
<PAGE>   1
                                                                    EXHIBIT 10.1

                                   AGREEMENT

DATE:            FEBRUARY 22, 1996

PARTIES:         First Party:     BEVERLY ENTERPRISES, INC., a Delaware 
                                  corporation, and its consolidated 
                                  subsidiaries, hereinafter collectively 
                                  referred to as "Company"; and

                 Second Party:    ROBERT D. WOLTIL, hereinafter referred to as 
                                  "WOLTIL"

AGREEMENT:

         FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
is hereby acknowledged, the parties hereto do agree between themselves as
follows:

         Section 1.       DEFINITIONS.

                 (a)      As used herein, "WOLTIL" shall mean Robert D. Woltil,
his successors-in-interest, predecessors-in-interest, assigns, administrators
and executors.

                 (b)      As used herein, the term the "Company" shall mean
Beverly Enterprises, Inc., its affiliates, subsidiaries, divisions, agents,
assigns, pension plans, compensation plans, other benefit plans, predecessors-
in-interest, successors-in-interest, and any officer, director, employee, agent
or other representative of any of the foregoing.

         Section 2.       RESIGNATION.

                 (a)      WOLTIL hereby tenders his resignation from the office
of Executive Vice President of the Company and President of Pharmacy
Corporation of America ("PCA") effective January 17, 1996. WOLTIL further
tenders his resignation as an employee of the Company effective February 17,
1996. The





                                      -1-
<PAGE>   2

Company hereby accepts such resignations effective on such dates. All duties
and obligations of WOLTIL in those positions are ended as of those dates, and
all obligations of the Company to WOLTIL with respect to those positions or
otherwise are terminated as of those dates, except as otherwise provided
herein.

                 (b)      The Parties enter into this Agreement to resolve and
finalize any disputes which have arisen or may arise between them concerning
WOLTIL's employment with the Company, and the termination thereof. Nothing in
this Agreement and no action taken pursuant to this Agreement constitutes or is
intended to constitute any admission or finding of fact or allegation,
admission of liability or fault, or assessment of liability with respect to any
claim which has been brought or which may be brought by either party concerning
WOLTIL's employment with the Company, or the termination thereof. This
Agreement and the Company's actions performed pursuant hereto shall not be
deemed to be or construed as an admission of any allegation of WOLTIL'S, nor
shall they constitute any admission of any fact, liability or fault as to any
claim or proceeding which has been, is now being or may be pursued by any
person, agency or entity, including without limitation, WOLTIL or any other
past or present employee of the Company. This Agreement shall not be used and
is not intended to be used as evidence in any action or proceeding for any
other purpose other than as evidence of the Parties' compromise of their
disputes and discharge of their claims.

         Section 3.       PAYMENTS. The Company agrees to pay WOLTIL the
following sums in consideration of his voluntary resignation:





                                      -2-
<PAGE>   3
                 (a)      Vacation. The sum of Twenty-three Thousand Six
Hundred Fifty-three and 84/100 Dollars ($23,653.84), which shall be subject to
all normal withholding taxes, in full payment for four (4) weeks of vacation
pay due to WOLTIL, which shall be payable on the date that this Agreement is
fully-executed by the Parties and becomes effective;

                 (b)      Severance Payments. WOLTIL will receive a severance
payment equal to the sum of: (1) fifty-two (52) weeks of pay in the aggregate
sum of Three Hundred Seven Thousand Five Hundred and No/100 Dollars
($307,500.00); and (2) 40% of base salary as a target bonus amount, which is
One Hundred Twenty-three Thousand and No/100 Dollars ($123,000.00); for a total
severance payment of Four Hundred Thirty Thousand Five Hundred and No/100
Dollars ($430,500.00), payable in full on the date that this Agreement is
fully executed by the Parties and becomes effective. Lump sum federal and
state withholding taxes will be withheld.

         Section 4.       BONUS AND CAR ALLOWANCE. It is understood and agreed
between the Parties hereto that WOLTIL shall not be entitled to any bonus from
the Company for 1995 or 1996 performance. It is further understood and
agreed between the parties hereto that WOLTIL's car allowance, if any, shall
terminate effective February 17, 1996.

