Exhibit 10.1
EMPLOYMENT AGREEMENT
     THIS AGREEMENT by and between PrairieStone Pharmacy, LLC, a Delaware
limited liability company (hereinafter the “Company”), and John J. Brady (the
“Executive”), dated and effective as of February 15, 2007.
     WHEREAS, the Executive is a founder of the Company;
     WHEREAS, the Executive is currently employed by the Company;
     WHEREAS, the Company has been acquired by Arcadia Resources, Inc.
(“Arcadia”); and
     WHEREAS, the Board of Managers of the Company (the “Board”), has determined
that it is in the best interests of the Company and its owner, Arcadia, to
continue to employ Executive as an officer of the Company and the Executive
desires to serve in that capacity.
     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
     1. Employment. The Company shall employ the Executive, and the Executive
shall serve the Company and its subsidiaries, if any, on the terms and
conditions set forth in this Agreement, for the period beginning on the date
hereof (the “Employment Date”) and continuing until terminated as provided below
in Section 4 (the “Employment Period”).
     2. Position and Duties.
          (a) As of the date of this Agreement, and during the Employment
Period, the Executive will be employed as President of the Company and such of
its subsidiaries as may be determined by the Board, performing such duties as
may be designated by the Board from time to time which shall be consistent with
the general nature of the duties and authority of a President in similarly
situated companies.
          (b) During the Employment Period, excluding any periods of vacation
and absence due to intermittent illness to which the Executive is entitled, and
any services or activities on behalf of civic or charitable institutions that do
not significantly interfere with the performance of his responsibilities to the
Company or violate the provisions of Section 10, the Executive shall devote his
full time and attention to the business and affairs of the Company and its
subsidiaries. Except as stated in the previous sentence, during the Employment
Period, Executive shall have no other employment or business interests;
provided, however, that the Executive shall be able to invest his personal
assets in investments and entities as long as such investments do not violate
Section 10 and do not require a material amount of the Executive’s time. The
Executive shall use reasonable efforts to carry out all duties and
responsibilities assigned to him faithfully and efficiently.
     3. Compensation.
          (a) Base Salary. During the Employment Period, the Executive shall
receive an annual base salary of $180,000 payable in accordance with the regular
payroll practices of the Company. The Executive’s base salary shall be reviewed
annually by the Board, in accordance with the Company’s standard practices for
executives generally, and may be increased, but not decreased, as determined by
the Board, in its sole discretion, or by any person or persons to whom the Board
has delegated such authority.

 

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          (b) Annual Bonus and Incentive Plans; Other Benefits. Beginning in
2007 and during the Employment Period, the Executive shall be eligible to
participate in any bonus or incentive plans that are available to the Company’s
senior executives.
          (c) Other Benefits. To at least the same extent as other senior
executives of Arcadia or the Company, except as required by law or applicable
government regulations, the Executive shall be entitled to participate in:
(i) any short-term and long-term incentive, savings, and retirement plans;
(ii) all practices, policies and programs including vacation policies
established by the Company; and (iii) the Executive and/or the Executive’s
family, as the case may be, shall be eligible for participation in, and shall
receive all benefits under, all welfare benefit plans, practices, policies and
programs provided by the Company.
          (d) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in carrying out the Executive’s duties under this Agreement,
provided that the Executive complies with the generally applicable policies,
practices and procedures of the Company for submission of expense reports,
receipts, or similar documentation of such expenses.
          (e) Automobile Allowance. The Company will provide Executive with an
automobile allowance of $750 per month throughout the term of this Agreement.
          (f) Carry Over of Vacation. Executive shall be entitled to four
(4) weeks of paid vacation/holiday leave annually.
     4. Termination of Employment.
          (a) Death or Disability. The Executive’s employment and the Employment
Period shall terminate automatically upon the Executive’s death or Disability
during the Employment Period. “Disability” means Executive’s inability, because
of mental or physical illness or incapacity, whether total or partial, to
perform one or more primary duties of the Executive’s employment with reasonable
accommodation, and which continues for a period of one hundred eighty (180) days
within any twelve (12) period. If any question shall arise during the
Executive’s employment hereunder regarding the Executive’s inability, because of
mental or physical illness or incapacity, whether total or partial, to perform
one or more primary duties of the Executive’s employment with reasonable
accommodation, Executive, at the request of the Company, shall submit to a
medical examination by a physician selected by the Company (the “Company
Physician”) to determine whether the Executive is so disabled. In the event that
the Executive disagrees with the findings of the Company Physician, Executive
shall have the right to submit to a second medical examination by a physician
selected by the Executive (the “Executive Physician”). If the Company
Physician’s and the Executive Physician’s findings agree with respect to
Executive’s disability status, such determination shall be binding on the
Company and the Executive. If the Company Physician’s and the Executive
Physician’s findings do not agree with respect to Executive’s disability status,
the Company Physician and the Executive Physician shall together designate a
third physician to make the determination with respect to Executive’s disability
status and such determination shall be binding on the Company and the Executive.
The date of the Executive’s Disability shall be the date on which a Physician
(whether Company, Executive or third Physician) makes a final, binding
determination of Executive’s disability.
          (b) By the Company. The Company may terminate the Executive’s
employment under this Agreement during the Employment Period for Cause or
without Cause. “Cause” means:

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               (i) The Executive’s fraud, theft or embezzlement committed with
respect to the Company, its affiliates or customers;
               (ii) the continued failure by the Executive to perform his duties
as contemplated by this Agreement (other than any such failure resulting from
his Disability or any such actual or anticipated failure after the issuance by
the Executive of a Notice of Termination for Good Reason) over a period of not
less than ninety (90) days; provided however, that the Company may only
terminate the Executive’s employment for “cause” under this subdivision only if
the Company has provided notice to the Executive of his performance failures and
such failures have not been cured by the Executive within thirty (30) days of
the receipt of notice by the Executive;
               (iii) the willful or negligent misconduct of the Executive that
is materially injurious the Company (including, without limitation, any breach
by the Executive of Section 10 of this Agreement), and, in the case of negligent
misconduct, such misconduct is not cured by Executive within thirty (30) days of
the receipt of notice by the Executive from the Company;
               (iv) the Executive’s conviction of a misdemeanor which directly
causes material financial harm to the Company, which harm is not cured by the
Executive within thirty (30) days of the receipt of notice by the Executive from
the Company of such harm;
               (v) the Executive’s conviction of a felony (including a felony
constituting a crime of moral turpitude);
               (vi) Executive’s material breach of this Agreement causing
material harm to the Company that is not cured within thirty (30) days of
receipt of notice thereof (any breach by the Executive of Section 11of this
Agreement shall be deemed a material breach); provided that no “cure” shall be
deemed to have been effected unless both the breach and the harm have been
cured;
               (vii) the Executive’s breach of a fiduciary duty owed to the
Company or its Affiliates; or
               (viii) the Executive’s willful failure to carry out any material
directive of the Board which does not require unlawful action nor breach this
Agreement
               (ix) Provided, however, that the Executive shall be limited to
one cure during any twelve (12) month period for all descriptions of cause and
only for those causes where a cure period is permitted.
          (c) A termination of Executive’s employment for Cause shall be
effectuated by giving the Executive written notice (“Notice of Termination for
Cause”) of the termination, setting forth in reasonable detail the specific
conduct that constitutes Cause and the specific provision(s) of this Agreement
on which the Company relies. The Executive shall have 30 days to remedy the
conduct set forth in the Notice of Termination for Cause. A termination of
Executive’s employment for Cause shall be effective on the thirtieth business
day following the date when the Notice of Termination for Cause is given, unless
the conduct set forth in the notice is remedied by the Executive within the
30 day period; provided, however, that the Executive shall be able to cure such
conduct only once within a twelve (12) month period.
          (d) By the Executive. The Executive may terminate employment under
this Agreement for Good Reason or without Good Reason. “Good Reason” means:

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               (i) any reduction in the Executive’s base salary;
               (ii) removal of the Executive from his position as President, or
failure to elect or re-elect the Executive to such position, except for “Cause”
as defined in paragraph (b) above;
               (iii) a material failure by the Company to comply with any
provision of Sections 2 and 3 of this Agreement, other than (i) a purely
monetary failure with respect to an amount less than $5,000, (ii) a failure
within Executive’s control or (iii) an isolated, insubstantial or inadvertent
failure that is not taken in bad faith and is remedied by the Company within
15 days after receipt of written notice thereof from the Executive;
               (iv) any action by the Company, except as required by law or
applicable government regulations, which is specific to the Executive that would
or does adversely affect Executive’s participation in bonus or incentive plans
or the Other Benefits as described in Sections 3(b) and/or 3(c); and
               (v) failure by the Company to obtain from any successor in
interest thereto assent to the terms of this Agreement.
          (e) A termination of employment by the Executive for Good Reason shall
be effectuated by giving the Company written notice (“Notice of Termination for
Good Reason”) of the termination, setting forth in reasonable detail the
specific conduct that constitutes Good Reason and the specific provision(s) of
this Agreement on which the Executive relies. The Company shall have 30 days to
remedy the conduct set forth in the Notice of Termination for Good Reason. A
termination of employment by the Executive for Good Reason shall be effective on
the thirtieth business day following the date when the Notice of Termination for
Good Reason is given, unless the conduct set forth in the notice is remedied by
the Company within the 30 day period; provided, however, that the Company shall
be able to cure such conduct only once within a twelve (12) month period.
          (f) A termination of the Executive’s employment by the Executive
without Good Reason shall be effected by giving the Company at least 30 days’
advance written notice of the termination.
          (g) Date of Termination. The “Date of Termination” means the date of
the Executive’s death, the date of the Executive’s Disability, the date the
termination of the Executive’s employment under this Agreement by the Company
for Cause or without Cause or by the Executive for Good Reason or without Good
Reason, as the case may be, is effective. The Employment Period shall end on the
Date of Termination. For all purposes of this Agreement, no termination of the
Executive’s employment shall be deemed to have occurred if the Executive’s
employment is transferred during the Employment Period from one PrairieStone
Pharmacy Affiliate as the employer to another PrairieStone Pharmacy Affiliate as
the employer.
          (h) “Affiliate” of the Company or any other person or entity means any
person or entity directly or indirectly controlling, controlled by, or under
common control with, such first person or entity. For purposes of this
definition, the terms “Control,” “Controlling,” and “Controlled” mean having the
right to elect a majority of the members or the board of directors or other
comparable body responsible for management and direction of a Person by
contract, by virtue of share ownership or otherwise.

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     5. Obligations of the Company upon Termination.
          (a) Termination During Initial 36 Months. If, during the first
36 months of the Employment Period, the Company terminates the Executive’s
employment (other than for Cause) or the Executive terminates employment under
this Agreement for Good Reason, and provided the Executive continues to abide by
the provisions of Section 9 of this Agreement, all of the Executive’s employment
compensation and benefits in effect on the Date of Termination shall be
continued in effect until the latter of (i) 36 months after the effective date
of this Agreement, or (ii) 12 months after the Date of Termination.
          (b) Termination After Initial 36 Months. If, after the initial
36 months of the Employment Period, the Company terminates the Executive’s
employment under this Agreement (other than for Cause) or the Executive
terminates employment under this Agreement for Good Reason (any such termination
of employment being a “Section 5(b) Termination”) and provided the Executive
continues to abide by the provisions of Section 9 of this Agreement:
               (i) the Executive shall be entitled to a continued payment for
one year of the Executive’s current base salary (as in effect on the Date of
Termination), payable in regular intervals, in accordance with the regular
payroll practices of the Company;
               (ii) the Executive shall receive a pro rata portion of any bonus
or incentive plan amount for that portion of the year prior to the Date of
Termination but only to the extent the Executive’s performance measures are
achieved at the end of the fiscal year. Pro rata bonuses shall be paid within
60 days of the end of the fiscal year.
               (iii) if after the Date of Termination the Executive elects to
receive continuation coverage under the Company’s group health plans pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the
Executive shall be entitled to reimbursement from the Company for the COBRA
premium costs of medical, prescription, dental and vision coverage, if any,
under the Company’s group health plans (as in effect from time to time) for the
Executive and, to the extent permitted under COBRA, the Executive’s spouse and
eligible dependents, such reimbursement not to exceed the COBRA rates for such
coverage and, unless terminated sooner as described below, such reimbursement to
continue for one year after the Date of Termination; provided, however, that the
Executive shall be required to submit to the Company reasonable evidence of
payment by the Executive of any such COBRA premiums in order to obtain
reimbursement from the Company and that the Executive may not submit any
requests for reimbursement of such payments more than once per calendar month;
provided, further, that the Company, in its sole discretion, may elect for the
first two calendar months (or portions thereof) of the Severance Period, as
applicable, to remit any such payments directly on behalf of the Executive
rather than requiring the Executive to remit such payments and seek
reimbursement therefore from the Company; provided, further, that the
obligations of the Company to reimburse any such payments shall terminate on the
date of occurrence of the first to occur of any of the following, if any of the
following should occur prior to the end of the Severance Period: (i) the date of
commencement of eligibility of the Executive under the group health plan of any
other employer or (ii) the date of commencement of eligibility of the Executive
for Medicare benefits under Title XVIII of the Social Security Act (“Medicare
Benefits”); and provided, further, that the Executive nevertheless shall be
entitled to elect COBRA continuation coverage without reimbursement under the
Company’s group health plans at the applicable COBRA premium rates through the
date that is 18 months after the Date of Termination or, if earlier, the date
that the Executive becomes covered under the group health plan of another
employer or becomes eligible for Medicare Benefits, if the obligations of the
Company to reimburse the Executive for COBRA premiums for continuation coverage
under the Company’s group health plans should terminate prior to such date.
Notwithstanding anything to the contrary set forth

