         12.      Representations and Covenants.

                  (a)      The Company represents and warrants that this
Agreement has been authorized by all necessary corporate action of the Company
and is a valid and binding agreement of the Company enforceable against it in
accordance with its terms.

                  (b)      The Executive represents and warrants that Executive
is not a party to any agreement or instrument that would prevent him from
entering into or performing Executive's duties in any way under this Agreement.
The Executive agrees and covenants that Executive will obtain, and submit to,
such physical examinations as may be necessary to facilitate the Company
obtaining an insurance policy for its benefit insuring the life of the
Executive.

                  (c)      The Company agrees that Executive shall be
indemnified for any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), Executive is made a party or
is threatened to be made a party to by reason of the fact that Executive is or
was a director or officer of the Company, or any subsidiary or affiliate of the
Company or is or was serving at the request of the Company, any subsidiary or
any affiliate as a director, officer, member, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a director, officer, member, employee or agent while serving as a
director, officer, member, employee or agent, pursuant to the By-Laws and
charter of the Company, as in effect from time to time.

                  (d)      The Company agrees to obtain and maintain during the
Term and for a period of six (6) years thereafter a directors and officers
liability insurance policy covering the Executive in an amount and in accordance
with terms no less favorable than other senior executives of the Company, as in
effect from time to time

         13.      Successors: Binding Agreement.

                  (a)      This Agreement shall not be assignable by Executive.
This Agreement may be assigned by the Company to a person or entity which is an
affiliate or a successor in interest to substantially all of the business
operations of the Company. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly

<PAGE>

                                                                              12

assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.

                  (b)      This Agreement is a personal contract and the rights
and interests of the Executive hereunder may not be sold, transferred, assigned,
pledged, encumbered, or hypothecated by him or her, except as otherwise
expressly permitted by the provisions of this Agreement. This Agreement shall
inure to the benefit of and be enforceable by the Executive and Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amount would still be payable to him hereunder had the Executive continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee or, if there is no such designee, to his estate.

         14.      Confidentiality and Non-Competition Covenants.

                  (a)      Executive will not (whether during or after
Executive's employment with the Company) disclose, retain, or use for
Executive's own benefit, purposes or account or the benefit, purposes or account
of any other person, firm, partnership, joint venture, association, corporation
or other business organization, entity or enterprise other than the Company and
any of its subsidiaries or affiliates, any trade secrets, Company know-how,
software developments, inventions, formulae, technology, designs and drawings or
other works of authorship, or any Company property or confidential information
relating to research, operations, finances, current and proposed products and
services, vendors, customers, advertising, costs, marketing, trading,
investment, sales activities, promotion, manufacturing processes, or the
business and affairs of the Company generally, or of any subsidiary or affiliate
of the Company ("Confidential Information") without the written authorization of
the Board; provided that the foregoing obligations (i) shall not apply to
information which is not unique to the Company or which is generally known to
the industry or the public other than as a result of Executive's breach of this
covenant or the wrongful acts of others who were under confidentiality
obligations to the Company as to the item or items involved and (ii) shall
survive the termination of Executive's employment for a period of three (3)
years with respect to Confidential Information that does not qualify as a trade
secret and, with respect to trade secrets, for so long as the information
qualifies as a trade secret. Executive agrees that upon termination of
Executive's employment with the Company for any reason, he will return to the
Company immediately all memoranda, books, papers, plans, information, letters
and other data, and all copies thereof or therefrom, in any way relating to the
business of the Company, its affiliates and subsidiaries, except that he may
retain only those portions of personal notes, notebooks and diaries that do not
contain Confidential Information of the type described in the preceding
sentence. Executive further agrees that he will not retain or use for
Executive's own benefit, purposes or account or the benefit, purposes or account
of any other person, firm, partnership, joint venture, association, corporation
or other business designation, entity or enterprise, other than the Company and
any of its subsidiaries or affiliates, at any time any trade names, trademark,
service mark, other proprietary business designation, patent, or other
intellectual property used or owned in connection with the business of the
Company or its affiliates.

                  (b)      The Executive covenants and agrees that any
information, materials, ideas, discoveries, inventions, techniques or programs
developed or discovered by the Executive in

<PAGE>

                                                                              13

connection with the performance of his duties hereunder, to the extent it
constitutes Confidential Information, shall remain the sole and exclusive
property of the Company and shall be subject to the covenants contained in the
preceding paragraph and Executive hereby assigns all of Executive's right, title
and interest in and to any such Confidential Information.

                  (c)      Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates and
accordingly agrees as follows:

                  (i)      During the Term and, for a period of two (2) years
         following the date Executive ceases to be employed by the Company for
         any reason (the "Restricted Period"), Executive will not, whether on
         Executive's own behalf or on behalf of or in conjunction with any
         person, company, business entity or other organization whatsoever,
         directly or indirectly solicit or assist in soliciting in competition
         with the Company, the business of any client or prospective client:

                           (A)      with whom Executive had personal contact or
                  dealings on behalf of the Company during the one (1) year
                  period preceding Executive's termination of employment; or

                           (B)      with whom employees reporting directly to
                  Executive have had personal contact or dealings on behalf of
                  the Company during the one year immediately preceding the
                  Executive's termination of employment.

                  (ii)     During the Term and, for a period of one (1) year
         following the date Executive ceases to be employed by the Company due
         to Executive's resignation without Good Reason, Executive will not
         directly or indirectly:

                           (A)      engage in a capacity that involves duties
                  and responsibilities similar to those duties and
                  responsibilities performed by Executive on behalf of the
                  Company or its subsidiaries, in any business that competes
                  with the business of the Company or its subsidiaries in any
                  geographical area that is within 15 miles of any geographical
                  area where the Company or its subsidiaries provides its
                  products or services (a "Competitive Business");

                           (B)      acquire a financial interest in any
                  Competitive Business as an individual, partner, shareholder,
                  officer, director, principal, agent, trustee or consultant; or

                           (C)      interfere with, or attempt to interfere
                  with, business relationships (whether formed before, on or
                  after the date of this Agreement) between the Company or any
                  of its affiliates and customers, clients, suppliers or
                  investors of the Company or its affiliates.

                  (iii)    Notwithstanding anything to the contrary in this
         Agreement, Executive may, directly or indirectly own, solely as an
         investment, securities of any person engaged in the business of the
         Company or its affiliates which are publicly traded on a national or
         regional stock exchange or on the over-the-counter market if Executive
         (i) is not a

<PAGE>

                                                                              14

         controlling person of, or a member of a group which controls, such
         person and (ii) does not, directly or indirectly, own 5% or more of any
         class of securities of such person.

