Document:

exhibit10-2.htm

Exhibit 10.2

 

 

SEPARATION AGREEMENT

 

THIS SEPARATION AGREEMENT (this “Agreement”) is made this 31st day of July, 2010 by OMNICARE, INC., a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 1600 Rivercenter II, 100 East Rivercenter Boulevard, Covington, Kentucky 41011 (the “Company”), OMNICARE MANAGEMENT COMPANY, a corporation organized and existing under the laws of the State of Delaware and a wholly owned subsidiary of the Company, (the “Management Company,” and together with the Company, the “Companies”) and CHERYL D. HODGES (the “Executive”).

 

INTRODUCTION

 

WHEREAS, the Executive is the Senior Vice President and Secretary of the Company;

 

WHEREAS, the Executive is a party to an employment agreement with Omnicare Management Company, dated August 4, 1988, as amended (the “Employment Agreement”);

 

WHEREAS, the Companies and the Executive have mutually agreed to terminate the employment relationship and to release each other from certain claims arising from or related to the employment relationship effective July 31, 2010.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, the parties agree as follows:

 

1. Cessation of Employment Relationship.

 

The employment of the Executive with the Companies will terminate on July 31, 2010 (the “Termination Date”).  The Executive hereby resigns, effective as of the Termination Date, from all positions and offices with the Companies and any affiliate of the Companies.  The Executive agrees to provide advice and assistance to aid in management transition following the Termination Date, as reasonably requested by the Company and on mutually agreeable terms.  In connection with providing such advice and assistance, the Executive will be provided reasonably necessary secretarial and other customary administrative assistance, as mutually agreed.

 

2. Payment Obligations.

 

(a) Severance.  The parties understand that the Executive’s termination of employment with the Companies will be treated as a termination without cause under Section 3 of the Employment Agreement.  Accordingly, the Company shall pay the Executive an aggregate severance amount of $2,138,582, in cash, payable in 12 equal monthly installments on the first business day of each month commencing with August, 2010, provided that (x) only a portion of the first such installment, equal to $490,000, shall be paid not later than August 6, 2010, (y) no portion of the installments due for September 2010 through January 2011, shall be paid in those months and (z) the remaining unpaid portion of the August 2010 installment and the entire amount of the installments for September 2010 through January 2011, together with interest on such amounts from their scheduled monthly payment date through February 1, 2011, at the rate of 8.75%, compounded monthly, shall be paid, in a single lump sum, on February 1, 2011, together with the monthly installment scheduled for that date.  The Company shall promptly deposit in a trust, with Northern Trust Company or another trustee mutually selected by Executive and the Company, that is intended to qualify as a “rabbi trust” within the meaning of applicable Internal Revenue Service guidance, and that is subject to terms and conditions that are reasonably acceptable to the Executive and the Company the entire unpaid principal balance of the amount set forth above and interest as set forth above shall cease to accrue from the date of such deposit.  The parties understand that the Executive will not receive any incentive awards for 2010 under the Omnicare, Inc. Annual Incentive Plan or the Omnicare, Inc. 2004 Stock & Incentive Plan.

 

(b) Health Care/Long-Term Care Policy.  The Company and the Executive shall cooperate to implement the portability provisions of the Company's long-term and home care plan and related insurance arrangement.

 

(c) Split Dollar Life.  The Executive will continue to be eligible for the benefit she is entitled to under the split dollar agreement between the Company and the Executive, dated February 25, 2000, in accordance with the terms of such agreement.  The bonus continuation in respect of such benefit is currently estimated to total $47,072.

 

(d) Payment for Accrued Salary/Vacation Time/Business Expenses.  The Executive shall be entitled to receive from the Company a lump-sum cash payment in respect of the Executive’s accrued but unpaid base salary through the Termination Date, accrued and unused vacation time in the amount of $43,750 and any unreimbursed business expenses in accordance with Section 2.5(a) of the Employment Agreement.  The payment shall be made not later than August 6, 2010.

 

(e) Stock Options.  As of the Termination Date, the Executive holds nonqualified stock options to purchase 446,859 shares of the common stock of the Company.  Pursuant to the terms of the applicable stock option agreements, the unvested stock options shall become exercisable upon the Termination Date and all outstanding options shall remain exercisable until the earlier of their expiration date or the three (3) year or fifteen (15) month anniversary of the Termination Date (as applicable, as set forth in the applicable stock option agreement).  The Company shall permit the Executive to exercise such options and to satisfy any associated tax obligations in the same ways as are made available generally to senior executives of the Company from time to time.  The Executive shall be reimbursed for her current contribution balance in the StockPlus Plan of the Company.  Such reimbursement shall be made promptly following the Termination Date but in no event later than the date required under Section 8(c)(ii) of the StockPlus Plan.

