<DOCUMENT>
<TYPE>SC 13D/A
<SEQUENCE>1
<FILENAME>green13dgilley123101.txt
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13D

                    Under the Securities Exchange Act of 1934
                               (Amendment No. 18)*

                             GREENBRIAR CORPORATION
--------------------------------------------------------------------------------
                                (Name of Issuer)

                     Common Stock, par value $0.01 per share
--------------------------------------------------------------------------------
                         (Title of Class of Securities)

                                   393648-40-7
--------------------------------------------------------------------------------
                                 (CUSIP Number)

                James R. Gilley, 14185 Dallas Parkway, Suite 650
                       Dallas, Texas 75254 (214) 407-8400
--------------------------------------------------------------------------------
            (Name, Address and Telephone Number of Person Authorized
                     to Receive Notices and Communications)

                                December 31, 2001
--------------------------------------------------------------------------------
             (Date of Event which Requires Filing of this Settlement


If the filing person has previously  filed a statement on Schedule 13G to report
the  acquisition  which is the subject of this  Schedule 13D, and is filing this
schedule  because of Rule  13d-1(e),  13d-l(f) or 13d-l(g),  check the following
box.

Note:  Schedules  filed in paper format shall include a signed original and five
copies of the  schedule,  including  all  exhibits.  See Rule 13d-1(7) for other
parties to whom copies are to be sent.

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

*The  remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).


<PAGE>



                                  SCHEDULE 13D

CUSIP No. 393648-40-7                                         Page 2 of 13 Pages
          -----------                                             ---   ---

--------------------------------------------------------------------------------
1    NAME OF REPORTING PERSONS
     I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

         James R. Gilley (SS# ###-##-####
         JRG   Investments   Co.,   Inc.  and  one   revocable   grantor   trust
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X]

--------------------------------------------------------------------------------
3    SEC USE ONLY



--------------------------------------------------------------------------------
4    SOURCE OF FUNDS*

         PF

--------------------------------------------------------------------------------
5    CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
     PURSUANT TO ITEMS 2(d) OR 2(e)                                   [_]



--------------------------------------------------------------------------------
6    CITIZENSHIP OR PLACE OF ORGANIZATION


         United States, Nevada
--------------------------------------------------------------------------------
               7    SOLE VOTING POWER

  NUMBER OF
                   106,142
   SHARES      _________________________________________________________________
               8    SHARED VOTING POWER
BENEFICIALLY

  OWNED BY         47,700
               -----------------------------------------------------------------
    EACH       9    SOLE DISPOSITIVE POWER

  REPORTING
                   106,142
   PERSON      _________________________________________________________________
               10   SHARED DISPOSITIVE POWER
    WITH
                   47,700

--------------------------------------------------------------------------------
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

         106,142 - JRG Investments
          47,700 - Grantor trust
--------------------------------------------------------------------------------
12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

                                                                      [-]

--------------------------------------------------------------------------------
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)


         36.2%
--------------------------------------------------------------------------------
14   TYPE OF REPORTING PERSON*


        IN, CO
--------------------------------------------------------------------------------
                     *SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE>

Item 1.           Security and Issuer.

         This statement  relates to common stock,  $.01 par value per share (the
"Shares"),  of Greenbriar  Corporation  (the "Issuer").  The Issuer's  principal
executive offices are located at 14185 Dallas Parkway,  Suite 650, Dallas, Texas
75254.

Item 2.           Identity and Background.

         This  statement is filed with respect to the  acquisition of options to
acquire  20,000 shares of Common Stock,  the lapse of options to acquire  10,000
shares of common stock, and the relinquishment of voting rights to 33,750 shares
of common stock issuable upon  conversion of Series D Preferred  Stock when such
Series D Preferred Stock was exchanged for a promissory note on July 1,2001, and
the  transfer  of 26,800  shares  from  Sylvia M.  Gilley to The April  Trust in
January 2002. As a result,  this schedule  reports the  beneficial  ownership of
153,842 shares of Common Stock,  consisting of (ii) 60,000 shares  issuable upon
exercise of stock options by James R. Gilley, (iii) 46,142 shares held of record
and  beneficially by JRG Investment Co., Inc., (iv) 42,300 shares held of record
and  beneficially  by The April Trust,  and (v) 5,400 shares  subject to a Stock
Purchase Warrant held by The April Trust. All numbers have been adjusted for the
one-for-25  reverse stock split on December 20, 2001 and a 25% stock dividend on
January 25, 2002.

