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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into this 17th day of February, 1996 by and between OMNICARE, INC., a
Delaware corporation (the "Company") and DAVID W. FROESEL, JR. ("Mr.
Froesel").
WHEREAS, the Company now desires to employ Mr. Froesel as an executive
of the Company for the purpose of conducting its institutional pharmacy
services for nursing homes, other long-term care institutions, home healthcare
and managed care organizations including, but not limited to, the sale and
distribution of pharmaceutical and medical supply products, the lease of oxygen
and other medical equipment and the provisions of pharmacy- related services
(referred to as the "Business") and Mr. Froesel desires to be employed by the
Company for that purpose;
THEREFORE, in consideration of these recitals and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT
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1.1 The Company agrees to employ Mr. Froesel as an executive
of the Company for the term of this Agreement. Mr. Froesel will be assigned
such duties with regard to the Business as are generally performed by an
executive of the Company, and such other duties as may from time to time be
assigned to Mr. Froesel by the President.
1.2 Mr. Froesel agrees to devote his exclusive and full
professional time and attention to his duties as an employee of the Company
and to perform such duties in an efficient, trustworthy and businesslike
manner. In addition, Mr. Froesel agrees that he will not render to others any
service of any kind for compensation or engage in any other business activity
including without limitation any involvement in any business in which Mr.
Froesel has any administrative or operating responsibility.
SECTION 2. COMPENSATION, BENEFITS AND EXPENSES
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2.1 BASE SALARY. The Company shall pay to Mr. Froesel a salary
("Base Salary") of $190,000.00 payable in equal semi-monthly installments, or
more frequently if the President of the Company determines that such salary
shall be paid in more frequent installments. Mr. Froesel's Base Salary may be
reviewed every 14-15 months, and may be adjusted at the Company's discretion
taking into consideration Mr. Froesel's performance, Company performance and
general economic conditions.
2.2 INCENTIVE COMPENSATION. At the commencement of this Agreement,
the Company will grant to Mr. Froesel $425,000.00 in Omnicare restricted
stock, which will vest in accordance with the terms and conditions of the
Company's plan, unless they sooner vest pursuant to the terms of Paragraphs
3.4 or 3.5 of this Agreement. Mr. Froesel will be eligible to participate in
the bonus and incentive compensation plans as may be maintained by the
Company for its executives.
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2.3 REIMBURSEMENT OF BUSINESS EXPENSES. During the term of this
Agreement, the Company will reimburse Mr. Froesel for all authorized, ordinary
and necessary business expenses incurred by him in connection with the
Business, including but not limited to the purchase and installation of
computer and facsimile equipment in Mr. Froesel's residence and a telephone
in his car, and the expenses incurred in utilizing such equipment in
connection with the Business. Reimbursement of such expenses shall be paid
monthly, upon submission by Mr. Froesel to the Company of vouchers itemizing
such expenses in a form satisfactory to the Company, properly identifying the
nature and business of any expenditures.
2.4 EXECUTIVE BENEFITS. Mr. Froesel will be eligible to
receive the same level of benefits provided by the Company to its
executives. In addition, the Company will contribute annually an amount
equal to 6% of Mr. Froesel's annual cash compensation to a Rabbi Trust which
will vest in five equal annual installments commencing one year following
the date each such contribution is made.
2.5 RELOCATION EXPENSES. All reasonable and customary out-of-pocket
expenses associated with relocating Mr. Froesel's family from Barrington,
Illinois, to Cincinnati, Ohio, shall be handled by the Company, including all
closing costs associated with the sale of the residence in Barrington
(including, but not limited to, real estate commission, survey, title
insurance, attorney's fees); all closing costs associated with the purchase
of a residence in the Cincinnati area (including, but not limited to,
inspections, attorney fees, survey, title insurance, and mortgage-related
fees and expenses such as points, processing fees, underwriting fees,
application and appraisal fees); the packing and movement of household goods;
transportation and hotel and food expenses associated with house- hunting
trips to Cincinnati; and temporary living expenses incurred during
transition.
SECTION 3. TERM OF EMPLOYMENT
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3.1 TERM. The initial term of employment of Mr. Froesel pursuant to
this Agreement shall commence on March 4, 1996, and shall continue for a
period of three years, until March 3, 1999. This Agreement shall be renewed
automatically at the end of this term for an additional three-year term, and
shall continue to automatically renew at the end of each three-year term for
like three-year terms, unless within 120 days prior to the end of the initial
three-year term or any subsequent three-year term, either party notifies the
other party that this Agreement shall not renew for the next additional term.