         Section 5         MEDICAL COVERAGE. WOLTIL's COBRA period for coverage
under the Beverly Medical Plan, Executive Medical Plan and Management Dental
Plan shall commence as of February 17, 1996 and will continue for forty-two
(42) months. The cost of coverage for the first twenty-four months shall be
paid for at the sole cost and expense of the Company. The premiums paid by the
Company for this coverage are taxable to WOLTIL, who shall be solely





                                      -3-
<PAGE>   4

responsible for any such tax. If WOLTIL becomes eligible for another group
health plan prior to the expiration of the forty-two (42) months of COBRA,
then, after the first twenty-four (24) months of COBRA, the coverage will be
terminated according to COBRA law. If coverage continues for the first 
twenty-four (24) months, then WOLTIL will be notified by the Company on or after
February 17, 1998 as to what the cost will be for COBRA conversion for
continued coverage for WOLTIL and his spouse and eligible dependents under its
Beverly Medical Plan, Executive Medical Plan and Management Dental Plan. If
coverage is desired by WOLTIL for the additional eighteen (18) months of the
COBRA conversion period, all costs and expenses for continued COBRA coverage
shall be paid by WOLTIL.

                 WOLTIL shall be solely responsible for presenting any claims
incurred by himself or any eligible dependent in accordance with the provisions
of the Beverly Medical Plan, Executive Medical Plan and the Management Dental
Plan.

         Section 6.       LIFE AND DISABILITY INSURANCE. The Executive Life
Insurance Plan, Basic Group Term Life Insurance Plan, the Long Term Disability
Insurance Plan and the Group Universal Life program will be handled as follows:

                 (a)      Executive Life Insurance on WOLTIL will be deemed to
be One Hundred Percent (100%) vested on January 17, 1996 and as such will
remain in force for the duration of WOLTIL'S life. The premium thereon shall be
paid by the Company. The face amount of the life insurance policy to be
provided by the Company shall be Three Hundred Thousand Dollars ($300,000). The
economic value on this benefit is taxable to WOLTIL, who shall be solely
responsible for any such tax.





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<PAGE>   5
                 (b)      The Company's Basic Group Term Life Insurance
coverage on WOLTIL's life in the amount of Two Hundred Ninety-three Thousand
Dollars ($293,000) insuring WOLTIL's life, may be converted at the sole cost
and expense of WOLTIL in accordance with the provisions of the existing policy
within thirty-one (31) days of February 17, 1996, or coverage will terminate as
of said date. It is Woltil's sole responsibility to submit the appropriate
conversion forms to the carrier.

                 (c)      The Long Term Disability coverage may be converted to
an individual policy within thirty-one days of February 17, 1996 or the
coverage will terminate as of said date in accordance with the provisions of
the existing policy. It is Woltil's sole responsibility to submit the
appropriate conversion forms to the carrier. Woltil will be reimbursed for one
year of coverage that is approved by the carrier from February 17, 1996 upon
submission to the Company of a bill from the carrier or a cancelled check to the
carrier. The reimbursement for the long term disability coverage will be
taxable to WOLTIL, who shall be solely responsible for any such tax.

                 (d)      The Group Universal Life Insurance coverage is
portable and Woltil will be billed by the carrier at the address he has on file
with the carrier. The Company will have no further responsibility in regards to
the Group Universal Life Insurance coverage after February 17, 1996 except to
forward any premiums withheld from WOLTIL'S pay to date.

         Section 7.       EMPLOYEE STOCK PURCHASE PLAN. WOLTIL will continue to
participate in the Employee Stock Purchase Plan through February 17, 1996
according to the provisions of the plan and the Company will forward WOLTIL'S
contributions and related Company match as it normally would to Merrill Lynch.





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<PAGE>   6
WOLTIL will continue to maintain sole discretion in managing his account
balance and the Company will have no further responsibility regarding his
account after the final payroll deductions and Company match have been
forwarded to WOLTIL'S account. If WOLTIL elects to maintain the account after
February 17, 1996, he will be notified by Merrill Lynch as to the cost of
maintaining his account. The fees related to maintaining the Merrill Lynch
account will be the sole responsibility of WOLTIL.