 

(f) Restricted Stock.  As of the Termination Date, the Executive holds 111,573 restricted shares of the common stock of the Company.  Pursuant to the terms of the applicable restricted stock agreement, all such restricted shares shall become fully vested upon the Termination Date.  The Company shall permit the Executive to satisfy any associated tax obligations in the same ways as are made available generally to senior executives of the Company from time to time.  The Company shall pay to the Executive $2901 not later than August 6, 2010 in respect of accrued dividends and related interest income with respect to the restricted shares.

 

(g) Other Benefits.  The Executive will be paid any amount due under any welfare and pension benefit plan of the Companies, including without limitation the ESOP and the S&I Plan portion of the Omnicare, Inc. Excess Benefit Plan and the Companies’ tax qualified pension plans, in accordance with the terms of each such plan and applicable law.  With respect to the General Pension Plan portion of the Omnicare, Inc. Excess Benefit Plan, the Executive will be entitled to the lump-sum present value of her Excess Benefits (as defined therein) as of the Termination Date of $8,720,374, of which $2,580,090 (which amount shall be credited with interest from August 16, 2010 through the date of payment at the rate of 8.75% per annum ) shall be paid promptly but in no event later than 30 days following the Termination Date and of which $6,140,284 shall be paid on February 1, 2011 or the Executive’s death, if earlier, plus interest thereon in accordance with Section 3 of the Employment Agreement.  Except as specifically provided in this Agreement, the Executive will not be due any other payments or benefits from the Companies in connection with her termination of employment, including, without limitation, any payments under any formal or informal severance plan of the Companies.  On the Termination Date, the Executive shall become fully vested in all her accounts under the ESOP and the S&I Plan portion of the Omnicare, Inc. Excess Benefit Plan and will be paid in accordance with the terms of such plan.

 

(h) Enforcement of Rights.  The Company shall promptly pay upon demand any reasonable legal fees incurred by Executive in connection with enforcement of any rights under paragraphs (a) through this paragraph (h) of Section 2 of this Agreement.  The Company shall promptly pay upon demand any reasonable legal fees incurred by Executive in connection with enforcement of any other rights under this Agreement, but only if she prevails substantially in enforcing such rights.

 

(i) The Company will arrange for moving the Executive’s personal property off the Company’s premises to the Executive’s residence in Cincinnati, Ohio.

 

3. Mutual Waiver and Release.  The payments, benefits and rights provided under this Agreement to the Executive are conditioned upon the execution and non-revocation by the Executive of the Executive General Release and Covenant Not to Sue attached as Exhibit A hereto.  If such release is not executed by Executive on the date hereof, or is revoked prior to the expiration of the revocation period set forth therein, then any payments, benefits or rights provided pursuant to Section 2 hereof shall be forfeited, and upon such revocation, this Agreement shall be null and void ab initio and this Agreement shall have had no impact upon the rights and obligations of the parties.  The benefits and rights provided under this Agreement to the Companies are conditioned upon the execution of the Companies General Release and Covenant Not to Sue attached as Exhibit B hereto.

 

4. Restrictive Covenants.

 

4.1 Company Property.  The Executive shall have no right, title or interest in any reports, studies, memoranda, correspondence, manuals, records, plans, or other written, printed or otherwise recorded materials of any kind relating to the affairs of or otherwise belonging to the Company, or in any copies, pictures, duplicates, facsimiles or other reproductions, recordings, abstracts or summaries thereof and the Executive will promptly surrender to the Company any such materials (other than materials which have been published or otherwise have lawfully been made available to the public generally) in her possession upon the termination of her employment or any time prior thereto upon request of the Company.

 

4.2 Nondisclosure.  Without the prior written consent of the Company, the Executive shall not at any time use for her own benefit or purposes or for the benefit or purposes of any other person, firm, partnership, association, corporation or business organization, entity or enterprise, or disclose (except in the performance of her duties to the Company) in any manner to any person, firm, partnership, association, corporation or business organization, entity or enterprise, any trade secret, or other confidential or proprietary information, data, know-how or knowledge (including, but not limited to, that relating to financial policies, product composition, manufacturing organization and methods, research and development policies and programs, service techniques, purchasing organization and methods, sales organization and methods, product pricing, market development and expansion plans, personnel policies and training and development programs, customer and supplier relationships, and franchising programs and franchisee relationships) belonging to, or relating to the affairs of, the Company.  The Companies agree and acknowledge that this paragraph 4.2 does not apply to materials which have been made available to the public generally without violating any agreement to which the Company is a party, and that this paragraph 4.2 shall not apply to the Executive’s disclosure in connection with responding to a subpoena or other valid legal requirement.

 

4.3 Disclosure of Inventions. The Executive shall promptly disclose to the Company (and to no one else) all improvements, discoveries and inventions that may be of significance to the Company made or conceived alone or in conjunction with others (whether or not patentable, whether or not made or conceived at the request of or upon the suggestion of the Company during or out of her usual hours of work or in or about the premises of the Company or elsewhere) while in the employ of the Company, or made or conceived within six months after the Termination Date, if resulting from, suggested by or relating to such employment.  All such improvements, discoveries and inventions shall, to the extent that they are patentable, be the sole and exclusive property of the Company and are hereby assigned to the Company.  At the request of the Company and at its cost and without liability to Executive, Executive shall assist the Company, or any person or persons from time to time designated by it, in obtaining the grant of patents in the United States and/or in such other country or countries as may be designated by the Company covering such improvements, discoveries and inventions and shall in connection therewith execute such applications, statements or other documents, furnish such information and data and take all such other action (including, but not limited to, the giving of testimony) as the Company may from time to time request.

 

4.4 Mutual Non-Disparagement.  The Executive shall not (i) make any public comments disparaging or denigrating the Company, including each of its respective current, former and future officers, directors, employees, agents, representatives, attorneys, and shareholders, or (ii) encourage or assist any other person or entity making any such public comments.  The Company shall cause the members of the Board of Directors of the Company and its executive officers and other officers with the title of Vice President and above not to (i) make any public comments disparaging or denigrating the Executive or (ii) encourage or assist any other person or entity making any such public comments.  For avoidance of doubt, “Company” for purposes of the preceding sentence shall mean only Omnicare, Inc.

 

4.5 Remedies.  The Executive acknowledges and agrees that the Companies' remedy at law for any breach of any of the Executive's obligations under Section 4.1, 4.2 or 4.3 would be inadequate, and agrees and consents that temporary and permanent injunctive relief may be granted in any proceeding that may be brought to enforce any provision of any such sections, without the necessity of proof of actual damage.

 

4.6 Cooperation.

 

(a) The Executive hereby agrees that the Executive shall make herself reasonably available to the Company and cooperate with the Company and in providing information and assistance that directly relate to the Executive’s prior positions with the Company.  The Executive further agrees to reasonably assist the Company with respect to all reasonable requests to provide documents, testify, or otherwise assist in connection with any legal proceeding or matter relating to the Company, including but not limited to, any Federal, state or local audit, proceeding or investigation, other than proceedings relating to the enforcement of this Agreement or other proceedings in which the Executive is a named party whose interests are adverse to those of the Company.  The Executive further agrees that she will continue to comply with the Company's policy on contacts with government and law enforcement, as described in the Company’s Statement of Corporate Ethics and Business Practices and the Code of Business Conduct and Ethics (copies of which will be provided to the Executive as soon as practical after the date hereof), and will notify the Company promptly if she is contacted in connection with any governmental investigation that may concern the Company.  All such requests to provide services shall be limited in nature and shall be scheduled taking into account the Executive’s obligations.  The Company will pay the Executive at an hourly rate of $225 and will reimburse the Executive for any reasonable out-of-pocket expenses incurred by the Executive at the request of the Company in connection with any such cooperation or participation.

 

(b) In the event of any legal proceeding or matter relating to the Executive's service with the Company, including but not limited to, any Federal, state or local audit, proceeding or investigation, other than proceedings relating to the enforcement of this Agreement or other proceedings in which the Executive's interests are adverse to those of the Company, the Company hereby agrees that it shall make available to the Executive all documents relevant to such matter, other than proprietary or confidential documents, and otherwise cooperate with the Executive and provide information and assistance, in all such cases as the Company determines to be reasonably requested by the Executive, and subject to such terms and conditions as the Company shall reasonably impose.

 

4.7 Severability.  Any provision of this Section 4 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 hereof in such jurisdiction or rendering that or any other provisions of this Section 4 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.

 

4.8 Affiliates.  For purposes of this Section 4, except for the second and third sentences of Section 4.4 hereof and the requirements to notify or obtain the consent of the Company, all references to the Company will include the Management Company and all other subsidiaries and affiliates of the Company.