Notwithstanding the foregoing, this Agreement may be terminated at any time
as described in Sections 3.2 through 3.6 hereof.
3.2 TERMINATION FOR CAUSE. The Company shall have the right to
terminate this Agreement by written notice for the following causes (a
"Termination for Cause"):
(a) Conduct which is materially detrimental to the
Company's reputation, goodwill or business
operations;
(b) Gross or habitual neglect of Mr. Froesel's duties or
breach of Mr. Froesel's duties or misconduct in
discharging such duties;
(c) Mr. Froesel's repeated absence from his duties
without the consent of the President of the Company;
(d) Mr. Froesel's failure or refusal to comply with the
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policies, standards and regulations of the Company
or to follow the directions of the President of the
Company in complying with those policies, standards
and regulations.
Upon any Termination for Cause, all payments to Mr. Froesel under
Section 2 of this Agreement shall cease immediately, with the exception of
reimbursement of authorized, ordinary and necessary business expenses already
incurred, and any compensation already earned or vested as of that date.
3.3 DISABILITY, ILLNESS OR DEATH. If Mr. Froesel is unable to perform
his duties under this Agreement by reason of illness or other physical or mental
disability, then this Agreement shall be deemed terminated ("Termination for
Disability"). Upon Termination for Disability, Mr. Froesel shall continue to
receive the compensation described in Section 3 hereof for a period of three
(3) months after the date of termination reduced by any disability payment to
which Mr. Froesel may be entitled in lieu of such compensation but not by any
disability payment for which Mr. Froesel has privately contracted without the
Company's involvement. If Mr. Froesel should die before the termination of this
Agreement, all payments to Mr. Froesel under Section 2 of this Agreement shall
terminate upon the date of his death, with the exception of reimbursement of
authorized, ordinary and necessary business expenses already incurred, and any
compensation already earned or vested as of that date.
3.4 TERMINATION FOR REASONS OTHER THAN WITH CAUSE. The Company shall
have the right to terminate this Agreement without cause upon ten (10) days
written notice to Mr. Froesel. If the Company terminates this Agreement without
cause, Mr. Froesel shall receive his Base Salary as that term is defined in
Section 2.1 of this Agreement for two years, and any restricted stock, stock
options and Rabbi Trust contributions Mr. Froesel has received shall vest
immediately upon termination. In the event of termination without cause, Mr.
Froesel acknowledges that the Company shall have no obligations or liability to
him whatsoever other than the obligations set forth in this paragraph.
3.5 TERMINATION DUE TO A CHANGE IN CONTROL. The Company shall have the
right to terminate this Agreement in the event of a change in control of
the Company. If the Company terminates this Agreement, Mr. Froesel will
receive his Base Salary and cash bonus compensation for the unexpired term
of this Agreement, plus an additional two years of Base Salary and cash
bonus compensation. For purposes of this Section 3.5, annual cash bonus
compensation after termination shall be equal to the last annual cash bonus
paid to Mr. Froesel prior to termination. In addition, the restricted
stock, stock options and Rabbi Trust contributions will vest immediately
upon termination. Notwithstanding the foregoing, payments to Mr. Froesel
under this Section, in the aggregate, shall be limited to an amount that
does not constitute an excess parachute payment under Section 280G of the
Internal Revenue Code of 1986, and any successor provisions thereof, and
the regulations thereunder
3.6 VOLUNTARY TERMINATION. In the event Mr. Froesel voluntarily
terminates his employment for any reason prior to the date of termination
of the initial three-year term or any subsequent terms, all payments to Mr.
Froesel under Section 2 shall cease, with the exception of reimbursement of
authorized, ordinary and necessary business expenses already incurred, and
any compensation already earned or vested as of that date.