                  (iv)     During the Restricted Period, Executive will not,
         whether on Executive's own behalf or on behalf of or in conjunction
         with any person, company, business entity or other organization
         whatsoever, directly or indirectly:

                           (A)      solicit or encourage any employee of the
                  Company or its affiliates (other than employees below the
                  administrator level) to leave the employment of the Company or
                  its affiliates; or

                           (B)      hire any such employee who was employed by
                  the Company or its affiliates as of the date of Executive's
                  termination of employment with the Company or who left the
                  employment of the Company or its affiliates coincident with,
                  or within one year prior to or after, the termination of
                  Executive's employment with the Company.

                  (d)      It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in this Section 14
to be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive,
the provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.

                  (e)      Executive acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
Section 14 would be inadequate and the Company would suffer irreparable damages
as a result of such breach or threatened breach. In recognition of this fact,
Executive agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to cease making any payments or providing any benefit otherwise
required by this Agreement and obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available.

         15.      Tax Consideration. Notwithstanding anything herein to the
contrary, in the event any payments to the Executive hereunder ("Total
Payments") are determined to be subject to the tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") or any similar
federal or state excise tax, FICA tax, or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together with
any such interest or penalties are hereinafter collectively referred to as the
"Excise Tax"), the Company shall pay to the Executive (or to the Internal
Revenue Service) at the time specified in Section 11(d)(vi), an additional
amount (the "Gross-Up Payment") such that after the payment by the Executive of
all federal, state, or local income taxes, Excise Taxes, FICA taxes, or other
taxes (including any

<PAGE>

                                                                              15

interest or penalties imposed with respect thereto) imposed upon the receipt of
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed on the Total Payments.

         If the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder at the time of termination of employment, the
Executive shall repay to the Company, at the time the reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction. If the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of termination of employment, the Company shall
make an additional Gross-Up Payment to the Executive in respect of such excess
at the time the amount of such excess is finally determined. The Executive shall
notify the Company in writing of any claim by the Internal Revenue Service that,
if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten
(10) business days after the Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim prior to
the expiration of the thirty (30) day period following the date on which he
gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such period that it desires
to contest such claim, the Executive shall:

                  (a)      give the Company any information reasonably requested
by the Company relating to such claim;

                  (b)      take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company;

                  (c)      cooperate with the Company in good faith in order to
effectively contest such claim; and

                  (d)      permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including legal and accounting fees and
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax, FICA tax, or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section 15,
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings, and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction, and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an

<PAGE>

                                                                              16

interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided,
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, other
issues raised by the Internal Revenue Service or any other taxing authority.

         If any such claim referred to in this Section 15 is made by the
Internal Revenue Service and the Company does not request the Executive to
contest the claim within the thirty (30) day period following notice of the
claim, the Company shall pay to the Executive (or the Internal Revenue Service)
the amount on any Gross-Up Payment owed to the Executive, but not previously
paid pursuant to this Section 15, immediately upon the expiration of such thirty
(30) day period. If any such claim is made by the Internal Revenue Service and
the Company requests the Executive to contest such claim, but does not advance
the amount of such claim to the Executive for purposes of such contest, the
Company shall pay to the Executive the amount of any Gross-Up Payment owed to
the Executive, but not previously paid under the provisions of this Section 15,
within five (5) business days of a Final Determination of the liability of the
Executive for such Excise Tax. For purposes of this Agreement, a "Final
Determination" shall be deemed to occur with respect to a claim when (i) there
is a decision, judgment, decree, or other order by any court of competent
jurisdiction, which decision, judgment, decree, or other order has become final,
i.e., all allowable appeals pursuant to this Section 15 have been exhausted by
either party to the action, (ii) there is a closing agreement made under Section
7121 of the Code, or (iii) the time for instituting a claim for refund has
expired, or if a claim was filed, the time for instituting suit with respect
thereto has expired.

         If, after the receipt by the Executive of an amount advanced by the
Company pursuant to this Section 15, the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of this Section 15) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If after the receipt by the
Executive of an amount advanced by the Company pursuant to this Section 15, a
determination is made by the Internal Revenue Service that the Executive is not
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

         16.      Entire Agreement. This Agreement contains all the
understandings between the parties hereto pertaining to the matters referred to
herein, and on the Effective Date shall supersede all undertakings and
agreements, whether oral or in writing, previously entered into by them with
respect thereto. The Executive represents that, in executing this Agreement, he
does not rely and has not relied upon any representation or statement not set
forth herein made by the Company with regard to the subject matter, bases or
effect of this Agreement or otherwise.

<PAGE>

                                                                              17

         17.      Amendment or Modification. Waiver. No provision of this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any party hereto of any breach by another party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.

         18.      Notices. Any notice to be given hereunder shall be in writing
and shall be deemed given when delivered personally, sent by courier or telecopy
or registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:

                  To Executive at:          C. Christian Winkle

                  With a copy to:           Robert W. Forman, Esq.
                                            Shapiro Forman Allen & Miller LLP
                                            380 Madison Avenue
                                            25th Floor
                                            New York, New York 10017

                  To the Company at:        Mariner Healthcare, Inc.
                                            One Ravinia Drive, Suite 1500
                                            Atlanta, Georgia 30346
                                            Attn: General Counsel

         Any notice delivered personally or by courier under this Section 18
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.

         19.      Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be validated and shall be enforced to the
fullest extent permitted by law.

         20.      Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.

         21.      Governing Law: Attorney's Fees.

                  (a)      This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
conflicts of laws principles.

<PAGE>

                                                                              18

                  (b)      The prevailing party in any dispute arising out of
this Agreement shall be entitled to be paid its reasonable attorney's fees
incurred in connection with such dispute from the other party to such dispute.

                  (c)      The Company shall reimburse Executive for his
reasonable attorneys and advisors fees and expenses in reviewing and negotiating
this Agreement, not to exceed $20,000.

         22.      Headings. All descriptive headings of sections and paragraphs
in this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.

         23.      Withholdings. All payments to the Executive under this
Agreement shall be reduced by all applicable withholding required by federal,
state or local tax laws.

         24.      Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

         25.      Release of Prior Employment Agreement. The Executive hereby
releases the Company and any predecessor company (including GranCare, Inc.,
Living Centers of America, Inc. and Paragon Health Network, Inc.) from all
obligations under any employment agreement entered into by the Executive and the
Company, including any obligation to pay severance or other post-termination
benefits, which shall be upon the execution hereof terminated and of no further
force or effect; provided, however, that in no event shall this release affect
the Executive's rights (i) under any grant or award under any stock option or
stock award plans of the Company and any predecessor company (including
GranCare, Inc., Living Centers of America, Inc. and Paragon Health Network,
Inc.), or (ii) to indemnification under any prior agreement or by-law or charter
provision of the Company or any predecessor company.