 

5. Miscellaneous.

 

5.1 Legal Fees.  The Company will reimburse the Executive for her reasonable legal fees and expenses incurred in connection with negotiating and executing this Agreement.

 

5.2 Indemnification.  Following the Termination Date and until the expiration of the applicable statute of limitations, if any, the Company will continue to provide to the Executive indemnification and director and officer insurance coverage substantially identical to that which the Company provides to its directors and officers.  At the Executive's request, subject to the consent of the Company which shall not be unreasonably withheld, the Executive shall be afforded separate counsel at Company expense designated by the Executive in connection with any matter for which indemnification or insurance may be sought in light of the existence of an actual or potential conflict with any other parties.

 

5.3 Withholding.  All payments and benefits payable pursuant to this Agreement shall be subject to reduction by all applicable withholding, social security and other federal, state and local taxes and deductions.

 

5.4 Section 409A Compliance.  To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Internal Revenue Code, and this Agreement shall be construed and applied in a manner consistent with this intent.  Notwithstanding any other provision herein to the contrary, 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) the Executive’s right to receive such reimbursements or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

 

5.5 Waiver.  Failure of any party hereto at any time to enforce any provision of this Agreement or to require performance by any other party of any provisions hereof shall in no way affect the validity of this Agreement or any part hereof or the right of such party thereafter to enforce its rights hereunder; nor shall it be taken to constitute a condonation or waiver by such party of that default or any other or subsequent default or breach.

 

5.6 Notices.  All notices or other communications hereunder shall not be binding on either party hereto unless in writing, and delivered to the other party thereto at the following address:

 

 

	
If to the Company:

	
Omnicare, Inc.

1600 RiverCenter II

100 East RiverCenter Boulevard

Covington, Kentucky  41011

Attention: General Counsel

 

	
If to the Management Company:

 

 

 

 

	
Omnicare, Inc.

1600 RiverCenter II

100 East RiverCenter Boulevard

Covington, Kentucky  41011

Attention: General Counsel

 

	
If to the Executive:

	
Cheryl D. Hodges

P.O. Box 15787

Cincinnati, Ohio 45215

 

	
With copy to:

	
Arthur Kohn

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

 

 

Notices shall be deemed duly delivered upon hand delivery thereof at the above addresses, one day after deposit with a nationally recognized overnight delivery company, or three days after deposit thereof in the United States mails, postage prepaid, certified or registered mail.  Any party may change its address for notice by delivery of written notice thereof in the manner provided.

 

5.7 Assignment.  No rights of any kind under this Agreement shall, without the prior consent of the Companies, be transferable to or assignable by Executive or any other person or, except as provided by applicable law, be subject to alienation, encumbrance, garnishment, attachment, execution or levy of any kind, voluntary or involuntary.  All payments due hereunder after the death of the Executive shall be paid according to the applicable laws of descent and distribution.  This Agreement shall be binding upon and shall inure to the benefit of the Companies and their respective successors and assigns.

 

5.8 Governing Law.  This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without regard to the conflicts of law principles thereof.

 

5.9 Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same document.

 

5.10 Headings.  The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

5.11 Entire Agreement.  This Agreement entered into among the parties as of the date hereof constitutes the entire understanding and agreement between the parties hereto, and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, concerning the subject matter hereof, including, without limitation, the Employment Agreement.  All negotiations by the parties concerning the subject matter hereof are merged into this Agreement, and there are no representations, warranties, covenants, understandings or agreements, oral or otherwise, in relation thereto by the parties hereto other than those incorporated herein.  No supplement modification or amendment of this Agreement shall be binding unless executed in writing by the parties.

 

SIGNATURES ON FOLLOWING PAGE

 

  

  

  

INTENDING TO BE LEGALLY BOUND, the parties or their duly authorized representatives have signed this Agreement as of the date first above written.

 

OMNICARE, INC.