         In  accordance  with the  instructions  to this  Item 2, the  following
information is hereby provided with respect to Mr. Gilley: There is no change in
Item 2(a) through (f).

Item 3.           Source and Amounts of Funds or Other Consideration.

         None.

Item 4.           Purpose of Transaction.

         1.       Effective  December  31,  2000 and 2001,  non-qualified  stock
options were issued to Mr.  Gilley to purchase  10,000 shares of Common Stock at
an exercise  price of $7.60 and $12.80,  per share  respectively,  which was the
average  closing  price of the  Company's  Common  Stock on the ten trading days
prior to the dates of grant of such  option,  conditioned  upon  listing  of the
shares on the American  Stock  Exchange.  The options were granted to Mr. Gilley
pursuant to the  requirement  of the  Employment  Agreement  between him and the
Company and may be exercised by him in whole or in part at any time prior to the
expiration of ten years.

         2.       On the same  date,  options  to  purchase  10,000  shares at a
exercise  price of $215.00 that were never  exercised  lapsed  pursuant to their
terms.

         3.       In January 2002, Sylvia M. Gilley,  spouse of James R. Gilley,
transferred  26,800  shares to The April  Trust for  reasons  related  to family
estate planning.

         4.       The shares of Series D  Preferred  Stock were  redeemed  for a
promissory  note at the  request  of the  Issuer to obtain  tax  deductions  for
interest  payments  instead  of  non-ductable  dividends.  Such  note  is in the
pricipal amount of $3,375,000,  bears interest at 10% payable quarterly,  and is
due July 1, 2003.

         Other  than as set out  herein,  Mr.  Gilley  has no  current  plans or
proposals  which  relate or would  result in any of the matters  listed in Items
4(a) through 4(j), inclusive, of Schedule 13D.

                                        3

<PAGE>


Item 5.           Interest in Securities of the Issuer.

         (a)      Mr.  Gilley,  JRG and The April  Trust for which he is trustee
                  and  beneficially  own  or  have  the  right  to  acquire,  an
                  aggregate of 153,842  Shares  (approximately  36.2% of the all
                  Shares  outstanding  plus the shares issuable upon exercise of
                  warrants or  convertible  securities  held by them).  All such
                  shares are owned of record by JRG,  Mr.  Gilley and the Trust.
                  Mr.  Gilley's  spouse owned of record and  beneficially or has
                  the right to acquire  an  additional  26,800  shares of Common
                  Stock,  which she has also  contributed  to The April Trust in
                  January 2002. Except for the 47,700 shares owned  beneficially
                  by the  trust,  the  registrant  and his spouse  disclaim  any
                  beneficial  ownership  in the  shares  owned of  record by the
                  other.

         (b)      Mr.  Gilley  has the sole  power to vote or to direct the vote
                  and to  dispose  or to direct  the  disposition  of all 46,142
                  Shares  which are owned of record by JRG, and shares the power
                  to vote or direct  the vote and to  dispose  as to direct  the
                  disposition of all 47,700 shares owned by The April Trust.

         (c)      None.

         (d)      No person other than Mr.  Gilley,  JRG or The April Trust have
                  the right to  receive  or the power to direct  the  receipt of
                  dividends  from,  or the proceeds from the sale of, any of the
                  Shares.

         (e)      Not applicable.

Item 6.           Contracts, Arrangements,  Understandings or Relationships with
                  Respect to Securities of the Issuer.

         No change.

Item 7.           Material to be Filed as Exhibits.

         Stock Option Agreement dated January 10, 2001

         Stock Option Agreement dated January 10, 2002



                                        4

<PAGE>

                                    SIGNATURE

         After reasonable  inquiry and to the best of my knowledge and belief, I
certify that the information  set forth in this statement is true,  complete and
correct.