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

                                       MARINER HEALTHCARE, INC.

                                       BY:
                                          --------------------------------------
                                          NAME:
                                          TITLE:

                                       EXECUTIVE

                                       -----------------------------------------
                                       C. Christian Winkle<PAGE>
                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") dated as of May 13, 2002,
is between Boyd P. Gentry (the "Executive") and Mariner Health Care Management
Company, a Delaware corporation (the "Company").

         WHEREAS, the Company has employed the Executive as SVP, Treasurer and
wishes to redefine the terms of the Executive's employment with the Company and
the Executive desires to accept such employment, for the term and upon the other
conditions hereinafter set forth; and

         WHEREAS, as a condition of entering into this Agreement, the Executive
agrees to waive the Executive's rights, if any, against the Company and any
predecessor company or any affiliate of the foregoing under any employment
agreement between the Executive and the Company or any such predecessor company
or affiliate; and

         WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company;

         NOW, THEREFORE, the parties agree as follows:

         1.       Employment. This Agreement shall constitute a binding
agreement between the parties as of the date hereof (the "Effective Date").

         2.       Term. Subject to the provisions of Section 10 of this
Agreement, this Agreement shall commence on the Effective Date and shall
continue during the period in which the Executive remains employed by the
Company (the "Term"). The Executive shall be considered an at-will employee and
his employment may be terminated by either party subject to the obligations of
the parties upon such termination as may be set forth hereinafter.

         3.       Position. During the Term, the Executive shall serve as SVP,
Treasurer of the Company or in such other executive position in the Company as
the Executive shall approve.

         4.       Duties and Reporting Relationship. During the Term, the
Executive shall, on a full time basis, use the Executive's skills and render
services to the best of the Executive's abilities in supervising and conducting
the operations of the Company and shall not engage in any other business
activities except with the prior written approval of the Board of Directors of
the Company (the "Board") or its duly authorized designee. The Executive shall
also perform such other executive and administrative duties (not inconsistent
with the position of SVP, Treasurer) as the Executive may reasonably be expected
to be capable of performing on behalf of the Company, as may from time to time
be authorized or directed by the Board or the Chief Executive Officer. The
Executive agrees to be employed by the Company in all such capacities for the
Term, subject to all the covenants and conditions hereinafter set forth.

<PAGE>

         5.       Salary and Annual Bonus.

                  (a)      Base Salary. The Executive's base salary hereunder
         shall be $325,000 a year, payable no less frequently than monthly and
         prorated for any partial year of employment. The Board shall review
         such base salary at least annually and may increase, but not decease,
         such base salary as it may deem advisable.

                  (b)      Annual Bonus. The Company shall provide the Executive
         with an opportunity to earn upon achievement of target performance
         goals, an annual bonus equal to sixty percent (60%) of the Executive's
         base salary (the "Target Bonus").

         6.       Vacation, Holidays and Sick Leave. During the Term, the
Executive shall be entitled to paid vacation, paid holidays and sick leave in
accordance with the Company's standard policies for its senior executive
officers.

         7.       Business Expenses. The Executive shall be reimbursed for all
ordinary and necessary business expenses incurred by the Executive in connection
with the Executive's employment upon timely submission by the Executive of
receipts and other documentation as required by the Internal Revenue Code and in
conformance with the Company's normal procedures.

         8.       Pension and Welfare Benefits. During the Term, the Executive
shall be eligible to participate fully in all health benefits, insurance
programs, pension and retirement plans and other employee benefit and
compensation arrangements, as in effect from time to time, available to senior
executive officers of the Company generally.

         9.       Stock Options On the Effective Date, the Company shall cause
Mariner Health Care, Inc. (the "Parent") to grant to the Executive, pursuant to
the terms of the Mariner Health Care, Inc. 2002 Stock Incentive Plan (the "2002
Plan"), options to purchase 65,000 shares of common stock of the Parent, all of
which shall have such terms and be subject to such conditions as are set forth
in the form of Stock Option Agreement promulgated under the 2002 Plan.
Thereafter, the Board of Directors of the Parent or the Compensation Committee
thereof, may grant to the Executive such other and additional awards under the
2002 Plan as may from time to time be deemed appropriate.

         10.      Termination of Employment.

                  (a)      General. The Executive's employment hereunder may be
         terminated without any breach of this Agreement only under the
         following circumstances.

                  (b)      Death or Disability.

                           (i)      The Executive's employment hereunder shall
                  automatically terminate upon the death of the Executive.

                           (ii)     If, as a result of the Executive's
                  incapacity due to physical or mental illness, the Executive is
                  unable to perform the essential functions of his or

                                       2
<PAGE>

                  her job for one hundred eighty (180) days (whether or not
                  consecutive) during any period of eighteen (18) consecutive
                  months, and no reasonable accommodation can be made that will
                  allow Executive to perform his or her essential functions, the
                  Company may terminate the Executive's employment hereunder for
                  any such incapacity (a "Disability").

                  (c)      Termination by the Company. The Company may terminate
         the Executive's employment hereunder at any time, whether or not for
         Cause. For purposes of this Agreement, "Cause" shall mean (i) continued
         failure by the Executive to substantially perform the duties
         contemplated by Section 4 hereof, which failure is not remedied within
         twenty (20) days after a written notice of such failure is delivered to
         the Executive by the Company, which notice identifies with
         particularity the manner in which the Company believes that the
         Executive has failed to perform his duties under Section 4 of this
         Agreement; (ii) the conviction (after exhausting all appeals) of the
         Executive of, or the entering of a plea of nolo contendere by, the
         Executive with respect to a felony; (iii) Executive's willful
         malfeasance or willful misconduct in connection with Executive's duties
         hereunder or any willful act or willful omission which is materially
         injurious to the financial condition or business reputation of the
         Company or any significant subsidiary; or (iv) Executive's breach of
         the provisions of Section 14 of this Agreement.

                  Action or inaction by Executive shall not be considered
         "willful" unless done or omitted by Executive intentionally and without
         Executive's reasonable belief that Executive's action or inaction was
         in the best interests of the Company, and shall not include failure to
         act by reason of total or partial incapacity due to physical or mental
         illness. The cessation of employment of the Executive shall not be
         deemed to be for Cause unless prior to such termination there shall
         have been delivered to the Executive a copy of a resolution duly
         adopted by the affirmative vote of not less than a majority of the
         disinterested membership of the Board of Directors at a meeting of such
         Board of Directors called and held for such purpose (after reasonable
         notice is provided to the Executive and the Executive is given an
         opportunity, together with counsel, to be heard before such Board of
         Directors), finding, that, in the good faith opinion of the Board of
         Directors, the Executive is guilty of the conduct described in clause
         (i), (ii) (iii) or (iv) above, and specifying the particulars thereof
         in detail.

                  (d)      Termination by the Executive. The Executive shall be
         entitled to terminate his or her employment hereunder (A) upon sixty
         (60) days' prior written notice, for Good Reason or (B) if his or her
         health should become impaired to an extent that makes his or her
         continued performance of his or her duties hereunder hazardous to his
         or her physical or mental health, provided that the Executive shall
         have furnished the Company with a written statement from a qualified
         doctor to such effect and provided, further, that, at the Company's
         request, the Executive shall submit to an examination by a doctor
         selected by the Company and such doctor shall have concurred in the
         conclusion of the Executive's doctor.

                                       3
<PAGE>

                  For purposes of this Agreement, "Good Reason" shall mean any
         one of the following acts by the Company, or failures by the Company to
         act, occurring during a Potential Change of Control or on or within one
         year following a Change of Control, unless, in the case of any act or
         failure to act described below, such act or failure to act is corrected
         prior to the Date of Termination specified in the Notice of Termination
         given in respect thereof:

                           (i)      any material diminution in the Executive's
                  authorities or responsibilities (including reporting
                  responsibilities) or from his or her title or position without
                  the Executive's express written consent to accept any such
                  change; the assignment to him or her of any duties or work
                  responsibilities which are inconsistent with such status,
                  title, position or work responsibilities; or any removal of
                  the Executive from, or failure to reappoint or reelect him or
                  her to any of such positions, except if any such changes are
                  because of Disability, resignation, death or termination by
                  the Company with Cause;

                           (ii)     the relocation of the Executive's office at
                  which the Executive is to perform the Executive's duties, to a
                  location more than fifty (50) miles from the location at which
                  the Executive previously performed the Executive's duties,
                  except for required travel on the Company's business to an
                  extent substantially consistent with the Executive's business
                  travel obligations prior to the Effective Date;

                           (iii)    the failure by the Company to continue to
                  provide the Executive with benefits substantially similar in
                  value to the Executive in the aggregate to those enjoyed by
                  the Executive under any of the Company's pension, life
                  insurance, medical, health and accident, or disability plans
                  in which the Executive was participating immediately prior to
                  the Effective Date, unless the Executive participates after
                  the Effective Date in employee benefit plans generally
                  available to senior executives of the Company;

                           (iv)     without the Executive's express written
                  consent, any failure by the Company to comply with any
                  material provision of this Agreement, which failure has not
                  been cured within twenty (20) days after notice of such
                  noncompliance has been given by the Executive to the Company;

                           (v)      any cessation of his or her status, title,
                  position or responsibilities (including reporting
                  responsibilities) as an officer of, Mariner Health Care, Inc.,
                  without the Executive's express written consent to accept any
                  such change;

                           (vi)     the failure of the Company to have the right
                  through management agreements to manage the operations of at
                  least seventy (70%) percent of the facilities operated by the
                  operating subsidiaries of Mariner Health Care, Inc. unless the
                  Executive's authority, duties and responsibilities over such
                  operations remain undiminished through other means; or

                                       4
<PAGE>

                           (vii)    any purported termination of the Executive's
                  employment which is not effected pursuant to a Notice of
                  Termination satisfying the requirements of Section 10(f)
                  below; for purposes of this Agreement, no such purported
                  termination shall be effective.

         The Executive's continued employment for ninety (90) days following any
         act or failure to act constituting Good Reason hereunder without the
         delivery of a Notice of Termination shall constitute consent to, and a
         waiver of rights with respect to, such act or failure to act.

                  (e)      Voluntary Resignation. Should the Executive wish to
         resign from his or her position with the Company or terminate his or
         her employment for other than Good Reason during the Term, the
         Executive shall give sixty (60) days written notice to the Company
         ("Notice Period"), specifying the date as of which his or her
         resignation is to become effective. During the Notice Period, the
         Executive shall cooperate fully with the Company in achieving a smooth
         transition of the Executive's duties and responsibilities to such
         person(s) as may be designated by the Company. The Company reserves the
         right to accelerate the Date of Termination by giving the Executive
         prior written notice

                  (f)      Notice of Termination. Any purported termination of
         the Executive's employment by the Company or by the Executive shall be
         communicated by written Notice of Termination to the other party hereto
         in accordance with Section 17. "Notice of Termination" shall mean a
         notice that shall indicate the specific termination provision in this
         Agreement relied upon and shall set forth in reasonable detail the
         facts and circumstances claimed to provide a basis for termination of
         the Executive's employment under the provision so indicated.

                  (g)      Date of Termination. "Date of Termination" shall mean
         (i) if the Executive's employment is terminated because of death, the
         date of the Executive's death, (ii) if the Executive's employment is
         terminated for Disability or termination by the Company for Cause, the
         date Notice of Termination is given, (iii) if the Executive's
         employment is terminated pursuant to Subsection (d) or (e) hereof or
         for any other reason (other than death, Disability or by the Company
         for Cause), the date specified in the Notice of Termination which shall
         not be less than sixty (60) days from the date such Notice of
         Termination is given.

                  (h)      Change in Control. For purposes of this Agreement, a
         Change in Control of the Company shall have occurred if:

                           (i)      any "Person" (as defined in Section 3(a)(9)
                  of the Securities Exchange Act of 1934 (the "Exchange Act") as
                  modified and used in Sections 13(d) and 14(d) of the Exchange
                  Act) other than (1) Mariner Health Care, Inc. (the "Parent"),
                  the Company or any of its subsidiaries, (2) any trustee or
                  other fiduciary holding securities under an employee benefit
                  plan of the Parent or any of its subsidiaries, (3) an
                  underwriter temporarily holding securities pursuant to an
                  offering of such securities, (4) any corporation owned,
                  directly or indirectly, by

                                       5
<PAGE>

                  the stockholders of the Parent in substantially the same
                  proportions as their ownership of the Parent's common stock or
                  (5) any of Oaktree Capital Management, LLC, Goldman Sachs
                  Credit Partners, LP, Foothill Partners, LP, Highland Capital
                  Management, LP or their respective affiliates (each a "Bank
                  Permitted Holder" and (1) through (5), collectively, the
                  "Permitted Holders"), is or becomes the "beneficial owner" (as
                  defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of the Parent representing more than
                  25% of the combined voting power of the Parent's then
                  outstanding voting securities;

