AMENDMENT NO. 2
TO THE
EMPLOYMENT AGREEMENT
BY AND BETWEEN
NEIGHBORCARE, INC. (THE "COMPANY")
AND
XXXX X. XXXXXXX, XX. ("EXECUTIVE")
WHEREAS, Executive is currently employed by the Company;
WHEREAS, the terms of Executive's employment are currently governed by
that certain amended and restated employment agreement, amended and restated
as of December 9, 2003, and amended as of June 22, 2004 (the "Employment
Agreement"); and
WHEREAS, Executive would have Good Reason pursuant to the terms of the
Employment Agreement to terminate his employment with the Company upon a
Change of Control that results in the Company becoming a subsidiary of
another entity and no longer publicly traded; and
WHEREAS, in the event of a Change of Control, it is likely to be in the
interest of the Company for Executive to be obligated to continue his
employment with the Company for a period of at least ninety days following
such Change of Control, to assist with transition and for other reasons;
WHEREAS, the Company and Executive wish to amend the terms of the
Employment Agreement effective as of a Change in Control of the Company (as
currently defined in Section 1.04 of the NeighborCare, Inc. Severance Pay
Plan), on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereby agree as follows:
1. Section 4(d) of the Employment Agreement is hereby amended by adding the
following paragraph at the end thereof: "Notwithstanding the foregoing,
Executive agrees not to exercise Executive's right to resign for Good Reason
pursuant to Section 4(d)(i) hereof until the end of the ninety (90) day period
commencing on the effective date of a Change of Control, so long as Executive
continues to be employed in the same position and title at the Company with
substantially similar responsibilities and duties during such ninety-day period
(taking into account that the Company may be a subsidiary and no longer publicly
traded following such Change of Control)."
2. Section 8(b) of the Employment Agreement is hereby amended by adding the
following paragraph at the end thereof:
Notwithstanding the foregoing, the provisions of Sections
8(b)(i) and 8(b)(iii) shall only prohibit Executive from
competition with, and solicitation or service of,
customers of the Company's LTC Pharmacy Services (as
defined below) business as of immediately prior to a
Change of Control and shall have no other effect;
provided that the restriction on competition shall not
apply to any association by the Executive with entities
for which LTC Pharmacy Services comprises 25% or less of
such entity's total business; and further provided that
the restriction on solicitation or service of customers,
directly or indirectly, shall apply only to Facilities
(as defined below) served by the Company as of July 6,
2005 or served by the Company during the 12-month period
immediately preceding the effective date of a Change of
Control. Notwithstanding the foregoing, during the
90-day period following the effective date of a Change of
Control, Executive shall be prohibited from soliciting or
serving, directly or indirectly, Facilities that have
been solicited by the Company during the 90-day period
prior to the effective date of such Change of Control.
"LTC Pharmacy Services" means: The provision of pharmaceutical
products, including, without limitation, prescription and
non-prescription drugs; biological products and infusion
therapies; all related pharmacy services, including, without
limitation, consultant pharmacist services, medical records,
formulary management services and group purchasing and enteral
nutrition products to nursing homes, assisted living
facilities, independent living facilities, supportive living
facilities, long-term acute care hospitals, facilities for the
developmentally disabled, retirement communities, continuing
care retirement communities, and other institutional and
long-term care settings (collectively, "Facilities") and to
residents of such Facilities; provided that the provision of
biological products, infusion therapies and enteral nutrition
products (and related services) to Facilities other than
nursing facilities, assisted living facilities, hospices and
long-term acute care hospitals shall be permitted.
3. Except as provided in this Amendment No. 2, the terms and conditions of
the Employment Agreement shall remain unchanged.
4. This Amendment No. 2 shall be of no further force or effect if a Change
in Control of the Company does not occur on or prior to December 31, 2005.
2
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
/s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------- NeighborCare, Inc.
Xxxx X. Xxxxxxx, Xx.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
July 12, 2005 Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President,
Human Resources
July 12, 2005
3