Date: January 25, 2002           /s/ James R. Gilley
                                 -----------------------------------------------
                                 James R. Gilley, Individually, on behalf of JRG
                                 Investments and as trustee

         Attention:        Intentional   misstatements   or  omissions  of  fact
                           constitute Federal criminal violations (See 18 U.S.C.
                           1001).




                                                 S:\CLIENT-M\356069\3\13d.21.wpd







                                        5

<PAGE>


                             GREENBRIAR CORPORATION

                  RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT


                                      Optionee: James R. Gilley
                                      Number of Shares: 8,000
                                      Option Exercise Price:  $9.50
                                      Effective Date of Grant: December 31, 2000



         i.       Grant of Options.  Greenbriar  Corporation  ("Company") hereby
grants to the above-named  optionee  ("Optionee"),  Non-Qualified  Stock Options
(collectively,  "Options") to purchase at the Option  Exercise  Price (set forth
above)  per share and on the terms and  conditions  set forth in this  agreement
("Agreement")  that  number of shares,  as adjusted  as herein  provided  (as so
adjusted,  "Option  Shares"),  of its  common  stock,  $.01 par  value per share
("Common  Stock"),  as is set forth above. The exercise price is the fair market
value per share of the Common  Stock as  reflected  by the closing  price of the
Common Stock on the American  Stock  Exchange on the ten trading days  preceding
December  31,  2000,  pursuant to a grant by the  Compensation  Committee of the
Company that was approved by the Board of Directors.

         ii.      Term of Options  and  Limitations  on Right to  Exercise.  The
Options shall become  exercisable  in full on the date hereof and listing of the
shares of Common Stock on the American Stock Exchange,  and shall expire at 5:00
p.m.,  Dallas,  Texas time,  on December  31,  2010,  unless  sooner  terminated
pursuant hereto.

         3.       Exercise of Options.  Other  terms,  times and  conditions  of
exercise of the Options are as follows:

                  a.       Prior to the  Expiration  Date,  the Options shall be
         fully  exercisable in whole or in part for a number of shares up to the
         aggregate number of all of the Option Shares.

                  b.       Upon the death or  Disability  of the  Optionee,  the
         Optionee or the personal representative of the Optionee, as applicable,
         may exercise the Options to the extent not previously  exercised  (and,
         in the case of  death,  to the  extent  the  Options  could  have  been
         exercised  by the  Optionee on the date of death)  subject to the terms
         set forth in this  Agreement,  until their  termination  as provided by
         Section 2 hereof.

                  c.       The  Options  shall be  exercised  by written  notice
         directed to the Secretary of the Company.  Such written notice shall be
         accompanied  by full  payment in cash for the  number of Option  Shares
         specified in such written notice.

                                        6

<PAGE>



                  d.       If the Optionee is subject to restrictions  regarding
         the  Optionee's  right to sell shares of Common Stock under  applicable
         securities laws and as a consequence  exercise of the Options would not
         be  taxable  under the  provisions  of Section  83(c) of the Code,  the
         Optionee,  upon exercise of the Options, shall be authorized to make an
         election to be taxed upon  exercise of the Options  under Section 83(b)
         of the  Code.  To  effect  such  election,  the  Optionee  may  file an
         appropriate  election with the Internal  Revenue  Service within thirty
         (30) days after  exercise of the Options and  otherwise  in  accordance
         with applicable Treasury Regulations.

                  e.       The Optionee  recognizes  that the Committee may make
         such  provisions  and  take  such  steps as it may  deem  necessary  or
         appropriate  for the  withholding  of any taxes that the Company or any
         subsidiary  of the Company is required by any law or  regulation or any
         governmental  authority,  whether federal,  state or local, domestic or
         foreign,  to make in  connection  with the  Optionee's  exercise of the
         Options.

                  f.       Subject to the terms of this  Agreement,  the Options
         may be exercised at any time and without  regard to any other option to
         purchase stock of the Company held by the Optionee.

