AMENDMENT NO. 1
TO THE
EMPLOYMENT AGREEMENT
BY AND BETWEEN
NEIGHBORCARE, INC. (THE "COMPANY")
AND
XXXXXXX X. XXXX ("EXECUTIVE")
WHEREAS, Executive is currently employed by the Company;
WHEREAS, the terms of Executive's employment are currently governed by
that certain employment agreement executed on June 29, 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; and
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)(iv) hereof until the
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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
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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. 1, the terms and conditions
of the Employment Agreement shall remain unchanged.
4. This Amendment No. 1 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
/s/ Xxxxxxx X. Xxxx NeighborCare, Inc.
-----------------------------
Xxxxxxx X. Xxxx
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------
July 12, 2005 Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President, Human
Resources
July 12, 2005