                           (ii)     during any period of not more than two (2)
                  consecutive years, not including any period prior to the
                  Effective Date, individuals who at the beginning of such
                  period constitute the Board of Directors of the Parent (the
                  "Parent Board"), and any new director (other than a director
                  designated by a person who has entered into an agreement with
                  the Parent to effect a transaction described in clause (i),
                  (iii), or (iv) of this Section 10(h)) whose election by the
                  Parent Board or nomination for election by the Parent's
                  stockholders was approved by a vote of at least a majority of
                  the directors then still in office who either were directors
                  at the beginning of the period or whose election or nomination
                  for election was previously so approved, cease for any reason
                  to constitute at least a majority thereof;

                           (iii)    the consummation of a merger or
                  consolidation of the Parent with any other corporation, other
                  than (A) a merger or consolidation which would result in the
                  voting securities of the Parent outstanding immediately prior
                  thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving or parent entity) 50% or more of the combined
                  voting power of the voting securities of the Parent or such
                  surviving or parent entity outstanding immediately after such
                  merger or consolidation or (B) a merger or consolidation in
                  which no persons (other than the Permitted Holders) acquire
                  25% or more of the combined voting power of the Parent's or
                  such surviving or parent entity's then outstanding securities;

                           (iv)     the consummation of a plan of complete
                  liquidation of the Parent or an agreement for the sale or
                  disposition by the Parent of at least a majority of the assets
                  of the Parent and its operating subsidiaries, taken as a whole
                  (or any transaction having a similar effect) or the Board, the
                  Board of Directors of the Parent or the Board of Directors of
                  one or more of its subsidiaries approve the entering into of
                  an agreement with one or more unrelated third parties under
                  which such one or more unrelated third parties are given the
                  power to control the management or operations of at least a
                  majority of the assets of the Parent and its subsidiaries,
                  taken as a whole;

                           (v)      the Parent fails to own outstanding
                  securities of the Company representing at least 51% of the
                  voting power and value of the Company; or

                                       6
<PAGE>

                           (vi)     in the event of the occurrence of a
                  Potential Change of Control described in Section 11(f)(5) or
                  (6), the subsequent occurrence at any time thereafter of any
                  of the following events:

                                    (A) the consummation of a merger or
                           consolidation of the Company, Parent or any of their
                           respective affiliates with any other Competitive
                           Business (as defined in Section 14 hereof) having
                           gross revenues in excess of 50% of the gross revenues
                           of the Parent and following such merger or
                           consolidation, a Bank Permitted Holder whose
                           acquisition of securities triggered a Potential
                           Change of Control pursuant to Section 11(f)(5) or (6)
                           hereof, owns at least 25% of the outstanding voting
                           securities of the entity resulting from such
                           combination; or

                                    (B) the acquisition by the Company, Parent
                           or their affiliates of substantially all of the
                           assets or securities of any Competitive Business (as
                           defined in Section 14 hereof) having gross revenues
                           in excess of 50% of the gross revenues of Parent and
                           (i) in the case of an acquisition of securities, the
                           securities acquired represent more than 50% of the
                           combined voting power of the Competitive Business's
                           then outstanding voting securities and (ii) following
                           such acquisition, a Bank Permitted Holder whose
                           acquisition of securities triggered a Potential
                           Change of Control pursuant to Section 11(f)(5) or (6)
                           hereof, owns at least 25% of the outstanding voting
                           securities of the Company or Parent.

         11.      Compensation During Disability; Death or Upon Termination.
Notwithstanding any other provision of this Agreement, the provisions of this
Section 11 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates.

                  (a)      During any period that the Executive fails to perform
         his or her duties hereunder as a result of incapacity due to a
         Disability ("Disability Period"), the Executive shall continue to
         receive his or her base salary at the rate then in effect for such
         period until his or her employment is terminated pursuant to Section
         10(b)(ii) hereof, provided that payments so made to the Executive
         during the Disability Period shall be reduced by the sum of the
         amounts, if any, payable to the Executive with respect to such period
         under disability benefit plans of the Company or under the Social
         Security disability insurance program, and which amounts were not
         previously applied to reduce any such payment.

                  (b)      If the Executive's employment is terminated by his or
         her death or Disability, the Company shall pay (i) any base salary due
         to the Executive under Section 5(a) through the date of such
         termination and (ii) an amount equal to the Target Bonus he or she
         would have received for the fiscal year that ends on or immediately
         after the Date of Termination, assuming the Company achieved the target
         level for which a bonus is paid under the plan described in Section
         5(b), prorated for the period beginning on the first day of the fiscal
         year in which occurs the Date of Termination through the Date of
         Termination.

                                       7
<PAGE>

                  (c)      If the Executive's employment is terminated by the
         Company for Cause or by the Executive for other than Good Reason, the
         Company shall pay the Executive his or her base salary through the Date
         of Termination at the rate in effect at the time Notice of Termination
         is given, and the Company shall have no further obligations to the
         Executive under this Agreement.

                  (d)      If within one (1) year following a Change in Control
         the Company terminates the Executive's employment without Cause, or the
         Executive terminates his or her employment for Good Reason, then

                           (i)      the Company shall pay the Executive his or
                  her base salary through the Date of Termination at the rate in
                  effect at the time Notice of Termination is given and all
                  other unpaid amounts, if any, to which the Executive is
                  entitled as of the Date of Termination under any compensation
                  plan or program of the Company, at the time such payments are
                  due;

                           (ii)     in lieu of any further salary payments to
                  the Executive for periods subsequent to the Date of
                  Termination, the Company shall pay as liquidated damages to
                  the Executive an aggregate amount equal to the product of (A)
                  the sum of (1) the Executive's base salary at the rate in
                  effect of the Date of Termination and (2) the greater of (I)
                  the average of the annual bonuses actually paid to the
                  Executive by the Company with respect to the two (2) fiscal
                  years which immediately precede the year in which the Date of
                  Termination occurs (provided if there was a bonus paid to the
                  Executive with respect only to one fiscal year that
                  immediately precedes the year in which the Date of Termination
                  occurs, then such single year's bonus shall be utilized in the
                  calculation pursuant to this subclause (I)) and (II) the bonus
                  the Executive would earn based on the target level of bonus
                  applicable for the year of termination and (B) the number two
                  and one-half (2.5);

                           (iii)    the Company shall pay the Executive an
                  amount equal to the prorated Target Bonus that would have been
                  paid for the period beginning on the first day of the fiscal
                  year in which the Date of Termination occurs;

                           (iv)     the Company shall continue coverage for the
                  Executive, on the same terms and conditions as would be
                  applicable if the Executive were an active Employee, under the
                  Company's life insurance, medical, health and similar welfare
                  benefit plans (other then group disability benefits) for a
                  period of thirty-six (36) months. Benefits otherwise
                  receivable by the Executive pursuant to this Section 11(d)(iv)
                  shall be reduced to the extent comparable benefits are
                  actually received by the Executive from a subsequent employer
                  during the period during which the Company is required to
                  provide such benefits, and the Executive shall report to the
                  Company any such benefits actually received by him or her;

                                       8
<PAGE>

                           (v)      all options, shares of restricted stock,
                  performance shares and any other equity based awards shall be
                  and become fully vested as of the Date of Termination; and

                           (vi)     the payments provided for in this Section
                  11(d) (other than Section 11(d)(iv)) shall be made not later
                  than the thirtieth (30th) day following the Date of
                  Termination.