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above, the Company, in its sole discretion, may discontinue any coverage
contemplated hereunder in the event that such continuation is not permitted
under or would adversely affect the tax status of the plan or plans of the
Company pursuant to which the coverage is provided, in which case the Company
shall make supplemental severance payments to the Executive in monthly amounts
equal to the amounts to which the Executive otherwise would have been entitled
to reimbursement hereunder in respect of such coverage for the remainder of the
period that the Company otherwise would have been obligated to make
reimbursements hereunder to the Executive. Any amounts that are reimbursed to
the Executive by the Company or paid directly to the Executive as supplemental
severance payments will be considered taxable income to the Executive and any
taxes on such amounts will be the Executive’s responsibility and subject to
applicable tax withholding.
               (iv) the Company shall also pay, or cause to be paid, to the
Executive, in a lump sum in cash within 30 days after the Date of Termination
certain of Executive’s accrued but unpaid cash compensation (the “Accrued
Obligations”), which shall include but not be limited to the Executive’s base
salary through the Date of Termination that has not yet been paid, any accrued
but unpaid vacation pay, and similar unpaid items that have accrued and as to
which the Executive has become entitled as of the Date of Termination, including
declared but unpaid bonuses and unreimbursed employee business expenses.
          (c) Death or Disability. If the Executive’s employment is terminated
by reason of the Executive’s death or Disability during the Employment Period,
the Company shall pay the Accrued Obligations to the Executive or the
Executive’s estate or legal representative, as applicable, in a lump sum in cash
within 30 days after the Date of Termination. In addition, the Company shall pay
a pro-rata portion of the Executive’s bonus to Executive or his estate or legal
representative, determined and paid in the manner set forth in subparagraph
5(a)(ii) above. Pro rata bonuses shall be paid within 60 days of the end of the
fiscal year for that portion of the year prior to the Date of Termination but
only to the extent the Executive’s performance measures are achieved at the end
of the fiscal year. In such event, the Company shall have no further obligations
under this Agreement or otherwise to or with respect to the Executive other than
for any entitlements under the terms of any other plans or programs of the
Company in which the Executive participated and under which the Executive has
become entitled to a benefit.
          (d) By the Company for Cause; By the Executive Other than for Good
Reason. If the Executive’s employment is terminated by the Company for Cause or
the Executive voluntarily terminates his employment other than for Good Reason,
the Company shall pay the Executive, or shall cause the Executive to be paid,
the Executive’s base salary through the Date of Termination that has not been
paid and the amount of any declared but unpaid bonuses, accrued but unpaid
vacation pay, and unreimbursed employee business expenses, and the Company shall
have no further obligations under this Agreement or otherwise to or with respect
to the Executive other than for any entitlements under the terms of any other
plans or programs of the Company in which the Executive participated and under
which the Executive has become entitled to a benefit.
     6. Tax Treatment. It is the intention of the parties that payments to be
made to the Executive whether under the terms of this Agreement or otherwise
shall not constitute “excess parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986 (as amended from time to time)
(the “Code) and any regulations thereunder. If the independent accountants
serving as auditors for the Company on the date of this Agreement (or any other
independent certified public accounting firm designated by the Company)
determine that any payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise) would be nondeductible by
the Company under Section 280G of the Code (or any successor provision), then
the amounts payable or distributable under this Agreement will be reduced to the
maximum amount which may be paid or distributed without causing such payments