________________________

By:

Title:

OMNICARE MANAGEMENT COMPANY

________________________

By:

Title:

EXECUTIVE

________________________

Cheryl D. Hodges

  

  

  

EXHIBIT A

 

EXECUTIVE RELEASE AND COVENANT NOT TO SUE

 

I, CHERYL D. HODGES, on behalf of myself and my heirs, executors, administrators and assigns, in consideration of the separation agreement among Omnicare, Inc., Omnicare Management Company and Cheryl D. Hodges, dated July 31, 2010 (the “Separation Agreement”) to which this Executive General Release and Covenant Not to Sue (the “Executive Release”) is attached, do hereby release and forever discharge and covenant not to sue Omnicare, Inc., Omnicare Management Company and its and their subsidiaries, affiliates, directors, members, officers, executives, agents, stockholders, and its and their affiliates, and its and their successors and assigns (both individually and in their official capacities) (the “Releasees”), from any and all actions, causes of action, covenants, contracts, claims, demands, suits, and liabilities whatsoever, which I ever had, now have or may have arising prior to or on the effective date of this Executive Release by reason of my employment with or severance of my employment from Omnicare, Inc., Omnicare Management Company and its and their affiliates (“Claims”).

 

By signing this Executive Release, I am providing a complete waiver of all Claims that may have arisen, whether known or unknown, up until and including the effective date of this Executive Release.  This includes, but is not limited to, claims based on Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967 (including the Older Workers Benefit Protection Act), the Americans With Disabilities Act, the Fair Labor Standards Act, the Equal Pay Act, the Family and Medical Leave Act, the Executive Retirement Income Security Act of 1974 (except as provided below), and all applicable amendments to the foregoing acts and laws, or any common law, public policy, contract (whether oral or written, express or implied) or tort law, and any other local, state or Federal law, regulation or ordinance having any bearing whatsoever on the terms and conditions of my employment and the cessation thereof.  This Executive Release shall not, however, apply to any obligation of the Companies pursuant to the Separation Agreement, any rights to indemnification from the Companies she may have, any rights that the Executive may have to obtain contribution in the event of the entry of judgment against the Executive as a result of any act or failure to act for which both the Executive and any of the Companies are jointly responsible or any benefit to which the Employee is entitled under any tax qualified pension plan of the Employer or its affiliates, COBRA continuation coverage benefits or any other welfare benefits required to be provided by statute (claims with respect thereto, collectively, “Excluded Claims”).  I further agree, promise and covenant that, to the maximum extent permitted by law neither, I, nor any person, organization, or other entity acting on my behalf has filed or will file, charged or will charge, claimed or will claim, sued or will sue, or caused or will cause or permitted or will permit to be filed, charged or claimed, any action for damages or other relief (including injunctive, declaratory, monetary or other relief) against the Releasees with respect to any Claims other than Excluded Claims.

 

I have been given but voluntarily declined twenty-one (21) days to review the Separation Agreement and this Executive Release and have been given the opportunity to consult with legal counsel, and I have signed the Separation Agreement and I am signing this Executive Release knowingly, voluntarily and with full understanding of its terms and effects, and I voluntarily accept the benefits provided for in the Separation Agreement for the purpose of making full and final settlement of all claims referred to above.  I also understand that I have seven days after execution to revoke this Executive Release, and that this Executive Release will not become effective if I exercise my right to revoke my signature within seven (7) days of execution.  I understand that such revocation must be delivered to the general counsel of the Company at its headquarters during such period to be effective.

 

I acknowledge that I have not relied on any representations or statements not set forth in the Separation Agreement or this Executive Release.  I will not disclose the contents or substance of the Separation Agreement or this Executive Release to anyone except my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof, and I will instruct each of the foregoing not to disclose the same.

 

This Executive Release will be governed by and construed in accordance with the laws of the State of Delaware.  If any provision in this Executive Release is held invalid or unenforceable for any reason, the remaining provisions shall be construed as if the invalid or unenforceable provision had not been included.

 

IN WITNESS WHEREOF, I have executed this Executive Release on this 31st day of July, 2010.

 

_____________________________

Cheryl D. Hodges

  

  

  

EXHIBIT B

 

COMPANIES RELEASE AND COVENANT NOT TO SUE

 

OMNICARE, INC., a corporation organized and existing under the laws of the State of Delaware, and OMNICARE MANAGEMENT COMPANY, a corporation organized and existing under the laws of the State of Delaware, and together with Omnicare, Inc., (the “Companies”), in consideration of the separation agreement among Omnicare, Inc., Omnicare Management Company and Cheryl D. Hodges (the “Executive”), dated July 31, 2010 (the “Separation Agreement”) to which this Companies General Release and Covenant Not to Sue (the “Companies Release”) is attached, do hereby release and forever discharge and covenant not to sue (and shall cause their subsidiaries and affiliates to hereby release and forever discharge and covenant not to sue) the Executive or her heirs, executors, administrators and assigns (the “Releasees”), from any and all actions, causes of action, covenants, contracts, claims, demands, suits, and liabilities whatsoever, which the Companies or any of their subsidiaries or affiliates ever had, now have or which the successors or assigns of the Companies or any of their subsidiaries or affiliates hereafter can, shall or may have arising prior to or on the date hereof by reason of the Executive’s employment with or severance of employment from Omnicare, Inc., Omnicare Management Company and its affiliates.  Notwithstanding the foregoing, this Companies Release shall not constitute a waiver, discharge, release or covenant not to sue with respect to claims under the Separation Agreement and acts or omissions for which the Executive would not be entitled to indemnification under Section 145 of the Delaware General Corporation Law.

