Exhibit 10.31

PHARMERICA CORPORATION

PharMerica Corporation 2007 Omnibus Incentive Plan

Substitution Non-Qualified Stock Option Agreement

THIS SUBSTITUTION NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”),
granted under the PharMerica Corporation 2007 Omnibus Incentive Plan (the
“Plan”), is effective as of             , 20    , and is entered into by and
between PharMerica Corporation, a Delaware Corporation (the “Company”), and
                     (the “Optionee”).

Preliminary Statements

WHEREAS, the Optionee was formerly an employee of AmerisourceBergen Corporation
(“Amerisource”) who was granted an option to purchase                  shares of
Amerisource common stock with an exercise price of $                 on
                ,              (the “Americsource Option”) under The
AmerisourceBergen Corporation 2002 Management Stock Incentive Plan;

WHEREAS, in connection with the merger of Americsource with and into the
Company, the Company has determined that it is desirable and in its best
interests to substitute the Americsource Option with an option to purchase
shares of the Company’s Stock (the “Stock”) in such manner that the substitution
shall not be considered a new option grant or a modified option under
Section 424 or the Code; and

WHEREAS, any capitalized term not herein defined shall have the meaning as set
forth in the Plan.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein:

1. Grant of Option. On the terms and conditions of this Agreement and the Plan,
the Company hereby grants to the Optionee the right and option (the “Option”) to
purchase from the Company                  shares of Stock. This Option shall
not constitute an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”). The date of grant of
this Option is             , 200   (the “Grant Date”). The Optionee acknowledges
and agrees that this Option is a substitution for the Americsource Option and
that effective as of the Grant Date, the Optionee shall have no rights under the
Americsource Option.

The Optionee’s right, if any, to continue to be employed by the Company will not
be enlarged or otherwise affected by the receipt of this Option, and the receipt
of this Option will not in any way restrict the right of the Company to
terminate the Optionee’s employment at any time.

2. Price. The purchase price (the “Option Price”) for the shares of Stock
subject to the Option granted by this Agreement is $             per share.

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3. Vesting of the Option. The Option granted pursuant to this Agreement shall
vest and become exercisable in accordance with the following provisions:

(a) Vesting of the Option. Provided that the Optionee remains in the continuous
employment of the Company through the vesting period, the Option shall vest and
become exercisable in accordance with the following schedule:

 

Vesting Date

 

No. of Shares Vested

  

Total Percentage of Option Vested

  _________      25%   _________      50%   _________      75%   _________   
100%

There shall be no proportional vesting prior to any Vesting Date; all vesting
shall occur only on the Vesting Date.

(b) Acceleration of Vesting of the Option. The Option shall become fully vested
and exercisable in the event of a Change in Control. Notwithstanding the
foregoing, the Committee, in its sole and absolute discretion, may accelerate
all or any portion of the vesting of the Option at any time.

(c) Forfeiture of the Option. The unvested portion of the Option shall
automatically be forfeited upon the date that the Optionee ceases to be employed
by the Company for any reason.

4. Exercise of the Option. Except as otherwise provided herein, the Option
granted pursuant to this Agreement shall be exercisable as follows:

(a) Exercise by the Optionee. Only the Optionee receiving the Option (or, in the
event of the Optionee’s legal incapacity or incompetency, the Optionee’s
guardian or legal representative and in the case of the Optionee’s death, the
Optionee’s estate) may exercise the Option.

(b) Option Term. Any non-forfeited portion of the Option shall be exercisable
until the date it terminates. The Option shall no longer be exercisable and
shall terminate upon the earliest to occur of:

(i) The expiration of the one-year period after the Optionee’s termination of
employment with the Company, if the termination is for any reason other than
voluntary or Cause;

 

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(ii) The expiration of the three-month period after the Optionee’s voluntary
termination of employment from the Company;

(iii) The expiration of the earlier of (a) the date set forth in this Agreement
or (b) the date that is three years from the date of the Optionee’s Voluntary
Retirement;

(iv) The date on which the Optionee’s employment is terminated for Cause;

(v) The tenth anniversary of the Grant Date.

(c) Definitions:

(i) “Voluntary Retirement” means any voluntary termination of employment by the
Grantee after reaching age 62 and completing five years of continuous service
with the Company or its Subsidiaries.

(ii) “Cause” means:

(A) any willful, material violation of any law or regulation applicable to the
business of the Company;

(B) conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, or any willful perpetration of a common law fraud;

(C) commission of any act of personal dishonesty which involves personal profit
in connection with the Company;

(D) intentional wrongful disclosure of confidential information of the Company;

(E) intentional wrongful engagement in any competitive activity,

(F) the willful and continued failure or refusal to perform the material duties
required of the Optionee as an employee, officer, director or consultant of the
Company (other than as a result of disability);

(G) disregard of the policies of the Company so as to cause material loss,
damage or injury to the property, reputation or employees of the Company;

(H) ongoing alcohol/drug addiction and a failure by the Optionee to successfully
complete a recovery program, or

(I) any other misconduct by the Optionee which is materially injurious to the
financial condition or business reputation of, or is otherwise materially
injurious to, the Company.

 

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5. Exercise Procedure. Vested portions of the Option may be exercised, in whole
or in part, by delivery to the Company’s principal office of a written notice of
exercise, to the attention of the Corporate Secretary, no less than three
(3) business days in advance of the effective date of the proposed exercise (the
“Exercise Date”), setting forth the number of shares of Common Stock with
respect to which the Option is to be exercised, the Grant Date of the Option and
the Exercise Date and accompanied by full payment of the exercise price and all
applicable withholding taxes. Applicable withholding taxes shall be calculated
based on the excess of the Fair Market Value of the shares of Common Stock over
the exercise price as of the Exercise Date.

6. Construction of Agreement. Any provision of this Agreement (or portion
thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction
shall, as to that jurisdiction and subject to this section, be ineffective to
the extent of such invalidity, illegality or unenforceability, without affecting
in any way the remaining provisions thereof in such jurisdiction or rendering
that or any other provisions of this Agreement invalid, illegal, or
unenforceable in any other jurisdiction. No waiver of any provision or violation
of this Agreement by the Company shall be implied by the Company’s forbearance
or failure to take action.

7. Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any party hereto upon any breach or default of any party
under this Agreement, shall impair any such right, power or remedy of such party
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party or any provisions or conditions of this Agreement, shall be in
writing and shall be effective only to the extent specifically set forth in such
writing.

8. Limitation on Transfer. The Option shall not be assignable or transferable
other than by will or by the laws of descent and distribution and in accordance
with the Plan.

9. Integration. This Agreement, and the other documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein and in the Plan. This Agreement, including without
limitation the Plan, supersedes all prior agreements and understandings between
the parties with respect to its subject matter.

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

11. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
the provisions governing conflict of laws.

 

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12. Optionee Acknowledgment. The Optionee hereby acknowledges receipt of a copy
of the Plan. The Optionee hereby acknowledges that all decisions, determinations
and interpretations of the Committee in respect of the Plan, this Agreement and
the Option shall be final and conclusive.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement, or caused this Agreement to be duly executed and delivered on his or
its behalf, as of the day and year first above written.

 

PHARMERICA CORPORATION   BY:  

 

  DATE:  

 

  OPTIONEE  

 

  DATE:  

 

  OPTIONEE’S ADDRESS: