**Exhibit 10.33**

**PHARMERICA CORPORATION**

**PharMerica Corporation 2007 Omnibus Incentive Plan**

**Substitution Incentive Stock Option Agreement**

**THIS SUBSTITUTION INCENTIVE 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 Kindred Healthcare,Inc. (“Kindred”) who was granted an incentive stock option to purchase                  shares of Kindred common stock with an exercise price of$             on                 ,             (the “Kindred Option”); 

**WHEREAS**, inconnection with the merger of Kindred with and into the Company, the Company has determined that it is desirable and in its best interests to substitute the Kindred 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 any other provision of 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 andoption (the “Option”) to purchase from the Company                  shares of Stock. This Option is intended to constitute an incentive stock optionwithin 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 Kindred Option and that effective as of the Grant Date, the Optionee shall have no rights under the Kindred 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 ofthis 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. 

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

**(a) Vesting of the Option.** Provided that the Optionee remains in thecontinuous 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 VestingDate. 

**(b) Acceleration of Vesting of the Option**. The Option shall become fully vested and exercisable in the event of a Change inControl or the death or Disability of the Optionee while employed with the Company. 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 Optioneeceases to be employed by the Company for any reason. 

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

**(a) Exercise by the Optionee.** Only the Optionee receivingthe 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 beexercisable and shall terminate upon the earliest to occur of: 

(i) unless the Committee otherwise determines in writing in its solediscretion, three (3) months after the date on which the Optionee’s employment is terminated other than by reason of (i) by the Company for Cause, (ii) the Optionee’s disability (within the meaning of Section 22(e)(3)of the Code), or (iii) the death of the Optionee; 

 

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(ii) immediately upon the termination of the Optionee’s employment by the Company for“cause” (as determined by the Board in its sole discretion); 

(iii) twelve (12) months after the date on which theOptionee’s employment is terminated by reason of the Optionee’s “permanent and total disability (within the meaning of Section 22(e)(3) of the Code); 

(iv) twelve (12) months after the date of termination of the Optionee’s employment by reason of the death of the Optionee; or 

(v) the tenth anniversary of the Grant Date. 

**(c) Definition of Cause**. For purposes hereunder, Causemeans: 

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

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

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

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

(v) intentional wrongful engagement in any competitive activity, 

(vi) 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);

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

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

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

**5. Exercise Procedure**. Vested portions of the Option may be exercised, inwhole 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 

 

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effective date of the proposed exercise (the “Exercise Date”), setting forth the number of shares of Common Stock with respect to which the Optionis 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 FairMarket Value of the shares of Common Stock over the exercise price as of the Exercise Date. 

**6**. **Construction ofAgreement**. 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 suchinvalidity, 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 bedeemed 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 ofany 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. Incentive Stock Option Treatment**. The terms of this Option shall be interpreted in a manner consistent with the intent of the Companyand the Optionee that the Option qualify as an Incentive Stock Option under Section 422 of the Code. If any provision of the Plan or this Agreement shall be impermissible in order for the Option to qualify as an Incentive Stock Option, then theOption shall be construed and enforced as if such provision had never been included in the Plan or the Option. If and to the extent that the number of Options granted pursuant to this Agreement exceeds the limitations contained in Section 422of the Code on the value of Shares with respect to which this Option may qualify as an Incentive Stock Option, this Option shall be a Non-Qualified Stock Option. 

**10. 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 itssubject 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, includingwithout limitation the Plan, supersedes all prior agreements and understandings between the parties with respect to its subject matter. 

 

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

**12. Governing Law**. ThisAgreement 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. 

**13. Optionee Acknowledgment**. The Optionee hereby acknowledges receipt of a copy of the Plan. The Optionee hereby acknowledges that alldecisions, 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 causedthis 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:**