         Section 8.       OPTIONS AND RESTRICTED STOCK. WOLTIL understands and
agrees that all issued option grants and restricted stock awarded to him under
any of the Company's stock option plans (i.e., the Company's Amended and
Restated 1981 Beverly Incentive Stock Option Plan, or the Amended and Restated
1981 and 1985 Non-qualified Stock Option Plans, or the Amended and Restated
Beverly Enterprises, Inc. 1993 Long-Term Incentive Stock Plan, all of such plans
together hereinafter referred to as the "Stock Plans") shall be fully vested on
and after February 17, 1996, and must be exercised, if at all, no later than
ninety (90) days following February 17, 1996. To the extent WOLTIL does not
exercise any of the stock options or other benefits issued pursuant to the
Stock Plans (the "Stock Options") within said ninety (90) day period, the Stock
Options shall be and are hereby cancelled effective as of the close of business
on May 18, 1996 and all right, title and interest in and to said stock options
in WOLTIL's name as of such date shall be and hereby is declared null and void
and cancelled. WOLTIL was granted the following stock options which have not
been exercised by WOLTIL or cancelled:





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<PAGE>   7
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
GRANT      DATE OF    TYPE       SHARES         PRICE OF        VESTED AS       VESTED      VESTED       CANCELLED
NUMBER     GRANT                 OR UNITS       GRANT - $       OF 2/17/96      AND         AND NOT
                                 GRANTED                        PURSUANT        EXERCISED   EXERCISED
                                                                TO
                                                                CONTRACT
- ------------------------------------------------------------------------------------------------------------------
<S>        <C>       <C>        <C>         <C>              <C>              <C>         <C>           <C>
050064     5/20/92     RSP        3,000          $-0-           3,000            1,800       1,200         -0-
- ------------------------------------------------------------------------------------------------------------------
090286     5/20/92      NQ        7,000        $7.875           7,000              -0-       7,000         -0-
- ------------------------------------------------------------------------------------------------------------------
050070     7/15/93     RSP       24,000          $-0-          24,000            9,600      14,400         -0-
- ------------------------------------------------------------------------------------------------------------------
051002     7/15/93     RSP        6,000          $-0-           6,000            2,400       3,600         -0-
- ------------------------------------------------------------------------------------------------------------------
090293     7/15/93      NQ       25,000       $13.125          25,000              -0-      25,000         -0-
- ------------------------------------------------------------------------------------------------------------------
091002     7/15/93      NQ        6,000       $13.125           6,000              -0-       6,000         -0-
- ------------------------------------------------------------------------------------------------------------------
006705     12/9/93     ISO       15,000        $12.50          15,000              -0-      15,000         -0-
- ------------------------------------------------------------------------------------------------------------------
091010     12/9/93      NQ       35,000        $12.50          35,000              -0-      35,000         -0-
- ------------------------------------------------------------------------------------------------------------------
060004     2/15/94   PH/NQ        2,750        $14.00           2,750              -0-       2,750         -0-
- ------------------------------------------------------------------------------------------------------------------
006739     12/8/94     ISO       12,000        $14.00          12,000              -0-      12,000         -0-
- ------------------------------------------------------------------------------------------------------------------
091042     12/8/94      NQ       18,000        $14.00          18,000              -0-      18,000         -0-
- ------------------------------------------------------------------------------------------------------------------
060035     2/15/95   PH/NQ        2,951        $13.75           2,951              -0-       2,951         -0-
- ------------------------------------------------------------------------------------------------------------------
075022     2/15/95   OU/NQ        1,181          $-0-           1,181              -0-       1,181         -0-
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

LEGENDS

o          ISO =       Incentive Stock Option
o          RSP =       Restricted Stock Plan
o           NQ =       Nonqualified Stock Option
o           PH =       Phantom Stock Option
o           OU =       Other Units


   Section 9.  DEFERRED COMPENSATION.  All benefits related to the Deferred
Compensation Plan were paid to WOLTIL in 1991; therefore, the Company has no
further obligation to WOLTIL related to this plan.

   Section 10.  RELOCATION.  If, on or before February 17, 1997, WOLTIL gives
written notice to the Company that he desires to relocate within the
Continental United States, the Company will reimburse WOLTIL for any reasonable
relocation expenses (in accordance with the general relocation





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<PAGE>   8
policy for Executives of PCA as then in effect, or at WOLTIL's election as in
effect on January 17, 1996, in connection with such relocation).