                  g.       In the event the  outstanding  shares of Common Stock
         are increased or decreased or changed into or exchanged for a different
         number or kind of shares or other  securities  of the Company or of any
         other   corporation   by   reason  of  any   merger,   sale  of  stock,
         consolidation, liquidation,  recapitalization,  reclassification, stock
         split up, combination of shares, stock dividend,  or transaction having
         similar effect, the total number of shares subject to this Option shall
         be proportionately and appropriately adjusted.  Following a transaction
         described above, if the Company continues in existence,  the number and
         kind of shares that are subject to any Option and the option  price per
         share shall be proportionately  and appropriately  adjusted without any
         change in the aggregate  price to be paid therefor upon exercise of the
         Option.  If the Company will not remain in  existence or  substantially
         all of its voting  Common Stock and Common Stock will be purchased by a
         single  purchaser  or group of  purchasers  acting  together,  then the
         Company may (i) declare that all Options shall  terminate 30 days after
         the Committee gives written notice to all Optionee's of their immediate
         right to  exercise  all Options  then  outstanding  (without  regard to
         limitations on exercise  otherwise  contained in the Options),  or (ii)
         notify the  Optionee  that the  Options  shall  apply with  appropriate
         adjustments  as  determined  by the  Company to the  securities  of the
         successor  corporation  to the Optionee  would have been  entitled,  or
         (iii) take action that is some  combination of aspects of (i) and (ii).
         The  determination  by  the  Company  as to  the  terms  of  any of the
         foregoing  adjustments shall be conclusive and binding.  Any fractional
         shares  resulting  from any of the  foregoing  adjustments  under  this
         section shall be disregarded and eliminated.


                                       7

<PAGE>


         4.       Nontransferability. The Options are not transferable except by
will  or by the  laws  of  descent  and  distribution  and  are  subject  to the
provisions of Section 7 hereof. The Options may be exercised during the lifetime
of the Optionee only by the Optionee.

         5.       Limitation of Rights.  The Optionee  shall have no rights as a
stockholder  with respect to the Option  Shares until the Optionee  shall become
the holder of record of such Option  Shares.  Neither the Plan,  the granting of
the Options nor this Agreement shall impose any obligation on the Company or any
subsidiary of the Company to continue the employment of the Optionee.

         6.       Optionee's Best Efforts  Covenant.  The Optionee hereby agrees
to use the  Optionee's  best  efforts to provide  services  to the  Company in a
workmanlike manner and to promote the Company's interests.

         7.       Restrictions  on  Transfer  and  Pledge.  Except as  otherwise
provided  herein,  the Options and all rights and privileges  granted  hereunder
shall not be transferred,  assigned, pledged or hypothecated in any way, whether
by  operation  of law or  otherwise,  and shall  not be  subject  to  execution,
attachment or similar process.

         8.       Restrictions on Issuance of Option Shares.  If at any time the
Board of Directors or the Committee determines, in its discretion, that listing,
registration or  qualification  of the Option Shares covered by the Options upon
any  securities  exchange  or under any state or federal  law, or the consent or
approval of any  governmental  regulatory  body,  is necessary or desirable as a
condition to the  exercise of the  Options,  the Options may not be exercised in
whole or in part  unless and until such  listing,  registration,  qualification,
consent or approval has been  effected or obtained  free of any  conditions  not
acceptable to the Board of Directors or the  Committee.  The Board or Committee,
as the case may be, shall make such a determination,  and notify the Optionee of
its  determination,  within two (2) days after receiving the Optionee's  written
notice of exercise of his Options. In the event of any such determination by the
Board or the  Committee,  the  Company  shall use its best  efforts to effect or
obtain such listing, registration, qualification, consent or approval.

         9.       Successors. This Agreement shall be binding upon any successor
of the Company, in accordance with the terms of this Agreement and the Plan.

         10.      Stock Reserve.  The Company shall at all times during the term
of this  Agreement  reserve and keep  available  such number of shares of Common
Stock as shall be sufficient to satisfy the requirements of this Agreement.  The
Company  shall pay all  original  issue  taxes (if any) on the  exercise  of the
Options,  and all other fees and expenses necessarily incurred by the Company in
connection therewith.

