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                                                                  EXHIBIT 10.20e


                            KENDLE INTERNATIONAL INC.
                        1998 EMPLOYEE STOCK PURCHASE PLAN


         1.       PURPOSE.

         The purpose of this Plan is to provide employees of Kendle and its
subsidiaries added incentive to their employment and to encourage their
increased efforts to promote the best interests of Kendle. The Plan seeks to
accomplish this purpose by permitting eligible employees to purchase Common
Shares of Kendle at below-market prices. For purposes of the Plan, a subsidiary
of the corporation of which Kendle is the common parent, is as defined by the
Internal Revenue Code of 1986 in Section 424(f). As used in this Plan, the term
"Kendle" means Kendle International Inc. and all such subsidiaries. This Plan is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Internal Revenue Code and all provisions of this Plan are to be construed so
as to meet that tax objective.

         2.       ELIGIBILITY.

         This Plan is available to each Eligible Employee of Kendle who meets
the following tests on the first day of a Purchase Period as defined in Section
3. An Eligible Employee is one (a) who has been continuously employed by Kendle
for at least one month; (b) whose customary employment by Kendle is at least 24
hours per week; and (c) whose customary employment by Kendle is more than five
months in any calendar year.

         An Eligible Employee may not purchase Common Shares hereunder if,
immediately thereafter such employee would own 5% or more of the total combined
voting power or value of all classes of stock of Kendle or any subsidiary
including attributable stock under Section 424(d) of the Internal Revenue Code,
or if, for a given calendar year, such employee's aggregate rights to purchase
stock under all employee stock purchase plans of Kendle would exceed $25,000 of
fair market value of such stock for such calendar year, all determined in the
manner provided by Section 423(b)(8) of the Internal Revenue Code.

         3.       EFFECTIVE DATE; TERM; PURCHASE PERIODS.

         This Plan shall become effective on June 30, 1998 or such later date as
may be specified by the Board of Directors. This Plan shall cease to be
effective unless, within 12 months after the date of its adoption by the Board,
it has been approved at a meeting of the shareholders of Kendle.

         This Plan shall remain in effect until all Common Shares issuable under
the Plan have been issued or June 30, 2003, whichever occurs first.

         A "Purchase Period" shall consist of the twelve month period beginning
on each July 1, commencing on or after the effective date and prior to
termination of the Plan.



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         4.       ADMINISTRATION OF THE PLAN.

         The Plan shall be administered by a Committee designated by the Board
consisting of two or more members of the Board, each of whom is a Non-Employee
Director within the meaning of Rule 16b-3(b) promulgated under the Securities
Exchange Act of 1934.

         In addition to the power to amend or terminate the Plan pursuant to
Section 9, the Committee shall have full power and authority to: (i) interpret
and administer the Plan and any instrument or agreement entered into under the
Plan; (ii) establish such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and (iii) make
any other determination and take any other action that the Committee deems
necessary or desirable for administration of the Plan. Decisions of the
Committee shall be final, conclusive and binding upon all persons, including
Kendle, any participant and any other employee of Kendle. A majority of the
members of the Committee may determine its actions and fix the time and place of
its meetings.

         The Plan shall be administered so as to ensure all participants have
the same rights and privileges as are provided by Section 423(b)(5) of the
Internal Revenue Code.

         5.       BASIS OF PARTICIPATION.

                  5.1      PAYROLL DEDUCTION. Each Eligible Employee shall be
entitled to enroll in the Plan as of the first day of the Purchase Period which
begins after such employee has become an Eligible Employee.

         To enroll in the Plan, an Eligible Employee shall execute and deliver a
payroll deduction authorization to Kendle or its designated agent. The
authorization shall become effective on the first day of the Purchase Period
following the execution and delivery of such authorization. Each authorization
shall direct that payroll deductions be made by Kendle for each payroll period
during which the employee is a participant in the Plan. The amount of each
payroll deduction for each such payroll period shall be a whole percentage
amount or a whole dollar amount, as determined by the Committee, in either case
not less than One Percent nor more than Ten Percent, or such greater or lesser
percentages as may be determined by the Committee, of the participant's current
regular wage or salary (before withholding or other deductions) paid to him/her
by Kendle.

         Payroll deductions (and any other amount paid under the Plan) shall be
made for each participant in accordance with his/her authorization until
participation in the Plan terminates, the authorization is revised or the Plan
terminates, all as hereinafter provided.

         A participant may not change the amount of payroll deduction during any
Purchase Period. Any requested changes on the amount of payroll deductions will
be effective beginning 


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on the first day of the next Purchase Period, subject to a participant's right
to terminate participation in the Plan at any time as provided in Section 8.

         Payroll deductions shall be credited to an account established for each
participant. At the end of each Purchase Period, the amount in each
participant's account will be applied to purchase Kendle Common Shares for such
Purchase Period. No interest shall accrue at any time for any amount credited to
a participant's account.

                  5.2      OTHER METHODS OF PARTICIPATION. The Committee may
establish additional procedures whereby Eligible Employees may participate in
the Plan by means other than payroll deduction, such as delivery of funds by
participants in a lump sum or automatic charges to participants' bank accounts.
Such other methods of participating shall be subject to such rules and
conditions as the Committee may establish. The Committee may at any time amend,
suspend or terminate any participation procedures established pursuant to this
paragraph without prior notice to any participant to Eligible Employee.

         6.       PURCHASE PRICE.

         The purchase price for Common Shares purchased under the Plan for any
Purchase Period shall be the lesser of (i) 85% of the fair market value of the
Common Stock on the first day of such Purchase Period or (ii) 85% of the fair
market value of the Common Shares on the last day of such Purchase Period. "Fair
market value" means the average of the highest and lowest quoted selling prices
for the Common Share as reported on the National Market System of The Nasdaq
Stock Market or such other consolidated transaction reporting system on which
the shares are primarily traded. If the shares are not traded on such date, then
the next preceding day on which the shares were traded, all as reported by such
source as the Committee may select. If the shares are not traded on a national
securities exchange or other market system, fair market value shall be set under
procedures established by the Committee.

         7.       ISSUANCE OF SHARES.

         Common Shares purchased by each participant shall be considered to be
issued and outstanding to the participant's credit as of the close of business
on the last day of each Purchase Period. A participant may any time withdraw
certificates for all or a portion of the Common Shares credited to his or her
account by giving written notice to Kendle, provided, however, that (a) no such
request may be made more frequently than once per Purchase Period, (b) such
request shall be for at least 25 Common Shares and (c) no participant shall be
entitled to receive a certificate for any fractional share. Kendle will pay any
stamp taxes imposed in connection with the issuance of any certificate under the
Plan.

         After the close of each Purchase Period, a report will be sent to each
participant stating entries made to the account, the number of Common Shares
purchased and the applicable purchase price.






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         8.       TERMINATION OF PARTICIPATION.

         A participant may at any time terminate participation in the Plan,
provided such termination is received by Kendle in writing prior to the last
business day of the Purchase Period for which such termination is to be
effective. Upon any such termination, Kendle shall promptly deliver to such
participant certificates for the number of full Common Shares held in the
account and cash equal to any remaining balances and in lieu of any fractional
shares. Such cash equivalent shall be determined by multiplying the fractional
share by the fair market value of a Common Share on the last day of the Purchase
Period immediately preceding such termination, determined as provided in Section
6.

         If the participant dies, terminates employment with Kendle for any
reason, or otherwise ceases to be an Eligible Employee, participation in the
Plan shall immediately terminate. In such event, certificates for the number of
full Common Shares held in the account, cash equal to any remaining balances and
the cash equivalent of any fractional share so held, determined as provided in
Section 6, shall be delivered promptly to such participant.

         9.       TERMINATION OR AMENDMENT OF THE PLAN.

         Kendle may terminate the Plan at any time. Notice of termination shall
be given to all participants, but any failure to give such notice shall not
impair the effectiveness of the termination.

         The Plan will terminate in any event when the maximum number of Common
Shares to be sold under the Plan has been purchased. Such termination shall not
impair any rights which under the Plan shall have vested on or prior to the date
of such termination. If at any time the number of shares remaining available for
purchase under the Plan are not sufficient to satisfy all then-outstanding
purchase rights, the Board may determine an equitable basis of allocating
available shares among all participants.

         The Board may amend the Plan from time to time; provided, however, no
such amendment shall (a) materially adversely affect any purchase rights
outstanding under the Plan during the Purchase Period in which such amendment is
to be effected, (b) increase the maximum number of Common Shares which may be
purchased under the Plan, (c) decrease the purchase price of the Common Shares
for any purchase period below the lesser of 85% of fair market value on either
of the first or the last day of such Purchase Period or (d) adversely affect the
qualification of the Plan under Section 423 of the Internal Revenue Code.

         Upon termination of the Plan, certificates for the number of full
Common Shares held in the account, cash equal to any remaining balances and the
cash equivalent of any fractional share so held, determined as provided in
Section 6, shall be delivered promptly to such participant.


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         10.      NON-TRANSFERABILITY.

         No right or interest in this Plan shall be assignable or transferable,
or subject to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. Any attempted assignment, transfer, pledge or other disposition of
any rights under this Plan shall be null and void and shall automatically
terminate all rights of a participant under the Plan.

         11.      SHAREHOLDER'S RIGHTS.

         No Eligible Employee or participant shall by reason of this Plan have
any rights of a shareholder of Kendle until and to the extent such person
acquires Common Shares as herein provided.

         12.      MAXIMUM NUMBER AND SOURCE OF SHARES; ADJUSTMENTS.

         The maximum number of Common Shares which may be purchased under this
Plan is Five Hundred Thousand (500,000) shares. Common Shares sold hereunder may
be treasury shares, authorized and unissued shares, or a combination thereof.
The Committee may also purchase Common Shares on behalf of the participants
through market transactions.

         If Kendle shall, at any time change its issued Common Shares into a
different number through stock dividend, stock split, combination or otherwise,
the number of Common Shares specified in this Plan shall be proportionately
adjusted.

         13.      MISCELLANEOUS.

                  13.1     Any authorization, election, notice or document under
this Plan from an Eligible Employee or participant shall be delivered to Kendle
and shall be effective when delivered.

                  13.2     This Plan, and Kendle's obligation to sell and
deliver Common Shares hereunder, shall be subject to all applicable federal,
state and foreign laws, rules and regulations, and to such approval by any
regulatory or governmental agency as may, in the opinion of counsel for Kendle,
be required.