exhibit10-24.htm


    Exhibit
10.24

    


    
      	
              EXECUTION
      COPY

            


    

    EMPLOYMENT
AGREEMENT

     

    THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made
and entered into this 21st day of October, 2009 by and between OMNICARE, INC., a
Delaware corporation (the “Company”) and John L.
Workman (“Executive”).

    


    WHEREAS,
the Company desires to employ the Executive as Executive Vice President, Chief
Financial Officer of the Company; and

    


    WHEREAS,
the Company and the Executive desire to enter into the Agreement to set forth
the terms of the Executive’s employment by the Company.

    


    THEREFORE,
in consideration of these recitals and the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

    


    SECTION 1 EMPLOYMENT

     

    1.1 Commencing
November 18, 2009 (“Effective Date”), the
Company shall employ Executive as Executive Vice President, Chief Financial
Officer of the Company for the Term of this Agreement set forth in Section 3.1,
reporting to the Chief Executive Officer.  Executive shall be assigned
such duties with regard to the business of the Company as are generally
performed by an executive of the Company serving in such position, and such
other duties as may from time to time be assigned to Executive by the Chief
Executive Officer consistent with such position.

     

    1.2 Executive
agrees to devote his exclusive and full professional time and attention to his
duties as an employee of the Company.  In addition, Executive agrees
that he shall not render to others any service of any kind for compensation or
engage in any other business activity including without limitation any
involvement in any business in which Executive has any administrative or
operating responsibility; provided, Executive may continue to serve as a member
of the board of directors of the company set forth on the Schedule attached
hereto or, in lieu of such service, with the prior consent of the Board of
Directors of the Company (“Board”) (which
consent shall not be unreasonably withheld), the board of directors of one other
public or privately-held company, provided that such service with any such
companies does not interfere with Executive’s discharge of his duties to the
Company and is not competitive with the Company.  If at any time
service on any board of directors would, in the discretion of the Board,
conflict with Executive’s fiduciary duty to the Company or create any appearance
thereof, Executive shall promptly resign from such other board of directors
after written notice of the conflict is received from the
Board.  Subject to Section 4 hereof, Executive shall not be precluded
from devoting reasonable periods of time required to manage his personal
investments and participate in professional, educational, philanthropic, or
community activities; provided that such activities do not interfere with
Executive’s discharge of his duties to the Company.

     

    1.3 Executive
shall perform his duties in the Covington, Kentucky metropolitan area but from
time to time Executive may be required to travel to other locations in
connection with his responsibilities under this Agreement.

     

    SECTION 2 COMPENSATION, BENEFITS AND
EXPENSES

     

    2.1 BASE SALARY. During
the Term, the Company shall pay to Executive a salary (“Base Salary”) at an
annual rate of $675,000, payable in accordance with the regular payroll
practices of the Company but not less frequently than monthly. Executive’s Base
Salary may be reviewed by the Compensation and Incentive Committee of the Board
(the “Compensation Committee”) every 14-15 months, and may be increased at the
Compensation Committee’s discretion taking into consideration Executive’s
performance, Company performance and general economic
conditions.  Notwithstanding the foregoing, Executive’s Base Salary
may be decreased in accordance with a uniform reduction in base salaries
applicable to all senior executives of the Company; provided that any such
decrease is restored in the same manner as such decreases are restored to other
senior executives of the Company.  The Base Salary as determined
herein from time to time shall constitute Executive’s “Base Salary” for purposes
of this Agreement.

     

    2.2 INCENTIVE
COMPENSATION. During the Term, Executive shall be eligible to participate
in the Company’s Annual Incentive Plan for Senior Executive Officers (or
successor plan; “AIP”) and such other
bonus and annual incentive compensation plans as may be maintained by the
Company for its executives.  Executive shall have the opportunity to
earn an annual target bonus of at least 75% of Executive’s Base Salary;
provided, Executive’s annual bonus for the 2010 fiscal year shall not be less
than a target-level amount.  Executive’s annual bonus (which may be
greater or, except for the 2010 fiscal year, less than the target bonus
percentage established above) to the extent earned and payable, shall be paid at
such time or times as is provided under and otherwise in accordance with the
terms of the AIP.  To compensate Executive for certain forfeitures
incurred upon terminating employment with his immediately preceding employer and
for Executive’s performance during 2009, on the date that 2009 annual bonuses
are paid to other senior executives, the Company shall pay to Executive, a lump
sum cash award of $625,000 reduced by (or promptly refunded to the Company as a
result of subsequent receipt of) the amount of annual bonus paid to Executive by
such preceding employer, provided that Executive is employed by the Company on
such date (except as provided below).  Executive shall be obligated to
inform the Company if he receives such incentive compensation from his prior
employer and to reimburse the Company for any duplicative amounts that he
receives.

     

    2.3 LONG TERM INCENTIVE
COMPENSATION.  During the Term, commencing with annual long
term incentive compensation awards granted to senior executives during 2010,
Executive shall be eligible to participate in the Company’s 2004 Stock and
Incentive Plan or successor plan (“2004 SIP”) and such
other long term incentive compensation plans as may be maintained by the Company
for its executives, and to receive awards thereunder in such amounts and on such
terms as may be from time to time determined by the Compensation Committee;
provided, Executive shall be granted a 2010 award under the 2004 SIP having a
value of not less than $1,200,000, comprised of restricted stock, stock options
or combinations thereof, and having such terms and conditions as determined by
the Compensation Committee consistent with awards at such time granted to other
senior executives.

     

    (a) SIGN-ON STOCK
AWARD.  On the Effective Date the Company shall grant to
Executive, pursuant to the 2004 SIP, an award of restricted stock having a face
value of $1,000,000, vesting and becoming unrestricted in ten equal installments
with an installment so vesting on each of the first ten anniversaries of the
Effective Date, provided that Executive is employed on such anniversary for such
installment to so vest (“Sign-On Stock
Award”).  The Sign-On Stock Award shall have such other terms
and conditions as apply under annual restricted stock awards granted to senior
executives during 2009.