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SECTION 4. CONFIDENTIAL INFORMATION
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4.1 Mr. Froesel agrees that during the term of his agreement or
thereafter, he and any persons or entities over which Mr. Froesel has
control shall not directly or indirectly (without the Company's prior
written consent), use for himself or use for, or disclose to any party
other than the Company, any secret, proprietary or confidential information
or data regarding the business of the Company, or any secret, proprietary
or confidential information or data regarding the costs, uses, methods,
applications or customers, trade accounts or suppliers (and pertinent
information regarding transactions and prospective transactions therewith)
or products made, sold by the Company, or regarding any secret, proprietary
or confidential design, apparatus, process, system, manufacturing or other
method at any time used, developed or investigated by the Company, whether
or not such item was invented, developed, acquired, discovered or
investigated by Mr. Froesel. At the termination of Mr. Froesel's employment
with the Company, or at any other time the Company requests, Mr. Froesel
agrees to promptly deliver to the Company all computer software or data,
memoranda, notes, records, sketches, plans or other documents made or
compiled by, delivered to, or otherwise acquired by Mr. Froesel concerning
the costs, uses, methods, designs, applications or purchases of products
made by or sold by the Company or any secret, proprietary or confidential
product, apparatus or process manufactured, used, developed, acquired or
investigated by the Company or by any person in a contractual relationship
with the Company. Mr. Froesel will undertake all reasonably necessary and
appropriate steps to insure that the confidentiality of such Company
proprietary or confidential information shall be maintained.
SECTION 5. COVENANT NOT TO COMPETE
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5.1 In consideration of his employment by the Company, and other good
and valuable consideration, Mr. Froesel agrees that during his employment
by Company, and for two years after termination of his employment,
regardless of whether such termination is voluntary or involuntary, he will
not, directly or indirectly, engage or be interested in any business
competing with the Company, its subsidiary or parent companies, or their
respective successors, or, directly or indirectly, have any interest in,
own, manage, operate, control, be connected with as a stockholder (other
than as a stockholder of less than five percent (5%) of the issued and
outstanding stock of a publicly held corporation), joint venturer, officer,
director, partner, employee or consultant, or otherwise engage or invest or
participate in, any business which shall compete with the Company or any
Business conducted by the Company, its subsidiary or parent companies, or
their respective successors, throughout the United States of America. For
purposes of this Section 5, the term "Business" shall also include any
business in which the Company is engaged during the Company's fiscal year
immediately preceding the date on which Mr. Froesel's employment is
terminated, the sales of which Business account for 10% or more of the
total consolidated sales of the Company during such fiscal year.
SECTION 6. INDEMNIFICATION
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6.1 Except to the extent prohibited by law, the Company shall save and
hold harmless Mr. Froesel from and against any claim of liability or loss
(including reasonable attorney's fees) arising as a result of Mr. Froesel's
good faith activities in the course of his employment hereunder.
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SECTION 7. MISCELLANEOUS PROVISIONS
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7.1 ASSIGNMENT AND SUCCESSORS. The rights and obligations of
the Company under this Agreement may be freely assigned and shall inure to
the benefit of and be binding upon the successors and assigns of the
Company. Mr. Froesel's obligation to provide services hereunder may not be
assigned to or assumed by any other person or entity.
7.2 NOTICES. All notices, requests, demands or other communications
under this Agreement shall be in writing and shall only be deemed to be duly
given if made in writing and sent by first class mail, overnight courier, or
telecopy to the following addresses:
Cheryl D. Hodges, Senior Vice President
and Secretary
Omnicare, Inc.
2800 Chemed Center
255 E. Fifth Street
Cincinnati, Ohio 45202
and
David W. Froesel, Jr.
11712 Grandstone
Montgomery, Ohio 45249
7.3 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.
7.4 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.
7.5 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.
7.6 INJUNCTIVE RELIEF. The parties hereto agree that money damages
would be an inadequate remedy for the Company in the event of breach or
threatened breach of this Agreement and thus, in any such event, the Company
may, either with or without pursuing any potential damage remedies, immediately
obtain and enforce any injunction prohibiting Mr. Froesel from violating this
Agreement.
7.7 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 Ohio.
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7.8 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 Hamilton County, Ohio, (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 him or
it by registered mail to the address referred to in Section 7.2 hereof or to
such other address as the parties shall designate in writing by notice duly
given in accordance with Section 7.2 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 him or it according to
the law governing such service in the State of Ohio, and waives all claims
of error by reason of any such service.
7.9 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.
7.10 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.
7.11 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
OMNICARE, INC.
By:/s/Joel F. Gemunder
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/s/David W. Froesel, Jr.
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David W. Froesel, Jr.
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