   Section 11.  EXECUTIVE RETIREMENT PLAN.  For the plan year 1996, the Company
will make a contribution to the Company's Executive Retirement Plan on behalf
of WOLTIL that it would have made if WOLTIL had not terminated his employment
and as specified by the plan. In no event, shall the Company's match for 1996
be less than the percentage contribution it made for WOLTIL for the 1995 plan
year nor will it exceed or be less than the percentage contribution made by the
Company on behalf of the other participating employees for the 1996 plan year.
It will be WOLTIL'S sole responsibility to submit a written election to
participate and deliver same to the Company by July 1, 1996 and to make
arrangements with the Company to forward such contributions to the Company. The
Company will continue to be responsible for forwarding the funds to WOLTIL'S
account in accordance with the plan. The Company shall determine if it will make
a Company contribution for the 1996 plan year in accordance with the provisions
of the plan.

   Section 12.  CONFIDENTIALITY.  The Company and WOLTIL each agree to keep the
terms of this Agreement confidential and that neither of them nor any of their
respective employees, agents, officers, representatives, heirs or assigns will
publicize the terms of this Agreement in any way, nor will they issue,
distribute, or make available any bulletin or written statement of any kind
concerning the subject matter of this Agreement or WOLTIL's termination except,
however, as required by legal process or to their tax advisors or heirs, or as
they both may otherwise agree in writing.





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<PAGE>   9
   Section 13.  NON-SOLICITATION AND NON-COMPETITION AGREEMENT.

        (a) WOLTIL shall not during the period from January 17, 1996 through
January 17, 1997, or at any time thereafter, make, use for his own purposes or
divulge to any person, firm or corporation (except under the authority of the
Company or if ordered to do so by a court of competent jurisdiction) any
information or fact relating to the management, business (including prospective
business), finances, its customers or the terms of any of the contracts of the
Company which has heretofore or may hereafter come to the knowledge of WOLTIL
which is not freely available to the public.

        (b)  WOLTIL hereby covenants with the Company that he will not for any
reason whatsoever and whether directly or indirectly, either alone or jointly
with any person, firm or corporation and whether as principal, servant or
agent:

            (i)  During the thirteen month period commencing on January 17,
   1996 and terminating on February 17, 1997, solicit or endeavor to entice
   away, offer employment to or employ, or offer or conclude any contract for
   services with any person who is employed by the Company as of the date of
   this Agreement;

            (ii)  At any time, in any way defame the Company or disparage its
   business capabilities, products, plans or management to any customer,
   potential customer, vendor, supplier, contractor, subcontractor of the
   Company so as to affect adversely the goodwill or business of the Company;
   and

            (iii)  At any time, use to the detriment of the Company any
   confidential information of a technical, trade, financial or other character
   which constitutes a legally protectable trade secret 





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<PAGE>   10

   and which WOLTIL has acquired or may acquire in the course of or as a result
   of his employment by the Company.

(c) During the thirteen (13) months commencing on January 17, 1996 and
terminating on February 17, 1997 (the "non-compete period"), WOLTIL shall not,
without the prior written consent of the Company, directly or indirectly work
for, engage in, or have any interest in, provide services to or manage or
operate any person, firm, corporation, partnership or business (whether as
director, officer, employee, agent, representative, partner, security holder,
consultant or otherwise) that engages in any of the health care businesses in
which the Company is engaged as of February 17, 1996. Provided, however, WOLTIL
shall be permitted to acquire a stock interest in such a corporation provided
such stock is publicly traded and the stock so acquired is not more than one
percent of the outstanding shares of such corporation, and, provided further,
that WOLTIL may engage in a business that is a non-competitive supplier to the
Company or that is a customer of Company products or services. In addition,
WOLTIL shall not, during the non-compete period, without the prior written
consent of the Company, directly or indirectly, work for, engage in, or have any
interest in, provide services to, manage or operate, in any capacity, Eckerd
Corp. or any institutional pharmacy, including, without limitation, Omnicare,
Inc., Symphony, a subsidiary of Integrated Health Services, or Vitalink Pharmacy
Services, Inc., a subsidiary of ManorCare, Inc. Except as limited in the
immediately preceding sentence, during the non-compete period, WOLTIL shall be
permitted to:

                (1) serve as the chief financial officer of a health care
                    company, even if such company has an institutional pharmacy
                    business, provided that the services WOLTIL performs





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<PAGE>   11
                    for the institutional pharmacy business are limited to
                    those which are consistent with his responsibilities as
                    chief financial officer;

                (2) serve as an investment banker who would provide services to
                    health care companies; or

                (3) serve as a consultant who would provide services to health 
                    care companies.