     

    2.4 BUY-OUT STOCK
AWARD.  To compensate Executive for certain forfeitures
incurred upon terminating employment with his immediately preceding employer, on
the Effective Date the Company shall grant to Executive, pursuant to the 2004
SIP, an award of restricted stock having a face value of $3,000,000, vesting and
becoming unrestricted in three equal installments with an installment so vesting
on each of the first three anniversaries of the Effective Date, provided that
Executive is employed on such anniversary for such installment to so vest
(except as provided below) (“Buy-Out Stock
Award”).  The Buy-Out Stock Award shall have such other terms
and conditions as apply under annual restricted stock awards granted to senior
executives during 2009.

     

    2.5 REIMBURSEMENT OF BUSINESS
EXPENSES. During the Term, the Company shall reimburse Executive for all
authorized, ordinary and necessary business expenses incurred and substantiated
by him in accordance with applicable Company policy.  In all events,
any reimbursement made to Executive pursuant to this Section 2.5 shall be made
not later than the end of the calendar year following the calendar year in which
the related expense was incurred.

     

    2.6 EXECUTIVE
BENEFITS.  During the Term, Executive shall be entitled to
participate in all employee benefit plans of the Company including thrift,
profit sharing, medical coverage, education, or other welfare benefits that the
Company has adopted or may adopt, maintain or contribute to for the benefit of
its senior executives in accordance with the terms of such plans and programs;
provided, nothing herein shall preclude the Company’s authority to amend or
terminate any such plans at any time and from time to time.  Executive
shall be entitled to four (4) weeks of vacation each calendar year, pro rated
for 2009.

     

    2.7 RABBI TRUST
BENEFIT.  Commencing 2010, for each fiscal year (or portion
thereof) of Executive’s employment during the Term, the Company shall contribute
an amount equal to 8% of Executive’s annual cash compensation for such fiscal
year to a rabbi trust under the Company’s Rabbi Trust for Deferred Compensation
Arrangements for selected executives (“Rabbi Trust”), a
non-qualified deferred compensation plan subject to Section 401(a)(1) of the
U.S. Employee Retirement Income Security Act of 1974, as amended, and Section
409A of the U.S. Internal Revenue Code of 1986, as amended (“Code”).  Executive’s
“cash
compensation” for a fiscal year shall be equal to the sum of Executive’s
Base Salary paid during such fiscal year and the annual bonus earned and payable
(if any) for such fiscal year pursuant to Section 2.2 hereof (notwithstanding
that payment of such bonus is expected to occur in the subsequent fiscal year,
or occur later in accordance with any applicable deferral election of the
Executive), whether such bonus is payable in cash or shares of Company common
stock (be it vested or restricted unvested stock).  Each such
contribution shall vest and become nonforfeitable in five equal annual
installments commencing one year following the last day of the fiscal year for
which each such contribution is made and on each anniversary thereof thereafter,
provided that Executive is employed on the date such installment is scheduled to
so vest (except as provided below), and upon a termination of Executive’s
employment all unvested amounts shall be immediately forfeited; provided,
Executive shall become fully vested in his Rabbi Trust benefit and all future
contributions thereafter upon the attainment of age 65 (or attainment of age 55
with five uninterrupted years of employment with the Company or its
subsidiaries).  Anything in this Section 2.7 to the contrary
notwithstanding, the Company shall have no obligation to make any such
contribution (and it shall not make any such contribution) at any time such
contribution (if made) would result in a transfer of property (within the
meaning of Section 83 of the Code by operation of Section 409A(b) of the
Code); provided that such contribution will be made at such later time, if any,
when such contribution would not result in a transfer of
property.  Executive’s accumulated contributions under the Rabbi Trust
(vested and unvested) shall be entitled to credit of an allocable share of the
income and gains, and debits of losses, of the Rabbi Trust from time to time in
accordance with the investment performance of the Rabbi Trust assets, which
amounts shall be added to, or deducted from, the amount of contributions to
which they relate and thereafter shall be treated as contributions for purposes
of vesting and distribution to Executive.  Subject to Section 6.14,
Executive’s Rabbi Trust benefit, to the extent then vested, shall be paid to
Executive six months and one day following Executive’s Separation from Service
(defined below) for any reason.  For the avoidance of doubt, all
amounts payable to Executive pursuant to his Rabbi Trust benefit shall at all
times be only unsecured contractual rights subject to the claims of the
Company’s general creditors.

     

    2.8 RELOCATION
EXPENSES.  Executive shall be entitled to reimbursement of all
reasonable and customary out-of-pocket expenses associated with relocating
Executive’s family from Hoover, Alabama, to the Cincinnati, Ohio area, including
all closing costs associated with the sale of the residence in Hoover, Alabama
(including, but not limited to, real estate commission, survey, title insurance,
attorney’s fees); all closing costs associated with the purchase of a residence
in the Cincinnati area (including, but not limited to, inspections, attorney
fees, survey, title insurance, and mortgage-related fees and expenses such as
points, processing fees, underwriting fees, application and appraisal fees); the
packing and movement of household goods and vehicles; transportation and hotel
and food expenses for Executive and his spouse associated with house-hunting
trips to Cincinnati; and reasonable temporary living expenses incurred during
transition for up to six months following the Effective Date, and, without
limiting the foregoing, in accordance with the Company’s policies and procedures
governing relocation of executives.  Executive shall not be entitled
to any reimbursement or other payment for any loss incurred on the sale of his
residence in Hoover, Alabama.  In addition, within thirty (30) days
following the Effective Date, the Company shall pay Executive a cash lump sum in
the amount of $100,000 for his miscellaneous and incidental relocation expenses
not otherwise covered under the provisions of this Section 2.8
above.  To the extent than any reimbursements under this Section 2.8
(other than the cash lump sum described in the preceding sentence) result in
taxable income to Executive, then Executive shall be fully grossed-up for
applicable federal, state and local taxes upon such reimbursements.