 

IN WITNESS WHEREOF, the Companies have executed this Companies Release on this 31st day of July, 2010.

 

	
  

	
OMNICARE, INC.

	
  

	
________________________

	
  

	
By:

	
  

	
Title:

	
  

	
OMNICARE MANAGEMENT COMPANY

	
  

	
________________________

	
  

	
By:

	
  

	
Title:exhibit10-3.htm

Exhibit 10.3

 

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 17th day of September, 2010 by and between OMNICARE, INC., a Delaware corporation (the “Company”) and JAMES D. SHELTON (“Executive”).

WHEREAS, Executive has been a member of the Company’s Board of Directors (the “Board”);

WHEREAS, the Company’s President and Chief Executive Officer retired from the Company on July 31, 2010;

WHEREAS, the Company and Executive have agreed that, while the Company engages in a search for a permanent President and Chief Executive Officer, the Executive will be employed on a temporary basis as the Company’s Interim President and Chief Executive Officer; and

WHEREAS, the Company and the Executive desire to enter into the Agreement to set forth the terms of the Executive’s temporary 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   From August 1, 2010 (“Effective Date”) through January 31, 2011 (the “Term”), the Company shall employ Executive as its Interim President and Chief Executive Officer, reporting directly to the Board.  Executive shall be assigned such duties with regard to the business of the Company as are generally performed by the president and chief executive officer of the Company, and such other duties as may from time to time be assigned to Executive by the Board consistent with such position.   The Executive shall be a member of the Board.

 

1.2   Executive agrees to devote a substantial portion of his professional time and attention to his duties as an employee of the Company; it being understood that Executive is engaged in other business activities and may manage his personal investments and participate in professional, educational, philanthropic, or community activities.

  

SECTION 2  COMPENSATION, BENEFITS AND EXPENSES

 

2.1   BASE SALARY. During the Term, in full consideration for his services as Interim President and Chief Executive Officer and as a member of the Board, the Company shall pay to Executive a salary (“Base Salary”) at a monthly rate of $83,333, payable in accordance with the regular payroll practices of the Company but not less frequently than monthly.

 

2.2   RESTRICTED STOCK UNIT AWARD. Simultaneously herewith, the Company is granting to Executive a stock unit award in the form of the stock unit award agreement attached hereto as Exhibit A (the “Stock Unit Agreement”) pursuant to the Company’s 2004 Stock and Incentive Plan.

  

2.3   REIMBURSEMENT OF BUSINESS AND LIVING EXPENSES. During the Term, the Company shall reimburse Executive for all ordinary and necessary business expenses incurred and substantiated by him in accordance with applicable Company policy.  In addition, Executive will be reimbursed for reasonable, customary housing, car rental, meal and living expenses while employed on a temporary basis under this Agreement in the Covington, Kentucky metropolitan area.

 

2.4    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 similarly–situated executives in accordance with the terms of such plans and programs, including applicable waiting periods and vesting schedules, which Executive acknowledges may extend beyond January 31, 2011; provided, however, Executive shall not be entitled to participate in the Company’s Excess Benefit Plan or the Company’s Rabbi Trust Deferred Compensation Plan.   Nothing in this Agreement shall preclude the Company’s authority to amend or terminate any plan at any time and from time to time.  

2.5           COMPANY AIRPLANE.  During the Term, Executive will be entitled to use of the Company’s airplane for travel to and from the Covington, Kentucky metropolitan area, to and from his residences, and for Company business.

 

SECTION 3  TERM; TERMINATION OF EMPLOYMENT

 

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

 

(a)   wilfull misconduct or gross negligence in connection with the Executive’s performance of his duties hereunder; it being understood that Executive’s conduct shall not be considered to be “wilfull” if he reasonably believed that his actions or omissions were in the best interest of the Company; or

 

(b)    the Executive’s conviction for, or plea of nolo contendere to, a felony or a violation of federal or state securities laws.