                  (e)      Except as provided in Subsection (f) hereof, if
         either prior to or following the first anniversary of a Change of
         Control, the Company terminates the Executive's employment without
         Cause, then

                           (i)      the Company shall pay the Executive his or
                  her base salary through the Date of Termination at the rate in
                  effect at the time Notice of Termination is given and all
                  other unpaid amounts, if any, to which the Executive is
                  entitled as of the Date of Termination under any compensation
                  plan or program of the Company, at the time such payments are
                  due;

                           (ii)     subject to the Executive's continued
                  compliance with Section 14 of this Agreement, in lieu of any
                  further salary payments to the Executive for period subsequent
                  to the Date of Termination, the Executive shall, for a period
                  of two and one-half (2 1/2) years from the Date of Termination
                  (the "Severance Period"), be entitled to continued payment of
                  the Executive's base salary at the rate in effect as of the
                  Date of Termination; provided, however, that in the event that
                  the Executive engages in a Competitive Business, provides
                  services for pay (including, without limitation, deferred
                  compensation, equity awards or other property) to a
                  Competitive Business or obtains a financial interest in a
                  Competitive Business from the date Executive's employment
                  hereunder is terminated until the second anniversary of the
                  Date of Termination, the Executive shall no longer be entitled
                  to any further payments of Executive's base salary;

                           (iii)    the Company shall pay the Executive his or
                  her Target Bonus prorated for the period beginning on the
                  first day of the fiscal year in which occurs the Date of
                  Termination through the Date of Termination;

                           (iv)     the Company shall continue coverage for the
                  Executive, on the same terms and conditions as would be
                  applicable if the Executive were an active employee, under the
                  Company's life insurance, medical, health, and similar welfare
                  benefit plans (other then group disability) for a period not
                  to exceed the number of months the Executive will be paid
                  under Section 11(e)(ii) beginning on the Date of Termination;

                           (v)      benefits otherwise receivable by the
                  Executive pursuant to clause (iv) of this Section 11(e) shall
                  be reduced to the extent comparable benefits are actually
                  received by the Executive from a subsequent employer during
                  the period

                                       9
<PAGE>

                  which the Company is required to provide such benefits, and
                  the Executive shall report to the Company any such benefits
                  actually received by him or her; and

                           (vi)     all options, shares of restricted stock,
                  performance shares and any other equity based awards shall be
                  and become fully vested as of the Date of Termination.

                  (f)      If during the Term, the Company (i) terminates the
         Executive's employment other than for Cause, or the Executive
         terminates his or her employment for Good Reason and (ii) the Date of
         Termination occurs during the pendency of a Potential Change of
         Control, and if a Change of Control occurs before the expiration of the
         pendency of the Potential Change of Control during which the Date of
         Termination occurred, the Executive shall be entitled to upon such
         Change of Control to:

                           (i)      the cash payments that would have been made
                  under Section 11(d) hereof as if the Date of Termination had
                  occurred immediately on the date of the Change of Control,
                  reduced by any other severance, salary continuation or similar
                  payments previously made to the Executive under Section 11(e)
                  hereof or otherwise, if any;

                           (ii)     benefit continuation provided for under
                  Section 11(d) in excess of the benefit continuation to which
                  he was otherwise entitled;

                  The payments provided for in this Section 11(f) shall be made
         not later than the thirtieth (30th) day following the date of the
         Change of Control.

                  As used in this Subsection (f), a "Potential Change of
         Control" shall be deemed to have occurred if:

                           (1)      the commencement of a tender or exchange
                  offer by any third person (other than a tender or exchange
                  offer which, if consummated, would not result in a Change of
                  Control) for twenty percent (20%) or more of the then
                  outstanding shares of common stock or combined voting power of
                  the Parent's then outstanding voting securities;

                           (2)      the execution of an agreement by the Parent
                  or Company, the consummation of which would result in the
                  occurrence of a Change of Control;

                           (3)      the public announcement by any person
                  (including the Parent or Company) of an intention to take or
                  to consider taking actions which if consummated would
                  constitute a Change of Control other than through a contested
                  election for directors of the Parent;

                           (4)      the adoption by the Board, as a result of
                  other circumstances, including circumstances similar or
                  related to the foregoing, of a resolution to the

                                       10
<PAGE>

                  effect that, for purposes of this Agreement, a Potential
                  Change of Control has occurred; or

                           (5)      the acquisition by a Bank Permitted Holder
                  of securities of the Company or Parent representing more than
                  30% of the combined voting power of the Company's or Parent's
                  then outstanding voting securities; or

                           (6)      the consummation of a merger or
                  consolidation of the Company or Parent with any other
                  corporation which is not a Change of Control, but in which a
                  Bank Permitted Holder acquires 30% or more of the combined
                  voting power of the Company's, Parent's or such surviving
                  entity's then outstanding securities.

         A Potential Change of Control will be deemed to be pending from the
         occurrence of the event giving rise to the Potential Change of Control
         until the earlier of the first anniversary thereof or the date the
         Board of Directors of the Company determines in good faith that such
         events will not result in the occurrence of a Change of Control.
         Notwithstanding the foregoing, a Potential Change of Control described
         in Subsections (5) or (6) hereof will not end earlier than two (2)
         years from the occurrence of the event giving rise to the Potential
         Change of Control. It is understood and expressly agreed that a
         Potential Change of Control described in Subsections (5) and (6) hereof
         will be applicable and given effect only if such Potential Change of
         Control is followed by an event described in Section 10(h)(vi) hereof.

                  (g)      If the Executive shall terminate his or her
         employment under clause (B) of Section 10(d) or under Section 10(e)
         hereof, the Company shall pay the Executive his or her base salary
         through the Date of Termination at the rate in effect at the time
         Notice of Termination is given, and the Company shall have no further
         obligations to the Executive under this Agreement.

                  (h)      The Executive shall not be required to mitigate the
         amount of any payment provided for in this Section 11 by seeking other
         employment or otherwise, and, except as provided in Sections 11(e)
         hereof, the amount of any payment or benefit provided for in this
         Section 11 shall not be reduced by any compensation earned by the
         Executive as the result of employment by another employer or by
         retirement benefits.