     

    SECTION 3 TERM; TERMINATION OF
EMPLOYMENT

     

    3.1 TERM. The initial
term of employment of Executive pursuant to this Agreement shall commence on the
Effective Date and shall continue for a period of two years. This Agreement
shall be extended automatically by successive one-year periods commencing on the
first anniversary of the Effective Date unless prior to such anniversary (and
any successive anniversary) either party notifies the other party that this
Agreement shall not be so extended for the next additional year period (such
initial term and each successive one-year extension thereof being the “Term”).  In
the event of a termination of the Agreement hereunder, Executive’s continuing
employment thereafter shall be at-will.  Notwithstanding the
foregoing, this Agreement and Executive’s employment may be terminated at any
time during the Term pursuant to Sections 3.2 through 3.6 hereof.

     

    3.2 TERMINATION FOR
CAUSE. The Company shall have the right to terminate this Agreement and
Executive’s employment, by written notice to Executive, for any of the following
causes (a  “Termination for
Cause”):

     

    (a) fraud or
willful or intentional misrepresentation in connection with the Executive’s
performance of his duties hereunder;

     

    (b) the
failure by the Executive to substantially perform his duties
hereunder;

     

    (c) the
failure by the Executive to follow the lawful directives of the Chief Executive
Officer and the Board;

     

    (d) willful
or intentional conduct by the Executive that is detrimental to the Company’s
reputation, goodwill or business operations in any material
respect;

     

    (e) breach or
threatened breach by the Executive of the restrictive covenants incorporated in
Section 4 hereof;

     

    (f) the
Executive’s conviction for, or plea of nolo contendere to a
charge of commission of, a felony or a violation of federal or state securities
laws; or

     

    (g) a
material breach of the representations in Section 6.2 hereof.

     

    In no
event shall the Executive be considered to have been terminated for “Cause”
unless the Company delivers a written notice of termination to the Executive
identifying in reasonable detail the acts or omissions constituting “Cause” and
the provision of this Agreement relied upon.  In the case where such
acts or omissions are not capable of cure, the Executive’s termination will take
effect upon his receipt of such notice.  In the case where such acts
or omissions are capable of cure, the Executive’s termination will take effect
15 days following his receipt of such notice if such acts or omissions are not
cured by Executive by such date, provided the Company may suspend the
Executive’s employment or place him on leave of absence pending such
cure.  For the avoidance of doubt, mere failure of the Company to
achieve earnings goals shall not constitute “Cause.”

    


    Upon any
Termination for Cause, all payments, contributions and other benefits to
Executive under  Section 2 of this Agreement shall cease immediately,
with the exception of reimbursement of authorized, ordinary and necessary
business expenses already incurred, and any compensation already earned or
vested as of that date.

    3.3 DISABILITY, ILLNESS OR
DEATH. If Executive is unable to perform his duties under this Agreement
by reason of illness or other physical or mental disability, and such physical
or mental disability has continued for 90 days or would be reasonably expected
to continue for at least 90 days, then this Agreement and Executive’s employment
shall be deemed terminated (“Termination for
Disability”). Upon Termination for Disability, Executive shall continue
to receive the compensation described in Section 3 hereof for a period of three
(3) months after the date of termination reduced by any disability payment to
which Executive may be entitled in lieu of such compensation but not by any
disability payment for which Executive has privately contracted and paid the
premiums.  If Executive should die before the termination of this
Agreement, all payments, contributions and benefits to Executive under Section 2
of this Agreement shall terminate upon the date of his death, with the exception
of reimbursement of authorized, ordinary and necessary business expenses already
incurred, and any compensation already earned or vested as of that
date.  The benefits provided in this Section 3.3 pursuant to a
Termination for Disability shall constitute “disability pay” within the meaning
of Treasury Regulation Section 31.3121(v)(2) -1(b)(4)(iv)(C).

     

    3.4 TERMINATION FOR REASONS
OTHER THAN WITH CAUSE. The Company shall have the right to terminate this
Agreement and Executive’s employment, other than a Termination for Cause, upon
ten (10) days’ written notice to Executive.  If the Company terminates
this Agreement and Executive’s employment other than a Termination for Cause
(and other than a Termination for Disability), subject to Section
3.8,

     

    (a) Executive
shall receive as severance pay continued payment of his Base Salary for eighteen
(18) months, such payment to be made in accordance with the Company’s standard
payroll practices;

     

    (b) Executive
shall receive a pro rata portion of the Executive’s annual AIP bonus under
Section 2.2 for the fiscal year in which the Executive’s termination occurs,
payable at the time that annual bonuses are paid to other senior executives,
determined by multiplying (i) the amount Executive would have received based
upon actual performance had employment continued through the end of the fiscal
year by (ii) the fraction, the numerator of which is the number of days that
Executive was employed by the Company during the fiscal year in which
Executive’s termination occurred and the denominator of which is 365 (“Pro Rata
Bonus”);

     

    (c) Executive
shall receive any unpaid annual bonus earned in accordance with the terms of the
AIP with respect to any fiscal year ending on or preceding the date of
termination, payable when annual bonuses are paid to senior executives for such
year;

     

    (d) To the
extent not fully vested, on the date of termination the Buy-Out Stock Award
shall become fully vested and unrestricted

     

    (e) To the
extent not fully vested, on the date of termination the next installment of the
Sign-On Stock Award to vest shall become vested and unrestricted on a pro rata
basis determined by dividing the number of days elapsed since the last
anniversary of the Effective Date by 365 or 366, as applicable.