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or distributions to be nondeductible. The determination shall take into account
(a) whether the payments or distributions are “parachute payments” under
Section 280G, (b) the amount of payments and distributions under this Agreement
that constitute reasonable compensation, and (c) the present value of such
payments and distributions determined in accordance with Treasury Regulations in
effect from time to time. The Executive shall have the right to designate which
payments or distributions will be reduced.
     7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company for which the Executive may qualify.
Vested benefits and other amounts that the Executive is otherwise entitled to
receive on or after the Date of Termination under any plan, policy, practice or
program of, or any contract or agreement with, the Company shall be payable in
accordance with such plan, policy, practice, program, contract or agreement, as
the case may be, except as explicitly modified by this Agreement.
     8. Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. Notwithstanding
this Section 8, the Executive shall continue to be subject to all of the
restrictions provided for in Section 9 of this Agreement during the Severance
Period.
     9. Confidential Information; Non-solicitation; Non-competition.
          (a) The Executive agrees and acknowledges that by reason of his
employment by and service to the Company, he will have access to, become exposed
to and/or become knowledgeable about confidential information of the Company and
its Affiliates (the “Confidential Information”) from time to time during the
Employment Period, including, without limitation, proposals, plans, inventions,
practices, systems, programs, processes, methods, techniques, research, records,
supplier sources, customer lists and other forms of business information that
are not known to the Company’s competitors, are not recognized as being
encompassed within standard business or management practices and/or are kept
secret and confidential by the Company. Executive agrees that at no time during
or after the Employment Period will he disclose or use the Confidential
Information except as may be required in the prudent course of business for the
benefit of the Company, or as may be required by law or in a legal proceeding.
          (b) The Executive acknowledges that the Company’s business plan to
engage in business throughout the United States. During the Executive’s
employment by the Company and for the duration of the Restricted Period (defined
below), the Executive agrees that he will not, unless acting with the prior
written consent of the Company, directly or indirectly, own, manage, control, or
participate in the ownership, management or control of, be financially
interested in, or be employed or engaged by, or otherwise affiliated or
associated with, as an officer, director, employee, consultant, independent
contractor or otherwise, any other corporation, partnership, proprietorship,
firm, association or other business entity, which is engaged in the management,
ownership or operation of retail pharmacies in the United States or any other
business that, as of the Date of Termination, is engaged in by the Company in
the United States, has been reviewed with the Board of Managers for development
to be owned or managed by the Company, within nine (9) months of the Date of
Termination, and/or has been divested by the Company but as to which the Company
has an obligation to refrain from involvement for so long as such restriction
applies to the Company; provided, however, that the ownership of not more than
5% of the equity of a publicly traded entity shall not be deemed to be a
violation of this paragraph. Notwithstanding the foregoing, the Executive shall
be relieved of the covenants provided for in this subsection in the event that
the Company fails to make payments to Executive as provided for in Section 5(a)
or (b) of this Agreement and the Company has not cured such failure within
fifteen (15) calendar days after receipt of written notice from Executive. The
foregoing will be construed to permit the

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Executive to own or operate an independent pharmacy or to practice as a licensed
pharmacist in an independent or retail pharmacy at any time following the Date
of Termination.
          (c) The Executive also agrees that he will not, directly or
indirectly, during the Restricted Period induce any person who is an employee,
officer, director, or agent of the Company, to terminate such relationship, or
employ, assist in employing or otherwise be associated in business with any
present or former employee or officer of the Company or its Affiliates,
including without limitation those who commence such positions with the Company
or its Affiliates after the Date of Termination.
          (d) During the Restricted Period, the Executive shall not attempt in
any manner to contact or solicit any individual, firm, corporation or other
entity (i) that is or has been, a customer, supplier or vendor of the Company or
its Affiliates at any time during the Restricted Period, (ii) to which a
proposal has been made by the Company during the Restricted Period or (iii) to
which the Company has made a proposal during the nine (9) months preceding the
Date of Termination, for the purpose of implementing retail pharmacies or
providing retail pharmacy or services or products similar to the services and
products provided by the Company at the Date of Termination. In addition, during
the Restricted Period, the Executive shall not persuade or attempt to persuade
any customer, supplier, vendor, licensor or other entity or individual doing
business with the Company to discontinue or reduce its business with the Company
or otherwise interfere in any way with the business relationships and activities
of the Company. For purposes of this paragraph (d), a customer of the Company or
its Affiliates includes any retail/grocery establishment, physicians office,
clinic or any healthcare or retail host business in which the Company or its
subsidiaries has located or has proposed to locate a pharmacy or provide
pharmacy services.
          (e) The Executive acknowledges and agrees that the restrictions
contained in this Section 9 are reasonable and necessary to protect and preserve
the legitimate interests, properties, goodwill and business of the Company, that
the Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
the Executive breach the provisions of this Section. The Executive represents
and acknowledges that (i) the Executive has been advised by the Company to
consult the Executive’s own legal counsel in respect of this Agreement, (ii) the
Executive has consulted with and been advised by his own counsel in respect of
this Agreement, and (iii) the Executive has had full opportunity, prior to
execution of this Agreement, to review thoroughly this Agreement with the
Executive’s counsel.
          (f) The Executive further acknowledges and agrees that a breach of the
restrictions in this Section 9 may not be adequately compensated by monetary
damages. The Executive agrees that actual damage may be difficult to ascertain
and that, in the event of any such breach, the Company may be entitled to
injunctive relief in addition to such other legal or equitable remedies as may
be available to the Company. In the event that the provisions of this Section 9
should ever be adjudicated to exceed the limitations permitted by applicable law
in any jurisdiction, it is the intention of the parties that the provision shall
be amended such that those provisions are made consistent with the maximum
limitations permitted by applicable law, that such amendment shall apply only
within the jurisdiction of the court that made such adjudication and that those
provisions otherwise be enforced to the maximum extent permitted by law.
          (g) If the Executive breaches his obligations under this Section 9, he
agrees that suit may be brought, and that he consents to personal jurisdiction,
in the United States District Court for the District of Minnesota, or if such
court does not have jurisdiction or will not accept jurisdiction, in any court
of general jurisdiction in Minneapolis, Minnesota; consents to the exclusive
jurisdiction of any such court in any such suit, action or proceeding; and
waives any objection which he may have to the laying of venue of any such suit,
action or proceeding in any such court.