  

                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 ordinary and necessary business or living expenses already incurred, and any compensation already earned or vested as of that date.

3.2   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 30 days or would be reasonably expected to continue for at least 30 days, then the Executive’s employment shall be deemed terminated (“Termination for Disability”). Upon Termination for Disability, Executive shall continue to receive the Base Salary described in Section 2.1 hereof for a period of three (3) months after the date of termination or until January 31, 2011, whichever period is shorter, 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 to Executive under Section 2.1 of this Agreement shall terminate upon the date of his death, with the exception of reimbursement of ordinary and necessary business expenses already incurred, and any compensation already earned or vested as of that date.  The benefits provided in this Section 3.2 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).  Upon a Termination for Disability or on account of death, Executive’s rights under the restricted stock unit award shall be governed by the terms of the Stock Unit Agreement and the 2004 Stock and Incentive Plan.

 

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

(a)           Executive shall receive reimbursement of ordinary and necessary business and living expenses already incurred, and any compensation already earned or vested as of that date; and

(b)           Executive shall receive as severance pay continued payment of his Base Salary for the remainder of the Term.

In the event of a termination of Executive by the Company under this Section 3.3, Executive acknowledges that the Company shall have no obligations or liability to him whatsoever other than the obligations set forth in this Section 3.3 and Exhibit A hereto.  Subject to Section 5.17 hereof, the severance pay shall be paid in arrears on the last day of each month following Executive’s termination of employment.

  

This Section 3.3 shall govern the payment of severance for any termination by the Company other than for Cause (and other than a Termination for Disability).

 

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 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 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, pricing and other terms with customers and suppliers, 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 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   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  MISCELLANEOUS PROVISIONS

 

5.1    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.

5.2    WITHHOLDING.  All payments and benefits payable pursuant to this Agreement shall be subject to reduction by all applicable withholding, social security and other federal, state and local taxes and deductions.

5.3   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.

 

5.4   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.

 

5.5   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:  General Counsel

 

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

 

5.6   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.

 

5.7   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.

 

5.8   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.

 

5.9   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.

 

5.10   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 his or it by registered mail to the address referred to in Section 5.5 hereof or to such other address as the parties shall designate in writing by notice duly given in accordance with Section 5.5 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 his 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.

 

5.11   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.

 

5.12   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.

 

5.13   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.

 

5.14   NO MITIGATION OR OFFSET. 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.

 

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

 

5.16   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.

 

5.17   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)   Executive’s right to receive the severance payments under Section 3.3 shall be treated as a right to receive a series of separate payments under Treasury Regulation Section 1.409A-2(b)(2)(iii).  With respect to any payment or benefit under Section 3.3 or pursuant to any other provision of this Agreement payable on account of Executive’s termination of employment that is properly treated as deferred compensation subject to Code Section 409A (after taking into account all exclusions applicable to such payment under Code Section 409A)(the “Separation Payments”), the Executive shall not be deemed to have terminated employment until he is deemed to have a Separation from Service.  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. 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 Separation Payments 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.

  

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

 

 

INTENDING TO BE LEGALLY BOUND, the parties or their duly authorized representatives have signed this Agreement as of the date first above written.

 

OMNICARE, INC.

________________________

By:  JOHN L. WORKMAN

Title:  Executive Vice President and Chief Financial Officer

EXECUTIVE

________________________

JAMES D. SHELTON

 

  

  

  

EXHIBIT A

 

OMNICARE, INC.

Restricted Stock Unit Award

AWARD AGREEMENT, dated as of September 17, 2010, between Omnicare, Inc., a Delaware corporation ("Omnicare"), and James D. Shelton (the "Participant").  This Award is granted by the Compensation and Incentive Committee of the Omnicare Board of Directors (the "Committee") pursuant to the terms of the 2004 Stock and Incentive Plan (the "Stock Plan").  The applicable terms of the Stock Plan are incorporated herein by reference, including the definitions of terms contained in the plans.

 

Section 1.   Stock Unit Award.  Omnicare hereby grants to the Participant, on the terms and conditions set forth herein, an Award of 40,282 "Stock Units."  The Stock Units are notional units of measurement denominated in shares of Common Stock (i.e., one Stock Unit is equivalent in value to one share of Common Stock, subject to the terms hereof).  The Stock Units represent an unfunded, unsecured deferred compensation obligation of Omnicare.

 

Section 2.   Vesting.  The Award shall become fully vested on the date hereof; provided, however, that the Award shall be forfeited in full if the Participant’s employment is terminated for “Cause” (as defined in the Participant’s Employment Agreement with Omnicare, dated September 17, 2010).