     

    (f) To the
extent not paid, the 2009 bonus shall be paid when 2009 bonuses are paid to
senior executives of the Company; and

     

    (g) Any
unvested Rabbi Trust contributions Executive has received or is due under
Section 2.7 for the fiscal year in which such termination occurs shall vest
immediately upon termination.

     

    (h) In
addition, Executive shall be entitled to continued participation for eighteen
(18) months in the Company’s medical, dental and vision welfare benefit plans
which cover Executive (and his eligible dependents) upon the same terms and
conditions in effect for active employees of the Company subject to Executive’s
continued co-payment of premiums for such coverage, to the extent that the terms
of such plans permit Executive’s continued participation during such period;
provided, in the event Executive obtains other employment that offers
substantially similar or more favorable benefits, determined on a
benefit-by-benefit and coverage-by-coverage basis, such continuation of benefits
by the Company shall immediately cease.  The continuation of medical,
dental and vision benefits under this Section 3.4 shall be conterminous with,
and reduce the period of coverage and count against, Executive’s right to
healthcare continuation benefits under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”).

     

    In the
event of a termination of Executive by the Company other than a Termination for
Cause under this Section 3.4, Executive acknowledges that the Company shall have
no obligations or liability to him whatsoever other than the obligations set
forth in this Section 3.4.  Subject to Section 3.8 and Section 6.14,
the first such severance payment under Section 3.4(a) shall be made not later
than thirty (30) days after Executive’s Separation from Service occurs.
Executive’s right to receive such severance payments under this Section 3.4 or
Section 3.5, as may apply, shall be treated as a right to receive a series of
separate payments under Treasury Regulation Section 1.409A-2(b)(2)(iii). As used
under this Agreement, a “Separation from
Service” occurs when Executive dies, retires, or otherwise has a
termination of employment with the Company that constitutes a “separation from
service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1),
without regard to the optional alternative definitions available
thereunder.

     

    In the
event that (i) the Company, prior to a Change in Control or more than
twenty-four (24) months following a Change in Control, shall commit a material
breach of this Agreement, (ii) Executive gives written notice to the Company
specifying the nature of such breach within thirty (30) days after the
occurrence of such material breach, and (iii) the Company shall not have
remedied such breach within thirty (30) days after receipt of such notice,
Executive shall have the right and option to terminate this Agreement and his
employment within ninety (90) days thereafter, which termination shall be
treated as a termination other than a Termination for Cause (and other than a
Termination for Disability) under Section 3.5(a).

     

    Except as
provided in Section 3.5 below, this Section 3.4 shall govern the payment of
severance for any termination by the Company other than for Cause (and other
than a Termination for Disability) that occurs prior to a Change in Control or
after the twenty-four (24) month period following the occurrence of a Change in
Control.

     

    3.5 TERMINATION UPON OR
FOLLOWING A CHANGE IN CONTROL.

     

    (a) The
Company shall have the right to terminate this Agreement and Executive’s
employment in the event of or following a Change in Control (as defined in the
2004 SIP as in effect on the date such Change in Control event occurs) of the
Company.  If the Company terminates this Agreement and Executive’s
employment other than a Termination for Cause (and other than a Termination for
Disability) at any time upon or during the twenty-four (24) month period
following the occurrence of a Change in Control, subject to Section
3.8.  This Section 3.5 shall also apply to a termination by the
Company other than for Cause within three (3) months before the occurrence of a
Change in Control at the request of a third party (directly or indirectly) that
consummates such Change in Control.

     

    (i) Executive
shall receive as severance pay a cash lump equal to (A) two (2) multiplied by
(B) the sum of (x) Executive’s Base Salary plus (y) the greatest of (1)
Executive’s annual bonus amount earned for the fiscal year immediately preceding
the fiscal year in which such termination occurs, or (2) Executive’s target
bonus amount set forth in Section 2.2 for the year in which such termination
occurs or (3) an annual bonus amount determined in accordance with Section 2.2
for the year in which such termination occurs based on an annualization of the
actual attainment of applicable performance goals for such fiscal year through
the date of termination.  Anything in the foregoing to the contrary
notwithstanding, if the Change in Control is not also a “change in control
event” (as defined in Treasury Regulation §1.409A-3(i)(5)), the severance pay
described in this subsection (i) will be paid in accordance with the Company’s
standard payroll practices in the same manner as under Section
3.4(a).

     

    (ii) Executive
shall receive a Pro Rata Bonus;

     

    (iii) Executive
shall receive any unpaid annual bonus earned in accordance with the terms of the
AIP with respect to any fiscal year ending on or preceding the date of
termination, payable when annual bonuses are paid to senior executives for such
year;

     

    (iv) to the
extent not fully vested, on the date of termination the Buy-Out  and
Sign-On Stock Award shall become fully vested and unrestricted;

     

    (v) to the
extent not paid, the 2009 Bonus shall be paid when 2009 bonuses are paid to
senior executives of the Company; and

     

    (vi) any
unvested Rabbi Trust contributions Executive has received or is due under
Section 2.7 for the fiscal year in which such termination occurs shall vest
immediately upon termination.

     

    (vii) In
addition, Executive shall be entitled to continued participation for twenty-four
(24) months in the Company’s medical, dental and vision welfare benefit plans
which cover Executive (and his eligible dependents) upon the same terms and
conditions in effect for active employees of the Company subject to Executive’s
continued co-payment of premiums for such coverage, to the extent that the terms
of such plans permit Executive’s continued participation during such period;
provided, in the event Executive obtains other employment that offers
substantially similar or more favorable benefits, determined on a
benefit-by-benefit and coverage-by-coverage basis, such continuation of benefits
by the Company shall immediately cease.  The continuation of medical,
dental and vision benefits under this Section 3.5 shall be conterminous with,
and reduce the period of coverage and count against, Executive’s right to
healthcare continuation benefits under COBRA.  If the Company cannot
provide such coverage to Executive, it shall pay him the applicable COBRA
premium each month as if coverage were being provided for such period of time
when the coverage cannot be so provided.

     

    In the
event of a termination of Executive by the Company other than a Termination for
Cause upon or during the twenty-four (24) month period following the occurrence
of a Change in Control, Executive acknowledges that the Company shall have no
obligations or liability to him whatsoever other than the obligations set forth
in this Section 3.5 or in Section 3.7. Subject to Section 3.8 and Section 6.14,
the severance payment under Section 3.5(a)(i) shall be made not later than
thirty (30) days after Executive’s Separation from Service occurs.

     

    (b) In the
event that the Company, upon or during the twenty-four (24) month
period  following a Change in Control, shall commit a material breach
of its obligations under this Agreement, Executive gives notice to the Company
from Executive specifying the nature of such breach within thirty (30) days
after the occurrence of such material breach, and the Company shall not have
remedied such breach within thirty (30) days after receipt of such notice,
Executive shall have the right and option to terminate this Agreement and his
employment within ninety (90) days thereafter, which termination shall be
treated as a termination other than a Termination for Cause (and other than a
Termination for Disability) under Section 3.5(a).   For purposes
of this Section 3.5(b), a “material breach of its
obligations” by the Company shall mean : (i) the assignment to Executive
of any duties inconsistent with his position, authority or responsibilities as
contemplated by Section 1.1 hereof, or any action by the Company that results in
a diminution in such position, authority or responsibilities (excluding for
these purposes an isolated and insubstantial action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by Executive); (ii) any requirement that Executive report to any person other
than the Chief Executive Officer or the Board of Directors of the Company; (iii)
any failure by the Company to comply with the compensation and benefits
provisions of Section 2 hereof; and (iv) the relocation of the Company’s
principal executive offices to a location more than 30 miles from its current
location in Covington, Kentucky.

     

    3.6 VOLUNTARY
TERMINATION. Executive may voluntarily terminate the Term and Executive’s
employment hereunder (other than as provided under Section 3.5(b)) by giving the
Company 60 days advance written notice of such termination.  In the
event Executive voluntarily terminates his employment for any reason during the
Term (other than as provided under Section 3.5(b)), all payments to Executive
under Section 2 shall cease, with the exception of reimbursement of authorized,
ordinary and necessary business expenses already incurred, and any compensation
already earned or vested as of that date.

     

    3.7 PARACHUTE TAX
INDEMNITY.

     

    (a) If it
shall be determined that any amount, right or benefit paid, distributed or
treated as paid or distributed by the Company or any of its affiliates to or for
Executive’s benefit (whether paid or payable or distributed or distributable
hereunder or otherwise, including, without limitation, in connection with a
change in control of the Company, but determined without regard to any
additional payments required under this Section 3.7) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code, or any interest
or penalties are incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, collectively, the
“Excise Tax”),
then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in
an amount such that after payment by Executive of all federal, state and local
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.  Any such Gross-Up Payment
shall be made as soon as reasonably practicable following such determination and
in all events not later than the end of Executive’s taxable year following
Executive’s taxable year in which the tax was remitted.

     

    (b) All
determinations required to be made under this Section 3.7, including whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by a
nationally recognized accounting firm as shall be designated jointly by
Executive and the Company (the “Accounting Firm”),
which shall be permitted to designate an independent counsel to advise it for
this purpose.  The Accounting Firm shall provide detailed supporting
calculations both to the Company and Executive within 15 business days of the
receipt of notice from Executive or the Company that there has been a Payment,
or such earlier time as is requested by the Company.  All fees and
expenses of the Accounting Firm and its legal counsel shall be paid by the
Company.  Any Gross-Up Payment, as determined pursuant to this Section
3.7, shall be paid by the Company to Executive (or to the Internal Revenue
Service on Executive’s behalf) within five days of the receipt of the Accounting
Firm’s determination.  All determinations made by the Accounting Firm
shall be binding upon the Company and Executive.  If as a result of
the uncertainty regarding the application of Section 4999 of the Code hereunder,
it is possible that the Internal Revenue Service may assert that an Excise Tax
is due that was not included in the Accounting Firm’s calculation of the
Gross-Up Payments (an “Underpayment”).  In
the event that the Company exhausts its remedies pursuant to this Section 3.7
and Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any additional Gross-Up Payments that are due as a result thereof shall be
promptly paid by the Company to Executive (or to the Internal Revenue Service on
Executive’s behalf).

     

    (c) Executive
shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up
Payment.  Such notification shall be given as soon as practicable but
no later than ten business days after Executive receives written notification of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid.  Executive shall not
pay such claim prior to the expiration of the 30-day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is
due).  If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive
shall: (i) give the Company all information reasonably requested by the Company
relating to such claim; (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney selected by the Company and reasonably acceptable to
Executive and ceasing all efforts to contest such claim; (iii) cooperate with
the Company in good faith in order to effectively contest such claim; and (iv)
permit the Company to participate in any proceeding relating to such claim;
provided, however, that the Company shall bear and pay directly all reasonable
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive harmless, on
an after-tax basis, from any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expense.  Without limiting the foregoing
provisions of this Section 3.7, the Company shall control all proceedings taken
in connection with such contest and, at its sole option, may pursue or forego
any and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine and direct; provided, however, that if the Company directs Executive
to pay such claim and sue for a refund, the Company shall advance the amount of
such payment to Executive, on an interest-free basis, and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for Executive’s taxable year with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.  Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.  Any payment,
indemnification or reimbursement made to Executive pursuant to this Section 3.7
shall be made as soon as reasonably practicable following the date the related
cost or expense was incurred or tax was remitted, as the case may be, and in all
events not later than the end of Executive’s taxable year following Executive’s
taxable year in which the cost or expense was incurred or tax was remitted, as
the case may be.

     

    (d) If, after
the Executive’s receipt of an amount advanced by the Company pursuant to this
Section 3.7, Executive becomes entitled to receive any refund with respect to
such claim, Executive shall promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after Executive’s receipt of an amount
advanced by the Company pursuant to this Section 3.7, a determination is made
that Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after the Company’s
receipt of notice of such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be
paid.

     

    3.8 RELEASE; COMPLIANCE WITH
COVENANTS; RESIGNATIONS.  Any payments or benefits made or
provided pursuant to Section 3.4 or Section 3.5 hereof are subject to
Executive’s:

     

    (a) Compliance
with the provisions of Section 4 hereof, other than inadvertent, immaterial
violations of such provisions that are cured promptly upon written notice of
such violation delivered to Executive by the Company;

     

    (b) Delivery
to the Company of an executed general release of all claims against the Company
(other than claims to enforce the provisions of Section 3.4, Section 3.5 or
Section 6, and claims for earned vested amounts under any employee benefit plan
and other claims that cannot by law be waived) within 30 days after Executive’s
termination date in accordance with the Company’s usual form of release of
claims then in use for executive separations; and

     

    (c) Delivery
to the Company of a resignation from all offices, directorships and fiduciary
positions with the Company, its affiliates and employee benefit
plans.

     

    Notwithstanding
the due date of any post-employment payments, any amounts due following a
termination under this Agreement shall not be due until after the expiration of
any revocation period applicable to the general release, that Executive has not
revoked, and any such amounts then due shall be paid (or commence being paid) to
Executive within forty-five (45) days after the date of termination or such
later date as may be required under Section 409A.  In the event that
the Executive dies before all payments pursuant to Section 3.4, Section 3.5 or
Section 3.7 have been paid, all remaining payments shall be made to the
beneficiary specifically designated by the Executive in writing prior to his
death, or, if no such beneficiary was designated (or the Company is unable in
good faith to determine the beneficiary designated), to the personal
representative of his estate.

     

    SECTION 4 SECTION
4.  RESTRICTIVE COVENANTS

     

    4.1 Nondisclosure of
Confidential Information.

     

    (a) Executive
acknowledges that during the course of Executive’s employment with the Company,
Executive has had or will have access to, and knowledge of, certain information
that the Company considers confidential, and the release of such information to
unauthorized persons would be extremely detrimental to the
Company.  As a consequence, the Executive hereby agrees and
acknowledges that the Executive owes a duty to the Company not to disclose, and
agrees that without the prior written consent of the Company, at any time,
either during or after the Executive's employment with the Company, the
Executive will not communicate, publish or disclose, to any person anywhere or
use, any Confidential Information (as hereinafter defined), except as may be
necessary or appropriate to conduct the Executive's duties hereunder, provided
the Executive is acting in good faith and in the best interest of the Company,
or as may be required by law or judicial process.  The Executive will
use reasonable best efforts at all times to hold in confidence and to safeguard
any Confidential Information from falling into the hands of any unauthorized
person.  The Executive will return to the Company all Confidential
Information in the Executive's possession or under the Executive's control
whenever the Company shall so request, and in any event will promptly return all
such Confidential Information if the Executive's relationship with the Company
is terminated for any reason and will not retain any copies thereof except that
Executive may retain copies of his own employment information relating to the
terms, conditions, benefits and performance of his employment pursuant to this Employment
Agreement.  For purposes hereof, the term "Confidential Information"
shall mean any information used by or belonging or relating to any member of the
Company that is not known generally to the industry in which the Company is or
may be engaged and which the Company maintains on a confidential basis,
including, without limitation, any and all trade secrets and proprietary
information, information relating to the Company’s businesses and services,
Executive information, customer lists and records, business processes,
procedures or standards, know-how, manuals, business strategies, records,
financial information, in each case whether or not reduced to writing or stored
electronically, as well as any information that any member of the Company
advises the Executive should be treated as confidential
information.  Further, Confidential Information shall not include
information which is independently obtained from a third party whose disclosure
violates no duty of confidentiality to the Company or which is or becomes
publicly available through no fault of Executive.

     

    (b) The
Executive acknowledges and agrees that all analyses, reports, proposals,
software, documentation, machine code and other intellectual property owned by
the Company (collectively, the “Company’s Intellectual Property”) are and shall
remain the sole and exclusive property of the Company, or as otherwise may be
noted, and that in no event shall the Executive have any ownership interest
therein.  In that connection, the Executive hereby irrevocably
assigns, transfers and conveys to the Company all of his right, title and
interest, if any, in and to the Company’s Intellectual Property, including any
rights the Executive may have to patent, copyright, trade secret or other
proprietary rights in the Company’s Intellectual Property.  The
Executive agrees to assist the Company in every proper way to obtain and from
time to time enforce patents, copyrights, trade secrets and all other
proprietary and intellectual property rights and interest in and to all the
Company’s Intellectual Property in any and all countries, and to that end the
Executive will execute and deliver all documents and other papers and materials
for use in applying for, obtaining and enforcing such patents, copyrights,
trademarks and other proprietary and intellectual property rights and interests,
as the Company may request in writing, together with any assignments thereof to
the Company or persons designated by it.  The Executive agrees that
the Company is appointed as his attorney to execute all such instruments and do
all such things for the purpose of assuring to the Company (or its designee) the
full benefit of the provisions of this paragraph.

     

    4.2 Noninterference with Clients
or Executives.  The Executive agrees that, during the period of
Executive's employment with the Company and for a period of  eighteen
(18) months from the date of termination of employment for any reason, whether
voluntary or involuntary (the “Restricted Period”), the Executive shall not, on
the Executive's own behalf or on behalf of any other person or entity, solicit
or in any manner influence or encourage any current or prospective client,
customer, Executive or other person or entity that has a business relationship
with the Company, to terminate or limit in any way their relationship with the
Company, or interfere in any way with such relationship, and/or (b) solicit or
in any manner influence or discourage any prospective client or customer that
was contacted by the Company within the twelve-month period preceding
Executive’s date of termination from entering into a business relationship with
the Company.

     

    4.3 Noncompetition.  The
Executive agrees that, during the Restricted Period, the Executive shall neither
directly nor indirectly, engage or hold an interest in any business engaged in
the Business in those geographic areas in which the Company conducts the
Business, nor directly or indirectly, have any interest in, own, manage,
operate, control, be connected with as a stockholder (other than as a
stockholder of less than five percent (5%) of the issued and outstanding stock
of a publicly held corporation), joint venturer, officer, director, partner,
employee or consultant, or otherwise engage or invest or participate in the
Business in those geographic areas in which the Company or its subsidiaries
engage in the Business.  For purposes of this Agreement, "Business"
shall mean (i) the distribution of pharmaceuticals, related pharmacy consulting,
data management services and medical supplies to nursing homes and long-term
care facilities, (ii) provision of comprehensive product development and
research services to companies in the pharmaceutical, biotechnology, medical
device and diagnostics industries and (iii) any other business in which the
Company or its subsidiaries are engaged in during the Restricted
Period.

     

    4.4 Enforcement.  The Executive acknowledges and
agrees that the provisions of this Section 4 are reasonable and necessary for
the successful operation of the Company.  The Executive further
acknowledges that if he breaches any provision of this Section 4, the Company
will suffer irreparable injury.  It is therefore agreed that the
Company shall have the right to enjoin any such breach or threatened breach, if
ordered by a court of competent jurisdiction.  The existence of this
right to injunctive and other equitable relief shall not limit any other rights
or remedies that the Company may have at law or in equity including, without
limitation, the right to monetary and compensatory damages.  In
addition, the Executive further acknowledges that if he breaches any provision
of this Section 4 following his termination of employment with the Company, the
Executive will forfeit the right to any unpaid severance or other payments due
under this Agreement, but Executive shall not forfeit payment of earned wages as
defined by applicable law.  If any provision of this Section 4 is
determined by a court of competent jurisdiction to be unenforceable in the
manner set forth herein, the Executive and the Company agree that it is the
intention of the parties that such provision should be enforceable to the
maximum extent possible under applicable law.  If any provisions of
this Section 4 are held to be invalid or unenforceable, such invalidation or
unenforceability shall not affect the validity or enforceability of any other
provision of this Section 4 (or any portion thereof).  For purposes of
the restrictions of this Section 4, references to the “Company” include
reference to its subsidiaries.

     

    SECTION 5 INDEMNIFICATION

     

    The
Company shall indemnify Executive to the fullest extent permitted by the
Company’s charter, by-laws and applicable law.  The Company shall
cover Executive under any contract of directors and officers liability insurance
both during and, while potential liability exists, after the term of this
Agreement and Executive’s employment to the same extent as the Company covers
its other officers and directors.

     

    SECTION 6 MISCELLANEOUS
PROVISIONS

     

    6.1 ASSIGNMENT AND
SUCCESSORS.  The rights and obligations of the Company under
this Agreement may be freely assigned (including, but not limited to assignment
to an affiliate of the Company for purposes of payroll) and shall inure to the
benefit of and be binding upon the successors and assigns of the
Company.  Executive’s obligation to provide services hereunder may not
be assigned to or assumed by any other person or entity.

     

    6.2 REPRESENTATIONS OF
EXECUTIVE.  The Executive represents and warrants that his
entering into this Agreement and his employment with the Company will not be in
breach of any agreement with any current or former employer and that he is not
subject to any other restrictions on solicitation of clients or customers or
competing against another entity.  The Executive understands that the
Company has relied on this representation in entering into this
Agreement.

     

    6.3 NOTICES. All notices,
requests, demands or other communications under this Agreement shall be in
writing and shall only be deemed to be duly given (a) on the date of delivery if
delivered by hand, (b) on the date of transmission, if delivered by confirmed
facsimile, (c) on the first business day following the date of deposit if
delivered by guaranteed overnight delivery service, or (d) on the fourth
business day following the date delivered or mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

     

    If to the
Company, to:

    


    Omnicare,
Inc.

    100 East
RiverCenter Boulevard

    Covington,
Kentucky 41011

    ATT:  President
and Chief Executive Officer

    


     

    If to
Executive to his last known address shown on the payroll records of the
Company

     

    6.4 SEVERABILITY. Any
provision of this Agreement which is deemed invalid, illegal or unenforceable in
any jurisdiction shall, as to that jurisdiction and subject to this paragraph,
be ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction. If any covenant
should be deemed invalid, illegal or unenforceable because its scope is
considered excessive, such covenant shall be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal and enforceable.

     

    6.5 COMPLETE
AGREEMENT.  This Agreement contains the entire agreement
between the parties and supersedes previous verbal and written discussions,
negotiations, agreements or understandings between the parties.

     

    6.6 AMENDMENT AND WAIVER.
This Agreement may be modified, amended or  waived only by a written
instrument signed by all the parties hereto. No waiver or breach of any
provision hereof shall be a waiver of any future breach,  whether
similar or dissimilar in nature.

     

    6.7 APPLICABLE
LAW.  This Agreement has been made and its validity,
performance and effect shall be determined in accordance with the laws of the
State of Delaware.

     

    6.8 CONSENT TO
JURISDICTION. The parties hereby (a) agree that any  suit,
proceeding or action at law or in equity (hereinafter referred to as an “Action”) arising out
of or relating to this Agreement must be instituted in state or federal court
located within Kenton County, Kentucky, (b) waive any objection which he or it
may have now or hereafter to the laying of the venue of any such Action, (c)
irrevocably submit to the jurisdiction of any such court in any such Action, and
(d) hereby waive any claim or defense of inconvenient forum. The parties
irrevocably agree that service of any and all process which may be served in any
such Action may be served upon him or it by registered mail to the address
referred to in Section 6.2 hereof or to such other address as the parties shall
designate in writing by notice duly given in accordance with Section 6.2 hereof
and that such service shall be deemed effective service of process upon the
parties in any such Action. The parties irrevocably agree that any such service
of process shall have the same force and validity as if service were made upon
him or it according to the law governing such service in the State of Kentucky,
and waives all claims of error by reason of any such service.

     

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

     

    6.10 INTERPRETATION. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any ways the meaning or interpretation of this Agreement. The
language in all parts of this Agreement shall in all cases be construed
according to its fair meaning, and not strictly for or against any party hereto.
In this Agreement, unless the context otherwise requires, the masculine,
feminine and neuter genders and the singular and the plural include one
another.

     

    6.11 NON-WAIVER OF RIGHTS AND
BREACHES. No failure or delay of any  party herein in the
exercise of any right given to such party hereunder shall constitute a waiver
thereof unless the time specified herein for the exercise of such right has
expired, nor shall any single or partial exercise of any right preclude other or
further exercise thereof or of any other right. The waiver of a party hereto of
any default of any other party shall not be deemed to be a waiver of any
subsequent default or other default by such party.

     

    6.12 NO MITIGATION OR
OFFSET. Except as provided in Sections 3.4(h) and 3.5(a)(vii) relating to
future benefit eligibility, Executive shall not be required to seek other
employment or to reduce any severance benefit payable to him under Section 3
hereof, and no such severance benefit shall be reduced on account of any
compensation received by Executive from the Company or any other employment. The
Company’s obligations to Executive hereunder, including, without limitation, any
obligation to provide severance benefits, shall not be subject to set-off or
counterclaim in respect of any debts or liabilities of Executive to the
Company.

     

    6.13 SURVIVAL.  The
provisions of Section 4 shall survive the termination the Agreement (and any
concurrent or subsequent termination of Executive’s employment).  The
provisions of Section 3 shall survive any termination of the Executive’s
employment during the Term of the Agreement.

     

    6.14 SUPERSEDING
AGREEMENT.  In the event of any conflict between the terms of
this Agreement and the terms of any Company plan, program or policy, the terms
of this Agreement shall control to the extent such terms are more favorable to
the Executive; provided that the Company shall have an appropriate opportunity
to conform the terms of any such conflicting plan, program or policy to the
terms of this Agreement.

     

    6.15  SECTION
409A.

     

    Anything
in this Agreement to the contrary notwithstanding:

     

    (a) It is
intended that any amounts payable under this Agreement shall either be exempt
from or comply with Section 409A of the Code and all regulations, guidance and
other interpretive authority issued thereunder (“Code Section 409A”)
so as not to subject Executive to payment of any additional tax, penalty or
interest imposed under Code Section 409A. The provisions of this Agreement shall
be construed and interpreted to avoid the imputation of any such additional tax,
penalty or interest under Code Section 409A yet preserve (to the nearest extent
reasonably possible) the intended benefit payable to Executive.

     

    (b) To the
extent that the reimbursement of any expenses or the provision of any in-kind
benefits under this Agreement is subject to Code Section 409A, (i) the amount of
such expenses eligible for reimbursement, or in-kind benefits to be provided,
during any one calendar year shall not affect the amount of such expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year; (ii) reimbursement of any such expense shall be made by no later
than December 31 of the year following the calendar year in which such expense
is incurred; and (iii) Executive’s right to receive such reimbursements or
in-kind benefits shall not be subject to liquidation or exchange for another
benefit.

     

    (c) If
Executive is a “specified employee” within the meaning of Treasury Regulation
Section 1.409A -1(i) as of the date of Executive’s Separation from Service, then
any payment or benefit pursuant to Sections 3.4(a) or 3.5(a)(i) or pursuant to
any other provision of this Agreement on account of Executive’s Separation from
Service, to the extent such payment (after taking into account all exclusions
applicable to such payment under Code Section 409A) is properly treated as
deferred compensation subject to Code Section 409A, shall not be made until the
first business day after (i) the expiration of six (6) months from the date of
Executive’s Separation from Service, or (ii) if earlier, the date of Executive’s
death (the “Delayed
Payment Date”). On (or within five business days after) the Delayed
Payment Date, there shall be paid to Executive or, if Executive has died, to the
representative of Executive’s estate, in a single cash lump sum, an amount equal
to the aggregate amount of the payments delayed pursuant to the preceding
sentence, plus interest thereon, compounded monthly, at an annual rate equal to
the Delayed Payment Interest Rate (as defined below) computed from the date on
which each such delayed payment otherwise would have been made to Executive
until the Delayed Payment Date. For purposes of the foregoing, the “Delayed Payment Interest
Rate” shall mean the highest interest rate, as of the first day of the
month in which the Separation from Service occurs, payable by the Company on its
outstanding publicly-traded debt (or if no such public debt is then outstanding,
the rate at which the Company could then borrow from its primary bank lender)
plus 100 basis points.

     

    6.16 DRUG
SCREEN.  This Agreement is contingent upon the Executive’s
successful completion of a pre-employment drug screen.  In the event
that, for any reason, such drug screen shall not be successfully completed, this
Agreement shall be null and void and the Company and the Executive shall have no
obligations hereunder.

     

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

    


     

     

     

    
      
        	 	OMNICARE, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Joel
      F. Gemunder	 
	 	 	Joel F.
      Gemunder, President and Chief Executive Officer 	 
	 	 	 	 
	 	 	 	 
	 	 	 /s/
      John L. Workman	 
	 	 	 John
      L. Workman