                  (i)      Release. Prior to making any payment pursuant to
         Sections 11(e)(ii) and 11(e)(iii), the Company shall have the right to
         require the Executive to sign, and the Executive hereby agrees to sign,
         an agreement to be bound by the terms of Section 14 of this Agreement
         and a waiver of all claims the Executive may have (including any claims
         under the Age Discrimination in Employment Act), and the Company may
         withhold payment of such amount until the period during which the
         Executive may revoke such waiver (normally seven days) has elapsed.

                                       11
<PAGE>

         12.      Representations and Covenants.

                  (a)      The Company represents and warrants that this
         Agreement has been authorized by all necessary corporate action of the
         Company and is a valid and binding agreement of the Company enforceable
         against it in accordance with its terms.

                  (b)      The Executive represents and warrants that he or she
         is not a party to any agreement or instrument which would prevent him
         or her from entering into or performing his or her duties in any way
         under this Agreement. The Executive agrees and covenants that he or she
         will obtain, and submit to, such physical examinations as may be
         necessary to facilitate the Company obtaining an insurance policy for
         its benefit insuring the life of the Executive.

         13.      Successors: Binding Agreement.

                  (a)      This Agreement shall not be assignable by Executive.
         This Agreement may be assigned by the Company to a person or entity
         which is an affiliate or a successor in interest to substantially all
         of the business operations of the Company. The Company will require any
         successor (whether direct or indirect, by purchase, merger,
         consolidation or otherwise) to all or substantially all of the business
         and/or assets of the Company to expressly assume and agree to perform
         this Agreement in the same manner and to the same extent that the
         Company would be required to perform it if no such succession had taken
         place.

                  (b)      This Agreement is a personal contract and the rights
         and interests of the Executive hereunder may not be sold, transferred,
         assigned, pledged, encumbered, or hypothecated by him or her, except as
         otherwise expressly permitted by the provisions of this Agreement. This
         Agreement shall inure to the benefit of and be enforceable by the
         Executive and his or her personal or legal representatives, executors,
         administrators, successors, heirs, distributees, devisees and legatees.
         If the Executive should die while any amount would still be payable to
         him or her hereunder had the Executive continued to live, all such
         amounts, unless otherwise provided herein, shall be paid in accordance
         with the terms of this Agreement to his or her devisee, legatee or
         other designee or, if there is no such designee, to his or her estate.

         14.      Confidentiality and Non-Competition Covenants.

                  (a)      Executive will not (whether during or after
         Executive's employment with the Company) disclose, retain, or use for
         Executive's own benefit, purposes or account or the benefit, purposes
         or account of any other person, firm, partnership, joint venture,
         association, corporation or other business organization, entity or
         enterprise other than the Company and any of its subsidiaries or
         affiliates, any trade secrets, Company know-how, software developments,
         inventions, formulae, technology, designs and drawings or other works
         of authorship, or any Company property or confidential information
         relating to research, operations, finances, current and proposed
         products and services, vendors, customers, advertising, costs,
         marketing, trading, investment, sales activities, promotion,
         manufacturing processes, or the business and affairs of the Company
         generally, or of any subsidiary or affiliate of the Company

                                       12
<PAGE>

         ("Confidential Information") without the written authorization of the
         Board; provided that the foregoing obligation (i) shall not apply to
         information which is not unique to the Company or which is generally
         known to the industry or the public other than as a result of
         Executive's breach of this covenant or the wrongful acts of others who
         were under confidentiality obligations to the Company as to the item or
         items involved and (ii) shall survive the termination of Executive's
         employment for a period of three years with respect to Confidential
         Information that does not qualify as a trade secret and, with respect
         to trade secrets, for so long as the information qualifies as a trade
         secret. Executive agrees that upon termination of Executive's
         employment with the Company for any reason, he will return to the
         Company immediately all memoranda, books, papers, plans, information,
         letters and other data, and all copies thereof or therefrom, in any way
         relating to the business of the Company, its affiliates and
         subsidiaries, except that he may retain only those portions of personal
         notes, notebooks and diaries that do not contain Confidential
         Information of the type described in the preceding sentence. Executive
         further agrees that he will not retain or use for Executive's own
         benefit, purposes or account or the benefit, purposes or account of any
         other person, firm, partnership, joint venture, association,
         corporation or other business designation, entity or enterprise, other
         than the Company and any of its subsidiaries or affiliates, at any time
         any trade names, trademark, service mark, other proprietary business
         designation, patent, or other intellectual property used or owned in
         connection with the business of the Company or its affiliates.

                  (b)      The Executive covenants and agrees that any
         Confidential Information, including any confidential or proprietary
         materials, ideas, discoveries, inventions, techniques or programs
         developed or discovered by the Executive in connection with the
         performance of his duties hereunder shall remain the sole and exclusive
         property of the Company and Executive hereby assigns all of his right,
         title and interest in and to any such Confidential Information.

                  (c)      Executive acknowledges and recognizes the highly
         competitive nature of the businesses of the Company and its affiliates
         and accordingly agrees as follows:

                           (i)      During the Term and, for a period of two (2)
                  years following the date Executive ceases to be employed by
                  the Company for any reason (the "Restricted Period"),
                  Executive will not, whether on Executive's own behalf or on
                  behalf of or in conjunction with any person, company, business
                  entity or other organization whatsoever, directly or
                  indirectly solicit or assist in soliciting in competition with
                  the Company, the business of any client or prospective client:

                                    (A) with whom Executive had personal contact
                           or dealings on behalf of the Company during the one
                           (1) year period preceding Executive's termination of
                           employment; or

                                       13
<PAGE>

                                    (B) with whom employees reporting directly
                           to Executive have had personal contact or dealings on
                           behalf of the Company during the one year immediately
                           preceding the Executive's termination of employment;

                           (ii)     During the Term and, for a period of one (1)
                  year following the date the Executive ceases to be employed by
                  the Company due to the Executive's resignation without Good
                  Reason, Executive will not directly or indirectly:

                                    (A) engage in a capacity that involves
                           duties and responsibilities similar to those duties
                           and responsibilities performed by Executive on behalf
                           of the Company or its subsidiaries, in any business
                           that competes with the business of the Company or its
                           subsidiaries in any geographical area that is within
                           15 miles of any geographical area where the Company
                           or its subsidiaries provide their products or
                           services (a "Competitive Business");

                                    (B) acquire a financial interest in any
                           Competitive Business, as an individual, partner,
                           shareholder, officer, director, principal, agent,
                           trustee or consultant; or

                                    (C) interfere with, or attempt to interfere
                           with, business relationships (whether formed before,
                           on or after the date of this Agreement) between the
                           Company or any of its affiliates and customers,
                           clients, suppliers or investors.