        (d)  WOLTIL covenants and agrees that a breach of these subparagraphs
(a), (b) or (c) would immediately and irreparably harm the Company and that a
remedy at law would be inadequate to compensate the Company for its losses by
reason of such breach and therefore that the Company shall, in addition to any
rights and remedies available under this Agreement or WOLTIL's Employment
Contract dated as of December 8, 1995, at law or otherwise, be entitled to an
injunction to be issued by any court of competent jurisdiction enjoining and
restraining WOLTIL from committing any violation of these subparagraphs (a),
(b) or (c).

        (e)  For purposes of this Section 13 and in consideration of this
Agreement, these non-solicitation and non-competition agreements have been
separately negotiated and bargained for, and constitute a substantial portion
of the consideration for this Agreement.

   Section 14.  LITIGATION.  WOLTIL recognizes that as a key member of the
staff of the Company, WOLTIL has occupied a position of trust and confidence
with respect to information of a secret or confidential nature which is or will
become the property of the Company, including but not limited to information
concerning various claims and lawsuits that have arisen or may arise out of the
Company's operations in which WOLTIL was directly or indirectly involved
(collectively, the "Litigation").  WOLTIL agrees that





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<PAGE>   12

WOLTIL will not at any time for so long as any such information shall remain
confidential or otherwise remain wholly or partially protectable, use, divulge,
furnish, or make accessible such information to anyone outside of the Company,
the Company's agents or representatives, except as required by legal process.

   For purposes of this Section 14, the term "information of a secret or
confidential nature" shall mean any information of any nature in any form
which at the time or times concerned is not generally known to or which could
not be obtained by persons engaged in a business similar to that conducted or
contemplated by Company and which relates to any one or more of the aspects of
the present or past businesses of the Company. For purposes hereof any such
confidential information which is disclosed to any third party by a present or
past employee or representative of the Company not authorized to make such
disclosures shall be deemed to remain confidential and protected.  WOLTIL
further agrees that WOLTIL shall continue to reasonably cooperate with the
Company and its attorneys concerning all aspects of the Litigation, including
but not limited to making himself available for a reasonable period of time for
reviews, conferences, meetings, depositions, and testimony until such time as
the Litigation has been finally resolved to the Company's satisfaction.

   For purposes of this Section 14, WOLTIL acknowledges that the Litigation
consists or may consist of several lawsuits of a complex nature such that it is
difficult to estimate the exact number of hours that WOLTIL will be needed to
devote to the Litigation. WOLTIL therefore agrees to make himself available to
the Company in compliance with this Section 14, for reasonable periods of time
as is required for lawsuits of a complexity similar to those comprising (or
which may in the future comprise) the Litigation and will





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<PAGE>   13
reasonably make himself available to the extent his professional schedule
permits. The Company agrees that its attorneys shall work with WOLTIL to insure
that, to the extent possible, the time that WOLTIL shall be required to devote
to the Litigation shall be scheduled in accordance with WOLTIL's preferences.
WOLTIL agrees that he will provide his services (including actual travel time)
required in connection with the Litigation at no cost to the Company for the
first One Hundred Seventy-six (176) hours which are required by the Litigation;
provided, however, the Company shall reimburse WOLTIL for the costs and
expenses reasonably incurred by WOLTIL in connection with the provision of such
services. All services required of WOLTIL in the Litigation in excess of One
Hundred Seventy-six (176) hours shall be compensated to WOLTIL at the rate of
One Hundred Fifty and No/100 Dollars ($150.00) per hour, and, in addition, the
Company shall reimburse WOLTIL for the costs and expenses reasonably incurred
by WOLTIL in connection with the provision of such services.