         11.      Listing  Approval.  This  Agreement  shall be  subject  to the
listing of the shares underlying the options on the American Stock Exchange.

         12.      Investment Intent. The Optionee hereby represents and warrants
as follows:

                                       8

<PAGE>


                  a.       The Shares will be acquired  for the  Optionee's  own
         account without the participation of any other person,  with the intent
         of  holding  the  Shares  for  investment  and  without  the  intent of
         participating,  directly or indirectly, in a distribution of the Shares
         and  not  with a view  to,  or  for  resale  in  connection  with,  any
         distribution of the Shares or any portion thereof.


                  b.       The Optionee,  through the  Optionee's  position with
         the Company,  has access to all material information with regard to the
         Company.

                  c.       The  Optionee  will not acquire the Shares based upon
         any representation,  oral or written, by any person with respect to the
         future  value  of  or  income  from  the  Shares  but  rather  upon  an
         independent  examination  and  judgment  as to  the  prospects  of  the
         Company.

                  d.       The Shares were not offered to the  Optionee by means
         of publicly disseminated advertisements or sales literature, nor is the
         Optionee aware of any offers made to other persons by such means.

                  e.       The  Optionee  acknowledges  that the  Optionee  must
         continue to bear the economic risk of the  investment in the Shares for
         an  indefinite  period  and  recognizes  that the  Shares  will be: (i)
         transferred  without  registration  under  any  state  or  federal  law
         relating to the  registration  of securities  for sale; and (ii) issued
         and transferred in reliance on the exemption from registration provided
         by Section 4(2) of the United States Securities Act of 1933, as amended
         (the "1933 Act").

         IN WITNESS WHEREOF,  Greenbriar  Corporation  acting by and through its
duly  authorized  officers,  has caused this  Agreement to be executed,  and the
Optionee has executed this Agreement, effective this 5th day of January, 2001.

                                            GREENBRIAR CORPORATION



                                            By:/s/ Gene S.  Bertcher
                                               ---------------------
                                               Name: Gene S. Bertcher
                                               Title:   Executive Vice President



                                               /s/ James R.  Gilley
                                               --------------------
                                               OPTIONEE - James R. Gilley


                                       9

<PAGE>


                             GREENBRIAR CORPORATION

                  RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT


                                      Optionee: James R. Gilley
                                      Number of Shares: 10,000
                                      Option Exercise Price:  $12.80
                                      Effective Date of Grant: December 31, 2001


         1.       Grant of Options.  Greenbriar  Corporation  ("Company") hereby
grants to the above-named  optionee  ("Optionee"),  Non-Qualified  Stock Options
(collectively,  "Options") to purchase at the Option  Exercise  Price (set forth
above)  per share and on the terms and  conditions  set forth in this  agreement
("Agreement")  that  number of shares,  as adjusted  as herein  provided  (as so
adjusted,  "Option  Shares"),  of its  common  stock,  $.01 par  value per share
("Common  Stock"),  as is set forth above. The exercise price is the fair market
value per share of the Common  Stock as  reflected  by the closing  price of the
Common Stock on the American  Stock  Exchange on the ten trading days  preceding
December  31,  2001,  pursuant to a grant by the  Compensation  Committee of the
Company that was approved by the Board of Directors.

         2.       Term of Options  and  Limitations  on Right to  Exercise.  The
Options shall become  exercisable  in full on the date hereof and listing of the
shares of Common Stock on the American Stock Exchange,  and shall expire at 5:00
p.m.,  Dallas,  Texas time,  on December  31,  2010,  unless  sooner  terminated
pursuant hereto.