                           (iii)    Notwithstanding anything to the contrary in
                  this Agreement, Executive may, directly or indirectly own,
                  solely as an investment, securities of any person engaged in
                  the business of the Company or its affiliates which are
                  publicly traded on a national or regional stock exchange or on
                  the over-the-counter market if Executive (i) is not a
                  controlling person of, or a member of a group which controls,
                  such person and (ii) does not, directly or indirectly, own 5%
                  or more of any class of securities of such person.

                           (iv)     During the Restricted Period, Executive will
                  not, whether on Executive's own behalf or on behalf of or in
                  conjunction with any person, company, business entity or other
                  organization whatsoever, directly or indirectly:

                                    (A) solicit or encourage any employee (other
                           than employees below the administrator level) of the
                           Company or its affiliates to leave the employment of
                           the Company or its affiliates; or

                                    (B) hire any such employee who was employed
                           by the Company or its affiliates as of the date of
                           Executive's termination of employment with the
                           Company or who left the employment of the Company or
                           its affiliates coincident with, or within one year
                           prior to or after, the termination of Executive's
                           employment with the Company.

                                       14
<PAGE>

                  (d)      It is expressly understood and agreed that although
         Executive and the Company consider the restrictions contained in this
         Section 14 to be reasonable, if a final judicial determination is made
         by a court of competent jurisdiction that the time or territory or any
         other restriction contained in this Agreement is an unenforceable
         restriction against Executive, the provisions of this Agreement shall
         not be rendered void but shall be deemed amended to apply as to such
         maximum time and territory and to such maximum extent as such court may
         judicially determine or indicate to be enforceable. Alternatively, if
         any court of competent jurisdiction finds that any restriction
         contained in this Agreement is unenforceable, and such restriction
         cannot be amended so as to make it enforceable, such finding shall not
         affect the enforceability of any of the other restrictions contained
         herein.

                  (e)      Executive acknowledges and agrees that the Company's
         remedies at law for a breach or threatened breach of any of the
         provisions of Section 14 would be inadequate and the Company would
         suffer irreparable damages as a result of such breach or threatened
         breach. In recognition of this fact, Executive agrees that, in the
         event of such a breach or threatened breach, in addition to any
         remedies at law, the Company, without posting any bond, shall be
         entitled to cease making any payments or providing any benefit
         otherwise required by this Agreement and obtain equitable relief in the
         form of specific performance, temporary restraining order, temporary or
         permanent injunction or any other equitable remedy which may then be
         available.

         15.      Entire Agreement. This Agreement contains all the
understandings between the parties hereto pertaining to the matters referred to
herein, and on the Effective Date shall supersede all undertakings and
agreements, whether oral or in writing, previously entered into by them with
respect thereto. The Executive represents that, in executing this Agreement, he
or she does not rely and has not relied upon any representation or statement not
set forth herein made by the Company with regard to the subject matter, bases or
effect of this Agreement or otherwise.

         16.      Amendment or Modification. Waiver. No provision of this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any party hereto of any breach by another party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.

         17.      Notices. Any notice to be given hereunder shall be in writing
and shall be deemed given when delivered personally, sent by courier or telecopy
or registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:

                  To Executive at:
                                    ----------------------------------

                                    ----------------------------------

                                    ----------------------------------

                                    ----------------------------------

                                       15
<PAGE>

                  To the Company at:   Mariner Health Care Management Company
                                       One Ravinia Drive, Suite 1500
                                       Atlanta, Georgia 30346
                                       Attn: General Counsel

                  Any notice delivered personally or by courier under this
Section 17 shall be deemed given on the date delivered and any notice sent by
telecopy or registered or certified mail, postage prepaid, return receipt
requested, shall be deemed given on the date telecopied or mailed.

         18.      Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be validated and shall be enforced to the
fullest extent permitted by law.

         19.      Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.

         20.      Governing Law: Attorney's Fees.

                  (a)      This Agreement will be governed by and construed in
         accordance with the laws of the State of Delaware, without regard to
         its conflicts of laws principles.

                  (b)      The prevailing party in any dispute arising out of
         this Agreement shall be entitled to be paid its reasonable attorney's
         fees incurred in connection with such dispute from the other party to
         such dispute.

         21.      Dispute Resolution. The Executive and the Company shall not
initiate legal proceedings relating in any way to this Agreement or to the
Executive's employment or termination from employment with the Company until
thirty (30) days after the party against whom the claim is made ("respondent")
receives written notice from the claiming party of the specific nature of any
purported claims and the amount of any purported damages attributable to each
such claim. The Executive and the Company further agree that if respondent
submits the claiming party's claim to the CPR Institute for Dispute Resolution,
JAMS/Endispute, or other local dispute resolution service for nonbinding
mediation prior to the expiration of such thirty (30) day period, the claiming
party may not institute arbitration or other legal proceedings against
respondent until the earlier of: (a) the completion of good-faith mediation
efforts or (b) 90 days after the date on which the respondent received written
notice of the claimant's claim(s); provided, however, that nothing in this
Section 21 shall prohibit the Company from pursuing injunctive or other
equitable relief against the Executive prior to, contemporaneous with, or

                                       16
<PAGE>

subsequent to invoking or participating in these dispute resolution processes.
The Company shall pay the cost of the mediator.

         22.      Headings. All descriptive headings of sections and paragraphs
in this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.

         23.      Withholdings. All payments to the Executive under this
Agreement shall be reduced by all applicable withholding required by federal,
state or local tax laws.

         24.      Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

         25.      Release of Prior Employment Agreement. The Executive hereby
releases the Company and any predecessor company (including GranCare, Inc.,
Living Centers of America, Inc. and Paragon Health Network, Inc.) from all
obligations under any employment agreement entered into by the Executive and the
Company, including any obligation to pay severance or other post-termination
benefits, which shall be upon the execution hereof terminated and of no further
force or effect; provided, however, that in no event shall this release affect
the Executive's rights under any grant or award under any stock option or stock
award plans of the Company and any predecessor company (including GranCare,
Inc., Living Centers of America, Inc. and Paragon Health Network, Inc.).

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

                                MARINER HEALTH CARE MANAGEMENT COMPANY

                                BY:
                                   ---------------------------------------------
                                NAME:
                                     -------------------------------------------
                                TITLE:
                                      ------------------------------------------

                                EXECUTIVE

                                ------------------------------------------------

                                       17
<PAGE>

                      UNCONDITIONAL GUARANTY OF PERFORMANCE

         Mariner Health Care, Inc., a Delaware corporation, does hereby
guarantee the prompt performance of all obligations of the Company under this
Agreement and the payment of all amounts owed to the Executive under Section 11
of this Agreement.

                                MARINER HEALTH CARE, INC.

                                BY:
                                   ---------------------------------------------
                                TITLE:
                                      ------------------------------------------

                                       18

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