   Section 15.  RELEASES.  In consideration of the provisions of this Agreement
and for other good and sufficient consideration, receipt whereof is hereby
acknowledged, the Company and WOLTIL do each hereby release and discharge the
other from all actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, attorneys' fees, costs, disbursements, bonds, bills,
covenants, contracts, controversies, agreements, promises, and demands
whatsoever, at law or in equity, present and future, known or unknown, in any
manner arising out of the employment relationship between the Company and
WOLTIL, and the termination thereof, including, without limitation, any and all
rights, duties and obligations arising out of or relating to that certain
Employment Contract between WOLTIL and the Company dated as of





                                      -13-
<PAGE>   14
December 8, 1995 and all said actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, attorneys' fees, costs, disbursements,
bonds, bills, covenants, contracts, controversies, agreements, promises, and
demands whatsoever, at law or in equity, are hereby satisfied in full,
terminated and forever discharged. No further action whatsoever shall be taken
before any tribunal or forum regarding said actions, causes of action, suits,
debts, dues, sums of money, accounts, reckonings, attorneys' fees, costs,
disbursements, bonds, bills, covenants, contracts, controversies, agreements,
promises, and demands whatsoever, at law or in equity.

   WOLTIL and the Company further agree not to file or lodge or bring any
charges, complaints, grievances or other claims in any forum including, but not
limited to judicial, administrative or arbitral forums relating to or arising
out of WOLTIL's employment with the Company or his resignation and severance
therefrom.

   WOLTIL affirms that there is no administrative or judicial proceeding
against the Company to which WOLTIL is a party or which has been filed on his
behalf. In the event that there is outstanding any such proceeding, WOLTIL
agrees to cause the immediate withdrawal and dismissal with prejudice of that
proceeding. In the event that any agency, court or other forum does not dismiss
with prejudice such proceeding, WOLTIL agrees that he will not give testimony
or evidence voluntarily against the Company in such proceeding. The prohibition
contained herein shall not apply with respect to information or testimony
provided by WOLTIL pursuant to a subpoena enforced by order of the court.

   Section 16.  INDEMNIFICATION.  The Company will indemnify WOLTIL to the
fullest extent permitted (including payment of expenses in advance of final





                                      -14-
<PAGE>   15
disposition of a proceeding) by the Certificate of Incorporation and By-Laws of
the Company, as in effect at such time or on the effective date of this
Agreement, whichever affords or afforded greater protection to WOLTIL, and
WOLTIL shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its directors and
officers, against all costs, charges and expenses whatsoever incurred or
sustained by his in connection with any action, suit or proceeding to which he
may be made a party by reason of his being or having been an officer or
employee of the Company or any of its subsidiaries or affiliates or his serving
or having served any other enterprises as an officer or employee at the request
of the Company. The Indemnification Agreement between Beverly Enterprises, Inc.
and WOLTIL dated December 31, 1991 shall remain in full force and effect for
its stated term for the services provided by WOLTIL to the Company during the
period up to and including February 17, 1996.

   Section 17.  POSITIVE RECOMMENDATION.  The Company shall respond, verbally,
to inquiries from a potential employer of WOLTIL with a positive
recommendation, and upon request of either WOLTIL or any such potential
employers, shall provide a positive letter of recommendation, provided WOLTIL
shall inform any such potential employers to direct their inquiries to the
attention of Boyd W. Hendrickson, President and Chief Operating Officer of the
Company. The Company shall use its best efforts to assure that neither its
Chairman or its Chief Operating Officer disparage WOLTIL's business
capabilities or reputation in the financial community from and after the date
hereof. As of the date hereof, WOLTIL is unaware of any action of the Company
which would be a breach hereunder if this Agreement had been in effect.





                                      -15-
<PAGE>   16
   Section 18.  THE COMPANY'S RIGHT OF SET-OFF.  In the event the Company, in
its discretion, believes that WOLTIL has breached any obligation under this
Agreement, in addition to any other legal or equitable remedies it may have,
the Company may suspend making the payments to WOLTIL provided for in this
Agreement and instead shall place such payments in an interest bearing account
to be held in escrow by the Company pending judicial resolution of the issue of
whether WOLTIL has breached this Agreement. Within a reasonable time of
suspending such payments, the Company shall commence an action in any court of
competent jurisdiction within the State of Florida seeking, in addition to
whatever other remedies may be available to it, an order that WOLTIL has
breached any provision of the this Agreement. Upon the entry of a final
judgment to that effect (and after any appeals, if any), then any damages to
the Company resulting from said breach, including but not limited to liquidated
damages, may be set-off by the Company from the amounts it holds in escrow
under this Section. Upon entry of any final judgment that WOLTIL has not
breached any provision of this Agreement (and after any appeals, if any) then
all funds held in escrow, including interest thereon, shall be released to
WOLTIL.  As of the date of execution of this Agreement, the Company is unaware
of any action by WOLTIL which, if this Agreement had been in effect, would
constitute a breach hereunder.