         3.       Exercise of Options.  Other  terms,  times and  conditions  of
exercise of the Options are as follows:

                  a.       Prior to the  Expiration  Date,  the Options shall be
         fully  exercisable in whole or in part for a number of shares up to the
         aggregate number of all of the Option Shares.

                  b.       Upon the death or  Disability  of the  Optionee,  the
         Optionee or the personal representative of the Optionee, as applicable,
         may exercise the Options to the extent not previously  exercised  (and,
         in the case of  death,  to the  extent  the  Options  could  have  been
         exercised  by the  Optionee on the date of death)  subject to the terms
         set forth in this  Agreement,  until their  termination  as provided by
         Section 2 hereof.

                  c.       The  Options  shall be  exercised  by written  notice
         directed to the Secretary of the Company.  Such written notice shall be
         accompanied  by full  payment in cash for the  number of Option  Shares
         specified in such written notice.

                  d.       If the Optionee is subject to restrictions  regarding
         the  Optionee's  right to sell shares of Common Stock under  applicable


                                       10

<PAGE>

         securities laws and as a consequence  exercise of the Options would not
         be  taxable  under the  provisions  of Section  83(c) of the Code,  the
         Optionee,  upon exercise of the Options, shall be authorized to make an
         election to be taxed upon  exercise of the Options  under Section 83(b)
         of the  Code.  To  effect  such  election,  the  Optionee  may  file an
         appropriate  election with the Internal  Revenue  Service within thirty
         (30) days after  exercise of the Options and  otherwise  in  accordance
         with applicable Treasury Regulations.

                  e.       The Optionee  recognizes  that the Committee may make
         such  provisions  and  take  such  steps as it may  deem  necessary  or
         appropriate  for the  withholding  of any taxes that the Company or any
         subsidiary  of the Company is required by any law or  regulation or any
         governmental  authority,  whether federal,  state or local, domestic or
         foreign,  to make in  connection  with the  Optionee's  exercise of the
         Options.

                  f.       Subject to the terms of this  Agreement,  the Options
         may be exercised at any time and without  regard to any other option to
         purchase stock of the Company held by the Optionee.

                  g.       In the event the  outstanding  shares of Common Stock
         are increased or decreased or changed into or exchanged for a different
         number or kind of shares or other  securities  of the Company or of any
         other   corporation   by   reason  of  any   merger,   sale  of  stock,
         consolidation, liquidation,  recapitalization,  reclassification, stock
         split up, combination of shares, stock dividend,  or transaction having
         similar effect, the total number of shares subject to this Option shall
         be proportionately and appropriately adjusted.  Following a transaction
         described above, if the Company continues in existence,  the number and
         kind of shares that are subject to any Option and the option  price per
         share shall be proportionately  and appropriately  adjusted without any
         change in the aggregate  price to be paid therefor upon exercise of the
         Option.  If the Company will not remain in  existence or  substantially
         all of its voting  Common Stock and Common Stock will be purchased by a
         single  purchaser  or group of  purchasers  acting  together,  then the
         Company may (i) declare that all Options shall  terminate 30 days after
         the Committee gives written notice to all Optionee's of their immediate
         right to  exercise  all Options  then  outstanding  (without  regard to
         limitations on exercise  otherwise  contained in the Options),  or (ii)
         notify the  Optionee  that the  Options  shall  apply with  appropriate
         adjustments  as  determined  by the  Company to the  securities  of the
         successor  corporation  to the Optionee  would have been  entitled,  or
         (iii) take action that is some  combination of aspects of (i) and (ii).
         The  determination  by  the  Company  as to  the  terms  of  any of the
         foregoing  adjustments shall be conclusive and binding.  Any fractional
         shares  resulting  from any of the  foregoing  adjustments  under  this
         section shall be disregarded and eliminated.

         4.       Nontransferability. The Options are not transferable except by
will  or by the  laws  of  descent  and  distribution  and  are  subject  to the
provisions of Section 7 hereof. The Options may be exercised during the lifetime
of the Optionee only by the Optionee.

                                       11

<PAGE>


         5.       Limitation of Rights.  The Optionee  shall have no rights as a
stockholder  with respect to the Option  Shares until the Optionee  shall become
the holder of record of such Option  Shares.  Neither the Plan,  the granting of
the Options nor this Agreement shall impose any obligation on the Company or any
subsidiary of the Company to continue the employment of the Optionee.