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           (h) For purposes of this Section 9, the term “Restricted Period”
following the Date of Termination means (i) if the Company terminates the
Executives employment without Cause or if the Executive terminates his
employment with Good Reason, the entire period during which payments to the
Executive continue pursuant to Section 5(a) or 5(b), or (ii) in any other case,
a period of one (1) year following the Date of Termination.
          (i) All Confidential Information; all innovations, inventions and
discoveries of the Company; and all correspondence, files, documents,
advertising, sales, manufacturers’ and other materials or articles or other
information of any kind, in any media, form or format, whether or not deemed
confidential, shall be and remain the sole property of the Company (“Company
Property”). Upon termination or at the Company’s request, whichever is earlier,
Executive shall immediately deliver to the Company all such Company Property.
          (j) If, contrary to the effort and intent of the parties, any covenant
or other obligation contained in this Section 9 shall be found not to be
reasonably necessary for the protection of the Company, to be unreasonable as to
duration, scope or nature of restrictions, or to impose an undue hardship on
Executive, then it is the desire of the parties that such covenant or obligation
not be rendered invalid thereby, but rather that the duration, scope or nature
of the restrictions be deemed reduced or modified, with retroactive effect, to
render such covenant or obligation reasonable, valid and enforceable. The
parties further agree that in the event a court, despite the efforts and intent
of the parties, declares any portion of the covenants or obligations in this
Section 9 invalid, the remaining provisions of this Section 9 shall nonetheless
remain valid and enforceable.
     10. Successors.
          (a) This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.
           (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
          (c) The Company shall 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 expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean both
the Company as defined above and any such successor that assumes and agrees to
perform this Agreement, by operation of law or otherwise.
     11. Miscellaneous.
          (a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Minnesota, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified except by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

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          (b) All notices and other communications under this Agreement shall be
in writing and shall be given by hand to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
John J. Brady
7928 Preservation Drive,
Indianapolis, Indiana 46278
If to the Company:
PrairieStone Pharmacy, LLC
2800 Campus Drive, Suite 30
Plymouth, MN 55441
Attn: Alan Lotvin
With a copy to:
Arcadia Resources, Inc.
405 5th Avenue South, Suite 6
Naples, Florida 34102
Attn: President and CEO
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 11. Notices and communications
shall be effective when actually received by the addressee.
          (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
          (d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.
          (e) The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (c) of Section 5 of this
Agreement) shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.
          (f) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
     12. The respective rights and obligations of the parties hereunder shall
survive any termination of the Executive’s employment to the extent necessary to
the intended preservation of such rights and obligations, including, but not by
way of limitation, those rights and obligations set forth in Sections 3, 5, 6, 8
and 9.

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     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization of the Committee, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.

          PRAIRIESTONE PHARMACY, LLC
      By:   /s/ Marvin R. Richardson         Name:   Marvin R. Richardson       
Title:   President and CEO        EXECUTIVE   /s/ John J. Brady     John J.
Brady        

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