 

Section 3.   Dividend Equivalents.  On any date that a dividend is paid to holders of the Common Stock (a “Dividend Payment Date”), an amount equal to the dividend the Participant would have received had he held shares of Common Stock rather than Stock Units (the “Dividend Equivalent Amount”) shall be notionally credited to the Participant.  The Dividend Equivalent Amount shall be credited with notional interest for the period from the Dividend Payment Date to the date of actual payment of the Dividend Equivalent Amount under this Award Agreement at a rate equal to the highest interest rate, determined as of the Dividend Payment Date, payable by Omnicare on any of its outstanding publicly-traded debt (or if no such public debt is then outstanding, the rate at which Omnicare could then borrow from its primary bank lender) plus 100 basis points (the "Imputed Interest").  On the Dividend Payment Date, an amount equal to the Dividend Equivalent Amount shall be contributed to an irrevocable “rabbi trust” (which shall be a grantor trust within the meaning of Sections 671-678 of the Internal Revenue Code of 1986, as amended) for the Participant’s benefit (the “Rabbi Trust”).  Amounts contributed to the Rabbi Trust for the Participant’s benefit shall be invested as directed by Omnicare in its sole discretion and Participant shall not have any claim against Omnicare with respect to the investment decisions made by Omnicare.  If at the end of any calendar quarter in which a Dividend Equivalent Amount remains unpaid the notional amount of such Dividend Equivalent Amount plus the related Imputed Interest accrued as of such date exceeds the value of the assets in the Rabbi Trust allocated to pay such amounts, Omnicare shall contribute an additional amount to the Rabbi Trust equal to such excess. A Dividend Equivalent Amount plus any related Imputed Interest shall be paid at the same time as the Stock Units to which such Dividend Equivalent Amount and Imputed Interest relate vest and are paid pursuant to Section 2 and Section 4 hereof.

 

Section 4.   Payment of Award.  Payment of the Stock Units (and any related Dividend Equivalent Amounts and Imputed Interest) shall be made within 30 days following the first of the following to occur: (i) a Change in Control that constitutes a change in ownership or effective control of a corporation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and all regulations, guidance and other interpretive authority issued thereunder (“Code Section 409A”) or (ii) the third anniversary of the date hereof.  The Stock Units shall be paid in shares of Common Stock and shall be paid to the Participant after payment of all applicable withholding taxes in the amount determined by the Committee.  The Participant may elect to satisfy such withholding tax obligation by having Omnicare retain Common Stock having a fair market value equal to the withholding obligation.  Dividend Equivalent Amounts and Imputed Interest related to Stock Units shall be paid to the Participant in cash after payment of all applicable withholding taxes in the amount determined by the Committee.

 

Section 5.   Restrictions on Transfer.  Neither this Award nor any Stock Units covered hereby may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to Omnicare as a result of forfeiture of the units as provided herein.

 

Section 6.   No Voting Rights.  The Stock Units, whether or not vested, will not confer any voting rights upon the Participant, unless and until the Award is paid in shares of Common Stock.

 

Section 7.   Award Subject to Stock Plan.  This Award is subject to the terms of the Stock Plan.  In the event of a conflict or ambiguity between any term or provision contained herein and a term or provision of the Stock Plan, the Stock Plan will govern and prevail.

 

Section 8.   Changes in Capitalization.  The Stock Units under this Award shall be subject to the provisions of the Stock Plan relating to adjustments for changes in corporate capitalization.

 

Section 9.   Section 409A.   The provisions of this Agreement and any payments made hereunder are intended to comply with, and should be interpreted consistent with, the requirements of Code Section 409A.  However, the Committee shall have the right in its sole discretion to adopt such amendments to the Stock Plan, this Award Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate either for this Award Agreement to be exempt from the application of Code Section 409A or to comply with the requirements of Code Section 409A.

 

Section 10.   No Right of Employment.  Nothing in this Award Agreement shall confer upon the Participant any right to continue as an employee of Omnicare or a Subsidiary or to interfere in any way with the right of Omnicare or an Affiliate to terminate the Participant's employment at any time or to change the terms and conditions of such employment.

 

Section 11.   Governing Law.  This Award Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the choice of law principles thereof.

 

OMNICARE, INC.

By:  ______________________________________

By:  JOHN L. WORKMAN

Title:  Executive Vice President and Chief

Financial Officer

PARTICIPANT

By:  ______________________________________

JAMES D. SHELTON

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