         6.       Optionee's Best Efforts  Covenant.  The Optionee hereby agrees
to use the  Optionee's  best  efforts to provide  services  to the  Company in a
workmanlike manner and to promote the Company's interests.

         7.       Restrictions  on  Transfer  and  Pledge.  Except as  otherwise
provided  herein,  the Options and all rights and privileges  granted  hereunder
shall not be transferred,  assigned, pledged or hypothecated in any way, whether
by  operation  of law or  otherwise,  and shall  not be  subject  to  execution,
attachment or similar process.

         8.       Restrictions on Issuance of Option Shares.  If at any time the
Board of Directors or the Committee determines, in its discretion, that listing,
registration or  qualification  of the Option Shares covered by the Options upon
any  securities  exchange  or under any state or federal  law, or the consent or
approval of any  governmental  regulatory  body,  is necessary or desirable as a
condition to the  exercise of the  Options,  the Options may not be exercised in
whole or in part  unless and until such  listing,  registration,  qualification,
consent or approval has been  effected or obtained  free of any  conditions  not
acceptable to the Board of Directors or the  Committee.  The Board or Committee,
as the case may be, shall make such a determination,  and notify the Optionee of
its  determination,  within two (2) days after receiving the Optionee's  written
notice of exercise of his Options. In the event of any such determination by the
Board or the  Committee,  the  Company  shall use its best  efforts to effect or
obtain such listing, registration, qualification, consent or approval.

         9.       Successors. This Agreement shall be binding upon any successor
of the Company, in accordance with the terms of this Agreement and the Plan.

         10.      Stock Reserve.  The Company shall at all times during the term
of this  Agreement  reserve and keep  available  such number of shares of Common
Stock as shall be sufficient to satisfy the requirements of this Agreement.  The
Company  shall pay all  original  issue  taxes (if any) on the  exercise  of the
Options,  and all other fees and expenses necessarily incurred by the Company in
connection therewith.

         11.      Listing  Approval.  This  Agreement  shall be  subject  to the
listing of the shares underlying the options on the American Stock Exchange.

         12.      Investment Intent. The Optionee hereby represents and warrants
as follows:

                  a.       The Shares will be acquired  for the  Optionee's  own
         account without the participation of any other person,  with the intent
         of  holding  the  Shares  for  investment  and  without  the  intent of
         participating,  directly or indirectly, in a distribution of the Shares
         and  not  with a view  to,  or  for  resale  in  connection  with,  any
         distribution of the Shares or any portion thereof.

                                       12

<PAGE>


                  b.       The Optionee,  through the  Optionee's  position with
         the Company,  has access to all material information with regard to the
         Company.

                  c.       The  Optionee  will not acquire the Shares based upon
         any representation,  oral or written, by any person with respect to the
         future  value  of  or  income  from  the  Shares  but  rather  upon  an
         independent  examination  and  judgment  as to  the  prospects  of  the
         Company.

                  d.       The Shares were not offered to the  Optionee by means
         of publicly disseminated advertisements or sales literature, nor is the
         Optionee aware of any offers made to other persons by such means.


                  e.       The  Optionee  acknowledges  that the  Optionee  must
         continue to bear the economic risk of the  investment in the Shares for
         an  indefinite  period  and  recognizes  that the  Shares  will be: (i)
         transferred  without  registration  under  any  state  or  federal  law
         relating to the  registration  of securities  for sale; and (ii) issued
         and transferred in reliance on the exemption from registration provided
         by Section 4(2) of the United States Securities Act of 1933, as amended
         (the "1933 Act").

         IN WITNESS WHEREOF,  Greenbriar  Corporation  acting by and through its
duly  authorized  officers,  has caused this  Agreement to be executed,  and the
Optionee has executed this Agreement, effective this 10th day of January, 2002

                                            GREENBRIAR CORPORATION


                                            By:/s/ Gene S.  Bertcher
                                               ---------------------
                                               Name: Gene S. Bertcher
                                               Title:   Executive Vice President

                                               /s/ James R.  Gilley
                                               --------------------
                                               OPTIONEE - James R. Gilley




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</TEXT>
</DOCUMENT>