   Section 19.  AUTHORITY OF COMPANY TO ENTER INTO THIS AGREEMENT.  The Company
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and qualified to transact business in the
State of Arkansas as a foreign corporation.  In addition, the execution and
delivery of this Agreement and the performance by it of its obligations under
this Agreement have been duly authorized by all necessary corporate





                                      -16-
<PAGE>   17
action of the Company and do not violate or conflict with: (a) any provision of
the Company's Articles of Incorporation or By-laws; (b) any law or any order,
writ, injunction, decree, rule, regulation of any Court, administrative agency
or any other governmental authority; or (c) any agreement to which the Company
is a party or by which the Company is bound.

   Section 20.  EXPERTS.  Each of the parties declares that prior to the
execution of this Agreement, it apprised itself of sufficient relevant data,
either through experts or through other sources of its own selection, including
without limitation full legal review by attorneys chosen by each party, in
order that it might intelligently exercise its own judgment in deciding whether
to execute this Agreement.

   Section 21.  NOTICE.  All notices and other communications to be given
pursuant to this Agreement shall be in writing and shall be delivered
telegraphed or mailed by first class registered or certified mail, postage
prepaid and return receipt requested to the other party, as set forth below:


          If to WOLTIL:            ROBERT D. WOLTIL
                                   316 Crestwood Lane
                                   Largo, FL 34640


          If to the COMPANY:       Beverly Enterprises, Inc.
                                   Attention: President
                                   5111 Rogers Avenue, Suite 40-A
                                   Fort Smith, AR 72919-0155


   Communications which are delivered or telegraphed shall be deemed to have
been given when delivered or telegraphed.  Communications which are mailed
shall be deemed to have been given 72 hours after deposit in the U.S. Postal
Service as required in this Section 20.

   Section 22.  CHOICE OF LAW.  The parties agree that the laws of the State of
Florida shall govern the enforcement and construction of the provisions of this
Agreement.





                                      -17-
<PAGE>   18
   Section 23.  ENTIRE AGREEMENT.  This Agreement sets forth the entire
agreement of the parties hereto, and any and all prior agreements, whether oral
or written, on the subject matter contained herein, are superseded by this
Agreement.  This Agreement may only be modified by a later agreement in writing
duly executed by each of the parties hereto. In the event of the commencement
of any litigation for the enforcement of any rights under this Agreement, the
prevailing party in such litigation shall be entitled to receive from the
unsuccessful party, all costs incurred in connection with such litigation,
including a reasonable amount as attorneys' fees.

   Section 24.  DISCLAIMER.  WOLTIL understands and agrees that he:

        (a) Has had a full twenty-one (21) days within which to consider this
Agreement before executing it;

        (b) Has carefully read and fully understands all of the provisions of
this Agreement;

        (c) Is, through this Agreement, releasing the Company from any and all
claims he may have against the Company;

        (d) Knowingly and voluntarily agrees to all of the terms set forth in
this Agreement;

        (e) Knowingly and voluntarily intends to be legally bound by the same;

        (f) Was advised and hereby is advised in writing to consider the terms
of this Agreement and consult with an attorney of his choice prior to executing
this Agreement;

        (g) Has a full seven (7) days following the execution of this Agreement
to revoke this Agreement and has been and hereby is advised in writing that
this Agreement shall not become effective or enforceable until





                                      -18-
<PAGE>   19
the revocation period has expired; and WOLTIL understands that rights or claims
under the Age Discrimination in Employment Act of 1967 (29 U.S.C. Section 621,
et seq.) that may arise after the date this Agreement is executed are not
waived or released.

   IN WITNESS WHEREOF, the undersigned, having read the foregoing Agreement,
and understanding all of its terms, execute it voluntarily, on the date first
set forth above, with full knowledge of its significance.



                                               FIRST PARTY
                                               -----------

                                               Beverly Enterprises, Inc.


                                               By: /s/ BOYD W. HENDRICKSON
                                                  ------------------------------
                                                   Boyd W. Hendrickson
                                                   President and Chief Operating
                                                   Officer



                                               SECOND PARTY
                                               ------------


                                                /s/ ROBERT D. WOLTIL
                                               ---------------------------------
                                               Robert D. Woltil





                                      -19-
